As filed with the Securities and Exchange Commission on February 20, 2001

Registration No. 333-
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--------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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FMC TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)

Delaware                      3533                   36-4412642
(State or other      (Primary Standard Industrial    (I.R.S. Employer
jurisdiction of      Classification Code Number)  Identification Number)
incorporation or
organization)

200 East Randolph Drive
Chicago, Illinois 60601
(312) 861-6000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)

-------------

William H. Schumann III
Senior Vice President and Chief Financial Officer
FMC Technologies, Inc.
200 East Randolph Drive
Chicago, Illinois 60601
(312) 861-6000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

-------------

Copies to:
Stephen F. Gates, Esq.    Andrew R. Brownstein, Esq.     James M. Prince, Esq.
FMC Corporation     Wachtell, Lipton, Rosen & Katz   Vinson & Elkins L.L.P.
200 East Randolph Drive      51 West 52nd Street         2300 First City Tower
Chicago, Illinois 60601       New York, NY 10019           1001 Fannin Street
(312) 861-6000              (212) 403-1000         Houston, Texas 77002-6760
(713) 758-2222

Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, please check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

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CALCULATION OF REGISTRATION FEE

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Proposed Maximum
Aggregate
Title of Each Class of Securities to Be      Offering Price     Amount of
Registered                         (2)        Registration Fee
-------------------------------------------------------------------------------

Common Stock, par value $.01 per share (and
associated preferred stock purchase rights)
(1)........................................    $350,000,000       $87,500
-------------------------------------------------------------------------------

-------
(1) Each share of Common Stock is accompanied by a right to purchase Junior
Participating Preferred Stock of the Registrant. Prior to the occurrence of
certain events, none of which have occurred as of this date, the rights
will not be exercisable or evidenced separately from the Common Stock.
(2) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(o) under the Securities Act of 1933,
as amended.

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment that specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to such Section 8(a), may determine.

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--------------------------------------------------------------------------------

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the     +
+Securities and Exchange Commission is effective. This prospectus is not an    +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted.             +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Subject to Completion
Preliminary Prospectus dated February 20, 2001

PROSPECTUS
Shares

FMC Technologies, Inc.

Common Stock

-----------

This is FMC Technologies, Inc.'s initial public offering. FMC Technologies
is selling all of the shares. The U.S. underwriters are offering         shares
in the U.S. and Canada, and the international managers are offering
shares outside the U.S. and Canada.

We expect the public offering price to be between $   and $   per share.
Currently, no public market exists for the shares. After pricing of the
offering, we expect that the shares will trade on the New York Stock Exchange
under the symbol "FTI."

Investing in the common stock involves risks that are described in the
"Risk Factors" section beginning on page 10 of this prospectus.

-----------

Per Share Total
--------- -----

Public offering price....................................    $       $
Underwriting discount....................................    $       $
Proceeds, before expenses, to FMC Technologies...........    $       $

The U.S. underwriters may also purchase up to an additional    shares from
FMC Technologies at the public offering price, less the underwriting discount,
within 30 days from the date of this prospectus to cover over-allotments. The
international managers may similarly purchase up to an additional    shares
from FMC Technologies.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

The shares will be ready for delivery on or about            , 2001.

-----------

Merrill Lynch & Co.

Credit Suisse First Boston

Salomon Smith Barney

-----------

The date of this prospectus is           , 2001.

[DESCRIPTION OF GRAPHIC TO COME BY AMENDMENT]

TABLE OF CONTENTS

Page
----

Prospectus Summary.......................................................   1
Risk Factors.............................................................  10
Cautionary Statement Regarding Forward-Looking Information...............  21
Use of Proceeds..........................................................  22
Dividend Policy..........................................................  22
Capitalization...........................................................  23
Selected Historical Combined Financial Data..............................  24
Unaudited Pro Forma Financial Information................................  26
Management's Discussion and Analysis of Financial Condition and Results
of Operations...........................................................  29
Business.................................................................  39
Management...............................................................  53
Arrangements Between FMC Technologies and FMC Corporation................  65
Principal Stockholder....................................................  75
Description of Capital Stock.............................................  76
Shares Eligible for Future Sale..........................................  81
Material U.S. Federal Tax Considerations for Non-U.S. Holders of Our
Common Stock............................................................  83
Underwriting.............................................................  86
Legal Matters............................................................  90
Experts..................................................................  90
Where You Can Find More Information......................................  90
Index to Combined Financial Statements................................... F-1

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You should rely only on the information contained in this prospectus. We
have not, and the underwriters have not, authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus is accurate only as of the date on
the front cover of this prospectus or other date stated in this prospectus. Our
business, financial condition, results of operations and prospects may have
changed since that date.

---------------

FMC Technologies, Inc., the logo and other trademarks, trade names and
service marks of FMC Technologies mentioned in this prospectus, including
Jetway(R), are the property of, or are licensed by, FMC Technologies, FMC
Corporation or a subsidiary of FMC Technologies or FMC Corporation.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this
prospectus. This summary does not contain all of the information that you
should consider before investing in our common stock. You should read the
entire prospectus carefully, especially the risks of investing in our common
stock discussed under "Risk Factors" and combined financial statements and
related notes. The terms "we," "us," "our" and "FMC Technologies" refer to the
issuer in this offering and our predecessor, the Energy Systems and Specialty
Systems businesses of FMC Corporation. The term "FMC Corporation" refers to FMC
Corporation, a Delaware corporation. This prospectus gives effect to the
expected execution of intercompany agreements between FMC Technologies and FMC
Corporation. Unless we specifically state otherwise, the information in this
prospectus does not take into account the possible issuance of up to
additional shares of our common stock, which the underwriters have the option
to purchase from us solely to cover over-allotments.

OUR COMPANY

We design, manufacture and service technologically sophisticated systems
and products for our customers through our Energy Systems and Specialty Systems
segments. Energy Systems is a leading supplier of systems and services used in
the offshore, particularly deepwater, exploration and production of crude oil
and natural gas. In addition, Specialty Systems provides technologically
advanced handling and processing systems to industrial customers. During the
year ended December 31, 2000, we generated $1,875.2 million of revenue, after
eliminations. In the year 2000, Energy Systems generated $1,037.3 million of
revenue, resulting in a 14.5% compound annual growth rate since 1994, and
Specialty Systems generated $839.5 million of revenue, resulting in an 8.5%
compound annual growth rate over the same period.

Energy Systems is a global leader in the provision of subsea drilling and
production systems, including subsea tree systems that control the flow of
crude oil and natural gas from the well, systems for floating production
solutions and surface drilling and production systems to oil and gas companies
involved in the exploration and production of crude oil and natural gas. Many
of the systems that we provide are for use in the exploration, development and
production of crude oil and natural gas reserves located in technologically
challenging deepwater environments, which involve water depths of greater than
1,000 feet. Worldwide exploration and production spending by oil and gas
companies has increased from approximately $55.0 billion in 1994 to
approximately $94.8 billion in 2000, representing a compound annual growth rate
of 9.5%. In addition, worldwide exploration and production spending is expected
to increase 19.7% in 2001 to approximately $113.5 billion. More specifically,
an external industry survey published in early 2000 projected that subsea tree
installations would increase at a compound annual growth rate of 17.0% between
2000 and 2004.

We are also a leading provider of specialized, high-performance fluid
control systems and products, measurement systems, loading systems and blending
and transfer systems to customers involved in the transportation and processing
of crude oil, natural gas and refined petroleum-based products.

In subsea systems, our largest business area:

.  We are a major supplier of subsea tree systems and associated services
to ExxonMobil Corporation, Shell Exploration and Production Company
(USA), Statoil A.S., Total Fina Elf S.A. and Petroleo Brasileiro S.A.
These five companies are projected to be among the eight most active
developers of subsea oil and gas over the next five years based on
projected subsea tree installations.

.  Since 1995, we have installed, or been awarded contracts for the
installation of, more subsea tree systems than any other manufacturer.

1

.  We set six of the ten water depth records established since 1987 for
subsea tree installations.

Energy Systems' financial performance generally has been less affected by
short-term market cycles and volatile commodity prices than the financial
performance of companies operating in other sectors of the oilfield services
industry. Most of the systems that we supply are highly engineered to meet the
unique demands of our customers and are typically ordered one or two years
prior to installation. We believe that, due to their long lead times and high
potential returns, the deepwater projects in which our systems are used
typically are not the marginal projects that are more subject to cancellation
or delay during periods of low crude oil and natural gas prices. In addition,
we believe that Energy Systems is less capital intensive than companies
operating in other sectors of the oilfield services industry due to factors
such as high engineering content, outsourcing of certain low value-added
manufacturing and advance payments received from customers.

Specialty Systems is a leading supplier of specialized handling and
processing systems and services to industrial companies. We design, manufacture
and service technologically sophisticated food handling and processing systems
used for, among other things, convenience food preparation and citrus juice
extraction for food processors such as Nestle S.A., Tyson Foods, Inc., and
Cargill, Incorporated. In addition, we design, manufacture and service
technologically advanced ground support equipment and systems for airlines,
airports and air freight companies, such as United Airlines, Inc., Delta Air
Lines, Inc. and FedEx Corporation. Our products include citrus juice extraction
and commercial freezing systems, as well as air cargo loaders and Jetway(R)
brand passenger boarding bridges.

We are a leading supplier of many of these systems and services:

.  We estimate that our equipment processes approximately 75% of the
global production of orange juice, freezes approximately 50% of
commercially frozen foods on a global basis and sterilizes a
significant portion of the world's canned foods.

.  We invented airline passenger boarding bridges and remain the leading
supplier of this product. We believe that we also have the largest
installed base of air cargo loaders.

OUR INDUSTRIES

The primary factor influencing demand for the exploration and production
systems and services that we provide is the level of exploration and production
spending by oil and gas companies, particularly with respect to offshore
activities worldwide. Exploration and production spending levels, in turn,
depend primarily on current and anticipated future crude oil and natural gas
prices, production volumes and oil and gas company operating costs.

Worldwide spending for the exploration and production of crude oil and
natural gas grew from approximately $55.0 billion in 1994 to approximately
$94.8 billion in 2000, representing a compound annual growth rate of 9.5%.
Worldwide exploration and production spending is expected to increase 19.7% in
2001 to $113.5 billion. More specifically, subsea tree installations are
projected to increase at a compound annual growth rate of 17.0% between 2000
and 2004.

In addition, exploration and production companies are increasingly
focusing their efforts on more remote deepwater areas where geological
formations have been less explored. The recent and anticipated increase in
exploration and production activity in deepwater areas is evidenced by:

.  an increase in major oil and gas company spending for deepwater
exploration and production from approximately 23% of total exploration
and production budgets in 1994 to approximately 50% in 2000;

2

.  since 1994, the addition of 41 new drilling rigs that are capable of
operating in water depths greater than 5,000 feet at a typical cost of
between $160 million and $380 million per rig, representing
approximately a six-fold increase from 1994 levels of drilling rigs
with equivalent water depth capabilities; and

.  an increase in the number of deepwater crude oil and natural gas
discoveries, from 16 in 1994 to 68 in 1999.

The reduction in development costs of crude oil and natural gas and the
development of efficient technological solutions in response to the extreme
environmental and logistical challenges posed by deepwater have been, and we
believe will continue to be, major factors influencing the growth of the subsea
oilfield services industry. Also, consolidation among oil and gas companies,
and the resulting cost cutting initiatives, have led oil and gas companies to
outsource more functions that they previously performed internally. These
factors have driven three principal ongoing trends:

.  technological improvements and refined installation techniques;

.  growth in the use of subsea systems and services; and

.  delivery of more integrated systems of related products and services
for subsea developments.

As with the exploration and production industry, the primary industries
that Specialty Systems serves--food processing and air transportation--are also
undergoing change.

.  Demand in several segments of the convenience food industry that we
serve is expected to continue to grow. For example, worldwide retail
sales of frozen ready-meals are forecast to increase at a compound
annual rate of 4.5% through 2005.

.  Food retailers are consolidating and increasing their purchasing
power. In response our food processing customers are seeking
technologically sophisticated integrated systems and services like
those we provide to maximize the efficiency of their operations while
maintaining high standards of food safety.

.  The worldwide fleet of airplanes is expected to grow at a compound
annual rate of 4.3% through 2019.

.  The airline industry has become increasingly consolidated through
mergers and alliances. For example, five alliances currently represent
approximately 50% of total worldwide passenger traffic.

We believe that these trends will continue to result in food processors,
airlines, airports and air freight companies outsourcing an increasing amount
of non-core services and seeking suppliers to provide integrated systems and
products that are technologically advanced, cost-efficient and supported by
extensive service capabilities.

OUR GROWTH STRATEGY

We intend to pursue a growth strategy based on maintaining leading
positions in our markets by providing differentiated technological solutions
for our customers and capitalizing on our extensive customer relationships.

From 1994 to 2000, Energy Systems' revenue and segment operating profit
increased at compound annual rates of 14.5% and 31.8%, respectively. During
that same period, Specialty Systems' revenue and segment operating profit
increased at compound annual rates of 8.5% and 25.3%, respectively.

3

We believe that growth in Energy Systems is based upon our ability to
supply the integrated systems required by the high-growth deepwater sector of
the exploration and production industry. We expect that demand for these
systems will continue to increase as exploration and production of crude oil
and natural gas in technologically challenging deepwater and remote areas
increases. In addition to benefiting from the expected growth in the business
areas we serve, we intend to pursue select, complementary acquisitions and the
following internal growth strategy:

.  Focus on Technological Innovation. We have increased Energy Systems'
research and development spending by a compound annual rate of 15.7%
from 1994 to 2000 to $33.8 million in 2000. We believe that our
technological innovations have optimized product performance and led
to breakthrough installation techniques, yielding substantial cost
savings that have helped to make deepwater production and development
of smaller fields an economic reality.

.  Develop and Maintain Alliances with Key Customers. We intend to expand
our current alliances and form new alliances with other companies
active in the oil and gas industry. Our current key subsea alliance
customers include Agip Exploration and Production, which is a
subsidiary of ENI S.p.A., Norsk Hydro Production, A.S., Shell
Exploration and Production, Statoil and Unocal Corporation. Through
our relationships with our customers, we are able to refine and
standardize our systems and services over many projects and to
optimize offshore installation techniques for the lowest total cost
and maximum reservoir recovery.

.  Provide a Broad Package of Systems and Services. We intend to develop
and acquire additional systems and services that complement our
current offerings and leverage our worldwide infrastructure. As major
oil companies increasingly outsource non-core operations, we believe
that they will continue to seek suppliers, like us, that can provide
an integrated solution to their exploration and production needs
through a single-source package of related systems and services.

We believe Specialty Systems' historical growth resulted from providing
technology-based systems and products for food processing and air
transportation companies. In addition to benefiting from the expected growth in
many of the industry segments we serve, we intend to continue to broaden the
scope of systems, equipment and services that we provide. We further intend to
leverage our large installed base of products and systems to enhance customer
relationships, generate new business and grow our aftermarket equipment and
services operations. From 1994 to 2000, Specialty Systems' aftermarket revenue
increased at a compound annual rate of approximately 10.9%. We intend to
continue to develop our aftermarket business by providing retrofits to
accommodate changing operating requirements and by providing continuous,
proactive service, including in some cases by placing our personnel at the
operating sites of our customers.

4

OUR RELATIONSHIP WITH FMC CORPORATION

We are currently a wholly owned subsidiary of FMC Corporation, which, in
addition to our operations, is a diversified producer of industrial chemicals,
specialty chemicals and agricultural products. After the completion of this
offering, FMC Corporation will own approximately      % of our outstanding
common stock, or      % if the underwriters exercise their over-allotment
option in full.

FMC Corporation has advised us that it currently intends to distribute
its remaining ownership interest in us to common stockholders of FMC
Corporation. If completed, the distribution, as previously announced, is
expected to take the form of a spin-off in which FMC Corporation distributes
all of our common stock that it owns through a special dividend to FMC
Corporation common stockholders. If circumstances change, FMC Corporation may
distribute its remaining ownership interest in us through an exchange offer by
FMC Corporation, in which its common stockholders would be offered the option
of tendering some or all of their shares in exchange for our common stock, and
a subsequent spin-off of FMC Corporation's remaining ownership interest in us.
FMC Corporation has advised us that it does not intend to complete the
distribution unless it receives a favorable tax ruling from the Internal
Revenue Service as to the tax-free nature of the distribution for U.S. federal
income tax purposes and the final approval of the Board of Directors of FMC
Corporation, among other conditions. FMC Corporation has also advised us that
it currently anticipates that this distribution will occur by the end of
calendar year 2001.

FMC Corporation has advised us that the final determination as to the
completion, timing, structure and terms of the distribution will be based on
financial and business considerations and prevailing market conditions. In
addition, FMC Corporation has advised us that, as permitted by the separation
and distribution agreement, it will not complete the distribution if its Board
of Directors determines that the distribution is not in the best interests of
FMC Corporation and its stockholders. FMC Corporation has the sole discretion
to determine whether or not to complete the distribution and, if it decides to
complete the distribution, to determine the timing, structure and terms of the
distribution.

We believe that we will realize benefits from our separation from FMC
Corporation, including the following:

.  More focused, entrepreneurial approach. As a smaller company with
fewer business units and a Board of Directors and management team
focused on our business, we expect to be in a better position to grow
our business areas and serve our customers more effectively through
quicker decision making, more efficient deployment of resources,
increased operational agility and enhanced responsiveness to customers
and markets.

.  Better market recognition of the value of our business. As a separate,
stand-alone company, we will offer a more focused investment
opportunity in Energy Systems and Specialty Systems than that
currently presented by a diversified FMC Corporation. We expect that
this will promote a more efficient equity valuation of our business
than if we were to be valued as a part of a larger, diversified
company.

.  Incentives for employees more directly linked to our performance. We
expect to enhance our employees' motivation and to strengthen our
management's focus through incentive compensation programs tied to the
market performance of our common stock. The separation will enable us
to offer our employees compensation more directly linked to the
performance of our business than when we were a part of FMC
Corporation, which we expect will enhance our ability to attract and
retain qualified personnel.

5

.  Increased ability to pursue strategic acquisitions. With enhanced
market recognition of the value of our businesses, we expect to be
better positioned to pursue strategic acquisitions to grow our
businesses.

Prior to this offering, we will enter into agreements with FMC
Corporation related to the separation of our business operations from FMC
Corporation. These agreements provide for, among other things, the transfer
from FMC Corporation to us of assets, and the assumption by us of liabilities,
primarily relating to our business. At the closing of this offering, the
transfer of assets and liabilities in the United States will be complete, and
the foreign transfers of assets and liabilities will be substantially complete.
For more information regarding the assets and liabilities to be transferred to
us, see "Arrangements Between FMC Technologies and FMC Corporation" and our
combined financial statements and the notes to those statements that are
included elsewhere in this prospectus.

The agreements between FMC Corporation and us also will govern our
various interim and ongoing relationships. All of the agreements relating to
the separation were made in the context of a parent-subsidiary relationship and
were negotiated in the overall context of the separation from FMC Corporation.
The terms of these agreements may be more or less favorable to us than if they
had been negotiated with unaffiliated third parties. See "Risk Factors--Risks
Related to Our Relationship with FMC Corporation" and "Arrangements Between FMC
Technologies and FMC Corporation."

---------------

We were incorporated on November 13, 2000 as a wholly owned subsidiary of
FMC Corporation. Our principal executive offices are located at 200 East
Randolph Drive, Chicago, Illinois 60601, and our telephone number is (312) 861-
6000.

6

The Offering

Common stock offered by FMC Technologies:

U.S. offering..........            shares
International                      
offering..............            shares
--------------------
Total..................            shares
Shares to be held by FMC
Corporation
after the offering........            shares

Shares outstanding after
the offering..............            shares

Use of proceeds............ We estimate that our net proceeds from this
offering without the exercise of the over-
allotment option will be approximately $
million. We intend to use these net proceeds to
pay off amounts outstanding under a $200 million
180-day revolving credit facility and a portion of
the borrowings under one or more revolving credit
facilities, all of which we will assume from FMC
Corporation in connection with this offering. Our
use of proceeds is more fully described under "Use
of Proceeds."

Risk factors............... See "Risk Factors" and other information included
in this prospectus for a discussion of factors you
should carefully consider before deciding to
invest in shares of our common stock.

Proposed New York Stock
Exchange symbol........... "FTI"

The number of shares of our common stock to be outstanding after this
offering includes an estimated   shares of our restricted stock that we expect
to issue to replace all shares of FMC Corporation restricted stock held by our
employees and a portion of the shares of FMC Corporation restricted stock held
by our directors in connection with this offering. The estimated number of
shares of our restricted stock to be issued in respect of FMC Corporation
restricted stock is based on the number of shares of FMC Corporation restricted
stock that would have been replaced had this offering occurred on      , 2001,
the closing price per share of FMC Corporation common stock of $  on      ,
2001 and the assumed offering price per share of our common stock in this
offering of $     . See "Management--Treatment of FMC Corporation Restricted
Stock."

The number of shares of our common stock to be outstanding after this
offering listed above does not include options that we expect to grant or
replace in connection with the separation. In connection with the offering, we
expect to grant options to employees and directors to purchase an aggregate of
approximately       shares of our common stock at an exercise price equal to
the initial public offering price. See "Management--Incentive Plans--The Stock
Plan" and "Management--Executive Compensation." In addition, we will replace
FMC Corporation options held by our employees and former employees and a
portion of the FMC Corporation options held by our directors with options to
acquire our common stock on the date FMC Corporation distributes our common
stock to its stockholders. See "Management--Treatment of FMC Corporation
Options."

7

Summary Historical Combined Financial Data

The following table presents summary historical and pro forma combined
financial data for FMC Technologies for the periods and dates indicated. The
information set forth below should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
our historical combined financial statements and notes to those statements
included elsewhere in this prospectus. The combined operating results data for
the years ended December 31, 1998, 1999 and 2000 and the combined balance sheet
data as of December 31, 1999 and 2000 are derived from, and are qualified by
reference to, our audited combined financial statements included elsewhere in
this prospectus. The combined operating results data for the years ended
December 31, 1996 and 1997 are derived from our unaudited combined financial
data that are not included in this prospectus. The unaudited pro forma
financial information gives effect to specified transactions as if those
transactions had been consummated on January 1, 2000 or December 31, 2000, as
described in "Unaudited Pro Forma Financial Information."

The historical combined financial information has been carved out from
the consolidated financial statements of FMC Corporation using the historical
results of operations and bases of the assets and liabilities of the
transferred businesses and gives effect to allocations of expenses from FMC
Corporation. Our historical combined financial information may not be
indicative of our future performance and does not necessarily reflect what our
financial position and results of operations would have been had we operated as
a separate, stand-alone entity during the periods presented.

Year Ended December 31,
------------------------------------------------
1996      1997      1998      1999      2000
--------  --------  --------  --------  --------
(in millions, except per share data)

Combined Statements of Income
Data:
Revenue......................  $1,689.7  $2,031.6  $2,185.5  $1,953.1  $1,875.2
Cost of sales or services....   1,312.9   1,551.1   1,669.3   1,479.8   1,421.1
Selling, general and
administrative expenses.....     299.9     324.1     337.8     302.4     291.2
Research and development.....      41.5      46.7      50.7      51.8      56.7
Asset impairments............       --       27.0       --        6.0       1.5
Restructuring and other
charges.....................       --       27.9       --        3.6       9.8
Interest expense (income),
net.........................       2.8       3.8       1.9      (0.5)      4.3
--------  --------  --------  --------  --------
Income from continuing
operations before income
taxes.......................      32.6      51.0     125.8     110.0      90.6
Provision for income taxes...       5.4      34.1      38.6      33.5      22.7
--------  --------  --------  --------  --------
Income from continuing
operations..................  $   27.2  $   16.9  $   87.2  $   76.5  $   67.9
========  ========  ========  ========  ========
Net income...................  $   35.0  $   16.9  $   87.2  $   71.0  $   67.9
========  ========  ========  ========  ========
Earnings per common share
from continuing operations..  $         $         $         $         $
========  ========  ========  ========  ========
Pro forma unaudited as
adjusted diluted earnings
per common share from
continuing operations.......                                          $
========
Other Financial Data:
Depreciation.................  $   48.1  $   48.9  $   49.0  $   46.2  $   41.2
Amortization.................      16.3      18.6      17.6      16.1      17.9
EBITDA (1)...................      99.8     122.3     194.3     171.8     154.0
Capital expenditures.........      93.5      66.3      59.4      40.9      43.1
Cash flows provided by (used
in):
Operating activities 
of continuing operations...    (270.1)    268.9     223.2     154.3       9.5
Investing activities........     (64.2)    (33.1)   (155.6)     (6.5)     63.4
Financing activities........     328.3    (237.9)    (65.2)   (135.5)    (90.4)
Order backlog (at year end)
(2).........................     923.0     988.8   1,133.9     840.6     644.3
Average segment operating
capital employed (3)........     998.1   1,062.4     917.8     832.8     868.4

December 31, 2000
----------------------
Pro Forma
Historical As Adjusted
---------- -----------
(in millions)

Combined Balance Sheet Data:
Working capital..........................................  $  127.9   $
Total assets.............................................   1,373.7
Total long-term debt.....................................       --
Stockholder's equity.....................................     642.0

8

--------
(1) EBITDA consists of income from continuing operations before interest and
income taxes plus depreciation of property, plant and equipment and
amortization of other long-term assets, primarily intangibles of acquired
companies. EBITDA is not a measure of financial performance under generally
accepted accounting principles. You should not consider it in isolation
from, or as a substitute for, net income or cash flow measures prepared in
accordance with generally accepted accounting principles or as a measure of
profitability or liquidity. Additionally, our EBITDA calculation may not be
comparable to other similarly titled measures of other companies. We have
included EBITDA as a supplemental disclosure because it may provide useful
information regarding our ability to service debt and to fund capital
expenditures.
(2) Order backlog is calculated as the estimated sales value of unfilled,
confirmed customer orders at the reporting date.
(3) Average segment operating capital employed is a two-point average of
segment operating capital employed as of the beginning and end of the year.
Segment operating capital employed represents segment assets less segment
liabilities. Segment assets exclude corporate and other assets, which are
principally cash equivalents, last-in, first-out inventory reserves,
deferred income tax benefits, intercompany eliminations, property, plant
and equipment not attributable to a specific segment and credits relating
to the sale of receivables. Segment liabilities exclude substantially all
debt, income taxes, pension and other postretirement benefit liabilities,
restructuring reserves, intercompany eliminations, reserves for
discontinued operations and deferred gains on the sale and leaseback of
equipment. Average segment operating capital employed is not a measure of
financial position under generally accepted accounting principles. You
should not consider it in isolation from, or as a substitute for,
stockholder's equity prepared in accordance with generally accepted
accounting principles or as a measure of financial position. Our management
views average segment operating capital employed as a primary measure of
segment capital.

9

RISK FACTORS

You should carefully consider the following risks and the other
information contained in this prospectus, including the combined financial
statements and related notes, before investing in our common stock. If any of
the events described below were to occur, our business, prospects, financial
condition, results of operations or cash flow could be materially adversely
affected. In that case, the trading price of our common stock could decline,
and you could lose all or part of your investment.

Industry-Related Risks

Demand for Energy Systems' systems and services depends on oil and gas industry
activity and expenditure levels, which are directly affected by trends in the
demand for and price of crude oil and natural gas.

Energy Systems is substantially dependent on conditions in the oil and
gas industry and that industry's willingness and ability to spend capital on
the exploration for and development of crude oil and natural gas. Any
substantial or extended decline in these expenditures may result in the reduced
discovery and development of new reserves of crude oil and natural gas, which
could adversely affect demand for Energy Systems' systems and services. The
level of these capital expenditures is generally dependent on current and
anticipated crude oil and natural gas prices, which have been characterized by
significant volatility in recent years. Crude oil and natural gas prices are
affected by many factors, including:

.  the level of exploration and production activity;

.  worldwide economic activity;

.  interest rates and the cost of capital;

.  environmental regulation;

.  the policies of national governments with respect to energy and crude
oil and natural gas exploration and production, including taxation
and other related legislation;

.  actions taken by, and effectiveness of coordination among, members of
the Organization of Petroleum Exporting Countries, or OPEC;

.  the cost of producing crude oil and natural gas;

.  the cost of developing alternative energy sources;

.  weather conditions; and

.  technological advances.

Demand for Specialty Systems' systems and services is significantly dependent
upon our customers' expenditures for capital equipment, and a prolonged,
substantial reduction in those expenditures could adversely affect the demand
for our systems and services.

Specialty Systems is greatly affected by changes in the levels of
expenditures by food processing companies and air transportation companies for
capital equipment. These changes are influenced by a number of factors, many of
which are beyond our control, such as our customers' overall profitability.
Other factors influencing food processing companies' expenditures for capital
equipment include the demand for processed and frozen foods, conditions in the
agricultural sector affecting food prices and public perception of food safety
and contamination. In the air transportation industry, the level of
expenditures for capital equipment depends on, among other factors, jet fuel
prices, the level of passenger and air freight activity and changes in foreign
and domestic regulation of the air transportation industry. If these
expenditures by our customers decline, Specialty Systems may experience reduced
demand for its systems and services. A prolonged or widespread reduction in the
demand for Specialty Systems' systems and services could have a significant
adverse impact on our results of operations or our financial condition.

10

We may lose money on fixed-price contracts.

As is customary for several of the business areas in which we operate,
many of our long-term contracts with our customers are performed on a fixed-
price basis. Under these contracts, we are typically responsible for all cost
overruns, other than the amount of any cost overruns resulting from requested
changes in order specifications. Our actual costs and any gross profit realized
on these fixed-price contracts will often vary from the estimated amounts on
which these contracts were originally based. This may occur for various
reasons, including:

.  errors in estimates or bidding;

.  changes in availability and cost of labor and materials; and

.  variations in productivity from our original estimates.

These variations and the risks inherent in our projects may result in
reduced profitability or losses on projects. Depending on the size of a
project, variations from estimated contract performance could have a
significant impact on our operating results.

The industries in which we operate or have operated expose us to potential
liabilities that may not be covered by insurance.

Energy Systems is subject to inherent risks, such as equipment defects,
malfunctions and failures, equipment misuse and natural disasters that can
result in uncontrollable flows of gas or well fluids, fires and explosions.
These risks could expose us to substantial liability for personal injury,
wrongful death, product liability, property damage, pollution and other
environmental damages. Through Specialty Systems, we are also subject to
potential liabilities arising from sources, such as the manufacture and use of
food processing and air transportation systems and services. The use of our
systems or services could subject us to significant liability for personal
injury, wrongful death, product liability or commercial claims. Although we
have obtained insurance against many of these risks, we cannot assure you that
our insurance will be adequate to cover our liabilities. Further, we cannot
assure you that insurance will be generally available in the future or, if
available, that premiums will be commercially justifiable. If we incur
substantial liability and the damages are not covered by insurance or are in
excess of policy limits, or if we were to incur liability at a time when we are
not able to obtain liability insurance, our business, results of operations or
financial condition could be materially adversely affected. In addition, under
the terms of the separation and distribution agreement, we will retain
specified self-insured product liabilities associated with selected
discontinued businesses of FMC Corporation related to past operations,
primarily the construction equipment, marine and rail and mining equipment
divisions.

Our customers' industries are undergoing continuing consolidation that may
impact our results of operations.

Each of the oil and gas, food processing and air transportation
industries is rapidly consolidating. As a result, some of our largest customers
have consolidated and are using their size and purchasing power to seek
economies of scale and pricing concessions. This consolidation may result in
reduced capital spending by customers or the acquisition of one or more of our
primary customers, which may lead to decreased demand for our systems and
services. We cannot assure you that we will be able to maintain our level of
sales to a customer that has consolidated or replace that revenue with
increased business activity with other customers. As a result, the acquisition
of one or more of our primary customers may have a significant negative impact
on our results of operations or our financial condition. We are unable to
predict what effect consolidations in the industry may have on price, capital
spending by our customers, our selling strategies, our competitive position,
our ability to retain customers or our ability to negotiate favorable
agreements with our customers.

We may be unable to successfully compete with other companies in our
industries.

The oilfield services, food processing equipment and air transportation
equipment industries are highly competitive. Some of our competitors are large
national and multinational companies that may have

11

significantly greater financial resources than we do. Like us, many of our
competitors offer a wide variety of systems and services. If these competitors
substantially increase the resources they devote to developing and marketing
competitive systems and services, we may not be able to compete effectively.
Similarly, consolidation among our competitors could enhance their system and
service offerings and financial resources, further intensifying competition.

Our operations and our customers' operations are subject to a variety of
governmental laws and regulations that may increase our costs, limit the demand
for our systems and services or restrict our operations.

Our business and our customers' businesses may be significantly affected
by:

.  U.S. federal, state and local and foreign laws and other regulations
relating to the oil and gas, food processing and air transportation
industries and companies operating globally;

.  changes in these laws and regulations; and

.  the level of enforcement of these laws and regulations.

We depend on the demand for our systems and services from oil and gas
companies. This demand is affected by changing taxes, price controls and other
laws and regulations relating to the oil and gas industry. For example, the
adoption of laws and regulations curtailing exploration and development for
drilling for crude oil and natural gas in our areas of operation for economic,
environmental or other policy reasons could adversely affect our operations by
limiting demand for our systems and services.

In light of our foreign operations and sales, we are also subject to
changes in foreign laws and regulations that may encourage or require hiring of
local contractors or require foreign contractors to employ citizens of, or
purchase supplies from, a particular jurisdiction. If we fail to comply with
any applicable law or regulation, our business, results of operations or
financial condition may be adversely affected.

Our businesses and our customers' businesses are subject to environmental laws
and regulation that may increase our costs, limit the demand for our systems
and services or restrict our operations.

Our operations and the operations of our customers are also subject to
U.S. federal, state and local and foreign laws and regulations relating to the
protection of the environment. These environmental laws and regulations affect
the systems and services we design, market and sell, as well as the facilities
where we manufacture our systems. In addition, environmental laws and
regulations could limit our customers' exploration and production activities.
We are required to invest financial and managerial resources to comply with
environmental laws and regulations and anticipate that we will continue to be
required to do so in the future. These laws and regulations change frequently,
which makes it impossible for us to predict their cost or impact on our future
operations. The modification of existing laws or regulations or the adoption of
new laws or regulations imposing more stringent environmental restrictions
could adversely affect our operations.

Current environmental laws and regulations restrict the amount and types
of substances that we can release into the environment. Compliance with these
and any future environmental laws and regulations could require significant
capital investments in pollution control equipment or changes in the way we
make our systems. In addition, because we use hazardous and other regulated
materials in our product development programs and manufacturing processes, we
are subject to risks of accidental contamination, personal injury claims and
civil and criminal fines. For example:

.  We are currently remediating two plant sites for which we have
reserved approximately $3 million.

.  We are a potentially responsible party at several disposal sites for
which we estimate the aggregate liability will be immaterial.

12

.  We have agreed to indemnify FMC Corporation for any liability
associated with contamination from past operations at all properties
to be transferred from FMC Corporation to us and at selected sites
used in our former businesses for which we are not aware of any
material liability.

Some environmental laws and regulations provide for joint and several
liability for remediation of spills and releases of hazardous substances. In
addition, we may be subject to claims alleging personal injury or property
damage as a result of alleged exposure to hazardous substances, as well as
damage to natural resources. These laws and regulations also may expose us to
liability for the conduct of, or conditions caused by, others, or for our acts
that were in compliance with applicable laws and regulations at the time the
acts were performed. Any of these laws and regulations could result in claims,
fines or expenditures that could be material to our earnings, financial
condition or cash flow.

Business-Related Risks

Disruptions in the political and economic conditions of the foreign countries
in which we conduct business or fluctuations in foreign currency exchange rates
could adversely affect our business or results of operations.

We operate significant manufacturing facilities in 14 countries other
than the United States, and our international operations account for
approximately 60% of our 2000 revenue. Multiple factors relating to our
international operations and to particular countries in which we operate could
have an adverse effect on our financial condition or results of operations.
These factors include:

.  changes in political, regulatory or economic conditions;

.  trade protection measures and price controls;

.  import or export licensing requirements;

.  economic downturns, civil disturbances or political instability;

.  currency restrictions;

.  nationalization and expropriation; and

.  potentially burdensome taxation.

Because a significant portion of our revenue is denominated in foreign
currencies, changes in exchange rates will result in increases or decreases in
our costs and earnings, and may also affect the book value of our assets
located outside the United States and the amount of our stockholders' equity.
We prepare our combined financial statements in U.S. dollars, but a significant
portion of our earnings and expenditures are denominated in other currencies.
Although we may seek to minimize our currency exposure by engaging in hedging
transactions where we deem it appropriate, we cannot assure you that our
efforts will be successful. To the extent we sell our systems and services in
foreign markets, currency fluctuations may result in our systems and services
becoming too expensive for foreign customers.

We expect to supplement our internal growth through strategic combinations, and
our success depends on our ability to successfully integrate, operate and
manage these acquired businesses and assets.

We expect to supplement our internal growth through strategic
combinations, asset purchases and other transactions that complement or expand
our existing businesses. Each of these transactions involves a number of risks,
including:

.  the diversion of our management's attention from our existing
businesses to integrating the operations and personnel of the
acquired or combined business or joint venture;

.  possible adverse effects on our operating results during the
integration process; and

.  our possible inability to achieve the intended objectives of the
transaction.

13

We may hire additional employees in connection with these acquisitions or
joint ventures. We may not be able to successfully integrate all of the newly
hired employees, or profitably integrate, operate, maintain and manage our
newly acquired operations in a competitive environment. We may not be able to
maintain uniform standards, controls, procedures and policies, and this may
lead to operational inefficiencies.

We may seek to finance an acquisition through borrowings or through the
issuance of new debt or equity securities. If we make a relatively large
acquisition, we could deplete a substantial portion of our financial resources
to the possible detriment of our other operations. Any future acquisitions
could also dilute the equity interests of our stockholders, require us to write
off assets for accounting purposes or create other undesirable accounting
results, such as significant expenses for amortization or impairment of
goodwill or other intangible assets.

Due to the type of contracts we enter into, the cumulative loss of several
major contracts may have an adverse effect on our results of operations.

We often enter into large, project-oriented contracts or long-term
equipment leases that, collectively, represent a significant portion of our
revenues. These agreements may be terminated or breached, or our customers may
fail to renew these agreements. If we were to lose several key agreements over
a relatively short period of time and if we were to fail to develop alternative
business opportunities, we could experience a significant adverse impact on our
results of operations or our financial condition.

Loss of our key management and other personnel could impact our business.

We depend on our senior executive officers and other key personnel. The
loss of any of these officers or key personnel could adversely affect our
operations. In addition, competition for qualified employees among companies
that rely heavily on engineering and technology is intense, and the loss of
qualified employees or an inability to attract, retain and motivate additional
highly skilled employees required for the operation and expansion of our
business could hinder our ability to conduct research activities successfully
and develop marketable systems and services.

Our business could be adversely affected by competing technology.

Technology is an important component of our business and growth strategy,
and our success as a company depends to a significant extent on the development
and implementation of new product designs and improvements. Whether we can
continue to develop systems and services and related technologies to meet
evolving industry requirements and, if so, at prices acceptable to our
customers will be significant factors in determining our ability to compete in
the industries in which we operate. Many of our competitors are large national
and multinational companies that may have significantly greater financial
resources than us, and they may be able to devote greater resources to research
and development of new systems, services and technologies than we are able to
do. Moreover, some of our competitors operate in narrow business areas,
allowing them to concentrate their research and development efforts directly on
products and services for those areas.

