TechnipFMC plc — Call Transcript 2025

Hey, everyone. I'm Marc Bianchi, U.S. Oilfield Services Analyst here at TD Cowen. We're excited to be joined by Doug Pferdehirt from TechnipFMC, Chairman and CEO of TechnipFMC. Thanks, Doug for being here. I guess maybe not everybody's as familiar with what you guys do, so maybe give us like a minute and a half on what you do, just to get us going. Marc, I don't think I've ever given an overview in a minute and a half, so that's a challenge. Let me first start, Marc by thanking you for allowing us to be here and for the quality research that you do. Also, to TD Cowen, to everybody here in attendance, and for those joining via the webcast, thank you for your interest in our company. It's very humbling. Look, we looked at the industry back in 2012-2014, and we made a decision that we felt there needed to be a material change in the way that business was done offshore, in order to ensure that our customers would have confidence again and that the capital flow would go from the U.S. unconventionals, which at the time was attracting a significant portion and a growing portion of the total capital expenditure back to offshore. That was about bringing certainty back to these offshore developments. The challenge was always the certainty and the delivery of these very large and complex projects. We knew we had a role to play, that we had to materially change the way that we operated as a company. That led to us developing a configurable architecture. Much like the auto industry, moving to where there were subcomponents that were pre-engineered, pre-designed, and were configurable based upon the customer need. The customer experience was still, "I'm getting something built for me," as when you place your order for an automobile, but in reality, they're not and we're not doing any engineering specific to your requirements. That's all been done upfront. That in itself removes nine to 12 months of detailed engineering, and it also removes a great degree of uncertainty and allows us to ensure the delivery of this very complex architecture as promised. Beyond that, we said, "Okay, this is good. This is important, but is there more that we could do?" We are not a company that focuses on consolidation. We are a company that focuses on integration. What can we do in the adjacent space that will create greater value towards our singular purpose, which is the relentless pursuit of the reduction of cycle time, again making offshore projects more economical and with greater certainty of the outcome of the delivery of those projects? That led to a merger between FMC Technologies and Technip on the 17th of January, 2017, a long time ago, almost a decade ago. Here we are today, to where the market has largely, we call that iEPCI, Integrated Engineering Procurement Construction Installation. On those projects, we're the architect, we are the builder and we provide the life of field services contract. We are literally engaged with the customer anywhere from 20-30 years. It's a very intimate, long-term relationship that we build with our customers. The success of these two things, moving the business to being integrated, which it was never in the past, so it used to be up to 14 different contracts, now a single contract with a single company, and the Subsea 2.0 architecture, both unique to our company, have led us to where we are today, to where our customers are rewarding us by recognizing that value because we're creating the value for them by the relentless pursuit of reduction of cycle time, improving their project returns. They're recognizing that, and rewarding us with now 80% of the business being direct awarded to our company in a market that's growing. It's a humbling and exciting position to be in, Marc. Good overview, Doug. I think this sort of plays into one of the ability to lower the costs, and make offshore more competitive than it was a decade ago. I think you have this view that we're not really going to be necessarily in cycles anymore, because really the marginal barrel or the lowest cost barrel is offshore, enabled in part by you. Can you just talk about maybe your worldview of some of the other sources of supply, and why you think offshore is really going to get the majority of the capital as we go forward? No, that's a fair question. I will also acknowledge that the lowest cost barrel is in the Middle East. You have to have economics, and you have to have access. The lowest cost barrel is in the Middle East, but there is very limited access in terms of capital flows by other than the national oil companies involved, into those regions or into those countries or kingdoms. As a result of that, they have to go to the next best economics that has access, and that's offshore. It is really as fundamental as that. We saw this coming back in the third quarter of 2021, we started talking about this. At the time, it seemed a little far-fetched, but you could see how that was setting up because at the same time, the economics in the U.S., unconventional, were deteriorating. Plenty of access, but deteriorating economics. We knew with what we had done with Subsea 2.0 configurable product platform, we knew that what we did with the iEPCI and having this integrated model, and all of this capability in-house, that we could drive that cost curve down. We had our own internal ambitions, and by doing so, we realized that we could improve the economics offshore again. What we had to deliver at the end of the day was certainty. That was the variable because our customers were still hesitant. Yes, we get it, we see it, we believe it, but you've got to deliver it. I will tell you, we have yet to deliver an iEPCI 2.0 project that was not followed up by a direct award of subsequent projects. That is how successful it has been. It has given our customers the confidence back. There are prolific reservoirs offshore. These are prolific reservoirs offshore. No fracking, no artificial lift. They flow naturally, very low decline rates, 4%-6% per annum versus the unconventionals, 30+% over the first couple of years. A very different setup in terms of the size of the reserves, the recoverable rates are much higher and the decline rates are much lower. Very favorable economics. It's just about making sure that the business is done the way that it was intended to be done, meaning on time, on schedule, and that's what we're delivering today. Really, it's unique what you're doing, but another competitor is attempting to replicate what you're doing, but they're a ways behind. Maybe just talk about the lead that you think you have. Of those two components, let's break it down into the product architecture and the integrated model. In terms of the product architecture, this was an extensive engineering effort. We started this in 2013. We announced it in 2017, and started taking orders in 2019. I mean, it's a huge body of work. There is no one else trying to do that today. There are companies talking about standardization, but standardization is not configurable. I do not think configurization is a word. There is a very distinct difference because we started focusing on standardization too. Standardization is simple, buy my piece of equipment. A customer, just like you, would be like the auto industry saying, "Buy my car. It is the only one I am going to make, and this is what I want you to buy." No, you want to have choices. You want to have color choices. You want to have engine size choices, whatever it may be. You want to have some choices. That's what we mean by configurable. It is just a different approach. Clearly, I think the market's adoption of the configurable platform is indisputable, and we have a significant advantage. Now, well over 50% of our orders are coming in with this 2.0 architecture. Now, there will always be space for this kind of bespoke, one-off kind of building and our competitor is kind of filling that void, but it is not somewhere where we aspire to participate. If you look at the integration side, look, there is a fork in the road from when you come to a strategic decisions in terms of making M&A type transactions. You can focus on consolidation, or you can focus on integration. I will tell you, consolidation, the outcome is more certain because you're just buying somebody who does what you do, and then cutting cost and trying to get benefit from it through cost synergies. That's a well-known playbook. Integration is often less traveled of the two paths, and in our case, it had never been done before. Look, it was not obvious. We chose that path, and our competitor has now chosen the path of consolidation. I would say we're actually heading in two very different directions, and our clients see that, and our clients recognize that. There is space for both of us, but we have different strategies, and we're proud of what we've delivered. Okay. You've said this, and we've had a few sessions together over the last couple of days, the relentless pursuit and reduction of cycle time. I think I've got it down now. Talk to us about how far along you are on that journey and what it means for the business. What does it mean for margins? What does it mean for capacity? What kind of advantage do you think it gives you? I've always been on the service side of the table. I started delivering newspapers before school and then many other service jobs throughout my career. Let me start with what's most important, which was, what is the benefit to our customer? That's all that matters. That's the thing. You have to focus on your client. You have to focus on creating success for your client. The relentless pursuit of reduction of cycle time translated for our customer, means higher project returns. Not only higher project returns, but higher project returns with certainty of the outcome, which is why they're spending more capital offshore, why they're exploring offshore again, why this is the big focus for them in their portfolio now, that maybe it wasn't over the last 15, 20 years because of other distractions that had occurred in the global energy mix. That's most important to me and keeps me aligned with my customers' interests. Now, we benefit as well. How do we benefit? By focusing on the relentless pursuit of cycle time and having the 2.0 and the iEPCI where the competition doesn't, it creates just greater differentiation for us and aligns our outcome with the outcome of our clients. People often use win-win. This truly is win-win. Our clients are winning because they're getting improved project returns with greater certainty, and we're winning because they're willing to give us a greater portion of the economic value that we create. That's only fair. Both sides are feeling good about it, and both sides are winning. Whereas if you're in a commodity business and you're just trying to increase day rates or you're trying to increase pricing, that's obviously counterproductive to your client relationship. Our client relationship is aligned. I mentioned earlier that we're the architect, as well as the builder. We are sitting there at the table, working with them intimately to design the architecture to meet their economical hurdle rates, two to three years in advance of that project actually moving into the execution phase. We are aligned from the beginning. This is why they have the confidence in us to again, honor us by us receiving 80% of our business as a direct award, never going out to a competitive tender. It was all about getting those aligned. Now, maybe to further answer your question, Marc, is it over? Have we achieved that outcome? Yes, but only partially, because we're only about 1/3 of the way through this journey. We still have significant areas that we are convinced that we can reduce cycle time, and improve the certainty of the outcome, hence improving clients' project returns offshore, which will lead to greater value to us and to our shareholders at the same time. I'm sure this is a question on everybody's mind, is, how do we translate that opportunity into margin upside or business throughput or something that I can put in a spreadsheet? What do I do with that? Look, let's just look at what's happened so far. I think the numbers speak for themselves. You've seen incremental margins that we've been able to deliver. Again, I shy away from talking about it, because it's more important for me to focus on my clients' returns and my clients' project returns. Yes, we benefit from it as well. This isn't a concept that I'm trying to convince you of here today. This is the way we've been operating. Remember, January 17, 2017, we created TechnipFMC. November of 2017, we launched Subsea 2.0. This has been going on for a while. 