TechnipFMC CEO. Doug, thank you for taking the time. Thank you for having us, and thank you to Goldman Sachs for a very productive day so far. Appreciate that. Doug, maybe we start high level. If you can spend a few minutes talking about your view of the macro, how that's playing out, and, maybe how you see your business feeding into that macro from that perspective. Sure, thank you. So when we look at the macro, our primary business is focused on the offshore, more specifically to the subsea. We are really observing where the, you know, the capital flows and where the capital flows are going. The capital flows are really driven by a few fundamentals. One is access, access to those parts of the world or to those reserves. The second is economics. And the third is the regulatory environment. And there's been a structural change. We started talking about this now five, six years ago, but it's really becoming, I think, evident and more widely accepted, or I would even dare to say, you know, accepted by everyone, which is there's this real structural change happening offshore because, you know, if you break up the world between kind of the Middle East, the offshore, and the North America market, they're very different fundamentals in terms of access, you know, great access in the U.S., but maybe the economics are a bit more challenging. If you look at Saudi or the Middle East and more generally, the access is more limited to external capital, but the economics are quite strong. But where they all come together in a perfect storm, if you will, is in the offshore, both in terms of access, in terms of the economics, and as well as in terms of the regulatory environment and the stability. So when you put those together, it's attracting the capital today. On top of that, we see emerging countries, so if you will, new opportunities that simply haven't existed. And the amount of new opportunities for the offshore region is far beyond what it's ever been in, certainly in my career. And you know, we all talk about Guyana. We know about Guyana. We're super proud to be part of the, you know, Guyana and working with ExxonMobil, Hess and their partners in Guyana. But other countries are looking to do something similar, and the reserves are there, the seismic is there, the exploration drilling has been completed. So they're trying to pull themselves forward in the queue to try to attract that capital to make sure that their reserves also get into the energy mix. So the dynamic right now offshore, well, pardon the pun, but it's much more dynamic than it's ever been. The opportunity set is far richer than it's ever been. And, you know, we are, we believe, very uniquely positioned in that market. Doug, you've also gone through, over a longer period of time, there's been a business model change, and you've gone through a few changes in how you price customers and how you think about the whole equation. Maybe if you can help us understand what that change has been, where you are today, where you see that evolving over time. Sure. And you'll have to cut me off 'cause this is one I could go on for a very long time. 'cause it's been a journey, and it's been a complex journey, but the journey is behind us, right? So that's the main message is we, we've done the difficult, the bold, the complex moves. We're now fully focused on executing and moving forward and seeing the benefits of that. So I'll try to be as brief as I can, but you, you had an industry that was always admired. I mean, what we do is pretty fascinating. The type of technology challenges that we face are very similar to NASA. NASA is probably the, the partner that we collaborate most, from a technology point of view, be it from automation and control, be it from material sciences. The atmospheric conditions that NASA has to deal with are at a similar magnitude of technical challenges what we deal with on the seafloor. Many people think of the seafloor as, you know, I don't know, diving down and, you know, picking up seashells. You know, where we are placing this equipment is one mile to two miles deep in the water column, so over 10,000 feet below the surface of the water. Extreme conditions in terms of, you know, corrosivity, in terms of pressure, and in terms of temperature. You have well fluid coming out that can be 350 degrees Fahrenheit, but you're in an environment on the seafloor that's about 35 degrees Fahrenheit. So that impact on the material is just absolutely dramatic. So it takes really advanced material science. And then it's 10 mi, or excuse me, two miles deep, 10,000 feet deep, has to survive a life, a lifespan of 20, 25-35 years depending upon the technology that's being used. And there's no real way to intervene other than through robotics. So it's all done with advanced automation and control and robotics. There's no human intervention. So it really is quite, you know, space age, if you will, technology that we do. The problem is we were in a scenario where every single project we were doing things for the first time. We were always doing first article. And when you do first article, you are in a bespoke model, which means you don't create leverage or you don't get any benefit of scalability. So