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Technip. Module 2 Oil and Gas—Drew Williams. Basic Facts. Energy technology, project management, and maintenance (97% from oil and gas) Headquarted in Paris, France Revenue = 8.2 Billion Euros 11.5 Billion in Assets Employ 38,000 people in 48 countries 2 Major Segments Onshore/Offshore

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Technip

Technip

Module 2 Oil and Gas—Drew Williams


Basic facts

Basic Facts

  • Energy technology, project management, and maintenance (97% from oil and gas)

  • Headquarted in Paris, France

  • Revenue = 8.2 Billion Euros

  • 11.5 Billion in Assets

  • Employ 38,000 people in 48 countries

  • 2 Major Segments

    • Onshore/Offshore

    • Subsea—niche area


Products

Products


Original balance sheet

Original Balance Sheet

*Acquisitions make the comparison across time a problem—accounts must be altered


Original income statement

Original Income Statement

*Acquisitions make the comparison across time a problem—accounts must be altered


Major acquisitions

Major Acquisitions

  • Global Industries Ltd.

    • December 2011

    • 100% Ownership

    • Sub-Sea know-how

    • Further entry into US and Mexican waters

    • $1.262 Billion Purchase

  • Issues

    • Did not produce 2011 Financials

    • Solution: Use 2010 financials + Extrapolate 2011 Quarterly Income Numbers


Major acquisitions1

Major Acquisitions

  • Stone & Webster Process Technologies

    • Purchase segment from The Shaw Group

    • Refining and Petroleum Chemicals—diversify

    • Further enter US Market

    • $295.3 Million Purchase

  • Isssues

    • No Financials for this Segment within Shaw

      • Purchased a segment of a segment

    • Different Fiscal Year (August 31 Year End)

    • The Shaw Group purchased in Feb 2013

    • Solution: Input=0, cite as flaw in calculation, rely on group members more heavily


Combined balance sheet

Combined Balance Sheet

  • Potential Issues:

  • GAAP vs. IFRS

  • Synergies

  • Currency Translation Changes

  • Different Account Classifications

  • Does not include a major acquisition


Combined i s

Combined I/S

  • Potential Issues:

  • GAAP vs. IFRS

  • Synergies

  • Currency Translation Changes

  • Different Account Classifications

  • Does not include a major acquisition

  • Extrapolation of 2011 numbers


Reformation of b s and i s

Reformation of B/S and I/S

Line by Line

Bias towards Enterprise

Very little detail—did not dig into accounts

Only glanced at footnotes


Balance sheet

Balance Sheet


Non current assets

Non Current Assets

All Enterprise Items

  • Enterprise

  • PPE

  • Intangible

  • Investments in Equity Affiliates

    • JV/Enterprise Investments

  • Deferred Tax Assets

  • Financial

  • Other Financial Assets

  • Available-for-sale financial assets


Current assets

Current Assets

Investigate further

*Split: Use 2% of Sales

  • Enterprise

  • Inventories

  • Construction Contracts

  • Advances paid to suppliers

  • Derivative financial instruments

  • Trade Receivables

  • Current income tax receivables

  • Other Current Receivables

  • Cash (2% of Sales)

  • Financial

  • Cash (less 2% of sales)


Non current liabilities

Non Current Liabilities

  • Enterprise

  • Non-Current Provisions

    • Retirement benefits

  • Deferred tax Liabilities

  • Other non-current liabilities

    • Needs to be investigated

  • Financial

  • Non-current financial debts

    • Financing decision


Current liabilities

Current Liabilities

Likely includes some financial

  • Enterprise

  • Trade Payables

  • Construction Contracts

  • Derivative Fin Instr.

  • Current Provisions

  • Current Income Taxes Payable

  • Other Current Liabilities

  • Financial

  • Current Financial Debts


Other items

Other Items

  • Financial

  • Assets Held for Sale

  • Non-Controlling Interests


Reformed balance sheet

Reformed Balance Sheet


Check

Check


Income statement

Income Statement


Income statement accounts

Income Statement Accounts


Income statement summary

Income Statement Summary

  • Enterprise

    • Revenues

    • Cost of Sales

    • R & D

    • Selling Costs

    • Admin Costs

    • Other Operating Income

    • Other Operating Expenses

    • Income from Sale Activities

    • Charges from Non-Current Activities

    • Share of Income/Loss from Equity Affiliates

  • Financial

    • Financial Income

    • Financial Expense


Other comprehensive income

Other Comprehensive Income

  • Financial

  • Fair Value Adj

  • Enterprise

  • Exchange Differences

  • Cash Flow Hedging

  • Other


Enterprise tax expense

Enterprise Tax Expense

Step 1: Take out all Financial Income/Expenses included in EPAT

Step 2: Add in OCI items included in EPAT

Step 3: Net Items

Step 4: Multiply by 33.33% (French Corp Tax Rate)

Step 5: Add/Subtract this number to Income Tax Expense


Enterprise tax expense1

Enterprise Tax Expense


Financial tax expense

Financial Tax Expense

Falls out from Enterprise Tax Expense


Reformed income statement

Reformed Income Statement


Check1

Check


Major issues summary

Major Issues Summary

  • Don’t account for 1 Acquisition

  • Combinations are Elementary

    • GAAP vs. IFRS

    • Synergies

    • Currency Translations

  • Accounts need to be further analyzed


Questions

Questions


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