50% of our inbound in 2024 has been IEPCI or these integrated projects. We've said this year, Subsea 2.0 is well over 50% of our inbound. This is happening today. Our customers are realizing, we have delivered iEPCI 2.0 projects multiple times for our customers today, so they're experiencing it already and they're seeing that benefit. You see what we've been able to deliver. We've already given 2026 guidance, which I think is probably unusual for most companies. We've already done it. We're a backlog company. We have significant visibility. Yes, it included more revenue and more margin. I think you're seeing it build out. We believe that as we continue to convert more of our backlog to this higher value backlog, iEPCI and 2.0, both for our clients and for ourselves, we'll continue to be able to grow margin as a result of more of that flowing through our execution. You're building that sustainability that is not necessarily driven by external factors. It's because of the difficult decisions we made almost 10 years ago, and realizing the benefit of those now in our results. I think someone had asked the question recently about, where can margins go? I think you gave a really interesting answer like, "Well, I do not want to have a target, and I do not want to give targets to my people because we get some other benefit from them thinking through how to do that." Maybe you could just talk a little bit more about that because there are some interesting organizational things that you guys are doing, that I do not think comes out as often as it could. Sure. I knew I was not going to get away with the prior answer, Marc, so I knew you were going to follow up and that is a fair question. Look, we get asked that question a lot because there is obviously interest. What I have said, and I appreciate you saying it was an acceptable answer. In some ways, I could understand people may not be satisfied with it, but it is the truth, which is I do not know where the margins are going to go. That does not mean I am worried about them going down. Let us be clear. I do not know where they are going to go because again, this is a new experience for us as well. What I do know is that we have real tangible evidence that the cadence and the flow rate, and our ability to be able to deliver these complex projects in shorter and shorter cycle times. We're not shaving days. We're shaving months and years off of a project on a consistent basis. We know, as I said earlier, we're only in the early innings, or I'm a hockey player, so we're only in the first period of a three-period match here. I mean, there's a lot left to be done. Look, me setting a target in this environment, I do think would be counterproductive, because the organization where we have gone as an organization is dramatically different than where we were just five years ago. Everybody talks about transformations and I get it, but would love for you to come and see how we operate today. It is a very different company. I had to change my behavior significantly. As a result of that, you have truly empowered 22,000 women and men. The output from that is just tremendous. Everybody is looking to shave a minute, an hour, a day in everything that they are doing. This is really lean. I mean, we have tried to model a lot after Toyota, who has been hugely successful in this area. They have been very supportive in the Lean Institute, in helping us through this journey. A lot of companies get lean through their manufacturing, and then they stop. We've taken this through the entire organization, every function, every person, including myself has had to transform their behavior in the way that they work, to where we're all focused on the same thing, which is the output, which is relentless pursuit of reduction of cycle time, i.e., improving our clients' results. Our clients see that. This is all about the clients being successful, and then we're successful as a result of that. The cultural change within the company is dramatic. Yeah, maybe I'll pause there, but what I do know is that there's certainly more fuel in the tank. We have a higher quality backlog than what we're executing today, because of what we're putting into it, more iEPCI, more 2.0, higher quality, all that will need to be executed. Today, it's another third, not to be confused with the prior third, but only about a third of our manufacturing capacity is actually executing Subsea 2.0 work today, yet 50% of the inbound is coming in at 2.0. By definition, as that flows through manufacturing, that will go to 50%. We should see a benefit from that. Again, I just want to keep repeating this because this is the key. It's not about our margin going up. It's about our clients' project returns improving, and as a result of that, our margins going up. That's how you keep the relationship with your customers. Yep. On the topic of lean, I think this is what you were alluding to on the earnings call, where there is sort of an opportunity to start to leverage lean maybe further downstream into some of the development. Is there anything more you can say about that? If there is a plan to say more in the future, when should we be expecting to hear more from you about that? Okay. Let's just go back quickly through the history of it. In 2013, we launched this concept of configurable architecture, started working with the Lean Institute on this. We were FMC Technologies at the time. Our scope was the seabed. FMC Technologies was everything that sat on the seabed, which by the way, everybody talks about a subsea tree. It's far greater than a subsea tree. Everything's big, the size of this room, and it's a small city down there. A lot of things are on the seabed, but the seabed needs to be reconnected to the surface. That's led to some smart people in the company saying, "Maybe we should do an integrated approach, not do a consolidation, but do an integration." That's the area that Technip played in, if you will, in the water column. That's called umbilical risers and flowlines. We brought that into the portfolio. We created the iEPCI, the integrated commercial model that we've talked about, again about shortening cycle time, removing redundancy. We've never really taken the opportunity yet to take all of those products, and fully move those to be configurable, okay? Just because it takes a while. As I mentioned, 2013 and 2017 as we went public with the seabed, you should expect that now that's the benefit of becoming one company. We couldn't have done that in a joint venture or an alliance, because your interests are not aligned enough. That's why we did the merger. Now we're looking at all of that other architecture, which there's a significant amount in the water column. Remember, when we talk about water column and subsea, and this stuff just gets me super excited, and I know it might not get everyone excited, but we're talking 1mi-2mi deep, 1mi-2mi of water before you get to the seabed. This stuff is pretty amazing. Down there, where no man has ever been, all remote automation and control robotics. We have robots on the seabed working on stuff. You just can't go down there. Now we have the opportunity to take 2.0 and apply it to all of that other part of the architecture. We've been working on that and we're making good progress, but that's an upside and that's what I was referring to. Okay, great. Maybe to talk a little bit about kind of the current market state, the outlook. You have guided to and have been delivering on $10 billion of orders in subsea per year. From an outsider, that is a remarkably consistent number. Is there something that drives that? There is a certain amount of sales capacity to work through projects with customers, maybe there is the customer's capacity, is there any reason that 10 is a magical number or is it just maybe coincidence that we have seen 10 for three years? I'm just going to have a little fun, right? Better than nine, right? Let's go back to how the 10 came to be, because I think that's important. 2021, wouldn't have been as many people in the room, and probably wouldn't have been as many people on the line. 2021 was a very different setup. There was a lot of skepticism. We're out there saying projects are there. We're talking to our clients. Capital is going to flow to the offshore again, and a whole lot of doubt and a whole lot of skepticism. In 2021, we put out a three-year target. The target was, over the next three years, we would achieve $30 billion. Now, we did that with a lot of science behind it, but we gave a $30 billion target over three years, never intending that it was going to be 10, 10, 10. By the way, it has not been. It has been $9.7 billion, $10.3 billion, but we were not expecting it to be as consistent as it was, because some of the projects we do are $1 billion, $1.5 billion projects. They could fall on December 31st or they could fall on January 2nd, and you do not control the timing of that. Really hard to do on an annual basis. It has just so happened to have been actually quite linear beyond what I would have expected. We set a three-year target of $30 billion, which I think it is important to go back and realize that. We weren't saying it's going to be $10 billion, we did not say it was going to be $10 billion per year every year for the next three years. We just said it was going to get to $30 billion. Now, we said for 2026, we have already said we expect it to look like 2025, which will be the $10 billion range. We do expect that again next year. The market size is growing. We have talked about that because of the capital flows going offshore again. We see exploration happening. That is going to drive more capital flows and more projects. That market is going to grow. Is there the capacity to grow? Yes. I think we are in a good spot right now with revenue growing, EBITDA growing, solid inbound, meaning backlog continuing to grow, I think is a good place to be. We just got a few minutes left, and I have a couple I want to ask on cash flow before we get there. Just in terms of the frontier market opportunities that you're talking to customers about. I think we all know, all right, Suriname, Namibia, maybe West Africa starts to come back. Maybe there's equatorial margin in Brazil. We know the subsea opportunity slide. What's the next stuff? When we update the subsea opportunity slide a year from now, two years from now, what's going to be on there that isn't on there now? Geographically wise, not customer-wise or anything like that. Yeah. I know we're going to run out of time, but I got to step back for a minute. Imagine what Marc just said. What he just said was, four countries that were not on the map before from offshore production or from production period. In my career, there has never been a period of time where in a couple of years you have added four. It is just profound. I just want to be careful. Oh, Suriname, Guyana, Namibia, Mozambique, Holy heck. This is amazing. This is truly amazing. I think we are taking it for granted, not you, Marc, but I just want to make sure that we realize this is significant. The growth in Guyana, where we are honored and humbled to be partnered with ExxonMobil and have provided 100% of their infrastructure in the country. Suriname, we will do the first project there, the GranMorgu project for TotalEnergies. We're very grateful for that. iEPCI 2.0, Mozambique. We're working for Eni in Mozambique today. It's profound. I mean, don't understate equatorial margin, you even threw in there. Equatorial margin is potentially another massive development. Now, this is in Brazil, which is already a large oil-producing country, but this could be another massive growth opportunity within Brazil. The Paleogene in the Gulf of Mexico. This is the 20,000 PSI deeper horizon in the U.S. Gulf. I mean, this is dramatic. This is dramatic. These are providing significant growth to the offshore, that even without what are all those other countries that are potentially going to come online, just focus on those. Those are real. Those are material. Those are going to drive activity well beyond the end of the decade. Now, to answer your question, I get interested in other countries in East Africa. I won't be specific, but there's other areas in East Africa that could potentially share the same geological feature as Mozambique. I get excited about the Eastern Mediterranean. I think both the activities from Israel to Egypt, but now in between, that could also come on. You could add two to three new countries producing in the Eastern Med. I get interested in the southern part of Africa beyond Namibia, which is obviously very exciting, but beyond Namibia. We didn't mention Indonesia. Yes, it's been a long-term producing, energy country, but now with the gas projects in Indonesia, that is growing quite rapidly. There's other areas that are probably further out. There's large gas reserves offshore Colombia. It's very deep water, but it's certainly something technically we could accomplish for our customers. Yeah, there's a lot more to be excited about, but realize, the setup that's there already is significant and material. Excellent, all right. I'm going to squeeze one more in, and we're probably going to go over. You just had a buyback reauthorization. You've been consistently buying back a lot of stock. I think your message before had been, we're really focused on buying back the stock rather than raising the dividend. As something that occurs to me, it could be a signal to send to the market about the stability of the business if you raise the dividend. How do you think about the decision process between buyback and dividend? No, it's a fair question. Look, it is one that we discuss often with our board, and certainly last quarter before we announced the increase of the buyback program. Let me be very clear. What we announced was a $2 billion buyback. That's a large portion of the outstanding shares of the company. The reason I'm emphasizing that is I think that exudes confidence, right? It's not that a dividend would exude more confidence than a $2 billion buyback on top of what previously had been a much smaller buyback program. Look, we think it's a great investment. Just look at the numbers. Just look at the fundamental metrics of the company. It looks like it should be trading at a much higher multiple. If you do a blind test and put those numbers against any industrial company, you're going to get a very different result. We believe that. We believe the investment community is recognizing and acknowledging that. Therefore, we believe that's the best place to return the cash to our shareholders. We are honored to be able to do so. Awesome, we'll leave it there. Doug, thanks a lot. Thank you all.

