U.K. Annual Report
and Accounts
for the year ended December 31, 2020
Driving change in energy
This U.K. Annual Report and Accounts
of TechnipFMC plc (“TechnipFMC,” the
“Company,” “we,” or “our”) comprises
the Strategic Report, Directors’ Report,
Directors’ Remuneration Report,
Remuneration Policy, and the TechnipFMC
plc consolidated IFRS financial statements
contained herein (“U.K. Annual Report”).
This U.K. Annual Report is available
for inspection at www.technipfmc.com
and will be included in the materials
for the 2021 annual general meeting of
shareholders to be held on May 20, 2021
(the “2021 Annual Meeting”).
Contents
Strategic Report
Letter from Our Chairman and CEO
2020 At-a-Glance
Company Overview
Business Segments
Business Review
Corporate Responsibility and Sustainability – Non-financial
Information Statement
Core Values and Foundational Beliefs
Code of Business Conduct
Corporate Responsibility and Sustainability 2018-2020
Supporting Communities
Advancing Gender Diversity
Respecting the Environment
Corporate Responsibility and Sustainability 2021-2023
Employee and Social Matters
Our Compliance Program
Supply Chain and Customer Matters
Health and Safety
Decision making and section 172 of the Companies Act
Principal Risks and Uncertainties
Directors’ Report
Directors
Share Capital and Articles of Association of the Company
Share Repurchases
Significant Shareholdings
Directors’ Indemnities
Company Details and Branches Outside the United Kingdom
Dividend
Employee Engagement and Business Relationship
Greenhouse Gas Emissions and Energy Consumption
Events since December 31, 2020
Future Developments
Change in Control
Political Donations
Financial Risk Management Objectives/Policies and Hedging Arrangements
iii TechnipFMC
1
1
4
7
10
32
47
47
48
49
51
57
61
71
73
77
81
82
85
87
106
106
107
108
109
109
110
110
110
110
110
111
111
111
111
U.K. Annual Report and Accounts Research and Development
Directors’ Responsibility Statements
Directors’ Remuneration Report
Introduction and Compliance Statement
Letter from the Chairman of the Compensation Committee
Annual Report on Remuneration: At-a-Glance – 2020 Highlights
Annual Report on Remuneration: Report for the Year Ended
December 31, 2020
Elements of 2020 Executive Compensation
Statement of Directors’ Shareholding and Share Interests
Application of the policy in 2021
Activities of the Compensation Committee in 2020
Statement of Voting at Annual Shareholders’ Meeting
Remuneration Policy
Approach to Recruitment Remuneration
Service Agreements
Illustrations of Application of Directors’ Remuneration Policy
Policy on Payment for Loss of Office
Potential Payments upon Change in Control
Future Policy Table for Non-Executive Directors
Differences between Remuneration Policy for Executive Directors
and Other Employees
Statement of consideration of employment conditions elsewhere
in the Company
Statement of consideration of shareholder views
Changes in the Remuneration Policy
Independent auditors’ report to the members of TechnipFMC plc
Consolidated Financial Statements
1. Consolidated Statements of Income
2. Consolidated Statements of Other Comprehensive Income
3. Consolidated Statements of Financial Position
4. Consolidated Statements of Cash Flows
5. Consolidated Statements of Changes in Stockholders’ Equity
6. Notes to Consolidated Financial Statements
Company Financial Statements
1. Company Statement of Financial Position
2. Company Statement of Changes in Shareholders’ Equity
3. Notes to the Company Financial Statements
112
112
114
114
114
119
128
132
148
155
159
161
162
169
170
171
173
174
175
177
177
177
178
179
186
187
188
189
191
193
194
295
296
298
299
iv TechnipFMC
U.K. Annual Report and Accounts Strategic Report
Letter from Our Chairman and CEO
April 9, 2021
Dear Shareholders,
2020 was a year like no other. We faced unprecedented global challenges due to the COVID-19 pandemic and the
sharp drop in demand for oil and natural gas. Throughout this period, the physical and mental health and well-being of
our people and those of the communities in which we work remained our top priority. Still, there were many notable
accomplishments in 2020 as a result of the tireless efforts and unwavering commitment of our global teams. Through
collaboration, we found solutions that allowed us to move projects forward safely, earning recognition from clients and
others in the industry. And thanks to the determination, innovation and resilience of our women and men, we protected
our backlog and remained focused on project execution, enabling us to deliver strong performance and achieve our
financial guidance across all segments.
We also took a series of strategic actions to bolster profitability and improve liquidity and cash flow. We reduced cash
outlays in the year through a revision to our dividend policy and a reduction in capital expenditures, focusing on the
most value-enhancing opportunities. We achieved more than $350 million in annualized run-rate cost savings. And we
revised executive compensation, effective May 1, 2020, to reflect a 30% reduction to the Chairman and CEO salary and
the Board of Directors’ retainer, and a 20% reduction to the salaries of the Executive Leadership team.
Throughout 2020, we continued our work to separate TechnipFMC into two industry leading, pure-play companies,
with the transaction completed through the partial Spin-off of Technip Energies on February 16, 2021. TechnipFMC now
exists as a fully integrated technology and services provider to the traditional and new energy industries. Our clients
continue to demonstrate their confidence in our unique value proposition and in the two weeks following the Spin-off,
we announced three integrated Engineering, Procurement, Construction and Installation (“iEPCI™”) projects, a market
where we expect to see continued growth.
Our achievements in 2020
In Subsea, we achieved full-year inbound orders of $4 billion in a very difficult market environment, driven by a higher
mix of service and small project activity. We had further success with our iEPCI™ model, including the award of BP’s
Platina project offshore Angola. There were Subsea 2.0™ milestones, with the first trees installed on the Shell BC-10 and
Woodside Pyxis projects. And as part of our digital transformation, we introduced Subsea Studio™, a digital front-end
design offering that will be extended to incorporate the execution and field management phases of a project.
Inbound orders for Technip Energies exceeded $5 billion for the year, driven by EPC contract awards for Sempra LNG and
IEnova’s Energía Costa Azul LNG Facility in Mexico, Assiut National Oil Processing Company’s new hydrocracking complex
in Egypt, and Shell’s Moerdijk Plant in the Netherlands to modernize ethylene furnaces and reduce total site emissions.
In October, Technip Energies further extended its leading position in hydrogen, announcing a strategic partnership and
investment with McPhy to accelerate the development of large scale and competitive green hydrogen solutions.
In Surface Technologies, the more resilient international markets accounted for over 60% of total segment revenue,
with increased activity in technology-driven businesses. International orders in the year included contract awards for
high-pressure gas equipment and in-country services in Kuwait, and orders for high-specification equipment in the
United Arab Emirates. In North America, we continued to leverage our subsea expertise by bringing digital innovation
into the surface arena. Here we are enhancing the customer experience by providing improved economics, better
performance and reduced emissions through the commercialization of proprietary technologies.
1 TechnipFMC
U.K. Annual Report and Accounts Sustainability
TechnipFMC was created with the vision to drive real and sustainable change in the energy industry. We realized a
number of successes this year that were a direct result of the three-year sustainability roadmap we created at the
launch of our Company. We are progressing our strategic vision for the future with accelerated actions to advance
Environmental, Social and Governance (“ESG”) initiatives. During the year, we introduced our bold 50 by 30 commitment
to deliver a 50% reduction in Scope 1 and 2 equivalent emissions by 2030. We also established an extensive set of new
ESG commitments to be realized through 2023.
In Subsea, we are redefining our operating model to reduce waste, emissions, and downtime through digital solutions
such as Subsea Studio™, digital twin technology, all-electric subsea infrastructure, and advancements in automation
with our Gemini® ROV technology. We also launched New Energy Ventures, focusing on renewable energy solutions and
investments. Most notably, our Deep Purple™ initiative leverages our core capabilities – iEPCI™, proprietary technologies
and partner alliances – to integrate offshore renewable energy sources such as novel wind and wave energy with
offshore green hydrogen storage to deliver new, cleaner energy to consumers.
In Surface Technologies, we are committed to helping our customers reduce their carbon footprint with innovative
solutions such as iComplete™ and iProduction™. Our iComplete™ ecosystem fully integrates wellsite operations, generating
significant efficiencies through autonomous maintenance and remote data access. And iProduction™ transforms the
production phase of an unconventional development by reducing emissions by more than 50%.
Beyond our environmental responsibilities, we are fully committed to supporting the communities in which we operate,
whether that be through charitable donations, iVolunteer efforts or educational programs focused on science, technology,
engineering, and mathematics. In 2020, we further strengthened our commitment to creating an inclusive culture with
the CEO Pledge and our Inclusion & Diversity roadmap, which put greater focus on equality of opportunity. And we will
continue to ensure that our actions are aligned with shareholders through executive compensation programs that are
focused on driving behavior that creates sustainable shareholder value.
Looking forward
While economic activity continues to be impacted by the COVID-19 pandemic, the short-term outlook for crude oil has
improved as the OPEC+ countries better manage the oversupplied market. Long-term demand for energy is still forecast
to rise, and we believe this outlook will ultimately provide our customers with the confidence to increase investments in
new sources of oil and natural gas production.
Our outlook in Subsea reflects renewed operator confidence given the improved economic outlook, lower market
volatility and higher oil price. After experiencing solid momentum in front end engineering and design (“FEED”) activity
in the second half of 2020, we expect FEED activity this year to return to the more robust levels seen in 2019 – further
supporting our view of a sustainable deepwater recovery. This year, we anticipate Brazil will be the most active region
of the world for new project orders, with additional market growth potential in the North Sea, Asia-Pacific, and Africa.
We remain very confident that inbound orders for 2021 will exceed the level achieved in 2020.
In Surface Technologies, we expect growth in international activity to drive the segment’s full-year revenue higher in
2021. In North America, we expect strong customer adoption of new technologies to drive growth in our completions-
related revenue, outperforming the overall market growth. We expect international markets to remain resilient and
represent approximately 65% of our full year revenue, benefiting from our exposure to the Middle East and Asia-Pacific.
No one could have predicted the events of 2020. COVID-19 has affected every facet of day-to-day life, and we have
responded by reinforcing our efforts around employee well-being, with a particular focus on mental health. We learned
invaluable lessons throughout the year, most notably that success can be achieved despite significant global challenges.
As a company, our Foundational Beliefs are our guiding light and drive our fundamental view that how we do business is
as important as why we do business.
2 TechnipFMC
U.K. Annual Report and Accounts As we embark on our independent journey as a leading technology provider to both the traditional and new energy
industries, we are well positioned to benefit from the improved market outlook. The energy industry is evolving as the
world looks to more sustainable and lower carbon solutions. We will support our clients through this change, using our
transferable skills and unique technologies to help support the world’s demand for energy.
Douglas J. Pferdehirt
Chairman and Chief Executive Officer
2020
Inbound orders:
$350m
cost savings
Subsea
Technip Energies
Surface Technologies
$4bn
$5bn
$1.1bn
50 by
30
Deliver 50% reduction
in emissions by 2030
Leading technologies
` Subsea Studio™
` Gemini©
` Deep Purple™
` iProduction™
` iEPCI™
` iComplete™
3 TechnipFMC
U.K. Annual Report and Accounts 2020 At-a-Glance
Response to a Difficult Operating Environment and COVID-19
Beginning in the first quarter of 2020, we faced global challenges due to the COVID-19 pandemic and the
unprecedented drop in demand for oil and gas. Supply chain disruptions, logistics constraints, and productivity
declines all impacted our operations across the globe. Throughout our responses to these challenges, our top priority
remained the physical and mental well-being of the women and men of TechnipFMC and the communities in which
we work. The Company established a global Incident Management Team sponsored by our executive officers and
including representatives from HSE, Security, People & Culture, Legal, Communications, Finance, Medical, and major
projects teams to assist in regularly updating our Board on COVID-19 impacts. Working together, we found solutions
that allowed us to move projects forward safely while also earning recognition from our customers for the way in
which we conducted business in such an unpredictable operating environment.