Our failure to comply with the laws and regulations governing U.S. government
contracts or the terms of any existing or future U.S. government contracts that
we enter into could harm our business.

We have an agreement relating to the sale of our Next Generation Small
Loader, which is a commercial air cargo loader, to the U.S. Air Force, and as a
result we are subject to various laws and regulations that apply to companies
doing business with the U.S. government. The laws governing U.S. government
contracts differ in several respects from the laws governing private contracts.
For example, many U.S. government contracts contain pricing terms and
conditions that are not applicable to private contracts. Moreover, U.S. defense
contracts, in particular, are unilaterally terminable at the option of the U.S.
government with compensation for work completed and costs incurred. Contracts
with the U.S. government are also subject

14

to special laws and regulations, the noncompliance with which may result in
various sanctions. Contractors, sometimes without their knowledge, are subject
to investigations by the U.S. government initiated in various ways.

Risks Related to Our Relationship with FMC Corporation

Our historical financial results as business segments of FMC Corporation may
not be representative of our results as a separate, stand-alone entity.

The historical financial information we have included in this prospectus
has been carved out from FMC Corporation's consolidated financial statements
and does not reflect what our financial position, results of operations or cash
flows would have been had we been a separate, stand-alone entity during the
periods presented. FMC Corporation did not account for us, and we were not
operated, as a separate, stand-alone entity for the historical periods
presented. Our historical costs and expenses reflected on our combined
financial statements include an allocation of the historical costs and expenses
that FMC Corporation incurred in connection with corporate and general
administrative services. This allocation is based on what we and FMC
Corporation consider to be reasonable reflections of the historical utilization
levels of these services required in support of our businesses. The historical
information does not necessarily indicate what our results of operations,
financial position, cash flows or costs and expenses will be in the future. We
have not made adjustments to reflect many significant changes that may occur in
our cost structure, funding and operations as a result of the separation,
including changes in our employee base, changes in our technology support,
changes in our tax structure, potential increased costs associated with reduced
economies of scale and potential increased costs associated with being a
publicly traded, stand-alone entity. For additional information, see "Combined
Financial Statements," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and our historical combined financial
statements and notes to those statements.

Our ability to operate our businesses may suffer if we do not, quickly and
cost-effectively, establish our own financial, administrative and other support
functions to successfully operate as a stand-alone entity, and we cannot assure
you that the transitional services FMC Corporation has agreed to provide us
will be sufficient for our needs.

Historically, our businesses have relied on financial, administrative and
other resources of FMC Corporation. After this offering, we will need to create
our own financial, administrative and other support systems or contract with a
third party to replace FMC Corporation's systems. We have entered into an
agreement with FMC Corporation under which FMC Corporation will provide
transitional services to us, including services related to information
technology systems, treasury, legal, financial and accounting services.
Although FMC Corporation is contractually obligated to provide us with these
services until the distribution, these services may not be sufficient to meet
our needs, and we may not be able to replace these services at all or obtain
these services at prices and on terms as favorable as we currently have them,
after our agreement with FMC Corporation expires. Any failure or significant
downtime in our own financial or administrative systems or in FMC Corporation's
financial or administrative systems during the transitional period could
prevent us from paying our employees, billing our customers or performing other
administrative services on a timely basis and could materially harm our
business or operations.

After the separation, we may experience increased costs resulting from
decreased purchasing power currently provided by our association with FMC
Corporation.

We have been able to take advantage of FMC Corporation's size and
purchasing power in procuring goods, technology and services, including
insurance, employee benefit support and audit services. Following the
separation and this offering, we will be a smaller and less diversified company
than FMC Corporation was prior to the separation, and there is no guarantee
that we will have access to financial and other resources

15

comparable to those available to FMC Corporation prior to the separation. As a
separate, stand-alone entity, we may be unable to obtain goods, technology and
services at prices and on terms as favorable as those available to us prior to
the separation.

Our relationship with FMC Corporation may hinder our ability to take advantage
of new business opportunities successfully.

Our ability to take advantage of specific business opportunities is
subject to procedures in our Certificate of Incorporation relating to
allocation of business opportunities between FMC Corporation and us. Although
currently FMC Corporation does not directly compete with us, our Certificate of
Incorporation provides that, unless otherwise provided in a written agreement
between FMC Corporation and us, FMC Corporation will have no duty to refrain
from engaging in the same or similar activities or lines of business as we
engage in or propose to engage in at the time of this offering. Furthermore,
subject to applicable law, FMC Corporation has no duty to communicate or offer
to us any corporate opportunities that come to its attention. As a result, it
may be more difficult for us to pursue successfully new business opportunities
available to both FMC Corporation and us, which could limit our potential
sources of revenue and growth. In addition, we have established procedures in
our Certificate of Incorporation that govern the conduct of our directors or
officers who also serve as directors or officers of FMC Corporation in the
event that any of them acquires knowledge of a corporate opportunity for both
FMC Corporation and us. Moreover, our ability to take advantage of specific
business opportunities may be affected by FMC Corporation's representation on
our Board of Directors and its voting control over us. See "Arrangements
Between FMC Technologies and FMC Corporation--Allocation of Corporate
Opportunities" for a description of allocation of business opportunities
between FMC Corporation and us.

Our relationship with FMC Corporation may limit our ability to obtain
additional financing.

Our business strategy anticipates future acquisitions and development of
new technologies. Any acquisition or development project could be subject to
our ability to access capital from outside sources on acceptable terms. Until
the distribution to its stockholders, FMC Corporation will control our Board of
Directors and be able to limit our ability to borrow funds or to issue
additional equity. For the distribution of the remaining shares of our common
stock to be tax free to FMC Corporation and its stockholders, FMC Corporation
must, among other things, own at least 80% of all of our voting power at the
time of the distribution. Therefore, prior to the distribution, we will not be
able to issue voting securities or convertible debt without FMC Corporation's
prior consent, and FMC Corporation is unlikely to give that consent so long as
it still intends to distribute the remaining shares. In addition, our ability
to issue voting securities and convertible debt will be limited during the
thirty months following the date of the distribution due to our need to
preserve the tax-free nature of the distribution.

We may have potential business conflicts of interest with FMC Corporation with
respect to our past and ongoing relationships that could harm our business
operations.

Conflicts of interest may arise between FMC Corporation and us in a
number of areas relating to our past and ongoing relationships, including:

.  labor, tax, employee benefit, indemnification and other matters
arising from the separation;

.  intellectual property matters;

.  solicitation and hiring of employees from each other and recruiting
of new employees;

.  business combinations involving us;

.  business operations or business opportunities of FMC Corporation or
us that would compete with the other party's business opportunities;

.  sales or distributions by FMC Corporation of all or any portion of
its ownership interest in us; and

.  the nature, quality and pricing of transition services to be provided
by FMC Corporation or us.

16

Our agreements with FMC Corporation may be amended upon agreement between
FMC Corporation and us. During the time that we are controlled by FMC
Corporation, FMC Corporation may be able to require us to agree to amendments
to these agreements. We may not be able to resolve any potential conflicts, and
even if we do so, the resolution may be less favorable to us than if we were
dealing with an unaffiliated party.

Control by FMC Corporation will limit your ability to influence the outcome of
matters requiring stockholder approval and could discourage potential
acquisitions of us by third parties.

After the completion of this offering, FMC Corporation will own more than
80% of our outstanding common stock. Although FMC Corporation has advised us
that it currently intends to distribute its remaining ownership interests in us
to its stockholders prior to the end of 2001, we cannot assure you that this
will occur. As long as FMC Corporation owns a majority of our outstanding
common stock, FMC Corporation will have the power to elect our entire Board of
Directors and take stockholder action without the vote of any other
stockholder. As a result, FMC Corporation will control all matters affecting
us, including:

.  the composition of our Board of Directors and, through our Board of
Directors, the making of decisions with respect to our business
direction and policies, including the appointment and removal of our
officers;

.  any determinations with respect to mergers or other business
combinations;

.  our acquisition or disposition of any or all of our assets;

.  our capital structure;

.  changes to the agreements providing for the separation;

.  the payment of dividends on our common stock;

.  determinations with respect to our tax returns; and

.  other aspects of our business direction and policies.

A majority of our directors following the offering will be directors or
officers of FMC Corporation, including Robert N. Burt, who is Chairman and
Chief Executive Officer of FMC Corporation, and Joseph H. Netherland, who is
President and a director of FMC Corporation. FMC Corporation's voting control
and board influence may discourage many types of transactions involving a
change of control, including transactions in which you as a holder of our
common stock might otherwise receive a premium for your shares over the then-
current market price. Furthermore, FMC Corporation is not prohibited from
selling a controlling interest in us to a third party.

Our directors and executive officers may have potential conflicts of interest
because of their ownership of FMC Corporation common stock and positions with
FMC Corporation.

Our executive officers and some of our directors own a substantial amount
of FMC Corporation common stock and options to purchase FMC Corporation common
stock. In addition, a majority of our directors serve as officers or directors
of FMC Corporation, and several of our executive officers may continue to serve
as officers or directors of FMC Corporation until the distribution, if the
distribution occurs. Robert N. Burt, our Chairman, will continue to be Chairman
and Chief Executive Officer of FMC Corporation, Joseph H. Netherland, our
President, Chief Executive Officer and a director, will continue to be
President and Director of FMC Corporation, William H. Schumann III, our Senior
Vice President, Chief Financial Officer and a director, will continue to be
Senior Vice President and Chief Financial Officer of FMC Corporation, and
Michael W. Murray, our Chief Human Resource Officer, will continue to be Vice
President--Human Resources of FMC Corporation. Ownership of FMC Corporation
common stock by our directors and officers after the separation and the
presence of FMC Corporation officers and directors on our Board of Directors
and in our senior management could create, or appear to create, potential
conflicts of interest when our directors and officers are faced with decisions
that could have different implications for FMC Corporation than they do for us.
In addition, our executive officers who are serving in officer positions at FMC
Corporation may not be able to devote the same exclusive attention or efforts
to our operations and business that individuals serving solely as our officers
would be able to do.

17

Our business and your investment in our common stock may be adversely affected
if FMC Corporation does not complete the distribution, because we would remain
subject to control by FMC Corporation.

Although FMC Corporation has advised us that it currently intends to
complete the distribution by the end of 2001, we cannot assure you whether or
when the distribution will occur. In certain circumstances, FMC Corporation in
exercising its fiduciary duties to its stockholders may need to alter or amend
its course of action. FMC Corporation's obligation to complete the distribution
is subject to receipt of a favorable ruling from the Internal Revenue Service
to the effect that the distribution will be tax free to FMC Corporation and its
stockholders for U.S. federal income tax purposes and final approval of the
distribution by the FMC Corporation Board of Directors, among other conditions.
At the time of this offering, FMC Corporation does not have a ruling from the
IRS regarding the tax treatment of the distribution. If FMC Corporation does
not obtain a favorable tax ruling, FMC Corporation may not make the
distribution in the expected time frame or, perhaps, at all. In order for the
distribution to be tax free, FMC Corporation must satisfy various requirements,
including owning at least 80% of all of our voting power at the time of the
distribution.

In addition, until the distribution occurs, the risks discussed in this
prospectus relating to FMC Corporation's control of us and the potential
business conflicts of interest between FMC Corporation and us will continue to
be relevant to you. If the distribution is delayed or not completed at all, the
liquidity of shares of our common stock in the market may be constrained unless
and until FMC Corporation elects to sell some of its significant ownership into
the public market. A lack of liquidity in our common stock may affect our stock
price.

If we take actions that cause the distribution to fail to qualify as a tax-free
transaction, we will be required to indemnify FMC Corporation for any resulting
taxes, which may prevent or delay a change of control of us after the
distribution.

FMC Corporation has advised us that it intends to distribute its shares
of our common stock to its stockholders before the end of 2001. Prior to
completing the distribution, FMC Corporation has advised us that it intends to
obtain a favorable ruling from the IRS to the effect that the distribution will
be tax free to FMC Corporation and its stockholders for U.S. federal income tax
purposes. Under the tax sharing agreement between FMC Corporation and us, if we
breach any representations in the tax sharing agreement relating to the ruling,
take or fail to take any action that causes our representations in the tax
sharing agreement relating to the ruling to be untrue or engage in a
transaction after the distribution that causes the distribution to be taxable
to FMC Corporation, we will be required to indemnify FMC Corporation for any
resulting taxes. The amount of any indemnification payments would be
substantial, and we likely would not have sufficient financial resources to
achieve our growth strategy after making those payments.

Current tax law generally provides for a presumption that the
distribution, if it occurs, may be taxable to FMC Corporation if we undergo or
enter into an agreement that would cause us to undergo a 50% or greater change
in stock ownership during a four-year period beginning on the date that begins
two years before the date of the distribution. Under the tax sharing agreement,
FMC Corporation is entitled to require us to reimburse any tax costs incurred
by FMC Corporation as a result of a transaction resulting in a change in
control of us. These costs may be so great that they delay or prevent a
strategic acquisition or change of control of us. The applicable tax law is
relatively new and undeveloped, and final interpretive regulations have not yet
been issued.

Our agreements with FMC Corporation may be less favorable to us than if they
had been negotiated at arm's length.

We negotiated and signed our agreements with FMC Corporation while we
were a wholly owned subsidiary of FMC Corporation. If each of these agreements
had been negotiated at arm's length, they may have been more favorable to us.
The allocation of assets and liabilities between FMC Corporation and us may not
reflect what two unaffiliated parties would have agreed to, and it is possible
that we may be required to indemnify FMC Corporation for liabilities, or may
not receive assets, related to our business or that we may be responsible for
liabilities unrelated to our business.

18

Persons may seek to hold us responsible for liabilities of FMC Corporation that
we did not assume in our agreements.

In the separation, FMC Corporation will retain all of its liabilities
that we do not assume under our agreements with FMC Corporation. Persons may
seek to hold us responsible for FMC Corporation's retained liabilities, such as
environmental contamination liabilities relating to FMC Corporation's
discontinued businesses or environmental or other liabilities relating to FMC
Corporation's chemical businesses. Under the agreements, FMC Corporation has
agreed to indemnify us for claims and losses relating to its retained
liabilities. However, if those liabilities are significant and we are held
liable for them, we cannot assure you that we will be able to recover the full
amount of our losses from FMC Corporation.

Risks Related to the Securities Markets and Ownership of Our Common Stock

The price of our common stock may be subject to wide fluctuations and may trade
below the initial public offering price.

Before this offering, there has not been a public market for our common
stock. We cannot assure you that an active public market for our common stock
will develop or be sustained after this offering. The market price of our
common stock could be subject to significant fluctuations after this offering
and may decline below the initial public offering price. The initial public
offering price of our common stock will be determined by negotiations between
us and representatives of the underwriters, based on numerous factors which we
discuss under "Underwriting." This price may not be indicative of the market
price of our common stock after this offering. We cannot assure you that you
will be able to resell your shares at or above the initial public offering
price. Among the factors that could affect our stock price are the risk factors
described in this section and other factors including:

.  quarterly variations in our operating results compared to market
expectations;

.  changes in expectations as to our future financial performance,
including financial estimates by securities analysts;

.  strategic moves by us or our competitors, such as acquisitions or
restructurings; and

.  general market conditions.

Stock markets in general have experienced extreme volatility that has
often been unrelated to the operating performance of a particular company.
These broad market fluctuations may adversely affect the trading price of our
common stock.

Provisions in our organizational documents and our rights agreement as well as
Delaware law may delay or prevent an acquisition of us that stockholders may
consider favorable, which could decrease the value of your shares.

Our Certificate of Incorporation and Bylaws and Delaware law contain
provisions that could make it harder for a third party to acquire us without
the consent of our Board of Directors. These provisions include supermajority
voting requirements for our stockholders to remove directors and amend our
organizational documents, a classified board of directors and limitations on
actions by our stockholders by written consent. Some of these provisions, such
as the limitation on stockholder actions by written consent, become effective
once FMC Corporation no longer controls us. In addition, our Board of Directors
has the right to issue preferred stock without stockholder approval, which
could be used to dilute the stock ownership of a potential hostile acquiror.
Delaware law also imposes some restrictions on mergers and other business
combinations between us and any holder of 15% or more of our outstanding common
stock. Our rights agreement imposes a significant penalty on any person or
group that acquires 15% or more of our outstanding common stock without the
approval of our Board of Directors. These restrictions under Delaware law and
our rights agreement do not apply to FMC Corporation so long as it holds 15% or
more of our common stock. Although we believe these provisions protect our
stockholders from coercive or otherwise unfair takeover tactics and thereby
provide for

19

an opportunity to receive a higher bid by requiring potential acquirers to
negotiate with our Board of Directors, these provisions apply even if the offer
may be considered beneficial by some stockholders.

Our share price may decline because of the ability of FMC Corporation and
others to sell shares of our common stock.

Sales of substantial amounts of our common stock after this offering, or
the possibility of those sales, could adversely affect the market price of our
common stock and impede our ability to raise capital through the issuance of
equity securities. See "Shares Eligible for Future Sale" for a discussion of
possible future sales of our common stock.

After this offering, we will have        outstanding shares of common
stock,   % of which will be owned by FMC Corporation, or, if the underwriters
elect to exercise their over-allotment option, we will have       outstanding
shares of our common stock,   % of which will be owned by FMC Corporation.
Additionally, we will have reserved an additional        shares of our common
stock for issuance pursuant to options we expect to grant in connection with
this offering. We will also issue options in replacement of all FMC Corporation
options held by our employees and former employees and of a portion of the FMC
Corporation options held by our directors. FMC Corporation has advised us that
it currently intends to complete the distribution by the end of calendar year
2001, subject to receipt of a favorable ruling from the IRS that the
distribution will be tax free to FMC Corporation and its stockholders for U.S.
federal income tax purposes and final approval of the Board of Directors of FMC
Corporation, among other conditions. Moreover, FMC Corporation has no
contractual obligation to retain its shares of our common stock, except for a
limited period described under "Underwriting" during which it will not sell any
of its shares of our common stock without the underwriter's consent until 180
days after the date of this prospectus. Subject to applicable U.S. federal and
state securities laws, after the expiration of this 180-day waiting period (or
before, with consent of the underwriters), FMC Corporation may sell any and all
of the shares of our common stock that it beneficially owns or distribute any
or all of these shares of our common stock to its stockholders. The separation
and distribution agreement grants FMC Corporation the right to require us to
register the shares of our common stock it holds in specified circumstances. In
addition, after the expiration of this 180-day waiting period, we could sell
additional shares of our common stock, subject to FMC Corporation's consent.
Any sale or distribution by FMC Corporation or us of our common stock in the
public market or to FMC Corporation's stockholders, or the perception that any
such sale or distribution could occur, could adversely affect prevailing market
prices for the shares of our common stock.

In connection with this offering, we intend to file a registration
statement on Form S-8 to register        shares of our common stock that are or
will be reserved for issuance under our stock plan.

We do not expect to pay dividends.

We do not anticipate paying any cash dividends on our common stock in the
foreseeable future. In addition, our ability to pay dividends may be restricted
by any bank credit agreement or indenture we enter into in the future.

You will experience immediate and substantial dilution in net tangible book
value per share.

Dilution per share represents the difference between the initial public
offering price and the net consolidated book value per share immediately after
the offering of our common stock. Purchasers of our common stock in this
offering will experience immediate dilution of $       in pro forma net
tangible book value per share.

20

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

You should not rely on forward-looking statements in this prospectus.
These statements involve known and unknown risks, uncertainties and other
factors that may cause our actual results, levels of activity, performance or
achievements to be materially different from any results, levels of activity,
performance or achievements expressed or implied by any forward-looking
statement. These factors include, among other things, those listed under "Risk
Factors" and elsewhere in this prospectus. In some cases, you can identify
forward-looking statements by such words or phrases as "will likely result,"
"is confident that," "expected," "should," "could," "may," "will continue to,"
"believes," "anticipates," "predicts," "forecasts," "estimates," "projects,"
"intends" or similar expressions, including the negative of those words and
phrases. Although these forward-looking statements are based on our
management's current views and assumptions regarding future events, future
business conditions and the outlook for us based on currently available
information, these forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
expressed in, or implied by, these statements. We wish to caution readers not
to rely on any of these forward-looking statements, which speak only as of the
date made, and we assume no obligation to update any of the forward-looking
statements after the date of this prospectus.

21

USE OF PROCEEDS

Our net proceeds from the sale of the        shares of our common stock
in this offering, assuming an initial public offering price of $       per
share, are estimated to be approximately $       million, after deducting
underwriting discounts and commissions and estimated offering expenses. If the
underwriters exercise their over-allotment option in full, we estimate that our
net proceeds will be approximately $       million. We expect to use the
estimated $       million of net proceeds from this offering to pay off all
amounts that we will assume under FMC Corporation's $200 million 180-day
revolving credit facility and a portion of the borrowings under one or more
revolving credit facilities that we will assume from FMC Corporation in
connection with this offering. If the over-allotment option is exercised in
full, we expect to use the approximately $   million of additional net proceeds
to further reduce the borrowings under these revolving credit facilities. Under
the terms of the $200 million 180-day revolving credit facility, the debt to be
repaid matures at the earlier of          , 2001 or seven days after the
closing of this offering and accrues interest at an annual rate of    above the
one-month London Interbank Offer Rate. The terms, maturity and interest rates
governing any additional credit arrangements that may be entered into in
connection with this offering are not known at this time. The documentation
governing these revolving credit facilities will be filed as exhibits to the
registration statement of which this prospectus is a part.

DIVIDEND POLICY

We do not intend to pay cash dividends on our common stock for the
foreseeable future. Instead, we currently intend to retain all available funds
and any future earnings for use in the operation and expansion of our business.
Our Board of Directors will make any future determination regarding the payment
of dividends based upon various factors then existing, including:

.  our financial condition, operating results and current and
anticipated cash needs;

.  general economic and business conditions;

.  our strategic plans and business prospects;

.  legal, contractual and regulatory restrictions on our ability to pay
dividends; and

.  other factors that our Board of Directors may consider to be
relevant.

22

CAPITALIZATION

The following table sets forth our capitalization as of December 31,
2000:

.  on an historical basis; and

.  on a pro forma as adjusted basis to reflect the assumption or
issuance of debt in connection with this offering, the sale of
shares of our common stock in this offering at an initial public
offering price of $      per share and the application of the net
proceeds from this sale as described under "Use of Proceeds."

You should read this table together with "Selected Historical Combined
Financial and Operating Data," our historical combined financial statements and
the notes to those statements and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included elsewhere in this
prospectus.

As of December 31,
2000
----------------------
Pro Forma
As Adjusted
Historical (unaudited)
---------- -----------
(in millions, except
for share amounts)

Cash and cash equivalents...............................   $ 17.8   $
------   ----------
Short-term debt.........................................   $ 41.1   $
------   ----------
Long-term debt, excluding current portion...............      --    $
------   ----------
Stockholder's equity:
Common stock, $0.01 par value, 1,000 shares
authorized, issued and outstanding on an historical
basis, and     shares issued and outstanding on a pro
forma as adjusted basis (1)..........................      --
Capital in excess of par value of common stock........      --
Accumulated other comprehensive loss..................   (111.4)
Owner's net investment................................    753.4
------   ----------
Total stockholder's equity..........................    642.0
------   ----------
Total capitalization................................   $683.1   $
======   ==========

--------
(1) The pro forma as adjusted number of shares of our common stock issued and
outstanding includes an estimated    shares of our restricted stock that we
expect to replace all shares of FMC Corporation restricted stock held by
our employees and a portion of the shares of FMC Corporation restricted
stock held by our directors in connection with this offering. The estimated
number of shares of our restricted stock to be issued in respect of FMC
Corporation restricted stock is based on the number of shares of FMC
Corporation restricted stock that would have been replaced had this
offering occurred on       , 2001, the closing price per share of FMC
Corporation common stock of $       on       , 2001 and an assumed offering
price per share of our common stock in this offering of $   . See
"Management--Treatment of FMC Corporation Restricted Stock." The number of
shares of our common stock does not include options that we expect to grant
or replace in connection with the separation.

23

SELECTED HISTORICAL COMBINED FINANCIAL DATA

The following table presents our selected historical and pro forma
combined financial data for the periods and dates indicated. The information
set forth below should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and our historical
combined financial statements and notes to those statements included elsewhere
in this prospectus. The combined operating results data for the years ended
December 31, 1998, 1999 and 2000 and the combined balance sheet data as of
December 31, 1999 and 2000 are derived from, and are qualified by reference to,
our audited combined financial statements included elsewhere in this
prospectus. The combined operating results data for the years ended December
31, 1996 and 1997 and the combined balance sheet data as of December 31, 1996,
1997 and 1998 are derived from our unaudited combined financial data that is
not included in this prospectus. The unaudited pro forma financial information
gives effect to specified transactions as if those transactions had been
consummated on January 1, 2000 or December 31, 2000, as described in "Unaudited
Pro Forma Financial Information."

The historical combined financial information has been carved out from
the consolidated financial statements of FMC Corporation using the historical
results of operations and bases of the assets and liabilities of the
transferred businesses and gives effect to allocations of expenses from FMC
Corporation. Our historical combined financial information may not be
indicative of our future performance and does not necessarily reflect what our
financial position and results of operations would have been had we operated as
a separate, stand-alone entity during the periods presented.

Year Ended December 31,
-------------------------------------------------
1996      1997       1998      1999      2000
--------  ---------  --------  --------  --------
(in millions, except per share data)

Combined Statements of
Income Data:
Revenue.....................  $1,689.7  $ 2,031.6  $2,185.5  $1,953.1  $1,875.2
Cost of sales or services...   1,312.9    1,551.1   1,669.3   1,479.8   1,421.1
Selling, general and
administrative expenses....     299.9      324.1     337.8     302.4     291.2
Research and development....      41.5       46.7      50.7      51.8      56.7
Asset impairments...........       --        27.0       --        6.0       1.5
Restructuring and other
charges....................       --        27.9       --        3.6       9.8
Interest expense (income),
net........................       2.8        3.8       1.9      (0.5)      4.3
--------  ---------  --------  --------  --------
Income from continuing
operations before income
taxes......................      32.6       51.0     125.8     110.0      90.6
Provision for income taxes..       5.4       34.1      38.6      33.5      22.7
--------  ---------  --------  --------  --------
Income from continuing
operations.................  $   27.2  $    16.9  $   87.2  $   76.5  $   67.9
========  =========  ========  ========  ========
Net income..................  $   35.0  $    16.9  $   87.2  $   71.0  $   67.9
========  =========  ========  ========  ========
Earnings per common share
from continuing
operations.................  $         $          $         $         $
========  =========  ========  ========  ========
Pro forma unaudited as
adjusted diluted earnings
per common share from
continuing operations......                                           $
========

Other Financial Data:
Depreciation................  $   48.1  $    48.9  $   49.0  $   46.2  $   41.2
Amortization................      16.3       18.6      17.6      16.1      17.9
EBITDA (1)..................      99.8      122.3     194.3     171.8     154.0
Capital expenditures........      93.5       66.3      59.4      40.9      43.1
Cash flows provided by (used
in):
Operating activities of
continuing operations.....    (270.1)     268.9     223.2     154.3       9.5
Investing activities.......     (64.2)     (33.1)   (155.6)     (6.5)     63.4
Financing activities.......     328.3     (237.9)    (65.2)   (135.5)    (90.4)
Order backlog (at year end)
(2)........................     923.0      988.8   1,133.9     840.6     644.3
Total assets (at year end)..   1,699.2    1,563.7   1,665.1   1,473.2   1,373.7
Long-term debt (at year
end).......................       8.4        8.3       --        --        --
Average segment operating
capital employed (3).......     998.1    1,062.4     917.8     832.8     868.4

December 31, 2000
----------------------
Pro Forma
Historical As Adjusted
---------- -----------
(in millions)

Combined Balance Sheet Data:
Working capital..........................................  $  127.9   $
Total assets.............................................   1,373.7
Total long-term debt.....................................       --
Stockholder's equity.....................................     642.0

(footnotes on following page)

24

--------
(1) EBITDA consists of income from continuing operations before interest and
income taxes plus depreciation of property, plant and equipment and
amortization of other long-term assets, primarily intangibles of acquired
companies. EBITDA is not a measure of financial performance under generally
accepted accounting principles. You should not consider it in isolation
from, or as a substitute for, net income or cash flow measures prepared in
accordance with generally accepted accounting principles or as a measure of
profitability or liquidity. Additionally, our EBITDA calculation may not be
comparable to other similarly titled measures of other companies. We have
included EBITDA as a supplemental disclosure because it may provide useful
information regarding our ability to service debt and to fund capital
expenditures.

(2) Order backlog is calculated as the estimated sales value of unfilled,
confirmed customer orders at the reporting date.

(3) Average segment operating capital employed is a two-point average of
segment operating capital employed as of the beginning and end of the year.
Segment operating capital employed represents segment assets less segment
liabilities. Segment assets exclude corporate and other assets, which are
principally cash equivalents, last-in, first-out reserves, deferred income
tax benefits, intercompany eliminations, property, plant and equipment not
attributable to a specific segment and credits relating to the sale of
receivables. Segment liabilities exclude substantially all debt, income
taxes, pension and other postretirement benefit liabilities, restructuring
reserves, intercompany eliminations, reserves for discontinued operations
and deferred gains on the sale and leaseback of equipment. Average segment
operating capital employed is not a measure of financial position under
generally accepted accounting principles. You should not consider it in
isolation from, or as a substitute for, stockholder's equity prepared in
accordance with generally accepted accounting principles or as a measure of
financial position. Our management views average segment operating capital
employed as a primary measure of segment capital.

25

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The unaudited pro forma combined statement of income and unaudited pro
forma condensed combined balance sheet have been prepared to reflect the
following adjustments to our historical results of operations and to give
effect to the following transactions as if those transactions had been
consummated on January 1, 2000 for statement of income purposes and on December
31, 2000 for balance sheet purposes:

.  our assumption and or issuance of $    million of debt in connection
with this offering;

.  our sale of     shares of common stock in this offering at an assumed
initial public offering price of $     per share;

.  our use of the assumed $    million net proceeds from this offering
to pay off a portion of the assumed or issued debt; and

.  the replacement of all FMC Corporation restricted stock held by our
employees and a portion of the FMC Corporation restricted stock held
by our directors with our restricted stock at the time of the closing
of the offering.

The unaudited pro forma combined statement of income and unaudited pro
forma condensed combined balance sheet should be read in connection with, and
are qualified by reference to, our combined financial statements and related
notes, as well as "Management's Discussion and Analysis of Financial Condition
and Results of Operations," included elsewhere in this prospectus. We believe
that the assumptions used in the preparation of this unaudited pro forma
financial information provide a reasonable basis for presenting the significant
effects directly attributable to the transactions discussed above. The
unaudited pro forma combined statement of income and unaudited pro forma
condensed combined balance sheet are not necessarily indicative of the results
that would have been reported had such events actually occurred on the dates
described above, nor are they indicative of our future results.

Year Ended December 31, 2000
------------------------------------
Pro Forma     Pro Forma
Unaudited Pro Forma Combined Statement of   Historical Adjustments   As Adjusted
Income                                     ---------- -----------   -----------
(in millions, except share and per
share amounts)

Revenue...................................   $1,875.2   $             $
Cost of sales or services.................    1,421.1
Selling, general and administrative
expenses.................................      291.2           (1)
Research and development..................       56.7
Asset impairments, restructuring and other
charges..................................       11.3
--------
Total costs and expenses................    1,780.3
--------
Income from continuing operations before
interest income, interest expense and
income taxes.............................       94.9
Interest income...........................        2.3
Interest expense..........................        6.6           (2)
--------
Income from continuing operations before
income taxes.............................       90.6
Provision for income taxes................       22.7           (3)
--------
Income from continuing operations.........   $   67.9   $             $
========   ========      ========
Unaudited pro forma as adjusted basic
earnings per common share from continuing
operations...............................                            $
========
Shares used in computing unaudited pro
forma as adjusted basic earnings per
common share from continuing operations...                                   (4)
========
Unaudited pro forma as adjusted diluted
earnings per common share from continuing
operations...............................                            $
========
Shares used in computing unaudited pro
forma as adjusted diluted earnings per
common share from continuing operations..                                    (5)
========

26

(1) Reflects incremental compensation expense expected to be incurred as a
result of the replacement of all FMC Corporation restricted stock held by
our employees and a portion of the FMC Corporation restricted stock held by
our directors with our restricted stock in connection with this offering.

(2) Reflects interest expense associated with approximately $       million of
debt that will be issued or assumed in connection with this offering less
amounts repaid with the proceeds of this offering as described in footnote
(2) to the unaudited condensed combined balance sheet. The interest expense
assumes that these amounts were outstanding as of January 1, 2000 and
remained outstanding for the entire period. Such debt was assumed to carry
an effective interest rate of     %. A one-eighth percent variance in that
interest rate would have increased or decreased interest expense by
approximately $    .

(3) The effect of taxes on the pro forma adjustments has been recognized using
a blended statutory U.S. federal and state rate of 39%.

(4) Unaudited pro forma as adjusted earnings per common share from continuing
operations has been calculated in accordance with the Securities and
Exchange Commission rules for initial public offerings. These rules require
that the weighted average share calculation gives retroactive effect to any
changes in our capital structure as well as the number of shares whose
proceeds will be used to pay any dividend or repay any debt as reflected in
the pro forma adjustments. It is anticipated that all of the proceeds from
the initial public offering will be used to repay debt. Therefore, pro
forma weighted average shares are comprised of       shares of our common
stock outstanding and       shares of our common stock included in the
proposed offering assuming all such shares are outstanding as of January 1,
2000.

(5) Unaudited pro forma as adjusted diluted earnings per common share from
continuing operations is computed using unaudited pro forma as adjusted
income from continuing operations divided by the assumed number of shares
outstanding of      . This share amount is calculated assuming that (a)
prior to the offering       shares of our common stock are outstanding, (b)
we sell       shares in this offering and (c) the dilutive effect of our
restricted stock to be issued to our employees and directors in replacement
of FMC Corporation restricted stock is       shares upon completion of this
offering.

27

As of December 31, 2000
---------------------------------------
Pro Forma        Pro Forma
Unaudited Pro Forma Condensed Combined    Historical Adjustments      As Adjusted
Balance Sheet                             ---------- -----------      -----------
(in millions)

Assets
Current assets:
Cash and cash equivalents................  $   17.8
Trade receivables, net...................     328.9
Inventories..............................     254.8
Other current assets.....................      91.8
--------
Total current assets...................     693.3
Property, plant and equipment, net.......     257.3
Other assets.............................     423.1
--------
Total assets...........................  $1,373.7
========

Liabilities and stockholder's equity
Current liabilities:
Accounts payable, trade and other........  $  328.3
Other current liabilities................     237.1
--------
Total current liabilities..............     565.4
Other liabilities........................     166.3
Long-term debt...........................       --             (1)(2)
Stockholder's equity:
Common stock, $0.01 par value, 1,000
shares authorized, issued and
outstanding on an historical basis, and
shares issued and outstanding on
a pro forma as adjusted basis...........       --
Capital in excess of par value of common
stock...................................       --             (2)
Accumulated other comprehensive loss.....    (111.4)
Owner's net investment...................     753.4            (1)(2)
--------
Total stockholder's equity.............     642.0
--------
Total liabilities and stockholder's
equity..............................  $1,373.7
========

(1) Reflects the assumption or issuance by us in connection with the offering
of $    million of debt resulting in an increase in our long-term debt and
a reduction in our owner's net investment.

(2) Reflects (a) our sale of         shares of common stock in this offering at
an assumed initial public offering price of $     per share, which, after
deducting estimated underwriting discounts and offering expenses payable by
us, will result in net offering proceeds of $    million, and (b) the use
of these net proceeds to pay off a portion of our debt.

28

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The following information should be read in conjunction with the selected
historical combined financial and operating data and the accompanying combined
financial statements and related notes included elsewhere in this prospectus.
The following discussion contains forward-looking statements that reflect our
plans, estimates and beliefs. Our actual results could differ materially from
those discussed in these forward-looking statements. Factors that could cause
or contribute to these differences include, but are not limited to, those
discussed below and elsewhere in this prospectus, particularly in "Risk
Factors" and "Cautionary Statement Regarding Forward-Looking Information."

Overview

Our Separation from FMC Corporation

On October 31, 2000, FMC Corporation announced its intention to
reorganize its Energy Systems and Specialty Systems businesses as a new
company, FMC Technologies, Inc., and to cause us to sell up to 19.9% of our
common stock in an initial public offering. FMC Technologies, Inc. was
incorporated in Delaware on November 13, 2000 and currently is a wholly owned
subsidiary of FMC Corporation. After the completion of this offering, FMC
Corporation will own approximately   % of our outstanding common stock, or % if
the underwriters exercise their over-allotment option in full. FMC Corporation
has advised us that it currently intends to distribute its remaining ownership
interest in us to common stockholders of FMC Corporation. If completed, the
distribution, as previously announced, is expected to take the form of a spin-
off in which FMC Corporation distributes all of our common stock that it owns
through a special dividend to FMC Corporation common stockholders. If
circumstances change, FMC Corporation may distribute its remaining ownership
interest in us through an exchange offer by FMC Corporation, in which its
common stockholders would be offered the option of tendering some or all of
their shares in exchange for our common stock, and a subsequent spin-off of FMC
Corporation's remaining ownership interest in us. FMC Corporation has advised
us that it does not intend to complete the distribution unless it receives a
favorable tax ruling from the IRS as to the tax-free nature of the distribution
for U.S. federal income tax purposes and the final approval of the Board of
Directors of FMC Corporation, among other conditions. FMC Corporation has also
advised us that it currently anticipates that this distribution will occur by
the end of calendar year 2001.

FMC Corporation has advised us that the final determination as to the
completion, timing, structure and terms of the distribution will be based on
financial and business considerations and prevailing market conditions. In
addition, FMC Corporation has advised us that, as permitted by the separation
and distribution agreement, it will not complete the distribution if its Board
of Directors determines that the distribution is not in the best interests of
FMC Corporation and its stockholders. FMC Corporation has the sole discretion
to determine whether or not to complete the distribution and, if it decides to
complete the distribution, to determine the timing, structure and terms of the
distribution. FMC Corporation and we have entered into various agreements
governing our relationship following the offering. For a description of these
agreements, see "Arrangements Between FMC Technologies and FMC Corporation."

Our Business

Energy Systems is a global leader in the provision of subsea drilling and
production systems, floating production, surface drilling and production
systems for oil and gas companies involved in the exploration and production of
crude oil and natural gas. Many of the systems that we provide are for use in
the exploration, development and production of crude oil and natural gas
reserves located in technologically challenging deepwater environments, which
involve water depths of greater than 1,000 feet. We are also a leading provider
of specialized, high-performance fluid control systems and products,
measurement systems, loading systems and blending and transfer systems to
customers involved in the transportation and processing of crude oil, natural
gas and refined petroleum-based products.

29

The primary factor influencing demand for the exploration and production
systems and services that we provide is the exploration and production spending
of oil and gas companies, particularly with respect to offshore activities
worldwide. Exploration and production spending levels, in turn, depend
primarily on current and anticipated future crude oil and natural gas prices,
production volumes and oil and gas company operating costs. During 1998, crude
oil prices declined to their lowest level in over 12 years, reaching $10.76 per
barrel of West Texas Intermediate crude and averaging $14.38 per barrel for the
year. This decline resulted in many exploration and production companies
canceling or deferring a significant portion of their exploration and
development activities. Crude oil prices substantially recovered during the
second half of 1999, averaging $23.10 per barrel, and exploration and
production companies enjoyed improved operating results and cash flows. Oil
prices continued their upward trend through 2000, averaging $30.37 per barrel.

