Business Combinations

12 Months Ended

Dec. 31, 2012

Business Combinations [Abstract]

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS

Schilling Robotics, LLC—On January 3, 2012, we exercised our option to purchase the remaining 55.0% of outstanding shares of Schilling Robotics, LLC (“Schilling Robotics”), a Delaware limited liability company, and closed the transaction on April 25, 2012. Schilling Robotics is a supplier of advanced robotic intervention products, including a line of remotely operated vehicle systems (“ROV”), manipulator systems and subsea control systems. The acquisition of the remaining interests in Schilling Robotics will allow us to grow in the expanding subsea environment, where demand for ROVs and the need for maintenance activities of subsea equipment is expected to increase.

Prior to April 25, 2012, we owned 45.0% of Schilling Robotics. Upon the closing of this transaction, we owned 100.0% of Schilling Robotics which is included among the consolidated subsidiaries reported in the Subsea Technologies segment. The acquisition-date fair value of our previously held equity interest in Schilling Robotics was $144.9 million with the fair value primarily estimated through an income approach valuation. We recorded a gain of $20.0 million in other income (expense), net on the consolidated statement of income related to the fair value remeasurement of our previously held equity interest in Schilling Robotics.

The purchase price with respect to the remaining outstanding shares was determined by applying the multiple of our market capital relative to our earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the year ended December 31, 2011 (determined in accordance with the terms of the unitholders agreement), to the EBITDA generated by Schilling Robotics during the year ended December 31, 2011 (subject to certain adjustments in accordance with the terms of the unitholders agreement). The consideration for the remaining outstanding shares was paid in cash.

Control Systems International, Inc.—On April 30, 2012, we acquired 100.0% of Control Systems International, Inc. (“CSI”) which is included among the consolidated subsidiaries reported in the Energy Infrastructure segment. Our acquisition of CSI will enhance our automation and controls technologies and benefit production and processing businesses such as measurement solutions through comprehensive fuel terminal and pipeline automation systems. Additionally, the acquired technologies support our long-term strategy to expand our subsea production and processing systems.

Pure Energy Services Ltd.—On October 1, 2012, we acquired 100.0% of Pure Energy Services Ltd. (“Pure Energy”) which is included among the consolidated subsidiaries reported in the Surface Technologies segment. Based in Calgary, Alberta, Canada, and operating in multiple field locations in both Canada and the United States, Pure Energy is a provider of fracturing flowback services and wireline services. The acquisition of Pure Energy is expected to complement the existing products and services of our Surface Technologies segment and to create client value by providing an integrated well site solution.

The acquisition-date fair value of the consideration transferred consisted of the following:

(In millions)	Schilling Robotics		CSI			Pure Energy		Total
Cash	$	282.8	$	49.0	(1)	$	287.0	$	618.8
Previously held equity interest	144.9		—			—		144.9
Purchase price withheld	—		10.0		(2)	—		10.0
Total	$	427.7	$	59.0		$	287.0	$	773.7

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(1)    Includes anticipated recovery of negative working capital.

(2) Represents the portion of the purchase price withheld ("holdback") by FMC Technologies pursuant to the terms of the stock purchase agreement. The holdback amount will be held and maintained by FMC Technologies as security for the payment of any and all amounts to which CSI indemnifies us, including final working capital adjustments and other indemnifications as listed in the stock purchase agreement. FMC Technologies may deduct from the holdback any eligible amounts and pay CSI the net amount three years after the closing date.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition dates.

(In millions)	Schilling Robotics			CSI			Pure Energy			Total
Assets:
Cash	$	3.9		$	0.3		$	0.2		$	4.4
Accounts receivable	22.4			8.2			44.8			75.4
Inventory	50.6			0.1			3.3			54.0
Other current assets	2.1			0.2			2.1			4.4
Property, plant and equipment	21.7			0.2			162.2			184.1
Intangible assets	145.9			35.1			58.2			239.2
Other long-term assets	0.7			—			—			0.7
Total identifiable assets acquired	247.3			44.1			270.8			562.2
Liabilities:
Current liabilities	(33.4		)	(15.8		)	(38.1		)	(87.3		)
Long-term debt	—			—			(18.6		)	(18.6		)
Deferred income taxes	—			—			(12.6		)	(12.6		)
Other long-term liabilities	(1.9		)	—			—			(1.9		)
Total liabilities assumed	(35.3		)	(15.8		)	(69.3		)	(120.4		)
Net identifiable assets acquired	212.0			28.3			201.5			441.8
Goodwill	215.7			30.7			85.5			331.9
Net assets acquired	$	427.7		$	59.0		$	287.0		$	773.7

The goodwill recognized is primarily attributable to expected synergies and assembled workforce acquired in Schilling Robotics, CSI, and Pure Energy. As of December 31, 2012, there were no changes in the recognized amounts of goodwill resulting from the acquisitions. The majority of the combined goodwill recognized for Schilling Robotics and CSI is deductible for tax purposes. Goodwill recognized for Pure Energy is not deductible for tax purposes.

The identifiable intangible assets acquired include the following:

	Schilling Robotics			CSI			Pure Energy
(In millions, except amortization periods)	Fair Value		Wgtd. Avg. Amortization Period (in years)	Fair Value		Wgtd. Avg. Amortization Period (in years)	Fair Value		Wgtd. Avg. Amortization Period (in years)
Technology	$	38.9	12	$	17.0	10	$	—	—
Trademarks/trade name	25.4		20	2.8		15	—		—
Customer relationships	42.9		20	15.3		15	57.6		20
Base technology – technical know-how	38.7		15	—		—	—		—
Non-compete agreements	—		—	—		—	0.6		2
Total identifiable intangible assets acquired	$	145.9		$	35.1		$	58.2

We recognized $1.2 million of acquisition-related costs that were expensed in the year ended December 31, 2012 related to the Schilling Robotics, CSI and Pure Energy acquisitions. These costs were recognized as selling, general and administrative expense in the consolidated statement of income. Revenue and net income of Schilling Robotics, CSI and Pure Energy from the acquisition dates included in our consolidated statements of income were $94.6 million, $19.7 million and $67.3 million of revenue, respectively, and $3.1 million, $2.4 million and $2.7 million of net income, respectively.

Pro Forma Impact of Acquisitions (unaudited)

The following unaudited supplemental pro forma results present consolidated information as if the acquisitions had been completed as of January 1, 2011. The 2012 pro forma results include: (i) $10.1 million of amortization for acquired intangible assets, (ii) $10.7 million in inventory fair value step-up amortization for Schilling Robotics, and (iii) $1.2 million of acquisition-related costs. The pro forma results do not include any potential synergies, cost savings or other expected benefits of the acquisitions. Accordingly, the pro forma results should not be considered indicative of the results that would have occurred if the acquisitions had been consummated as of January 1, 2011, nor are they indicative of future results.

	Year Ended December 31,
(In millions)	2012 Pro Forma		2011 Pro Forma
Revenue	$	6,394.4	$	5,512.8
Net income	$	446.0	$	444.3