Beyond operations, we took strategic actions focused on cash and liquidity preservation to bolster profitability
and cash flow. We reduced capital outlays in the year through revisions to our dividend policy and high-grading of
our capital expenditures on value-enhancing opportunities. We achieved more than $350 million in annualized run-
rate cost savings. Finally, we revised executive compensation, effective May 1, 2020, to reflect a 30% reduction to
the Chairman and CEO’s salary and the Board of Directors’ retainer and a 20% reduction to our other executive
officers’ salaries.
Strategic Transaction
Completed the separation of TechnipFMC into two industry-leading, pure-play companies through the Spin-off of
Technip Energies on February 16, 2021 (the “Spin-off”)
TechnipFMC
Technip Energies
` Primarily comprising Subsea and Surface Technologies
` Primarily comprising the Technip Energies segment
segments
` Listing: Euronext Paris with Level 1 American
` Listings: NYSE, Euronext Paris
depositary receipts (“ADRs”)
` HQ: Houston, Texas and Paris, France
` HQ: Paris, France
` Domicile: United Kingdom
` Employees: ~20,000
` Domicile: Netherlands
` Employees: ~15,000
4 TechnipFMC
U.K. Annual Report and Accounts ESG
Appointed Margareth Øvrum and
Sophie Zurquiyah to the Board
` Reduced the size of the Board from 15 to 10 directors upon the
completion of the Spin-off
` Formed our ESG Committee to reflect expanded oversight
duties and commitment to ESG matters and reporting
` Achieved all of our 2018-2020 ESG objectives, and announced
our 2021-2023 ESG commitments and scorecard, including a
“50 by 30” objective to reduce CO2 emissions by 50% by 2030
` Enhanced commitment to Inclusion and Diversity across the
organization
` For 2021, included an ESG metric in our annual cash incentive
plan, to directly link our compensation program to our ESG
commitments and objectives
Compensation
The COVID-19 impact on the Company triggered a need to adjust our compensation program, as we strived to
achieve appropriate results in an exceptional year, and to reinforce the link between pay and performance alignment
with the long-term interests of our shareholders.
` Reduced Chairman and CEO’s salary by 30% and other executives’ salaries by 20% for the remainder of 2020,
effective May 1, 2020
` Reduced directors’ annual cash retainers by 30% for the remainder of 2020, effective May 1, 2020
` Adjusted 2020 annual incentive metrics for Q2-Q4 2020 to address strategic priorities due to the COVID-19
pandemic and business downturn and capped payout for business performance indicators at target (100%)
` Continued to include sustainability measures in the individual performance portion of our annual cash incentive
plan to reinforce the Company’s commitment to our Foundational Beliefs while responding to the challenging
business environment
5 TechnipFMC
U.K. Annual Report and Accounts 2020 Segment Financials1
Subsea
Technip Energies
Surface Technologies
Results
` Inbound orders of $4 billion,
supported by higher mix of
service and small project activity
` Additional integrated awards all
from repeat iEPCI™ customers
` Backlog of $6.9 billion
Results
` Second consecutive year of
Results
` International revenue more
revenue growth, driven by LNG
and downstream projects
` Approximately 60% of total
order backlog linked to energy
transition, including LNG
` Backlog of $14.1 billion
than 60% of total segment, with
increased revenue in technology-
driven businesses
` Significant decline in North
America market activity partially
mitigated by aggressive cost
reduction
` Backlog of $0.4 billion
2020 Company Financials1
Revenue
Profit (Loss) before income taxes
Inbound orders
Backlog
Twelve months ended
(In millions)
December 31,
2020
December 31,
2019
$13,057.4
-$3,061.1
$10,065.5
$21,388.2
$13,426.2
-$2,175.8
$22,693.0
$24,251.1
Change
(3)%
41%
(56)%
(12)%
(1) Reported financial results for the twelve months ended December 31, 2020 and inbound and backlog as of December 31, 2020 are as reported in
this U.K. Annual Report.
The record inbound orders and solid execution of 2019 gave us strong momentum into the new year, but 2020 abruptly
shifted to a year of unprecedented global challenges due to the COVID-19 pandemic and the sharp drop in demand for oil
and natural gas.
Revenue decreased by $368.8 million in 2020 compared to 2019, primarily driven by decreased project activity in
Subsea and sharply lower demand in North America for Surface Technologies. The decrease was partially offset by the
increased activity in Technip Energies, including the continued ramp-up of Arctic LNG 2.
Operating results in the year were largely impacted by significant impairment and other non-recurring charges totaling
$3,436.9 million, most of which were included in Subsea and Surface Technologies. Results were also impacted by a
reduced contribution from Yamal LNG and lower margin realization on early stage projects in Technip Energies versus the
prior year. Results included the benefits of our accelerated cost reduction actions initiated in the first quarter of 2020.
The significant decline in commodity prices, due in part to the lower demand resulting from COVID-19, contributed to
the decrease in the inbound orders during 2020. The decline in backlog was more modest, with our significant backlog
providing solid revenue visibility in future periods.
6 TechnipFMC
U.K. Annual Report and Accounts Company Overview
TechnipFMC plc, a public limited company incorporated and organized under the laws of England and Wales, with
registered number 09909709, and with registered office at One St. Paul’s Churchyard, London EC4M 8AP, United
Kingdom (“TechnipFMC”, the “Company,” “we,” or “our”) is a global leader in the energy industry; delivering projects,
products, technologies, and services. With our proprietary technologies and production systems, integrated expertise,
and comprehensive solutions, we are transforming our customers’ project economics. We have operational headquarters
in Paris, France, and Houston, Texas, United States, and in 2020 we operated across three business segments: Subsea,
Technip Energies, and Surface Technologies. We are uniquely positioned to deliver greater efficiency across project
lifecycles from concept to project delivery and beyond. Through innovative technologies and improved efficiencies, our
offering unlocks new possibilities for our customers in developing their energy resources and in their positioning to meet
the energy transition challenge. On February 16, 2021, the Company completed the Spin-off. Subsequent to the Spin-off,
the Company will operate under two reporting segments: Subsea and Surface Technologies, for further details see section
“The Spin-off” below.
Enhancing our performance and competitiveness is a key component of this strategy, which is achieved through
technology and innovation differentiation, seamless execution, and reliance on simplification to drive costs down. We are
targeting profitable and sustainable growth by seizing market growth opportunities and expanding our range of services.
We are managing our assets efficiently to ensure we are well-prepared to drive and benefit from the opportunities in
many of the segments we serve.
In 2020, each of our more than 35,000 employees is driven by a steady commitment to clients and a culture of project
execution, purposeful innovation, challenging industry conventions, and rethinking how the best results are achieved.
This leads to fresh thinking, streamlined decisions, and smarter results, enabling us to achieve our vision of enhancing the
performance of the world’s energy industry.
History
In March 2015, FMC Technologies, Inc., a U.S. Delaware corporation (“FMC Technologies”), and Technip S.A., a French
société anonyme (“Technip”), signed an agreement to form an exclusive alliance and to launch Forsys Subsea, a 50/50
joint venture, that would unite the subsea skills and capabilities of two industry leaders. This alliance, which became
operational on June 1, 2015, was established to identify new and innovative approaches to the design, delivery, and
maintenance of subsea fields.
Forsys Subsea brought the industry’s most talented subsea professionals together early in operators’ project concept
phase with the technical capabilities to design and integrate products, systems, and installation to significantly reduce
the cost of subsea field development and enhance overall project economics.
Based on the success of the Forsys Subsea joint venture and its innovative approach to integrated solutions, Technip
and FMC Technologies announced in May 2016 that the companies would combine through a merger of equals to create
a global subsea leader, TechnipFMC, that would drive change by redefining the production of oil and gas. The business
combination was completed on January 16, 2017 (the “Merger”), and on January 17, 2017, TechnipFMC began operating
as a unified, combined company trading on the New York Stock Exchange (“NYSE”) and on the Euronext Paris Stock
Exchange (“Euronext Paris”) under the symbol “FTI.”
In 2017, our first year as a merged company, TechnipFMC secured several project awards as many operators moved
forward with final investment decisions for major onshore projects and subsea developments. Several of the subsea
awards incorporated the use of our integrated approach to project delivery, validating our unique business model aimed
at lowering project costs and accelerating the delivery of initial hydrocarbon production. This was made possible by
bringing together the complimentary subsea work scopes of the merged companies.
In 2018, TechnipFMC delivered the industry’s first three full-cycle, integrated projects and realized considerable growth
in Subsea order inbound, driven in part by its unique integrated offering, iEPCI™ (“iEPCI”). For all of 2019, the value of
7 TechnipFMC
U.K. Annual Report and Accounts integrated subsea awards to TechnipFMC more than doubled versus the prior year, representing more than 50% of all
Subsea project order inbound. The increase was driven by a wider adoption of the integrated business model, particularly
by those clients where we have unique alliances. With the industry’s most comprehensive and only truly integrated
subsea market offering, we have continued to expand the deepwater opportunity set for our clients.
TechnipFMC’s expertise does not end with the production of hydrocarbons. Because of its best in class Engineering
and Construction (“E&C”) project design and execution capabilities, enabled by a portfolio of proprietary technologies,
TechnipFMC continues to secure and deliver projects that further enable our clients to monetize resources – from
liquefaction of gas, both onshore and on floating vessels, through refining and product facilities and with green chemistry
and renewables.
The Spin-off
On August 26, 2019, we announced our intention to separate into two diversified pure-play market leaders –
TechnipFMC, focused on subsea and surface hydrocarbon production, and Technip Energies, focused on downstream
engineering, procurement, and construction (”EPC”) project execution. Due to the COVID-19 pandemic, a significant
decline in commodity prices, and the heightened volatility in global equity markets, on March 15, 2020, we announced
the postponement of the completion of the transaction until the markets sufficiently recover. On January 7, 2021, we
announced the resumption of activity toward completion of the transaction based on increased clarity in the market
outlook and our demonstrated ability to successfully execute projects.
On February 16, 2021, we completed the separation of the Technip Energies business segment. The transaction was
structured as a spin-off (the “Spin-off”), which occurred by way of a pro rata dividend (the “Distribution”) to our
shareholders of 50.1 percent of the outstanding shares in Technip Energies N.V. Each of our shareholders received one
ordinary share of Technip Energies N.V. for every five ordinary shares of TechnipFMC held at 5:00 p.m., New York City
time on the record date, February 17, 2021. Technip Energies N.V. is now an independent public company and its shares
trade under the ticker symbol “TE” on the Euronext Paris stock exchange.