Speaker 2: Hey, everyone. I'm Marc Bianchi, U.S. Oilfield Services Analyst here at TD Cowen. We're excited to be joined by Doug Pferdehirt from TechnipFMC, Chairman and CEO of TechnipFMC. Thanks, Doug for being here. I guess maybe not everybody's as familiar with what you guys do, so maybe give us like a minute and a half on what you do, just to get us going. Hey, everyone. hey everyone I'm Marc Bianchi, U.S. i'm marc bianchi u.s Oilfield Services Analyst here at TD Cowen. oilfield services analyst here at td cowen We're excited to be joined by Doug Pferdehirt from TechnipFMC, Chairman and CEO of TechnipFMC. we're excited to be joined by doug pferdehirt from technipfmc chairman and ceo of technipfmc Thanks, Doug for being here. thanks doug for being here I guess maybe not everybody's as familiar with what you guys do, so maybe give us like a minute and a half on what you do, just to get us going. i guess maybe not everybody's as familiar with what you guys do so maybe give us like a minute and a half on what you do just to get us going

Speaker 1: Marc, I don't think I've ever given an overview in a minute and a half, so that's a challenge. Let me first start, Marc by thanking you for allowing us to be here and for the quality research that you do. Also, to TD Cowen, to everybody here in attendance, and for those joining via the webcast, thank you for your interest in our company. It's very humbling. Look, we looked at the industry back in 2012-2014, and we made a decision that we felt there needed to be a material change in the way that business was done offshore, in order to ensure that our customers would have confidence again and that the capital flow would go from the U.S. unconventionals, which at the time was attracting a significant portion and a growing portion of the total capital expenditure back to offshore. Marc, I don't think I've ever given an overview in a minute and a half, so that's a challenge. marc i don't think i've ever given an overview in a minute and a half so that's a challenge Let me first start, Marc by thanking you for allowing us to be here and for the quality research that you do. let me first start marc by thanking you for allowing us to be here and for the quality research that you do Also, to TD Cowen, to everybody here in attendance, and for those joining via the webcast, thank you for your interest in our company. also to td cowen to everybody here in attendance and for those joining via the webcast thank you for your interest in our company It's very humbling. it's very humbling Look, we looked at the industry back in 2012-20 14, and we made a decision that we felt there needed to be a material change in the way that business was done offshore, in order to ensure that our customers would have confidence again and that the capital flow would go from the U.S. unconventionals, which at the time was attracting a significant portion and a growing portion of the total capital expenditure back to offshore. look we looked at the industry back in 2012-20 14 and we made a decision that we felt there needed to be a material change in the way that business was done offshore in order to ensure that our customers would have confidence again and that the capital flow would go from the u.s unconventionals which at the time was attracting a significant portion and a growing portion of the total capital expenditure back to offshore That was about bringing certainty back to these offshore developments. The challenge was always the certainty and the delivery of these very large and complex projects. We knew we had a role to play, that we had to materially change the way that we operated as a company. That led to us developing a configurable architecture. Much like the auto industry, moving to where there were subcomponents that were pre-engineered, pre-designed, and were configurable based upon the customer need. The customer experience was still, "I'm getting something built for me," as when you place your order for an automobile, but in reality, they're not and we're not doing any engineering specific to your requirements. That's all been done upfront. That was about bringing certainty back to these offshore developments. that was about bringing certainty back to these offshore developments The challenge was always the certainty and the delivery of these very large and complex projects. the challenge was always the certainty and the delivery of these very large and complex projects We knew we had a role to play, that we had to materially change the way that we operated as a company. we knew we had a role to play that we had to materially change the way that we operated as a company That led to us developing a configurable architecture. that led to us developing a configurable architecture Much like the auto industry, moving to where there were subcomponents that were pre-engineered, pre-designed, and were configurable based upon the customer need. much like the auto industry moving to where there were subcomponents that were pre-engineered pre-designed and were configurable based upon the customer need The customer experience was still, "I'm getting something built for me," as when you place your order for an automobile, but in reality, they're not and we're not doing any engineering specific to your requirements. the customer experience was still "i'm getting something built for me," as when you place your order for an automobile but in reality they're not and we're not doing any engineering specific to your requirements That's all been done upfront. that's all been done upfront That in itself removes nine to 12 months of detailed engineering, and it also removes a great degree of uncertainty and allows us to ensure the delivery of this very complex architecture as promised. Beyond that, we said, "Okay, this is good. This is important, but is there more that we could do?" We are not a company that focuses on consolidation. We are a company that focuses on integration. What can we do in the adjacent space that will create greater value towards our singular purpose, which is the relentless pursuit of the reduction of cycle time, again making offshore projects more economical and with greater certainty of the outcome of the delivery of those projects? That led to a merger between FMC Technologies and Technip on the 17th of January, 2017, a long time ago, almost a decade ago. That in itself removes nine to 12 months of detailed engineering, and it also removes a great degree of uncertainty and allows us to ensure the delivery of this very complex architecture as promised. that in itself removes nine to 12 months of detailed engineering and it also removes a great degree of uncertainty and allows us to ensure the delivery of this very complex architecture as promised Beyond that, we said, "Okay, this is good. beyond that we said "okay this is good This is important, but is there more that we could do?" We are not a company that focuses on consolidation. We are a company that focuses on integration. this is important but is there more that we could do?" we are not a company that focuses on consolidation. we are a company that focuses on integration What can we do in the adjacent space that will create greater value towards our singular purpose, which is the relentless pursuit of the reduction of cycle time, again making offshore projects more economical and with greater certainty of the outcome of the delivery of those projects? what can we do in the adjacent space that will create greater value towards our singular purpose which is the relentless pursuit of the reduction of cycle time again making offshore projects more economical and with greater certainty of the outcome of the delivery of those projects That led to a merger between FMC Technologies and Technip on the 17th of January, 2017, a long time ago, almost a decade ago. that led to a merger between fmc technologies and technip on the 17th of january 2017 a long time ago almost a decade ago Here we are today, to where the market has largely, we call that iEPCI, Integrated Engineering Procurement Construction Installation. On those projects, we're the architect, we are the builder and we provide the life of field services contract. We are literally engaged with the customer anywhere from 20-30 years. It's a very intimate, long-term relationship that we build with our customers. Here we are today, to where the market has largely, we call that iEPCI, Integrated Engineering Procurement Construction Installation. here we are today to where the market has largely we call that iepci integrated engineering procurement construction installation On those projects, we're the architect, we are the builder and we provide the life of field services contract. on those projects we're the architect we are the builder and we provide the life of field services contract We are literally engaged with the customer anywhere from 20- 30 years. we are literally engaged with the customer anywhere from 20- 30 years It' s a very intimate, long-term relationship that we build with our customers. it' s a very intimate long-term relationship that we build with our customers The success of these two things, moving the business to being integrated, which it was never in the past, so it used to be up to 14 different contracts, now a single contract with a single company, and the Subsea 2.0 architecture, both unique to our company, have led us to where we are today, to where our customers are rewarding us by recognizing that value because we're creating the value for them by the relentless pursuit of reduction of cycle time, improving their project returns. They're recognizing that, and rewarding us with now 80% of the business being direct awarded to our company in a market that's growing. It's a humbling and exciting position to be in, Marc. The success of these two things, moving the business to being integrated, which it was never in the past, so it used to be up to 14 different contracts, now a single contract with a single company, and the Subsea 2.0 architecture, both unique to our company, have led us to where we are today, to where our customers are rewarding us by recognizing that value because we're creating the value for them by the relentless pursuit of reduction of cycle time, improving their project returns. T hey're recognizing that, and rewarding us with now 80% of the business being direct awarded to our company in a market that's growing. the success of these two things moving the business to being integrated which it was never in the past so it used to be up to 14 different contracts now a single contract with a single company and the subsea 2.0 architecture both unique to our company have led us to where we are today to where our customers are rewarding us by recognizing that value because we're creating the value for them by the relentless pursuit of reduction of cycle time improving their project returns. t hey're recognizing that and rewarding us with now 80% of the business being direct awarded to our company in a market that's growing It's a humbling and exciting position to be in, Marc. it's a humbling and exciting position to be in marc

Speaker 2: Good overview, Doug. I think this sort of plays into one of the ability to lower the costs, and make offshore more competitive than it was a decade ago. I think you have this view that we're not really going to be necessarily in cycles anymore, because really the marginal barrel or the lowest cost barrel is offshore, enabled in part by you. Can you just talk about maybe your worldview of some of the other sources of supply, and why you think offshore is really going to get the majority of the capital as we go forward? Good overview, Doug. good overview doug I think this sort of plays into one of the ability to lower the costs, and make offshore more competitive than it was a decade ago. i think this sort of plays into one of the ability to lower the costs and make offshore more competitive than it was a decade ago I think you have this view that we're not really going to be necessarily in cycles anymore, because really the marginal barrel or the lowest cost barrel is offshore, enabled in part by you. i think you have this view that we're not really going to be necessarily in cycles anymore because really the marginal barrel or the lowest cost barrel is offshore enabled in part by you Can you just talk about maybe your worldview of some of the other sources of supply, and why you think offshore is really going to get the majority of the capital as we go forward? can you just talk about maybe your worldview of some of the other sources of supply and why you think offshore is really going to get the majority of the capital as we go forward