Energy Systems' financial performance generally has been less affected by
short-term market cycles and volatile commodity prices than the financial
performance of companies operating in other sectors of the oilfield services
industry. Most of the systems that we supply are highly engineered to meet the
unique demands of our customers and are typically ordered one or two years
prior to installation. We believe that, due to their long lead times and high
potential returns, the deepwater projects in which our systems are used
typically are not the marginal projects that are more subject to cancellation
or delay during periods of low crude oil and natural gas prices. In addition,
we believe that Energy Systems is less capital intensive than companies
operating in other sectors of the oilfield services industry due to factors
such as high engineering content, outsourcing of certain low value-added
manufacturing and advance payments received from customers.

Specialty Systems is a leading supplier of specialized handling and
processing systems and services to industrial companies. Demand for Specialty
Systems' equipment, systems and services is greatly affected by changes in the
levels of capital investment by the largest customers in this segment. These
changes are influenced by a number of factors, many of which are beyond our
control, such as our customers' overall profitability and general economic
conditions. Other factors influencing capital expenditures by food processing
customers include the demand for processed and frozen foods, conditions in the
agricultural sector affecting price, and public perception of food safety and
contamination. The level of expenditures by air transportation customers
depends on, among other factors, jet fuel prices, labor costs, the level of
passenger and air freight activity, and changes in foreign and domestic
regulation of air transportation.

Outlook

Worldwide exploration and production spending by oil and gas companies is
expected to increase 19.7% in 2001 to $113.5 billion from $94.8 billion in
2000. While revenues from large deepwater exploration and production contracts
have been slower to materialize following the recent recovery of crude oil and
natural gas prices than we previously expected, we have recently begun to
realize benefits from increasing deepwater production spending. During the
third quarter of 2000, we signed significant alliance agreements with Agip
Exploration and Production and Norsk Hydro to provide systems used in deepwater
exploration and production and expect to begin realizing revenue from these
agreements in the second half of 2001. In addition, recently we were awarded a
$13 million order from Petroleo Brasileiro S.A. for subsea tree systems for two
developments off the coast of Brazil, Marlim and Marlim Sul. While we view the
increased activity as a positive indicator of strengthening oil and gas
industry exploration and production activity, pricing remains competitive. We
believe that many of our major oil and gas customers that have announced
mergers have essentially completed the integration of the merged entities, and
that they will focus on exploration and development efforts, including the
development of large offshore deepwater basins.

Although spending for airline ground support equipment and systems is not
expected to change significantly in 2001 from the levels in 2000, increased
operating costs for airlines may negatively impact airlines' purchases of
capital assets, while more favorable fuel prices could generate incremental
opportunities for sales of ground support equipment. In addition, revenues
generated from the Next Generation Small Loader Contract with the U.S. Air
Force could favorably impact our operating results in 2001 as compared with
2000. The five-year contract is valued at $135 million and has the potential to
generate revenue of $458 million over

30

the next 15 years. We also continue to maintain or grow our market share and
improve our after-market services to food handling and processing equipment
customers. Florida's citrus crops were subjected to below freezing temperatures
early in 2001. The projected reduced citrus yields may negatively impact citrus
equipment revenues and profitability.

Basis of Presentation

FMC Corporation has operated the businesses it will transfer to us in the
separation as internal units of FMC Corporation through various divisions and
subsidiaries or through investments in unconsolidated affiliates. Our combined
financial statements have been carved out from the consolidated financial
statements of FMC Corporation using the historical results of operations and
bases of the assets and liabilities of the transferred businesses. FMC
Corporation has provided general and administrative services to our businesses,
including accounting, treasury, tax, legal, human resources, information
technology and other corporate and infrastructure services. The costs of these
services have been allocated to us and included in our combined financial
statements based upon the relative levels of use of those services causing the
incurrence of the expenses. The expense allocations have been determined on the
basis of assumptions and estimates that management believes to be a reasonable
reflection of our utilization of those services. These allocations and
estimates, however, are not necessarily indicative of the costs and expenses
that would have resulted if we had operated as a separate entity in the past,
or of the costs we may incur in the future. For information relating to our
relationship with FMC Corporation and services and arrangements between FMC
Corporation and us following the separation, see "Arrangements Between FMC
Technologies and FMC Corporation." For more information regarding these or
other allocations made in connection with the preparation of our combined
financial statements, see Note 2 and the other notes to those statements.

The financial information presented in this prospectus does not reflect
the debt or interest expense we would have incurred if we were a stand-alone
entity. In addition, the financial information presented in this prospectus may
not be indicative of our combined financial position, operating results or cash
flows in the future or what our financial position, operating results and cash
flows would have been had we been a separate, stand-alone entity during the
periods presented. The financial information presented in this prospectus does
not reflect any changes that will occur in our funding or operations as a
result of this offering, the distribution and our becoming a stand-alone
entity.

31

RESULTS OF OPERATIONS

The following table summarizes our combined operating results in 1998,
1999 and 2000, which were derived from our audited combined financial
statements included elsewhere in this prospectus. The information contained in
the table should be read in conjunction with the selected historical combined
financial data and the historical combined financial statements and notes
thereto included elsewhere in this prospectus. Segment operating profit is
defined as total segment revenue less segment operating expenses. The following
items have been excluded in computing segment operating profit: corporate staff
expense, interest income and expense associated with corporate debt facilities
and investments, income taxes, asset impairments and restructuring and other
charges (See Note 5 to our combined financial statements), last-in, first-out,
or LIFO, inventory adjustments and other income and expense items.

Year Ended December 31,
----------------------------
1998      1999      2000
--------  --------  --------
(in millions)

REVENUE
Energy Systems................................... $1,320.9  $1,129.4  $1,037.3
Specialty Systems................................    868.2     826.3     839.5
Eliminations.....................................     (3.6)     (2.6)     (1.6)
--------  --------  --------
Total revenue.................................. $2,185.5  $1,953.1  $1,875.2
========  ========  ========

SEGMENT OPERATING PROFIT
Energy Systems................................... $   95.2  $   97.1  $   72.4
Specialty Systems................................     72.8      64.2      69.0
--------  --------  --------
Total segment operating profit.................    168.0     161.3     141.4
Corporate expenses...............................    (36.4)    (35.3)    (33.7)
Other expense, net...............................     (3.9)     (6.9)     (1.5)
--------  --------  --------
Operating profit, before asset impairments,
restructuring and other charges, net interest
income (expense) and income tax expense.........    127.7     119.1     106.2
Asset impairments................................      --       (6.0)     (1.5)
Restructuring and other charges..................      --       (3.6)     (9.8)
Net interest income (expense)....................     (1.9)      0.5      (4.3)
--------  --------  --------
Income from continuing operations, before
income taxes..................................    125.8     110.0      90.6
Income tax expense...............................     38.6      33.5      22.7
--------  --------  --------
Income from continuing operations..............     87.2      76.5      67.9
Discontinued operations, net of income taxes.....      --       (5.5)      --
--------  --------  --------
Net income..................................... $   87.2  $   71.0  $   67.9
========  ========  ========

Year Ended December 31, 2000 Compared with Year Ended December 31, 1999

Revenue. Our total revenue for the year ended December 31, 2000 decreased
$77.9 million, or 4.0%, to $1,875.2 million, compared to $1,953.1 million for
the year ended December 31, 1999, as a result of declines in Energy Systems'
revenue, which were partially offset by increased Specialty Systems' revenue.
Energy Systems' revenue in 2000 decreased $92.1 million, or 8.2%, to $1,037.3
million from $1,129.4 million in 1999. Specialty Systems' revenue in 2000
increased $13.2 million, or 1.6%, to $839.5 million, compared to $826.3 million
in 1999.

Lower Energy Systems' revenue in 2000 reflected continued delays by oil
and gas companies in the awarding of new contracts for large subsea projects.
The delays were attributable in part to restructuring and merger activity in
the oil and gas industry and to delays experienced by oil and gas companies in
obtaining required government approvals for subsea projects located offshore
West Africa. Higher sales of surface wellhead and fluid control equipment in
2000, historically considered a leading indicator of market activity, partly
offset the lower subsea revenue.

32

Specialty Systems' revenue in 2000 increased compared to revenue in 1999
primarily due to the acquisition of Northfield Freezing Equipment in February
2000, higher sales volumes of food processing and handling equipment, continued
growth in our after-market services and higher sales volumes of Jetway(R)
systems. These increases were partly offset by lower sales volumes of ground
support equipment, such as domestic loaders, deicers and material handling
systems, and by lower sales of loaders in Europe and the Middle East, as
airlines responded to higher operating costs primarily driven by higher fuel
costs, in 2000 by restricting capital purchases. In addition, lower sales
volumes of agricultural machinery also partly offset the increased revenue.

Segment Operating Profit. Total segment operating profit decreased $19.9
million, or 12.3%, to $141.4 million in 2000 from $161.3 million in 1999.
Energy Systems' operating profit in 2000 decreased $24.7 million, or 25.4%, to
$72.4 from $97.1 million in 1999. Operating profit for Specialty Systems
increased $4.8 million, or 7.4%, to $69.0 million in 2000 from $64.2 million in
1999.

Energy Systems' operating profit in 2000 and 1999 included pre-tax gains
of $0.5 million and $4.6 million, respectively, from the sale of assets.
Excluding these gains, Energy Systems' operating profits decreased 22.3% to
$71.9 million in 2000 from $92.5 million in 1999. This decrease was primarily
the result of lower sales volumes of subsea and floating production systems due
to delays in the awarding of new contracts by oil and gas companies, and an
$8.1 million increase in research and development expense, primarily directed
at new subsea market initiatives.

Specialty Systems' operating profit increased in 2000 as compared to
1999, due primarily to cost reductions, which resulted in part from then-
current and prior restructuring activities. Also contributing to the increased
operating profit were higher sales volumes of Jetway(R) systems and a cost
overrun that occurred in 1999 associated with an international Jetway(R)
project. The higher operating profit was partly offset by lower profits on
ground support equipment due to reduced margins that were driven by lower sales
volumes and changes in customer mix, as well as increased competitive pressure
and lower profits on freezer sales, which were negatively affected by customer
consolidation.

Corporate Expenses. Corporate expenses decreased $1.6 million, or 4.5%,
to $33.7 million in 2000 from $35.3 million in 1999, due to ongoing and prior
restructuring efforts.

Other Expense, net. Other income and expense is comprised primarily of
LIFO inventory adjustments and pension income or expense. Pension and other
postretirement benefit expense decreased from $8.7 million in 1999 to $5.2
million as a result of an increase in the discount rate used to calculate
pension expense for 2000.

Asset Impairments and Restructuring and Other Charges. In the second
quarter of 2000, we recorded asset impairments and restructuring and other one-
time charges totaling $11.3 million before taxes, or $6.9 million after taxes.
Asset impairments of $1.5 million were required to write down selected Energy
Systems' assets, as estimated future cash flows attributed to these assets
indicated that an impairment of the assets had occurred. Restructuring and
other one-time charges were $9.8 million before taxes, and included $8.0
million, which resulted primarily from strategic decisions to restructure
selected Specialty Systems' operations, and included reductions in force of 236
individuals. Restructuring charges of $1.4 million at Energy Systems included
severance costs related to planned reductions in force of 68 individuals as a
result of the delay in orders received from oil and gas companies for major
systems. Restructuring charges of $0.4 million related to a corporate reduction
in force.

Net Interest Income (Expense). Net interest is associated with cash
balances and third-party debt in our operating companies. Because FMC
Corporation has historically funded most of its businesses centrally, third-
party debt and cash for operating companies have been minimal and are not
representative of what our actual debt or cash balances would have been had we
been a separate, stand-alone entity. Net interest expense in 2000 was $4.3
million, compared to interest income of $0.5 million in 1999. The increase in
net interest expense in 2000 was primarily the result of a reduction of short-
term marketable securities in foreign businesses,

33

Income Tax Expense. Income tax expense in 2000 was $22.7 million,
resulting in an effective tax rate of 25.0%, as compared to income tax expense
of $33.5 million and an effective tax rate of 30.4% in 1999. The differences
between the effective tax rates for these periods and the statutory U.S.
federal income tax rate relate primarily to differing foreign tax rates,
foreign sales corporation benefits, incremental state taxes and non-deductible
goodwill amortization and expenses. A greater benefit from lower foreign tax
rates in 2000 accounted for the overall decreased effective rate compared to
1999.

Discontinued Operations. In 1999, we recorded a provision for
discontinued operations of $9.0 million ($5.5 million after tax) to increase
our actuarially-determined product liability reserves associated with
discontinued machinery businesses.

Net Income. Net income in 2000 decreased $3.1 million, or 4.4%, to $67.9
million, compared to $71.0 million in 1999.

Order Backlog. Our combined order backlog as of December 31, 2000 was
$644.3 million, of which $425.1 million was related to Energy Systems and
$219.2 million was related to Specialty Systems. Our combined order backlog as
of December 31, 1999 was $840.6 million, of which $593.4 million was related to
Energy Systems and $247.2 million was related to Specialty Systems. The decline
in Energy Systems' order backlog in 2000 as compared with 1999 was primarily
related to delays by oil and gas companies in the awarding of new contracts for
large subsea projects. The decline in order backlog for Specialty Systems in
2000 as compared with 1999 was primarily due to lower orders for food
processing equipment in 2000.

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

Revenue. Our total revenue for the year ended December 31, 1999 decreased
$232.4 million, or 10.6%, to $1,953.1 million, compared to $2,185.5 million for
the year ended December 31, 1998, as a result of declines in both segments'
revenue. Energy Systems' revenue in 1999 decreased $191.5 million, or 14.5%, to
$1,129.4 million from $1,320.9 million in 1998. Specialty Systems' revenue in
1999 decreased $41.9 million, or 4.8%, to $826.3 million, compared to $868.2
million in 1998.

Lower Energy Systems' revenue reflected reduced customer exploration and
production spending in 1999 compared to 1998, due to lower crude oil and
natural gas prices in 1998 and in the first half of 1999. In addition, market
uncertainty related to the direction of oil and natural gas prices and
consolidation by major oil companies resulted in delays in subsea projects.
Energy Systems' revenue in 1999 also declined following the disposition of our
Crosby Valve business to a subsidiary of Tyco International Ltd. in 1998.
Crosby Valve, which had revenue of $52.5 million through the date of
divestiture in July 1998, was not strategically aligned with other Energy
Systems businesses. Partly offsetting these declines were higher deliveries
relating to the Elf Girassol Angola and Terra Nova Canada projects and higher
sales to several of Energy Systems' alliance customers, including Shell
Exploration and Production U.S.A. and Exxon.

The decline in Specialty Systems' revenue in 1999 compared to its revenue
in 1998 was partly due to lower domestic sales of cargo loaders, as most of the
major airlines completed replacement programs of older fleets in 1998 and
returned to more normal purchasing patterns in 1999. In addition, lower sales
of freezing systems and the divestiture of our converting equipment product
line in 1998 also contributed to the decline in revenue in 1999. These
reductions were partially offset by increased sales of food processing
equipment to major food processors and increased sales of ground support
equipment to European airports and airlines.

Segment Operating Profit. Total segment operating profit decreased $6.7
million, or 4.0%, in 1999 to $161.3 million, compared to $168.0 million in
1998. Energy Systems' operating profit in 1999 increased $1.9 million, or 2.0%,
to $97.1 million from $95.2 million in 1998. Operating profit for Specialty
Systems declined $8.6 million, or 11.8%, to $64.2 million in 1999 from $72.8
million in 1998.

34

Energy Systems' operating profit in 1999 and 1998 included pre-tax gains
of $4.6 million and $16.0 million, respectively, from the sale of assets.
Excluding these gains, Energy Systems' operating profit increased by 16.8% from
$79.2 million in 1998 to $92.5 million in 1999. Energy Systems' increased
operating profit in 1999 compared to 1998 resulted from improved margins driven
by product mix and cost reduction efforts.

Specialty Systems' lower operating profit in 1999 compared to 1998 was a
result of lower sales volumes, particularly for loaders, and lower margins for
passenger boarding bridge projects due to a cost overrun in 1999 associated
with an international Jetway(R) project. These lower revenue and margins were
partially offset by higher margins resulting from a higher percentage of
Specialty Systems' sales to the food and citrus processing industries and
continued growth within our after-market services.

Corporate Expenses. Corporate expenses decreased $1.1 million, or 3.1%,
to $35.3 million in 1999 from $36.4 million in 1998, due to ongoing and prior
cost reduction efforts.

Other Expense, net. Other income and expense is comprised primarily of
LIFO inventory adjustments and pension income or expense. Pension and
postretirement benefit expense of $8.7 million in 1999 increased from $2.9
million in 1998 because of a decrease in the discount rate used to calculate
pension expense in 1999 and a 1999 provision for nonqualified pension benefits.

Asset Impairments and Restructuring and Other Charges. In the third
quarter of 1999, we recorded asset impairments and restructuring and other one-
time charges totaling $9.6 million before taxes, or $5.9 million after taxes.
Asset impairments of $6.0 million before taxes were required to write-down
selected Specialty Systems' assets as estimated future cash flows attributed to
these assets indicated that an impairment of the assets had occurred. The
restructuring and other one-time charges of $3.6 million before taxes resulted
primarily from strategic decisions to divest or restructure selected corporate
departments and a number of businesses, including selected Energy Systems and
Specialty Systems operations.

Net Interest Income (Expense). Because FMC Corporation has historically
funded most of its businesses centrally, third-party debt and cash for
operating companies have been minimal and are not representative of what our
actual debt or cash balances would have been had we been a separate, stand-
alone entity. Net interest income in 1999 was $0.5 million, compared to net
interest expense in 1998 of $1.9 million. The reduced net interest expense in
1999 resulted from lower average debt balances.

Income Tax Expense. Income tax expense in 1999 was $33.5 million,
resulting in an effective tax rate of 30.4%, compared to income tax expense of
$38.6 million and an effective tax rate of 30.7% in 1998. The differences
between the effective tax rates for these periods and the statutory U.S.
federal income tax rate relate primarily to differing foreign tax rates,
foreign sales corporation benefits, incremental state taxes and non-deductible
goodwill amortization and expenses.

Discontinued Operations. In 1999, we recorded a provision for
discontinued operations of $9.0 million ($5.5 million after tax) to increase
our actuarially-determined product liability reserves associated with
discontinued businesses.

Net Income. Net income in 1999 decreased $16.2 million, or 18.6%, to
$71.0 million, compared to $87.2 million in 1998.

Order Backlog. Our combined order backlog as of December 31, 1999 was
$840.6 million, of which $593.4 million was related to Energy Systems and
$247.2 million was related to Specialty Systems. Our combined order backlog as
of December 31, 1998 was $1,133.9 million, of which $877.9 was related to
Energy Systems and $256.0 million was related to Specialty Systems. The lower
order backlog for Energy Systems reflected reduced customer exploration and
production spending in 1999 as compared to 1998.

35

Liquidity and Capital Resources

We had cash and cash equivalents of $17.8 million and $40.1 million at
December 31, 2000 and 1999, respectively. We generated cash from operating
activities of $9.5 million in 2000, compared to $154.3 million in 1999 and
$223.2 million in 1998. Operating working capital, which excludes cash and cash
equivalents, short-term debt and income tax balances, increased $110.4 million
from $40.6 million at December 31, 1999 to $151.0 million at December 31, 2000.
Our working capital balances vary significantly depending on the payment terms
and timing of delivery on key contracts, particularly for Energy Systems'
customers. During 1998 and 1999, working capital requirements declined
significantly due to favorable advance payment terms on key contracts, many of
which were approaching completion in 2000. Working capital requirements rose
significantly in 2000 due to the delay by oil and natural gas companies in
awarding significant new long-term contracts, and a trend toward lower advance
payments.

During the fourth quarter of 1999, FMC Corporation entered into an
accounts receivable financing facility under which accounts receivable are sold
without recourse through a wholly owned, bankruptcy remote subsidiary. As part
of FMC Corporation, we have participated in the receivable financing facility,
which resulted in a reduction of accounts receivable of $38.0 million and $22.3
million on our combined balance sheets at December 31, 2000 and 1999,
respectively. Net discounts recognized on sales of receivables are included in
selling, general and administrative expenses in the combined statements of
income and amounted to $0.1 million and $0.3 million for the years ended
December 31, 2000 and 1999, respectively.

Cash provided by investing activities was $63.4 million in 2000, compared
to cash used in investing activities of $6.5 million in 1999 and $155.6 million
in 1998, reflecting our receipt of $125.4 million of Tyco preferred stock in
1998 in conjunction with the disposition of Crosby Valve and our subsequent
redemption of the Tyco preferred stock in 2000 for $128.7 million, including
dividends of $1.2 million. In addition, in 2000, we acquired Northfield
Freezing Equipment for $39.8 million in cash and the assumption of liabilities.
In 1999, we acquired additional outstanding shares of CBV Industria Mecanica
S.A. for $21.7 million and now own approximately 98% of CBV. We continue to
evaluate other potential acquisitions, divestitures and joint ventures on an
ongoing basis.

During 2000 and 1999, we entered into agreements for the sale and
leaseback of $13.7 million and $29.1 million of equipment, respectively. We
received net proceeds of $22.5 million in 2000 and $52.1 million in 1999 in
connection with these transactions. Non-amortizing deferred credits were
recorded in conjunction with the sale transactions. These credits totaled $31.8
and $23.4 million at December 31, 2000 and 1999, respectively, and are included
in other long-term liabilities. For more information on these sale and
leaseback transactions, see Note 7 to our combined financial statements.

Total borrowings were $41.1 million and $12.0 million at December 31,
2000 and 1999. Because FMC Corporation has historically funded most of its
businesses centrally, third-party debt and cash for operating companies has
been minimal and is not representative of what our actual debt balances would
have been had we been a separate stand-alone entity.

We anticipate that our debt after giving effect to this offering will be
approximately $    million or $    million if the underwriters' over-allotment
option is fully exercised and that the net proceeds will be used to reduce
debt. In addition, pursuant to the separation and distribution agreement, this
amount will be decreased to reflect net cash generated or increased to reflect
net cash utilized by our operations from January 1, 2001 to the closing of this
offering. We expect that our debt will consist of one or more of the following:
third-party revolving credit facilities, commercial paper, uncommitted bank
facilities and medium-term notes.

We expect to meet our operating needs, fund capital expenditures and
potential acquisitions and meet debt service requirements through cash
generated from operations and the credit facilities discussed above. Until the
date of the offering, we expect to participate in FMC Corporation's accounts
receivable financing facility. On or before the completion of this offering, we
will discontinue selling receivables under FMC Corporation's accounts
receivable financing facility. Consequently, it is expected that receivables
will

36

subsequently increase by the amount of receivables sold as of this offering,
with a corresponding increase in debt. As of December 31, 2000, approximately
$38 million of accounts receivable were sold. Capital spending is forecast to
be approximately $60 million for 2001, compared with $43.1 million in 2000.

Derivative Financial Instruments and Market Risks

We are subject to financial market risks, including fluctuations in
currency exchange rates. In managing our exposure to these risks, we may use
derivative financial instruments in accordance with the established policies
and procedures discussed below. We do not use derivative financial instruments
for trading purposes. At December 31, 2000, our derivative holdings consisted
primarily of foreign currency forward contracts.

When we sell or purchase products or services outside the United States,
transactions are frequently denominated in currencies other than U.S. dollars.
We mitigate our exposure to variability in currency exchange rates when
possible through the use of natural hedges, whereby purchases and sales in the
same foreign currency and with similar maturity dates offset one another.
Additionally, we initiate hedging activities by entering into foreign exchange
forward or options contracts with third parties when natural hedges are not
feasible. The maturity dates of the currency exchange agreements that provide
hedge coverage are substantially synchronized with those of the underlying
purchase or sales commitments.

To monitor our currency exchange rate risks, we use a sensitivity
analysis, which measures the impact on earnings of an immediate 10% devaluation
of the foreign currencies to which we have exposure. Based on the sensitivity
analysis at December 31, 2000, such a fluctuation in currency exchange rates in
the near term would not materially affect our combined operating results,
financial position or cash flows. We believe that our hedging activities have
been effective in reducing our risks related to historical currency exchange
rate fluctuations.

During September 1998, we entered into $33.0 million of forward contracts
to offset risks associated with the portions of our Brazilian investments
denominated in the Brazilian real. During the first quarter of 1999, the
Brazilian real devalued. Losses from the decline in value of our real-
denominated investments during the 1999 devaluation, as well as 1999 economic
losses related to the Brazilian economic crisis, were offset by gains on these
forward contracts.

In connection with the separation, we expect to enter into one or more
debt instruments that will subject us to the risk of loss associated with
movements in interest rates. We may from time to time enter into arrangements
to manage or mitigate interest rate risk utilizing derivative financial
instruments.

For more information on derivative financial instruments, see Notes 3 and
14 to the combined financial statements.

Recently Issued Accounting Pronouncements

Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended, is effective for
our combined financial statements beginning January 1, 2001. This statement
will require us to recognize all derivatives on the balance sheet at fair
value. Derivatives that are not hedges must be adjusted to fair value through
income. If the derivative is a hedge, depending on the nature of the hedge,
changes in the fair value of the derivative will either be offset against the
change in fair value of the hedged item through earnings or recognized in other
comprehensive income until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value will be recognized
in earnings immediately. We expect that our adoption of this statement on
January 1, 2001 will result in the recognition of a net loss of approximately
$7.2 million after tax in the combined statement of income and a charge of
approximately $2.3 million to other comprehensive income in the first quarter
of 2001, both of which will be accounted for as the cumulative effect of a
change in accounting principle.

37

Conversion to the Euro

On January 1, 1999, 11 European Union member states adopted the euro as
their common national currency. During the transition period ending January 1,
2002, either the euro or a participating country's present currency will be
accepted as legal tender. Beginning on January 1, 2002, euro-denominated bills
and coins will be issued, and by July 1, 2002, the euro will be the only
currency that the member states will use.

We continue to address the strategic, financial, legal and systems issues
related to the various phases of the transition. We are evaluating customer and
business needs on a timely basis and are attempting to anticipate and prevent
complications related to the conversion. Throughout the transition period, we
have incurred and will continue to incur minor costs related primarily to
programming changes in our information systems.

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BUSINESS

Overview

We design, manufacture and service technologically sophisticated systems
and products for our customers through our Energy Systems and Specialty Systems
segments. Energy Systems is a leading supplier of systems and services used in
the offshore, particularly deepwater, exploration and production of crude oil
and natural gas. In addition, Specialty Systems provides technologically
advanced handling and processing systems to industrial customers. During the
year ended December 31, 2000, we generated $1,875.2 million of revenue, after
eliminations. In the year 2000, Energy Systems generated $1,037.3 million of
revenue, resulting in a 14.5% compound annual growth rate since 1994, and
Specialty Systems generated $839.5 million of revenue, resulting in a 8.5%
compound annual growth rate over the same period.

Energy Systems

Energy Systems is a global leader in the provision of subsea drilling and
production systems, including subsea tree systems that control the flow of
crude oil and natural gas from the well, systems for floating production
solutions and surface drilling and production systems to oil and gas companies
involved in the exploration and production of crude oil and natural gas. Many
of the systems that we provide are for use in the exploration, development and
production of crude oil and natural gas reserves located in technologically
challenging deepwater environments, which involve water depths of greater than
1,000 feet. Worldwide exploration and production spending by oil and gas
companies has increased from approximately $55.0 billion in 1994 to
approximately $94.8 billion in 2000, representing a compound annual growth rate
of 9.5%. In addition, worldwide exploration and production spending is expected
to increase 19.7% in 2001 to approximately $113.5 billion. More specifically,
an external industry survey published in early 2000 projected that subsea tree
installations would increase at a compound annual growth rate of 17.0% between
2000 and 2004.

We are also a leading provider of specialized, high-performance fluid
control systems and products, measurement systems, loading systems and blending
and transfer systems to customers involved in the transportation and processing
of crude oil, natural gas and refined petroleum-based products.

In subsea systems, our largest business area:

.  We are a major supplier of subsea tree systems and associated
services to ExxonMobil Corporation, Shell Exploration and Production
Company (USA), Statoil A.S., Total Fina Elf S.A. and Petroleo
Brasileiro S.A. These five companies are projected to be among the
eight most active developers of subsea oil and gas over the next five
years based on projected subsea tree installations.

.  Since 1995, we have installed, or been awarded contracts for the
installation of, more subsea tree systems than any other
manufacturer.

.  We set six of the ten water depth records established since 1987 for
subsea tree installations.

We supply subsea systems to leading exploration and production companies.
We believe that the continuing consolidation in the oil and gas industry will
lead to further outsourcing by the major oil companies and the selection of a
limited number of vendors. We believe our customers prefer vendors that can
provide comprehensive systems and services that are engineered to fit their
individual needs--particularly for highly capital-intensive and technologically
challenging subsea deepwater projects.

With our integrated systems for subsea exploration and production, we
have aggressively pursued alliances with oil and gas companies that are
actively engaged in the subsea development of crude oil and natural gas.
Development of subsea fields, particularly in deepwater environments, involves
substantial capital

39

investments by our customers. Our customers have sought the security of
alliances with us to ensure timely and cost-effective delivery of subsea and
other energy-related systems that provide an integrated solution to their
needs. Our key subsea alliance customers include Agip Exploration and
Production, which is a subsidiary of ENI S.p.A., Norsk Hydro, Shell Exploration
and Production Company, Statoil and Unocal Corporation. In addition to these
alliances, we are currently supplying subsea trees to Amerada Hess Corporation,
Anadarko Petroleum Corporation, BP Amoco p.l.c., ExxonMobil, Kerr-McGee
Corporation, Petrobras, Petro-Canada, Total Fina Elf, Vietsopetro and Woodside
Petroleum Ltd.

We have an established presence in more than 30 countries and are
involved in all of the world's major subsea crude oil and natural gas basins
currently under development. Since 1994, we have installed more than 315 subsea
trees, which reside on the ocean floor and are used to control and regulate the
flow of crude oil and natural gas from wells. Of the trees that we have
installed since 1994, approximately 90% are located off the coast of Brazil, in
the Gulf of Mexico, off the coast of West Africa or in the North Sea. Deepwater
fields are forecasted to account for 90% of the reserves to be developed in
fields off of the coast of Brazil, 89% in the Gulf of Mexico and 45% off the
coast of West Africa.

We have developed our leadership position through our investment in and
application of technology to our systems and products. In 1987, we set a world
record for the deepest subsea tree completion at 1,348 feet off of the coast of
Brazil. Between 1987 and 2000, we set another five world records, and, in March
2001, we expect to set yet another deepwater world record by installing a
subsea tree at a depth of approximately 6,200 feet, also off of the coast of
Brazil. To maintain our leading technology, between 1994 and 2000, we have
increased our research and development spending by an average of 15.7% per
year. Our research and development teams have focused on introducing new
systems and services that lower our customers' operating costs and capital
requirements to access deepwater reserves. To meet the demands of crude oil and
natural gas production in increasingly deeper water, we are currently focusing
on developing subsea systems for use in up to 10,000 feet of water under
conditions that involve extreme well pressures and temperatures. In addition,
to enhance the recovery of subsea crude oil and natural gas reserves and
improve the financial returns associated with subsea developments, we are
developing systems that are intended to lower the cost of intervening into
subsea wells and to put subsea processing and other production-related
activities on the ocean floor.

Energy Systems' financial performance generally has been less affected by
short-term market cycles and volatile commodity prices than the financial
performance of companies operating in other sectors of the oilfield services
industry. Most of the systems that we supply are highly engineered to meet the
unique demands of our customers and are typically ordered one or two years
prior to installation. We believe that, due to their long lead times and high
potential returns, the deepwater projects in which our systems are used
typically are not the marginal projects that are more subject to cancellation
or delay during periods of low crude oil and natural gas prices. In addition,
we believe that Energy Systems is less capital intensive than companies
operating in other sectors of the oilfield services industry due to factors
such as high engineering content, the outsourcing of certain low value-added
manufacturing and advance payments received from customers.

Growth Strategy

Worldwide spending for the exploration and production of crude oil and
natural gas grew from $55.0 billion in 1994 to $94.8 billion in 2000,
representing a compound annual growth rate of 9.5%. Worldwide exploration and
production spending is expected to increase 19.7% in 2001 to $113.5 billion.
More specifically, an external industry survey published in early 2000
projected that subsea tree installations would increase at a compound annual
growth rate of 17.0% between 2000 and 2004.

From 1994 to 2000, Energy Systems' revenue and segment operating profit
increased at compound annual rates of 14.5% and 31.8%, respectively. Energy
Systems' revenue for 1994 includes the first full year of its ownership of two
acquired subsea businesses, Kongsberg Offshore A.S. and SOFEC, Inc. These two
acquisitions substantially expanded Energy Systems' scope of subsea products
and contributed to the development of our subsea systems and floating
production offerings.

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We believe that growth in Energy Systems is based upon our ability to
supply the integrated systems required by the high-growth deepwater sector of
the exploration and production industry. We expect that demand for these
systems will continue to increase as exploration and production of crude oil
and natural gas in technologically challenging deepwater and remote areas
increases. In addition to benefiting from the expected growth in the business
areas we serve, we intend to pursue select, complementary acquisitions and the
following internal growth strategy:

.  Focus on Technological Innovation. We have increased Energy Systems'
research and development spending by a compound annual rate of 15.7%
from 1994 to 2000 to $33.8 million in 2000. We believe that our
technological innovations have optimized product performance and led
to breakthrough installation techniques, yielding substantial cost
savings that have helped to make deepwater production and the
development of smaller fields an economic reality. We believe that
reductions in the total cost of production of an offshore field and
the technological challenges posed by ultra-deepwater production have
been, and will continue to be, major factors influencing the
development of subsea products and services.

.  Develop and Maintain Alliances with Key Customers. We intend to
expand our current alliances and form new alliances with other
companies active in the oil and gas industry. Our current key subsea
alliance customers include Agip Exploration and Production, Norsk
Hydro, Shell Exploration and Production Company, Statoil and Unocal.
Through our relationships with our customers, we are able to refine
and standardize our systems and services over many projects and to
optimize offshore installation techniques for the lowest total cost
and maximum reservoir recovery.

.  Provide a Broad Package of Systems and Services. We intend to develop
and acquire additional systems and services that complement our
current offerings and leverage our worldwide infrastructure. As major
oil companies increasingly outsource non-core operations, we believe
that they will continue to seek suppliers, like us, that can provide
an integrated solution to their exploration and production needs
through a single-sourced package of related systems and services.

Industry

The primary factor influencing demand for the exploration and production
systems and services that we provide is the exploration and production spending
of oil and gas companies, particularly with respect to offshore activities
worldwide. Exploration and production spending levels, in turn, depend
primarily on current and anticipated future crude oil and natural gas prices,
production volumes and oil and gas company operating costs.

The oil and gas industry has increasingly focused on deepwater field
development. This heightened focus has resulted in increases in new deepwater
discoveries, deepwater exploration and production spending, offshore crude oil
and natural gas production volume and the number of deepwater drilling rigs.
For example, the number of deepwater crude oil and natural gas discoveries has
increased from 16 during 1994 to 68 during 1999. Deepwater fields are forecast
to account for 90% of the reserves to be developed in fields off of the coast
of Brazil, 89% in the Gulf of Mexico and 45% off the coast of West Africa.
Since 1978, a total of 40 billion barrels of oil equivalent has been discovered
in deepwater locations, and only 4% of those barrels have been produced.

We estimate that, in 1994, the major oil and gas companies spent
approximately 23% of their exploration and production budgets on deepwater
activities. We further estimate that, in 2000, they spent approximately 50% of
their exploration and production budgets on deepwater activities. This
increased exploration and production activity in offshore fields has resulted
in significant increases in the amount of crude oil and natural gas produced
from offshore areas in recent years. In 1990, worldwide non-OPEC offshore oil
production was 10.9 million barrels of oil per day, representing 26% of the
worldwide non-OPEC production.

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In 2000, worldwide non-OPEC offshore oil production was 19.3 million barrels of
oil per day, representing 40% of the worldwide non-OPEC production.

The oilfield services industry has recognized this movement to offshore
and deepwater exploration and production and are investing the capital required
to meet the demands of this increasing activity. For example, offshore drilling
contractors are increasing the number of drilling rigs capable of operating in
deepwater. A drilling rig capable of operating in ultra-deepwater, which
involves depths beyond 5,000 feet, represents a significant investment,
typically between $160 million and $380 million for a new rig. Since 1994, 41
new drilling rigs were added to operate in ultra-deepwater. This represents
approximately a six-fold increase from 1994 levels of drilling rigs with
equivalent water depth capabilities.

The reduction in development costs of crude oil and natural gas and the
development of efficient technological solutions in response to the extreme
environmental and logistical challenges presented by deepwater have been, and
we believe will continue to be, major factors influencing the growth of the
subsea oilfield services industry. In addition, consolidation among oil and gas
companies, and the cost cutting initiatives that have resulted, have led to
more outsourcing of functions previously performed by the oil and gas
companies. These factors have driven three principal ongoing trends:

.  technological improvements and refined installation techniques;

.  growth in the use of subsea systems and services; and

.  delivery of more integrated systems of related products and services
for subsea developments.

Technological improvements and refined installation techniques. Oil and
gas companies have increasingly relied upon more sophisticated technologies to
reach remote crude oil and natural gas reserves deep below the ocean's surface.
Advances in exploration and production techniques, such as three-dimensional
seismic data collection and interpretation, directional drilling, deepwater
completion technology and floating production facilities, have contributed
significantly to the ability of oil and gas companies to economically recover
these remote reserves. For example, oil and gas companies have increasingly
used technologically sophisticated floating production platforms, as opposed to
fixed platforms, as they permit oil and gas companies to produce, process and
offload crude oil and natural gas from offshore fields having widely differing
production characteristics and water depths. These include:

.  floating production, storage and offloading vessels, or FPSOs, which
are ships fitted with crude oil and natural gas production and
processing systems;

.  tension leg platforms, or TLPs, which are floating production and
drilling structures that are anchored to the ocean floor with
tendons; and

.  SPARs, which are cylindrical floating production and drilling
structures anchored to the seabed by a spread mooring pattern of
cables.

In 1994, there were only four TLPs and no SPARs in operation worldwide. In
2001, it is anticipated that the number of units in operation worldwide will
increase to 14 TLPs and four SPARs. Likewise, currently, there are 72 FPSOs in
operation or under construction, as compared to 23 in 1994.

Growth in the use of subsea products and services. As improved subsea
technology has increased the water depths at which this technology may be
applied, the number of subsea completions installed each year on a worldwide
basis has increased significantly, from 123 in 1994 to an estimated 206 in
2000, representing a 9.0% compound annual growth rate. In addition, oil and gas
companies have used subsea technology in conjunction with floating production
technology to develop reservoirs where a fixed platform is not economical or
practical. These techniques have become increasingly important as cost-
efficient methods to recover crude oil and natural gas reserves.

Delivery of more integrated solutions for subsea developments. To further
reduce the cost of subsea developments, oil and gas companies are increasingly
relying on a primary subsea contractor to provide

42

extensive project coordination and management. As a result of this trend,
engineering, procurement, installation and commissioning, or EPIC, turnkey
contracting has emerged as one alternative to customary, segmented contracts.
One form of subsea EPIC turnkey contracting involves a single contractor
providing global project coordination and management for a broad range of
products and services. In EPIC turnkey contracting, significant cost
efficiencies can be realized by a primary contractor with extensive internal
resources. As such, a primary contractor is generally able to engineer and
design integrated systems that have a minimum number of interface gaps between
otherwise independent products and systems.