In connection with the Spin-off, on January 7, 2021, BPI, which has been one of our substantial shareholders since 2009,
entered into a Share Purchase Agreement pursuant to which BPI agreed to purchase a portion of our retained stake in
Technip Energies N.V. (the “BPI Investment”) for $200.0 million (the “Purchase Price”). On February 25, 2021, BPI paid
$200.0 million in connection with the Share Purchase Agreement. The Purchase Price was subject to adjustments, and
BPI’s ownership stake was determined based upon a thirty-day volume-weighted average price of Technip Energies
N.V.’s shares (with BPI’s ownership collared between an 11.82 percentage floor and a 17.25 percentage cap), less a 6%
discount. The BPI Investment was subject to customary conditions and regulatory approval. On March 31, 2021, pursuant
to the Share Purchase Agreement, BPI exercised its right and purchased from TechnipFMC 7.5 million shares in Technip
Energies N.V. for $100.0 million. On April 8, 2021, we refunded $100.0 million to BPI as a result of their revised level of
investment. We intend to significantly reduce our shareholding in Technip Energies N.V. over the 18 months following the
Spin-off. See Note 33 to our consolidated financial statements included in this U.K. Annual Report.
Beginning in the first quarter of 2021, Technip Energies’ historical financial results for periods prior to the Distribution
will be reflected in our consolidated financial statements as discontinued operations.
The Spin-off enables both companies to benefit from distinct and compelling market opportunities across the energy
value chain; dedicated focus of management, resources, and capital; and unique value propositions with differentiated
investment appeal.
` TechnipFMC is a fully-integrated technology and services provider, driving energy development across deepwater,
conventional, and unconventional resources. TechnipFMC continues to successfully demonstrate leadership in
integrated subsea project delivery and is focused on replicating this success through the development of integrated
production models for the surface market. TechnipFMC is also poised to benefit from service opportunities resulting
from the world’s largest installed base of subsea production equipment, umbilicals, risers, and flowlines, and in the
supply of surface integrated systems in the drilling, frac, production and measurement markets.
8 TechnipFMC
U.K. Annual Report and Accounts ` Technip Energies is a leading engineering and construction player, with a robust project delivery model, strong
technical capabilities, and proven track record as demonstrated by the successful execution of some of the world’s
most iconic EPC projects. Technip Energies will continue to leverage its industry-leading process technology portfolio,
particularly in the areas of ethylene and hydrogen, while pursuing further opportunities to enhance and differentiate
this portfolio, and to accelerate the journey to a low-carbon future.
9 TechnipFMC
U.K. Annual Report and Accounts Business Segments
On February 16, 2021, we completed the Spin-off. Subsequent to the Spin-off, we will operate under two reporting
segments: Subsea and Surface Technologies.
Subsea
We are focused on transforming subsea by safely delivering innovative solutions that improve economics, enhance
performance and reduce emissions. As a fully-integrated technology and services provider, we continue to drive
responsible energy development.
Our Subsea segment provides integrated design, engineering, procurement, manufacturing, fabrication, installation,
and life of field services for subsea systems, subsea field infrastructure, and subsea pipe systems used in oil and gas
production and transportation.
We are an industry leader in front-end engineering and design (“FEED”), subsea production systems (“SPS”), subsea
flexible pipe, and subsea umbilicals, risers, and flowlines (“SURF”) and subsea robotics. We also have the capability to
install these products and related subsea infrastructure with our fleet of highly specialized vessels. By integrating the
SPS and SURF work scopes, we are able to drive greater value to our clients through more efficient field layout and
execution of the installation campaign. This capability, in conjunction with our strong commercial focus, has enabled the
successful market introduction of an integrated subsea business model, iEPCI (“iEPCI”), which spans a project’s early
phase design through the life of field.
Our integrated business model is unlocking incremental opportunities and materially expanding the deepwater
opportunity set. Since the first iEPCI project was awarded in 2016, market adoption of the business model has
accelerated each year.
Through integrated FEED studies, or iFEED™ (“iFEED”), we are uniquely positioned to influence project concept and
design. Using innovative solutions for field architecture, including standardized equipment, new technologies, and
simplified installation, we can significantly reduce subsea development costs and accelerate time to first production.
Our first-mover advantage and ability to convert iFEED studies into iEPCI contracts, often as a direct award, creates
a unique set of opportunities for us that are not available to our peers. This allows us to deliver a fully integrated –
and technologically differentiated – subsea system, and to better manage the complete work scope through a single
contracting mechanism and a single interface, yielding meaningful improvements in project economics and time to first oil.
We continue to support our clients following project delivery by offering aftermarket and life of field services. Our wide
range of capabilities and solutions, including integrated life of field, or iLOF™ (“iLOF”), allows us to help clients increase
oil and gas recovery and equipment uptime while reducing overall cost. Our iLOF offering is designed to unlock the
full potential of subsea infrastructures during operations by transforming the way subsea services are delivered and
proactively addressing the challenges operators face over the life of subsea fields. We provide production optimization,
asset life extension insight, proactive de-bottlenecking, and condition-based maintenance.
Our Subsea business depends on our ability to maintain a cost-effective and efficient production system, achieve planned
equipment production targets, successfully develop new products, and meet or exceed stringent performance and
reliability standards.
10 TechnipFMC
U.K. Annual Report and Accounts
Subsea segment products and services
Subsea Production Systems
Our systems are used in the offshore production of crude oil and natural gas. 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 processing facility, such as a
floating production facility, a fixed platform, or an onshore facility.
Our subsea production systems and products include subsea trees, chokes and flow modules, manifold pipeline
systems, controls and automation systems, well access systems, multiphase and wet-gas meters, and additional
technologies. The design and manufacture of our subsea systems requires a high degree of technical expertise and
innovation. Some of our systems are designed to withstand exposure to the extreme hydrostatic pressure of deepwater
environments, as well as internal pressures of up to 20,000 pounds per square inch (“psi”) and temperatures of up to
400º F. The development of our integrated subsea production systems includes initial engineering design studies and
field development planning and considers all relevant aspects and project requirements, including optimization of drilling
programs and subsea architecture.
Subsea Processing Systems
Our subsea processing systems, which include subsea boosting, subsea gas compression, and subsea separation, are
designed to accelerate production, increase recovery, extend field life, and/or lower operators’ production costs for
greenfield, subsea tie-back and brownfield applications. To provide these products, systems, and services, we utilize our
engineering, project management, procurement, manufacturing, and assembly and test capabilities.
Rigid Pipe
We design and fabricate rigid pipes for production and service applications at our spoolbases. Rigid pipes are installed
from our fleet of differentiated rigid pipelay vessels. Our pipelines optimize flow assurance through innovative insulation
coatings, electric trace heating, plastic liners, and pipe-in-pipe systems.
Flexible Pipe and Umbilicals
We design and manufacture flexible pipes as well as steel tube, thermoplastic hose, power, communication, and hybrid
(a combination of steel tube, thermoplastic hose, and electrical cables) umbilicals. TechnipFMC vessels will typically
perform the installation of the flexible pipes and umbilicals, but we also sell these products directly to oil companies or
to other vessel operators.
Vessels
We have a fleet of 18 vessels that are used for the installation and servicing of our products. We have sole ownership of
ten vessels, ownership of six vessels as part of joint ventures, and two vessels operated under long-term charters.
Subsea Services
We provide a portfolio of well and asset services that improve economics and enhance performance over the life of
our clients’ subsea development cycle. Well services include all service offerings: (i) provision of exploration and
production wellhead systems and services; (ii) remotely operated vehicle (“ROV”) drill support services; (iii) well
completion installation services; (iv) well access and intervention services, both rig-based and vessel-based (riserless
light well intervention or “RLWI”); and (v) well plug and abandonment. Asset Services include all service offerings, such
as (i) maintenance services for test, modification, refurbishment, and upgrade of subsea equipment and tooling; (ii)
integrity services based on product and field data to optimize the performance of the subsea asset, including proactive
inspection, maintenance, and repair (“IMR”) of subsea infrastructure; and (iii) production metering services to enhance
well and field production, including real time virtual metering services and flow assurance services.
Key drivers of subsea services market activity are the services linked to subsea wells in greenfield development and
brownfield subsea tiebacks, or infill developments.
11 TechnipFMC
U.K. Annual Report and Accounts Additionally, with our extensive experience in subsea equipment, our leading installed base of subsea production
equipment, our broad range of services, and our historical technical design and manufacturing leadership, we are in a
unique position to offer integrated solutions across the “life of field” (“LOF”) services. These combine asset light solutions
(e.g. RLWI), digital services (e.g. data driven monitoring, surveillance, and production management suite of applications),
and leading edge automated and robotic systems (e.g. Schilling ROVs) to enhance the economics of producing fields
through maximization of asset uptime, higher production volumes, and lower operating expense.
Robotics, Controls and Automation
We design and manufacture ROVs and manipulator arms that are used in subsea drilling, construction, IMR, and life
of field services. Our product offering includes hydraulic work-class ROVs, tether-management systems, launch and
recovery systems, remote manipulator arms, and modular control systems. We also provide support and services such as
product training, pilot simulator training, spare parts, and technical assistance.
We also provide electro-hydraulic and electric production and intervention control systems, allowing accurate control and
monitoring of subsea installations to ensure the highest production availability that can ensure safe and environmentally
friendly field operations. These include the sensors, multiphase flow meters, digital infrastructure, integrity monitoring,
control functionality, and automation features needed for subsea systems. Robotics capabilities are now being used in the
control of manifold valves during production, which demonstrates a convergence of our technologies in order to provide
better systems for our customers.
Subsea Studio™ Digital Platform
Subsea Studio™ is our portfolio of digital solutions to increase performance, transform experience, and enable innovation.
Subsea Studio™ FD is our front-end field development tool, transforming conventional concept, FEED and tender phases
into ultra-fast digital field development. Subsea Studio™ Ex is our project execution digital application that increases the
efficiency and speed of project execution with a data-centric approach. Subsea Studio™ LOF uses our digitally enabled
operations and advanced data driven services to enhance performance and production targets.
Research, Engineering, Manufacturing and Supply Chain (“REMS”)
REMS is an organization formed in September 2019 to support accelerated technology innovation, and product delivery
improvements. We accomplish this by reducing the cycle-time of engineering and manufacturing our products, including
working with our suppliers to reduce their costs, and optimizing our processes and how we manage workflow. Through
REMS, we are focused on challenging existing technologies and implementing world-class manufacturing practices,
including LEAN and process automation, to improve reliability while reducing total product cost and lead time to delivery.
Our REMS organization primarily supports our Subsea segment but is also integrated across our Surface Technologies
segment.
Product Management
In 2019, we established a Product Management function to expand our capabilities to assess, define, and deliver
the technologies and products of the future. This function enables REMS, and the Subsea and Surface Technologies
businesses to drive the understanding of customer requirements, competitive landscape, and investment prioritization.
Capital Intensity
Many of the systems and products we supply for subsea applications are highly engineered to meet the unique demands
of our customers’ field properties and are typically ordered one to two years before installation. We often receive advance
payments and progress billings from our customers to fund initial development and working capital requirements.
Dependence on Key Customers
Generally, our customers in the Subsea segment are major integrated oil companies, national oil companies, and
independent exploration and production companies.
We actively pursue alliances with companies that are engaged in the subsea development of oil and natural gas to
12 TechnipFMC
U.K. Annual Report and Accounts promote our integrated systems for subsea production. These alliances are typically related to the procurement of subsea
production equipment, although some alliances are related to EPCI services. Development of subsea fields, particularly in
deepwater environments, involves substantial capital investments. Operators have also sought the security of alliances
with us to ensure timely and cost-effective delivery of subsea and other energy-related systems that provide integrated
solutions to meet their needs.