Speaker 1: No, that's a fair question. I will also acknowledge that the lowest cost barrel is in the Middle East. You have to have economics, and you have to have access. The lowest cost barrel is in the Middle East, but there is very limited access in terms of capital flows by other than the national oil companies involved, into those regions or into those countries or kingdoms. As a result of that, they have to go to the next best economics that has access, and that's offshore. It is really as fundamental as that. We saw this coming back in the third quarter of 2021, we started talking about this. At the time, it seemed a little far-fetched, but you could see how that was setting up because at the same time, the economics in the U.S., unconventional, were deteriorating. No, that's a fair question. no that's a fair question I will also acknowledge that the lowest cost barrel is in the Middle East. i will also acknowledge that the lowest cost barrel is in the middle east You have to have economics, and you have to have access. you have to have economics and you have to have access The lowest cost barrel is in the Middle East, but there is very limited access in terms of capital flows by other than the national oil companies involved, into those regions or into those countries or kingdoms. the lowest cost barrel is in the middle east but there is very limited access in terms of capital flows by other than the national oil companies involved into those regions or into those countries or kingdoms As a result of that, they have to go to the next best economics that has access, and that's offshore. as a result of that they have to go to the next best economics that has access and that's offshore It is really as fundamental as that. it is really as fundamental as that We saw this coming back in the third quarter of 2021, we started talking about this. we saw this coming back in the third quarter of 2021 we started talking about this At the time, it seemed a little far-fetched, but you could see how that was setting up because at the same time, the economics in the U.S., unconventional, were deteriorating. at the time it seemed a little far-fetched but you could see how that was setting up because at the same time the economics in the u.s unconventional were deteriorating Plenty of access, but deteriorating economics. We knew with what we had done with Subsea 2.0 configurable product platform, we knew that what we did with the iEPCI and having this integrated model, and all of this capability in-house, that we could drive that cost curve down. We had our own internal ambitions, and by doing so, we realized that we could improve the economics offshore again. What we had to deliver at the end of the day was certainty. That was the variable because our customers were still hesitant. Yes, we get it, we see it, we believe it, but you've got to deliver it. I will tell you, we have yet to deliver an iEPCI 2.0 project that was not followed up by a direct award of subsequent projects. That is how successful it has been. It has given our customers the confidence back. Plenty of access, but deteriorating economics. plenty of access but deteriorating economics We knew with what we had done with Subsea 2.0 configurable product platform, we knew that what we did with the iEPCI and having this integrated model, and all of this capability in-house, that we could drive that cost curve down. we knew with what we had done with subsea 2.0 configurable product platform we knew that what we did with the iepci and having this integrated model and all of this capability in-house that we could drive that cost curve down We had our own internal ambitions, and by doing so, we realized that we could improve the economics offshore again. we had our own internal ambitions and by doing so we realized that we could improve the economics offshore again What we had to deliver at the end of the day was certainty. what we had to deliver at the end of the day was certainty That was the variable because our customers were still hesitant. that was the variable because our customers were still hesitant Yes, we get it, we see it, we believe it, but you' ve got to deliver it. yes we get it we see it we believe it but you' ve got to deliver it I will tell you, we have yet to deliver an iEPCI 2.0 project that was not followed up by a direct award of subsequent projects. That is how successful it has been. It has given our customers the confidence back. i will tell you we have yet to deliver an iepci 2.0 project that was not followed up by a direct award of subsequent projects. that is how successful it has been. it has given our customers the confidence back There are prolific reservoirs offshore. These are prolific reservoirs offshore. No fracking, no artificial lift. They flow naturally, very low decline rates, 4%-6% per annum versus the unconventionals, 30+% over the first couple of years. A very different setup in terms of the size of the reserves, the recoverable rates are much higher and the decline rates are much lower. Very favorable economics. It's just about making sure that the business is done the way that it was intended to be done, meaning on time, on schedule, and that's what we're delivering today. There are prolific reservoirs offshore. there are prolific reservoirs offshore These are prolific reservoirs offshore. these are prolific reservoirs offshore No fracking, no artificial lift. no fracking no artificial lift They flow naturally, very low decline rates, 4%-6% per annum versus the unconventionals, 30+% over the first couple of years. they flow naturally very low decline rates 4%-6% per annum versus the unconventionals 30+% over the first couple of years A very different setup in terms of the size of the reserves, the recoverable rates are much higher and the decline rates are much lower. a very different setup in terms of the size of the reserves the recoverable rates are much higher and the decline rates are much lower Very favorable economics. very favorable economics It's just about making sure that the business is done the way that it was intended to be done, meaning on time, on schedule, and that's what we're delivering today. it's just about making sure that the business is done the way that it was intended to be done meaning on time on schedule and that's what we're delivering today

Speaker 2: Really, it's unique what you're doing, but another competitor is attempting to replicate what you're doing, but they're a ways behind. Maybe just talk about the lead that you think you have. Really, it' s unique what you're doing, but another competitor is attempting to replicate what you're doing, but they're a ways behind. really, it' s unique what you're doing but another competitor is attempting to replicate what you're doing but they're a ways behind Maybe just talk about the lead that you think you have. maybe just talk about the lead that you think you have

Speaker 1: Of those two components, let's break it down into the product architecture and the integrated model. In terms of the product architecture, this was an extensive engineering effort. We started this in 2013. We announced it in 2017, and started taking orders in 2019. I mean, it's a huge body of work. There is no one else trying to do that today. There are companies talking about standardization, but standardization is not configurable. I do not think configurization is a word. There is a very distinct difference because we started focusing on standardization too. Standardization is simple, buy my piece of equipment. A customer, just like you, would be like the auto industry saying, "Buy my car. It is the only one I am going to make, and this is what I want you to buy." No, you want to have choices. You want to have color choices. Of those two components, let's break it down into the product architecture and the integrated model. of those two components let's break it down into the product architecture and the integrated model In terms of the product architecture, this was an extensive engineering effort. in terms of the product architecture this was an extensive engineering effort We started this in 2013. we started this in 2013 We announced it in 2017, and started taking orders in 2019. we announced it in 2017 and started taking orders in 2019 I mean, it's a huge body of work. i mean it's a huge body of work There is no one else trying to do that today. there is no one else trying to do that today There are companies talking about standardization, but standardization is not configurable. there are companies talking about standardization but standardization is not configurable I do not think configurization is a word. i do not think configurization is a word There is a very distinct difference because we started focusing on standardization too. there is a very distinct difference because we started focusing on standardization too Standardization is simple, buy my piece of equipment. standardization is simple buy my piece of equipment A customer, just like you, would be like the auto industry saying, "Buy my car. It is the only one I am going to make, and this is what I want you to buy." No, you want to have choices. a customer just like you would be like the auto industry saying "buy my car. it is the only one i am going to make and this is what i want you to buy." no you want to have choices You want to have color choices. you want to have color choices You want to have engine size choices, whatever it may be. You want to have some choices. That's what we mean by configurable. It is just a different approach. Clearly, I think the market's adoption of the configurable platform is indisputable, and we have a significant advantage. Now, well over 50% of our orders are coming in with this 2.0 architecture. Now, there will always be space for this kind of bespoke, one-off kind of building and our competitor is kind of filling that void, but it is not somewhere where we aspire to participate. If you look at the integration side, look, there is a fork in the road from when you come to a strategic decisions in terms of making M&A type transactions. You can focus on consolidation, or you can focus on integration. You want to have engine size choices, whatever it may be. you want to have engine size choices whatever it may be You want to have some choices. you want to have some choices That's what we mean by configurable. that's what we mean by configurable It is just a different approach. it is just a different approach Clearly, I think the market's adoption of the configurable platform is indisputable, and we have a significant advantage. clearly i think the market's adoption of the configurable platform is indisputable and we have a significant advantage Now, well over 50% of our orders are coming in with this 2.0 architecture. now well over 50% of our orders are coming in with this 2.0 architecture Now, there will always be space for this kind of bespoke, one-off kind of building and our competitor is kind of filling that void, but it is not somewhere where we aspire to participate. now, there will always be space for this kind of bespoke one-off kind of building and our competitor is kind of filling that void but it is not somewhere where we aspire to participate If you look at the integration side, look, there is a fork in the road from when you come to a strategic decisions in terms of making M&A type transactions. if you look at the integration side look, there is a fork in the road from when you come to a strategic decisions in terms of making m&a type transactions You can focus on consolidation, or you can focus on integration. you can focus on consolidation or you can focus on integration I will tell you, consolidation, the outcome is more certain because you're just buying somebody who does what you do, and then cutting cost and trying to get benefit from it through cost synergies. That's a well-known playbook. Integration is often less traveled of the two paths, and in our case, it had never been done before. Look, it was not obvious. We chose that path, and our competitor has now chosen the path of consolidation. I would say we're actually heading in two very different directions, and our clients see that, and our clients recognize that. There is space for both of us, but we have different strategies, and we're proud of what we've delivered. I will tell you, consolidation, the outcome is more certain because you're just buying somebody who does what you do, and then cutting cost and trying to get benefit from it through cost synergies. i will tell you consolidation the outcome is more certain because you're just buying somebody who does what you do and then cutting cost and trying to get benefit from it through cost synergies That's a well-known playbook. that's a well-known playbook Integration is often less traveled of the two paths, and in our case, it had never been done before. integration is often less traveled of the two paths and in our case it had never been done before Look, it was not obvious. look it was not obvious We chose that path, and our competitor has now chosen the path of consolidation. we chose that path and our competitor has now chosen the path of consolidation I would say we're actually heading in two very different directions, and our clients see that, and our clients recognize that. i would say we're actually heading in two very different directions and our clients see that and our clients recognize that There is space for both of us, but we have different strategies, and we're proud of what we've delivered. there is space for both of us but we have different strategies and we're proud of what we've delivered

Speaker 2: Okay. You've said this, and we've had a few sessions together over the last couple of days, the relentless pursuit and reduction of cycle time. I think I've got it down now. Talk to us about how far along you are on that journey and what it means for the business. What does it mean for margins? What does it mean for capacity? What kind of advantage do you think it gives you? Okay. okay You've said this, and we've had a few sessions together over the last couple of days, the relentless pursuit and reduction of cycle time. you've said this and we've had a few sessions together over the last couple of days the relentless pursuit and reduction of cycle time I think I've got it down now. i think i've got it down now Talk to us about how far along you are on that journey and what it means for the business. talk to us about how far along you are on that journey and what it means for the business What does it mean for margins? what does it mean for margins What does it mean for capacity? what does it mean for capacity What kind of advantage do you think it gives you? what kind of advantage do you think it gives you