Consolidation among oil and gas companies, as evidenced by the publicly-
announced mergers and acquisitions within the oil and gas sector, has also
driven the demand for integrated solutions for subsea developments. These
consolidations and the resulting cost-cutting initiatives have led to more
outsourcing of functions previously performed by the oil and gas companies,
such as project engineering and project management. We believe this will lead
to a greater demand for integrated subsea systems and services.

In addition to the total level of exploration and production of crude oil
and natural gas, the spending of oil and gas companies on the delivery and
distribution of crude oil and natural gas influences the demand for
transportation and processing systems and products. Economic factors
influencing this spending include the demand for natural gas, the need for
liquid petroleum and natural gas custody transfer solutions, the importation of
liquid natural gas, facility upgrades in refineries and distribution terminals
and new pipeline construction.

Systems, Products and Services

Energy Systems provides customers with systems consisting of a package of
technologically sophisticated products and services. We design and manufacture
each system to provide our customers with a customized combination of products
and services that offer integrated solutions to help solve the problems they
face in the exploration, production, transportation and processing of crude oil
and natural gas.

We market our systems through our own sales force comprised of over 150
technically-oriented sales personnel, as well as agents in selected countries
who operate on a commission basis. Approximately 40% of Energy Systems' sales
are made on a percentage of completion basis as opposed to a "ship and bill"
basis.

Subsea Systems. We are a leading supplier of systems used in the
production of crude oil and natural gas reserves located below the ocean's
surface. Subsea systems are placed on the seafloor and are used to control the
flow of crude oil and natural gas from the reservoir to a host facility, such
as an FPSO, TLP, SPAR or fixed platform. A host facility remotely controls the
subsea equipment and acts as a distribution hub to receive the crude oil and
natural gas produced from the subsea wells. The distance between a subsea
system and the host facility can vary from near proximity to 20 or more miles.
Subsea systems require sophisticated technology, requiring a high degree of
technical expertise and innovation. These systems are designed to withstand
exposure to the extreme atmospheric pressure that deepwater environments
present as well as internal pressures of up to 15,000 pounds per square inch
from the well. For deepwater developments, subsea systems are installed with
the assistance of remotely operated vehicles that are deployed from a drilling
rig or support vessel.

We provide integrated subsea development systems, including the initial
engineering design studies, subsea completion systems, control systems,
manifolds, templates, flow line connection and tie-in systems, installation and
workover tools and wellheads. In order to provide these systems and services,
we have developed capabilities, such as system and detail engineering, project
management and global procurement, manufacturing, construction and testing, as
well as field support for installation, commissioning, intervention and
maintenance of subsea developments throughout the life of the field.

Floating Production. We are a global supplier of turret and mooring
systems for FPSOs. We also design and supply marine import and export
terminals.

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A key component of the economical development of offshore crude oil and
natural gas reserves is the use of floating production systems as the host
facility. An FPSO is one type of floating production system that permits oil
and gas companies to produce, process and offload crude oil and natural gas
from offshore fields having widely differing production characteristics and
water depths. FPSOs typically perform the same function as fixed offshore
platforms in the production of crude oil and natural gas, but FPSOs cannot be
used as a platform for drilling and heavy well maintenance. In many
circumstances, FPSOs provide a number of advantages over fixed platforms. For
example, FPSOs are suitable for a wide range of field sizes and water depths,
may be reused on more than one development, generally cost less and are easier
to install and remove than fixed platforms and may reduce the time from the
discovery of crude oil and natural gas to production.

A typical field development involving an FPSO consists of wells completed
using subsea systems that are connected to the FPSO by flexible or rigid pipes
referred to as "risers" that carry the crude oil and natural gas from the ocean
floor to the vessel. The risers are connected to a turret, which is anchored in
place by a mooring system, allowing the FPSO to rotate according to the
prevailing weather and sea conditions. The FPSO controls the flow of crude oil
and natural gas from the subsea wells through a subsea control system that
communicates with each subsea well through an umbilical line. The crude oil and
natural gas are pre-processed onboard the FPSO and are exported to shuttle
tankers via off-take systems.

In addition to our capabilities for designing and producing turret and
mooring systems, we own a 37.5% interest in MODEC International LLC, a joint
venture with a wholly owned subsidiary of Mitsui Group. MODEC International
designs and supplies FPSOs and TLPs. Like FPSOs, TLPs provide a number of
advantages over fixed platforms, including the ability to operate in a wider
range of water depths, generally lower installation and operating costs,
ability to reuse on other fields, easier installation and removal and,
potentially, a shorter period of time to construct and install. FPSOs are
currently used in operations off of the coast of West Africa and Brazil and in
the North Sea. Although FPSOs currently are prohibited from being used off the
coast of the United States, we believe they will be approved for use in the
Gulf of Mexico within the next several years.

Surface. We provide a full range of surface wellheads and trees for
standard and critical service applications. Surface wellhead equipment is used
to support the casing and tubing strings in a well. In addition, the surface
wellhead equipment contains the well pressure, while the surface tree is used
to control and regulate the flow from the well. Our surface products and
systems are used worldwide on both land and offshore applications, including
TLP and SPAR platforms. Our technical and engineering expertise makes us a
leading supplier of critical service products used in difficult climatic
conditions, such as Arctic cold or high temperatures. Our surface business
supports its customers through leading engineering, manufacturing, field
installation support and aftermarket services.

Fluid Control. We are a leading supplier of flowline products,
reciprocating pumps and compact manifold systems for a range of oilfield
applications.

Our flowline products include high-pressure swivels, fittings and valves
used by other oilfield services companies in pressure pumping applications.
These products provide the conduit between the well service pumps and the
wellhead during cementing or well stimulation operations. The high-pressure and
corrosive nature of the chemicals used in cementing and well stimulation
operations dictates that flow line products typically are replaced frequently.

Our reciprocating pump product line includes duplex, triplex and
quintuplex pumps utilized in a variety of applications. Typical applications
include charge pumps for blow-out preventor accumulators, injection pumps for
enhanced production and pumps utilized in reverse osmosis systems for producing
potable water on offshore and other remote locations. In addition, we are a
leading supplier of pumps to the trenchless drilling industry, which has
emerged as the primary means of laying fiber optic cable.

We are a leading supplier of compact production manifolds for the
offshore industry. Building upon a uniquely designed family of compact valves
and fittings, we assume turnkey responsibility for the design, engineering,
manufacturing, fabrication and installation of high-pressure production
manifolds suited for

44

applications where weight and space are of paramount importance. As a result,
our systems are used throughout the world on offshore fixed platforms, TLPs,
SPARs and FPSOs.

Loading Systems. We are a leading supplier of land and marine-based fluid
loading and transfer systems to the oil and gas industry. Our systems are
capable of loading and offloading marine vessels transporting a wide range of
fluids, such as crude oil, liquefied natural gas and refined products. While
these systems are typically constructed on a fixed jetty platform, we also
supply advanced loading systems that can be mounted on a vessel to facilitate
ship-to-ship loading and offloading operations.

Measurement Systems. We are a leading supplier of precision measurement
systems for use in custody transfer of crude oil, natural gas and refined
products. We combine the strength of advanced metering technology with state-
of-the-art electronics and supervisory control systems to provide the precise
measurement of fluids for purposes such as verifying ownership and determining
revenue or tax obligations.

Blending and Transfer. We are a leading supplier of blending systems for
the petroleum industry, and we supply bulk conveying systems to the power
industry. Our process and software engineering, mechanical design and project
management expertise enables us to execute these projects on a turnkey basis.

Specialty Systems

Specialty Systems is a leading supplier of specialized handling and
processing systems and services to industrial companies. We design, manufacture
and service technologically sophisticated food handling and processing systems
used for, among other things, convenience food preparation and citrus juice
extraction for food processors such as Nestle S.A., Tyson Foods, Inc., and
Cargill, Incorporated. In addition, we design, manufacture and service
technologically advanced ground support equipment and systems for airlines,
airports and air freight companies, such as United Airlines, Inc., Delta Air
Lines, Inc. and FedEx Corporation. Our products include citrus juice extraction
and commercial freezing systems as well as air cargo loaders and Jetway(R)
brand passenger boarding bridges.

We are a leading supplier of many of these systems and services:

.  We estimate that our equipment processes approximately 75% of the
global production of orange juice, freezes approximately 50% of
commercially frozen foods on a global basis and sterilizes a
significant portion of the world's canned foods.

.  We invented airline passenger boarding bridges and remain the leading
supplier of this product. We believe that we also have the largest
installed base of air cargo loaders.

Our historical and current strong positions in business areas in which we
operate have provided us the large installed base of systems and equipment. We
currently have an installed base of more than 5,800 industrial freezers, 1,200
sterilizer units, 1,000 coating systems, 2,850 juice extractors, 5,500 cargo
loaders and 5,000 passenger boarding bridges.

Specialty Systems' equipment is located in more than 110 countries around
the world. Through our global presence, we are able to follow the geographical
expansion and consolidation of our customers and continue to provide the same
high level of service and aftermarket support around the world.

We believe that we have leading positions in most of the business areas
in which we operate as a result of our application of superior technology to
create solutions for our customers' specific requirements. For example, our
flat product freezer is a leading technology used for freezing products such as
hamburgers. We estimate that our freezers process approximately 60% of the
hamburgers sold by McDonald's restaurants. Our continuing presence with our
customers in our aftermarket business enables us to tailor our research and
development efforts to fit our customers' specific requirements.

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Growth Strategy

From 1994 to 2000, Specialty Systems' revenue and segment operating
profit increased at compound annual rates of 8.5% and 25.3%, respectively.

We believe Specialty Systems' historical growth resulted from providing
technology-based systems and products for food processing and air
transportation companies. In addition to benefiting from the expected growth in
many of the industry segments we serve, we intend to continue to broaden the
scope of systems, equipment and services that we provide. We further intend to
leverage our large installed base of products and systems to enhance customer
relationships, generate new business and grow our aftermarket equipment and
services operations.

.  Provide Broader Solutions. We intend to grow through increasing the
scope of systems, equipment and services that we provide to our
customers. As our customers continue to consolidate and expand
geographically, they are reducing their supplier base and developing
stronger relationships with their remaining suppliers. In the
fragmented food equipment industry, our strong customer
relationships, strong industry position and large installed base give
us a unique opportunity to provide our customers additional systems
and support. Similarly, as our air transportation customers
consolidate, expand geographically and form alliances, our existing
customer relationships and technologically advanced systems provide
us the customer knowledge, reputation and installed base that will
help to further broaden our product, leasing, maintenance, operation
and parts supply offerings.

.  Increase Aftermarket Operations. We intend to continue to leverage
our large installed base of equipment to grow our aftermarket
equipment and services operations to provide improved operational
efficiency for our customers. From 1994 to 2000, Specialty Systems'
aftermarket revenue increased at a compound annual rate of
approximately 10.9%. We provide retrofits to accommodate changing
operational requirements and continuous, proactive service, including
in some cases on-site personnel.

Industry

We currently provide specialized handling and processing systems,
primarily to the food processing and air transportation industries.

These industries are undergoing continuing consolidation. Major food
retailers are increasing their purchasing power through combinations. To
maintain profitability, food processors are being pressured to become more
efficient and to lower costs. As a result, they are consolidating and are
seeking technologically sophisticated integrated systems and services, such as
those we provide, to maximize the efficiency of their operations, while
maintaining high standards of food safety. Significant consolidations and
strategic alliances are reshaping the air transportation industry. Five
alliances currently represent approximately 50% of the total worldwide
passenger traffic. As with the food processors, the air transportation industry
is seeking broader solutions to support the efficient use of the airplane
fleets.

The worldwide fleet of airplanes is forecast to grow at a compound annual
rate of 4.3% through 2019, primarily driven by global economic development,
increased trade and the deregulation of airline markets and supported by growth
in both passenger traffic and air cargo. To accommodate this growth, airports,
airlines and air freight companies are expected to expand their existing
infrastructure. As a result of the projected airline fleet growth and the
demand that this growth is placing on current systems and infrastructure,
airports, airlines and air freight companies are seeking suppliers that can
provide total solutions such as integrated systems and processes to support
their primary operations.

Consumer demand in several segments of the convenience food industry we
serve has increased during the last decade, and is expected to continue to
grow. For example, worldwide retail sales of frozen ready-meals are forecast to
increase at a compound annual rate of 4.5% through 2005. In addition, the fast-
food industry is

46

growing, and fast-food companies are expanding geographically. For example,
McDonald's international restaurant sales grew at a compound annual rate of
17.0% from 1985 through 1999. This has increased the demand for systems and
services that we supply to food processors like H.J. Heinz Company, Tyson, Del
Monte Foods Company, Nestle, ConAgra Foods, Inc. and Unilever p.l.c., which in
turn supply processed food to food retailers and fast food restaurants.

We believe that projected growth in these industries and the trend toward
consolidation will continue to result in food processors, airlines, airports
and air transportation companies outsourcing an increasing amount of non-core
services and seeking suppliers to provide integrated systems and products that
are technologically advanced, cost-efficient and supported by extensive service
capabilities.

Systems, Products and Services

We offer a broad portfolio of systems, products and services to our
customers. We market our systems through our own sales force comprised of
approximately 185 technically oriented sales personnel as well as in some
cases, through independent distributors and sales representatives. The majority
of Specialty Systems' sales are made on a ship and bill basis as opposed to
under percentage of completion contracts. Most of the citrus processing
equipment is provided to our customers under full-service leases for which we
are paid fixed rates, plus payments based on actual production volumes. The
majority of these full-service leases are three to five years in duration and
incorporate the provision of equipment and, in many cases, full-time, on-site
maintenance personnel. Our customers typically renew these contracts upon
expiration.

Fruit and Vegetable Processing Systems. We are a leading supplier of
commercial citrus processing equipment. We estimate that our citrus extraction
equipment processes approximately 75% of the global production of orange juice.
Our primary products and services include citrus juice extractors, by-product
systems and processing plants, and aseptic juice and pulp systems.

We are also a leading global supplier of sterilization systems used for
the production of shelf-stable and pasteurized packaged foods, including
fruits, vegetables, soups, milk and a broad range of ready meals. Components of
these systems include a filler, a closer, a sterilizer and a control system. In
addition, we are among the leading suppliers of tomato processing equipment.

Freezing Systems. We are the largest supplier of industrial freezing
equipment to the world's food processing industry. We estimate that our
industrial freezer equipment freezes about 50% of commercially frozen foods on
a global basis. We design, assemble and sell a number of industry-leading
freezing technologies, including fluidization, self-stacking spiral and flat
product freezing technologies. Our equipment is used for a variety of frozen
food products, such as meat, seafood, poultry, bakery products, ready-meals,
fruits, vegetables and dairy products.

Convenience Food Systems. We manufacture and supply an array of equipment
and services that enable us to provide integrated coating and cooking systems
for a variety of convenience foods. We believe that our installed base of
systems produces more meat, seafood and poultry products in North America than
that of any other supplier. Our products include continuous batter-breading,
frying and oven-cooking equipment. In addition, we supply complete processing
lines for the production of french fries and potato chips.

Air Cargo Loaders. We are a leading supplier of air cargo loaders to
commercial airlines and airfreight service providers. Our loaders service wide-
body jet aircraft and can be configured to lift up to 30 tons. We provide what
we believe to be the loader of choice for most major customers. From 1995 to
present, we have been the sole supplier of cargo loaders to FedEx. Our
installed base of approximately 5,500 loaders in operation around the world is
greater than that of any of our competitors. In addition, in 2000, we were
awarded a contract to supply the U.S. Air Force with a commercial air cargo
loader known as the Next Generation Small Loader, which is expected to generate
revenue of approximately $135 million over the next five years.

47

Passenger Boarding Bridges. We manufacture Jetway(R) passenger boarding
bridges, which have been a market leader for more than 40 years. We have an
installed base of more than 5,000 Jetway(R) passenger boarding bridges.

Aftermarket Services. We also provide aftermarket services and products
for our systems and equipment. We provide retrofits to accommodate changing
operational requirements and continuous, proactive service, including, in some
cases, on-site personnel. These systems and other services enable us to provide
an integrated approach to addressing critical problems faced by our customers.
As a result of our relationship with Jetway(R) customers, we developed
additional features, such as power and preconditioned air generators and
potable water suppliers, that provide comfort for our customers' passengers and
are intended to simplify and expedite airplane turn-around at gates.

Research and Development

The objectives of our research and development programs are to discover
new products and business opportunities in relevant fields, and to improve
existing products. Worldwide expenditures for research and development by
business segment for the three most recent fiscal years were as follows:

Year Ended
December 31,
-----------------
1998  1999  2000
----- ----- -----
(in millions)

Energy Systems.......................................... $24.7 $25.7 $33.8
Specialty Systems.......................................  26.0  26.1  22.9
----- ----- -----
Total................................................. $50.7 $51.8 $56.7
===== ===== =====

Intellectual Property

We own a number of U.S. and foreign patents, trademarks and licenses that
are cumulatively important to our business. We own approximately 1,460 U.S. and
foreign patents and have approximately 850 patent applications pending in the
United States and abroad. Further, we license certain intellectual property
rights to or from third parties. We also own numerous U.S. and foreign
trademarks and trade names and have approximately 1,040 registrations and
pending applications in the United States and abroad. We do not believe that
the loss of any one or group of related patents, trademarks or licenses would
have a material adverse effect on our overall business.

Competition

We market our products primarily through our own technically-oriented
sales organization, and, in some cases, through independent distributors and
sales representatives. We conduct business worldwide in more than 100
countries. Energy Systems competes with other companies that supply subsea
systems and floating production products, and with smaller companies that are
focused on a specific application, technology or geographical area in our other
product areas. Specialty Systems competes with a variety of local and regional
companies, which typically are focused on a specific application, technology or
geographical area, and with a few large multinational companies.

We compete by leveraging our industry experience to provide advanced
technology, integrated systems, high product quality and reliability and
quality aftermarket service. In Energy Systems, we differentiate ourselves by
the depth of our industry experience, engineering and design capabilities,
product performance, integrated systems, global manufacturing capability,
quality, reliability, service and price. In Specialty Systems, we differentiate
ourselves on many of the same bases as in Energy Systems--the depth of our
industry experience, engineering and design capabilities, product performance,
integrated systems, reliability, service and price--and, in the food processing
industry in particular, on the basis of yield and hygiene.

48

Order Backlog

Our combined order backlog as of December 31, 2000 was $644.3 million, of
which $425.1 million was related to Energy Systems and $219.2 million was
related to Specialty Systems. Our combined order backlog as of December 31,
1999 was $840.6 million, of which $593.4 million was related to Energy Systems
and $247.2 million was related to Specialty Systems. Although we provide many
of our systems, equipment and services pursuant to long-term agreements entered
into in advance of the delivery of those items to our customers, orders are not
entered into order backlog until formally recognized by receipt of a confirmed
customer order.

Employees

As of December 31, 2000, approximately 9,300 people were employed in our
U.S. and foreign operations. Approximately 500 of our employees are represented
by collective bargaining agreements in the United States. Outside the United
States, various local agreements apply. In 2000, three of our collective
bargaining agreements in the United States covering approximately 360 employees
were renegotiated. In 2001, one additional contract will expire, which is under
negotiation at the present time. We maintain good employee relations and have
successfully concluded virtually all of our recent negotiations without a work
stoppage. In those rare instances where a work stoppage has occurred, there has
been no material effect on our combined revenue and earnings. We, however,
cannot predict the outcome of future contract negotiations.

Facilities and Properties

We lease executive offices in Chicago, Illinois. Most of our plant sites
are owned. We believe our properties and facilities meet our current operating
requirements and are in good operating condition and that each of our
significant manufacturing facilities is operating at a level consistent with
the industry in which we operate. The significant production properties for our
Energy Systems operations currently are:

Location                        Sq. Feet (approximate)               Leased or Owned
-----------------------         ----------------------               ---------------

United States:
--------------
Longmont, Colorado                       8,000                           Leased
Tupelo, Mississippi                    330,000                            Owned
Oklahoma City, Oklahoma                 40,000                            Owned
Erie, Pennsylvania                     350,000                            Owned
Corpus Christi, Texas                   15,000                            Owned
Houston, Texas                         390,000                            Owned
Stephenville, Texas                    300,000                            Owned
International:
--------------
Rio de Janeiro, Brazil                 225,000                            Owned
Sens, France                           185,000                            Owned
Ellerbek, Germany                      200,000                            Owned
Jakarta, Indonesia                      44,000                            Owned
Pasir Gudang, Malaysia                  34,000                            Owned
Villahermosa, Mexico                    30,000                            Owned
Kongsberg, Norway                      568,000                           Leased
Singapore, RS                           97,000                            Owned
Dumfermline, Scotland                  152,000                            Owned
Maracaibo, Venezuela                    60,000                            Owned

49

The significant production properties for our Specialty Systems
operations currently are:

Location                         Sq. Feet (approximate)               Leased or Owned
------------------------         ----------------------               ---------------

United States:
--------------
Madera, California                      250,000                            Owned
Stockton, California                     58,000                        Owned/Leased
Orlando, Florida                        253,000                            Owned
Lakeland, Florida                       208,000                            Owned
Hoopeston, Illinois                     359,000                            Owned
Northfield, Minnesota                    48,000                            Owned
Sandusky, Ohio                          140,000                            Owned
Smithville, Ohio                         52,000                            Owned
Newberg, Oregon                         101,000                           Leased
Chalfont, Pennsylvania                  350,000                           Leased
Homer City, Pennsylvania                267,000                            Owned
Ogden, Utah                             350,000                            Owned

International:
--------------
St. Niklaas, Belgium                    539,000                            Owned
Araraquara, Brazil                       94,000                            Owned
Collecchio, Italy                        34,000                           Leased
Parma, Italy                             68,000                            Owned
Madrid, Spain                            27,000                            Owned
Helsingborg, Sweden                     227,000                        Owned/Leased
Fakenham, United Kingdom                117,000                            Owned

Additionally, we have in excess of 50 service centers in various
locations throughout the world.

Legal Proceedings

Pursuant to the separation and distribution agreement, at the time of
our separation from FMC Corporation, we will assume liabilities related to
specified legal proceedings. As a result, although FMC Corporation will remain
the named defendant, we will manage the litigation and indemnify FMC
Corporation for costs, expenses and judgments arising from this litigation.
The following describes legal proceedings to which FMC Corporation or we are a
party and for which we will assume any liabilities or receive any benefits.

We are involved in and have assumed liabilities arising from a patent
infringement lawsuit brought by IMODCO Inc. against FMC Corporation and our
wholly owned subsidiary SOFEC Inc. involving FPSO turret mooring systems. We
do not believe that our design infringes the IMODCO patent. In addition, we
believe that the IMODCO patent is invalid and unenforceable. We are confident
that we will prevail in this litigation, but, like all litigation, the
ultimate result cannot be reliably predicted. If we do not prevail,
significant damages could be assessed against SOFEC and us relating to up to
two installed systems. In addition, any recovery supporting the validity of
the IMODCO patent could affect the types of products SOFEC or we could offer
to the oil and gas industries.

We are aware of other potential claims that may arise in the ordinary
course of our business. For example, Cooper Cameron Corporation has brought a
patent infringement action against Kvaerner Oilfield Products, Inc. alleging
that a Cooper Cameron patent on a horizontal tree system has been infringed.
While FMC Corporation and we are not parties to that litigation, we produce a
similar system. We believe, however, that the Cooper Cameron patent is invalid
and unenforceable. If the Cooper Cameron patent is found to be valid and
enforceable, however, they could demand significant royalty costs from us for
installed and future systems, and they could possibly attempt to enforce that
demand through litigation. Any remedy could affect

50

the types of products we could offer to the oil and gas industry. In addition,
we have developed, applied for a patent regarding and are now selling a new
design that we also believe does not infringe any patents.

In addition, under the separation and distribution agreement, we have
assumed specified liabilities relating to discontinued and closed machinery
businesses of FMC Corporation. Among the assumed liabilities are those arising
in connection with cranes that one of these businesses manufactured and sold.
From time to time personal injury and other claims have been made regarding
these cranes. We have reserved what we believe to be an adequate amount to
cover any liabilities arising in connection with any of these claims.

We are involved in other legal proceedings arising in the ordinary course
of business. Although the results of litigation cannot be predicted with
certainty, we do not believe that the resolution of the proceedings that we are
involved in, either individually or taken as a whole will have a material
adverse effect on our business, results of operations or financial condition.

Raw Materials

For both of our business segments, we purchase carbon steel, stainless
steel, aluminum and steel castings and forgings both domestically and
internationally. We do not use single source suppliers for the majority of our
raw material purchases and believe the available supplies of raw materials are
adequate. Moreover, raw materials essential to our business are generally
readily available.

Dependence on Key Customers

No single customer accounts for more than 10% of our 2000 combined
revenue.

Energy Systems' customers include large oil and gas companies, and we
have signed multiyear alliances and agreements to supply certain of their major
projects with our systems and services. In any given year, purchases by these
large oil and gas companies vary significantly. The loss of one or more of
these customers could have a material adverse effect on Energy Systems.

Government Contracts

Our contract to supply the U.S. Air Force with our commercial air cargo
loader, the Next Generation Small Loader, is expected to generate revenue of
approximately $135 million over the next five years, with the potential for the
value of the contract to increase to $485 million over the next 15 years. U.S.
defense contracts are unilaterally terminable at the option of the U.S.
government with compensation for work completed and costs incurred. Contracts
with the U.S. government are subject to special laws and regulations, the
noncompliance with which may result in various sanctions.

Governmental Regulation and Environmental Matters

Our operations are subject to various federal, state, local and foreign
laws and regulations governing the prevention of pollution and the protection
of environmental quality. If we fail to comply with these environmental laws
and regulations, administrative, civil and criminal penalties may be imposed,
and we may become subject to regulatory enforcement actions in the form of
injunctions and cease and desist orders. We may also be subject to civil claims
arising out of a pollution event. These laws and regulations may expose us to
liability for the conduct of or conditions caused by others or for our own acts
even though these actions were in compliance with all applicable laws at the
time they were performed.

Under the Comprehensive Environmental Response, Compensation and
Liability Act, referred to as CERCLA, and related state laws and regulations,
joint and several liability can be imposed without regard to fault or the
legality of the original conduct on certain classes of persons that contributed
to the release of a hazardous substance into the environment. These persons
include the owner and operator of a contaminated site where a hazardous
substance release occurred and any company that transported, disposed of or
arranged for

51

the transport or disposal of hazardous substances that have been released into
the environment, and including hazardous substances generated by any closed
operations or facilities. In addition, neighboring landowners or other third
parties may file claims for personal injury, property damage and recovery of
response cost. In addition, we may be subject to the corrective action
provisions of the Resource, Conservation and Recovery Act, or RCRA, and
analogous state laws that require owners and operators of facilities that
treat, store or dispose of hazardous waste to clean up releases of hazardous
waste constituents into the environment associated with their operations.

We are currently remediating two contaminated properties, one in
Lakeland, Florida and another in Orlando, Florida. We have set aside reserves
of $2.7 million for these sites, which we believe will be adequate to complete
the remediation projects at those sites. We are currently not aware of any
additional liability related to hazardous waste disposal sites, although other
sites may exist. Under the separation and distribution agreement between FMC
Corporation and us, we are responsible for environmental liabilities and
obligations relating to specified closed businesses, including liability for
any contamination at any former properties used in connection with those closed
businesses. We believe that it is unlikely that any material liability will be
incurred in connection with those closed businesses.

Our businesses historically have resulted in significantly less
remediation liability than those businesses remaining with FMC Corporation
under the separation and distribution agreement. For instance, as of December
31, 1999 FMC Corporation had set aside $266.8 million for environmental
liabilities, but only $3.3 million of this amount was attributable to our
businesses. We anticipate that our future exposure to environmental liabilities
associated with contaminated properties will be consistent with our past
experiences, and therefore we do not expect any material liabilities to arise
in connection with those businesses.

Some of our facilities and operations are also governed by laws and
regulations relating to worker health and workplace safety, including the
Federal Occupational Safety and Health Act, or OSHA. We believe that
appropriate precautions are taken to protect our employees and others from
harmful exposure to potentially hazardous materials handled and managed at our
facilities, and that we operate in substantial compliance with all OSHA or
similar regulations.

52

MANAGEMENT

Directors and Executive Officers

Set forth below is information concerning our directors and executive
officers. Unless otherwise indicated, each position was with us. Prior to the
closing of this offering, we intend to add seven additional directors, two of
whom will be unaffiliated with us or FMC Corporation. All ages are as of
January 1, 2001.

Name            Age                         Position(s)
----            ---                         -----------

Robert N. Burt            63 Chairman of the Board of Directors
Joseph H. Netherland      54 Chief Executive Officer, President and Director
William H. Schumann III   50 Senior Vice President, Chief Financial Officer and Director
Charles H. Cannon, Jr.    48 Vice President
Michael W. Murray         54 Chief Human Resource Officer
Peter D. Kinnear          53 Vice President

Robert N. Burt has served as our Chairman of the Board of Directors since
February 16, 2001. Since November 1991, Mr. Burt has served as, and he
continues to be, Chairman and Chief Executive Officer of FMC Corporation. From
1977 to 1983, Mr. Burt was General Manager of FMC Corporation's Agricultural
Chemical Group, and, from 1983 to 1988, was General Manager of its Defense
Systems Group. Mr. Burt also served as a Vice President of FMC Corporation from
1978 to 1988 and as Executive Vice President of FMC Corporation from September
1988 until his appointment as Chairman and Chief Executive Officer. He is a
director of Phelps-Dodge Corporation and Pfizer Inc. He serves on the Board of
Trustees of the Orchestral Association of Chicago, and serves on the Boards of
Directors of the Rehabilitation Institute of Chicago, Evanston Hospital
Corporation and the Chicago Abused Women Coalition. He is Chairman of the
Business Roundtable and is on the Board of Trustees and the Executive Committee
of Manufacturers Alliance for Productivity and Innovation.

Joseph H. Netherland has served as our Chief Executive Officer and
President and a director since February 16, 2001. Since June 1999, Mr.
Netherland has served as, and he continues to be, President of FMC Corporation.
After the distribution, Mr. Netherland will no longer serve FMC Corporation in
any capacity. Mr. Netherland was Executive Vice President of FMC Corporation
from 1998 until his appointment as President. He was also the General Manager
of FMC Corporation's Energy and Transportation Group from 1992 to 2001. Mr.
Netherland joined FMC Corporation in 1973 as a Business Planner for its
Machinery Group, and he held several management positions over the next few
years. Mr. Netherland became General Manager of FMC Corporation's former
Petroleum Equipment Group in 1985. He was elected a Vice President of FMC
Corporation in 1987, and became General Manager of FMC Corporation's former
Specialized Machinery Group in April 1989. Mr. Netherland is a former chairman
and currently serves on the Board of Directors of the Petroleum Equipment
Suppliers Association. He also serves on the Board of Directors of the American
Petroleum Institute. Mr. Netherland is also a member of the Advisory Board of
the Department of Engineering at Texas A&M University, and is a member of the
President's Council at Georgia Institute of Technology.

William H. Schumann III has served as our Senior Vice President and Chief
Financial Officer and a director since February 16, 2001. Upon completion of
this offering, Mr. Schumann will no longer serve as a director. Since December
1999, Mr. Schumann has served as, and he continues to be, Senior Vice President
and Chief Financial Officer of FMC Corporation. After the distribution, Mr.
Schumann will no longer serve FMC Corporation in any capacity. Mr. Schumann
joined FMC Corporation in 1981 as Director of Pension Investments. Since then,
he has served in a variety of finance and line roles at FMC Corporation,
including Director of Investor Relations from 1985 to 1987, Treasurer from 1987
to 1990, General Manager of Agricultural Products from 1995 to 1998, and Vice
President of Corporate Development from 1998 to 1999. Mr. Schumann serves on
the Board of Directors of Great Lakes Advisors, Inc. and is a Trustee of Feltre
School.

Charles H. Cannon, Jr. has served as our Vice President since February
16, 2001. Since 1998, Mr. Cannon has served as Vice President and General
Manager--FMC FoodTech and Transportation Systems Group. After this offering,
Mr. Cannon will no longer serve FMC Corporation in any capacity. Mr. Cannon

53

joined FMC Corporation in 1982 as a Senior Business Planner in the Corporate
Development Department. He became Division Manager of FMC Corporation's Citrus
Machinery Division in 1989, Division Manager of its Food Processing Systems
Division in 1992 and Vice President and General Manager of FMC FoodTech in
1994. Mr. Cannon serves on the Boards of Directors of the National Food
Processors Association and the Food Machinery Europe Association.

Michael W. Murray has served as our Chief Human Resource Officer since
February 16, 2001. Since 1995, Mr. Murray has served as, and continues to be,
Vice President--Human Resources of FMC Corporation. After the distribution,
Mr. Murray will no longer serve FMC Corporation in any capacity. Mr. Murray
joined FMC Corporation in 1972 as a personnel assistant in New York. He became
Industrial Relations Manager for FMC Corporation's Fiber Division in 1974.
Subsequently, Mr. Murray served as Human Resources Manager for FMC
Corporation's Bayport Chemical Plant and Compensations and Benefits Manager for
its Agricultural Chemicals Group, and Group Human Resources Director for FMC
Corporation's Agricultural Products Group, Defense Systems Group and Chemical
Products Group, consecutively. He became Human Resources Director for FMC
Europe N.V. in 1992. He serves on the Board of Directors of Junior Achievement
of Chicago and the Human Resources Institute.

Peter D. Kinnear has served as our Vice President since February 16,
2001. Since February 2000, Mr. Kinnear has served as Vice President of FMC
Corporation. After this offering, Mr. Kinnear will no longer serve FMC
Corporation in any capacity. Mr. Kinnear joined FMC Corporation in 1971 as a
Planning Assistant for FMC Corporation's Machinery Group, and held several
management positions over the years. He became Division Manager of FMC
Corporation's Fluid Control Division in 1985, Division Manager of its Wellhead
Equipment Division in 1992 and General Manager of its Petroleum Equipment and
Systems Division in 1994. Mr. Kinnear is a former chairman and currently serves
on the Board of Directors of the Petroleum Equipment Suppliers Association. He
also serves on the Boards of Directors of the National Ocean Industries
Association, the Ocean Energy Center and Spindletop, an oil-related
organization in Houston.

Board Structure

Immediately before the closing of this offering, our directors will be
divided into three classes serving staggered three-year terms. At each annual
meeting of our stockholders, directors will be elected to succeed the class of
directors whose terms have expired. Class I's term will expire at the 2002
annual meeting of our stockholders, Class II's term will expire at the 2003
annual meeting of our stockholders, and Class III's term will expire at the
2004 annual meeting of our stockholders. Our classified board could have the
effect of increasing the length of time necessary to change the composition of
a majority of our Board of Directors. In general, at least two annual meetings
of stockholders will be necessary for stockholders to effect a change in a
majority of the members of the Board of Directors.

Committees

Our Board of Directors is expected to have the following two committees:
an audit committee and a compensation and organization committee. The functions
of a nominating committee will be performed by our Board of Directors. The
membership and function of each committee are described below.

Audit Committee. Our audit committee, which will be composed solely of
independent directors, as determined in accordance with the rules of the New
York Stock Exchange, will assist our Board of Directors in fulfilling its
responsibilities to oversee our accounting, auditing and financial reporting
practices, internal control policies and procedures and corporate compliance
policies. The committee will:

.  recommend to our Board of Directors the selection of our independent
auditors;

.  review our annual and quarterly financial statements and discuss them
with our auditors and our internal financial staff prior to their
submission to our Board of Directors;

.  review the independence of the independent accountants conducting the
audit;

54

.  review the effectiveness and scope of the activities provided by the
independent accountants and our internal audit program;

.  discuss with our management and the auditors our accounting system
and related systems of internal control;

.  review our compliance programs;

.  consult, as it deems necessary, with the independent accountants,
internal auditors and our internal financial staff; and

.  review the effectiveness and adequacy of our financial organization
and internal control, significant changes in our accounting policies,
U.S. federal income tax issues and related reserves and potential
significant litigation.

Compensation and Organization Committee. Our compensation and
organization committee, which will be composed of non-employee directors, will:

.  review and approve compensation policies and practices for our top
executives;

.  establish the total compensation for our Chief Executive Officer and
President;

.  review and approve major changes in our employee benefit plans;

.  review short- and long-term incentive plans and equity grants;

.  review significant organizational changes and management succession
planning; and

.  recommend to our Board of Directors candidates for executive officer
positions at our company.

Board of Directors' Compensation and Relationships

Compensation Plan for Non-Employee Directors

Prior to this offering, as a part of the FMC Technologies, Inc. Incentive
Compensation and Stock Plan, we intend to adopt a compensation plan for non-
employee directors that will replicate in all material respects the FMC
Corporation Compensation Plan for Non-Employee Directors.

Retainer and Other Fees. Under this plan, each director who is not also
an officer of our company or FMC Corporation will be paid as of the time of
this offering $40,000 as an annual retainer. At least $25,000 of this annual
retainer fee will be deferred and invested in a stock account that will be
credited with units representing our common stock at a price equal to the
offering price per share in this offering with an initial value equal to the
deferred amount. The remainder will be paid in quarterly installments in cash
or, at the election of the non-employee director, may be deferred and invested
in a stock account that will be credited with units representing our common
stock at the fair market value of our common stock on the date of that election
with an initial value equal to the deferred amount. Each non-employee director
will also receive $1,000 for each Board of Directors' meeting and Board of
Directors' committee meeting that he or she attends, and will be reimbursed for
reasonable incidental expenses incurred in connection with those meetings. Each
non-officer director who chairs a committee will be paid an additional $4,000
per year.

Options. Under the compensation plan for non-employee directors, we will
grant at the time of this offering an option to purchase a number of shares of
our common stock designed to have an approximate present value of $24,000 with
an exercise price equal to the offering price per share in this offering. The
options will have a 10-year life and will become exercisable approximately one
year after the date of grant.

Other Compensation

Officers of our company and of FMC Corporation will not receive any
additional compensation for their service as our directors. No other
remuneration is paid to our board members in their capacity as directors.
Except as specified above, directors who are not our employees do not
participate in our employee benefit plans.

55

Stock Ownership of Directors and Executive Officers

All of our common stock is currently owned by FMC Corporation, and thus
none of our present or future officers or directors currently own any shares of
our common stock. Our officers and directors will receive shares of our common
stock in the distribution in respect of any shares of FMC Corporation common
stock that they hold on the record date of the distribution. In addition,
shares of FMC Corporation restricted stock that they own will be replaced as of
the closing of this offering with comparable shares of our restricted stock,
and FMC Corporation options that they own will be replaced as of the date of
the distribution with comparable options to purchase shares of our common
stock.

The following table sets forth the FMC Corporation common stock and
options to purchase FMC Corporation common stock held by our directors and
executive officers as of December 31, 2000.

Shares of FMC Corporation
Common Stock
Name                                 Beneficially Owned (1)   Percent of Class
----                                ------------------------- ----------------

Robert N. Burt.....................          481,560               1.58%
Joseph H. Netherland...............          144,705                 *
William H. Schumann III............           74,196                 *
Charles H. Cannon, Jr..............           75,850                 *
Michael W. Murray..................           51,351                 *
Peter D. Kinnear...................           34,070                 *

All directors and executive
officers as a group (6 persons)...          895,715                2.92%

--------
*  Indicates less than 1% of FMC Corporation outstanding common stock.

