FMC Technologies to Acquire MODEC Shares

FMC Technologies, Inc. has formally notified MODEC, Inc. of its intent to exercise its right to acquire common shares of MODEC, Inc. under its existing agreement. Upon FMC Technologies' notification, a subsidiary of MODEC, Inc. is obligated to purchase FMC Technologies' 37.5 percent ownership in MODEC International LLC.

As a result of these two transactions, FMC Technologies will receive cash and/or common shares of MODEC, Inc. totaling between $60 million and $80 million at current market values and exchange rates. MODEC, Inc. has the right, under the existing agreement, to determine the amount of common stock issued to FMC Technologies, which could be up to 2.9 million newly issued shares. The current book value of FMC Technologies' joint venture interest is approximately $17 million. FMC Technologies expects the transactions to be completed by the end of 2004.

FMC Technologies' interest in MODEC International LLC is estimated to have a value between 10 and 14 percent of MODEC, Inc. A subsidiary of MODEC, Inc. will pay FMC Technologies, in cash, any difference between its interest in MODEC International LLC and the market value of newly issued shares, including the cost of FMC Technologies' acquisition of those shares.

MODEC, Inc. completed an IPO in Japan in 2003 with an issuance of 4.3 million shares. FMC Technologies' ability to realize the transaction value could be affected by the illiquidity of such a large equity position relative to the outstanding publicly traded shares of MODEC, Inc.

Completion of the transactions will require FMC Technologies to surrender its ownership interest in MODEC International LLC and any future earnings or losses associated with it. The impact of that ownership interest in 2004 is expected to be less than $0.01 per diluted share.

MODEC International LLC is a joint venture of FMC Technologies and MODEC USA, a subsidiary of MODEC, Inc. MODEC, Inc., based in Japan, is a turnkey supplier of Floating Production, Storage and Offloading (FPSO) vessels, Floating Storage and Offloading (FSO) vessels and tension leg platforms (TLP) for the energy industry.