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Technip

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

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  1. Technip Module 2 Oil and Gas—Drew Williams

  2. 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

  3. Products

  4. Original Balance Sheet *Acquisitions make the comparison across time a problem—accounts must be altered

  5. Original Income Statement *Acquisitions make the comparison across time a problem—accounts must be altered

  6. 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

  7. 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

  8. Combined Balance Sheet • Potential Issues: • GAAP vs. IFRS • Synergies • Currency Translation Changes • Different Account Classifications • Does not include a major acquisition

  9. 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

  10. 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

  11. Balance Sheet

  12. 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

  13. 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)

  14. 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

  15. 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

  16. Other Items • Financial • Assets Held for Sale • Non-Controlling Interests

  17. Reformed Balance Sheet

  18. Check

  19. Income Statement

  20. Income Statement Accounts

  21. 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

  22. Other Comprehensive Income • Financial • Fair Value Adj • Enterprise • Exchange Differences • Cash Flow Hedging • Other

  23. 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

  24. Enterprise Tax Expense

  25. Financial Tax Expense Falls out from Enterprise Tax Expense

  26. Reformed Income Statement

  27. Check

  28. Major Issues Summary • Don’t account for 1 Acquisition • Combinations are Elementary • GAAP vs. IFRS • Synergies • Currency Translations • Accounts need to be further analyzed

  29. Questions

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