(1) Shares "beneficially owned" include: (a) shares of FMC Corporation common
stock owned by the individual, (b) shares of FMC Corporation common stock
held by the FMC Corporation Savings and Investment Plan for the account of
the individual as of December 31, 2000, (c) shares of FMC Corporation
restricted stock owned by the individual, and (d) shares of FMC Corporation
common stock subject to FMC Corporation options that are exercisable within
60 days. Shares of FMC Corporation common stock included in clause (d) in
the aggregate are 373,400 shares for Mr. Burt, 107,900 shares for Mr.
Netherland, 56,500 shares for Mr. Schumann, 47,400 shares for Mr. Cannon,
33,400 shares for Mr. Murray, 14,600 shares for Mr. Kinnear, and 633,200
shares for all directors and executive officers as a group.

Executive Compensation

The following table contains compensation information for our Chairman,
our Chief Executive Officer and President and four of our other executive
officers who, based on employment with FMC Corporation and its subsidiaries,
were the most highly compensated for the year ended December 31, 2000. All of
the information included in this table reflects compensation earned by the
individuals for services with FMC Corporation and its subsidiaries.

56

Summary Compensation Table

Long-Term Compensation
----------------------------------
Annual Compensation         Awards           Payouts
------------------- ----------------------- ----------
Restricted  Number of                  All
Name and Principal                                   Stock     Securities     LTIP       Other
FMC Technologies                                     Award     Underlying   Payouts   Compensation
Position                  Year  Salary  Bonus (1)    (2)(3)   Options/SARs   (1)(2)       (4)
------------------        ---- -------- ---------- ---------- ------------ ---------- ------------

Robert N. Burt..........  2000 $928,175 $1,439,042  $535,669     49,700    $        0   $193,655(5)
Chairman                 1999  883,986    371,275   106,059     76,320     1,087,304     94,007
1998  841,890    400,021    44,822     63,600       451,078     79,007

Joseph H. Netherland....  2000  583,533    735,076   350,438     32,500             0    140,222(6)
Chief Executive Officer  1999  530,828    187,341   337,767     40,000       596,632    106,797
and President            1998  465,388    141,579   765,015     21,000       681,784    522,738(6)

William H. Schumann
III....................  2000  372,294    352,339   140,175     12,700             0     34,244
Senior Vice President    1999  309,948    104,607   294,875     13,800       199,359     17,223
and
Chief Financial Officer  1998  277,716     34,437         0     11,500             0     13,207

Charles H. Cannon, Jr...  2000  333,930    174,946   650,206     10,600             0     35,391
Vice President           1999  303,093     67,893    33,767     13,800       346,142    193,713(7)
1998  276,432     61,921    19,040     10,100       191,518    226,522(7)

Michael W. Murray.......  2000  261,837    224,526   409,050      5,900             0     25,045
Chief Human Resource     1999  248,763     69,653         0      9,000       149,258     17,733
Officer
1998  234,742     61,033         0      7,500        19,555     11,582

Peter D. Kinnear........  2000  277,862    129,429    75,094      6,600             0     33,511
Vice President           1999  250,788     54,170   465,720          0       293,422     38,566
1998  234,990     52,638         0      3,400       474,034     20,367

--------
(1) Beginning in 2000, the FMC Corporation incentive plan provides for annual
bonuses to be paid based on performance against specified objectives for
individual and overall corporation results. Previously, the incentive plan
provided for bonuses to be paid based upon individual performance and for
long-term incentive payouts based upon FMC Corporation's achievement of
specified objectives during one-year periods that commenced annually. The
amount of the long-term incentive payouts was not determined until the
applicable performance period ended. Prior to 2000, those payouts could
have been made in cash and/or FMC Corporation common stock, including FMC
Corporation restricted stock. Currently, those payouts are only paid in
cash.
(2) The six officers listed in the table held FMC Corporation restricted stock
on December 31, 2000 with a value based on the closing market price per
share of FMC Corporation common stock on December 29, 2000, the last
trading day of the year, as follows: Mr. Burt, 33,983 shares at $2,436,156;
Mr. Netherland, 34,654 shares at $2,484,259; Mr. Schumann, 9,800 shares at
$702,538; Mr. Cannon, 23,743 shares at $1,702,076; Mr. Murray, 10,898
shares at $781,250; and Mr. Kinnear, 9,340 shares at $669,561. Dividends
will not be paid on shares of FMC Corporation restricted stock unless FMC
Corporation pays dividends on all of its common stock.
(3) Prior to 2000, officers had the option to take a portion of the long-term
payout subject to a three-year restriction on resale. As a result, each
becomes eligible for an additional 20% payout in the form of shares of FMC
Corporation common stock. These additional shares are included in the
Restricted Stock Award Column for 2000, 1999 and 1998 at market value as of
the date of grant. This amount will be forfeited if the executive
terminates voluntarily prior to the end of the applicable three-year
period.
(4) Includes annual FMC Corporation matching contributions to its qualified and
nonqualified savings plans.
(5) This amount includes $51,522 for personal use of the company aircraft.

57

(6) This amount includes payments of $44,749 and $460,423 for relocation
expenses in 2000 and 1998, respectively.
(7) This amount includes payments of $157,458 and $136,599 for expatriate
allowances for 1999 and 1998, respectively, and a relocation gross-up of
$62,845 for 1998.

Option Grants of FMC Corporation Common Stock to Executive Officers

The following table discloses information regarding stock options granted
in fiscal year 2000 to the executive officers named in the summary compensation
table with respect to shares of FMC Corporation common stock. These options
were granted under the FMC 1995 Stock Option Plan. FMC Corporation did not
grant stock appreciation rights under any plan during 2000.

Number of     Percent
Securities      of
Underlying Total Options
Options      Granted    Exercise or                  Grant Date
Granted in to Employees  Base Price                  Present Value
Name                         2000       in 2000     Per Share  Expiration Date    (1)(2)
----                      ---------- ------------- ----------- --------------- -------------

Robert N. Burt..........    49,700       24.9        $50.56        2/10/10      $1,407,504
Joseph H. Netherland....    32,500       16.3         50.56        2/10/10         920,400
William H. Schumann
III....................    12,700        6.4         50.56        2/10/10         359,664
Charles H. Cannon, Jr...    10,600        5.3         50.56        2/10/10         300,192
Michael W. Murray.......     5,900        3.0         50.56        2/10/10         167,088
Peter D. Kinnear........     6,600        3.3         50.56        2/10/10         186,912

--------
(1) We used the Black-Scholes option pricing model to value these options as of
February 10, 2000, the date of the grant. The model assumed: an option term
of 10 years; an interest rate of 6.52% that represents the interest rate on
a long-term U.S. Treasury security; an assumed annual volatility of
underlying stock of 28.86%, and no dividends being paid. FMC Corporation
made no assumptions regarding restrictions on vesting or the likelihood of
vesting.
(2) The ultimate values of the options will depend on the future market price
of FMC Corporation common stock, which cannot be forecast with reasonable
accuracy. The actual value, if any, an option holder will realize when
exercising an option will depend on the excess of the market price of FMC
Corporation's common stock over the exercise price on the date the option
is exercised.

Aggregated Option Exercises in 2000 and Year-End Option Values

The following table discloses information regarding the aggregate number
of FMC Corporation options that the executive officers named in the summary
compensation table exercised in fiscal year 2000 and the value of remaining FMC
Corporation options held by those executives on December 31, 2000.

Value of Unexercised in-
Number of Securities        the-Money Options
Number of                  Underlying Unexercised          at 12/31/00
Shares                      Options at 12/31/00               (1)
Acquired On                ------------------------- -------------------------
Name                       Exercise   Value Realized Exercisable/Unexercisable Exercisable/Unexercisable
----                      ----------- -------------- ------------------------- -------------------------

Robert N. Burt..........      --           --             309,800/189,620        $5,646,150/2,973,933
Joseph H. Netherland....      --           --               86,900/93,500         1,723,928/1,672,545
William H. Schumann
III....................      --           --               45,000/38,000             694,978/616,203
Charles H. Cannon, Jr...      --           --               37,300/34,500             652,550/569,181
Michael W. Murray.......      --           --               25,900/22,400             402,222/351,452
Peter D. Kinnear........      --           --               11,200/10,000             113,832/145,646

--------
(1) The closing price per share of FMC Corporation's common stock at December
29, 2000, the last trading day of 2000, was $71.69.

58

Retirement Plans

Our employees will be participants in the FMC Corporation Employees'
Retirement Program, a qualified defined benefit pension plan, until the closing
date of this offering. As of that date, we intend to adopt a qualified defined
benefit pension plan that will replicate in all material respects the FMC
Corporation Employees' Retirement Program. We also intend to adopt a non-
contributory supplemental defined benefit pension plan that will replicate in
all material respects the FMC Corporation Salaried Employees' Equivalent
Retirement Plan, a supplemental defined benefit pension plan. The following
individuals will all be participants in both our qualified and supplemental
defined benefit pension plans: Messrs. Netherland, Schumann, Cannon, Murray and
Kinnear.

The following table shows the estimated annual retirement benefits under
the current FMC Corporation qualified and supplemental defined benefit pension
plans payable upon retirement at age 65, which is the normal retirement age
under the plans, based upon the plans' formulae as of 2001 at various levels of
salary and years of service. Our pension plans will replicate in all material
respects the current FMC Corporation qualified and supplemental pension plans,
and our pension plans will grant full credit for service with FMC Corporation
with regard to all matters, including, without limitation, benefit calculation
and vesting.

Pension Plan Table

Estimated Annual Retirement Benefits
for Years of Service Indicated
---------------------------------------------------------
Final Average Earnings   15 years 20 Years 25 Years 30 Years 35 Years 40 Years
----------------------   -------- -------- -------- -------- -------- --------

$  150,000.............. $ 30,959 $ 41,279 $ 51,599 $ 61,918 $ 72,238 $ 83,488
250,000..............   53,459   71,279   89,099  106,918  124,738  143,488
350,000..............   75,959  101,279  126,599  151,918  177,238  203,488
450,000..............   98,459  131,279  164,099  196,918  229,738  263,488
550,000..............  120,959  161,279  201,599  241,918  282,238  323,488
650,000..............  143,459  191,279  239,099  286,918  334,738  383,488
900,000..............  199,709  266,279  332,849  399,418  465,988  533,488
1,150,000..............  255,959  341,279  426,599  511,918  597,238  683,488
1,300,000..............  289,709  386,279  482,849  579,418  675,988  773,488
1,450,000..............  323,459  431,279  539,099  646,918  754,738  863,488

--------
(1) Benefits shown are total qualified plus nonqualified pension benefits.

(2) Social Security Covered Compensation for a participant retiring at age 65
in 2001 is $37,212.

(3) "Final Average Earnings" in the table means the average of covered
compensation for the highest 60 consecutive calendar months out of the 120
calendar months immediately before retirement. Covered compensation
includes salary, bonus and LTIP payout amounts as reflected in the Summary
Compensation Table.

(4) At February 1, 2001, Messrs. Burt, Netherland, Schumann, Cannon, Murray and
Kinnear had, respectively, 27, 27, 19, 18, 28 and 29 years of credited
service under the FMC Corporation pension plan and its supplements.

(5) Applicable benefits for employees whose years of service and earnings
differ from those shown in the table are equal to (A + B) times C where:
(A) equals 1% of allowable Social Security covered compensation ($37,212
for a participant retiring at age 65 in 2000) times years of credited
service (up to a maximum of 35 years) plus 1.5% of the difference between
Final Average Earnings and allowable Social Security compensation times
years of credited service (up to a maximum of 35 years); (B) equals 1.5% of
Final Average Earnings times years of credited service in excess of 35
years; and (C) equals the ratio of credited service at termination to
credited service projected to age 65.

59

(6) The amounts shown will not be reduced by Social Security benefits or other
offsets. As the Internal Revenue Code limits the annual benefits that may
be paid from a tax-qualified retirement plan, FMC Corporation has adopted,
and we will adopt, permitted supplemental arrangements to maintain total
benefits during retirement at the levels shown in the table.

Treatment of FMC Corporation Options

We intend to replace all of the FMC Corporation options held by our
employees and former employees of our businesses and a portion of the FMC
Corporation options held by our directors as of the date of the distribution
with options to purchase shares of our common stock that will be issued
pursuant to our stock plan. As of          , 2001, our directors and employees
held options to purchase     shares of FMC Corporation common stock at a
weighted average exercise price per share of $   . The price per share of FMC
Corporation common stock on that date was $   . The number of shares of common
stock underlying, and the exercise price of, these replacement options will be
based on the closing price per share of our common stock and of FMC Corporation
common stock on the trading day immediately preceding the date of the
distribution. The replacement options to purchase shares of our common stock
are expected to have substantially the same vesting provisions and exercise
periods as the FMC Corporation options had immediately before the date of
distribution.

Treatment of FMC Corporation Restricted Stock

Many of our employees and directors hold restricted stock of FMC
Corporation. As of           , 2001, our employees and directors held
shares of FMC Corporation restricted stock. The price per share of FMC
Corporation common stock on that date was $   . As of the closing date of this
offering, we intend to replace each of these shares of FMC Corporation
restricted stock held by our employees and a portion of the shares of FMC
Corporation restricted stock held by our directors with shares of our
restricted stock that will be issued pursuant to our stock plan. The number of
shares of our restricted stock granted will be based on the offering price per
share of our common stock in this offering and the closing price per share of
FMC Corporation common stock on the trading day immediately preceding the
closing date of this offering. The replacement restricted shares are expected
to have substantially the same vesting provisions as the FMC Corporation
restricted stock.

Incentive Plans

The Stock Plan

Prior to this offering, we will adopt the FMC Technologies, Inc.
Incentive Compensation and Stock Plan. The stock plan is designed to promote
our success and enhance our value by linking the interests of certain of our
officers, employees, directors and consultants to those of our stockholders and
by providing participants with an incentive for outstanding performance. This
plan is further intended to provide flexibility in its ability to motivate,
attract and retain officers, employees, directors and consultants upon whose
judgment, interest and special efforts our business is largely dependent. The
description below summarizes the material terms of this plan.

Persons Eligible for Grants. Our officers, employees, directors and
consultants, and officers, employees, directors and consultants of our
subsidiaries and affiliates will be eligible to participate in this plan.

At the time of this offering, we expect to grant to certain officers,
employees and directors options to purchase shares of common stock under the
plan at an exercise price equal to the initial public offering price. We will
grant options to purchase an aggregate of         shares, and it is expected
that Messrs. Burt, Netherland, Schumann, Cannon, Murray and Kinnear will be
granted options to purchase       ,       ,       ,       ,        and
shares, respectively. We expect that these options will vest and become
exercisable on the first business day of the third calendar year following the
calendar year of the grant. Generally, unvested options will expire at the time
of the participant's termination of employment. In lieu of granting some of
these options, we reserve the right to issue an equivalent amount of our
restricted shares.

60

Administration. The plan will be administered by the compensation and
organization committee of our Board of Directors, and will provide for the
grant of both non-qualified and incentive stock options, stock appreciation
rights, restricted stock, performance units, and other equity-based awards.

Authorized Shares. The maximum number of shares of common stock available
for issuance under the plan will be           . The plan will provide for a
maximum annual stock award of         shares of common stock to any individual,
in addition to specified dollar limitations on specified awards.

Term. The term of options to be granted under the plan may not exceed 10
years. Our compensation and organization committee will provide vesting
schedules and any other applicable restrictions in each award agreement.

Exercise. Options under the plan will have an exercise price equal to the
fair market value of the common stock on the date of grant or, in the case of
options granted at the time of this offering, equal to the initial public
offering price. A participant exercising an option may pay the exercise price
by check or, if approved by our compensation and organization committee, with
previously acquired shares of our common stock or shares of our common stock
otherwise receivable upon exercise of the option or in a combination of cash
and our common stock. Our compensation and organization committee, in its
discretion, may allow the cashless exercise of options through the use of a
broker-dealer.

Other Awards. We may grant stock appreciation rights under the stock plan
either in tandem with options, or as stand-alone awards. Tandem stock
appreciation rights will be subject to the same vesting terms as the options to
which they relate. The stock appreciation rights will permit a participant to
receive cash or shares of our common stock, or a combination thereof, as
determined by our compensation and organization committee. The amount of cash
or the value of the shares to be received by a participant will be equal to the
excess of the fair market value of a share of our common stock on the date of
exercise over the stock appreciation right exercise price, multiplied by the
number of shares with respect to which the stock appreciation right is
exercised. We may grant restricted stock subject to performance or service-
based goals upon which restrictions will lapse. Additionally, we may grant
performance units subject to performance goals and/or service-based
restrictions. These performance-based units will be payable in cash or shares
of our common stock or a combination of the two as determined by our
compensation and organization committee. We may also grant dividend and
interest equivalents with respect to awards and other awards based on the value
of our common stock.

Transferability of Options and Stock Appreciation Rights. Options and
stock appreciation rights will be nontransferable other than by will or the
laws of descent and distribution or, at the discretion of our compensation and
organization committee, under a written beneficiary designation and, in the
case of a nonqualified option, in connection with a gift to members of the
holder's immediate family. The gift may be made directly or indirectly or by
means of a trust or partnership or limited liability company and, during the
participant's lifetime, may be exercised only by the participant, any such
permitted transferee or a guardian, legal representative or beneficiary.

Change of Control. In the event we undergo a change of control, any
option or stock appreciation right that is not then exercisable and vested will
become fully exercisable and vested, restrictions on restricted stock will
lapse and performance units will be deemed earned. A change of control of our
company means generally:

.  the acquisition by a person of an amount of common stock from any
source, including FMC Corporation, representing at least 20% of our
outstanding common stock or voting securities unless, after the
acquisition, FMC Corporation continues to hold more than 50% of our
outstanding common stock;

.  a change in the majority of the members of our Board of Directors,
unless approved by the incumbent directors;

61

.  the completion of specified mergers, business combinations or asset
sales, unless after the transaction (a) our stockholders prior to the
transaction own more than 60% of the resulting entity, (b) members of
our Board of Directors before the transaction constitute a majority
of the Board of Directors of the resulting entity, and (c) no person,
other than FMC Corporation prior to the distribution, owns 20% or
more of our outstanding common stock or voting securities;

.  approval by our stockholders of a liquidation, dissolution or sale of
substantially all of our assets; or

.  a change of control of FMC Corporation, as defined in the FMC
Corporation executive severance agreements, if, at the time of its
change of control, FMC Corporation owns more than 50% of our
outstanding common stock. The FMC Corporation executive severance
agreements' definition of a change of control of FMC Corporation is
substantially similar to our stock plan's definition of a change of
control of our company.

Neither this offering nor the distribution will constitute a change of control
under the stock plan.

Amendments and Termination. Once the stock plan is adopted, our Board of
Directors may at any time amend or terminate it and may amend the terms of any
outstanding option or other award, except that no termination or amendment may
impair the rights of participants as they relate to outstanding options or
awards. No amendment to the stock plan will be made without the approval of our
stockholders to the extent approval is required by law or by stock exchange
rule. With respect to any awards granted to an individual who is employed or
providing services outside the United States and who is not compensated from a
payroll maintained in the United States, the compensation and organization
committee may, in its sole discretion, modify the provisions of the stock plan
as they pertain to the individual to comply with applicable foreign law.

Compensation Plan for Non-Employee Directors

Our non-employee directors will be entitled to receive stock awards and
other compensation for their service. See "Board of Directors' Compensation and
Relationships--Compensation Plan for Non-Employee Directors."

Termination and Change of Control Arrangements

The following of our executive officers currently are parties to
executive severance agreements under the FMC Corporation Executive Severance
Plan that would provide them with benefits in the event of specified
terminations of employment following a change of control of FMC Corporation:
Messrs. Burt, Netherland, Schumann, Cannon, Murray and Kinnear. After this
offering we plan to provide these executives, other than Mr. Burt, with new
executive severance agreements that are substantially similar to their existing
executive severance agreements with FMC Corporation, and these new executive
severance agreements will supercede their existing executive severance
agreements with FMC Corporation.

Severance Benefits

Under the new executive severance agreements, if a change of control of
our company occurs and if, within two years following that change of control,
the executive's employment is terminated by us without cause or the executive
terminates his or her employment for good reason, then the executive is
entitled to benefits from us. In general, these benefits include:

.  a lump sum payment of three (for Messrs. Netherland, Schumann and
Cannon) or two (for Messrs. Murray and Kinnear) times the sum of (a)
the executive's salary and (b) the greater of (i) the executive's
highest target or actual management incentive award for any year or
(ii) the average of the two actual incentive awards paid for the two
plan years immediately preceding the executive's termination;

.  immediate vesting of long-term incentive awards, restricted stock and
stock options;

.  continuation of medical and other benefits for up to three years;

62

.  distribution of accrued nonqualified retirement plan benefits; and
.  an additional three years of credited service for purposes of our
non-qualified plans.

We will compensate the executive for any excise tax liability as a result
of change of control payments from us under the agreement or otherwise. The
following officers can receive the above severance benefits if they voluntarily
terminate their employment with us during the 30-day period immediately
following the first anniversary of a change of control: Messrs. Netherland and
Schumann.

Each executive will acknowledge that neither this offering nor the
distribution constitutes a change of control under his or her executive
severance agreement with FMC Corporation, his or her new executive severance
agreement with our company or any other plans of FMC Corporation or our
company.

The definition of change of control is the same as that in our stock
plan. See "Incentive Plans--The Stock Plan--Change of Control."

Definitions of Good Reason and Cause

Under the new executive severance agreements, an executive may terminate
for good reason following:

.  diminution of duties to below the pre-change of control level;
.  relocation of over 50 miles;
.  reduction in base salary; or
.  reduction in levels of participation in benefit or incentive plans to
below pre-change of control levels.

We may terminate an executive's employment for cause under the new
executive severance agreements if the executive:

.  willfully and continually fails to perform his or her duties;
.  willfully engages in conduct materially injurious to us; or
.  is convicted of a felony.

Limitation of Liability and Indemnification Matters

As permitted by applicable Delaware law, we have included in our
Certificate of Incorporation a provision to generally eliminate the personal
liability of our directors for monetary damages for breach or alleged breach of
their fiduciary duties as directors. However, this provision does not eliminate
or limit liability of a director for a director's breach of the duty of
loyalty, for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, for any transaction from which a
director derived an improper personal benefit and for other specified actions.
In addition, our Certificate of Incorporation and Bylaws provide that we are
required to indemnify our officers and directors under a number of
circumstances, including those circumstances in which indemnification would
otherwise be discretionary, and we are required to advance expenses to our
officers and directors as incurred in connection with proceedings against them
for which they may be indemnified. At present, we are not aware of any pending
or threatened litigation or proceeding involving a director, officer, employee
or agent of ours in which indemnification would be required or permitted. We
believe that these indemnification provisions are necessary to attract and
retain qualified persons as directors and officers.

Insofar as indemnification for liabilities arising under the Securities
Act may be granted to directors, officers or persons controlling us under the
foregoing provisions, we have been informed that in the opinion of the SEC this
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.

63

Related Party Transactions

FMC Corporation has historically operated the businesses it will transfer
to us in the separation as internal units of FMC Corporation through various
divisions and subsidiaries or through investments in unconsolidated affiliates.
For a discussion of transactions between FMC Corporation and us, see
"Arrangements Between FMC Technologies and FMC Corporation" and Note 18 to the
combined financial statements.

64

ARRANGEMENTS BETWEEN FMC TECHNOLOGIES AND FMC CORPORATION

We have provided below a summary description of the separation and
distribution agreement and the key related agreements. This description, which
summarizes the material terms of these agreements, is not complete. You should
read the full text of these agreements, which will be filed with the SEC as
exhibits to the registration statement of which this prospectus is a part.

Separation and Distribution Agreement

The separation and distribution agreement contains the key provisions
relating to the separation of our businesses from those of FMC Corporation,
this offering and FMC Corporation's planned distribution of our common stock.
The separation and distribution agreement identifies the assets to be
transferred to us by FMC Corporation and the liabilities to be assumed by us
from FMC Corporation. The separation and distribution agreement also describes
when and how these transfers and assumptions will occur. In addition, we will
enter into agreements with FMC Corporation governing various interim and
ongoing relationships between FMC Corporation and us following the closing date
of this offering. These other agreements include:

.  the tax sharing agreement;

.  the employee benefits agreement;

.  the transition services agreement; and

.  the license agreement for the FMC Corporation corporate name and
logo.

FMC Corporation and we will execute the separation and distribution
agreement and ancillary agreements before the closing of this offering.

Asset Transfer

Effective on the date of the closing of this offering, FMC Corporation
will transfer the following assets to us, except as provided in one of the
ancillary agreements:

.  all assets reflected on our audited balance sheet as of December 31,
2000 or the accounting records supporting our balance sheet, plus all
assets acquired by FMC Corporation between December 31, 2000 and the
closing date of this offering that would have been included on our
balance sheet as of December 31, 2000 had they been owned on December
31, 2000;

.  all other assets primarily related to our businesses or the former
Energy Systems and Specialty Systems businesses of FMC Corporation;

.  the lease on our Chicago corporate headquarters and real property
primarily related to our business;

.  the subsidiaries, partnerships, joint ventures and other equity
interests primarily related to our businesses;

.  our rights under any insurance policies as provided in any ancillary
agreements;

.  all computers, desks, furniture, equipment and other assets used
primarily by FMC Corporation employees who will become our employees
due to the separation;

.  all foreign exchange contracts entered into in connection with our
business; and

.  other assets agreed upon by us and FMC Corporation.

65

Assumption of Liabilities

Effective on the closing date of this offering, we will assume the
following liabilities from FMC Corporation, except as provided in one of the
ancillary agreements:

.  all liabilities reflected on our audited balance sheet as of December
31, 2000 or the accounting records supporting our balance sheet, plus
all liabilities of FMC Corporation incurred or arising between
December 31, 2000 and the closing date of this offering that would
have been included on our balance sheet as of December 31, 2000 had
they arisen or been incurred on December 31, 2000;

.  all other liabilities primarily related to or arising primarily from
(a) any asset that is transferred to us pursuant to the separation,
(b) our current business or (c) specified closed businesses of FMC
Corporation's former Energy Systems and Specialty Systems businesses,
in each case, whether incurred or arising prior to, on or after the
closing date of this offering;

.  all liabilities assumed by us under an express provision of the
separation and distribution agreement or any ancillary agreement;

.  selected liabilities primarily relating to specified discontinued
businesses of FMC Corporation's former Specialty Systems businesses;

.  all liabilities for environmental remediation or other environmental
responsibilities primarily related to our business and specified
closed businesses of FMC Corporation's former energy and food and
transportation businesses, or all real property transferred to us as
part of our assets;

.  all liabilities for products of our business or certain closed
businesses of FMC Corporation's former Energy Systems and Specialty
Systems businesses sold to third parties by us or FMC Corporation;

.  all liabilities under FMC Corporation's $200 million 180-day
revolving credit facility and any other debt arrangements that we
will assume in the separation;

.  all liabilities relating to us arising under the separation and
distribution agreement; and

.  other liabilities agreed upon by us and FMC Corporation.

Further Assurances

The separation and distribution agreement provides that FMC Corporation
and we will cooperate to effect any transfers of assets and liabilities that
are not completed on the closing date of this offering as promptly following
that date as is practicable. Until these transfers can be completed, the party
retaining the assets or liabilities to be transferred will act as a custodian
and trustee on behalf of the other party with respect to those assets or
liabilities. In an effort to place each party, insofar as reasonably possible,
in the same position as that party would have been had the transfers occurred
at the time contemplated by the separation and distribution agreement, the
separation and distribution agreement provides that the benefits derived or
expenses incurred from those assets or liabilities will be passed on to the
party that would have received the assets or liabilities if the transfers had
occurred as contemplated.

Conditions to the Separation and this Offering

The separation and distribution agreement provides that the separation
and the completion of this offering are subject to several conditions that must
be satisfied, or waived by FMC Corporation, including:

.  the Board of Directors of FMC Corporation shall have given final
approval of this offering;

.  the SEC shall have declared effective the registration statement
relating to this offering, and no stop order shall be in effect with
respect to that registration statement;

66

.  the actions and filings necessary or appropriate with state
securities and blue sky laws and any comparable foreign laws shall
have been taken and where applicable become effective or been
accepted;

.  the New York Stock Exchange shall have accepted for listing the
shares of our common stock to be issued in this offering;

.  we shall have entered into the underwriting agreements regarding this
offering and the conditions to the offering listed in the
underwriting agreement shall have been satisfied or waived;

.  no order by any court or other legal restraint preventing completion
of the separation, this offering or the distribution shall be in
effect;

.  the separation and distribution agreement shall not have been
terminated; and

.  all third-party consents and governmental approvals required in
connection with the separation and this offering shall have been
received, except where failure to obtain these consents or approvals
would not have a material adverse effect on either (a) the ability of
us and FMC Corporation to complete this separation from FMC
Corporation, this offering and the distribution, or (b) the business,
assets, liabilities, financial condition or results of operations of
us and our subsidiaries taken as a whole.

Conditions to the Distribution

The separation and distribution agreement provides that the distribution
is subject to several conditions that must be satisfied, or waived by FMC
Corporation, including:

.  the Board of Directors of FMC Corporation shall have given final
approval of the distribution;

.  the actions and filings necessary or appropriate with U.S. federal
and state securities and blue sky laws and any comparable foreign
laws in connection with the distribution shall have been taken, and,
where applicable, become effective or been accepted;

.  the NYSE shall have accepted for listing the shares of our common
stock to be issued in the distribution;

.  no order by any court or other legal restraint preventing completion
of the separation, this offering or the distribution shall be in
effect;

.  FMC Corporation shall have received a favorable private letter ruling
from the IRS as to the tax-free nature of the distribution for U.S.
federal income tax purposes;

.  all third-party consents and governmental approvals required in
connection with the separation and this offering shall have been
received, except where failure to obtain these consents or approvals
would not have a material adverse effect on either (a) the ability of
us and FMC Corporation to complete the separation, this offering and
the distribution, or (b) the business, assets, liabilities, financial
condition or results of operations of us and our subsidiaries taken
as a whole; and

.  the separation and distribution agreement shall not have been
terminated.

Financing Arrangements

FMC Corporation and we have arranged a $200 million 180-day revolving
credit facility and anticipate entering into one or more revolving credit
facilities with lender banks. FMC Corporation has advised us that it will
borrow the full amount under its $200 million 180-day revolving credit facility
and up to $    million under the additional revolving credit facilities. The
separation and distribution agreement provides that we will assume all of these
facilities from FMC Corporation before the closing of this offering. We will
use a portion of the proceeds of this offering to repay all amounts assumed
under the $200 million 180-day revolving credit facility, and the balance of
the proceeds from this offering, including amounts from the over-allotment

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option if exercised, will be applied to reduce borrowings under one or more
revolving credit facilities that we will assume from FMC Corporation in the
separation. In addition, we expect that we may enter debt arrangements
consisting of one or more of the following: commercial paper, uncommitted bank
facilities and medium term notes.

Foreign Transfers

The transfer of international assets and the assumption of international
liabilities will be accomplished through agreements among international
subsidiaries, as contemplated by the separation and distribution agreement.
The separation and distribution agreement acknowledges that circumstances in
some jurisdictions outside of the United States may require the timing of part
of the international separation to be delayed past the closing date of this
offering.

Indemnification

In general, under the separation and distribution agreement, we will
indemnify FMC Corporation and its representatives and affiliates from all
liabilities that we assume under the separation and distribution agreement and
any and all losses by FMC Corporation or its representatives or affiliates
arising out of or due to either our failure to pay, perform or discharge in
due course these liabilities or our breach of the separation and distribution
agreement. We will also indemnify FMC Corporation for any and all losses
arising out of or based upon any untrue statement of a material fact or
material omission in this prospectus or in any similar documents relating to
the distribution. In general, FMC Corporation will indemnify us and our
representatives and affiliates from all liabilities that FMC Corporation
retains under the separation and distribution agreement and any and all losses
by us or our representatives or affiliates arising out of or due to either FMC
Corporation's failure to pay, perform or discharge in due course these
liabilities or its breach of the separation and distribution agreement. All
indemnification amounts would be reduced by any insurance proceeds and other
offsetting amounts recovered by the indemnitee.

Access to Information

Under the separation and distribution agreement, the following terms
govern access to information:

.  on the closing date of this offering, FMC Corporation will deliver to
us all corporate books and records related to our business;

.  before and after the closing date of this offering, subject to
applicable confidentiality provisions and other restrictions, we and
FMC Corporation will each give the other any information within that
company's possession that the requesting party reasonably needs (a)
to comply with requirements imposed on the requesting party by a
governmental authority, (b) for use in any proceeding or to satisfy
audit, accounting, tax or similar requirements, or (c) to comply with
its obligations under the separation and distribution agreement or
the ancillary agreements;

.  after the closing date of this offering, we will provide to FMC
Corporation, at no charge, all financial and other data and
information that FMC Corporation determines is necessary or advisable
in order to prepare its financial statements and reports or filings
with any governmental authority;

.  after the closing date of this offering, we and FMC Corporation will
each use reasonable best efforts to provide assistance to the other
for litigation and to make available to the other directors,
officers, other employees and agents as witnesses, in legal,
administrative or other proceedings, and will cooperate and consult
to the extent reasonably necessary with respect to any litigation;

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.  the company providing information, consultant or witness services
under the separation and distribution agreement will be entitled to
reimbursement from the other for reasonable expenses;

.  we and FMC Corporation will each retain all proprietary information
in its possession relating to the other's business for a period of
time, and, if the information is to be destroyed, the destroying
company will give the other company the opportunity to receive the
information; and

.  from and after the closing date of this offering, we and FMC
Corporation will agree to hold in strict confidence all information
concerning or belonging to the other obtained prior to the closing
date of this offering or furnished pursuant to the separation and
distribution agreement or any ancillary agreement, subject to
applicable law.

No Representations and Warranties

Pursuant to the separation and distribution agreement, we understand and
agree that FMC Corporation will not represent or warrant to us as to the assets
to be transferred to us, the liabilities to be assumed by us, our business or
the former energy and food and transportation businesses of FMC Corporation. We
will take all assets "as is, where is" and bear the economic and legal risk
relating to conveyance of, and title to, the assets.

Registration Rights

Under the separation and distribution agreement, FMC Corporation has the
right to require us to register for offer and sale all or a portion of our
common stock held by FMC Corporation, so long as our common stock FMC
Corporation requires us to register, in each case, represents at least 5% of
the aggregate shares of our common stock then issued and outstanding and FMC
Corporation holds not less than 10% of our then-outstanding common stock on the
date it requests us to register our common stock.

Piggy-Back Registration Rights

If we at any time intend to file on our behalf or on behalf of any of our
security holders a registration statement in connection with a public offering
of any of our securities on a form and in a manner that would permit the
registration for offer and sale of our common stock held by FMC Corporation,
FMC Corporation has the right to include its shares of our common stock in that
offering.

Registration Expenses

We are responsible for the registration expenses in connection with the
performance of our obligations under the registration rights provisions in the
separation and distribution agreement. FMC Corporation is responsible for all
of the fees and expenses of counsel to FMC Corporation, any applicable
underwriting discounts or commissions, and any registration or filing fees with
respect to shares of our common stock being sold by FMC Corporation.

Termination

The separation and distribution agreement may be terminated at any time
prior to the distribution by the mutual consent of FMC Corporation and us. If
the separation and distribution agreement is terminated after this offering but
prior to the distribution, only the obligations of FMC Corporation and us
regarding the distribution will terminate, and the other provisions of the
separation and distribution agreement will remain in full force and effect.

Expenses

In general, FMC Corporation and we are responsible for our own costs
incurred in connection with the transactions contemplated by the separation and
distribution agreement. However, with regard to this offering,

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we are responsible for all third-party costs associated with this offering,
including costs related to the registration statement of which this prospectus
is a part. Additionally, if the distribution is completed, FMC Corporation will
be responsible for all associated third-party costs.

Tax Sharing Agreement

We and some of our subsidiaries have historically been included in FMC
Corporation's consolidated group for U.S. federal income tax purposes (the "FMC
Corporation Federal Group"), as well as in certain consolidated, combined or
unitary groups which include FMC Corporation and some of its subsidiaries for
U.S. state and local and foreign income tax purposes (the "FMC Corporation
Combined Group"). Prior to this offering, FMC Corporation and we will enter
into a tax sharing agreement in connection with the offering.

Under the tax sharing agreement, FMC Corporation and we generally will
make payments between us so that, with respect to tax returns for any taxable
period in which we or any of our or FMC Corporation's subsidiaries are included
in the FMC Corporation Federal Group or any FMC Corporation Combined Group, the
amount of taxes to be paid by us will be determined, subject to adjustment, as
if we and each of our subsidiaries included in the FMC Corporation Federal
Group or FMC Corporation Combined Group filed our own consolidated, combined or
unitary tax return. However, in the event we incur a tax loss for any taxable
period ending after the date of execution of the tax sharing agreement during
which we are still a member of the U.S. consolidated tax group, we may only
receive a benefit for such tax loss to the extent that such loss can be carried
back to a prior taxable year in which we were a member of the U.S. consolidated
tax group of FMC Corporation. FMC Corporation and we will jointly prepare pro
forma tax returns with respect to any tax return filed with respect to the FMC
Corporation Federal Group or any FMC Corporation Combined Group in order to
determine the amount of tax sharing payments under the tax sharing agreement.
We will generally be responsible for any taxes with respect to tax returns that
include only us and our subsidiaries.

FMC Corporation will be primarily responsible for preparing and filing
any tax return with respect to the FMC Corporation Federal Group or any FMC
Corporation Combined Group. Under the tax sharing agreement, we will be
responsible for preparing the portion of these tax returns that relates
exclusively to us or any of our subsidiaries. However, we will be required to
submit those portions to FMC Corporation for FMC Corporation's review and
approval. We generally will be responsible for preparing and filing any tax
returns that include only us and our subsidiaries.

FMC Corporation will be primarily responsible for controlling and
contesting any audit or other tax proceeding with respect to the FMC
Corporation Federal Group or any FMC Corporation Combined Group. Under the tax
sharing agreement, in connection with a tax liability in excess of $5 million
resulting from a tax audit or other tax proceeding, we will have the right to
control and contest any audit or tax proceeding that relates to any item
included on the portion of any tax return that we are responsible for
preparing. In the case of a tax liability less than $5 million that relates to
any item on the portion of the tax return that we are responsible for
preparing, FMC Corporation will have the right to control and contest any audit
or tax proceeding. In addition, we have assumed primary responsibility for
certain specific areas where the ability to provide factual and financial
information to sustain the tax treatment accorded such item on a tax return is
within our control. However, we cannot enter into any settlement or agreement
or make any decision in connection with any judicial or administrative tax
proceeding with FMC Corporation's review and approval, which it may not
unreasonably withhold. Disputes arising between FMC Corporation and us relating
to matters covered by the tax sharing agreement are subject to resolution
through specific dispute resolution provisions in the tax sharing agreement.

We have been and will be included in the FMC Corporation Federal Group
for periods in which FMC Corporation beneficially owned at least 80% of the
total voting power and value of our outstanding common stock. Each member of a
consolidated group for U.S. federal income tax purposes is jointly and
severally liable for the U.S. federal income tax liability of each other member
of the consolidated group. Accordingly, although the tax sharing agreement
allocates tax liabilities between us and FMC Corporation, for any period in
which we were included in the FMC Corporation Federal Group, we could be liable
in the event that any U.S. federal tax liability was incurred, but not
discharged, by any other member of the FMC Corporation Federal Group.