if you will, you're somewhat limited in the value that you can create. At the same time, it was customary among our customers to do each project with a new or different piece of specifications, which led to a brand new piece of equipment, even for the same customer in the same region, one field to the other field, and we needed to find a way to move that forward, so when we looked at it, we saw, actually, there it was really three dimensions that needed to be addressed. The commercial model needed to be addressed, the product architecture needed to be addressed, and then thirdly, internally, we needed to address our operating model, and we've been working on all three of those, for as much as almost 10 years now. It led to the merger. It led to the creation of TechnipFMC, and now we're seeing the benefit of that. I'll pass it back to you if you wanna dive into those three categories. Yeah, sure. Maybe if you can go through each one of them. Maybe the technology side, you've spent a lot of time talking about Subsea 2.0, Configured to Order, how that improves your time efficiency. If you can talk about why that efficiency is important, what that is doing to your direct orders, and how that has stood out against what the industry practice has been. Okay, thank you. So Subsea 2.0 being, let's, you know, this new product architecture. So when we were doing the bespoke or the first article on every single project, you know, that's what it was. It was something we had never built before. We were gonna build it for the first time for use on that project, never to be used again, and that's what we did, and that's what, you know, how the industry kind of developed. Our customers understood that build, you know, the saying design one, build many, or standardization was beneficial. I mean, our customers clearly understood that. But there wasn't an option. You know, the only option was choose one supplier's architecture and make that the standard. Well, that didn't really work, right? Because think about the automotive industry. You don't wanna buy the same car as your neighbor, and the same car, same color, same configuration. You wanna have some input into that vehicle and how it's built for you. But the automotive manufacturer certainly doesn't wanna engineer and design one car and sell one car to you. So what the automotive industry figured out was configurability versus standardization. So we learned. We actually worked very closely with the Lean Institute and Toyota. They were very helpful and worked very closely with us to go and look at what we offer, this architecture on the seafloor, and really break it down into configurable components. So again, the easiest way to think about it is the automotive industry. The automotive industry has an automobile, has hundreds and, you know, has thousands of parts in it. Let's just think about the transmission. The transmission has thousands of parts. But when you order a car, you don't order the gears or the gear lube or the transmission casing. You either get a manual transmission or an automatic transmission, same as engine sizes and things. So they broke them down into configurable components, and then they gave you, the consumer, the option of configuring your own vehicle. Now, you get your vehicle delivered, you feel really good, your favorite auto manufacturer, whoever it is, built that just for you. Then you drive down the street, and if you have children, like my daughters, they point out that there's a car that looks just like yours a week after you bought it. And you realize they probably built thousands of this exact configuration. But when you ordered it, it felt like your own. This is what we've done with the subsea industry. So with the 2.0 configurable product architecture, we actually have an app now, so the client can go on their favorite device. They have scroll-down menus just like you do when you order your vehicle. It's how you order subsea equipment: 5,000, 10,000, 15,000, or 20,000 PSI, 200, 350, or 400 degrees Fahrenheit, flow module, no flow module, etc. When they do that, we go straight into assembly and test. Just like the automotive industry, they don't engineer that car for you. They assemble, test, and deliver that car for you. We assemble, test, deliver, and commission it on the seabed. So it's the same idea. That has taken out approximately nine months of engineering that was done at the time of order just to be able to place orders in the supply chain 'cause remember, these things had never been built before. There was something unique and different about what the client was asking for. So what that leads to then is a completely different operating model. So the second part is this different operating model that we now have, which allows us to use that leverage, to use that scalability. Things are interchangeable between projects, but even between clients now that before were from the time of the forging all the way through to the time of the final delivery, there was no way to change or alter that order. We now have much more flexibility and much more adaptability built into the way that we operate the company. This is created, again, from a business that had no leverage or scalability. We