Speaker 1: I've always been on the service side of the table. I started delivering newspapers before school and then many other service jobs throughout my career. Let me start with what's most important, which was, what is the benefit to our customer? That's all that matters. That's the thing. You have to focus on your client. You have to focus on creating success for your client. The relentless pursuit of reduction of cycle time translated for our customer, means higher project returns. Not only higher project returns, but higher project returns with certainty of the outcome, which is why they're spending more capital offshore, why they're exploring offshore again, why this is the big focus for them in their portfolio now, that maybe it wasn't over the last 15, 20 years because of other distractions that had occurred in the global energy mix. I've always been on the service side of the table. i've always been on the service side of the table I started delivering newspapers before school and then many other service jobs throughout my career. i started delivering newspapers before school and then many other service jobs throughout my career Let me start with what's most important, which was, what is the benefit to our customer? let me start with what's most important which was what is the benefit to our customer That's all that matters. that's all that matters That's the thing. that's the thing You have to focus on your client. you have to focus on your client You have to focus on creating success for your client. you have to focus on creating success for your client The relentless pursuit of reduction of cycle time translated for our customer, means higher project returns. the relentless pursuit of reduction of cycle time translated for our customer means higher project returns Not only higher project returns, but higher project returns with certainty of the outcome, which is why they're spending more capital offshore, why they're exploring offshore again, why this is the big focus for them in their portfolio now, that maybe it wasn't over the last 15, 20 years because of other distractions that had occurred in the global energy mix. not only higher project returns but higher project returns with certainty of the outcome which is why they're spending more capital offshore why they're exploring offshore again why this is the big focus for them in their portfolio now that maybe it wasn't over the last 15 20 years because of other distractions that had occurred in the global energy mix That's most important to me and keeps me aligned with my customers' interests. Now, we benefit as well. How do we benefit? By focusing on the relentless pursuit of cycle time and having the 2.0 and the iEPCI where the competition doesn't, it creates just greater differentiation for us and aligns our outcome with the outcome of our clients. People often use win-win. This truly is win-win. Our clients are winning because they're getting improved project returns with greater certainty, and we're winning because they're willing to give us a greater portion of the economic value that we create. That's only fair. Both sides are feeling good about it, and both sides are winning. Whereas if you're in a commodity business and you're just trying to increase day rates or you're trying to increase pricing, that's obviously counterproductive to your client relationship. That's most important to me and keeps me aligned with my customers' interests. that's most important to me and keeps me aligned with my customers' interests Now, we benefit as well. now we benefit as well How do we benefit? how do we benefit By focusing on the relentless pursuit of cycle time and having the 2.0 and the iEPCI where the competition doesn't, it creates just greater differentiation for us and aligns our outcome with the outcome of our clients. by focusing on the relentless pursuit of cycle time and having the 2.0 and the iepci where the competition doesn't it creates just greater differentiation for us and aligns our outcome with the outcome of our clients People often use win-win. people often use win-win This truly is win-win. this truly is win-win Our clients are winning because they're getting improved project returns with greater certainty, and we're winning because they're willing to give us a greater portion of the economic value that we create. our clients are winning because they're getting improved project returns with greater certainty and we're winning because they're willing to give us a greater portion of the economic value that we create That's only fair. that's only fair Both sides are feeling good about it, and both sides are winning. both sides are feeling good about it and both sides are winning Whereas if you're in a commodity business and you're just trying to increase day rates or you're trying to increase pricing, that's obviously counterproductive to your client relationship. whereas if you're in a commodity business and you're just trying to increase day rates or you're trying to increase pricing that's obviously counterproductive to your client relationship Our client relationship is aligned. I mentioned earlier that we're the architect, as well as the builder. We are sitting there at the table, working with them intimately to design the architecture to meet their economical hurdle rates, two to three years in advance of that project actually moving into the execution phase. We are aligned from the beginning. This is why they have the confidence in us to again, honor us by us receiving 80% of our business as a direct award, never going out to a competitive tender. Our client relationship is aligned. our client relationship is aligned I mentioned earlier that we're the architect, as well as the builder. i mentioned earlier that we're the architect as well as the builder We are sitting there at the table, working with them intimately to design the architecture to meet their economical hurdle rates , two to three years in advance of that project actually moving into the execution phase. we are sitting there at the table working with them intimately to design the architecture to meet their economical hurdle rates , two to three years in advance of that project actually moving into the execution phase We are aligned from the beginning. T his is why they have the confidence in us to again, honor us by us receiving 80% of our business as a direct award, never going out to a competitive tender. we are aligned from the beginning. t his is why they have the confidence in us to again honor us by us receiving 80% of our business as a direct award never going out to a competitive tender It was all about getting those aligned. Now, maybe to further answer your question, Marc, is it over? Have we achieved that outcome? Yes, but only partially, because we're only about 1/3 of the way through this journey. We still have significant areas that we are convinced that we can reduce cycle time, and improve the certainty of the outcome, hence improving clients' project returns offshore, which will lead to greater value to us and to our shareholders at the same time. It was all about getting those aligned. it was all about getting those aligned Now, maybe to further answer your question, Marc, is it over? now maybe to further answer your question marc is it over Have we achieved that outcome? have we achieved that outcome Yes, but only partially, because we're only about 1/3 of the way through this journey. yes but only partially because we're only about 1/3 of the way through this journey We still have significant areas that we are convinced that we can reduce cycle time, and improve the certainty of the outcome, hence improving clients' project returns offshore, which will lead to greater value to us and to our shareholders at the same time. we still have significant areas that we are convinced that we can reduce cycle time and improve the certainty of the outcome hence improving clients' project returns offshore which will lead to greater value to us and to our shareholders at the same time

Speaker 2: I'm sure this is a question on everybody's mind, is, how do we translate that opportunity into margin upside or business throughput or something that I can put in a spreadsheet? What do I do with that? I'm sure this is a question on everybody's mind, is, how do we translate that opportunity into margin upside or business throughput or something that I can put in a spreadsheet? i'm sure this is a question on everybody's mind, is how do we translate that opportunity into margin upside or business throughput or something that i can put in a spreadsheet What do I do with that? what do i do with that

Speaker 1: Look, let's just look at what's happened so far. I think the numbers speak for themselves. You've seen incremental margins that we've been able to deliver. Again, I shy away from talking about it, because it's more important for me to focus on my clients' returns and my clients' project returns. Yes, we benefit from it as well. This isn't a concept that I'm trying to convince you of here today. This is the way we've been operating. Remember, January 17, 2017, we created TechnipFMC. November of 2017, we launched Subsea 2.0. This has been going on for a while. 50% of our inbound in 2024 has been IEPCI or these integrated projects. We've said this year, Subsea 2.0 is well over 50% of our inbound. This is happening today. Look, let's just look at what's happened so far. look let's just look at what's happened so far I think the numbers speak for themselves. i think the numbers speak for themselves You've seen incremental margins that we've been able to deliver. you've seen incremental margins that we've been able to deliver Again, I shy away from talking about it, because it's more important for me to focus on my clients' returns and my clients' project returns. again i shy away from talking about it because it's more important for me to focus on my clients' returns and my clients' project returns Yes, we benefit from it as well. yes we benefit from it as well This isn't a concept that I'm trying to convince you of here today. this isn't a concept that i'm trying to convince you of here today This is the way we've been operating. this is the way we've been operating Remember, January 17, 2017, we created TechnipFMC. remember january 17 2017 we created technipfmc November of 2017, we launched Subsea 2.0. november of 2017 we launched subsea 2.0 This has been going on for a while. 50% of our inbound in 2024 has been IEPCI or these integrated projects. this has been going on for a while 50% of our inbound in 2024 has been iepci or these integrated projects We've said this year, Subsea 2.0 is well over 50% of our inbound. we've said this year subsea 2.0 is well over 50% of our inbound This is happening today. this is happening today Our customers are realizing, we have delivered iEPCI 2.0 projects multiple times for our customers today, so they're experiencing it already and they're seeing that benefit. You see what we've been able to deliver. We've already given 2026 guidance, which I think is probably unusual for most companies. We've already done it. We're a backlog company. We have significant visibility. Yes, it included more revenue and more margin. Our customers are realizing, we have delivered iEPCI 2.0 projects multiple times for our customers today, s o they're experiencing it already and they're seeing that benefit. our customers are realizing we have delivered iepci 2.0 projects multiple times for our customers today, s o they're experiencing it already and they're seeing that benefit You see what we've been able to deliver. you see what we've been able to deliver We've already given 2026 guidance, which I think is probably unusual for most companies. we've already given 2026 guidance which i think is probably unusual for most companies We've already done it. we've already done it We're a backlog company. we're a backlog company We have significant visibility. we have significant visibility Yes, it included more revenue and more margin. yes it included more revenue and more margin I think you're seeing it build out. We believe that as we continue to convert more of our backlog to this higher value backlog, iEPCI and 2.0, both for our clients and for ourselves, we'll continue to be able to grow margin as a result of more of that flowing through our execution. You're building that sustainability that is not necessarily driven by external factors. It's because of the difficult decisions we made almost 10 years ago, and realizing the benefit of those now in our results. I think you're seeing it build out. i think you're seeing it build out We believe that as we continue to convert more of our backlog to this higher value backlog, iEPCI and 2.0, both for our clients and for ourselves, we'll continue to be able to grow margin as a result of more of that flowing through our execution. we believe that as we continue to convert more of our backlog to this higher value backlog iepci and 2.0 both for our clients and for ourselves we'll continue to be able to grow margin as a result of more of that flowing through our execution You're building that sustainability that is not necessarily driven by external factors. you're building that sustainability that is not necessarily driven by external factors It's because of the difficult decisions we made almost 10 years ago, and realizing the benefit of those now in our results. it's because of the difficult decisions we made almost 10 years ago and realizing the benefit of those now in our results