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FMC Corporation and we have agreed to cooperate, and we have agreed to
take all actions reasonably requested by FMC Corporation, in connection with
FMC Corporation's obtaining of a ruling from the IRS regarding the tax-free
nature of the distribution. We generally will be responsible for, among other
things, any corporate taxes resulting from the failure of the distribution to
qualify as a tax-free transaction to the extent these taxes are attributable
to, or result from, any action or failure to act by us or certain transactions
involving us following the distribution.

The tax sharing agreement places certain restrictions upon us regarding
the sale of assets, the sale or issuance of additional securities or the entry
into some types of corporate transactions during a restriction period that
continues until the thirty months after the distribution. In particular, the
tax sharing agreement restricts us during the restriction period from:

.  selling gross assets which comprise either 60% of our gross assets or
the consolidated gross assets of us and our affiliates;

.  issuing or selling additional securities, including any issuances as
compensation for services or pursuant to the exercise of compensatory
stock options, that total:

-- 20% or more of our equity securities over the period from and
including the date of the distribution to the second anniversary of
the date of the distribution, and

-- 40% of our equity securities over the period from the date of the
distribution to the end of the restriction period; or

.  entering into any other corporate transaction which would either result
in a disqualified distribution for Federal income tax purposes or cause
us to undergo a 50% or greater change in our stock ownership during a
four-year period beginning on the date that begins two years before the
date of the distribution.

The tax sharing agreement also assigns responsibilities for
administrative matters, such as the filing of returns, payment of taxes due,
retention of records and conduct of audits, examinations or similar
proceedings.

Employee Benefits Agreement

We will enter into an employee benefits agreement with FMC Corporation at
the closing of this offering that will govern our employee benefit obligations,
including both compensation and benefits, with respect to our active employees
and retirees and other terminated employees who have performed services for our
business before or after the separation or whose employee benefit obligations
we have otherwise agreed to assume. Under the employee benefits agreement, we
will assume and agree to pay, perform, fulfill and discharge, in accordance
with their respective terms, all obligations to, or relating to, former
employees of FMC Corporation or its affiliates who will be employed by us and
our affiliates and specified former employees of FMC Corporation or its
affiliates (including retirees) who either were employed in our businesses
before or after the separation or who otherwise are assigned to us for purposes
of allocating employee benefit obligations.

Benefit Plans

Until the date of the distribution, employees and former employees
allocated to us will continue to participate in the FMC Corporation pension and
other employee benefit plans, except that domestic employees will participate
in our own qualified and non-qualified defined benefit pension plans as of the
later of the closing of this offering or the start of their employment with us
instead of participating in the FMC Corporation qualified and non-qualified
defined benefit plans. Effective immediately after this offering, we will
establish our domestic qualified and non-qualified defined benefit plans, and
effective immediately after the distribution, we will establish the remainder
of our own pension and employee benefit plans. The material terms of our
pension and employee benefit plans will generally mirror the FMC Corporation
plans as in effect at that time. The employee benefits agreement does not
preclude us from discontinuing or changing our plans at any time, with certain
exceptions relating to health and welfare plans.

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Our plans generally will assume all obligations under the FMC Corporation
plans to employees and former employees allocated to us. Specified assets
funding these obligations, including assets held in trusts, will be transferred
from trusts and other funding vehicles associated with the FMC Corporation
plans to the corresponding trusts and other funding vehicles associated with
our plans. Our plans will generally provide that any employee or former
employee allocated to us will receive full recognition and credit under these
plans for all service, all compensation, and all other benefit-affecting
determinations that would have been recognized under the corresponding FMC
Corporation plan. However, there will be no duplication of benefits payable by
FMC Corporation.

Retirement Plans

The trusts for our qualified pension plans will receive assets from FMC
Corporation's qualified pension plans' trusts on the basis of actuarial
calculations in accordance with governmental regulations. Our trusts that will
fund our domestic qualified 401(k) plan and our non-qualified deferred
compensation plan will receive a percentage of the assets of the corresponding
FMC Corporation trusts based upon the assets allocated to employees' accounts.
The division of these assets will occur, with respect to our qualified defined
benefit plans, after this offering and, with respect to the rest of our plans,
after the date of the distribution.

Stock Awards

Under the employee benefits agreement, we will issue awards under our
stock plan in replacement of all awards under the FMC Corporation stock-based
plans held by employees and, in the case of stock options, former employees
allocated to us and a portion of the FMC Corporation stock awards held by our
directors.

In connection with the replacement of FMC Corporation options, the number
of shares of our common stock underlying, and the exercise price of, the
replacement options we will grant will be based on the closing price per share
of our common stock and of FMC Corporation common stock on the trading day
immediately before the date of the distribution. We will pay the holder of the
replacement option cash in lieu of any fractional share upon exercise of the
replacement option. The substitute award for each FMC Corporation stock award
consisting of performance shares, stock units, restricted stock or restricted
stock units will be based on the offering price per share of our common stock
in this offering and the closing price per share of FMC Corporation common
stock on the trading day immediately preceding the closing date of this
offering. We will pay to the holder of the replacement award cash in lieu of
any fractional share upon the grant of the replacement award. The other terms
and conditions of each replacement award will be the same as those of the
surrendered FMC Corporation stock award.

It is not possible to specify at this time how many shares of our common
stock will be subject to substitute awards at the date of this offering or the
distribution because we do not know at this time either how many FMC
Corporation stock awards held by directors, employees and former employees
allocated to us will be outstanding at the date of this offering or the
distribution or at what ratio the FMC Corporation options and restricted stock
will be replaced with our options and restricted stock. Our stockholders are,
however, likely to experience some dilutive impact from these adjustments.

As of               , 2001, there were approximately
shares of FMC Corporation common stock subject to options held by our
directors, employees and former employees that would have been replaced with
our options had this offering occurred on that date, and approximately
shares of FMC Corporation common stock represented by other FMC
Corporation stock awards held by our directors and employees that would have
been replaced with our stock awards had the offering occurred on that date.

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Transition Services Agreement

The transition services agreement governs the provision by FMC
Corporation to us and by us to FMC Corporation of support services, such as:

.  cash management and debt service administration,

.  accounting,

.  tax,

.  payroll,

.  legal,

.  human resources administration,

.  financial transaction support,

.  information technology,

.  public affairs,

.  data processing,

.  procurement,

.  real estate management, and

.  other general administrative functions.

The terms of these services generally will expire at the distribution,
subject to exceptions.

License Agreement for FMC Corporation Corporate Name and Logo

This license agreement will provide that FMC Corporation will grant us a
worldwide, royalty free license to use the name "FMC" and the FMC logo for use
in the businesses we operate.

Allocation of Corporate Opportunities

Although FMC Corporation does not directly compete with us presently, our
Certificate of Incorporation provides that unless otherwise provided in a
written agreement between FMC Corporation and us, FMC Corporation will have no
duty to refrain from engaging in the same or similar activities or lines of
business as we engage in, and, to the fullest extent permitted by law, neither
FMC Corporation nor any officer or director of FMC Corporation (except as
provided below) will be liable to us or our stockholders for breach of any
fiduciary duty by reason of any of these activities of FMC Corporation. In the
event that FMC Corporation acquires knowledge of a potential transaction or
matter that may be a corporate opportunity for both FMC Corporation and us, FMC
Corporation will, to the fullest extent permitted by law, have no duty to
communicate or offer this corporate opportunity to us, and will, to the fullest
extent permitted by law, not be liable to us or our stockholders for breach of
any fiduciary duty as a stockholder of our company by reason of the fact that
FMC Corporation pursues or acquires that corporate opportunity for itself,
directs that corporate opportunity to another person or does not communicate
information regarding that corporate opportunity to us.

In the event that one of our directors or officers who is also a director
or officer of FMC Corporation acquires knowledge of a potential transaction or
matter that may be a corporate opportunity for both us and FMC Corporation,
that director or officer will, to the fullest extent permitted by law, have
fully satisfied his or her fiduciary duty to us and our stockholders with
respect to that corporate opportunity if that director or officer acts in a
manner consistent with the following policy:

.  a corporate opportunity offered to any person who is one of our
officers, and who is also a director but not an officer of FMC
Corporation, will belong to us;

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.  a corporate opportunity offered to any person who is one of our
directors but not one of our officers, and who is also a director or
officer of FMC Corporation, will belong to us if the opportunity is
expressly offered to that person in his or her capacity as a director
of our company, and otherwise will belong to FMC Corporation; and

.  a corporate opportunity offered to any person who is an officer of us
and FMC Corporation will belong to us if the opportunity is expressly
offered to the person in his or her capacity as an officer of our
company, and otherwise will belong to FMC Corporation.

These corporate opportunities provisions will expire once FMC Corporation
owns less than 20% of our common stock and once none of our directors or
officers is also a director or officer of FMC Corporation.

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PRINCIPAL STOCKHOLDER

Prior to this offering, all of the outstanding shares of our common stock
will be owned by FMC Corporation. After this offering, FMC Corporation will own
about   % of our outstanding common stock or approximately   % if the
underwriters fully exercise their over-allotment option. After completion of
this offering and prior to the distribution, FMC Corporation will be able,
acting alone, to elect our entire Board of Directors and to approve any action
requiring stockholder approval. Except for FMC Corporation, we are not aware of
any person or group that will beneficially own more than 5% of our outstanding
shares of common stock following this offering. None of our executive officers,
directors or director nominees currently owns any shares of our common stock,
but those who own shares of FMC Corporation common stock will be treated on the
same terms as other holders of FMC Corporation stock in any distribution by FMC
Corporation. See "Management--Stock Ownership of Directors and Executive
Officers" for a description of the ownership of FMC Corporation stock by our
directors and executive officers.

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DESCRIPTION OF CAPITAL STOCK

General

Upon the completion of this offering, we will be authorized to issue
shares of our common stock, $.01 par value, and    shares of undesignated
preferred stock, $.01 par value. The following description of our capital stock
is subject to and qualified in its entirety by our Certificate of Incorporation
and Bylaws, which are included as exhibits to the registration statement of
which this prospectus is a part, and by the provisions of applicable Delaware
law.

Common Stock

Prior to this offering, there were    shares of our common stock
outstanding, all of which were held of record by FMC Corporation.

The holders of our common stock are entitled to one vote per share on all
matters to be voted upon by our stockholders. Subject to preferences that may
be applicable to any of our outstanding preferred stock, the holders of our
common stock are entitled to receive ratably such dividends, if any, as may be
declared from time to time by our Board of Directors out of funds legally
available for that purpose. See "Dividend Policy." In the event of our
liquidation, dissolution or winding-up, the holders of our common stock are
entitled to share ratably in all assets remaining after payment of liabilities,
subject to prior distribution rights of our preferred stock, if any, then
outstanding. The holders of our common stock have no preemptive or conversion
rights or other subscription rights. There are no redemption or sinking fund
provisions applicable to our common stock.

Preferred Stock

Our Board of Directors has the authority, without action by our
stockholders, to designate and issue our preferred stock in one or more series
and to designate the rights, preferences and privileges of each series, which
may be greater than the rights of our common stock. It is not possible to state
the actual effect of the issuance of any shares of our preferred stock upon the
rights of holders of our common stock until our Board of Directors determines
the specific rights of the holders of our preferred stock. However, the effects
might include, among other things:

.  restricting dividends on our common stock;

.  diluting the voting power of our common stock;

.  impairing the liquidation rights of our common stock; or

.  delaying or preventing a change in control of our company without
further action by our stockholders.

At the closing of this offering, no shares of our preferred stock will be
outstanding, and, other than shares of our preferred stock that may become
issuable pursuant to our rights agreement, we have no present plans to issue
any shares of our preferred stock. See "-- The Rights Agreement."

As of the closing of this offering,           shares of our junior
participating preferred stock will be reserved for issuance upon exercise of
our preferred share purchase rights.

Anti-Takeover Effects of Our Certificate of Incorporation and Bylaws and
Delaware Law

Some provisions of Delaware law and our Certificate of Incorporation and
Bylaws could make the following more difficult, although they have little
significance while we are controlled by FMC Corporation:

.  acquisition of us by means of a tender offer;

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.  acquisition of us by means of a proxy contest or otherwise; or

.  removal of our incumbent officers and directors.

These provisions, summarized below, are expected to discourage coercive
takeover practices and inadequate takeover bids. These provisions also are
designed to encourage persons seeking to acquire control of us to first
negotiate with our Board of Directors. We believe that the benefits of
increased protection give us the potential ability to negotiate with the
proponent of an unfriendly or unsolicited proposal to acquire or restructure
us and outweigh the disadvantages of discouraging those proposals because
negotiation of them could result in an improvement of their terms.

Election and Removal of Directors

Our Certificate of Incorporation provides that our Board of Directors is
divided into three classes. The term of the first class of directors expires
at our 2002 annual meeting of stockholders, the term of the second class of
directors expires at our 2003 annual meeting of stockholders and the term of
the third class of directors expires at our 2004 annual meeting of
stockholders. At each of our annual meetings of stockholders, the successors
of the class of directors whose term expires at that meeting of stockholders
will be elected for a three-year term, one class being elected each year by
our stockholders. This system of electing and removing directors may
discourage a third party from making a tender offer or otherwise attempting to
obtain control of us if FMC Corporation no longer controls us because it
generally makes it more difficult for stockholders to replace a majority of
the directors. Our Certificate of Incorporation also provides that directors
may be removed with or without cause only by the vote of holders of at least
80% of our outstanding shares of stock entitled to vote generally in the
election of directors.

Size of Board and Vacancies

Our Certificate of Incorporation provides that the number of directors
on our Board of Directors will be fixed exclusively by our Board of Directors.
Newly created directorships resulting from any increase in our authorized
number of directors or any vacancies in our Board of Directors resulting from
death, resignation, retirement, disqualification, removal from office or other
cause will be filled solely by the vote of our remaining directors in office.

Elimination of Stockholder Action by Written Consent

Our Certificate of Incorporation permits our stockholders to act by
written consent without a meeting as long as FMC Corporation owns at least 50%
of our voting stock. Once FMC Corporation ceases to own that percentage of our
voting stock, our Certificate of Incorporation eliminates the right of our
stockholders to act by written consent.

Amendments to Our Bylaws

Our Certificate of Incorporation and Bylaws provide that our Bylaws may
only be amended by the vote of a majority of our whole Board of Directors or
by the vote of holders of at least 80% of the outstanding shares of our voting
stock.

Amendment of Certificate of Incorporation Provisions

The amendment of any of the above provisions in our Certificate of
Incorporation would require approval by holders of at least 80% of our
outstanding common stock.

Stockholder Meetings

Under our Bylaws, only our Board of Directors may call special meetings
of our stockholders.

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Requirements for Advance Notification of Stockholder Nominations and
Proposals

Our Bylaws establish advance notice procedures with respect to
stockholder proposals and nomination of candidates for election as directors
other than nominations made by or at the direction of our Board of Directors or
a committee of our Board of Directors.

Delaware Anti-Takeover Law

Our Certificate of Incorporation provides that Section 203 of the
Delaware General Corporation Law, an anti-takeover law, does not apply to us
until FMC Corporation owns less than 15% of our outstanding common stock.

In general, Section 203 prohibits a publicly held Delaware corporation
from engaging in a business combination with an interested stockholder for a
period of three years following the date the person became an interested
stockholder, unless the business combination or the transaction in which the
person became an interested stockholder is approved in a prescribed manner.
Generally, a "business combination" includes a merger, asset or stock sale, or
other transaction resulting in a financial benefit to the interested
stockholder. Generally, an "interested stockholder" is a person that together
with affiliates and associates, owns or within three years prior to the
determination of interested stockholder status, did own, 15% or more of a
corporation's voting stock. Section 203 is not applicable to business
combinations with FMC Corporation. The existence of this provision after FMC
Corporation no longer owns at least 15% of our outstanding shares may have an
anti-takeover effect with respect to transactions not approved in advance by
our Board of Directors, including discouraging attempts that might result in a
premium over the market price for the shares of our common stock.

No Cumulative Voting

Our Certificate of Incorporation and Bylaws do not provide for cumulative
voting in the election of directors.

Undesignated Preferred Stock

The authorization of our undesignated preferred stock makes it possible
for our Board of Directors to issue our preferred stock with voting or other
rights or preferences that could impede the success of any attempt to change
control of us. These and other provisions may have the effect of deferring
hostile takeovers or delaying changes of control of our management.

The Rights Agreement

Our Board of Directors will adopt a rights agreement prior to the
offering. Pursuant to our rights agreement, one preferred share purchase right
will be issued for each outstanding share of our common stock. Our rights being
issued are subject to the terms of our rights agreement.

Our Board of Directors will adopt our rights agreement to protect our
stockholders from coercive or otherwise unfair takeover tactics. In general
terms, our rights agreement works by imposing a significant penalty upon any
person or group that acquires 15% or more of our outstanding common stock
without the approval of our Board of Directors.

For those interested in the specific terms of our rights agreement, we
provide the following summary description. Please note, however, that this
description is only a summary, is not complete, and should be read together
with our entire rights agreement, which will be publicly filed with the SEC as
an exhibit to the registration statement of which this prospectus is a part.

78

The Rights

Our Board of Directors authorized the issuance of one of our rights for
each share of our common stock outstanding on   , 2001. Our rights initially
trade with, and are inseparable from, our common stock. Our rights are
evidenced only by certificates that represent shares of our common stock. New
rights will accompany any new shares of common stock we issue after    , 2001
until the date on which the rights are distributed as described below.

Exercise Price

Each of our rights will allow its holder to purchase from us one one-
hundredth of a share of our series A junior participating preferred stock for
$  , once the rights become exercisable. This portion of our preferred stock
will give our stockholders approximately the same dividend, voting, and
liquidation rights as would one share of our common stock. Prior to exercise,
our right does not give its holder any dividend, voting, or liquidation rights.

Exercisability

Our rights will not be exercisable until:

.  ten days after the public announcement that a person or group has
become an "acquiring person" by obtaining beneficial ownership of 15%
or more of our outstanding common stock, or, if earlier,

.  ten business days (or a later date determined by our Board of
Directors before any person or group becomes an acquiring person)
after a person or group begins a tender or exchange offer that, if
completed, would result in that person or group becoming an acquiring
person.

In light of FMC Corporation's substantial ownership position, our rights
agreement contains provisions excluding FMC Corporation from the operation of
the adverse terms of our rights agreement until the first time it ceases to
beneficially own at least 15% of our outstanding common stock.

Until the date our rights become exercisable, our common stock
certificates also evidence our rights, and any transfer of shares of our common
stock constitutes a transfer of our rights. After that date, our rights will
separate from our common stock and be evidenced by book-entry credits or by
rights certificates that we will mail to all eligible holders of our common
stock. Any of our rights held by an acquiring person are void and may not be
exercised.

Consequences of a Person or Group Becoming an Acquiring Person

.  Flip In. If a person or group becomes an acquiring person, all
holders of our rights except the acquiring person may, for $
purchase shares of our common stock with a market value of $   ,
based on the market price of our common stock prior to such
acquisition.

.  Flip Over. If we are later acquired in a merger or similar
transaction after the date our rights become exercisable, all holders
of our rights except the acquiring person may, for $   , purchase
shares of the acquiring corporation with a market value of $
based on the market price of the acquiring corporation's stock prior
to such merger.

Our Preferred Share Provisions

Each one one-hundredth of a share of our preferred stock, if issued:

.  will not be redeemable;

79

.  will entitle holders to quarterly dividend payments of $.01 per
share, or an amount equal to the dividend paid on one share of our
common stock, whichever is greater;

.  will entitle holders upon liquidation either to receive $1 per share
or an amount equal to the payment made on one share of our common
stock, whichever is greater;

.  will have the same voting power as one share of our common stock; and

.  if shares of our common stock are exchanged via merger, consolidation
or a similar transaction, will entitle holders to a per share payment
equal to the payment made on one share of our common stock.

The value of one one-hundredth interest in a share of our preferred stock
should approximate the value of one share of our common stock.

Expiration

Our rights will expire on   , 2011.

Redemption

Our Board of Directors may redeem our rights for $.01 per right at any
time before any person or group becomes an acquiring person. If our Board of
Directors redeems any of our rights, it must redeem all of our rights. Once our
rights are redeemed, the only right of the holders of our rights will be to
receive the redemption price of $.01 per right. The redemption price will be
adjusted if we have a stock split or stock dividends of our common stock.

Exchange

After a person or group becomes an acquiring person, but before an
acquiring person owns 50% or more of our outstanding common stock, our Board of
Directors may extinguish our rights by exchanging one share of our common stock
or an equivalent security for each right, other than rights held by the
acquiring person.

Anti-Dilution Provisions

Our Board of Directors may adjust the purchase price of our preferred
stock, the number of shares of our preferred stock issuable and the number of
our outstanding rights to prevent dilution that may occur from a stock
dividend, a stock split or a reclassification of our preferred stock or common
stock. No adjustments to the purchase price of our preferred stock of less than
1% will be made.

Amendments

The terms of our rights agreement may be amended by our Board of
Directors without the consent of the holders of our rights. After a person or
group becomes an acquiring person, our Board of Directors may not amend the
agreement in a way that adversely affects holders of our rights.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Computershare
Investor Services.

New York Stock Exchange Listing

We expect the shares of our common stock to be approved for listing on
the New York Stock Exchange under the symbol "FTI."

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SHARES ELIGIBLE FOR FUTURE SALE

All of the           shares, or           shares if the underwriters
exercise their over-allotment option, of our common stock sold in this offering
will be freely tradable without restriction under the Securities Act, except
for any shares that may be acquired by an affiliate of us as defined in Rule
144 under the Securities Act. Persons that may be deemed to be affiliates
generally include our individuals or entities that control, are controlled by,
or are under common control with, us, and may include our directors or officers
of FMC Technologies as well as our significant stockholders, if any.

The shares of our common stock held by FMC Corporation are deemed
"restricted securities" as defined in Rule 144, and may not be sold other than
through registration under the Securities Act or under an exemption from
registration.

After the completion of this offering, FMC Corporation will own
approximately     % of our outstanding common stock, or     % if the
underwriters exercise their over-allotment option in full. FMC Corporation has
advised us that it currently intends to distribute its remaining ownership
interest in us to common stockholders of FMC Corporation. If completed, the
distribution, as previously announced, is expected to take the form of a spin-
off in which FMC Corporation distributes all of our common stock that it owns
through a special dividend to FMC Corporation common stockholders. If
circumstances change, FMC Corporation may distribute its remaining ownership
interest in us through an exchange offer by FMC Corporation, in which its
common stockholders would be offered the option of tendering some or all of
their shares in exchange for our common stock, and a subsequent spin-off of FMC
Corporation's remaining ownership interest in us. FMC Corporation has advised
us that it does not intend to complete the distribution unless it receives a
favorable tax ruling from the IRS as to the tax-free nature of the distribution
for U.S. federal income tax purposes and the final approval of the Board of
Directors of FMC Corporation, among other conditions. FMC Corporation has also
advised us that it currently anticipates that this distribution will occur by
the end of calendar year 2001.

FMC Corporation has advised as that the final determination as to the
completion, timing, structure and terms of the distribution will be based on
financial and business considerations and prevailing market conditions. In
addition, FMC Corporation has advised us that, as permitted by the separation
and distribution agreement, it will not complete the distribution if its Board
of Directors determines that the distribution is not in the best interests of
FMC Corporation and its stockholders. FMC Corporation has the sole discretion
to determine whether or not to complete the distribution and, if it decides to
complete the distribution, to determine the timing, structure and terms of the
distribution.

Shares of our common stock distributed to FMC Corporation common
stockholders in the distribution generally will be freely transferable, except
for shares of our common stock received by persons that may be deemed to be our
affiliates. Persons who are our affiliates will be permitted to sell the shares
of our common stock that are issued in this offering or that they receive in
the distribution only through registration under the Securities Act, or under
an exemption from registration, such as the one provided by Rule 144.

We, our directors, our executive officers and FMC Corporation have agreed
with the underwriters that, during the period beginning from the date of this
prospectus and continuing to and including the date 180 days after the date of
this prospectus, we generally will not offer, sell, contract to sell or
otherwise dispose of any shares of our common stock without the prior written
consent of Merrill Lynch & Co. on behalf of the underwriters.

In connection with this offering, we will grant options to purchase
approximately         shares of our common stock. After this offering, we
intend to file a registration statement on Form S-8 to register approximately
shares of our common stock that are reserved for issuance or sale under
our stock plans that we will adopt in connection with the offering, as
described under "Management--Incentive Plans." Currently there are no
outstanding options to purchase shares of our common stock. All shares of our
common stock issuable upon exercise of options to be granted under our stock
plans will be freely tradable upon

81

effectiveness of the S-8 registration statement without restrictions under the
Securities Act, except to the extent held by one of our affiliates (in which
case they will be subject to the limitations of Rule 144 described above). In
addition, we expect the registration statement on Form S-8 will register shares
of our restricted stock that we will issue to replace all shares of FMC
Corporation restricted stock held by our employees and a portion of the shares
of FMC Corporation restricted stock held by our directors in connection with
the offering. The terms of our restricted stock are limited by the terms of our
stock plan. See "Management--Treatment of FMC Corporation Restricted Stock" and
"Management--Incentive Plans--The Stock Plan."

In addition, in connection with the distribution, we expect to replace
all FMC Corporation options held by our employees and former employees and a
portion of the FMC Corporation options held by our directors with options to
acquire our common stock. See "Management--Treatment of FMC Corporation
Options."

82

MATERIAL U.S. FEDERAL TAX CONSIDERATIONS
FOR NON-U.S. HOLDERS OF OUR COMMON STOCK

The following is a general discussion of material U.S. federal income and
estate tax considerations with respect to the ownership and disposition of
shares of our common stock applicable to non-U.S. holders. In general, a "non-
U.S. holder" is any holder other than:

.  a citizen or resident of the United States;

.  a corporation created or organized in the United States or under the
laws of the United States or of any state;

.  an estate, the income of which is includible in gross income for U.S.
federal income tax purposes regardless of its source; or

.  a trust if (a) a court within the United States is able to exercise
primary supervision over the administration of the trust and (b) one
or more U.S. persons have the authority to control all substantial
decisions of the trust.

This discussion is based on current provisions of the Internal Revenue
Code of 1986, as amended, Treasury Regulations promulgated thereunder, judicial
opinions, published positions of the Internal Revenue Service, and all other
applicable authorities, all of which are subject to change (possibly with
retroactive effect). We assume in this discussion that a non-U.S. holder holds
shares of our common stock as a capital asset (generally property held for
investment). This discussion does not address all aspects of U.S. federal
income and estate taxation that may be important to a particular non-U.S.
holder in light of that non-U.S. holder's individual circumstances nor does it
address any aspects of U.S. state, local or non-U.S. taxes. This discussion
also does not consider any specific facts or circumstances that may apply to a
non-U.S. holder subject to special treatment under the U.S. federal income tax
laws (such as insurance companies, tax-exempt organizations, financial
institutions, brokers, dealers in securities, partnerships, owners of more than
5% of our common stock and certain U.S. expatriates). Accordingly, we urge
prospective investors to consult with their own tax advisor regarding the U.S.
federal, state, local and non-U.S. income and other tax considerations of
acquiring, holding and disposing of shares of our common stock.

Dividends

In general, dividends we pay to a non-U.S. holder will be subject to U.S.
withholding tax at a 30% rate of the gross amount (or a lower rate prescribed
by an applicable income tax treaty) unless the dividends are effectively
connected with a trade or business carried on by the non-U.S. holder within the
United States and, if a treaty applies, are attributable to a permanent
establishment of the non-U.S. holder within the United States. Dividends
effectively connected with this U.S. trade or business, and, if a treaty
applies, attributable to such a permanent establishment of a non-U.S. Holder,
generally will not be subject to U.S. withholding tax if the non-U.S. holder
files certain forms, including IRS Form W-8ECI (or any successor form), with
the payor of the dividend, and generally will be subject to U.S. federal income
tax on a net income basis, in the same manner as if the non-U.S. holder were a
resident of the United States. A non-U.S. holder that is a corporation, may be
subject to an additional branch profits tax at a rate of 30% (or a lower rate
as may be specified by an applicable income tax treaty) on the repatriation
from the United States of its "effectively connected earnings and profits,"
subject to certain adjustments. Under applicable Treasury Regulations, a non-
U.S. holder (including, in certain cases of non-U.S. holders that are entities,
the owner or owners of such entities) is required to satisfy certain
certification requirements in order to claim a reduced rate of withholding
pursuant to an applicable income tax treaty.

83

Gain on Sale or Other Disposition of Common Stock

In general, a non-U.S. holder will not be subject to U.S. federal income
tax on any gain realized upon the sale or other disposition of the holder's
shares of our common stock unless:

.  the gain is effectively connected with a trade or business carried on
by the non-U.S. holder within the United States (in which case the
branch profits tax discussed above may also apply if the non-U.S.
holder is a corporation) or the gain is attributable to a permanent
establishment of the non-U.S. holder maintained in the United States
if that is required by an applicable income tax treaty as a condition
to subjecting a non-U.S. holder to United States income tax on a net
basis;

.  the non-U.S. holder is an individual and is present in the United
States for 183 days or more in the taxable year of disposition and
certain other tests are met;

.  the non-U.S. holder is subject to tax pursuant to the provisions of
the Internal Revenue Code regarding the taxation of U.S. expatriates;
or

.  We are or have been a U.S. real property holding corporation (a
"USRPHC") for U.S. federal income tax purposes (which we do not
believe that we have been, currently are, or will become) at any time
within the shorter of the five-year period preceding the disposition
and the non-U.S. holder's holding period. If we were or were to
become a USRPHC at any time during this period, generally gains
realized upon a disposition of shares of our common stock by a non-
U.S. holder that did not directly or indirectly own more than 5% of
our common stock during this period would not be subject to U.S.
federal income tax, provided that our common stock is "regularly
traded on an established securities market" (within the meaning of
Section 897(c)(3) of the Internal Revenue Code). We believe that our
common stock will be treated as regularly traded on an established
securities market during any period in which it is listed on the
NYSE.

Estate Tax

Shares of our common stock that are owned or treated as owned by an
individual who is not a citizen or resident (as defined for U.S. federal estate
tax purposes) of the United States at the time of death will be includible in
the individual's gross estate for U.S. federal estate tax purposes, unless an
applicable estate tax treaty provided otherwise, and therefore may be subject
to U.S. federal estate tax.

Backup Withholding, Information Reporting and Other Reporting Requirements

We must report annually to the IRS and to each non-U.S. holder the amount
of dividends paid to, and the tax withheld with respect to, each non-U.S.
holder. These reporting requirements apply regardless of whether withholding
was reduced or eliminated by an applicable tax treaty. Copies of this
information also may be made available under the provisions of a specific
treaty or agreement with the tax authorities in the country in which the non-
U.S Holder resides or is established.

U.S backup withholding tax is imposed at the rate of 31% on certain
payments to persons that fail to furnish the information required under the
U.S. information reporting requirements.

Under the Treasury Regulations, the payment of proceeds from the
disposition of shares of our common stock to or through a U.S. office of a
broker will be subject to information reporting and backup withholding, unless
the beneficial owner, under penalties of perjury, certifies, among other
things, its status as a non-U.S. holder or otherwise establishes an exemption.
The payment of proceeds from the disposition of shares of our common stock to
or through a non-U.S. office of a broker generally will not be subject to
backup withholding and information reporting, except as noted below. In the
case of proceeds from a disposition of shares of our common stock paid to or
though a non-U.S. office of a broker that is:

.  a U.S. person;

.  a "controlled foreign corporation" for U.S. federal income tax
purposes;

84

.  a foreign person 50% or more of whose gross income from certain
periods is effectively connected with a U.S. trade or business; or

.  a foreign partnership if at any time during its tax year (a) one or
more of its partners are U.S. persons who, in the aggregate, hold
more than 50% of the income or capital interests of the partnership
or (b) the foreign partnership is engaged in a U.S. trade or
business,

information reporting (but not backup withholding) will apply unless the broker
has documentary evidence in its files that the owner is a non-U.S. holder and
certain other conditions are satisfied, or the beneficial owner otherwise
establishes an exemption (and the broker has no actual knowledge to the
contrary).

Backup withholding is not an additional tax. Any amounts withheld under
the backup withholding rules from a payment to a non-U.S. holder can be
refunded or credited against the non-U.S. holder's U.S. federal income tax
liability, if any, provided that the required information is furnished to the
IRS in a timely manner.

The foregoing discussion of certain U.S. federal income tax
considerations is for general information only and is not tax advice.
Accordingly, each prospective non-U.S. holder of shares of our common stock
should consult his, her or its own tax adviser with respect to the federal,
state, local and foreign tax consequences of the acquisition, ownership and
disposition of common stock.

85

UNDERWRITING

We intend to offer the shares in the U.S. and Canada through the U.S.
underwriters and elsewhere through the international managers. Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Credit Suisse First Boston Corporation and
Salomon Smith Barney Inc. are acting as U.S. representatives of the U.S.
underwriters named below. Subject to the terms and conditions described in a
U.S. purchase agreement among us and the U.S. underwriters, and concurrently
with the sale of        shares of our common stock to the international
managers, we have agreed to sell to the U.S. underwriters, and the U.S.
underwriters severally have agreed to purchase from us, the number of shares of
our common stock listed opposite their names below.

Number
U.S. Underwriter                                   of Shares
----------------                                   ---------

Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................................
Credit Suisse First Boston Corporation........................
Salomon Smith Barney Inc......................................
-------
Total....................................................
=======

We have also entered into an international purchase agreement with the
international managers for sale of the shares outside the U.S. and Canada for
whom Merrill Lynch International, Credit Suisse First Boston (Europe) Limited
and Salomon Brothers International Limited are acting as lead managers. Subject
to the terms and conditions in the international purchase agreement, and
concurrently with the sale of         shares of our common stock to the U.S.
underwriters under the U.S. purchase agreement, we have agreed to sell to the
international managers, and the international managers severally have agreed to
purchase from us, an aggregate of        shares of our common stock in this
offering. The initial public offering price per share and the total
underwriting discount per share of our common stock are identical under the
U.S. purchase agreement and the international purchase agreement.

The U.S. underwriters and the international managers have agreed to
purchase all of the shares of our common stock sold under the U.S. and
international purchase agreements if any of these shares of our common stock
are purchased. If an underwriter defaults, the U.S. and international purchase
agreements provide that the purchase commitments of the nondefaulting
underwriters may be increased or the purchase agreements may be terminated. The
closings for sale of shares of our common stock to be purchased by the U.S.
underwriters and the international managers are conditioned on one another.

We have agreed to indemnify the U.S. underwriters and the international
managers against certain liabilities, including liabilities under the
Securities Act, or to contribute to payments the U.S. underwriters and
international managers may be required to make in respect of those liabilities.

The underwriters are offering the shares of our common stock, subject to
prior sale, when, as and if issued to and accepted by them, subject to approval
of legal matters by their counsel, including the validity of the shares of our
common stock, and other conditions contained in the purchase agreements, such
as the receipt by the underwriters of officer's certificates and legal
opinions. The underwriters reserve the right to withdraw, cancel or modify
offers to the public and to reject orders in whole or in part.

Merrill Lynch will be facilitating Internet distribution for this
offering to some of its Internet subscription customers. Merrill Lynch intends
to allocate a limited number of shares of our common stock for sale to its
online brokerage customers. An electronic prospectus is available on the
Internet Web sites maintained by Merrill Lynch and Credit Suisse First Boston
Corporation. Other than the prospectus in electronic format, the information on
the Web sites of Merrill Lynch, Credit Suisse First Boston Corporation and
Salomon Smith Barney Inc. is not part of this prospectus.

86

Commissions and Discounts

The U.S. representatives have advised us that the U.S. underwriters
propose initially to offer the shares of our common stock to the public at the
initial public offering price on the cover page of this prospectus and to
dealers at that price less a concession not in excess of $       per share. The
U.S. underwriters may allow, and the dealers may reallow, a discount not in
excess of $       per share to other dealers. After the initial public
offering, the public offering price, concession and discount may be changed.

The following table shows the public offering price, underwriting
discount and proceeds before expenses to us. This information assumes either no
exercise or full exercise by the U.S. underwriters and the international
managers of their over-allotment options.

Per Share Without Option With Option
--------- -------------- -----------

Public offering price...............      $           $             $
Underwriting discount...............      $           $             $
Proceeds, before expenses, to us....      $           $             $

The expenses of the offering, not including the underwriting discount,
are estimated at $       and are payable by us.

Over-allotment Option

We have granted an option to the U.S. underwriters to purchase up to
additional shares of our common stock at the public offering price less
the underwriting discount. The U.S. underwriters may exercise this option for
30 days from the date of this prospectus solely to cover any over-allotments.
If the U.S. underwriters exercise this option, each will be obligated, subject
to the conditions contained in the purchase agreements, to purchase a number of
additional shares of our common stock proportionate to that U.S. underwriter's
initial amount reflected in the above table.

We have also granted an option to the international managers, exercisable
for 30 days from the date of this prospectus, to purchase up to
additional shares of our common stock to cover any over-allotments on terms
similar to those granted to the U.S. underwriters.

Intersyndicate Agreement

The U.S. underwriters and the international managers have entered into an
intersyndicate agreement that provides for the coordination of their
activities. Under the intersyndicate agreement, the U.S. underwriters and the
international managers may sell shares of our common stock to each other for
purposes of resale at the initial public offering price, less an amount not
greater than the selling concession. Under the intersyndicate agreement, the
U.S. underwriters and any dealer to whom they sell shares of our common stock
will not offer to sell or sell shares to persons who are non-U.S. or non-
Canadian persons or to persons they believe intend to resell to persons who are
non-U.S. or non-Canadian persons, except in the case of transactions under the
intersyndicate agreement. Similarly, the international managers and any dealer
to whom they sell shares of our common stock will not offer to sell or sell
shares of our common stock to U.S. persons or Canadian persons or to persons
they believe intend to resell to U.S. persons or Canadian persons, except in
the case of transactions under the terms of the intersyndicate agreement.

No Sales of Similar Securities

We, our executive officers and directors and FMC Corporation have agreed,
with exceptions, not to sell or transfer any of our common stock for 180 days
after the date of this prospectus without first obtaining

87

the written consent of Merrill Lynch. Specifically, we and these other persons
have agreed not to directly or indirectly:

.  offer, pledge, sell or contract to sell any of our common stock,

.  sell any option or contract to purchase any of our common stock,

.  purchase any option or contract to sell any of our common stock,

.  grant any option, right or warrant for the sale of any of our common
stock, other than pursuant to our employee benefit plans or director
stock plan,

.  lend or otherwise dispose of or transfer any of our common stock,

.  file, or request or demand that we file, a registration statement
related to our common stock other than in connection with our
employee benefit plans, or

.  enter into any swap or other agreement that transfers, in whole or in
part, the economic consequence of ownership of any of our common
stock whether any such swap or transaction is to be settled by
delivery of shares or other securities, in cash or otherwise.

This lockup provision applies to our common stock and to securities
convertible into or exchangeable or exercisable for or repayable with our
common stock. It also applies to our common stock owned now or acquired later
by the person executing the agreement or for which the person executing the
agreement later acquires the power of disposition. These restrictions do not
apply to shares of our common stock sold to the underwriters and international
managers under this prospectus.

New York Stock Exchange Listing

We expect the shares to be approved for listing on the New York Stock
Exchange under the symbol "FTI." In order to meet the requirements for listing
of our common stock on the NYSE, the U.S. underwriters and the international
managers have undertaken to sell a minimum number of shares of our common stock
to a minimum number of beneficial owners as required by the NYSE.

