Welcome to the FMC Technologies Second Quarter Earnings Analyst Call. My name is Paulette and I'll 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 Brad Alexander. Mr. Alexander, you may begin.

Thank you, Paulette. Good morning, and welcome to FMC Technologies' second quarter 2014 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, President and CEO.

Good morning. Welcome to our second quarter 2014 conference call. With me today is Maryann Seaman, our Chief Financial 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. We delivered strong quarterly operational results driven primarily by our subsea performance. Total company quarterly revenue was $2 billion and operating profit was $291 million. Earnings were $0.72 per diluted share for the quarter when excluding the gain related to the sale of our material handling products businesses. Subsea activity remained strong overall despite no large contracts awarded during the quarter. We received $850 million of subsea awards in the quarter and these inbound orders included small project awards, many from your partners and continued growth in our subsea service revenue. Subsea margins increased sequentially as we projected. Our focus on improving project execution and reducing our cost structure over the past few quarters is reflected in our increased subsea margins. More importantly, we are demonstrating our ability to more reliably execute complex subsea projects to meet our customers' requirements in this growing market. Examples of this focus on execution include our progress in completing Petrobras Pre-Salt trees with a high level of local content on time. And successfully achieving critical equipment deliveries for Total's CLOV project in Angola that recently delivered first oil on schedule. One of the emerging areas for deepwater subsea growth in the Gulf of Mexico is the Paleogene trend, also referred to as the lower tertiary. This geological trend is characterized by extreme reservoir conditions with well pressures at the seabed of up to 20,000 psi and temperatures of 350 degrees Fahrenheit. To address this challenge, we have reached an agreement with Anadarko, BP, ConocoPhillips and Shell to develop the next…

Thanks, John. Our operations performed well in the second quarter. Subsea technologies operating profit was $194 million in the quarter with a margin of 14.6%. Subsea technologies operating margins improved 390 basis points year-over-year with operating profit increasing 61%. Stronger growth margin performance and an improved cost structure in our subsea systems business contributed to the expected improvement. Sequentially, margins increased as our subsea service activity increased and both our project portfolio and execution on our backlog continue to improve. This quarterly progress continues to give us confidence in the full year performance that we have been forecasting. We expect to deliver similar subsea operating margins in the second half of the year. We continue to see very strong performance in both our western region and Brazil operations. Additionally, the headcount reductions and other operational improvements that have been executed in our eastern region, created a cost structure that is better aligned with our level of activity. This structure and operational efficiency should continue to support our improving performance going forward. Moving to our surface technology results. Surface technologies operating profit for the second quarter was $79 million, a 38% increase from the prior year quarter. Margins in the quarter were 15.5%. North America fluid control orders were strong throughout the quarter. Repair and replacement activity is the primary driver of our stronger orders. However, we are now beginning to see some customers place capital orders associated with new fleet construction. This is offset somewhat by sequentially lower levels of customer restocking which appears to be nearing completion. These developments have increased our confidence in the state of the North American market as we look at the remainder of the year. Our international surface wellhead business experienced the anticipated sequential increase in activity and continued to perform well as activity…

(Operator Instructions) And our first question comes from Brad Handler from Jefferies. Please go ahead.

I guess I will target surface. Perhaps a little bit more color around your conversation with respect to the orders. So the $502 million in orders were down sequentially and yet your narrative suggests strength in fluid control. So maybe just a little bit more color about some of the segments within that order book and perhaps an understanding as to how it stepped down sequentially, please.

Brad, for fluid control in the first quarter we had kind of a rush of restocking orders that came in on the first quarter and that wasn’t repeated in the second -- we didn’t expect it to be repeated in the second quarter. So that’s one reason why we are optimistic about fluid control orders going forward, is because the first quarter was kind of anomaly. But I think when you look at the second quarter fluid control orders, they were solid in terms of consumables and then as I mentioned in my prepared remarks, we saw the first signs of capital orders and that’s what gives us -- and then also some comments from the industry now, the pressure pumpers saying they want to add capacity. These are all good signs for fluid control. But if you are worried about the sequential drop off, I would say fluid contributed a little bit because first quarter was unusually high.