now have that built into the company today. We're just in the early stages of benefiting from that because we went through the whole process of the engineering. Four years, the most extensive engineering program we've ever done was to take this incredibly complex 'cause the architecture is bigger than the size of this ballroom. I mean, we have massive spreads on the seafloor, and we had to figure out a way how to get that down into these configurable components versus thousands of individual parts and then make it, take it out to our customers, make sure our customers accepted it, qualified it, and subscribed to it. We're, we've, you know, we've been commercial. We've been selling this now since 2017, late 2017. We introduced it into the market. It makes up about 50% of our orders. We're now seeing that flow through our manufacturing plant. Why is that exciting? 'Cause to me, 2025 and the future years are very exciting. The hard work is done, as I said before. Now we see it flow through the plant. It has fundamentally changed the efficiency of the company. We knew on paper, theoretically, that we should be able to double our throughput capacity. We've now demonstrated and exceeded doubling our capacity. So imagine the same capital investment, no new investment. I can put twice as much through the same footprint. And we're now finding out it's gonna be more than twice as much. We're learning as we go as we get more of this flowing through. So 50% of our orders, about 20, half of that is flowing through the plant. That'll continue to ramp up as it converts from orders into the manufacturing assembly and test. We're seeing the benefit of that now. It's actually an extremely exciting time for the company to see this come together. I didn't touch on the commercial model. I don't know if you wanna handle that. Please, please. And then the third element was, you know, to really fundamentally change the cycle time of offshore projects, which is really the key. Offshore projects have been notorious for being long, you know, expensive, and unfortunately, often not being delivered on time. So we recognized that to really make this a structural and sustainable change for the offshore capital flows, as we talked about early on, was we had actually make a fundamental change in the delivery model. So the commercial model or the delivery model is now what we call integrated projects, or I for integrated EPCI, Engineering, Procurement, Construction, and Installation. So we merged with Technip to create TechnipFMC so that we would have all of those capabilities under one roof. The result of that is when I take an iEPCI, an integrated project, along with the Subsea 2.0 and that faster cycle time, I can deliver a project approximately one year earlier than I used to and one year earlier than my competitor who still is in a 1.0 non-integrated world. It's created a tremendous moat around our company. We're humbled by that. We don't take it for granted. We continue to work on that every single day. We can talk about other technologies that we're working on, but it's, but it's been truly game-changing and positioned us uniquely in the industry. This has led to, if there's one number that you take away from this, it's led to 70%, 70% of our business being directly awarded to our company. This is just unheard of. Never goes out to competitive tender because what we have built is so unique, so differentiating, and, quite frankly, so interesting to our clients. In terms of the other technologies, if you can spend a couple of minutes on the all-electric option, what are you seeing there? You have a pilot project I think you are working on with BP. Any kind of color there and how you're thinking about that part of the business? Sure. So, if you look at a traditional subsea architecture today, the valves, you know, everything is actuated with hydraulic controls. Hydraulic controls are dependable. They've been around forever. You all flew on airplanes in the past that were hydraulically controlled. You don't anymore. You know, there's obviously benefits to electric over hydraulic or electric controls. The main benefit in subsea is the distance that you can send the signal with limited loss. So we all know electricity can go a long way with very limited loss. That's why you see very long transmission lines and underwater cables. Hydraulic control means you're pushing hydraulic fluid. When you hit the brakes in your car, assuming they're hydraulically controlled, you hit the brake, it pushes the fluid out to the caliper, puts the, you know, puts friction on the wheel so it slows down. Same thing in subsea, except remember, we gotta go two miles up to two miles vertically down to the seabed, and then you can go out, you know, another, you know, five, seven, eight miles in a, in a star-shaped pattern to get to the individual wells. That's a very long distance. It creates latency, and it also makes you build equipment called an umbilical that's very complex and very expensive. You can replace all of that with electric controls with basically a long extension cord. Now, it's a little more elegant than an extension cord, but with a long power cable, and that's all that you need. So