Before this offering, there has been no public market for our common
stock. The initial public offering price will be determined through
negotiations among us and the U.S. representatives and the lead managers. In
addition to prevailing market conditions, the factors to be considered in
determining the initial public offering price are:

.  the valuation multiples of publicly traded companies that the U.S.
representatives and the lead managers believe to be comparable to us,

.  our financial information,

.  the history of, and the prospects for, our company and the industry
in which we compete,

.  an assessment of our management, our past and present operations, and
the prospects for, and timing of, our future revenues,

.  the present state of our development, and

.  the above factors in relation to market values and various valuation
measures of other companies engaged in activities similar to ours.

An active trading market for the shares may not develop. It is also
possible that after the offering the shares of our common stock will not trade
in the public market at or above the initial public offering price.

The underwriters do not expect to sell more than 5% of the shares of our
common stock being offered in this offering in the aggregate to accounts over
which they exercise discretionary authority.

88

Price Stabilization and Short Positions and Penalty Bids

Until this offering of shares of our common stock is completed, SEC rules
may limit underwriters and selling group members from bidding for and
purchasing our common stock. However, the U.S. underwriters may engage in
transactions that stabilize the price of our common stock, such as bids or
purchases to peg, fix or maintain that price.

The U.S. underwriters may purchase and sell our common stock in the open
market. These transactions may include short sales, stabilizing transactions
and purchases to cover positions created by short sales. Short sales involve
the sale by the U.S. underwriters of a greater number of shares than they are
required to purchase in the offering. "Covered" short sales are sales made in
an amount not greater than the underwriters' option to purchase additional
shares from the issuer in the offering. The U.S. underwriters may close out any
covered short position by either exercising their option to purchase additional
shares or purchasing shares in the open market. In determining the source of
shares to close out the covered short position, the U.S. underwriters will
consider, among other things, the price of shares available for purchase in the
open market as compared to the price at which they may purchase shares through
the over-allotment option. "Naked" short sales are any sales in excess of such
option. The U.S. underwriters must close out any naked short position by
purchasing shares in the open market. A naked short position is more likely to
be created if the U.S. underwriters are concerned that there may be downward
pressure on the price of our common stock in the open market after pricing that
could adversely affect investors who purchase in the offering. Stabilizing
transactions consist of various bids for or purchases of common stock made by
the U.S. underwriters in the open market prior to the completion of the
offering.

The U.S. underwriters may also impose a penalty bid. This occurs when a
particular underwriter repays to the other underwriters a portion of the
underwriting discount received by it because the U.S. underwriters have
repurchased shares sold by or for the account of that underwriter in
stabilizing or short covering transactions.

Similar to other purchase transactions, the U.S. underwriters' purchases
to cover the syndicate short sales may have the effect of raising or
maintaining the market price of our common stock or preventing or retarding a
decline in the market price of our common stock. As a result, the price of our
common stock may be higher than the price that might otherwise exist in the
open market.

Neither we nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of our common stock. In addition, neither
we nor any of the underwriters makes any representation that the U.S.
underwriters will engage in these transactions or that these transactions, once
commenced, will not be discontinued without notice.

Other Relationships

Some of the underwriters and their affiliates have engaged in, and may in
the future engage in, investment banking and other commercial dealings in the
ordinary course of business with us or FMC Corporation. Some of the
underwriters and their affiliates also have engaged in commercial banking and
investment banking transactions and services with us or FMC Corporation,
including with respect to the separation, and may in the future engage in these
transactions and services. They have received customary compensation for these
services and transactions. In this regard, affiliates of each of the U.S.
representatives are participating as lenders to FMC Corporation under the $200
million 180-day revolving credit facility. An affiliate of Salomon Smith Barney
Inc. is acting as administrative agent for this facility. All amounts
outstanding under this facility will be assumed by us and repaid in full out of
the proceeds from this offering.

89

LEGAL MATTERS

Wachtell, Lipton, Rosen & Katz, New York, New York, will pass upon the
validity of our common stock being sold in this offering and other legal
matters for us. Vinson & Elkins L.L.P., Houston, Texas, will pass upon a number
of legal matters relating to this offering for the underwriters. Each of these
firms has in the past represented and continues to represent one or more of the
underwriters, and Wachtell, Lipton, Rosen & Katz has in the past represented
and continues to represent FMC Corporation, on a regular basis and in a variety
of matters other than this offering.

EXPERTS

The audited combined financial statements and schedules of FMC
Technologies, Inc. as of December 31, 1999 and 2000, and for each of the years
in the three-year period ended December 31, 2000, have been included in this
prospectus and in the registration statement in reliance upon the report of
KPMG LLP, independent certified public accountants, appearing elsewhere herein,
and upon the authority of said firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC, a registration statement on Form S-1 under
the Securities Act of 1933 with respect to our common stock offered in this
prospectus. This prospectus does not contain all of the information set forth
in the registration statement and the exhibits and schedules to that
registration statement. For further information with respect to us and the
common stock, we refer you to this registration statement and its exhibits and
schedules. Statements contained in this prospectus as to the contents of any
contract or other document are not necessarily complete and, in each instance,
reference is made to the copy of that contract or document filed as an exhibit
to the registration statement, each of these statements being qualified in all
respects by that reference. You may read and copy the registration statement,
including exhibits to the registration statement, at the SEC's public reference
room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room. Our
filings with the SEC are also available to the public through the SEC's
Internet site at http://www.sec.gov.

Upon completion of this offering, we will be subject to the informational
requirements of the Securities Exchange Act of 1934, as amended, and, in
accordance with those requirements, will file reports, proxy and information
statements and other information with the SEC. You may inspect and copy these
reports, proxy and information statements and other information at the
addresses set forth above.

We will make available to our stockholders our annual reports containing
consolidated or combined financial statements audited by our independent
auditors and quarterly reports containing unaudited consolidated or combined
financial statements for each of the first three quarters of each fiscal year.

90

INDEX TO COMBINED FINANCIAL STATEMENTS

Page
----

Report of Independent Public Accountants.................................  F-2

Combined Statements of Income for the Years Ended December 31, 1998, 1999
and 2000................................................................  F-3

Combined Balance Sheets as of December 31, 1999 and 2000.................  F-4

Combined Statements of Cash Flows for the Years Ended December 31, 1998,
1999 and 2000...........................................................  F-5

Combined Statements of Changes in Stockholder's Equity for the Years
Ended December 31, 1998, 1999 and 2000..................................  F-6

Notes to Combined Financial Statements...................................  F-7

F-1

When the transactions described in Note 18 of the notes to the combined
financial statements have been finalized, we will be in a position to render
the following report.

/s/ KPMG LLP

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors and Stockholder,
FMC Technologies, Inc.:

We have audited the accompanying combined balance sheets of FMC
Technologies, Inc. as of December 31, 1999 and 2000, and the related combined
statements of income, cash flows and changes in stockholder's equity for each
of the years in the three-year period ended December 31, 2000. These combined
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these combined financial statements
based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the financial position of FMC
Technologies, Inc. as of December 31, 1999 and 2000, and the results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 2000 in conformity with accounting principles generally
accepted in the United States of America.

Chicago, Illinois
February 9, 2001

F-2

FMC TECHNOLOGIES, INC.

COMBINED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 1998, 1999 AND 2000

Year ended December 31,
(In millions, except per share data)                ---------------------------
1998     1999      2000
-------- --------  --------

Revenue............................................ $2,185.5 $1,953.1  $1,875.2
Costs and expenses:
Cost of sales or services..........................  1,669.3  1,479.8   1,421.1
Selling, general and administrative expenses.......    337.8    302.4     291.2
Research and development...........................     50.7     51.8      56.7
Asset impairments (Note 5).........................      --       6.0       1.5
Restructuring and other charges (Note 5)...........      --       3.6       9.8
-------- --------  --------
Total costs and expenses.........................  2,057.8  1,843.6   1,780.3
-------- --------  --------
Income from continuing operations before interest
income, interest expense and income taxes.........    127.7    109.5      94.9
Interest income....................................      6.2      4.0       2.3
Interest expense...................................      8.1      3.5       6.6
-------- --------  --------
Income from continuing operations before income
taxes.............................................    125.8    110.0      90.6
Provision for income taxes (Note 9)................     38.6     33.5      22.7
-------- --------  --------
Income from continuing operations..................     87.2     76.5      67.9
Discontinued operations, net of income taxes
(Note 12).........................................      --      (5.5)      --
-------- --------  --------
Net income....................................... $   87.2 $   71.0  $   67.9
======== ========  ========
Earnings per common share from continuing
operations (Note 3)............................... $        $         $
======== ========  ========
Earnings per common share from discontinued
operations (Note 3)............................... $        $         $
======== ========  ========
Earnings per common share (Note 3)................. $        $         $
======== ========  ========
Unaudited pro forma as adjusted basic earnings per
common share from continuing operations
(Note 18).........................................                    $
========
Unaudited pro forma as adjusted diluted earnings
per common share from continuing operations
(Note 18).........................................                    $
========

The accompanying notes are an integral part of the combined financial
statements.

F-3

FMC TECHNOLOGIES, INC.

COMBINED BALANCE SHEETS

AS OF DECEMBER 31, 1999 AND 2000

December 31,
(In millions, except share and par value data)                   ------------------
1999      2000
--------  --------

Assets

Current assets:
Cash and cash equivalents....................................... $   40.1  $   17.8
Trade receivables, net of allowances of $10.4 in 1999 and $7.2
in 2000........................................................    267.5     328.9
Inventories (Note 6)............................................    250.8     254.8
Other current assets............................................     68.3      62.0
Deferred income taxes (Note 9)..................................     31.7      29.8
--------  --------
Total current assets........................................    658.4     693.3
Investments.....................................................    151.5      29.9
Property, plant and equipment, net (Note 7).....................    280.6     257.3
Goodwill and intangible assets, net.............................    359.7     373.1
Other assets....................................................      5.7      12.0
Deferred income taxes (Note 9)..................................     17.3       8.1
--------  --------
Total assets................................................ $1,473.2  $1,373.7
========  ========

Liabilities and stockholder's equity

Current liabilities:
Short-term debt (Note 8)........................................ $   12.0  $   41.1
Accounts payable, trade and other...............................    367.5     328.3
Accrued payroll.................................................     48.7      39.7
Other current liabilities.......................................    125.5     113.5
Current portion of accrued pension and other postretirement
benefits (Note 10).............................................      4.3      13.2
Income taxes payable (Note 9)...................................     14.0      29.6
--------  --------
Total current liabilities...................................    572.0     565.4
Accrued pension and other postretirement benefits, less current
portion (Note 10)..............................................     75.4      59.2
Reserve for discontinued operations (Note 12)...................     33.8      30.6
Other liabilities...............................................     65.4      76.5
Commitments and contingent liabilities (Note 17)................      --        --
Stockholder's equity:
Common stock, $0.01 par value, 1,000 shares authorized, issued
and outstanding in 2000........................................      --        --
Capital in excess of par value of common stock..................      --        --
Accumulated other comprehensive loss............................    (78.3)   (111.4)
Owner's net investment..........................................    804.9     753.4
--------  --------
Total stockholder's equity..................................    726.6     642.0
--------  --------
Total liabilities and stockholder's equity................ $1,473.2  $1,373.7
========  ========

The accompanying notes are an integral part of the combined financial
statements.

F-4

FMC TECHNOLOGIES, INC.

COMBINED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1998, 1999 AND 2000

Year ended December 31,
(In millions)                                         -------------------------
1998     1999     2000
-------  -------  -------

Cash provided by operating activities of continuing
operations:
Income from continuing operations...................  $  87.2  $  76.5  $  67.9
Adjustments to reconcile income from continuing
operations to cash provided by operating activities
of continuing operations:
Depreciation and amortization.....................     66.6     62.3     59.1
Asset impairments (Note 5)........................      --       6.0      1.5
Restructuring and other charges (Note 5)..........      --       3.6      9.8
Deferred income taxes.............................      3.4     16.7     11.1
Other.............................................    (11.1)     2.7      6.9
Changes in operating assets and liabilities:
Accounts receivable sold..........................      --      22.0     15.6
Trade receivables, net............................     (6.8)    46.3    (78.3)
Inventories.......................................      0.3     32.1    (16.5)
Other current assets and other assets.............     (0.6)     0.8     17.5
Accounts payable including advance payments,
accrued payroll, other current liabilities and
other liabilities................................    103.2   (111.3)   (89.7)
Income taxes payable..............................     (3.0)     3.0     15.6
Accrued pension and other postretirement benefits,
net..............................................    (16.0)    (6.4)   (11.0)
-------  -------  -------
Cash provided by operating activities of continuing
operations.........................................    223.2    154.3      9.5
-------  -------  -------
Cash required by discontinued operations (Note 12)..     (2.9)    (7.4)    (3.2)
-------  -------  -------
Cash provided (required) by investing activities:
Acquisitions and joint venture investments........      --     (49.1)   (47.4)
Capital expenditures..............................    (59.4)   (40.9)   (43.1)
Proceeds from disposal of property, plant and
equipment and sale-leasebacks....................     46.3     59.4     31.6
Receipt of Tyco preferred stock (Note 4)..........   (121.6)     --       --
Redemption of Tyco preferred stock (Note 4).......      --       --     127.5
(Increase) decrease in investments................    (20.9)    24.1     (5.2)
-------  -------  -------
Cash provided (required) by investing activities....   (155.6)    (6.5)    63.4
-------  -------  -------
Cash provided (required) by financing activities:
Net increase (decrease) in short-term debt........     (2.6)   (11.1)    29.0
Repayment of long-term debt.......................     (8.0)     --       --
Distribution to owner.............................    (54.6)  (124.4)  (119.4)
-------  -------  -------
Cash required by financing activities...............    (65.2)  (135.5)   (90.4)
-------  -------  -------
Effect of exchange rate changes on cash and cash
equivalents........................................     (1.2)     9.8     (1.6)
-------  -------  -------
Increase (decrease) in cash and cash equivalents....     (1.7)    14.7    (22.3)
Cash and cash equivalents, beginning of year........     27.1     25.4     40.1
-------  -------  -------
Cash and cash equivalents, end of year..............  $  25.4  $  40.1  $  17.8
=======  =======  =======

Supplemental cash flow information: Income taxes paid, net of refunds,
were $38.2 million, $13.8 million and $1.8 million for 1998, 1999 and 2000,
respectively. Interest payments for 1998, 1999 and 2000 were $4.7 million, $4.6
million and $8.8 million, respectively.

The accompanying notes are an integral part of the combined financial
statements.

F-5

FMC TECHNOLOGIES, INC.

COMBINED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY

FOR THE YEARS ENDED DECEMBER 31, 1998, 1999 AND 2000

Accumulated
other
Owner's net comprehensive Comprehensive
(In millions)                          investment  income (loss) income (loss)
----------- ------------- -------------

Balance at December 31, 1997..........   $ 825.7      $ (31.9)
Net income............................      87.2          --        $ 87.2
Foreign currency translation
adjustment (Note 13).................       --          (3.9)        (3.9)
Distribution to owner.................     (54.6)         --           --
-------      -------       ------
$ 83.3
======
Balance at December 31, 1998..........     858.3        (35.8)
Net income............................      71.0          --          71.0
Foreign currency translation
adjustment (Note 13).................       --         (39.3)       (39.3)
Minimum pension liability adjustment
(Note 10)............................       --          (3.2)        (3.2)
Distribution to owner.................    (124.4)         --           --
-------      -------       ------
$ 28.5
======
Balance at December 31, 1999..........     804.9        (78.3)
Net income............................      67.9          --          67.9
Foreign currency translation
adjustment (Note 13).................       --         (34.4)       (34.4)
Minimum pension liability adjustment
(Note 10)............................       --           1.3          1.3
Distribution to owner.................    (119.4)         --           --
-------      -------       ------
$ 34.8
======
Balance at December 31, 2000..........   $ 753.4      $(111.4)
=======      =======

The accompanying notes are an integral part of the combined financial
statements.

F-6

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

Note 1. Nature of Organization and Business

On October 31, 2000, FMC Corporation announced its intention to
reorganize its Energy Systems and Specialty Systems businesses as a new
company, FMC Technologies, Inc. ("FMC Technologies" or the "Company"), and to
sell up to 19.9% of FMC Technologies' common stock by means of an initial
public offering (the "offering"), followed by a distribution (the
"distribution") to FMC Corporation's stockholders of FMC Corporation's
remaining interest in the Company's common stock. FMC Corporation has further
advised FMC Technologies that the distribution is expected to occur by the end
of calendar year 2001.

FMC Technologies was incorporated in Delaware on November 13, 2000 and
currently is a wholly owned subsidiary of FMC Corporation. FMC Technologies
designs, manufactures and services technologically sophisticated systems and
products for its customers through its Energy Systems and Specialty Systems
segments. Energy Systems is a leading supplier of systems and services used in
the offshore, particularly deepwater, exploration and production of crude oil
and natural gas. Specialty Systems provides technologically advanced handling
and processing systems to industrial customers.

Note 2. Basis of Presentation

FMC Corporation has operated the businesses it will transfer to FMC
Technologies in the separation as internal units of FMC Corporation through
various divisions and subsidiaries, or through investments in unconsolidated
affiliates. Before the closing of the offering, FMC Corporation intends to
contribute substantially all of its ownership interests in the businesses
included in these combined financial statements to the Company with the
remainder to be transferred shortly after the closing. These combined financial
statements reflect the combined results of the businesses as if they had been
contributed to the Company for all periods. Subsequent to the contribution, all
of the businesses included in these combined financial statements will be
consolidated subsidiaries or divisions of the Company, or will be investments
of the Company or its subsidiaries.

FMC Technologies' combined financial statements have been carved out from
the consolidated financial statements of FMC Corporation using the historical
results of operations and bases of the assets and liabilities of the
transferred businesses, and give effect to certain allocations of expenses from
FMC Corporation. Such expenses represent costs related to general and
administrative services that FMC Corporation has provided to FMC Technologies,
including accounting, treasury, tax, legal, human resources, information
technology and other corporate and infrastructure services. The costs of these
services have been allocated to FMC Technologies and included in the Company's
combined financial statements based upon the relative levels of use of those
services. The expense allocations have been determined on the basis of
assumptions and estimates that management believes to be a reasonable
reflection of FMC Technologies' utilization of those services. These
allocations and estimates, however, are not necessarily indicative of the costs
and expenses that would have resulted if FMC Technologies had operated as a
separate entity in the past, or of the costs the Company may incur in the
future. For information relating to FMC Technologies' relationship with FMC
Corporation and services between FMC Technologies and FMC Corporation following
the separation, see Note 18.

The Company's cash resources are managed under a centralized system
wherein receipts are deposited to the corporate accounts of FMC Corporation and
disbursements are centrally funded. Accordingly, settlement of certain assets
and liabilities arising from common services or activities provided by FMC
Corporation and certain related-party transactions are reflected as net equity
distributions to FMC Corporation.

The combined financial statements do not reflect the debt or interest
expense FMC Technologies would have incurred if it were a stand-alone entity.
In addition, the combined financial statements may not be

F-7

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

indicative of the Company's combined financial position, operating results or
cash flows in the future or what the Company's financial position, operating
results and cash flows would have been had FMC Technologies been a separate,
stand-alone entity during the periods presented. The combined financial
statements do not reflect any changes that will occur in the Company's funding
or operations as a result of the offering, the distribution and FMC
Technologies becoming a stand-alone entity.

Note 3. Principal Accounting Policies

Use of estimates--The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results are likely to
differ from those estimates, but FMC Technologies' management does not believe
such differences will materially affect the Company's financial position,
results of operations or cash flows.

Principles of combination--The combined financial statements include the
accounts of the Energy Systems and Specialty Systems businesses of FMC
Corporation that will be transferred to FMC Technologies in the separation. All
material intercompany accounts and transactions are eliminated in combination.

Revenue recognition--Revenue from equipment sales is either recognized
upon transfer of title to the customer (which is generally upon shipment) or,
in the case of larger long-term contracts, under the percentage of completion
method. Under the percentage of completion method, revenue is recognized as
work progresses on each contract in the ratio that costs incurred to date bear
to total estimated costs. Any expected losses on contracts in progress are
charged to operations in the period the losses become probable. Service revenue
related to the installation and maintenance of equipment is recognized as the
service is provided.

Cash equivalents--The Company considers investments in all highly liquid
debt instruments with original maturities of three months or less to be cash
equivalents.

Accounts receivable--During the fourth quarter of 1999, FMC Corporation
entered into an accounts receivable financing facility under which accounts
receivable are sold without recourse through a wholly owned, bankruptcy remote
subsidiary. As part of FMC Corporation, FMC Technologies' operations have
participated in the facility, which resulted in reductions of accounts
receivable of $22.3 million and $38.0 million at December 31, 1999 and 2000,
respectively. The Company accounts for the sales of receivables in accordance
with the requirements of Statement of Financial Accounting Standards ("SFAS")
No. 125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities." Net discounts recognized on sales of
receivables are included in selling, general and administrative expenses in the
combined statements of income and amounted to $0.3 million and $0.1 million for
the years ended December 31, 1999 and 2000, respectively.

Revenue in excess of billings on completed contracts accounted for under
the percentage of completion method is included in accounts receivable and
amounted to $34.5 million at December 31, 1999 and $76.3 million at December
31, 2000.

Inventories--Inventories are stated at the lower of cost or market value.
Inventory costs include those costs directly attributable to products prior to
sale, including all manufacturing overhead but excluding costs to distribute.
Cost is determined on the last-in, first-out ("LIFO") basis for all domestic
inventories, except certain inventories relating to contracts-in-progress,
which are stated at the actual production cost incurred to date, reduced by
amounts identified with recognized revenue. At December 31, 2000, inventories
accounted for

F-8

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

under the LIFO method totaled $93.6 million. The first-in, first-out ("FIFO")
method is used to determine the cost for all other inventories.

Investments--Investments in companies in which FMC Technologies'
ownership interest is 50% or less and in which FMC Technologies exercises
significant influence over operating and financial policies, and majority owned
investments in which FMC Technologies' control is restricted or temporary in
nature, are accounted for using the equity method after eliminating the effects
of any material intercompany transactions. All other investments are carried at
their fair values or at cost, as appropriate.

Property, plant and equipment--Property, plant and equipment is recorded
at cost. Depreciation for financial reporting purposes is provided principally
on the straight-line basis over the estimated useful lives of the assets (land
improvements--20 years, buildings--20 to 50 years, and machinery and
equipment--3 to 18 years). Gains and losses are reflected in income upon sale
or retirement of assets. Expenditures that extend the useful lives of property,
plant and equipment or increase productivity are capitalized.

The Company reviews the recovery of the net book value of property, plant
and equipment for impairment whenever events and circumstances indicate that
the net book value of an asset may not be recoverable from the estimated
undiscounted future cash flows expected to result from its use and eventual
disposition. In cases where undiscounted expected future cash flows are less
than the net book value, an impairment loss is recognized equal to the amount
by which the net book value exceeds the fair value of the assets.

Goodwill and intangible assets--Goodwill and identifiable intangible
assets (such as trademarks) are amortized on a straight-line basis over their
estimated useful or legal lives, not exceeding 40 years. The Company
periodically evaluates the recoverability of the net book value of goodwill and
intangible assets, particularly in the case of a change in business
circumstances or other triggering event, based on expected undiscounted future
cash flows for each operation having a significant goodwill balance. In cases
where undiscounted expected future cash flows are less than the net book value,
an impairment loss is recognized equal to the amount by which the net book
value exceeds the fair value of the assets. Amortization of goodwill and
intangible assets was $16.4 million, $15.0 million and $15.7 million in 1998,
1999 and 2000, respectively.

Accounts payable--Amounts advanced by customers as deposits on orders not
yet billed and progress payments on contracts-in-progress are classified with
accounts payable and amounted to $181.8 million at December 31, 1999 and $120.2
million at December 31, 2000.

Income taxes--The provision for income taxes reflected in FMC
Technologies' combined financial statements has been computed as if FMC
Technologies were a stand-alone entity and filed separate tax returns. Current
income taxes are provided on income reported for financial statement purposes
adjusted for transactions that do not enter into the computation of income
taxes payable. Deferred tax liabilities and assets are measured using enacted
tax rates for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and liabilities.
Income taxes are not provided for the equity in undistributed earnings of
foreign subsidiaries or affiliates when it is management's intention that such
earnings will remain invested in those companies. Taxes are provided for in the
year in which the decision is made to repatriate the earnings.

Accumulated other comprehensive loss--At December 31, 1999, accumulated
other comprehensive loss consisted of cumulative foreign currency translation
losses of $75.1 million and a minimum pension liability adjustment of $3.2
million. At December 31, 2000, accumulated other comprehensive loss consisted
of cumulative foreign currency translation losses of $109.5 million and a
minimum pension liability adjustment of $1.9 million.

F-9

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Earnings per common share--Earnings per common share has been computed by
dividing net earnings by the weighted average number of common shares
outstanding during the period. For purposes of computing earnings per share,
weighted average shares outstanding assumes      shares of common stock of the
Company were outstanding for all periods presented.

Foreign currency translation--Assets and liabilities of most foreign
operations are translated at exchange rates in effect at the balance sheet
date, and the foreign operations' income statements are translated at the
monthly exchange rates for the period. For operations in non-highly
inflationary countries, translation gains and losses are recorded as a
component of accumulated other comprehensive income (loss) in stockholder's
equity until the foreign entity is sold or liquidated. For operations in highly
inflationary countries and where the local currency is not the functional
currency, inventories, property, plant and equipment, and other noncurrent
assets are converted to U.S. dollars at historical exchange rates, and all
gains or losses from conversion are included in net income. Foreign currency
effects on cash and cash equivalents and debt in hyperinflationary economies
are included in interest income or expense.

Derivative financial instruments and foreign currency transactions--The
Company uses derivative financial instruments selectively to offset exposure to
market risks arising from changes in foreign exchange rates. Derivative
financial instruments currently used by the Company primarily consist of
foreign currency forward contracts. Contracts are executed centrally to
minimize transaction costs on currency conversions and minimize losses due to
adverse changes in foreign currency markets. The Company evaluates and monitors
combined net exposures by currency and maturity, and external derivative
financial instruments correlate with that net exposure in all material
respects.

Gains and losses on hedges of existing assets and liabilities are
included in the carrying amounts of those assets or liabilities and are
ultimately recognized in income when those carrying amounts are converted.
Gains and losses related to hedges of firm commitments also are deferred and
included in the basis of the transaction when it is completed. Gains and losses
on unhedged foreign currency transactions are included in income as part of
cost of sales or services. Gains and losses on derivative financial instruments
that protect the Company from exposure in a particular currency, but do not
currently have a designated underlying transaction, are also included in income
as part of cost of sales or services. If a hedged item matures, is sold,
extinguished, or terminated, or is related to an anticipated transaction that
is no longer likely to take place, the derivative financial instrument related
to the hedged item is closed out and the related gain or loss is included in
income as part of cost of sales or services or interest expense, as appropriate
in relation to the hedged item.

Cash flows from hedging contracts are reported in the combined statements
of cash flows in the same categories as the cash flows from the transactions
being hedged.

Segment information--The Company's determination of its reportable
segments on the basis of its strategic business units and the commonalities
among the products and services within each segment corresponds to the manner
in which the Company's management reviews and evaluates operating performance.
The Company has combined certain similar operating segments that meet
applicable criteria established under SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information."

Energy Systems is a leading supplier of systems and services used in the
offshore, particularly deepwater, exploration and production of crude oil and
natural gas. Specialty Systems provides technologically advanced handling and
processing systems to industrial customers. See Note 15 for a further
description and additional information regarding the Company's segments.

F-10

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Note 4. Business Combinations and Divestitures

In August 1998, the Company acquired a majority of the voting stock of
CBV Industria Mecanica S.A. ("CBV"), a leading wellhead manufacturer in Brazil.
Following a 1999 tender offer for the remaining outstanding shares of CBV, the
Company holds a 98% ownership interest in CBV. CBV's operations are included in
the Energy Systems segment.

On February 16, 2000, the Company acquired York International
Corporation's Northfield Freezing Systems Group ("Northfield") for $39.8
million in cash and the assumption of certain liabilities. Northfield,
headquartered in Northfield, MN, is a manufacturer of freezing systems for
industrial food processing. Northfield's products include freezers, coolers and
dehydrators for the food processing industry. The Company has recorded goodwill
(to be amortized over 40 years) and other intangible assets totaling $41.6
million relating to the acquisition. Northfield's operations are included in
the Specialty Systems segment.

The Company completed smaller acquisitions and joint venture investments
during the years ended December 31, 1998, 1999 and 2000.

All acquisitions were accounted for using the purchase method of
accounting, and, accordingly, the purchase prices have been allocated to the
assets acquired and liabilities assumed based on the estimated fair values of
such assets and liabilities at the dates of acquisition. The excess of the
purchase prices over the fair values of the net tangible assets acquired has
been recorded as intangible assets, primarily goodwill, and is amortized over
periods ranging from 10 to 40 years. Had the acquisitions occurred at the
beginning of the earliest period presented, the effect on the Company's
combined financial statements would not have been significantly different than
those reported and, accordingly, pro forma financial information has not been
provided.

The purchase prices for all of the aforementioned acquisitions were
satisfied from cash flows from operations and external financing. Results of
operations of the acquired companies have been included in the Company's
combined statements of income from the respective dates of acquisition.

In July 1998, the Company completed the sale of its Crosby Valve business
to a subsidiary of Tyco International Ltd. ("Tyco") for cash and Tyco preferred
stock. In October 2000, the Company redeemed its investment in Tyco preferred
stock in exchange for cash proceeds of $128.7 million, including dividends of
$1.2 million. Crosby Valve was included in the Energy Systems segment until its
sale in July 1998.

Asset sales and the divestiture of Crosby Valve during the year ended
December 31, 1998 resulted in gains of $19.1 million. Asset sales during the
years ended December 31, 1999 and 2000 resulted in gains of $10.1 million and
$3.3 million, respectively.

Note 5. Asset Impairments and Restructuring and Other Charges

Restructuring spending related to a restructuring program initiated in
1997 was $13.2 million and $8.9 million in 1998 and 1999, respectively. All
restructuring activities were completed and there were no remaining accruals
related to this program at December 31, 1999.

In the third quarter of 1999, the Company recorded asset impairments and
restructuring and other one-time charges of $9.6 million ($5.9 million after
tax). Asset impairments of $6.0 million were required to write down certain
Specialty Systems assets. Estimated future cash flows attributed to these
assets indicated that an impairment of the assets had occurred. The
restructuring and other one-time charges of $3.6 million resulted primarily
from strategic decisions to divest or restructure certain corporate departments
and a number of businesses, including certain Specialty Systems and Energy
Systems operations. Restructuring spending under all 1999 programs totaled $2.7
million and $0.9 million in 1999 and 2000, respectively, and included severance

F-11

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

payments for 122 individuals. All restructuring activities were completed and
there were no remaining accruals related to these programs at December 31,
2000.

In the second quarter of 2000, FMC Technologies recorded asset
impairments and restructuring and other one-time charges totaling $11.3 million
before taxes ($6.9 million after tax). Asset impairments of $1.5 million were
required to write down certain Energy Systems equipment, as estimated future
cash flows attributed to these assets indicated that an impairment of the
assets had occurred. Restructuring and other one-time charges were $9.8
million, of which $8.0 million resulted primarily from strategic decisions to
restructure certain Specialty Systems operations, and included planned
reductions in force of 236 individuals. Restructuring charges of $1.4 million
at Energy Systems included severance costs related to planned reductions in
force of 68 individuals as a result of the delay in orders received from oil
and gas companies for major systems. Restructuring charges of $0.4 million
related to a corporate reduction in force. Restructuring spending under these
programs totaled $7.0 million in 2000. Management believes that the severance
of the remaining 53 employees and other activities associated with these
restructuring programs will be substantially complete by March 31, 2001.

Note 6. Inventories

Inventories are recorded at the lower of cost or market value. The
current replacement costs of inventories exceeded their recorded values by
$78.8 million and $82.3 million at December 31, 1999 and 2000, respectively.
During 1999, the Company reduced certain LIFO inventories that were carried at
lower than prevailing costs, resulting in a reduction of LIFO expense of $2.0
million. There were no reductions in LIFO inventories during 1998 and 2000.

Inventories consisted of the following:

December 31,
(In millions)                                          ----------------
1999     2000
-------  -------

Raw materials and purchased parts..................... $ 108.5  $ 112.0
Work in progress......................................   134.3    120.8
Manufactured parts and finished goods.................   109.4    124.6
-------  -------
Gross inventory before valuation adjustments and
LIFO reserves....................................   352.2    357.4
Valuation adjustments and LIFO reserves...............  (101.4)  (102.6)
-------  -------
Net inventory..................................... $ 250.8  $ 254.8
=======  =======

F-12

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Note 7. Property, Plant and Equipment

Property, plant and equipment consisted of the following:

December 31,
(In millions)                                             ---------------
1999     2000
-------  ------

Land and land improvements............................... $  17.3  $ 17.6
Buildings................................................   138.5   133.8
Machinery and equipment..................................   442.8   420.1
Construction in progress.................................    10.6    12.6
-------  ------
Total cost...........................................   609.2   584.1
Accumulated depreciation.................................  (328.6) (326.8)
-------  ------
Net property, plant and equipment.................... $ 280.6  $257.3
=======  ======

Depreciation expense was $49.0 million, $46.2 million and $41.2 million
in 1998, 1999 and 2000, respectively.

During 1999 and 2000, the Company entered into agreements for the sale
and leaseback of certain equipment. Net property, plant and equipment was
reduced by the equipment's carrying values of $29.1 million in 1999 and $13.7
million in 2000. The net cash proceeds received were $52.1 million in 1999 and
$22.5 million in 2000. Non-amortizing deferred credits were recorded in
conjunction with the sale transactions. These credits totaled $23.4 and $31.8
million at December 31, 1999 and 2000, respectively, and are included in other
long-term liabilities. The Company has annual fair market value purchase
options under the agreements. The leases, which end in December 2004, are
classified as operating leases in accordance with SFAS No. 13, "Accounting for
Leases."

Note 8. Debt

At December 31, 1999 and 2000, short-term debt included third-party debt
of FMC Technologies' foreign operations of $11.9 million and $14.0 million,
respectively. The weighted average interest rates on these outstanding
borrowings were approximately 8.8% and 8.4% at December 31, 1999 and 2000,
respectively. In addition, at December 31, 2000, short-term debt included $26.9
million of borrowings from MODEC International, LLC, a 37.5%-owned joint
venture, at an interest rate of approximately 7.2%.

Because FMC Corporation has historically funded most of its businesses
centrally, third-party debt and cash for operating companies has been minimal
and is not representative of what the Company's actual debt balances would have
been had the Company been a separate, stand-alone entity. See Note 18 for a
further description of the financing arrangements relating to the separation.

Note 9. Income Taxes

The operating results of FMC Technologies have been included in FMC
Corporation's U.S. consolidated income tax returns and the state and foreign
tax returns of FMC Corporation and its domestic affiliates. In certain
instances, income of domestic subsidiaries of FMC Technologies is reported on
separate state income tax returns of the domestic subsidiaries. In addition,
operating results of foreign operations of FMC Technologies have been included
in the tax returns of foreign affiliates of FMC Corporation. As long as FMC
Corporation continues to own at least 80% of the voting power and value of FMC
Technologies' outstanding capital stock, FMC Technologies will continue to be
included in the U.S. consolidated income tax returns of FMC Corporation and
certain state and foreign income tax returns of FMC Corporation and its
affiliates.

F-13

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

The provision for income taxes in FMC Technologies' combined financial
statements has been prepared as if FMC Technologies were a stand-alone entity
and filed separate tax returns. See Note 18 for a description of the tax
sharing agreements between FMC Corporation and FMC Technologies.

Domestic and foreign components of income from continuing operations
before income taxes are shown below:

Year Ended December
31,
(In millions)                                       --------------------
1998   1999   2000
------ ------  -----

Domestic..........................................  $ 76.8 $ 26.8  $11.6
Foreign...........................................    49.0   83.2   79.0
------ ------  -----
Total.........................................  $125.8 $110.0  $90.6
====== ======  =====

The provisions (benefits) for income taxes attributable to income from
continuing operations consisted of:

Year Ended December
31,
(In millions)                                       --------------------
1998   1999   2000
------ ------  -----

Current:
Federal.........................................  $ 10.4 $  7.4  $(0.2)
Foreign.........................................    20.8    7.9   11.2
State and local.................................     4.0    1.5    0.6
------ ------  -----
Total current.................................    35.2   16.8   11.6
Deferred..........................................     3.4   16.7   11.1
------ ------  -----
Total.........................................  $ 38.6 $ 33.5  $22.7
====== ======  =====

Total income tax provisions were allocated as follows:

Year Ended December
31,
(In millions)                                       --------------------
1998   1999   2000
------ ------  -----

Continuing operations.............................  $ 38.6 $ 33.5  $22.7
Discontinued operations...........................     --    (3.5)   --
------ ------  -----
Income tax provision..............................  $ 38.6 $ 30.0  $22.7
====== ======  =====

Significant components of the deferred income tax provisions attributable
to income from continuing operations before income taxes were as follows:

Year Ended December
31,
(In millions)                                       --------------------
1998   1999   2000
------ ------  -----

Deferred tax (exclusive of the valuation
allowance).......................................  $  3.3 $ 13.7  $11.8
Increase (decrease) in the valuation allowance for
deferred tax assets..............................     0.1    3.0   (0.7)
------ ------  -----
Deferred income tax provision.....................  $  3.4 $ 16.7  $11.1
====== ======  =====

F-14

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Significant components of the Company's deferred tax assets and
liabilities were as follows:

December 31,
(In millions)                                             --------------
1999    2000
------  ------

Reserves for discontinued operations and restructuring... $ 15.4  $ 19.1
Accrued pension and other postretirement benefits........   35.5    34.3
Other reserves...........................................   40.6    34.2
Net operating loss carryforwards.........................    6.1     5.4
Other....................................................   11.8    11.9
------  ------
Deferred tax assets....................................  109.4   104.9
Valuation allowance......................................   (6.1)   (5.4)
------  ------
Deferred tax assets, net of valuation allowance........  103.3    99.5
------  ------
Property, plant and equipment............................   25.7    25.7
Unbilled percentage of completion revenue and other......   28.6    35.9
------  ------
Deferred tax liabilities...............................   54.3    61.6
------  ------
Net deferred tax assets.............................. $ 49.0  $ 37.9
======  ======

The effective income tax rate applicable to income from continuing
operations before income taxes was different from the statutory U.S. federal
income tax rate due to the factors listed in the following table:

Year Ended
December 31,
(Percent of income from operations)                                  ----------------
1998  1999  2000
----  ----  ----

Statutory U.S. tax rate............................................   35%   35%   35%
Net difference:
Foreign sales corporation income subject to different tax rates..   (2)   (3)   (2)
State and local income taxes, less federal income tax benefit....    2     1     1
Foreign earnings subject to different tax rates..................   (7)   (6)  (11)
Tax on intercompany dividends and deemed dividends for tax
purposes........................................................    2     2     3
Nondeductible goodwill...........................................    2     1     1
Nondeductible expenses...........................................    1     1     1
Equity in earnings of affiliates not taxed.......................   (1)   --    --
Change in valuation allowance....................................   --    --    (1)
Other............................................................   (1)   (1)   (2)
---   ---   ---
Total difference...............................................   (4)   (5)  (10)
---   ---   ---
Effective tax rate.................................................   31%   30%   25%
===   ===   ===

U.S. income taxes have not been provided for the equity in undistributed
earnings of foreign consolidated subsidiaries ($172.1 million and $153.1
million at December 31, 1999 and 2000, respectively) or foreign unconsolidated
subsidiaries and affiliates ($2.8 million and $2.0 million at December 31, 1999
and 2000, respectively). Restrictions on the distribution of these earnings are
not significant. Foreign earnings taxable to the Company as dividends were $7.9
million, $14.0 million and $35.3 million in 1998, 1999 and 2000, respectively.

