Welcome the Second Quarter 2015 Earnings Analyst Call. My name is Loraine, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Mr. Brad Alexander. Mr. Alexander, you may begin.

Thank you, Loraine. Good morning, and welcome to FMC Technologies' second quarter 2015 earnings conference call. Our news release and financial statements issued yesterday can be found on our website. I would like to caution you with respect to any forward-looking statements made during this call. Although these forward-looking statements are based on our current expectations, beliefs and assumptions regarding future developments and business conditions, they are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by these statements. Known material factors that could cause our actual results to differ from our projected results are described in our 10-K, 10-Q and other filings with the SEC. We wish to caution you not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any of our forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise. I will now turn the call over to John Gremp, FMC Technologies' Chairman and CEO. John T. Gremp - Chairman, President & Chief Executive Officer: Good morning. Welcome to our second quarter 2015 conference call. With me today are Maryann Seaman, our Chief Financial Officer and Doug Pferdehirt, our President and Chief Operating Officer. I'll discuss highlights from the quarter, Maryann will provide specifics on our financial performance, and then we'll open up the call for your questions. Earnings were $0.46 per diluted share for the quarter. Total company quarterly revenue was $1.7 billion, and operating profit was $216 million. Quarterly revenue for Subsea Technologies was $1.2 billion, with margins of 14.8%. Our focus on execution and the strength of our backlog has continued to drive our strong margins. For…

Thank you. We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up question. And our first question comes from Jud Bailey from Wells Fargo. Please go ahead.

Thanks. Good morning. I wanted to kind of follow up on Subsea margins. Maryann, you mentioned that, as your backlog starts to come down, as your backlog starts to come down, you'll reduce your workforce appropriately. What other steps can you take, as your backlog comes down, to try to preserve margins into 2016? Maryann T. Seaman - Chief Financial Officer & Executive Vice President: Yeah. Good morning. So maybe just a little bit of color before I completely address your question. As we look back at prior cycles, this cycle looks very different than it has in the past. So, first of all, we're coming off of a very solid well-priced backlog in this cycle versus last. You may remember, during the last down cycle, we were in the process of actually growing our head count to prepare for growth. In this cycle actually, we've begun our reduction of workforce heading into this cycle, so another positive. You've seen growth in our Subsea services for the last several quarters. And then lastly, as we have demonstrated, our execution continues to improve. All of those things will work quite well for us. Standardization and all the internal work that we have done, if you will, to rationalize the workforce, as well as standardize our own internal portfolio, will help that as well. All of those things give us confidence in our ability to maintain those margins this year. Clearly, next year, we'll have some struggle at maintaining a 15% margin, obviously because of pricing, but we are very confident that we will not see the level of margin this cycle that we did last. So, we will not see single-digit margins next cycle.

Okay. Is there a way to think about as we look into next year of all the moving parts, is to think about the magnitude of the margin deterioration given all the factors you mentioned? Maryann T. Seaman - Chief Financial Officer & Executive Vice President: Yeah. So, again, we're a little early stages. Obviously, as we look at the next couple of quarters and the inbound orders that are coming in, that will have some impact on it. But again, we are not expecting single digit. I would tell you kind of low-double-digit margins for 2016 is what we're looking at. A little bit difficult for us to sort of give you some quarterly rollout of that just yet. Keep in mind, you remember always our first quarter versus our fourth quarter is always cycled down because of service levels. That help?

Thank you. And our next question comes from Bill Herbert from Simmons & Company. Please go ahead. William A. Herbert - Simmons & Company International: Thank you. Good morning. Maryann, if we could stick on Subsea margins here for a second and talk a little bit more about the glide path, 15% margin for this year, low-double-digit margin for next year. Walk me through that again, because, I mean, I get the virtues (19:29) with regard to well price backlog, right-sizing head count, positive mix shift in Subsea services, offset by perhaps operating leverage and pricing. Just strikes me that the latter two are going to have a disproportionate impact in 2016 to arrive at a low-double-digit margin. So can you amplify on that for me? Maryann T. Seaman - Chief Financial Officer & Executive Vice President: Yeah. Sure. So Bill, keep in mind we are still working off of a very solid backlog, right. William A. Herbert - Simmons & Company International: Got that. Maryann T. Seaman - Chief Financial Officer & Executive Vice President: As you know, right, as we're going to be inbounding more price sensitive, the first if you will, sort of 12 months of a project, we typically don't see much more than 10% to 15% of that roll through. William A. Herbert - Simmons & Company International: Okay. Maryann T. Seaman - Chief Financial Officer & Executive Vice President: So your comments are probably more impacting 2017 than they will be 2016. So we'll still be rolling off, as you know, we started the year with a pretty substantial backlog. So we'll still be rolling off a lot of that well-priced backlog into 2016. Later in 2016 and beginning into 2017 is when you'll really see the impact of that lower margin. And by…

Thank you. And our next question comes from Bill Sanchez from Howard Weil. Please go ahead.