the contract that we announced earlier or towards the end of 2024 was the Northern Endurance Partnership. It's in the U.K. It is a carbon capture and storage project. We're extremely excited about this. We are the company that enables that carbon to be able to take it offshore and to inject that CO2 into an aquifer for permanent storage. Obviously important for the world, important for society, but enabled by the all-electric system because the distance that we're going from the emitters onshore to the actual aquifer where it's being stored is 145 km. You can't push hydraulic fluid 145 km, or you'd have to have a huge pipe, and you'd have it would be expensive. You'd have massive friction losses, etc. Or you would have to come up in intermediate locations back up to the surface, so you have to build a big surface floating structure. You'd have to re-energize, pump it back down, so forth and so on. In this case, from shore to the injection point on the seabed, there is nothing visible on the water surface, all enabled by the all-electric system. So this is the industry's first all-electric application. We strongly believe the carbon transportation and storage market will be primarily driven by this type of all-electric subsea technology. And we also fundamentally believe that the right place to be storing carbon is offshore, not underneath of residential communities and onshore, but taking it offshore. Doug, as you think about the opportunities in 2025, both in terms of inbounds and what might be incremental to those inbounds, what does the market look like in terms of what customers are talking to you about? Let's, if you'll allow me to kinda go 2025 and beyond. Please, yeah. which I'm sure you'll allow me to do, 'cause it's actually '25, you know. We are very well-positioned. So we have visibility and an understanding that is quite unprecedented because of this unique position we're in, in a very consolidated segment where we have this competitive differentiation. So, but, you know, so we, we're seeing well beyond 2025 is my point. The three kinda buckets that I would look at is you have customers that are really, first and foremost, focused on securing our capacity. Look, they know we have a lot of scalability now, and as we talked about before, Subsea 2.0, more efficient, we can do more with less, etc. But they also don't wanna be in a position where we're not able to do their work 'cause they wanna do iEPCI, the integrated approach. They wanna do 2.0, so they wanna secure our capacity. So they're giving us visibility far beyond what we would typically have. So today, as we sit here today, most of those clients are talking to us about 2028- 2030. That's the timeframe they're talking about. Then you have a group of customers that are smaller in scale. they don't have as many offshore opportunities, and they wanna, they want the fastest cycle time because this is, this is their way to generate revenue, right? So they wanna see this field develop as quickly as they can. Well, they love the iEPCI 2.0 model 'cause, as I said, it typically is one year or faster than the competition is able to deliver. So they're coming to us talking about acceleration, product acceleration, product acceleration, product acceleration. So securing capacity, acceleration. And then the third bucket, which I think is least understood and least appreciated, goes back to one of my earlier comments about the richness of the opportunity sets, the not only of the number of customers expanded, as I just talked about with these smaller players trying to accelerate the development of offshore projects, but also the number of countries, right? And again, Guyana is the leading example of that. But beyond Guyana, there's multiple other countries that you've heard about or will hear about that have massive reserves offshore that have now kind of they're kinda leaning forward saying, "Hey, wait a minute. We saw what happened in Guyana. How do we make that happen here?" So they are putting in place more business-friendly policies to really drive and attract investment from our customers into those regions. So you will see new countries come online at a much faster pace than we have ever experienced before. So it's kind of three different conversations. I guess the underlying takeaway is they're all actually very favorable, but for different reasons. But they're all trying to achieve the same outcome, which is ensure that they can deliver world-class, safe, effective offshore projects, and they believe we're the company to help them do that. That's very helpful. So, Doug, you've mentioned that you've got visibility on orders for multiple years effectively. If you think about the backlog that you already have, it sounds like the backlog that's about to convert from here on is potentially higher margin because there's more higher margin sort of orders in there. Can you talk about that and what that does to your margin profile? Where do you wanna get to in terms of margin on a normalized basis longer term? I knew you weren't gonna let me get off the stage without that one. Look, great question. Agree with, you know, agree with the, the thesis of the question. The quality of the backlog is not just