Speaker 2: I think someone had asked the question recently about, where can margins go? I think you gave a really interesting answer like, "Well, I do not want to have a target, and I do not want to give targets to my people because we get some other benefit from them thinking through how to do that." Maybe you could just talk a little bit more about that because there are some interesting organizational things that you guys are doing, that I do not think comes out as often as it could. I think someone had asked the question recently about, where can margins go? i think someone had asked the question recently about where can margins go I think you gave a really interesting answer like, "Well, I do not want to have a target, and I do not want to give targets to my people because we get some other benefit from them thinking through how to do that." Maybe you could just talk a little bit more about that because there are some interesting organizational things that you guys are doing, that I do not think comes out as often as it could. i think you gave a really interesting answer like "well i do not want to have a target and i do not want to give targets to my people because we get some other benefit from them thinking through how to do that." maybe you could just talk a little bit more about that because there are some interesting organizational things that you guys are doing that i do not think comes out as often as it could

Speaker 1: Sure. I knew I was not going to get away with the prior answer, Marc, so I knew you were going to follow up and that is a fair question. Look, we get asked that question a lot because there is obviously interest. What I have said, and I appreciate you saying it was an acceptable answer. In some ways, I could understand people may not be satisfied with it, but it is the truth, which is I do not know where the margins are going to go. That does not mean I am worried about them going down. Let us be clear. I do not know where they are going to go because again, this is a new experience for us as well. Sure. sure I knew I was not going to get away with the prior answer, Marc, so I knew you were going to follow up and that is a fair question. i knew i was not going to get away with the prior answer marc so i knew you were going to follow up and that is a fair question Look, we get asked that question a lot because there is obviously interest. look we get asked that question a lot because there is obviously interest What I have said, and I appreciate you saying it was an acceptable answer. what i have said and i appreciate you saying it was an acceptable answer In some ways, I could understand p eople may not be satisfied with it, but it is the truth, which is I do not know where the margins are going to go. in some ways i could understand p eople may not be satisfied with it but it is the truth which is i do not know where the margins are going to go That does not mean I am worried about them going down. Let us be clear. that does not mean i am worried about them going down. let us be clear I do not know where they are going to go because again, this is a new experience for us as well. i do not know where they are going to go because again this is a new experience for us as well What I do know is that we have real tangible evidence that the cadence and the flow rate, and our ability to be able to deliver these complex projects in shorter and shorter cycle times. We're not shaving days. We're shaving months and years off of a project on a consistent basis. We know, as I said earlier, we're only in the early innings, or I'm a hockey player, so we're only in the first period of a three-period match here. I mean, there's a lot left to be done. Look, me setting a target in this environment, I do think would be counterproductive, because the organization where we have gone as an organization is dramatically different than where we were just five years ago. What I do know is that we have real tangible evidence that the cadence and the flow rate, and our ability to be able to deliver these complex projects in shorter and shorter cycle times. what i do know is that we have real tangible evidence that the cadence and the flow rate and our ability to be able to deliver these complex projects in shorter and shorter cycle times We're not shaving days. we're not shaving days We're shaving months and years off of a project on a consistent basis. we're shaving months and years off of a project on a consistent basis We know, as I said earlier, we're only in the early innings, or I'm a hockey player, so we're only in the first period of a three-period match here. we know as i said earlier we're only in the early innings or i'm a hockey player so we're only in the first period of a three-period match here I mean, there's a lot left to be done. i mean there's a lot left to be done Look, me setting a target in this environment, I do think would be counterproductive, because the organization where we have gone as an organization is dramatically different than where we were just five years ago. look me setting a target in this environment i do think would be counterproductive because the organization where we have gone as an organization is dramatically different than where we were just five years ago Everybody talks about transformations and I get it, but would love for you to come and see how we operate today. It is a very different company. I had to change my behavior significantly. As a result of that, you have truly empowered 22,000 women and men. The output from that is just tremendous. Everybody is looking to shave a minute, an hour, a day in everything that they are doing. This is really lean. I mean, we have tried to model a lot after Toyota, who has been hugely successful in this area. They have been very supportive in the Lean Institute, in helping us through this journey. A lot of companies get lean through their manufacturing, and then they stop. Everybody talks about transformations and I get it, but would love for you to come and see how we operate today. everybody talks about transformations and i get it but would love for you to come and see how we operate today It is a very different company. it is a very different company I had to change my behavior significantly. i had to change my behavior significantly As a result of that, you have truly empowered 22,000 women and men. as a result of that, you have truly empowered 22,000 women and men The output from that is just tremendous. Everybody is looking to shave a minute, an hour, a day in everything that they are doing. the output from that is just tremendous. everybody is looking to shave a minute an hour a day in everything that they are doing This is really lean. this is really lean I mean, we have tried to model a lot after Toyota, who has been hugely successful in this area. They have been very supportive in the Lean Institute, in helping us through this journey. i mean we have tried to model a lot after toyota who has been hugely successful in this area. they have been very supportive in the lean institute in helping us through this journey A lot of companies get lean through their manufacturing, and then they stop. a lot of companies get lean through their manufacturing and then they stop We've taken this through the entire organization, every function, every person, including myself has had to transform their behavior in the way that they work, to where we're all focused on the same thing, which is the output, which is relentless pursuit of reduction of cycle time, i.e., improving our clients' results. Our clients see that. This is all about the clients being successful, and then we're successful as a result of that. The cultural change within the company is dramatic. Yeah, maybe I'll pause there, but what I do know is that there's certainly more fuel in the tank. We have a higher quality backlog than what we're executing today, because of what we're putting into it, more iEPCI, more 2.0, higher quality, all that will need to be executed. We've taken this through the entire organization, every function, every person, including myself has had to transform their behavior in the way that they work, to where we're all focused on the same thing, which is the output, which is relentless pursuit of reduction of cycle time, i.e., improving our clients' results. we've taken this through the entire organization every function every person including myself has had to transform their behavior in the way that they work to where we're all focused on the same thing which is the output which is relentless pursuit of reduction of cycle time i.e improving our clients' results Our clients see that. our clients see that This is all about the clients being successful, and then we're successful as a result of that. this is all about the clients being successful and then we're successful as a result of that The cultural change within the company is dramatic. the cultural change within the company is dramatic Yeah, maybe I'll pause there, but what I do know is that there's certainly more fuel in the tank. yeah maybe i'll pause there but what i do know is that there's certainly more fuel in the tank We have a higher quality backlog than what we're executing today, because of what we're putting into it, m ore iEPCI, more 2.0, higher quality, a ll that will need to be executed. we have a higher quality backlog than what we're executing today because of what we're putting into it, m ore iepci more 2.0 higher quality, a ll that will need to be executed Today, it's another third, not to be confused with the prior third, but only about a third of our manufacturing capacity is actually executing Subsea 2.0 work today, yet 50% of the inbound is coming in at 2.0. By definition, as that flows through manufacturing, that will go to 50%. We should see a benefit from that. Again, I just want to keep repeating this because this is the key. It's not about our margin going up. It's about our clients' project returns improving, and as a result of that, our margins going up. That's how you keep the relationship with your customers. Today, it's another third, not to be confused with the prior third, but only about a third of our manufacturing capacity is actually executing Subsea 2.0 work today, yet 50% of the inbound is coming in at 2.0. today it's another third not to be confused with the prior third but only about a third of our manufacturing capacity is actually executing subsea 2.0 work today yet 50% of the inbound is coming in at 2.0 By definition, as that flows through manufacturing, that will go to 50%. by definition as that flows through manufacturing that will go to 50% We should see a benefit from that. we should see a benefit from that Again, I just want to keep repeating this because this is the key. again i just want to keep repeating this because this is the key It's not about our margin going up. it's not about our margin going up It's about our clients' project returns improving, and as a result of that, our margins going up. it's about our clients' project returns improving and as a result of that our margins going up That's how you keep the relationship with your customers. that's how you keep the relationship with your customers

Speaker 2: Yep. On the topic of lean, I think this is what you were alluding to on the earnings call, where there is sort of an opportunity to start to leverage lean maybe further downstream into some of the development. Is there anything more you can say about that? If there is a plan to say more in the future, when should we be expecting to hear more from you about that? Yep. yep On the topic of lean, I think this is what you were alluding to on the earnings call, where there is sort of an opportunity to start to leverage lean maybe further downstream into some of the development. on the topic of lean i think this is what you were alluding to on the earnings call where there is sort of an opportunity to start to leverage lean maybe further downstream into some of the development Is there anything more you can say about that? is there anything more you can say about that If there is a plan to say more in the future, when should we be expecting to hear more from you about that? if there is a plan to say more in the future when should we be expecting to hear more from you about that