Okay. That’s helpful. Perhaps as a follow up and related to the same. What lead times are you able to quote now, I suppose on pumps. I imagine your turn on treating iron is still very short, but on pumps what lead times are you quoting? And maybe the basis for the question is, we are starting to see a lot of indications of build in fracking equipment. Not sure whether there is any delay in you receiving your order for the pump relative to the indications or other long lead items for building out a frac fleet.

Brad, during the last ramp up in 2011 we had substantially increased our capacity at our Stephenville facility where all this equipment is being manufactured. So whether it's for treating iron, I know you asked specifically about pumps, but whether it's for treating iron or pumps, we have more than enough capacity to meet demand. But you are right, in that market there is really no backlog. When the calls comes for your treating iron, you have to have it. Not that what I have said in my prepared remarks, we are especially ready for a ramp up on treating iron, for sure. And also for the pumps. We geared up. We are relatively new pump manufacturer but we geared up for a lot larger volume then actually what we ever saw in pumps. So I don’t anticipate any lead-time issues or capacity issues with regard to serving the market whether it's for treating for iron ore for pumps. And I think the supply chain -- we have been pretty careful in anticipation of this recovery to make sure that our inventories and our supply chain was well stocked. We don’t want to miss any part of this recovery.

And our next question comes from Ole Slorer from Morgan Stanley. Please go ahead.

I wonder whether you could just give a little bit more color on the surface side with respect to what's relating to pressure pumping, given that this appears to be sort of at the very early stages of an upswing. How much of your surface revenues in the quarter, roughly, were driven by either fluid ends and treating iron or any kind of complete product or spreads.

Yes, Ole, hi. Good morning. So we have seen as you know from the first quarter, some strength coming out of fluid control in the back half of the year. And that largely was being driven by sort of the replacement cycle, you know the restocking if you will. In the second quarter, we continued to see the repair and replacement and now what we are beginning to see is somewhat of a tailing off if you will of that restocking. And beginning to see sort of the new orders for the capital expansion. So a lot of the change quarter-to-quarter sequentially was driven by the strength in the fluid control business as we saw kind of continuation of the back half of the year.

So would it be fair to say that this is still a smallish part of your surface technology revenues?

I am sorry, was -- is it a what, please?

Would it be fair to say that this is still a small part of your surface technology overall revenues?

Sure. That would be fair to say.

Okay. On the subsea side, the margins, very strong compared to what we see out of any of your peer group. So just want to get a little bit more color on whether there was something unique in this quarter. That timing of orders, shipments, anything along those lines? I know your accounting method should really smoothen that out, but versus something with just more structural as a shift in your business relates to new products from subsea intervention. For example, you had some downtime on both in the first quarter, dockings etcetera. Now you're rolling out a much more capital intensive service part of that business that could, in my view, structurally change the margins. But I just want to get a little bit of an understanding of if you could walk us through the rather large step up from first to second quarter.

Yes. Ole, it's almost all exclusively related to execution. I think I am ensuring in these calls for the last year and a half that our margins and backlog have continued to walk up as a result of more favorable market conditions. And the second quarter, quite frankly, reflects that better price backlog flowing through the P&L with substantially better execution. I don’t think there was anything abnormal about it other than this is how we intend to run the business going forward and these are the kind of margins you should expect from a company that’s executing well.

And our next question comes from Bill Herbert from Simmons & Co. Please go ahead. Bill Herbert - Simmons & Co.: John, back to the subsea outlook for a second here. Given the strength that we have witnessed in the first half, especially in the first quarter with regard to inbound, I think there's not a crisis in confidence with regard to the $5 billion target for this year in orders. What would be helpful is really in terms of the roadmap for second half. In terms of what do you think is a decent estimate for book to bill on the one hand and also the composition of orders in the second half of the year? I would expect that you would embed it in your forecast, be counting on a major project or two in addition to the onesies and twosies?