Our alliances establish important ongoing relationships with our customers. While these alliances do not contractually
commit our customers to purchase our systems and services, they have historically led to, and we expect that they
would continue to result in, such purchases.
The commitment to our customers goes beyond project delivery, and we nurture these alliances with transparency and
collaboration to better understand their needs to ensure customer success.
No single Subsea customer accounted for 10% or more of our 2020 consolidated revenue.
Competition
We are the only fully integrated company that can provide the complete suite of subsea production equipment,
umbilicals, and flowlines with the complete portfolio of installation and LOF services enabling us to develop a subsea field
as a single company. We compete with companies that supply some of the components as well as installation companies.
Our competitors include Aker Solutions ASA, Baker Hughes Company (“Baker Hughes”), Dril-Quip, Inc., McDermott
International, Inc. (“McDermott”), National Oilwell Varco, Oceaneering International, Inc., Saipem S.p.A. (“Saipem”),
Schlumberger, Ltd. (“Schlumberger”), and Subsea 7 S.A.
Seasonality
In the North Sea, winter weather generally subdues drilling activity, reducing vessel utilization and demand for subsea
services as certain activities cannot be performed. As a result, the level of offshore activity in our Subsea segment is
negatively impacted in the first quarter of each year.
Market Environment
The volatile, and generally low, crude oil price environment of the last several years led many of our customers to reduce
their capital spending plans and defer new deepwater projects. Order activity in 2020 was particularly impacted by the
sharp decline in commodity prices in April, driven in part by the reduced economic activity, and the general uncertainty
related to the COVID-19 pandemic. The reduction and deferral of new projects resulted in delayed subsea projects
inbound for the industry.
While economic activity continues to be impacted by the pandemic, the short-term outlook for crude oil has improved as
the OPEC+ countries better manage the oversupplied market. Long-term demand for energy is still forecast to rise, and
we believe this outlook will ultimately provide our customers with the confidence to increase investments in new sources
of oil and natural gas production.
The trajectory and pace of further recovery and expansion in the subsea market is subject to the capital our clients
dedicate to developing offshore oil and gas fields amongst their entire portfolio of projects and drivers of capital
expansion or discipline. The risk of project sanctioning delays is still present in the current environment; however,
innovative approaches to subsea projects, like our iEPCI solution, have improved project economics, and many offshore
discoveries can be developed economically at today’s crude oil prices. In the long-term, deepwater development is
expected to remain a significant part of many of our customers’ portfolios.
As the subsea industry continues to evolve, we have taken actions to further streamline our organization, achieve
standardization, and reduce cycle times. The rationalization of our global footprint will also further leverage the benefits
of our integrated offering. We aim to continuously align our operations with activity levels, while preserving our core
capacity in order to deliver current projects in backlog and future order activity.
13 TechnipFMC
U.K. Annual Report and Accounts Strategy
With our proprietary technologies and production systems, and integration expertise, we are transforming subsea by
safely delivering innovative solutions that improve economics, enhance performance, and reduce emissions. We have
used these capabilities to develop a new subsea commercial model that is transforming the way we interact with our
customers and create value with them.
Our strategy includes the following priorities:
` Engagement in the conceptual design and integrated front-end engineering of subsea development projects to create
value through technology and integration of scopes by simplifying field architecture and accelerating both delivery
schedules and time to first production.
` Innovative research and development (“R&D”), often in collaboration with clients and partners, to develop leading
products and technologies that deliver greater efficiency to the client, lower development costs, unlock stranded and/
or marginal fields, and enable frontier developments.
` Focus on selecting the right projects to ensure a strong and healthy backlog.
` Superior project execution capabilities allowing us to mobilize the right teams, assets, and facilities to capture and
profitably execute complex subsea projects and services.
` Capitalize on combined competencies coming from alliances and partnerships with both clients and suppliers.
` Leverage supplier relationships to optimize supply chain market dynamics and implement greater simplification and
standardization in products and processes.
TechnipFMC is a clear leader in the subsea industry. Our success has been built on our technological strength, innovation,
focus on digitalization, and strong partnerships with major oil companies to expand market opportunities.
Recent and Future Developments
We continue to focus on performance improvement and optimization strategies that will improve our profitability. Our
investments decisions fully support our business with technologies that will differentiate our portfolio.
Subsea StudioTM is transforming the conventional concept, FEED and tendering phases of subsea projects. Working with
our clients, we are now able to develop ultra-fast, digital field architectures that bring together decades of engineering
knowledge with artificial intelligence and machine learning to optimize product configurations, accelerate execution, and
maximize value.
Subsea StudioTM has an open architecture that allows integration with other engineering and manufacturing systems,
eliminating the need for multiple hand-offs, and resulting in as much as a 50% reduction in the time required for front-
end engineering. We are extending the platform beyond subsea system design to incorporate the execution and field
management phases of a project. Once fully implemented, we will have a complete digital thread from concept design,
all the way through to the life of the field.
To further our commitment to meaningfully contribute to the energy transition, we formed New Energy Ventures to
define a detailed business plan and identify and develop business opportunities and investment cases. We seek to
make energy more sustainable through electrification of offshore fields through renewable sources. Offshore floating
wind, wave energy, and green hydrogen will be main contributors to our subsea energy transition vision. Our core
competencies in systems engineering, safety control and systems, high pressure gas pipelines and risers, connection
systems, and subsea tank systems are easily transferable from oil and gas to alternative energy solutions.
We have set a target to reduce up to 50% of CO2 emissions from offshore upstream life of field. Subsea is a field
development solution that is uniquely positioned to minimize carbon footprint and drive simplification in field design,
product design and offshore operations to enable a platform-less future.
14 TechnipFMC
U.K. Annual Report and Accounts Subsea all-electric field developments enable longer step-out and tiebacks as well as unmanned platforms and
operations. Subsea processing and power solutions move technology from topside to seabed. Automation and robotics
such as the Gemini ROV represent a step change towards autonomous operations.
Our subsea products and infrastructure help our clients’ businesses be less carbon intensive across activities by reducing
CO2 emissions.
We expect our iEPCI capabilities to provide a competitive advantage as we deliver comprehensive and differentiated
solutions. In addition, we anticipate the following longer-term trends in the subsea market:
` Increased market adoption of integrated subsea projects, leading to further penetration of our integrated business
model and higher levels of iEPCI order activity for our Company.
` Growing service opportunities, driven by (i) higher levels of project activity, (ii) increased asset integrity and
production management activities focused on improving uptime and production volume and lowering emissions, and
(iii) increased maintenance and intervention activity resulting from an expanding and aging installed equipment base.
` Smaller projects (less than $75 million) and direct awards will continue to contribute meaningfully to our order mix.
In 2020, these awards collectively represented more than half of our total subsea inbound orders, with the remainder
being publicly announced projects and subsea service activities. Subsea tiebacks are often part of this mix, and these
shorter cycle brownfield expansions provide operators with faster paybacks and higher returns.
` There is a growing trend towards independent operators and new entrants undertaking subsea developments; we are
a natural partner for this customer group because of our ability to offer fully integrated solutions.
` Natural gas developments are growing in prominence. We believe that more than 20% of offshore capital
expenditures could be directed at natural gas developments by early next decade. We also anticipate that 45% of gas
production will come from offshore, with significant growth in the Middle East (shallow water) followed by Australia
(deep water) in the next five years.
We continue to work closely with our customers and believe that, in the context of lower oil prices, with our unique
business model we can further reduce their project break-even levels by offering cost-effective approaches to their
project developments and accelerating time to first oil and gas.
Product Development
Technology development progressed on our Subsea 2.0™ (“Subsea 2.0”) product platform, the next generation of
subsea equipment, using designs that are significantly simpler, leaner, and smarter than current designs. These products
incorporate a modular product architecture and component level standardization to enable a flexible configure-to-order
approach, reducing hardware delivery time for clients. The products are expected to deliver breakthroughs in the way
subsea products are manufactured, assembled, installed, and maintained over the life of the field. Incorporating our
Subsea 2.0 platform can greatly simplify the subsea infrastructure, while reducing greenhouse gas emissions. When
combined with iEPCI, it also simplifies vessel installation campaigns by providing an even greater environmental and
economic benefit and unlocks first oil and gas faster. In 2020, we installed Subsea 2.0 trees on two projects, with
production under way offshore in Brazil. Additionally, we were awarded our latest iEPCI project with Shell in Malaysia.
It incorporates our Subsea 2.0 technology as well as a diverse set of other projects in some of the most active basins in
the world.
Our Joint Industry Program for electrification of the field progressed well this year. This system solution will drive
reduced emissions, enable more digitally enabled intelligent field operations, improve economics for long step-out and
subsea tie-back to short field developments, and contribute to a more sustainable way to develop oil and gas resources.
In a partnership with Halliburton, we introduced Odassea™, the first distributed acoustic sensing solution for subsea wells.
This technology platform enables operators to execute intervention-less seismic imaging and reservoir diagnostics to
reduce total cost of ownership while improving reservoir knowledge. This project expands our unique integrated subsea
15 TechnipFMC
U.K. Annual Report and Accounts solution and leverages the competencies and know-how to drive a higher level of sustainability. In the field, we are
delivering solutions with the technology to multiple subsea projects at all stages from conceptual design to execution
and installation.
This year, we have also advanced on our journey towards more autonomous operations with the launch of the Gemini™®
(“Gemini”) ROV system, featuring advanced automation and precision robotics to increase offshore productivity. Gemini is
the next generation of advanced 250 horse power work class ROV system providing unprecedented subsea productivity.
The integration of ROV, manipulators and tooling enables a transition to highly automated subsea robotics, which
reduces task time from hours to minutes, ensuring predictable results every time. Featuring a significant advancement
in manipulator design, the Gemini manipulators provide integrated hydraulics, electric power, communications, and force
compliance. Additionally, the ROV has access to more than 30 subsea exchangeable tools and a comprehensive fluid
intervention system to support the most demanding deepwater drilling and completion operations. With a depth rating
of up to 4,000 meters, Gemini can remain subsea for one month, enabling 24/7 operations without recovery for tooling
reconfiguration. Its combination of system availability, capability and productivity reduces operational costs and delivers
unequaled performance.
In addition to investments to develop lower-cost production solutions, we also invest in the development of technology
to expand our service portfolio. As an example, we have simultaneously launched a suite of new ROV services for drill
rigs alongside Gemini to drive even greater efficiency.
Acquisitions and Investments
We did not make any material acquisitions or corporate investments in 2020. We have focused on business
transformation to mitigate the adverse effects of the rapidly changing market environment and to ensure the long-term
viability of our subsea business.
Going forward, we will need fewer assets to deliver more comprehensive solutions:
` We are optimizing our operations across geographies, and if economic returns don’t make sense, we will look to exit.
` We continue to right-size our assets to better align with and leverage the benefits of our differentiated offering and
the advantages of new technologies – such as Subsea 2.0 – and integrated project delivery.
` We continue to partner with others, providing us access to unique assets in a more capital efficient manner.
As the subsea industry continues to evolve, we are accelerating actions to further streamline our organization, achieve
standardization, and reduce cycle times. We aim to continuously align our operations with activity levels, while
preserving our core capacity in order to deliver current projects in backlog and future order activity.
16 TechnipFMC
U.K. Annual Report and Accounts Technip Energies
Technip Energies offers a full range of design, project management, and construction services to our customers
spanning the entire downstream value chain, including technical consulting, concept selection, and final acceptance
test. With the drive of the energy transition, we are increasingly deploying low-carbon solutions. We have been
successful in meeting our clients’ needs given our proven skills in managing large engineering, procurement, and
construction projects.