Thanks. Good morning. John T. Gremp - Chairman, President & Chief Executive Officer: Good morning, Bill.

My first question is referring to the Surface business. Maryann, you gave guidance here for margins for full year, averaging at 12% which is at the low end of the guidance you gave on the first quarter call of 12% to 13%, yet you had a big step down in profitability in 2Q here. It's clearly, I think, worse that you all's expectations at the time of the first quarter call. What's giving you guys the confidence now to see that kind of margin ramp in the back half of the year to get you back to almost even with what you guys thought 90 days ago? Maryann T. Seaman - Chief Financial Officer & Executive Vice President: Hey, Bill. So I think I mentioned in my comments a lot of the head count reductions in Surface that we've been talking about have largely been made. We will continue to see the benefit of that in the back half of the year along with, beginning to see some of the benefits of the restructuring. We still have more work to do with respect to the integration of the pad that John has talked about as well but we expect to get some benefit. So the absence of severance cost in the back half of the year and the benefit from the lower work force given we've taken out about 15% of that head count in Surface so far this year.

So just the timing was delayed in 2Q, Maryann, from when you all expected to kind of get that benefit? Is that a fair way to think about it? I mean it doesn't look like the margin decline was as structural as maybe one would think just looking at the release. Maryann T. Seaman - Chief Financial Officer & Executive Vice President: So again, Bill, I think first of all, the second quarter pricing pressure was a little bit worse than what we had expected. We think that will continue, but we do believe that the back half of the year, we will have the benefit of all of the cost reduction initiatives that were taken. We moved more aggressively in the first half of the year than initially thought as we saw these actions happening.

Thank you. And our next question comes from Ole Slorer from Morgan Stanley. Please go ahead. Ole H. Slorer - Morgan Stanley & Co. LLC: Thank you very much. So John, it's easy to understand if you and Thierry meet with the C-level executives amongst your clients that they are very receptive for the concept of Forsys. But to what extent – can you elaborate a little bit more on to what extent you are seeing this being accepted, lower down in the oil company organizations? Because that's typically where you get the biggest resistance. John T. Gremp - Chairman, President & Chief Executive Officer: Thanks, Ole. Let me kind of hopefully not digress but sort of set the stage. When you think of any industry, particularly our industry, attempting to go through a major step change in how we do business, it seems like it requires certain things. First of all, it requires the business imperative, which now we have, not just because of low oil prices but because of declining returns. So, there's a sense of urgency, there's a business imperative to make change. And we've talked about that before. It can't be incremental change to improve the returns. They have to be significant, material, and they have to be sustainable. So, the industry, it has that imperative because of the declining returns. The second, I think, important thing is that the solution that drives a step change, it has to be real, it has to be tangible, and it has to be compelling. And the Forsys Subsea change in business model is very much that. And then thirdly, if you're going to make a step change, it has to be relatively simple to implement. Something that's compounded, just complex and convoluted is going to be very difficult…

Thank you. And our next question comes from David Anderson from Barclays. Please go ahead.

John, I was wondering if you can just comment, a little bit of a comment, kind of more the near-term outlook on the Subsea side. We've heard from service companies talking about a shift in offshore from exploration towards development. You put up a nice number in Subsea today, with increased confidence on the $3 billion number. I understand all the talk about change of business model. That doesn't seem to be what's happening right now in the market. Can you talk a little bit more what's happening right now in these orders, and your confidence? Is it because the projects or – our costs are coming down enough to move projects ahead? Are these things – is this more about cash flow? Can you just help us understand a little bit more about how the order pattern develops over the next, call it, six to 12 months? John T. Gremp - Chairman, President & Chief Executive Officer: Okay. So, Dave, let's talk about the balance of 2015 and why we have confidence in exceeding the $3 billion. So, obviously, we had a strong Q2. You add the Q1 and Q2 together, $1.6 billion. We're over halfway to our target of $3 billion. What gives us the confidence? We said in the last quarter that we were pleased with the Subsea service activity in the first quarter. It sort of mirrored the run rates that we had in 2014. We thought it would hold up. It did hold up in the second quarter. Second quarter Subsea service numbers were equivalent, actually a little bit better than the first quarter numbers. That's two quarters in a row in this downturn of Subsea service inbound holding up. That gives us confidence. The second thing is the small, less than $100 million orders.…