Speaker 1: Okay. Let's just go back quickly through the history of it. In 2013, we launched this concept of configurable architecture, started working with the Lean Institute on this. We were FMC Technologies at the time. Our scope was the seabed. FMC Technologies was everything that sat on the seabed, which by the way, everybody talks about a subsea tree. It's far greater than a subsea tree. Everything's big, the size of this room, and it's a small city down there. A lot of things are on the seabed, but the seabed needs to be reconnected to the surface. That's led to some smart people in the company saying, "Maybe we should do an integrated approach, not do a consolidation, but do an integration." That's the area that Technip played in, if you will, in the water column. That's called umbilical risers and flowlines. Okay. okay Let's just go back quickly through the history of it. let's just go back quickly through the history of it In 2013, we launched this concept of configurable architecture, started working with the Lean Institute on this. in 2013 we launched this concept of configurable architecture started working with the lean institute on this We were FMC Technologies at the time. we were fmc technologies at the time Our scope was the seabed. our scope was the seabed FMC Technologies was everything that sat on the seabed, which by the way, everybody talks about a subsea tree. fmc technologies was everything that sat on the seabed which by the way everybody talks about a subsea tree It's far greater than a subsea tree. it's far greater than a subsea tree Everything's big, the size of this room, and it's a small city down there. everything's big the size of this room and it's a small city down there A lot of things are on the seabed, but the seabed needs to be reconnected to the surface. a lot of things are on the seabed but the seabed needs to be reconnected to the surface That's led to some smart people in the company saying, "Maybe we should do an integrated approach, not do a consolidation, but do an integration." That's the area that Technip played in, if you will, in the water column. that's led to some smart people in the company saying "maybe we should do an integrated approach not do a consolidation but do an integration." that's the area that technip played in if you will in the water column That's called umbilical risers and flowlines. that's called umbilical risers and flowlines We brought that into the portfolio. We created the iEPCI, the integrated commercial model that we've talked about, again about shortening cycle time, removing redundancy. We've never really taken the opportunity yet to take all of those products, and fully move those to be configurable, okay? Just because it takes a while. As I mentioned, 2013 and 2017 as we went public with the seabed, you should expect that now that's the benefit of becoming one company. We couldn't have done that in a joint venture or an alliance, because your interests are not aligned enough. That's why we did the merger. Now we're looking at all of that other architecture, which there's a significant amount in the water column. We brought that into the portfolio. we brought that into the portfolio We created the iEPCI, the integrated commercial model that we've talked about, again about shortening cycle time, removing redundancy. we created the iepci the integrated commercial model that we've talked about again about shortening cycle time removing redundancy We've never really taken the opportunity yet to take all of those products, and fully move those to be configurable, okay? we've never really taken the opportunity yet to take all of those products and fully move those to be configurable okay Just because it takes a while. just because it takes a while As I mentioned, 2013 and 2017 as we went public with the seabed, y ou should expect that now that's the benefit of becoming one company. as i mentioned 2013 and 2017 as we went public with the seabed, y ou should expect that now that's the benefit of becoming one company We couldn't have done that in a joint venture or an alliance, because your interests are not aligned enough. we couldn't have done that in a joint venture or an alliance because your interests are not aligned enough That's why we did the merger. that's why we did the merger Now we're looking at all of that other architecture, which there's a significant amount in the water column. now we're looking at all of that other architecture which there's a significant amount in the water column Remember, when we talk about water column and subsea, and this stuff just gets me super excited, and I know it might not get everyone excited, but we're talking 1mi-2mi deep, 1mi-2mi of water before you get to the seabed. This stuff is pretty amazing. Down there, where no man has ever been, all remote automation and control robotics. We have robots on the seabed working on stuff. You just can't go down there. Now we have the opportunity to take 2.0 and apply it to all of that other part of the architecture. We've been working on that and we're making good progress, but that's an upside and that's what I was referring to. Remember, when we talk about water column and subsea, and this stuff just gets me super excited, and I know it might not get everyone excited, but we're talking 1mi-2mi deep, 1mi-2mi of water before you get to the seabed. remember when we talk about water column and subsea and this stuff just gets me super excited and i know it might not get everyone excited but we're talking 1mi-2mi deep 1mi-2mi of water before you get to the seabed This stuff is pretty amazing. this stuff is pretty amazing Down there, where no man has ever been, all remote automation and control robotics. down there where no man has ever been all remote automation and control robotics We have robots on the seabed working on stuff. we have robots on the seabed working on stuff You just can't go down there. you just can't go down there Now we have the opportunity to take 2.0 and apply it to all of that other part of the architecture. now we have the opportunity to take 2.0 and apply it to all of that other part of the architecture We've been working on that and we're making good progress, but that's an upside and that's what I was referring to. we've been working on that and we're making good progress but that's an upside and that's what i was referring to

Speaker 2: Okay, great. Maybe to talk a little bit about kind of the current market state, the outlook. You have guided to and have been delivering on $10 billion of orders in subsea per year. From an outsider, that is a remarkably consistent number. Is there something that drives that? There is a certain amount of sales capacity to work through projects with customers, maybe there is the customer's capacity, is there any reason that 10 is a magical number or is it just maybe coincidence that we have seen 10 for three years? Okay, g reat. okay, g reat Maybe to talk a little bit about kind of the current market state, the outlook. maybe to talk a little bit about kind of the current market state the outlook You have guided to and have been delivering on $10 billion of orders in subsea per year. you have guided to and have been delivering on $10 billion of orders in subsea per year From an outsider, that is a remarkably consistent number. from an outsider that is a remarkably consistent number Is there something that drives that? There is a certain amount of sales capacity to work through projects with customers, m aybe there is the customer's capacity, i s there any reason that 10 is a magical number or is it just maybe coincidence that we have seen 10 for three years? is there something that drives that? there is a certain amount of sales capacity to work through projects with customers, m aybe there is the customer's capacity, i s there any reason that 10 is a magical number or is it just maybe coincidence that we have seen 10 for three years

Speaker 1: I'm just going to have a little fun, right? Better than nine, right? Let's go back to how the 10 came to be, because I think that's important. 2021, wouldn't have been as many people in the room, and probably wouldn't have been as many people on the line. 2021 was a very different setup. There was a lot of skepticism. We're out there saying projects are there. We're talking to our clients. Capital is going to flow to the offshore again, and a whole lot of doubt and a whole lot of skepticism. In 2021, we put out a three-year target. The target was, over the next three years, we would achieve $30 billion. Now, we did that with a lot of science behind it, but we gave a $30 billion target over three years, never intending that it was going to be 10, 10, 10. I'm just going to have a little fun, right? i'm just going to have a little fun right Better than nine, right? better than nine right Let's go back to how the 10 came to be, because I think that's important. 2021, wouldn't have been as many people in the room, and probably wouldn't have been as many people on the line. 2021 was a very different setup. let's go back to how the 10 came to be because i think that's important 2021 wouldn't have been as many people in the room and probably wouldn't have been as many people on the line 2021 was a very different setup There was a lot of skepticism. there was a lot of skepticism We're out there saying projects are there. we're out there saying projects are there We're talking to our clients. we're talking to our clients Capital is going to flow to the offshore again, and a whole lot of doubt and a whole lot of skepticism. capital is going to flow to the offshore again and a whole lot of doubt and a whole lot of skepticism In 2021, we put out a three-year target. in 2021 we put out a three-year target The target was, over the next three years, we would achieve $30 billion. the target was over the next three years we would achieve $30 billion Now, we did that with a lot of science behind it, but we gave a $30 billion target over three years, never intending that it was going to be 10, 10, 10. now we did that with a lot of science behind it but we gave a $30 billion target over three years never intending that it was going to be 10 10 10 By the way, it has not been. It has been $9.7 billion, $10.3 billion, but we were not expecting it to be as consistent as it was, because some of the projects we do are $1 billion, $1.5 billion projects. They could fall on December 31st or they could fall on January 2nd, and you do not control the timing of that. Really hard to do on an annual basis. It has just so happened to have been actually quite linear beyond what I would have expected. We set a three-year target of $30 billion, which I think it is important to go back and realize that. We weren't saying it's going to be $10 billion, we did not say it was going to be $10 billion per year every year for the next three years. By the way, it has not been. by the way, it has not been It has been $9.7 billion, $10.3 billion, but we were not expecting it to be as consistent as it was, because some of the projects we do are $1 billion, $1.5 billion projects. T hey could fall on December 31st or they could fall on January 2nd, and you do not control the timing of that. it has been $9.7 billion $10.3 billion but we were not expecting it to be as consistent as it was because some of the projects we do are $1 billion $1.5 billion projects. t hey could fall on december 31st or they could fall on january 2nd and you do not control the timing of that Really hard to do on an annual basis. really hard to do on an annual basis It has just so happened to have been actually quite linear beyond what I would have expected. it has just so happened to have been actually quite linear beyond what i would have expected We set a three-year target of $30 billion, which I think it is important to go back and realize that. we set a three-year target of $30 billion which i think it is important to go back and realize that We weren't saying it's going to be $10 b illion, w e did not say it was going to be $10 billion per year every year for the next three years. we weren't saying it's going to be $10 b illion, w e did not say it was going to be $10 billion per year every year for the next three years We just said it was going to get to $30 billion. Now, we said for 2026, we have already said we expect it to look like 2025, which will be the $10 billion range. We do expect that again next year. The market size is growing. We have talked about that because of the capital flows going offshore again. We see exploration happening. That is going to drive more capital flows and more projects. That market is going to grow. Is there the capacity to grow? Yes. I think we are in a good spot right now with revenue growing, EBITDA growing, solid inbound, meaning backlog continuing to grow, I think is a good place to be. We just said it was going to get to $30 billion. we just said it was going to get to $30 billion Now, we said for 2026, we have already said we expect it to look like 2025, which will be the $10 billion range. now we said for 2026, we have already said we expect it to look like 2025 which will be the $10 billion range We do expect that again next year. we do expect that again next year The market size is growing. We have talked about that because of the capital flows going offshore again. the market size is growing. we have talked about that because of the capital flows going offshore again We see exploration happening. That is going to drive more capital flows and more projects. we see exploration happening. that is going to drive more capital flows and more projects That market is going to grow. that market is going to grow Is there the capacity to grow? is there the capacity to grow Yes. yes I think we are in a good spot right now with revenue growing, EBITDA growing, solid inbound, meaning backlog continuing to grow, I think is a good place to be. i think we are in a good spot right now with revenue growing ebitda growing solid inbound meaning backlog continuing to grow i think is a good place to be

Speaker 2: We just got a few minutes left, and I have a couple I want to ask on cash flow before we get there. Just in terms of the frontier market opportunities that you're talking to customers about. I think we all know, all right, Suriname, Namibia, maybe West Africa starts to come back. Maybe there's equatorial margin in Brazil. We know the subsea opportunity slide. What's the next stuff? When we update the subsea opportunity slide a year from now, two years from now, what's going to be on there that isn't on there now? Geographically wise, not customer-wise or anything like that. We just got a few minutes left, and I have a couple I want to ask on cash flow before we get there. we just got a few minutes left and i have a couple i want to ask on cash flow before we get there Just in terms of the frontier market opportunities that you're talking to customers about. just in terms of the frontier market opportunities that you're talking to customers about I think we all know, all right, Suriname, Namibia, maybe West Africa starts to come back. i think we all know all right suriname namibia maybe west africa starts to come back Maybe there's equatorial margin in Brazil. maybe there's equatorial margin in brazil We know the subsea opportunity slide. we know the subsea opportunity slide What's the next stuff? what's the next stuff When we update the subsea opportunity slide a year from now, two years from now, what's going to be on there that isn't on there now? when we update the subsea opportunity slide a year from now two years from now what's going to be on there that isn't on there now Geographically wise, not customer- wise or anything like that. geographically wise not customer- wise or anything like that