Right, Bill. The roadmap -- so let me just address that head on. The roadmap for the second half is what I am going to call our base business which we are really encouraged from the second quarter with no major awards won to book. $850 million of what I am going to call base business. It's coming from strong subsea service revenue and call outs from our partners. I was impressed by how good that number was and certainly hopeful that that will continue through the second half of the year. And then you put on top of that and so are looking at $2.8 billion in inbound orders for the first half. You add this base load for two more quarters and put on top of that one or two, probably two, targeted projects which we fully expect to book this year and you get over $5 billion. Bill Herbert - Simmons & Co.: Good. That’s helpful. And then secondly, on the Q1 call you had sold a pretty constructive multiyear outlook for subsea orders. If memory serves, kind of a high single-digit rate of annualized growth predominantly driven by the strong development backlog that currently resides with deepwater end of season IOCs. Does that outlook still stand? It sounds like you remain encouraged for 2015, for example.

Bill, I absolutely do. We will start with you just said and I won't repeat everything I said in the last quarter's call but we know that the backlog of undeveloped deep water discoveries from all the major operators remains very high. We have seen no major deferments or postponements as a result of returns or cash flows. So we haven't seen any major changes in their interest in developing their deepwater portfolio. And then as I look -- and you know in this industry we have a great deal of visibility. So I can look out into 2015 and I can see named projects and the named projects for 2015, significant projects, in 2015 exceed the named projects that I saw in 2014 and that's what gives me confidence in the multiyear outlook.

And our next question comes from Bill Sanchez from Howard Weil. Please go ahead. William Sanchez – Howard Weil: John, I was hoping you could spend a moment talking about the press release you guys put out on Monday. I mean clearly we have heard hear a theme from you this year about standardization. Wanting to see more of that with your clients. You have announced this joint industry program if you will. I guess first, when I look at this it looks like you are really kind of starting, what I would say the top of the food chain in terms of standardization here. I mean this seems to be high spec type equipment. And I am just curious, one, when do you start realizing orders from this initiative and I guess, two, does this joint venture ultimately trickle down to what I think we all believe are the more traditional subsea type of hardware sales that I am assuming is probably a larger percentage of your current orders. Any thoughts there?

Yes. Well, thanks for the question, Bill. It took -- I had to wait till the fourth quarter to talk about what I really wanted to talk about, which is extraordinary agreement that we were able to broker with four important operators, particularly in the Gulf of Mexico. You are right, it's the top of the food chain in terms of the -- it's the highest level of technology. Which you could say is, there is a certain amount of risk associated with that and cost associated with that, which is what brought these four operators together to do something that’s really unprecedented in the industry and that is agree on not a science experiment, but to agree to develop and qualify and ultimately build standard equipment for high pressure, high temperature which is required for the lower tertiary. So it's groundbreaking in terms of what it means for the industry. It's exactly what I think and I think the industry thinks, needs to happen to improve the returns for these major deepwater projects. And I am hopeful as I mentioned in my prepared remarks, that this will set an example or a model for how we might go forward with more conventional equipment. To answer your specific question when will this materialize in terms of orders, it's a couple of years out. We are on track to deliver this technology when each of the four operators require it but it's a couple of years out. But you know it's significant for the industry. Clearly it's significant for us because we are the ones that will be providing this unique equipment that will be needed throughout the Gulf of Mexico. But I am hopeful that we will be able to expand this approach to more conventional equipment. William Sanchez – Howard Weil: Great. My follow up would just be on Brazil. Last year you had still a healthy level of callout awards. We know that the delivery schedules took a little bit longer there. Can you just talk about the pace of delivery on those orders that you've received? Is Petrobras still taking those in an orderly fashion in expectation of what you had and maybe talk about future orders there? What does the outlook look like for on the Pre-Salt side going forward?

As you know, Bill, two year ago we won the Pre-Salt tree award which delivered over four years. In 2014 we would have delivered about 50% of that. So over the next couple of years we will finish out that backlog for trees. We were awarded the first Pre-Salt manifolds. They have called off almost two-thirds, I think 14 of the 19 manifolds that we received, they have called those off. We expect further call offs potentially this year. And then beyond that, again, we will have a couple of years of Pre-Salt backlog to work off but beyond that we would imagine that Petrobras will have to reload up on the requirements for Pre-Salt and we will participate in that.

And your next question comes from Doug Becker from Bank of America Merrill Lynch. Please go ahead.