So in other words, you were talked about the smaller awards in the services side? I guess I could think about that as sort of more cash flow driven or kind of it generates more cash flow for IOCs. So, is there enough running room right now from what you see over the next, call it, 12 months to kind of stabilize that part and then the incremental comes from lower project costs. Is that kind of a good way to think about it for the next 12 months? John T. Gremp - Chairman, President & Chief Executive Officer: I think it's an excellent way to think about it. One reason why we saw the Q2 bump up in smaller projects, not surprisingly they were in the Gulf of Mexico and many of them were our partners. We have a lot of partners in the Gulf of Mexico. We have a strong position. The Gulf of Mexico, the projects are smaller, they don't cut as much into the capital budgets. They usually have better economics because they're tying back through existing infrastructure. They happen faster because national oil companies aren't involved in the production sharing contract bidding process. So, yeah, I think the smaller projects bounce back first because they're generally Gulf of Mexico related and they don't have – they're smaller, so their capital demands are less and the lead times are faster. So yeah, I guess when you think about it that way, they would come back faster. The bigger projects, they're going to come back as they're being more related to the pace of rework. I think that's a great way to look at it.

Thanks, John.

Thank you. And our next question comes from Doug Becker from Bank of America. Please go ahead.

Thanks. Certainly don't want to beat a dead horse but still want to get a little more clarity on the Subsea margins. Is the low-double-digit margin commentary related to new work or really for Subsea Technologies overall? In other words, 2016 margins should be higher than that double digits and then for 2017, while it's still early, margins may be gravitating toward that level but there's the potential for offsets with the cost inefficiencies? Maryann T. Seaman - Chief Financial Officer & Executive Vice President: Yeah. So my comment about the sort of low-double-digit margins is the comment on average for 2016. The first half of the year we would obviously expect to be a bit stronger than the back half of the year as we're working off backlog. So in my comment to address 2017 is when you would actually see more backlog being converted to revenue from what we expect to be lower-priced inbound coming in now. And at that juncture in 2017, much more of the cost reduction work that we're doing and the rationalization of the workforce, as well as other structural changes within Subsea should be able to offset that in 2017.

Got it. And then John, maybe just a little more color on the moving parts in Subsea services for 2016, particularly as it relates to, at least it would seem like the potential for lower installation work just because of the slowdown this year, and then uncertainty around refurbishment work in Norway next year. John T. Gremp - Chairman, President & Chief Executive Officer: Certainly, the installation-related service activity will be driven by our backlog, and that will start to decline. So, we're anticipating some. It's a little hard to predict that. I mean, they've got equipment at inventory, and so forth. So, it's a little hard to predict. But we would expect installation to start to drift down. Actually, the refurbishment outside of Norway is holding up pretty well. Our Brazilian operation, believe it or not, is holding up well. Gulf of Mexico is very, very strong, and probably will actually get stronger in 2016 because of that load. The refurbishment in Norway decline is mostly around 2015. We haven't set targets for 2016 yet, so I wouldn't count that out yet. I think 2016, we have to look at capital budgets, how they're formed, we've got to get a bigger sense. But we're not – there will be some pressure on Subsea service revenue in 2016 just because of the declining backlog. But beyond that, I think the rest should remain solid.

Thank you. And our next question comes from Kurt Hallead from RBC Capital Markets. Please go ahead.

Hey, good morning. John T. Gremp - Chairman, President & Chief Executive Officer: Good morning, Kurt.