Note 10. Pensions and Postretirement and Other Benefit Plans

Through the end of 2000, substantially all of the Company's domestic
employees participated in FMC Corporation's qualified pension and
postretirement medical and life insurance plans after meeting certain
employment criteria, and may have participated in FMC Corporation's other
benefit plans depending on their

F-15

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

location and employment status. Foreign-based employees may also have been
eligible to participate in FMC Corporation-sponsored or government-sponsored
programs that were available to them.

Pension and postretirement amounts recognized in the Company's combined
financial statements have been determined on the basis of certain assumptions
regarding whether FMC Corporation or FMC Technologies will assume the assets
and liabilities related to specific groups of current and former FMC
Corporation employees. The ultimate distribution of pension and postretirement
benefit assets and liabilities will be governed by the employee benefits
agreement that the Company will enter into with FMC Corporation and will
involve actuarial calculations and determinations about the employment status
of FMC Corporation's corporate office employees. See Note 18.

The funded status of the Company's allocated portion of FMC Corporation's
domestic qualified and non-qualified pension, the United Kingdom pension plan,
one German pension plan and FMC Corporation's domestic postretirement health
care and life insurance benefit plans, together with the associated balances
recognized in the Company's combined financial statements as of December 31,
were as follows:

Other
Postretirement
Pensions         Benefits
(In millions)                                 --------------  ----------------
1999    2000    1999     2000
------  ------  -------  -------

Accumulated benefit obligation:
Plans with unfunded accumulated benefit
obligation.................................. $ 16.8  $ 16.6  $   --   $   --
======  ======  =======  =======
Change in benefit obligation:
Benefit obligation at January 1.............. $341.2  $328.2  $  39.3  $  36.5
Service cost...............................   15.3    12.6      1.1      1.0
Interest cost..............................   23.1    24.1      2.7      2.6
Actuarial gain.............................  (38.4)   (9.4)    (3.4)    (2.3)
Amendments.................................    0.7     0.2      --       0.1
Foreign exchange currency rate changes.....    --     (4.1)     --       --
Transfer of U.K. inactive group............    --     32.3      --       --
Plan participants' contributions...........    --      --       1.4      1.8
Benefits paid..............................  (13.7)  (16.1)    (4.6)    (4.6)
------  ------  -------  -------
Benefit obligation at December 31........  328.2   367.8     36.5     35.1
------  ------  -------  -------
Change in fair value of plan assets:
Fair value of plan assets at January 1.......  300.8   285.2      --       --
Actual return on plan assets...............   (3.4)   41.1      --       --
Foreign exchange currency rate changes.....    --     (4.1)     --       --
Transfer of U.K. inactive group............    --     33.6      --       --
Company contributions......................    1.5     1.5      3.2      2.8
Plan participants' contributions...........    --      --       1.4      1.8
Benefits paid..............................  (13.7)  (16.1)    (4.6)    (4.6)
------  ------  -------  -------
Fair value of plan assets at December
31......................................  285.2   341.2      --       --
------  ------  -------  -------
Funded status of the plans (liability).......  (43.0)  (26.6)   (36.5)   (35.1)
Unrecognized actuarial loss (gain)...........   23.0     5.0     (0.4)    (2.3)
Unrecognized prior service cost (income).....    8.3     7.0    (13.2)   (10.0)
Unrecognized transition asset................  (12.0)   (6.3)     --       --
------  ------  -------  -------
Net amounts recognized in the balance
sheets at December 31................... $(23.7) $(20.9) $ (50.1) $ (47.4)
======  ======  =======  =======
Prepaid benefit cost......................... $  5.0  $ 11.1  $    --  $    --
Accrued benefit liability....................  (34.6)  (36.1)   (50.1)   (47.4)
Intangible asset.............................    2.7     2.2      --       --
Accumulated other comprehensive income.......    3.2     1.9      --       --
------  ------  -------  -------
Net amounts recognized in the balance
sheets at December 31................... $(23.7) $(20.9) $ (50.1) $ (47.4)
======  ======  =======  =======

F-16

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

The following table summarizes the assumptions used and the components of
net annual benefit cost (income) for the years ended December 31:

Other
Postretirement
Pensions              Benefits
(In millions)                      ----------------------  -------------------
1998    1999    2000   1998   1999   2000
------  ------  ------  -----  -----  -----

Assumptions as of September 30:
Discount rate.....................   6.75%   7.50%   7.50%  6.75%  7.50%  7.50%
Expected return on assets.........   9.20%   9.25%   9.25%   --     --     --
Rate of compensation increase.....   5.00%   5.00%   4.25%   --     --     --
------  ------  ------  -----  -----  -----
Components of net annual benefit
cost:
Service cost.................... $ 12.1  $ 15.3  $ 12.6  $ 1.2  $ 1.1  $ 1.0
Interest cost...................   20.4    23.1    24.1    2.9    2.7    2.6
Expected return on plan assets..  (24.7)  (26.1)  (27.1)   --     --     --
Amortization of transition
asset..........................   (7.0)   (7.0)   (6.8)   --     --     --
Amortization of prior service
cost...........................    1.4     1.6     1.6   (2.8)  (3.1)  (3.1)
Recognized net actuarial (gain)
loss...........................   (0.2)    1.1     0.6   (0.4)   --    (0.3)
------  ------  ------  -----  -----  -----
Net annual benefit cost....... $  2.0  $  8.0  $  5.0  $ 0.9  $ 0.7  $ 0.2
======  ======  ======  =====  =====  =====

The change in the discount rate used in determining domestic pension and
other postretirement benefit obligations from 6.75% to 7.50% decreased the
projected benefit obligations by $33.5 million at December 31, 1999.

The change in the rate of compensation increase used in determining
domestic pension plan obligations from 5.0% to 4.25% decreased the projected
benefit obligation by $7.8 million at December 31, 2000.

For measurement purposes, a 6.0% annual rate of increase in the per
capita cost of health care benefits was assumed for 1999 and 2000. The rate was
assumed to decrease to 5.0% for 2001 and remain at that level thereafter.

Assumed health care cost trend rates have an effect on the amounts
reported for the health care plan. A one-percentage point change in the assumed
health care cost trend rates would have the following effects:

One        One
Percentage Percentage
(In millions)                                        Point      Point
Increase   Decrease
---------- ----------

Effect on total of service and interest cost
components.......................................    $ --      $ --
Effect on postretirement benefit obligation.......    $0.3      $(0.2)

The Company has adopted SFAS No. 87, "Employers' Accounting for
Pensions," for its pension plan for employees in the United Kingdom and for one
pension plan in Germany. The financial impact of compliance with SFAS No. 87
for other non-U.S. pension plans is not materially different from the locally
reported pension expense. The cost of providing pension benefits for foreign
employees was $3.0 million in 1998, $3.7 million in 1999 and $3.4 million in
2000.

To effect a separation of the pension plan in the United Kingdom, FMC
Technologies was allocated the assets and liabilities associated with inactive
participants of FMC Corporation's divested process additives division effective
December 31, 2000. FMC Technologies will also assume any net annual benefit
cost or

F-17

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

income associated with these participants beginning in 2001. The addition of
this participant group increased the pension's projected benefit obligation by
$32.3 million, the pension plan's assets by $33.6 million and the pension's
prepaid benefit cost by $5.8 million at December 31, 2000.

The Company has recognized expense of $7.6 million, $7.5 million and $7.5
million in 1998, 1999 and 2000, respectively, for FMC Technologies' share of
matching contributions to the FMC Corporation Savings and Investment Plan, a
qualified domestic salary-reduction plan under Section 401(k) of the Internal
Revenue Code.

Note 11. Incentive Compensation Plans

The Company did not grant stock-based compensation or maintain its own
incentive compensation programs during the three years ended December 31, 2000.
However, certain employees of the Company participate or have participated in
FMC Corporation's 1995 Management Incentive Plan (the "Incentive Plan") and FMC
Corporation's 1995 Stock Option Plan (the "Option Plan"), which provide
incentives and awards to key employees of FMC Corporation. The Incentive Plan
and the Option Plan are administered by a committee of the Board of Directors
of FMC Corporation, which reviews and approves financial targets as well as the
time and conditions for payment.

The Incentive Plan provides for the grant of incentive awards payable
partly in cash and partly in FMC Corporation common stock. The Company was
allocated expense of $3.8 million, $6.8 million and $5.7 million during the
years ended December 31, 1998, 1999 and 2000, respectively, for the Incentive
Plan. This expense represented the cost of FMC Corporation restricted stock and
bonuses granted to employees and directors of the Company and to certain
employees of FMC Corporation who provided services to the Company. The Option
Plan provides for regular grants of FMC Corporation stock options. The exercise
price for options is not less than the fair market value of the stock at the
date of grant. The contractual life of each option is generally ten years and
substantially all options vest in three to four years. FMC Corporation accounts
for stock options under the provisions of APB Opinion No. 25 "Accounting for
Stock Issued to Employees." Accordingly, no compensation cost has been
recognized for the Incentive Plan and Option Plan and therefore, no
compensation cost has been allocated to the Company.

See Note 18 for a description of new incentive compensation arrangements
that are expected to be adopted by the Company before completion of the
offering.

Note 12. Discontinued Operations

The Company has retained specified self-insured product liabilities
associated with specified discontinued businesses of FMC Corporation related to
past operations, primarily the construction equipment, marine and rail and
mining equipment divisions, which were divested or closed before 1984. Reserves
related to these liabilities amounted to $33.8 million at December 31, 1999 and
$30.6 million at December 31, 2000.

In the fourth quarter of 1999, FMC Technologies provided $9.0 million
($5.5 million after tax) to increase its recorded liabilities based on revised
actuarial estimates of the ultimate cost of product liability claims related to
these discontinued businesses. During 1998, 1999 and 2000, respectively, FMC
Technologies spent $2.9 million, $7.4 million and $3.2 million in settlement of
these liabilities.

F-18

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Note 13. Foreign Currency

The Norwegian krone and Swedish krona were relatively stable against the
U.S. dollar in 1998 while the Mexican peso weakened and certain Asian
currencies experienced significant intra-year volatility. Additionally in 1998,
the Japanese yen reversed its previous trend and strengthened. Exposures in
1999 were affected primarily by the weakening of the Norwegian krone and
Swedish krona as well as the stronger Japanese yen. In 2000, foreign currency
transactional exposures were most affected by the weakening of the British
pound, Norwegian krone and Swedish krona against the U.S. dollar. The Company
mitigates its transactional exposure to variability in currency exchange rates
by entering into foreign exchange forward and option contracts with third
parties.

During 2000, the Company's earnings were negatively affected by
approximately $6 million before tax due to the impact of weaker European
currencies (particularly the euro, Norwegian krone and Swedish krona) on the
Company's foreign currency-denominated sales, which was partly offset by the
benefit of paying certain local operating costs in the same European
currencies.

Net income for 1998, 1999 and 2000 included aggregate foreign currency
gains (losses) of $(2.5) million, $3.8 million and $4.5 million, respectively.

The following table presents the foreign currency adjustments to key
balance sheet categories and the offsetting adjustments to accumulated other
comprehensive loss or to income for the years ended December 31:

Gains (Losses)
(In millions)                                      ---------------------
1998    1999    2000
-----  ------  ------

Cash and cash equivalents......................... $(1.2) $  9.8  $ (1.6)
Other working capital.............................  (2.5)  (20.7)  (26.2)
Property, plant and equipment, net................  (0.7)   (8.3)   (8.8)
Investments.......................................  (2.8)    6.3     0.7
Debt..............................................   0.7     0.7    (0.1)
Other.............................................   0.1   (23.3)    6.1
-----  ------  ------
$(6.4) $(35.5) $(29.9)
=====  ======  ======
Other comprehensive loss.......................... $(3.9) $(39.3) $(34.4)
Gain (loss) included in income....................  (2.5)    3.8     4.5
-----  ------  ------
$(6.4) $(35.5) $(29.9)
=====  ======  ======

Note 14. Financial Instruments

Derivative financial instruments--At December 31, 1999 and 2000,
derivative financial instruments consisted primarily of foreign exchange
forward contracts. The Company entered into these agreements to manage the
currency risk associated with purchases and sales denominated in currencies
other than the U.S. dollar. Substantially all of the foreign exchange forward
contracts relate to receivables, payables and intercompany transactions and are
accounted for as hedges.

During 1998, the Company entered into forward contracts with a notional
value of $33.0 million to offset various risks associated with the potential
devaluation of the Brazilian real. The contracts matured in 1999, subsequent to
the devaluation of the Brazilian real. Losses from the decline in value of the
Company's real-denominated investments during the 1999 devaluation, as well as
1999 economic losses related to the Brazilian economic crisis, were offset by
gains on the forward contracts.

F-19

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

As of December 31, 1999 and 2000, the Company held foreign exchange
forward contracts with notional amounts of $388.7 million and $417.8 million,
respectively, in which foreign currencies (primarily Norwegian krone, Singapore
dollars and British pounds in 1999 and 2000) were purchased, and approximately
$254.2 million and $335.7 million, respectively, in which foreign currencies
(primarily Singapore dollars, British pounds, euros and Norwegian krone in 1999
and Norwegian krone, Swedish krona, Singapore dollars and British pounds in
2000) were sold. Notional amounts are used to measure the volume of derivative
financial instruments and do not represent potential gains or losses on these
agreements.

Fair value disclosures--The carrying amounts of cash and cash
equivalents, trade receivables, other current assets, accounts payable, amounts
included in investments and accruals meeting the definition of financial
instruments and short-term debt approximate fair value.

Fair values relating to foreign exchange contracts were $(5.6) million
and $(18.7) million at December 31, 1999 and 2000, respectively, and reflect
the estimated net amounts that the Company would pay to terminate the contracts
at the reporting date based on quoted market prices of comparable contracts at
those dates. The carrying values of foreign exchange contracts were $(1.7)
million and $5.0 million at December 31, 1999 and 2000, respectively.

Standby letters of credit and financial guarantees--In the ordinary
course of business with customers, vendors and others, the Company is
contingently liable for performance under letters of credit and other financial
guarantees totaling approximately $90 million at December 31, 2000. The
Company's management does not believe it is practicable to estimate the fair
values of these financial instruments and does not expect any losses from their
resolution.

F-20

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Note 15. Segment Information

Segment operating profit

Segment operating profit is defined as total segment revenue less segment
operating expenses. The following items have been excluded in computing segment
operating profit: corporate staff expense, interest income and expense
associated with corporate debt facilities and investments, income taxes, asset
impairments and restructuring and other charges (Note 5), LIFO inventory
adjustments and other income and expense items.

Year ended December 31,
(In millions)                                ----------------------------
1998      1999      2000
--------  --------  --------

Revenue:

Energy Systems.............................  $1,320.9  $1,129.4  $1,037.3
Specialty Systems..........................     868.2     826.3     839.5
Eliminations...............................      (3.6)     (2.6)     (1.6)
--------  --------  --------
Total revenue..........................  $2,185.5  $1,953.1  $1,875.2
========  ========  ========
Income from continuing operations before
income taxes:

Energy Systems.............................  $   95.2  $   97.1  $   72.4
Specialty Systems..........................      72.8      64.2      69.0
--------  --------  --------
Total segment operating profit...........     168.0     161.3     141.4
Corporate expenses (1).....................     (36.4)    (35.3)    (33.7)
Other expense, net (2).....................      (3.9)     (6.9)     (1.5)
--------  --------  --------
Operating profit before asset
impairments, restructuring and other
charges, net interest income (expense)
and income tax expense..................     127.7     119.1     106.2
Asset impairments (3)......................       --       (6.0)     (1.5)
Restructuring and other charges (4)........       --       (3.6)     (9.8)
Net interest income (expense)..............      (1.9)      0.5      (4.3)
--------  --------  --------
Total income from continuing operations
before income taxes...................  $  125.8  $  110.0  $   90.6
========  ========  ========

--------
(1) Corporate expenses primarily include staff expenses.
(2) Other expense, net consists of all other corporate items, including LIFO
inventory adjustments and pension income or expense.
(3) Asset impairments in 1999 relate to Specialty Systems. Asset impairments in
2000 relate to Energy Systems. See Note 5.
(4) Restructuring and other charges in 1999 relate to Energy Systems ($1.5
million), Specialty Systems ($1.1 million) and Corporate ($1.0 million).
Restructuring and other charges in 2000 relate to Energy Systems ($1.4
million) and Specialty Systems ($8.0 million) and Corporate ($0.4 million).
See Note 5.

Segment assets and liabilities

Segment assets and liabilities are those assets and liabilities that are
recorded and reported by segment operations. Segment operating capital employed
represents segment assets less segment liabilities. Segment assets exclude
corporate items, which are principally cash equivalents, LIFO reserves,
deferred income tax benefits, eliminations of intercompany receivables,
property, plant and equipment not attributable to

F-21

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

a specific segment, and credits relating to the sale of receivables. Segment
liabilities exclude substantially all debt, income taxes, pension and other
postretirement benefit liabilities, restructuring reserves, intercompany
eliminations, reserves for discontinued operations and deferred gains on the
sale and leaseback of equipment.

December 31,
(In millions)                                         -----------------
1999     2000
-------- --------

Operating Capital Employed (1):
Energy Systems....................................... $  439.3 $  505.0
Specialty Systems....................................    364.4    428.1
-------- --------
Total operating capital employed...................    803.7    933.1
Segment liabilities included in total operating
capital employed....................................    511.4    446.6
Corporate items (2)..................................    158.1     (6.0)
-------- --------
Total assets..................................... $1,473.2 $1,373.7
======== ========
Segment Assets:
Energy Systems....................................... $  749.4 $  752.1
Specialty Systems....................................    565.7    627.6
-------- --------
Total segment assets...............................  1,315.1  1,379.7
Corporate items (2)..................................    158.1     (6.0)
-------- --------
Total assets..................................... $1,473.2 $1,373.7
======== ========

--------
(1) FMC Technologies' management views operating capital employed, which
consists of assets, net of liabilities, reported by the Company's
operations (and excludes corporate items such as cash equivalents, debt,
pension liabilities, income taxes and LIFO reserves), as a primary measure
of segment capital.
(2) Corporate items include cash equivalents, LIFO reserves, deferred income
tax benefits, eliminations of intercompany receivables, property, plant and
equipment not attributable to a specific segment and credits relating to
the sale of receivables. As of December 31, 1999, Corporate items also
include $127.5 million of Tyco preferred stock, which was received as part
of the sale of Crosby Valve to a subsidiary of Tyco in July 1998. The
Company redeemed its investment in Tyco preferred stock in October 2000.
See Note 4.

Geographic segment information

Geographic segment sales represent sales by location of the Company's
customers or their headquarters. Geographic segment long-lived assets include
investments, net property, plant and equipment, and certain other non-current
assets. Intangible assets of acquired companies are not reported by geographic
segment.

Revenue

Year Ended December 31,
(In millions)                                  --------------------------
1998     1999     2000
-------- -------- --------

Third party revenue (by location of customer)
United States................................. $  830.3 $  713.2 $  734.7
Norway........................................    294.2    221.1    206.0
All other countries...........................  1,061.0  1,018.8    934.5
-------- -------- --------
Total revenue............................. $2,185.5 $1,953.1 $1,875.2
======== ======== ========

F-22

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Long-lived assets

December 31,
(In millions)                                               -------------
1999   2000
------ ------

United States.............................................. $210.9 $195.4
Brazil.....................................................   31.6   32.5
All other countries........................................  101.7   71.8
------ ------
Total long-lived assets................................ $344.2 $299.7
====== ======

Other business segment information

Research and
Capital      Depreciation and     development
expenditures      amortization         expense
----------------- ----------------- -----------------
Year ended        Year ended        Year ended
December 31,      December 31,      December 31,
(In millions)             ----------------- ----------------- -----------------
1998  1999  2000  1998  1999  2000  1998  1999  2000
----- ----- ----- ----- ----- ----- ----- ----- -----

Energy Systems........... $30.4 $14.7 $20.2 $36.5 $31.4 $29.8 $24.7 $25.7 $33.8
Specialty Systems........  28.9  26.1  21.8  26.9  28.2  28.2  26.0  26.1  22.9
Corporate................   0.1   0.1   1.1   3.2   2.7   1.1   --    --    --
----- ----- ----- ----- ----- ----- ----- ----- -----
Total................ $59.4 $40.9 $43.1 $66.6 $62.3 $59.1 $50.7 $51.8 $56.7
===== ===== ===== ===== ===== ===== ===== ===== =====

Note 16. Quarterly Information (Unaudited)

(In millions, except per                1999                              2000
share data)               --------------------------------- ---------------------------------
1st                               1st
Qtr.  2nd Qtr. 3rd Qtr. 4th Qtr.  Qtr.  2nd Qtr. 3rd Qtr. 4th Qtr.
------ -------- -------- -------- ------ -------- -------- --------

Revenue.................  $471.7  $510.7   $469.9   $500.8  $441.5  $495.3   $452.3   $486.1
======  ======   ======   ======  ======  ======   ======   ======
Income from continuing
operations before net
interest income
(expense) and income
tax expense............  $ 17.0  $ 30.2   $ 22.5   $ 39.8  $ 12.8  $ 23.8   $ 25.1   $ 33.2
======  ======   ======   ======  ======  ======   ======   ======
Income from continuing
operations.............  $ 11.9  $ 21.1   $ 15.7   $ 27.8  $  8.8  $ 17.0   $ 18.0   $ 24.1
Discontinued operations,
net of income taxes....     --      --       --      (5.5)    --      --       --       --
------  ------   ------   ------  ------  ------   ------   ------
Net income..............  $ 11.9  $ 21.1   $ 15.7   $ 22.3  $  8.8  $ 17.0   $ 18.0   $ 24.1
======  ======   ======   ======  ======  ======   ======   ======
Earnings per common
share..................  $       $        $        $       $       $        $        $
======  ======   ======   ======  ======  ======   ======   ======

F-23

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Note 17. Commitments and Contingent Liabilities

FMC Technologies leases office space, plants and facilities and various
types of manufacturing, data processing and transportation equipment. Leases of
real estate generally provide for payment of property taxes, insurance and
repairs by FMC Technologies. Capital leases are not significant. Rent expense
under operating leases amounted to $22.8 million, $24.5 million and $29.3
million in 1998, 1999 and 2000, respectively.

Minimum future rental payments under noncancelable leases aggregated
approximately $125.6 million as of December 31, 2000 and are payable as
follows: $23.3 million in 2001, $22.8 million in 2002, $21.3 million in 2003,
$20.1 million in 2004, $11.4 million in 2005 and $26.7 million thereafter.

The Company also has certain other contingent liabilities arising from
litigation, claims, performance guarantees, and other commitments incident to
the ordinary course of business. The Company's management believes that the
ultimate resolution of its known contingencies will not materially affect the
combined financial position, results of operations or cash flows of FMC
Technologies.

Note 18. Proposed Public Offering of Common Stock (Unaudited)

The Offering

The Board of Directors of FMC Corporation and the Company's Board of
Directors have authorized management of the Company to file a registration
statement with the Securities and Exchange Commission for the offering. It is
anticipated that the Company will file an Amended and Restated Certificate of
Incorporation to authorize     shares of FMC Technologies common stock and
shares of FMC Technologies preferred stock. There are currently 1,000 shares of
FMC Technologies common stock outstanding.

Before the closing of the offering, FMC Corporation intends to contribute
substantially all of its ownership interests in the businesses included in
these combined financial statements to the Company with the remainder to be
transferred shortly after the offering. These financial statements reflect the
combined results of the businesses as if they had been so contributed to the
Company for all periods. Subsequent to the contribution, all of the businesses
included in these combined financial statements will be consolidated
subsidiaries or divisions of the Company or will be investments of the Company
or its subsidiaries.

The Distribution

FMC Corporation has advised the Company that it currently intends to
distribute its remaining ownership interest in the Company to common
stockholders of FMC Corporation. If completed, the distribution, as previously
announced, is expected to take the form of a spin-off in which FMC Corporation
distributes all of the Company's common stock that it owns through a special
dividend to FMC Corporation common stockholders. If circumstances change, FMC
Corporation may distribute its remaining ownership interest in the Company
through an exchange offer by FMC Corporation, in which its common stockholders
would be offered the option of tendering some or all of their shares in
exchange for FMC Technologies common stock, and a subsequent spin-off of FMC
Corporation's remaining ownership interest in the Company. FMC Corporation has
advised the Company that it does not intend to complete the distribution unless
it receives a favorable tax ruling from the Internal Revenue Service as to the
tax-free nature of the distribution for U.S. federal income tax purposes and
the final approval of the Board of Directors of FMC Corporation, among other
conditions. FMC Corporation has also advised the Company that it currently
anticipates that this distribution will occur by the end of calendar year 2001.

FMC Corporation has advised the Company that the final determination as
to the completion, timing, structure and terms of the distribution will be
based on financial and business considerations and prevailing

F-24

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

market conditions. In addition, FMC Corporation has advised the Company that,
as permitted by the separation and distribution agreement between FMC
Corporation and the Company described below, it will not complete the
distribution if its Board of Directors determines that the distribution is not
in the best interests of FMC Corporation and its stockholders. FMC Corporation
has the sole discretion to determine whether or not to complete the
distribution and, if it decides to complete the distribution, to determine the
timing, structure and terms of the distribution.

Financing Arrangements

FMC Technologies anticipates that its debt after giving effect to the
offering will be approximately $   million or $   million if the underwriters'
over-allotment option is fully exercised, assuming that in each case the net
proceeds of the offering are used to reduce debt. In addition, pursuant to the
separation and distribution agreement between FMC Technologies and FMC
Corporation, this amount will be decreased to reflect net cash generated or
increased to reflect net cash utilized by FMC Technologies' operations from
January 1, 2001 to the closing of the offering. FMC Technologies expects that
FMC Technologies' debt will consist of one or more of the following: third
party revolving credit facilities, commercial paper, uncommitted bank
facilities and medium term notes.

Employee Benefit Plans

Effective at the date of the offering, FMC Technologies will establish
its own qualified and non-qualified U.S. defined benefit pension plans, and
effective immediately after the distribution, FMC Technologies will establish
any additional pension and employee benefit plans. The material terms of FMC
Technologies' pension and employee benefit plans will generally mirror FMC
Corporation's plans as in effect at that time. The employee benefits agreement
between the Company and FMC Corporation does not preclude FMC Technologies from
discontinuing or changing its plans at any time, with certain exceptions
relating to health and welfare plans. Employees of FMC Technologies will begin
participating in FMC Technologies' new plans at the date of the establishment
of each plan. Certain FMC Corporation employees will not begin participating in
FMC Technologies' plans until they become employees of FMC Technologies.

FMC Technologies' plans will assume all obligations under FMC
Corporation's plans to employees and former employees allocated to FMC
Technologies. Specified assets funding these obligations, including assets held
in trusts, will be transferred from trusts and other funding vehicles
associated with FMC Corporation's plans to the corresponding trusts and other
funding vehicles associated with FMC Technologies' plans as soon as
practicable. FMC Technologies' plans will provide that any employee or former
employee allocated to it will receive full recognition and credit under these
plans for all service, all compensation, and all other benefit-affecting
determinations that would have been recognized under the corresponding FMC
Corporation plan. However, there will be no duplication of benefits payable by
FMC Corporation or its plans.

Prior to the offering, FMC Technologies will adopt the FMC Technologies,
Inc. Incentive Compensation and Stock Plan (the "FMC Technologies Stock Plan").
The Company's employees, consultants and directors and employees, consultants
and directors of its subsidiaries will be eligible to participate in the FMC
Technologies Stock Plan. At the time of the offering, the Company expects to
grant options to purchase shares of FMC Technologies common stock under the FMC
Technologies Stock Plan at an exercise price equal to the offering price per
share in the offering.

In addition, as of the closing date of the offering, FMC Technologies
intends to replace each of the shares of FMC Corporation restricted stock held
by the Company's employees and a portion of those shares held by the Company's
directors with shares of the Company's restricted stock that will be issued
pursuant to the FMC Technologies Stock Plan. The historical combined financial
statements reflect an allocation of expense related to FMC Corporation's
existing restricted stock program. To the extent that the Company replaces any

F-25

FMC TECHNOLOGIES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

FMC Corporation restricted stock with FMC Technologies restricted stock prior
to the distribution, the Company may incur incremental compensation expense. It
is currently estimated that approximately $    million of expense will be
recorded over the vesting period related to such restricted stock. Based on the
number of shares of FMC Corporation restricted stock held by the Company's
employees and directors on     , 2001, an assumed offering price per share of
FMC Technologies common stock in the offering of $     and a price per share of
FMC Corporation common stock of $    ,      shares of FMC Technologies common
stock would be issued.

FMC Technologies intends to replace all of the FMC Corporation options
held by the Company's employees and former employees of its businesses and a
portion of the FMC Corporation options held by the Company's directors as of
the date of the distribution with options to purchase shares of the Company
common stock that will be issued pursuant to the FMC Technologies Stock Plan.

Arrangements Between FMC Technologies and FMC Corporation

The separation and distribution agreement contains the key provisions
relating to the separation of FMC Technologies' businesses from those of FMC
Corporation, the offering and FMC Corporation's planned distribution of FMC
Technologies common stock. The separation and distribution agreement identifies
the assets to be transferred to FMC Technologies by FMC Corporation and the
liabilities to be assumed by FMC Technologies from FMC Corporation. The
separation and distribution agreement also describes when and how these
transfers and assumptions will occur. In addition, FMC Technologies has entered
into additional agreements with FMC Corporation governing various interim and
ongoing relationships between FMC Corporation and FMC Technologies following
the closing date of the offering. These other agreements include: a tax sharing
agreement; an employee benefits agreement; a transition services agreement; and
a license agreement for the FMC corporate name and logo. FMC Technologies and
FMC Corporation will execute the separation and distribution agreement and
ancillary agreements before the closing of the offering.

Earnings Per Common Share

Earnings per common share from continuing operations has been computed by
dividing income from continuing operations by the weighted average number of
common shares outstanding during the period. For purposes of computing earnings
per share, weighted average shares outstanding assumes     common shares
outstanding for all periods presented.

Unaudited pro forma as adjusted basic earnings per common share for the
year ended December 31, 2000 has been calculated by dividing net earnings by
the weighted average shares outstanding as calculated in accordance with
Securities and Exchange Commission rules for initial public offerings. Such
rules require that the weighted average share calculation give retroactive
effect to any changes in the capital structure of the Company as well as the
number of shares whose proceeds will be used to pay any dividend or repay any
debt as reflected in the pro forma adjustments. It is anticipated that all of
the proceeds from the offering will be used to repay debt. Therefore, pro forma
weighted average shares of the Company for the year ended December 31, 2000,
are comprised of     shares of common stock to be outstanding and
shares of common stock included in the offering, assuming all such shares are
outstanding as of the beginning of the period.

Unaudited pro forma as adjusted diluted earnings per common share from
continuing operations is computed using unaudited pro forma as adjusted income
from continuing operations divided by the assumed number of shares outstanding
of   . This share amount is calculated assuming that (a) prior to the offering
common shares are outstanding, (b) the sale of    shares in the offering
and (c) the dilutive effect of the Company's restricted stock to be issued to
the Company's employees and directors in replacement of FMC Corporation
restricted stock is    shares upon completion of the offering.

F-26

[DESCRIPTION OF GRAPHIC TO COME BY AMENDMENT]

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Through and including        , 2001 (the 25th day after the date of this
prospectus), all dealers effecting transactions in these securities, whether or
not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealers' obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.

Shares

[LOGO]

FMC Technologies, Inc.

Common Stock

---------------

P R O S P E C T U S

---------------

Merrill Lynch & Co.

Credit Suisse First Boston

Salomon Smith Barney

, 2001

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth the estimated costs and expenses, other
than underwriting discounts and commissions, payable in connection with the
sale of common stock being registered, all of which will be paid by the
Registrant:

Amount
-------

Securities and Exchange registration fee......................... $87,500
NASD filing fee..................................................  30,500
New York Stock Exchange listing fee..............................    *
Printing expenses................................................    *
Legal fees and expenses..........................................    *
Accounting fees and expenses.....................................    *
Blue sky fees and expenses.......................................    *
Transfer agent and registrar fees and expenses...................    *
Miscellaneous....................................................    *
-------
Total.......................................................... $  *
=======

--------
*To be filed by amendment

Item 14. Indemnification of Directors and Officers

Section 145 of the General Corporation Law of the State of Delaware
provides as follows:

A corporation shall have the power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation)
by reason of the fact that the person is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by the person in connection with such action,
suit or proceeding if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interest of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe the person's conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement, conviction or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create
a presumption that the person did not act in good faith and in a manner which
the person reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that the person's conduct was unlawful.

A corporation shall have the power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred
by the person in connection with the defense or settlement of such action or
suit if the person acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the corporation and
except that no indemnification shall be made in respect to any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.

As permitted by the General Corporation Law of the State of Delaware, the
Registrant has included in its Certificate of Incorporation a provision to
eliminate the personal liability of its directors for monetary

II-1

damages for breach of their fiduciary duties as directors, subject to certain
exceptions. In addition, the Registrant's Certificate of Incorporation and
Bylaws provide that the Registrant is required to indemnify its officers and
directors under certain circumstances, including those circumstances in which
indemnification would otherwise be discretionary, and the Registrant is
required to advance expenses to its officers and directors as incurred in
connection with proceedings against them for which they may be indemnified.

The U.S. Purchase Agreement and the International Purchase Agreement are
expected to provide that the Underwriters are obligated, under certain
circumstances, to indemnify directors, officers and controlling persons of the
Registrant against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. Reference is made to the form of U.S.
Purchase Agreement and the form of International Purchase Agreement to be filed
as Exhibits 1.1 and 1.2 hereto, respectively.

The Separation and Distribution Agreement by and among the Registrant and
FMC Corporation is expected to provide for indemnification by the Registrant of
FMC Corporation and its directors, officers and employees for certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.

The Registrant maintains directors and officers liability insurance for
the benefit of its directors and officers.

Item 15. Recent Sales of Unregistered Securities

Registrant has not sold any securities, registered or otherwise, within
the past three years, except for the shares issued upon formation to
Registrant's sole stockholder, FMC Corporation.

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits

Exhibit
Number                              Exhibit Title
-------                             -------------

1.1    --Form of U.S. Purchase Agreement.*

1.2    --Form of International Purchase Agreement.*

2.1    --Form of Separation and Distribution Agreement.*

3.1    --Registrant's Amended and Restated Certificate of Incorporation.*

3.2    --Registrant's Amended and Restated Bylaws.*

4.1    --Form of Specimen Certificate for Registrant's Common Stock.*

4.2    --Form of Preferred Share Purchase Rights Agreement between the
Registrant and     , as Rights Agent.*

5.1    --Opinion of Wachtell, Lipton, Rosen & Katz.*

10.1    --Form of Tax Sharing Agreement.*

10.2    --Form of Employee Benefits Agreement.*

10.3    --Form of Transition Services Agreement.*

10.4    --Registrant's Incentive Compensation and Stock Plan.*

21.1    --Subsidiaries of the Registrant.*

23.1    --Consent of KPMG LLP.

23.2    --Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit 5.1).*

24.1    --Powers of Attorney (contained on page II-4).

--------
*  To be filed by amendment.

II-2

(b) Financial Statement Schedules

Schedules have been omitted because the information required to be set
forth therein is not applicable or is shown in the combined financial
statements or notes thereto.

Item 17. Undertakings

The undersigned Registrant hereby undertakes:

(1) That for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed
to be part of this Registration Statement as of the time it was declared
effective.

(2) That for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.

(3) To provide to the underwriters at the closing specified in the
underwriting agreements, certificates in such denominations and registered
in such names as required by the underwriters to permit prompt delivery to
each purchaser.

(4) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of
such issue.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the city of Chicago,
state of Illinois, on February 20, 2001.

FMC TECHNOLOGIES, INC.

/s/ William H. Schumann III
By: _________________________________
Name: William H. Schumann III
Title: Senior Vice President,
Chief Financial
Officer and Director

Know all persons by these presents, that each person whose signature
appears below, as a director or officer of the registrant, does hereby make,
constitute and appoint Stephanie K. Kushner, Randall S. Ellis and Steven A.
Shapiro, or any one of them acting alone, his lawful attorneys, with full power
of substitution and resubstitution, in his name, place and stead, in any and
all capacities, to execute and sign this registration statement on Form S-1 for
the registration of shares of common stock of the registrant, par value $0.01
per share, and any associated preferred share purchase rights to be issued in
the initial public offering by the registrant, any registration statement for
the same offering that is to be effective upon filing pursuant to Rule 462(b)
promulgated under the Securities Act of 1933, as amended, and any and all
amendments or post-effective amendments to this registration statement, with
all exhibits and any and all documents required to be filed with respect
thereto with the Securities and Exchange Commission or any regulatory
authority, giving and granting unto said attorneys full power and authority to
do and perform such actions as fully as they might have done or could do if
personally present and executing any of said documents. This power of attorney
may be signed in several counterparts.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.

Signature                           Title                    Date
---------                           -----                    ----

/s/ Joseph H. Netherland       Chief Executive Officer,      February 20, 2001
____________________________________  President and Director
Joseph H. Netherland          (Principal Executive
Officer)

/s/ Robert N. Burt          Chairman and Director         February 20, 2001
____________________________________
Robert N. Burt

/s/ William H. Schumann III      Senior Vice President, Chief  February 20, 2001
____________________________________  Financial Officer and
William H. Schumann III         Director (Principal
Financial Officer and
Principal Accounting
Officer)

II-4

EXHIBIT INDEX

Exhibit
Number                              Exhibit Title
-------                             -------------

1.1    --Form of U.S. Purchase Agreement.*

1.2    --Form of International Purchase Agreement.*

2.1    --Form of Separation and Distribution Agreement.*

3.1    --Registrant's Amended and Restated Certificate of Incorporation.*

3.2    --Registrant's Amended and Restated Bylaws.*

4.1    --Form of Specimen Certificate for Registrant's Common Stock.*

4.2    --Form of Preferred Share Purchase Rights Agreement between the
Registrant and      , as Rights Agent.*

5.1    --Opinion of Wachtell, Lipton, Rosen & Katz.*

10.1    --Form of Tax Sharing Agreement.*

10.2    --Form of Employee Benefits Agreement.*

10.3    --Form of Transition Services Agreement.*

10.4    --Registrant's Incentive Compensation and Stock Plan.*

21.1    --Subsidiaries of the Registrant.*

23.1    --Consent of KPMG LLP.

23.2    --Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit 5.1).*

24.1    --Powers of Attorney (contained on page II-4).

--------
*  To be filed by amendment.

Exhibit 23.1

[KPMG LLP LETTERHEAD]

The Board of Directors and Stockholder
FMC Technologies, Inc.:

We consent to the use in the registration statement on Form S-1 of FMC
Technologies, Inc. of our report dated February 9, 2001, with respect to the
combined balance sheets of FMC Technologies, Inc. as of December 31, 1999 and
2000, and the related combined statements of income, cash flows and changes in
stockholder's equity for each of the years in the three-year period ended
December 31, 2000, and to the reference to our firm under the heading "Experts"
in the prospectus.

/s/ KPMG LLP

Chicago, Illinois
February 19, 2001