Technip Energies’ onshore business combines the study, engineering, procurement, construction, and project management
of the entire range of facilities related to the production, treatment, and transportation of gas, oil and renewables, the
transformation of petrochemicals such as ethylene, polymers, and fertilizers, as well as other major activities including
refining and hydrogen.
Technip Energies conducts large-scale, complex, and challenging projects that involve extreme climatic conditions
and non-conventional resources and are subject to increasing environmental and regulatory performance standards.
Technip Energies relies on technological know-how for process design and engineering, either through the integration
of technologies from leading alliance partners or through its own technologies. Technip Energies seeks to integrate and
develop advanced technologies and reinforce its strong project execution capabilities in each of its onshore activities.
Technip Energies’ offshore business combines the study, engineering, procurement, construction, and project
management within the entire range of fixed and floating offshore facilities, many of which were the first of their kind,
including the development of floating liquefied natural gas (“FLNG”) facilities.
Principal Products and Services
Onshore Engineering & Construction
Technip Energies designs and builds different types of facilities for the development of onshore gas, oil, and renewables,
processing facilities, and product export systems. In addition, Technip Energies renovates existing facilities by
modernizing production equipment and control systems, in accordance with applicable environmental standards.
Natural Gas Treatment and Liquefaction
Technip Energies offers a complete range of services across the gas value chain to support its clients’ capital projects
from concept to delivery. Technip Energies’ capabilities include the design and construction of facilities for liquefied
natural gas (“LNG”), gas-to-liquids (“GTL”), natural gas liquids (“NGL”) recovery, and gas treatment.
In the field of LNG, Technip Energies pioneered base-load LNG plant construction through the first-ever facility in
Arzew, Algeria. Working with its partners, Technip Energies has constructed facilities that can deliver more than 105
million metric tonnes per annum (“Mtpa”), which is a significant portion of the global liquefaction capacity in operation
today. Technip Energies brings knowledge and conceptual design capabilities that are unique among engineering and
construction companies involved in LNG. Technip Energies has engineered and delivered a broad range of LNG plants,
including mid-scale and very large-scale plants, both onshore and offshore, and plants in remote locations. Technip
Energies has experience in the complete range of services for LNG, receiving terminals from conceptual design studies to
EPC. Reference projects include LNG trains in Qatar (the sixth largest ever constructed), Yemen, and a series of mid-scale
LNG plants in China. Together with its joint venture partners, Technip Energies delivered the first phase of the Yamal
LNG plant (“Yamal”) in the Russian Arctic with all three trains put in production before the end of 2018. During 2019, the
Arctic LNG 2 project for Novatek was sanctioned following award of the EPC contract to Technip Energies, together with
its joint venture partners. Technip Energies combines its capabilities with its technology and know-how to develop new
solutions that supports the energy transition in reducing LNG plant emissions and improving their energy efficiency.
17 TechnipFMC
U.K. Annual Report and Accounts Technip Energies is also well-positioned in the GTL market and is one of the few contractors with experience in large GTL
facilities. Technip Energies has unique experience in delivering plants using Sasol’s “Slurry Phase Distillate” technology,
and it has provided front-end engineering design for the Fischer-Tropsch section of more than 60% of commercial liquids
conversion capacity worldwide. Technip Energies’ clients also benefit from its development of environmental protection
measures, including low nitrogen oxide and sulfur oxide emissions, waste-water treatment, and waste management.
Technip Energies specializes in the design and construction of large-scale gas treatment complexes as well as existing
facility upgrades. Gas treatment includes the removal of carbon dioxide and sulfur components from natural gas using
chemical or physical solvents, sulfur recovery, and gas sweetening processes based on the use of an amine solvent.
Technip Energies ranks among the top contractors in the field in relation to sulfur recovery units installed in refineries
or natural gas processing plants. Given its long-term experience in the field of sour gas processing, Technip Energies can
provide support to clients for the overall evaluation of the gas sweetening/sulfur recovery chain and the selection of
optimum technologies.
Refining
Technip Energies is a leader in the design and construction of refineries. Technip Energies manages many aspects of
these projects, including the preparation of concept and feasibility studies, and the design, construction, and start-up of
complex refineries or single refinery units. Technip Energies has been involved in the design and construction of more
than 30 new refineries or major refinery expansions and are one of the few contractors in the world to have built seven
new refineries since 2000. Technip Energies has extensive experience with technologies related to refining and have
completed more than 840 individual process units within major expansion or refurbishment projects, implemented in
more than 75 countries. As a result of its cooperation with the most highly renowned technology licensors and catalyst
suppliers, and its strong technological expertise and refinery consulting services, Technip Energies is able to provide
an independent selection of appropriate technologies to meet specific project and client targets. These technologies
result in direct benefits to the client, such as energy efficiency, emission control and environmental protection, including
hydrogen and carbon dioxide management, sulfur recovery units, water treatment, and zero flaring. With a strong record
of accomplishment in refinery optimization and performance improvement projects, Technip Energies has experience and
competence in relevant technological fields in the refining sector. Transition to a low-carbon economy is a strategic trend
driving the refining industry today for which Technip Energies offers significant experience, technological skills, solid
project development, and delivery references.
Biofuels
Biofuels are a renewable alternative to fossil fuels and an advanced solution to meet stringent, medium-term climate
targets. In this domain, Technip Energies is one of the global leaders and delivers a wide range of biofuel plants utilizing
various technologies. Technip Energies has end-to-end project management expertise, delivering projects from feasibility
studies to full EPC project execution. Opportunities lie in expansions or revamps of existing refineries, as well as stand-
alone projects. As an example, Technip Energies is a partner of choice for Neste’s NEXBTL projects, being involved in its
facilities in Singapore and Rotterdam.
Hydrogen
Hydrogen is widely used in the production of cleaner transport fuels and is also the most widely used industrial gas in
the refining, chemical, and petrochemical industries. With more than 55 years’ experience and expertise in the production
of hydrogen, Technip Energies offers a single point of responsibility for the design and construction of hydrogen and
synthesis gas production units, with tailored solutions ranging from Process Design Packages to full lump-sum turnkey
projects. Technip Energies also offers services for maintenance and performance optimization of running units as well as
a wide choice of proprietary technologies, including steam reforming technology used worldwide. Technip Energies has
solutions in place for carbon capture readiness in future hydrogen plants, targeting more than a two-thirds’ reduction
18 TechnipFMC
U.K. Annual Report and Accounts in carbon dioxide release from hydrogen plants. Driven by its track record in grey and blue hydrogen projects, Technip
Energies is also focused on positioning carbon-free, green, hydrogen in the current and future energy landscape,
on the basis of its extensive expertise in hydrogen technology. In October 2020, Technip Energies entered into a
strategic alliance with McPhy, a leading manufacturer and supplier of carbon-free hydrogen production and distribution
equipment, to develop large-scale and competitive carbon-free hydrogen solutions from production to liquefaction,
storage, and distribution.
Ethylene
Technip Energies holds proprietary technologies and is a leader in the design, construction, and commissioning of
ethylene production plants. Technip Energies designs steam crackers, from concept stage through construction and
commissioning, for both new plants (including mega-crackers) and plant expansions. Technip Energies has a portfolio of
the latest generation of commercially proven technologies and is uniquely positioned to be both a licensor and an EPC
contractor. Technip Energies’ technological developments have improved the energy efficiency in ethylene plants by
improving thermal efficiency of the furnaces and reducing the compression power required per ton, thereby reducing
carbon dioxide emissions per ton of ethylene by 30% over the last 20 years.
Petrochemicals
Technip Energies is one of the world leaders in the process design, licensing, and realization of petrochemical units,
including basic chemicals, intermediate, and derivative plants. Technip Energies provides a range of services that includes
process technology licensing and development and full EPC complexes. Technip Energies is accelerating the energy
transition by improving monomer and energy efficiencies of its plants and by integrating feedstock shifts to improve
production costs and carbon footprints. Technip Energies licenses a portfolio of chemical technologies through long-
standing alliances and relationships with leading manufacturing companies and technology providers. Technip Energies
has research centers to develop and test technologies for polymer and petrochemical applications, where fully automated
pilot plants gather design data to scale-up processes for commercialization.
Fertilizers
Technip Energies’ expertise covers the entire value chain from mining and beneficiation to fertilizers, including ammonia,
urea, and phosphoric acid plants. Working in more than 40 countries, Technip Energies has engineered and delivered
more than 350 large fertilizer complexes and integrated units. Technip Energies services offerings range from global
strategic planning, technical consulting, and feasibility studies to complete turnkey facilities and further assistance to
production and de-bottlenecking. Through its commitment to continuous end-to-end innovation for higher performance
and efficiencies, Technip Energies helps its clients develop optimized and sustainable process schemes for their projects
and meet the highest environmental standards.
Sustainable Chemistry
Technip Energies is a key player in sustainable chemistry and offers a variety of technologies, processes and services in
the areas of biofuels, biochemicals, and circular economy applications. With leading engineering and project management
capabilities originating from expertise in chemicals, petrochemicals, refining, and fermentation, it provides high value for
clients – from process development in the very early stage of the project, to the implementation of large and complex
sustainable chemicals plants.
Decarbonization
Technip Energies provides solutions that span from energy efficiency to full carbon removal, adapting to a variety of
client challenges and requirements. Technip Energies makes clients’ businesses less carbon intensive across activities,
decarbonizes fossil-based energies and manages the resulting CO2 in a sustainable manner. Technip Energies’ current
19 TechnipFMC
U.K. Annual Report and Accounts portfolio of sustainable technologies includes process designs that improve energy efficiency and reduce emissions and
provides answers today for its customers.
Carbon-free energy solutions
To offer carbon-free solutions requires overcoming many technical and commercial challenges, as well as integrating
multiple technologies for the management of electrical power from wind or solar intermittency. In this field, Technip
Energies is expanding its portfolio of technologies and processes to carbon-free energy chains such as green hydrogen
produced from renewable energy.
Fixed Platforms
Technip Energies offers a broad range of fixed platform solutions in shallow water, including: (i) large conventional
platforms with pile steel jackets whose topsides are installed offshore either by heavy lift vessel or floatover; (ii) small,
conventional platforms installed by small crane vessel; (iii) steel gravity-based structure platforms, generally with
floatover topsides; and (iv) small to large self-installing platforms. Technip Energies offers a range of design, construction,
and industrial applications that are key to the global transition to a less carbon intensive economy.
Floating Production Units
Technip Energies offers a broad range of floating platform solutions for moderate to ultra-deepwater applications,
including:
` Spar Platforms: Capable of operating in a wide range of water depths, the Spar is a low motion floater that can
support full drilling with dry trees or with tender assist and flexible or steel catenary risers. The Spar topside is
installed offshore either by heavy lift vessel or floatover. Technip Energies has constructed 17 Spar facilities which
are currently operating in the world.
` Semi-Submersible Platforms: These platforms are well-suited for oil field developments where subsea wells drilled by
a mobile offshore drilling unit are appropriate. Semi-Submersibles can operate in a wide range of water depths and
may have full drilling and large topside capabilities. Technip Energies has its own unique design of low-motion Semi-
Submersible platforms that can accommodate dry trees.