a function of the commercial value of it, which has clearly been improving. Just as importantly is the terms and conditions and, and what we are putting into the backlog in terms of what we are committing to deliver. So when we announce IEPCI 2.0 direct award, which again is the vast majority of what we're, we're announcing, that's the highest quality because not only does it mean the customer sees the value, so they're paying for the value that we're creating, but as importantly to us, it means very low risk, very low risk. We still have to execute. Don't get me wrong. We still have to execute, but we're not doing something for the first time. We're pulling from, remember the automotive, we're pulling the transmission, we're pulling the engine, we're pulling the chassis. Everything's been engineered. Everything's been designed. The supply chain is in place. We're able to place bulk orders with the supply chain instead of one order at a time. They're starting to build inventory and holding that on our behalf, which further shortens the cycle time and de-risk the project. So for all of those reasons, the type of project is just as important. And, you know, the, we said that, you know, 2024 has been a year where we expanded the quality of the backlog, meaning not only the commercial quality but all the other attributes. And we've already said in 2025, we expect more iEPCI and more Subsea 2.0 as part of that mix of the 2025 inbound. So, very, very favorable, and it continues to move in that direction. So what does that mean for margin, which is the, you know, I knew you were not gonna let me off the stage? Look, our margin expansion has actually been quite tremendous. If you just look at the growth rate, the trajectory of the margin, we had 2025 margin guidance held at 15%, 15.5%. We subsequently updated that to 18%, 18.5%. And more recently, we updated that to a range of between 18.5% and 20%, or call it 19.25% at the midpoint. And that's all because we're seeing the benefit of the 2.0, the iEPCI, the new operating model, the configured to order, the scalability, the leverage. We're just experiencing that. And remember, it's still the minority of what's flowing through the plant. It will become the majority of what's flowing through the plant 'cause we've got the orders coming in. So it will. So as that converts, one, it's fair to, you know, conclude, that the outlook for 2025 is certainly not a peak margin, but yet a major milestone on a more ambitious journey. Got it. Doug, in terms of capital allocation priorities, how are you thinking about free cash flow generation, CapEx, and then between dividends, buybacks, M&A opportunities? How do you think about the moving pieces there? Sure. So, we have been quite successful. We've obviously been generating, you know, good profitability and cash associated with that 'cause, I should also mention revenues growing at the same time. So we just talked about all of the flip of $10 billion a year. You know, revenues in the $7.5-$7.7 billion range for this year. We already gave guidance for 2025 going to $8.5 billion. So you should expect there's an upward trajectory to that too, just based upon the volume of inbound that we have. So revenue growing, margin growing, obviously, we're gonna generate a significant amount of cash. We said that we would convert no less than 50% of that. We also said that we would distribute up to 60% of the free cash flow. We've exceeded that quite significantly. We just announced a $1 billion share buyback following almost distributing $750 million so far, between dividend and buyback. We just announced a new $1 billion buyback. We are very committed and very aware of if we have a use for that that we can justify that's gonna create shareholder value, we'll put it to use. If not, we're gonna distribute that. And we have no problem distributing that. If you look at our CapEx spending, we have fundamentally changed the operating model of the company. We've reduced the fixed asset base. We got out of this arms race of who has the most or the biggest assets. We are collaborating with our competitors using their assets on our work. Remember, 70% of our work is direct awarded. Never goes out to a competitive tender. So that means for those others, their total addressable market has shrunk materially. So let's just say they're more willing to work with us than ever, in order to be able to be part of that addressable market that they no longer have access to. So, we call that the vessel ecosystem. We're not building our new assets. We're working with other people's assets on our job, which gives us scalability without us taking any of the risk associated with it. Around 3% today. And as we grow, we certainly feel we can stay on the lower end of that 3.5%-4.5% guidance. So there's no big surprise. I'm not gonna come and sit here next year and tell you we're building this big asset and justify it. We've fundamentally changed the mentality of our company, which I think will not only help our company but honestly help the overall industry as well. In terms of M&A, we've done our big M&A. We are constantly investing in technologies, particularly around material sciences, robotics, automation, and