Speaker 1: Yeah. I know we're going to run out of time, but I got to step back for a minute. Imagine what Marc just said. What he just said was, four countries that were not on the map before from offshore production or from production period. In my career, there has never been a period of time where in a couple of years you have added four. It is just profound. I just want to be careful. Oh, Suriname, Guyana, Namibia, Mozambique, Holy heck. This is amazing. This is truly amazing. I think we are taking it for granted, not you, Marc, but I just want to make sure that we realize this is significant. The growth in Guyana, where we are honored and humbled to be partnered with ExxonMobil and have provided 100% of their infrastructure in the country. Yeah. I know we're going to run out of time, but I got to step back for a minute. yeah. i know we're going to run out of time but i got to step back for a minute Imagine what Marc just said. imagine what marc just said What he just said was, four countries that were not on the map before from offshore production or from production period. what he just said was four countries that were not on the map before from offshore production or from production period In my career, there has never been a period of time where in a couple of years you have added four. in my career there has never been a period of time where in a couple of years you have added four It is just profound. it is just profound I just want to be careful. i just want to be careful Oh, Suriname, Guyana, Namibia, Mozambique, Holy heck. oh suriname guyana namibia mozambique holy heck This is amazing. this is amazing This is truly amazing. this is truly amazing I think we are taking it for granted, not you, Marc, but I just want to make sure that we realize this is significant. i think we are taking it for granted not you marc but i just want to make sure that we realize this is significant The growth in Guyana, where we are honored and humbled to be partnered with ExxonMobil and have provided 100% of their infrastructure in the country. the growth in guyana where we are honored and humbled to be partnered with exxonmobil and have provided 100% of their infrastructure in the country Suriname, we will do the first project there, the GranMorgu project for TotalEnergies. We're very grateful for that. iEPCI 2.0, Mozambique. We're working for Eni in Mozambique today. It's profound. I mean, don't understate equatorial margin, you even threw in there. Equatorial margin is potentially another massive development. Now, this is in Brazil, which is already a large oil-producing country, but this could be another massive growth opportunity within Brazil. The Paleogene in the Gulf of Mexico. This is the 20,000 PSI deeper horizon in the U.S. Gulf. I mean, this is dramatic. This is dramatic. These are providing significant growth to the offshore, that even without what are all those other countries that are potentially going to come online, just focus on those. Those are real. Those are material. Suriname, we will do the first project there, the GranMorgu project for TotalEnergies. suriname we will do the first project there the granmorgu project for totalenergies We're very grateful for that. iEPCI 2.0, Mozambique. we're very grateful for that iepci 2.0 mozambique We're working for Eni in Mozambique today. we're working for eni in mozambique today It's profound. it's profound I mean, don't understate equatorial margin, you even threw in there. i mean don't understate equatorial margin you even threw in there Equatorial margin is potentially another massive development. equatorial margin is potentially another massive development Now, this is in Brazil, which is already a large oil- producing country, but this could be another massive growth opportunity within Brazil. now this is in brazil which is already a large oil- producing country but this could be another massive growth opportunity within brazil The Paleogene in the Gulf of Mexico. the paleogene in the gulf of mexico This is the 20,000 PSI deeper horizon in the U.S. this is the 20,000 psi deeper horizon in the u.s Gulf. gulf I mean, this is dramatic. i mean this is dramatic This is dramatic. this is dramatic T hese are providing significant growth to the offshore, that even without what are all those other countries that are potentially going to come online, just focus on those. t hese are providing significant growth to the offshore that even without what are all those other countries that are potentially going to come online just focus on those Those are real. those are real Those are material. those are material Those are going to drive activity well beyond the end of the decade. Now, to answer your question, I get interested in other countries in East Africa. I won't be specific, but there's other areas in East Africa that could potentially share the same geological feature as Mozambique. I get excited about the Eastern Mediterranean. I think both the activities from Israel to Egypt, but now in between, that could also come on. You could add two to three new countries producing in the Eastern Med. I get interested in the southern part of Africa beyond Namibia, which is obviously very exciting, but beyond Namibia. Those are going to drive activity well beyond the end of the decade. those are going to drive activity well beyond the end of the decade Now, to answer your question, I get interested in other countries in East Africa. now to answer your question i get interested in other countries in east africa I won't be specific, but there's other areas in East Africa that could potentially share the same geological feature as Mozambique. i won't be specific but there's other areas in east africa that could potentially share the same geological feature as mozambique I get excited about the Eastern Mediterranean. i get excited about the eastern mediterranean I think both the activities from Israel to Egypt, but now in between, that could also come on. i think both the activities from israel to egypt but now in between that could also come on You could add two to three new countries producing in the Eastern Med. you could add two to three new countries producing in the eastern med I get interested in the southern part of Africa beyond Namibia, which is obviously very exciting, but beyond Namibia. i get interested in the southern part of africa beyond namibia which is obviously very exciting but beyond namibia We didn't mention Indonesia. Yes, it's been a long-term producing, energy country, but now with the gas projects in Indonesia, that is growing quite rapidly. There's other areas that are probably further out. There's large gas reserves offshore Colombia. It's very deep water, but it's certainly something technically we could accomplish for our customers. Yeah, there's a lot more to be excited about, but realize, the setup that's there already is significant and material. We didn't mention Indonesia. we didn't mention indonesia Yes, it's been a long-term producing, energy country, but now with the gas projects in Indonesia, that is growing quite rapidly. yes it's been a long-term producing energy country but now with the gas projects in indonesia that is growing quite rapidly There's other areas that are probably further out. there's other areas that are probably further out There's large gas reserves offshore Colombia. there's large gas reserves offshore colombia It's very deep water, but it's certainly something technically we could accomplish for our customers. it's very deep water but it's certainly something technically we could accomplish for our customers Yeah, there's a lot more to be excited about, but realize, the setup that's there already is significant and material. yeah there's a lot more to be excited about but realize the setup that's there already is significant and material

Speaker 2: Excellent, all right. I'm going to squeeze one more in, and we're probably going to go over. You just had a buyback reauthorization. You've been consistently buying back a lot of stock. I think your message before had been, we're really focused on buying back the stock rather than raising the dividend. As something that occurs to me, it could be a signal to send to the market about the stability of the business if you raise the dividend. How do you think about the decision process between buyback and dividend? Excellent, a ll right. excellent, a ll right I'm going to squeeze one more in, and we're probably going to go over. i'm going to squeeze one more in and we're probably going to go over You just had a buyback reauthorization. you just had a buyback reauthorization You've been consistently buying back a lot of stock. you've been consistently buying back a lot of stock I think your message before had been, we're really focused on buying back the stock rather than raising the dividend. i think your message before had been we're really focused on buying back the stock rather than raising the dividend As something that occurs to me, it could be a signal to send to the market about the stability of the business if you raise the dividend. as something that occurs to me it could be a signal to send to the market about the stability of the business if you raise the dividend How do you think about the decision process between buyback and dividend? how do you think about the decision process between buyback and dividend

Speaker 1: No, it's a fair question. Look, it is one that we discuss often with our board, and certainly last quarter before we announced the increase of the buyback program. Let me be very clear. What we announced was a $2 billion buyback. That's a large portion of the outstanding shares of the company. The reason I'm emphasizing that is I think that exudes confidence, right? It's not that a dividend would exude more confidence than a $2 billion buyback on top of what previously had been a much smaller buyback program. No, it's a fair question. no it's a fair question Look, it is one that we discuss often with our board, and certainly last quarter before we announced the increase of the buyback program. look it is one that we discuss often with our board and certainly last quarter before we announced the increase of the buyback program Let me be very clear. let me be very clear What we announced was a $2 billion buyback. what we announced was a $2 billion buyback That's a large portion of the outstanding shares of the company. that's a large portion of the outstanding shares of the company The reason I'm emphasizing that is I think that exudes confidence, right? the reason i'm emphasizing that is i think that exudes confidence right It's not that a dividend would exude more confidence than a $2 billion buyback on top of what previously had been a much smaller buyback program. it's not that a dividend would exude more confidence than a $2 billion buyback on top of what previously had been a much smaller buyback program Look, we think it's a great investment. Just look at the numbers. Just look at the fundamental metrics of the company. It looks like it should be trading at a much higher multiple. If you do a blind test and put those numbers against any industrial company, you're going to get a very different result. We believe that. We believe the investment community is recognizing and acknowledging that. Therefore, we believe that's the best place to return the cash to our shareholders. We are honored to be able to do so. Look, we think it's a great investment. look we think it's a great investment Just look at the numbers. just look at the numbers Just look at the fundamental metrics of the company. just look at the fundamental metrics of the company It looks like it should be trading at a much higher multiple. it looks like it should be trading at a much higher multiple If you do a blind test and put those numbers against any industrial company, you're going to get a very different result. if you do a blind test and put those numbers against any industrial company you're going to get a very different result We believe that. we believe that We believe the investment community is recognizing and acknowledging that. we believe the investment community is recognizing and acknowledging that Therefore, we believe that's the best place to return the cash to our shareholders. therefore we believe that's the best place to return the cash to our shareholders We are honored to be able to do so. we are honored to be able to do so

Speaker 2: Awesome, we'll leave it there. Doug, thanks a lot. Awesome, w e'll leave it there. awesome, w e'll leave it there Doug, t hanks a lot. doug, t hanks a lot

Speaker 1: Thank you all. Thank you all. thank you all