` Tension-Leg Platforms (“TLP”): An appropriate platform for deepwater drilling and production in water depths up to
approximately 1,500 meters, the TLP can be configured with full drilling or with tender assist and is generally a dry
tree unit. The TLP and our topside can be integrated on to the substructure in a cost-effective manner at quayside.
Floating Production, Storage and Offloading (“FPSO”)
Working with its construction partners, Technip Energies has delivered some of the largest FPSOs in the world. FPSOs
enable offshore production and storage of oil which is then transported by a tanker where pipeline export is uneconomic
or technically challenged (e.g., ultra-deepwater). FPSOs utilize onshore processes adapted to a floating marine
environment. They can support large topsides and hence large production capacities. Leveraging its industry-leading
capabilities in gas monetization, particularly FLNG, Technip Energies is currently well-positioned to leverage the global
offshore gas cycle with gas FPSOs.
Floating Liquefied Natural Gas
FLNG is an innovative alternative to traditional onshore LNG plants and is suitable for remote and stranded gas fields
that were previously deemed uneconomical. FLNG is a commercially attractive and carbon conscious approach to the
monetization of offshore stranded gas fields or associated gas from oil production. It avoids the cost of building and
operating long-distance pipelines and extensive onshore infrastructure. Technip Energies pioneered the FLNG industry
and is the contractor best able to integrate all of the core activities required to deliver an FLNG project: LNG process,
20 TechnipFMC
U.K. Annual Report and Accounts offshore facilities, loading systems, and subsea infrastructure. Technip Energies delivered the industry’s first and largest
FLNG facilities and is currently executing ENI’s Coral South FLNG, which will be installed offshore Mozambique in
East Africa.
Mining and Metals
Technip Energies offers its clients an integrated approach and expertise across the mineral value chain from mining to
processing. The Sintoukola potash project in the Congo is a prime example of this integrated approach. Technip Energies
covers the entire project lifecycle, from conceptual studies to engineering, procurement, construction, and project
management services or EPC Lump-Sum Turn-Key services with references including successful completed projects
and ongoing projects dedicated to the treatment of nickel, uranium, phosphate, potash, alumina, and iron ore.
Technip Energies brings together the know-how and determination to transform its clients’ project economics.
Life Sciences
Technip Energies is a leading provider in the design and construction of pharmaceuticals and bio-technologies facilities,
bringing together know-how, process engineering expertise, construction management, commissioning, and qualification.
Technip Energies offers fully integrated technical and regulatory solutions from design to validation. Technip Energies
provides its clients a robust experience with more than 350 pharmaceuticals and bio-technologies facilities delivered in
the past 25 years.
Nuclear
Technip Energies has recognized expertise and dedicated capabilities at several stages of the nuclear industry chain, from
mining to chemistry, underground waste storage and reprocessing. Technip Energies provides engineering services from
basic to detailed design, project management, control assistance, and construction services for the nuclear market.
Loading Systems
Technip Energies is globally recognized for setting technical and performance standards in fluid transfer, delivering
liquid and gas loading systems to the most challenging applications, both onshore and offshore. Technip Energies leads
the market with 10,000 loading arms supplied, including more than 500 arms for LNG. Technip Energies has developed
unique offshore LNG transfer systems for all FLNG facilities operating to-date. Technip Energies offers equipment design
and fabrication projects, as well as services over the life of its systems.
Cybernetix robotics and surveillance
Technip Energies offers innovative robotics and surveillance systems for harsh environments and operational constraints.
Technip Energies works with an array of clients in the energy industry. This includes nuclear, where Technip Energies
involvement dates back more than 20 years. Technip Energies’ solutions help energy clients increase uptime, reduce
costs, and improve safety and speed of decision-making through augmented monitoring and advanced robotics solutions
for inspection and dexterous interventions.
Capital Intensity
Technip Energies executes turnkey contracts on a lump-sum or reimbursable basis through engineering, procurement,
construction, and project management services on both brownfield and greenfield developments and projects.
Technip Energies can execute EPC contracts through sole responsibility, joint ventures, or consortiums with other
companies. Technip Energies often receives advance payments and progress billings from its customers to fund initial
development and working capital requirements. However, its working capital balances can vary significantly through
the project lifecycle depending on the payment terms and timing on contracts.
21 TechnipFMC
U.K. Annual Report and Accounts Dependence on Key Customers
Generally, Technip Energies’ customers are major integrated oil companies or national oil companies. Technip Energies
has developed long-term relationships with its main clients around its portfolio of technologies, expertise in project
management, and strong execution, while addressing national content development requirements. Technip Energies’
customers have sought the security of partnerships with Technip Energies to ensure timely and cost-effective delivery
of their projects. One customer, Arctic LNG, represented more than 10% of our 2020 consolidated revenue.
Competition
In the onshore market, Technip Energies faces a large number of competitors, including U.S. companies (Bechtel
Corporation, Fluor Corporation, KBR, Inc. (“KBR”), and McDermott), Asian and Australian companies (Chiyoda Corporation,
JGC Corporation, Hyundai Engineering & Construction Co., Ltd., Samsung Engineering Co., Ltd, SK Engineering &
Construction Co., Ltd, and Worley Limited), European companies (Wood Group plc, Maire Tecnimont Group, Petrofac, Ltd.,
Saipem, and Tecnicas Reunidas, S.A.). In addition, Technip Energies competes against smaller, specialized, and locally based
engineering and construction companies in certain countries or for specific units such as petrochemicals.
Competition in the offshore market is relatively fragmented and includes various players with different core capabilities,
including offshore construction contractors, shipyards, leasing contractors, and local yards in Asia Pacific, the Middle East,
and Africa. Competitors include China Offshore Oil Engineering Co., Ltd., Daewoo Shipbuilding & Marine Engineering Co.,
Ltd., Hyundai Heavy Industries Co., Ltd., JGC Corporation, KBR, McDermott, MODEC Inc., Saipem, and Samsung Heavy
Industries Co., Ltd.
Seasonality
Technip Energies’ onshore business is generally not impacted by seasonality. Technip Energies’ offshore business could
be impacted by seasonality in the North Sea and other harsh environment regions during the offshore installation
campaign at the end of a project.
Market Environment
In the first quarter of 2020, the COVID-19 pandemic provoked an unprecedented drop in demand for oil and gas, while
supply was maintained at a high level for some time by some large oil and gas producing countries, resulting in sharp
price reductions. Technip Energies’ clients reacted rapidly, cutting their investments and delaying project sanctions.
Given the long cycle nature of Technip Energies business and the resilience and maturity of the projects in backlog,
Technip Energies has been able to mitigate a significant portion of COVID-19 operational impacts. For its large capital
projects, deferrals of new projects were recorded while on-going projects were maintained. With the introduction of its
energy transition framework, Technip Energies is well positioned to accompany clients in their shift towards low-carbon
societies and pursue commercial opportunities, including in digitalization.
The onshore market activity continues to provide a tangible set of opportunities in LNG due to the critical role
that natural gas plays as a transition fuel. By focusing on selectivity, cost competitiveness and an agility to capture
new opportunities, Technip Energies continues to pursue refining, petrochemical, fertilizer, and renewables project
opportunities. Based on a solid track-record, technologies and its energy transition framework, Technip Energies is
well positioned for growth in sustainable chemistry and other low-carbon or carbon-free energy solutions.
Offshore market activity is expected to benefit in the near-term as macro conditions continue to support the
international growth cycle, resulting in increased activity in offshore and deepwater exploration and development. In
the long term, new upstream investment will also be required as gas becomes a bigger portion of the global energy
mix. Technip Energies is well positioned to capture these opportunities due to its offering in all offshore markets and
leadership position in FLNG or gas FPSO.
22 TechnipFMC
U.K. Annual Report and Accounts Strategy
Technip Energies strategy is based on the following:
` Selectivity of clients, projects, and geographies, which serves to maintain early engagement, leading to influence over
technological choices, design considerations, and project specifications that make projects economically viable.
` Technology-driven differentiation with strong project management, which eliminates or significantly reduces technical
and project risks, leading to both schedule and cost certainty without compromising safety.
` Excellence in project execution, because of our global, multi-center project delivery model complemented by deep
partnerships and alliances to ensure the best possible execution for complex projects.
Technip Energies continues to invest in innovation and technology. Technip Energies is at the forefront of digital solutions
due in part to its investment in three dimensional models, often referred to as digital twin, and interfaces.
Technip Energies continues to serve its clients in traditional markets, developing more energy-efficient solutions while
making their facilities less-carbon intensive. Technip Energies’ framework about Energy Transition is organized around
four pillars, and will help us accelerate the journey to a low-carbon society:
` LNG – to deliver the necessary infrastructure as a global leader as we transition to a low-carbon society.
` Sustainable Chemistry – to design and implement processes for products from renewable sources and to provide
circular solutions for the generation of safe and sustainable substances that are in demand by industry and society.
` Decarbonization – to make Technip Energies’ clients’ businesses less carbon intensive across our activities,
decarbonize fossil-based energies and manage the resulting CO2 in a sustainable manner.
` Carbon-Free Solutions – to expand Technip Energies’ portfolio of technologies and processes that provide non-
carbon-based energy alternatives.
Recent and Future Developments
Technip Energies’ active early engagement with its clients through front-end engineering studies serves to optimize
project economics while also significantly mitigating risks during project execution. Technip Energies direct engagement
led to the signing of a major EPC contract in July for the construction of a new hydrocracking complex for the Assiut
refinery in Egypt. Technip Energies continues to selectively track refining, petrochemical, fertilizer, and sustainable
chemistry project opportunities – notably in the Middle East, Africa, Asia and North America – as these sectors typically
prove to be more resilient through a downturn.
In response to an increase in demand for gas, new offshore investment will be required in the long term. Recent
discoveries of offshore fields with reserves in regions such as Australia and East Africa are expected to benefit future
activity; however, the timing of increased investment in these regions could be deferred. Offshore continued as a leader
in gas projects with the ongoing Karish FPSO project for Energean, Tortue FPSO project for BP, and Coral FLNG project
for Eni.
Product Development
Technip Energies is positioned as a premier provider of project execution and technology solutions, which enables its
customers to unlock resources at advantaged capital and operating economics. Technip Energies invests in these main
onshore R&D areas: (i) the development of process technology and equipment for economy of scale; (ii) continuous
improvement of its proprietary process technologies and other solutions to reduce operating and investment cost; and
(iii) diversification of its proprietary technology offering, especially in the energy transition domain.
Technip Energies’ offshore R&D efforts are focused on improving the economics of its clients’ diverse fixed and floating
platform projects. Additionally, to further reduce operating and investment costs, Technip Energies continues to progress
the development of robotic solutions for offshore platforms and work towards a standard and adaptable design for
Normally Unmanned Installations. Technip Energies is also evaluating the various opportunities that will emerge as the
23 TechnipFMC
U.K. Annual Report and Accounts industry and societal demands shift as part of the energy transition. Technip Energies continues to assess and implement
the best digital technologies to support the business.
Acquisitions and Investments
Technip Energies has made an investment in McPhy, a leading manufacturer and supplier of carbon-free hydrogen
production and distribution equipment. Technip Energies also signed a memorandum of understanding with McPhy,
pursuant to which the two companies will jointly work on technology development and project implementation. In
addition to its leadership position in hydrogen, this collaboration will help Technip Energies develop large-scale and
competitive Green hydrogen solutions.