John, I think you pretty well detailed a positive outlook for subsea orders in 2015. Curious what role you expect Petrobras to play in the 2015 outlook for orders.

Well, Doug, it's hard for me at this point to know how Petrobras is going to approach that next supply awards for Pre-Salt. I think there is a lot and lot of factors in there. But it wouldn’t be unreasonable in 2015 for them to start to layer back up on their requirements. But that’s a little hard for me to say at this point. And they haven't indicated what their plans are but if you just look at how they are consuming the equipment, if you look at their concern that they have had in the past of not being able to ensure supply of equipment. You know that happened two years ago when all their Pre-Salt equipment was with one supplier and they had issues. So I would imagine they are going to be somewhat conservative and not get themselves into a bind again. So it's possible that at 2015 we could see a reloading but I am not real clear on that.

Fair enough. And then on subsea margins, as we think about the second half of the year, is there still execution upside there? Or is the 15% margins, give or take, are we kind of capped there just given what's in backlog and likely to be converted in the second half at this point?

Yes. Hey, Doug. So the second quarter margins gave us increased confidence on our ability to deliver that back half of '15. The way that I would characterize that for you is we see, and obviously the second quarter gave us more confidence, that these margins in the back half are very achievable. And so obviously we manage a lot or risks and opportunities in those and to the extent that we continue to do that well, we see that back half of the year being extremely achievable in subsea.

And our next question comes from David Anderson from JPMorgan. Please go ahead.

Just a quick question on the subsea pricing out there. Are you starting to see that on the onesies and twosies, kind of some of those smaller awards that seem to be making up a bigger portion of your order book? Can you just give us a sense where that stands now, John?

Well, obviously in the second quarter it was all onesies and twosies plus our service for us. Most of -- I think for our company we could allow the onesies-twosies because it's a call off from our frame agreements. If you don’t have frame agreements you don’t have alliance, then the inclination for an operator is to order and tender the entire field or a lot of the field. When you have a frame agreement and you are not tendering, why do that. And you have standardized on your equipment, you just call it off. So I think our company tends to get more onesies and twosies as a result of these call offs. In terms of pricing of the onesies and twosies, most of our call offs are part of our frame agreements so we get good pricing on those because of the frame agreements.

And you kind of get market rate on those, is that correct? If I recall then the (indiscernible)?

Well, at least market rate. I mean in a down market we always get better than market rates but in an up market, yes, we get market rates.

Around subsea separation, Marlim, I've been hearing pretty positive things from Petrobras in private but I haven't heard them say anything publicly. Can you give us a sense as to where that stands and when you think the next one could come from, from what you can tell right now?

Right. Well, as far as we are concerned, it's in Petrobras' hands. It's not about the technology, it's not about whether it's proven or they want to use it. That’s all been settled. It works. It met or exceeds their expectations. They like the technology, they need it. This has to do with other strategies and considerations that Petrobras has and how they want and when they want to go back into those legacy fields and deal with their production declines. I am glad you are hearing positive remarks from them, we hear positive remarks from them as well. But I don’t see anything in the near term from Petrobras with regard to an order, at least they haven't hinted that to us. They have got other issues and priorities that they need to sort out before they put together their plan for ordering Marlim type equipment.

And our next question comes from Marshall Adkins from Raymond James. Please go ahead. Marshall Adkins - Raymond James & Associates: Hey, John, I want to come back to that standardization consortium. Is it just for high temperature, high pressure stuff?

It’s for all the equipment that’s required for the lower tertiary which is 20,000, 350 degree subsea production is the scope. So, yes, all the subsea production equipment that those four operators will need to develop their lower tertiaries included in the scope. And I don’t know if you are -- yes? Marshall Adkins - Raymond James & Associates: Does it represent a change in customer attitude and say you come up with a standardized package, are other industry participants going to have access to that or is that just an FMC thing?

Right. It absolutely represents a change in the industry. We have seen standardization in the industry before. Sometimes an operator will standardize within their own portfolio in a region. Sometimes they will accept an FMC standard. But we have never seen four operators agree upfront that they are going to agree on what the standard is and then buy that standard. So that’s what is ground breaking in this that each of those four operators are going to buy the same part number to develop their lower tertiary fields and they will buy that from FMC. It is exclusive in the sense that they will only buy the equipment from FMC. But other -- this equipment and this technology will be available to the market.