I just (43:27) a lot of conversation so far in Subsea, so I'll shift it a bit and ask about Surface. You already mentioned and gave us some insights on the improvement in margins the back half of the year. As we roll forward, can you give us some general sense as to how much your business going into 2016 may be driven by frac equipment versus other dynamics around Surface? And given the significant excess capacity and some major service companies have indicated, 50% spare capacity in the business, give us some indication of how you might see a improvement in frac equipment orders as you kind of work through that excess. John T. Gremp - Chairman, President & Chief Executive Officer: Kurt, just to ground everybody, our largest historically and even today in the downturn and most significant business in onshore surface North America is our Fluid Control business. The Fluid Control business is one step back in the supply chain. Our customers aren't the E&P customers. Our customers are the pressure pumpers. So, we're encouraged that the pressure pumpers are coming out saying that they've seen the bottom. That's good news. We can't say that because our biggest customer is them, and between their reaction to rig count and their orders to us are things like inventory levels, their restocking plans, and the degree to which they've cannibalized assets that are underutilized. We don't have that kind of visibility so we wouldn't necessarily want to call the bottom right away until we see the pressure pumpers stabilize and increase their activity to Fluid Control. But it's got to happen. The good news is they see the bottom. Eventually, they run out of their inventory, eventually, they have to restock. You can't cannibalize forever, and we'll start to see that uptick. So that's how we view the balance of 2015. For all of Surface we think it'll be relatively flat. We're a little unsure of Fluid Control so we don't want to call it yet. But then we see the recovery starting in 2016, and the restocking that'll occur by the pressure pumpers, we'll start to see the uptick in our most significant business in Surface Wellhead, Fluid Control.

Okay. That's great. Great color. Appreciate that. Maybe just one follow-up. In terms of use of cash, you indicated your CapEx plans for the remainder of the year. Just wondering what you may be seeing out there in terms of any acquisition opportunities and bid-ask spreads related to acquisition opportunities. Have they narrowed at all? And how does that kind of dovetail into the prospect for buying back some more stock? John T. Gremp - Chairman, President & Chief Executive Officer: Right. So, as you pointed out, our capital spend is down. It'll stay down. We have plenty of capacity. Even our most recent investments in Subsea service-related assets should start to slow. So that number will stay down. We don't anticipate it ticking up at all over the next couple of years. So the remaining cash will certainly be available for M&A. You know in the environment, in this kind of environment, it does present opportunities. Our approach, really, for the last six or so years has been to focus our M&A attention on fulfilling our growth strategies for the business, and that's not going to change. There are things that we can do to support our growth strategies, and as there are opportunities available to use our cash for that, we will. We don't anticipate and we're not pursuing any kind of transformational acquisition at all. We're very much focused on our existing growth strategy, so M&A will be related to that. And then surplus cash, we'll probably continue our – depending on the nature of the cash flows, remember, we are still in uncertain times, will be directed towards stock buybacks.

Thank you. And our next question comes from Brad Handler from Jefferies. Please go ahead.

Thanks, guys. Good morning. Maryann, a couple questions from me. Maybe I'll ask them both and just let you address both. The first is, thanks to you guys, I now know that the Angolan kwanza has devalued by 6% in June. I was not aware of that before. But the black market suggests that it could devalue a whole lot more as you alluded to in your comments. But could you help us understand, if it does indeed trade down to the 190 (48:06) level that the black market is trading to, what's the financial impact on you? What steps can you take to protect against that as we think about the corporate? So, that's question number one. And question number two is simpler, I guess. Accounts receivable were up a fair amount in 2Q. What is your thoughts around – was that related to one big customer? What are your thoughts around working that back down as we might have expected in the second half of the year? Thanks. Maryann T. Seaman - Chief Financial Officer & Executive Vice President: Hi, Brad. Sure. So, with respect to the kwanza, we have a couple of opportunities to protect against that sort of going forward. But you're right and, hence, that's why I made the comment that there is some risk given the dependence on oil price and oil revenues to that economy. We are protected largely until the time at which we actually bill. So, we have sort of two elements of risk. One is the receivable risk. And we have been and continue to be talking with our customers. Much of our contractual language gives us relief and protection. Some of our customers we have actually been able to reach good conclusion with. Others we are still in the…

Okay. Maryann T. Seaman - Chief Financial Officer & Executive Vice President: On the receivables question, no, nothing in particular. We are moving a lot of projects into final execution phase. So, we have no concerns over any receivable risk whatsoever. This is just normal business as we would've expected; no risk here at all.

Okay. Thank you.

Thank you. And our next question comes from Rob MacKenzie from IBERIA Capital. Please go ahead.