Surface Technologies
The Surface Technologies segment designs, manufactures, and services products and systems used by companies
involved in land and shallow water exploration and production of crude oil and natural gas. Our Surface Technologies
product families include (i) drilling, (ii) stimulation, (iii) production, (iv) measurement, and (v) services. We manufacture
most of our products internally in facilities located worldwide.
Principal Products and Services
Drilling
We provide a full range of drilling and completion systems for both standard and custom engineered applications. The
customer base of our drilling and completion offerings is oil and gas exploration and production companies.
Surface Wellheads and Production Trees
Our products are used to control and regulate the flow of crude oil and natural gas from the well. The wellhead is a
system of spools and sealing devices from which the entire downhole well string hangs and provides the structural
support for surface production trees. Production trees are comprised of valves, actuators and chokes which can be
combined in both vertical and horizontal configurations, depending on customer-specific requirements.
Surface wellheads and production trees are “per-well” systems which are designed for onshore shale, onshore
conventional, and offshore shallow water platform applications, and are typically sold directly to exploration and
production operators during the drilling and completion phases of the well lifecycle. Our surface wellhead and production
tree systems are used worldwide, and we are one of the few companies that provide global coverage and a full range
of system configurations, including (i) conventional wellheads, (ii) Unihead® drill-thru wellheads designed for faster
installation and drill-time optimization, and (iii) high-pressure, high-temperature (“HPHT”) systems for extreme production
applications.
We also provide services associated to our surface wellhead and production tree portfolio, including service personnel
and rental tooling for wellhead and production tree installation and life of field repair, refurbishment, and general
maintenance. Our wellhead and production tree business relies on our ability to successfully provide the necessary field
operations coverage, responsiveness, and reliability to prevent downtime and non-productive time during the drilling and
completion phases.
24 TechnipFMC
U.K. Annual Report and Accounts Completion and stimulation
Our iComplete™ offering is the first integrated pressure containment kit for the onshore conventional stimulation market.
Its CyberFrac™ digital platform reduces manpower in the red zone and enables efficiencies that significantly reduce GHG
emissions, lower downtime, and eliminate the integration burden for operators.
We are one of the few oilfield service providers that can offer an integrated solution covering the fracturing through
flowback phases. iComplete™ provides our exploration and production customers with an integrated rental and service
offering, including fracturing tree and manifold systems, as well as pressure control flowlines, flowback and well testing
equipment, and field services.
Fracturing Tree and Manifold Systems
During the completion of a shale well, the well undergoes hydraulic fracturing. During this phase, durable and wear-
resistant wellsite equipment is temporarily deployed. Our equipment is designed to sustain the high pressure and highly
erosive fracturing fluid which is pumped through the well into the formation.
Our equipment (fracturing tree systems, fracturing valve greasing systems, hydraulic control units, fracturing manifold
systems, and rigid and flexible flowlines) is temporarily laid out between the wellhead and the fracturing pump truck
during hydraulic fracturing. These products are typically supplied to exploration and production operators who rent this
equipment directly from us during the hydraulic fracturing activities. Associated with our fracturing equipment rental
is fracturing rig-up / rig-down field service personnel, as well as oversight and operation of the equipment during the
multiple fracturing stages for a shale well.
TechnipFMC’s manifold solutions help increase operational efficiency for a pad site with multiple wells. Our SuperFrac™
Manifold provides time savings and pumping efficiencies when stimulating multiple wells on a single pad. The manifolds
are installed and connected to multiple trees off the critical path, which allows our customers to fracture more stages
per day in a compact footprint and efficiently move operations from one well to another, saving time and money. We
also offer conventional and articulating arm manifold trailers, which are used as the connection point between fracturing
pump trucks and the fracturing flowline and manifold system.
Our Ground Level Fracturing System is an essential tool for unconventional operators who use simultaneous operations
to efficiently run completions in multi-well pads. The innovative system design uses various lengths of trunkline to align
the SuperFrac™ Manifold and fracturing tree at ground level, which minimizes the number of flowline connections for
safer operation. We are a significant supplier of flowline pipework (rigid and flexible) that is used to move the fracturing
product from the pump truck, via the manifold and into the fracturing trees.
Pressure Pumping
We design and manufacture equipment used in well completion and stimulation activities by major oilfield service and
drilling companies, as well as by oil and gas exploration and production operators directly.
Flexibles
We have been a leading supplier of flexible lines since the 1970s and have successfully introduced a portfolio of flexible
solutions for the onshore stimulation market. Our PumpFlex™ and WellFlex™ products can be incorporated into most
shale operations and are an integral part of our iComplete™ system.
Flowline.
We are a leading supplier of flowline products and services to the oilfield industry. From the original Chiksan® and Weco®
products to our revolutionary equipment designs and integrated services, our family of flowline products and services
provides our customers with reliable and durable pressure pumping equipment. Our facilities stock flowline products in
the specific sizes, pressures, and materials common to each region. Our commitment is to help our customers worldwide
25 TechnipFMC
U.K. Annual Report and Accounts attain maximum value from their pressure pumping assets by guaranteeing that the right products arrive at the job site
in top working condition. Our total solutions approach includes the InteServ tracking and management system, mobile
inspection and repair, strategically located service centers, and genuine Chiksan® and Weco® spare parts.
Well Service Pumps
We offer a diverse line of well service pumps for use in high-pressure pumping operations such as hydraulic fracturing
and stimulation, including triplex and quintuplex pumps, each with its own industry-leading features, including: (i)
heavy-duty power ends, paired with main journal roller bearings and heavy-duty rod journal bearings, (ii) heavy-duty
crankshafts, (iii) fluid cylinders, with accessible packing and valves, and (iv) made-to-order pumps. Our pumps can
withstand some of the harshest operating conditions, with pressure ranges up to 20,000 psi and flow rates up to 1,500
gallons per minute.
Production
Our upstream production offering includes well control, safety and integrity systems, multiphase meter modules, in-
line separation and processing systems, and standard pumps. These offerings are differentiated by our comprehensive
portfolio of in-house compact, modular, and digital technologies, and are designed to enhance field project economics
and reduce operating expenditures with an integrated system that spans from wellhead to pipeline.
Our iProduction™ system is the first automated integrated production platform for onshore unconventional. Our
digital interface enables operators to manage their production operations remotely, leveraging Insitex data-monitoring
technology. Our separation portfolio and measurement technologies, combined with our expertise in modularization,
enable our customers to achieve first production faster with fully optimized and environmentally conscious, compact
systems.
Flowback and Well Testing Services
After a shale well is hydraulically fractured, the well moves to the flowback phase in which much of the fracturing fluid
pumped into the well flows back out through the wellhead and fracturing tree system. This phase lasts until the wellbore
flow is adequate for flow through the production facilities downstream of the wellsite. Our flowback and well testing
offering includes chokes, de-sanders, and advanced well testing equipment and related services which are provided to
exploration and production operators during the flowback phase. Our Automated Well Testing Package (AWT™) is now
widely used in North America enabling operators to remove personnel from processes and its digital package anticipates
service. These offerings enable a substantial reduction in downtime and enhanced safety.
Well Control and Integrity Systems
We supply control components and safety systems designed to safely and efficiently run a wellpad, modules on an
offshore platform, or a production facility. Our systems are based on standard, field-proven building blocks and designed
for minimal maintenance during life of field operations.
Surface Multiphase Meter
Our multiphase meters (“MPMs”) are a collection of technologically advanced innovations that provide a differentiated
approach to multiphase measurement. The patented technology in our MPMs offers many unique features that provide
a step change in allocation measurement and allows for continuous surveillance of wells across a full range of operating
conditions. Our MPMs provide real-time data to a central facility, or our cloud portal, for production reporting and remote
notification and system troubleshooting.
Separation and Processing Systems
TechnipFMC provides industry-leading technology for the separation of oil, gas, sand, and water. These solutions are
26 TechnipFMC
U.K. Annual Report and Accounts used in onshore production facilities and on offshore platforms worldwide. Our family of separation products delivers
client success by increasing efficiency and throughput and reducing the footprint of processing facilities. Our separation
systems offering includes internal components for oil and gas multiphase separation, in-line deliquidisers, and solids
removal, as well as fully assembled separation modules and packages designed and fabricated for oil and gas separation,
fracturing flowback treatment, solids removal, and primary produced water treatment.
Standard Pumps and Skid Systems
We provide complete skid solutions, from design consultation through startup and commissioning. We offer a diverse line
of reciprocating pumps, customized according to the application with pressure ranges available up to 10,000 psi and flow
rates up to 1,500 gallons per minute.
Automation and Digital Systems
We provide hardware and software solutions to automate and provide simple human interfaces for a number of our
critical products. These digital offerings help enable the removal of personnel from critical zones, either offshore or
onshore. In addition, the digital signatures from our products can then be interpreted and used via condition performance
monitoring to eliminate unplanned downtime.
Measurement
We design, manufacture, and service measurement products for the oil and gas industry. Our flow computers and control
systems manage and monitor liquid and gas measurement for applications such as custody transfer, fiscal measurement,
and batch loading and deliveries. Our FPSO metering systems provide the precision and reliability required for measuring
large flow rates of marine loading operations. Our gas and liquid measurement systems are utilized in multiple energy-
related applications, including crude oil and natural gas production and transportation, refined product transportation,
petroleum refining, and petroleum marketing and distribution. We combine advanced measurement technology with
state-of-the-art electronics and supervisory control systems to provide the measurement of both liquids and gases. This
ensures processes operate efficiently while reducing operating costs and minimizing the risks associated with custody
transfer.
Services
We offer our customers a comprehensive suite of service packages to ensure optimal performance and reliability of our
equipment. These service packages include all phases of the asset’s life cycle: from the early planning stages through
testing and installation, commissioning, and operations, replacement and upgrade, maintenance, storage, preservation,
intervention, integrity, decommissioning, and abandonment.
Capital Intensity
Surface Technologies manufactures most of its products, resulting in a reliance on manufacturing locations throughout
the world, including fully owned manufacturing hubs in Stephenville, Texas, U.S., and Singapore, and a wide global
network of third-party suppliers. We also maintain a large quantity of rental equipment related to our drilling and
completion and pressure control offerings.
Dependence on Key Customers
Generally, Surface Technologies’ customers are major integrated oil companies, national oil companies, independent
exploration and production companies and oil and gas service companies. No single Surface Technologies customer
accounted for 10% or more of our 2020 consolidated revenue.
Competition
Surface Technologies is a market leader for many of our products and services. Some of the factors that distinguish us
27 TechnipFMC
U.K. Annual Report and Accounts from other companies in the same sector include our technological innovation, reliability, product quality, and ability
to integrate across a broad portfolio scope. Surface Technologies competes with other companies that supply surface
production equipment and pressure control products. Some of our major competitors include Baker Hughes, Cactus, Inc.,
Forum Energy Technologies, Inc., Gardner Denver, Inc., Schlumberger, Haliburton, and The Weir Group plc.
Market Environment
It has been a challenging year for the surface market, driven in part by the COVID-19 pandemic and the decline in
hydrocarbon demand. Drilling and completion activity during 2020 decreased by approximately 40% compared to 2019
levels.
North American activity remained lower during the year, however, the number of U.S. fracturing crews has started to
recover from the trough reached in May, and the weekly U.S. rig count has stabilized. Activity outside of North America
remains resilient. We also continue to benefit from our exposure to the Middle East and Asia Pacific, both of which are
being supported by strength in gas-related activity. The business mix outside of North America is expected to account for
as much as 65% of total segment revenue in 2021.