And our next question comes from Jim Wicklund from Credit Suisse. Please go ahead.

Good quarter, guys. I know that BP and Shell are frame agreement customers. Are Anadarko and Conoco as well?

Anadarko is an exclusive alliance partner with us. Conoco is a little different. We have provided most of Conoco's subsea equipment over the last couple of years and although we don’t have a formal relationship with them at this time, I'd say we have informal partnership in that they have used a lot of FMC equipment. But, you are right, three of them actually have exclusive agreements with us.

Congratulations on getting four of the oil companies to agree to anything. Good job. John, you're talking about water treating and that you've done some pilots and that you're moving toward commercialization of the technology. Can you talk about, you know water treating has been the Holy Grail for onshore for a long time. You guys bought Pure to get in the flowback business. Can you talk a little bit more about what that technology is and what it could mean?

Right. The technology is separation systems which is -- you know bought a separation company years ago to develop separation technology to be used on the seabed. As it turns out, that technology is pretty applicable to the shale plays so we just tapped into that. I think it's fantastic technology, but the real secret here, Jim, and you already alluded to it, is we have access to the flowback. And the Pure Energy acquisition was really what made this happen. There is a lot of people out there that do water treatment and we get that. But we actually have access to it through Pure Energy. So we get the flowback. We are the ones who get it. So now we get to apply what was originally acquired as subsea separation technology to the shale plays.

And our next question comes from Jim Crandell from Cowen. Please go ahead. Jim Crandell – Cowen & Co.: Can you tell me how many tree orders you had in the quarter and what the Quest total number was for the second quarter?

We inbounded 15 subsea trees, Jim. The Quest numbers haven't been published but because Kaombo will fall in the second quarter and that was 65 trees, I would look for a 100ish or around 100 or less, a few less trees to be shown by Quest when those numbers come out. But we were 15 and the total will be around 100 when you include the Kaombo numbers. Jim Crandell – Cowen & Co.: Okay. And could you give us a range for the full year for the industry and your thoughts about magnitude of increase in 2015?

Well, Jim, we have talked about this before. The tree count is starting to lose some of its significance because of the manifold work and subsea services are growing. So I want to be a little bit careful when I talk about tree counts. We should be around 150 trees when the Quest numbers come in for the first half of the year. The Quest tree number is in the 400 plus range for 2014. I think at this stage you have to be a little careful because these big awards, particularly ones in Africa, they are coming towards the end of the year, could easily flip into 2015. So I am a little hesitant to call what the tree count will be. One, because it's starting to lose some of its significance in terms of subsea inbound dollars, and two, we are getting a little closer to the end of the year. But we are probably at about 150 or so half way through the year.

And our next question comes from Byron Pope from Tudor Pickering. Please go ahead. Byron Pope – Tudor Pickering Holt: Just have one question on the subsea business. With your guidance of fiscal '14 revenues of, call it the 5 billionish, it's looking at roughly close to double digit top line growth. And I thought that the subsea services element of that business as being faster growth business and higher margins. So it sounded in your prepared remarks like you're still constructive on that element of the subsea franchise. And so just wanted to get your sense for which geo markets are going to drive the services side of subsea as you think about the back half of the year and into 2015?

Well, Byron, you are absolutely right, that we are looking for subsea service growth in the coming years. You know we are already very strong in the North Sea. So for our company, we would see revenue growth in markets that we haven't served as strong as we have in the North Sea. So look to the Gulf of Mexico, look to Brazil and look to West Africa as new geo markets where we would see subsea services to continue to grow.

And our next question comes from Chuck Minervino from Susquehanna. Please go ahead.

Two questions for you. Number one, Maryann, I think you talked the last quarter about the backlog conversion rates for '14, I think it was something around 50%. And then I believe you said kind of approaching 60% by '16. I'm not really sure if that's correct from the transcript or if it was more supposed to be '15, but can you give us a little color on where you expect backlog conversion to be in '15 and then '16, if you kind of have an idea on that?