Thank you. I guess my question will be for you, Doug. Having worked both in the equipment and on the service side of the business, recently one of your competitors is mimicking your Forsys venture, bringing in a SURF player, and already has a downhole component, if you will, to their joint venture. Do you see any strategic benefit in further expanding the Forsys joint venture to go more downhole? Douglas J. Pferdehirt - President & Chief Operating Officer: Hey, Rob. Thank you. Just to reiterate what John said. There's really four components that are required to successfully transform a business model, or to introduce a new commercial model. There's the environment, there's a true, real, value-added, compelling proposition. And there's simplicity in the concept and therefore, the ease of implementation. And then trust to make the leap of faith or the change. And we really think those are the four key elements. So regardless of the configuration of companies, if you cannot meet those four requirements, it will introduce barriers and challenges along the way. And as we've been able to articulate this morning, and hopefully convince you, we're getting that feedback and we're moving forward in a very positive way. In regards to the reservoir, we work very closely with our clients, and so when we talk about a Forsys Subsea approach, that's really a combination between the two industry leaders, being Technip in the SURF category and FMC Technologies in the SPS category. And our customer, and our customer brings that knowledge and that competence and that ownership of the reservoir to the table, and we work very closely together.

Great. Thank you. That's all I had.

Thank you. And our next question comes from Byron Pope from Tudor, Pickering, Holt. Please go ahead. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: Good morning. I just have a very quick question on Surface Technologies. John, you mentioned in your prepared remarks that the pricing reductions in Surface, North America Surface, were a bit worse than you expected. And was that the case across Wellheads, Fluid Control and Completion Service? And my sense is, that might just be a function of how far and fast activity has fallen, as opposed to there being some industry structure change that has made the pricing environment tougher. So, just was hoping you could comment on that. John T. Gremp - Chairman, President & Chief Executive Officer: Yeah. Well, Byron, I think you're right. One, it was across the board, and you got it right. I mean, when we gave our estimate of what the impact in the downturn would be on Surface, we were reflecting on past downturns. It's all we had to go on. And this downturn is different. The pressure on pricing and what we've had to accept across the board, Surface, Fluid Control, Completion Services, has been much more severe than we saw in the past. And I think you're right. It's the severity and the steepness and the speed at which this downturn occurred, drove much more aggressive pricing pressure, and that's what made this cycle different than the past, and why our Q2 numbers were disappointing from where we thought they would be. As Maryann pointed out, we're taking action. We didn't anticipate this cycle to be different. Now that it is, we're going through another round of restructuring. And I think more importantly, if I can, Byron, I'd like to talk a…

Thank you. And our last question comes from Jim Wicklund from Credit Suisse. Please go ahead. James Wicklund - Credit Suisse Securities (USA) LLC (Broker): Good morning, guys. Thanks for squeezing me in. John T. Gremp - Chairman, President & Chief Executive Officer: Good morning, Jim. James Wicklund - Credit Suisse Securities (USA) LLC (Broker): Maryann, are Subsea services margins accretive to Subsea? Maryann T. Seaman - Chief Financial Officer & Executive Vice President: You mean Subsea Technologies in total? The answer is yes, Jim. James Wicklund - Credit Suisse Securities (USA) LLC (Broker): Okay. And so, the intervention work, which isn't really backlog driven in those type services, should continue to grow for the next couple of years regardless of slowdown in new project awards, right? Maryann T. Seaman - Chief Financial Officer & Executive Vice President: Yeah. So, you're right. We are very optimistic about the growth of Subsea services. For 2016, we're assuming that we'll be able to continue levels. We'll see continued operation of Light Well Intervention both in the North Sea, and then obviously the potential for the Gulf of Mexico as well. So, yes, that would be improvements to the margin. And we're quite optimistic that we'll see those levels continue into 2016. James Wicklund - Credit Suisse Securities (USA) LLC (Broker): Okay. And you talk about the $5 million-plus in restructuring in Subsea in the quarter, and you said there was another $15 million to $20 million in restructuring charges and I'm sorry, my phone may have missed it. Is that this year or next year or just in future periods? Maryann T. Seaman - Chief Financial Officer & Executive Vice President: Yeah, Jim. I'm talking all about 2015 right now. You may remember a call or two ago, we talked about somewhere in the neighborhood of 10% reduction as we were preparing and watching for this downturn. We are probably going to approach close to 15% of total head count. Much of Surface has already been done, but given the activity levels that we've got in Subsea, we've only begun to work on our Subsea structure where standardization has given us efficiency gains. So, what we'll be doing in the balance of this year will largely be Subsea as we're preparing for lower volumes, but I am talking that number in 2015.

Thank you. I will now turn the call over to Mr. Brad Alexander for closing remarks.

This concludes our second quarter conference call. A replay of our call will be available on our website beginning at approximately 2:00 PM Eastern Time today. We will conduct our third quarter 2015 conference call on October 21 at 9:00 a.m. Eastern Time. If you have any further questions, please feel free to contact me. Thank you for joining us. Loraine, you may now end the call.

Thank you. And thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.