control. We'll continue to do that. These aren't big expenditures, but we're able to do it with, you know, a relatively small amount of money. Or more importantly, the most valuable currency we have today is not our share, is not our stock, is not our cash. Our most valuable currency today is our subsea engineering. So when we have academia or when we have, you know, startup companies come to us, they're trying to understand, "How do you do this?" We're one of the very few companies that build equipment to sit on the sea floor for 35 years without intervention, work in that hostile environment, and all driven by advanced automation, control, robotics, and material science. So we normally we'll just sit down and actually trade off subsea engineering hours for, if we want, you know, equity in that startup company as an example. So no big cash drain there either. I'm not saying if the right opportunity didn't come along, you know, we wouldn't look at it, but we have no big white space. We don't need to go do M&A. We certainly don't need to consolidate. We are not a consolidator, we're a technology company. We're not gonna do consolidation. So I think you should rest assured that there's gonna be significant free cash flow generated and that we are committed to shareholder distributions. Doug, what are the things that you keep an eye on as you think about the business going forward that could be potential causes of concern that you're constantly trying to stay up to date on? What are those kinds of things, and how do you think about managing the business through those? What do I think about? Managing the business through those potential concerns. Yeah. So thanks for, you know, kinda bringing me back to reality, right? I mean, everything we just talked about, honestly, I hope to you, certainly to us, we're very excited. You know, sounds pretty good, but look, it's, you know, there's nothing without its challenges, right? So, in our business, you know, we're doing hundreds of projects a day, various different parts around the world, multiple different customers, and they all have their own complexities. Yes, if it's iEPCI 2.0, it's much more simplified than the old work, but there's still challenges, right? We're still living in the same world as everybody else. The CTO or the configured Order model has simplified it because just to give you an example, one of the primary things, it's not the only thing, but one of the primary things we do is build subsea trees. That subsea tree used to have 1,000 different suppliers, 1,000 different suppliers being part of that. That's now 100, right? So we've been able to so 'cause again, you're doing it at the component level versus the subcomponent level. But the way that we manage the company, and this was one of the big changes, was we are out there actively looking at every stage of the project, including, you know, the very beginning, at where are the risks in the project and what is where are we not doing well. So what do I mean by that? In our company, we break everything down, and it's either red or it's green. If it's on track, if it's on budget, you know, it doesn't matter. It could be our HR function, something within HR in terms of recruiting, or it could be a subsea project, or it could be finance. But if it's red, it's red. We've eliminated orange. Orange is the get out of jail free card. Most management presentations you've ever sat in, if you go and look at them, they're mainly orange and yellow. Ban orange and yellow from your company, and you'll get the truth 'cause it's either on track or it's not on track. And if it's not on track, that's what we focus on. So we look at those reds, and we see them much earlier than we used to. And because we see them much earlier, there's plenty of reds. I don't wanna make you not want to be an owner of our company, but I'm being honest. There's a lot of reds, but the reds are very early stage and normally addressable within a day or a week if they're escalated at the right level. So we also encourage people to escalate the reds. Our saying is, "It's okay to be red. It's not okay to stay red." So if you're red and you hide it because you're trying to solve it yourself and you don't want management to know until it's too late and it becomes a big problem, that's a problem for you. But if you bring it forward and use the help chain, as we call it, then we can help address it early on in the project. So it's fundamentally changed. I don't wanna suggest that I'm an anxious person by nature. You know, my wife thinks I wanna be too much in control of things. You know, I am an anxious person, but it's a healthy anxiety now because when I see the reds, I know we can address them because it's early on. It used to be I didn't see the reds till, quite frankly, it was too late. There was no way to recover. Now we can constantly look at things. There's decisions that we can make. There's support that we can provide. So it's also, again, a fundamental change in the way that the company's operating. Doug, that's all the time we had. So thank you so much for taking the time. Appreciate all the comments. Appreciate the conversation. Thank you very much, and thank you all for attending.