Sure, hey, Chuck. So you are right. In '14 we are seeing obviously a lower conversion rate and that’s because of sort of the longer tail of the backlog we have with the project like Egina and certainly the backlog that John's being talking about with respect to Petrobras and Pre-Salt. If you look it this year and as just we have kind of reconfirmed, we are looking at about another $5 billion of inbound coming. And that inbound has got a little bit of a different makeup than last year. So it's a smaller tail etcetera, and we would expect to be able to see in '15 that backlog convert at a more traditional level. And when you take the backlog that we have got from this year and that what we are adding, we begin to see 2015 returning closer to that more traditional high 50s, 60s sort of turnover, and then you take the subsea services growth as we were just talking about. So a little too soon for me to make any kinds of prediction on 2016. That will obviously depend on what the makeup of the inbound of 2015 looks like. But given what we see right now and the outlook for the balance of the year inbound, we think that '15 will see the conversion rate return to a more normal level as we have seen in the past.

Great, so kind of closer to the 60% number, okay. And then on the subsea margins, kind of similar to a question you got earlier. You guys have made quite a bit of progress over the last 12 months in subsea margins. Can you just help us understand how far along we are in that? I mean have we kind of got towards the seventh inning here in the margin expansion story or is there more to go? I know a lot of it was kind of fixing the labor force geographically and getting that right in the execution side of it. Is there a next step here that we could be focused on over the next 12 months?

We are clearly in the seventh inning. I mean, Maryann's talked about exit margins of 2014 in the mid-teens and that’s what we thought we would be with good execution. So I think further margin expansion will come from the market.

And our next question comes from Stephen Gengaro from Sterne, Agee. Please go ahead. Stephen Gengaro - Sterne, Agee & Leach: Actually just to sort of follow up on the last question. John, when you look at the, sort of I guess creeping up of pricing on the subsea side over the last year and you talked a little bit about the better backlog that you executed in the second quarter. Where does it stand now as far as sort of that margin mix in the backlog versus say the beginning of the year, even a year ago?

Well, a year ago we had low margin projects as a result of a combination of some of our execution challenges and pricing from two and three years ago. And those throughout last year and into the first half of this year have been exiting our backlog and being replaced by better margin business that we have obtained over the last year as the pricing environment has improved. And so I think when you get deeper into the second half of this year, you are going to see most of the backlog reflect the margins that we have experienced in this more favorable pricing environment. So that’s where the -- when you got the response I did to the last question was, I think we are starting to see the margin expansion slow down a little bit both as a result of our improved execution and the backlog now starting to almost entirely reflect the better market environment.

And our next question comes from Michael Lamotte from Guggenheim. Please go ahead.

If I could just follow-up on the subsea services discussion a little bit with a question more specifically about intervention tool utilization visibility over the next, call it six to nine months. And also, John, if you could talk about the refurbishment business and general trends in that segment.

With regard to the intervention tools, you know we have the three tools that have full contracts. They will be fully utilized. In the first quarter of course we had the recertification, but going forward all three of the stacks will be fully utilized as we expect. I am not sure if you are referring to the new stacks we are building. Our fourth stack will be available -- well it finishes construction at the end of this year and it will go into service really next year. And we are working on developing contracts for that stack. So I don’t see any underutilization in our capital equipment. For intervention we are on track. With regard to refurbishment, thank you for bringing that up. I think this is an important new trend in the industry. As the subsea equipment starts to mature, it needs to be refurbished. We have been making investments to prepare for that. We have more than adequate capacity but this is a market that will, for us anyway because we have the largest installed base, this is a market that’s going to continue to grow and we are ready for that. And you will see it in the more mature basins like the North Sea and Gulf of Mexico.

Okay. Are you making plans at this point to add a fifth stack or are you going to look for contract on the fourth before you begin to initiate construction on the fifth?

Actually we have launched manufacturing of both stack no. 5 and stack no. 6.

And our next question comes from Jeff Spittel from Clarkson Capital. Please go ahead.

I think we've covered a lot of relevant ground, so just one for me. On the surface margin guidance, pretty encouraging for the back half of the year. Is there any element of some pricing momentum embedded in those expectations or is this more just looking at execution and some better throughput there?

It's the latter. I mean we are executing well in our surface business, this is about volume.

And our next question comes from Jeffrey Campbell from Tuohy Investors. Please go ahead.

John, earlier, you said that FMC would be the exclusive supplier to the alliance, the four E&Ps, but the equipment would be available to other producers. Just kind of thinking about standardization. In the best case scenario it sounds like we're almost talking about producers standardizing around FMC's efforts in the joint alliance. But is there also some kind of standardization that the rest of the industry would participate in?

Well, Jeff, you mean the rest of the industry -- if you mean other operators, it will be available to other operators from FMC for that standard. It is not a standard that will be available to the industry to build and manufacture.

Okay. And then I guess as a follow-up to just the idea of standardization and you were saying that this might trickle down to more traditional subsea applications. Can you just kind of comment broadly on what you see in the subsea kit that is possible to be standardized and what's in the kit that will unlikely ever be standardized?

Right. And just to be clear, I said I am hopeful that this approach will be used because I think it's, well I don’t even know if it’s arguable, it's really the best way to improve returns, improve project execution and improve reliability. So I am really hopeful that it will trickle down to other products. What can best be standardized is the key components of a subsea production system. And when I talk about standardization I am talking about the quality, specs, the configuration, the design and so forth. What doesn’t need to be standardized in my view is the layout of the entire field. That’s not nearly as important. And that probably should be customized for the unique geology or geography of that subsea development. What's really critical and what makes the difference in terms of cost, lead times and reliability, is those key components. The tree, the manifold technology, the connection system, the controls. This is what's critical to be standardized and that’s what the partnership with the four operators is geared towards standardizing. The actual configuration of the field, how the equipment will be positioned in the field, that will vary field by field.

And our last question comes from Ole Slorer from Morgan Stanley. Please go ahead.

Yes, thanks for giving me another shot here. Just some longer-term, just quick updates on technologies. If you could just bring us up to speed about the performance of the subsea, what the separation system on Marlim, how it has performed since you installed it. And also just give us a quick update on where you stand on your developments on subsea boosting pumps which will service as well as the ESP initiative. And also if you could comment on how you sort of see the trend between boosting and separation play out regionally over the next couple of years, when should we expect things to pick up and where.

Okay. To start with Marlim. The Marlim equipment was fully tested in a live environment. The separation capability of the system met or exceeded Petrobras' original requirements and they were successful in achieving that. The pumps worked, the reinjection happened as planned. So it's now in Petrobras' eyes, fully qualified and meets their functional specs. So I don’t know -- and that was the system installed on a well, tied back to the production platform. The top side modifications were completed. Pretty much everything, to my knowledge everything that needed to be qualified and tested and proven out was done so. So now, Ole, it's beyond the technology, it's about where do they want to apply it and their plans to do that. So I think we are done with the technology qualification. With regard to boosting, where do we stand. On multiphase, helico-axial boosting we are tendering multiple projects as we speak and hopeful, of course, that we will be -- and which we are fully qualified for and which we fully hope that we will be successful when those awards are made, which could be at the end of this year or early next year. With regard to that outlook for subsea processing, there is almost two times what we saw in '14 and '13 the number of subsea processing projects, both boosting and separation. I would say about two-thirds of them are boosting only. A third or maybe 40% include separation. You get out to 2016 and you have almost a doubling of the potential projects. And we know all these projects won't necessarily go forward. I might add, these are not studies or feed studies, these are actual hardware -- named projects that include hardware. So that’s the outlook and the mix is somewhere in there out, maybe a third or 40% include separation, the balance is boosting. 2015, twice as many projects as we saw in '13 and '14. 2016, even stronger yet.

Okay, well thanks for that quick rundown and I understand why you think that the tree count is becoming irrelevant. So thanks a lot.

I will now turn the call back over to Brad Alexander for closing comments.

This concludes our second quarter conference call. A replay of our call will be available on our Web site beginning at approximately 2:00 p.m. Eastern time today. We will conduct our third quarter 2014 conference call on October 22 at 9:00 a.m. Eastern time. If you have any further questions, please feel free to contact me. Thank you for joining us. Paulette, you can now end the call.

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