Strategy
We exist to transform the surface market in order to provide customers with breakthrough reductions in cost and carbon
intensity in the drilling, completion, upstream production, and midstream and downstream transportation sectors. We
distinguish our offering by three key strengths: technology, integration, and automation.
Technology
We are committed to differentiated core products that enable integrated solutions to leverage the benefits of smarter
designs.
Integration
Integrated ecosystems that reduce costs and increase uptime through pre-engineered, modular solutions which drive
improvements in greenhouse gas emissions.
Automation
Intelligent products that are remotely managed using actionable data, reducing manpower in the field, maximizing uptime,
and enabling enhanced production.
Product Development
In 2020, we capitalized on the launch of our revolutionary integrated ecosystems, iProduction™ and iComplete™, with the
successful installation of our first iProduction™ system with Shell in their Permian basin iShale™ production site, and the
implementation of our iComplete™ integrated system in the U.S. utilizing our digital interface technology, CyberFrac™.
iProduction™ is a modern production approach that includes well pad processing, gathering lines, and central processing
facilities under a single digital interface. iProduction™ uses proprietary process technology, allowing customers
to eliminate tanks, decrease GHG emissions and reduce footprint while maintaining reliability. By integrating and
modularizing pre-engineered standard products, we reduced our clients’ costs by up to 33%, reduce time to first oil by
up to 30% and, using our digital twin technology, each site is monitored and controlled remotely – delivering new levels
of insightful data to ensure uptime.
iComplete™ uses standardized equipment that can be set up for any unconventional well in the world. The integrated
system removes 80% of connections and reduces the need for manual intervention during operations thanks to our
CyberFrac™ digital interface, which provides actionable data remotely. Our customers get to oil faster and reduce
operating costs by 30%. This revolutionary approach is making our customers’ frac pads faster, safer, and smarter.
28 TechnipFMC
U.K. Annual Report and Accounts Acquisitions and Investments
In June 2018, we broke ground on a new 52,000 square meter facility in Dhahran, Saudi Arabia, with work continuing
throughout 2019. Despite the COVID-19 pandemic, work has progressed through 2020 and we are on track to open the
facility by mid-2021. The facility, which will be comprised of two stories and a 13, 000 square meter manufacturing
space, is part of our continued investment in the Middle East to reinforce our leading position in delivering local solutions
that extend asset life and improve project returns. The new facility positions us to respond to the expected increase in
activity in the area while strengthening our capabilities, providing a solid platform for us to grow in what is a strategic
market for our surface business. The new facility will offer a broader range of capabilities and greater value-add in-
country, supporting our full portfolio with high technology equipment in the drilling, completion, production, and pressure
control sectors.
Capitalizing on Energy Transition
TechnipFMC continues to innovate and introduce new technologies across our portfolio of products and services.
Leveraging our vast experience and competencies from decades of working in the transformation of the energy sector,
we enable our clients to achieve their energy transition targets.
In Subsea, we fundamentally changed the way we design, manage, and execute projects, starting with digital tools such as
our Subsea Studio™. Our Subsea 2.0™ platform can greatly simplify subsea infrastructure, while reducing greenhouse gas
emissions by nearly 50%. Combined with iEPCI™, our unique integrated model, it simplifies vessel installation campaigns,
providing an even greater environmental and economic benefit. Our vision includes an “all-electric” system powered by
renewable energy, with the potential to eliminate emissions.
Technip Energies continues to break boundaries and accelerate the journey to a low-carbon society. With decades of
experience in the energy industry, Technip Energies is using its engineering, process and technology competencies as
well as R&D facilities to find decarbonized solutions for a better environment. Technip Energies has structured its energy
transition framework around four pillars: LNG, sustainable chemistry, decarbonization and carbon-free energy solutions.
Technip Energies is a leader in gas treatment and liquefaction and has significant expertise and prospects in sustainable
chemistry, such as its partnership with Neste for renewable diesel projects. It has expanded its footprint in the circular
economy, including collaboration with Carbios to demonstrate its recycling technology. Technip Energies’ Genesis
advisory services have a particular focus on energy transition. Technip Energies is a leader in hydrogen, with proven
technology to deliver blue hydrogen and, through its investment in McPhy, it is well positioned for the emerging Green
hydrogen market.
Surface Technologies’ high-efficiency solutions enable our clients to reach hydrocarbons faster with fully optimized
and environmentally compact systems. Our integrated service lines, such as iProduction™ and iComplete™, provide
additional opportunities and benefits to our customers. For instance, a project utilizing our iProduction™ integrated
production system allows the client to capture more than 50% of the greenhouse gases that are typically released into
the atmosphere during the production phase of an unconventional development.
29 TechnipFMC
U.K. Annual Report and Accounts Other business information relevant to our business segments
Sources and Availability of Raw Materials
Our business segments purchase carbon steel, stainless steel, aluminum, and steel castings and forgings from the global
marketplace. We typically do not use single source suppliers for the majority of our raw material purchases; however,
certain geographic areas of our businesses, or a project or group of projects, may heavily depend on certain suppliers for
raw materials or supply of semi-finished goods. We believe the available supplies of raw materials are adequate to meet
our needs.
Research and Development
We are engaged in R&D activities directed toward the improvement of existing products and services, the design of
specialized products to meet customer needs, and the development of new products, processes, and services. A large
part of our product development spending has focused on the improved design and standardization of our Subsea and
Technip Energies products to meet our customer needs.
Patents, Trademarks, and Other Intellectual Property
We own a number of patents, trademarks, and licenses that are cumulatively important to our businesses. As part of our
ongoing R&D focus, we seek patents when appropriate for new products, product improvements, and related service
innovations. We have approximately 7,300 issued patents and pending patent applications worldwide. Further, we license
intellectual property rights to or from third parties. We also own numerous trademarks and trade names and have
approximately 660 registrations and pending applications worldwide.
We protect and promote our intellectual property portfolio and take actions we deem appropriate to enforce and defend
our intellectual property rights. We do not believe, however, that the loss of any one patent, trademark, or license, or
group of related patents, trademarks, or licenses would have a material adverse effect on our overall business.
7,300
patents issued and
pending applications
35,000
employees
Employees
As of December 31, 2020, we had more than 35,000 employees.
Segment and Geographic Financial Information
The majority of our consolidated revenue and segment operating profits are generated in markets outside of the
United States. Each segment’s revenue is dependent upon worldwide oil and gas exploration, production and
petrochemical activity.
Financial information about our segments and geographic areas is incorporated herein by reference from Note [3] to our
consolidated financial statements of this U.K. Annual Report.
30 TechnipFMC
U.K. Annual Report and Accounts Order Backlog
Information regarding order backlog is incorporated herein by reference from the section entitled “Business Review” of
the Strategic Report contained in this U.K. Annual Report.
Website Access to Reports and Proxy Statement
Our U.K. Annual Reports and Half-Year Reports are available free of charge through our website at www.technipfmc.com,
under “Investors” as soon as reasonably practicable. Unless expressly noted, the information on our website or any other
website is not incorporated by reference in this U.K. Annual Report and should not be considered part of this U.K. Annual
Report or any other filing we make.
31 TechnipFMC
U.K. Annual Report and Accounts Business Review
Introduction
In this U.K. Annual Report, the Company is reporting in its consolidated financial statements the results of its operations
for the year ended December 31, 2020, which consist of the combined results of operations of Technip S.A. and FMC
Technologies, Inc.
Due to the Merger, FMC Technologies’ results of operations have been included in the consolidated financial statements
for periods subsequent to the consummation of the Merger on January 16, 2017. Under the acquisition method of
accounting, Technip was identified as the accounting acquirer and acquired a 100% interest in FMC Technologies.
Historically, Technip prepared its financial statements in accordance with IFRS, as adopted by the European Union
(“IFRS”), and FMC Technologies prepared its financial statements in accordance with U.S. GAAP. Following completion
of the Merger, the Company is preparing its consolidated financial statements in accordance with both (i) U.S. GAAP in
accordance with U.S. securities law and reporting requirements, and (ii) international accounting standards in conformity
with the requirements of the U.K. Companies Act 2006 (the “Companies Act”) and international financial reporting
standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. The U.S. GAAP
financial statements for the year ended December 31, 2020 were contained in the Annual Report on Form 10-K filed
with the
SEC on March 5, 2021 and the IFRS consolidated financial statements are contained in this U.K. Annual Report.
The basis of presentation, critical accounting estimates and significant accounting policies are set out in Note 1 to the
consolidated financial statements contained in this U.K. Annual Report.
Key Performance Indicators
We are a global leader in energy projects, technologies, systems and services. We have manufacturing operations
worldwide, strategically located to facilitate efficient delivery of these products, technologies, systems and services to
our customers. We report our results of operations in the following segments: Subsea, Technip Energies and Surface
Technologies. Management’s determination of our reporting segments was made on the basis of our strategic priorities
and corresponds to the manner in which our Chief Executive Officer reviews and evaluates operating performance to
make decisions about resource allocations to each segment.
We focus on economic- and industry-specific drivers and key risk factors affecting our business segments as we
formulate our strategic plans and make decisions related to allocating capital and human resources. The results of our
segments are primarily driven by changes in capital spending by oil and gas companies, which largely depend upon
current and anticipated future crude oil and natural gas demand, production volumes, and consequently, commodity
prices. We use crude oil and natural gas prices as an indicator of demand. Additionally, we use both onshore and offshore
rig count as an indicator of demand, which consequently influences the level of worldwide production activity and
spending decisions. We also focus on key risk factors when determining our overall strategy and making decisions for
capital allocation. These factors include risks associated with the global economic outlook, product obsolescence and the
competitive environment. We address these risks in our business strategies, which incorporate continuing development
of leading-edge technologies and cultivating strong customer relationships.
Our Subsea segment is affected by changes in commodity prices and trends in deepwater oil and natural gas production.
Our Technip Energies segment is impacted by change in commodity prices, population growth and demand for natural
gas, although the onshore market is typically more resilient to these changes impacting the segment. Our Subsea and
Technip Energies segments both benefit from the current market fundamentals supporting the demand for new liquefied
natural gas facilities. Technip Energies also benefits from the construction of petrochemical and fertilizer plants.
32 TechnipFMC
U.K. Annual Report and Accounts Our Surface Technologies segment is primarily affected by changes in commodity prices and trends in land-based and
shallow water oil and natural gas production. We have developed close working relationships with our customers. Our
results reflect our ability to build long-term alliances with oil and natural gas companies and to provide solutions for their
needs in a timely and cost-effective manner. We believe that by closely working with our customers, we enhance our
competitive advantage, improve our operating results and strengthen our market positions.
As we evaluate our operating results, we consider business segment performance indicators like segment revenue,
operating profit and capital employed, in addition to the level of inbound orders and order backlog. A significant
proportion of our revenue is recognized under the percentage of completion method of accounting. Cash receipts from
such arrangements typically occur at milestones achieved under stated contract terms. Consequently, the timing of
revenue recognition is not always correlated with the timing of customer payments. We aim to structure our contracts
to receive advance payments that we typically use to fund engineering efforts and inventory purchases. Working capital
(excluding cash) and net cash are therefore key performance indicators of cash flows. These key performance indicators
are detailed in the paragraph entitled “Consolidated Results of Operations” below.
In each of our segments, we serve customers from around the world. During 2020, approximately 84% of our total sales
were recognized outside of the United States. We evaluate international markets and pursue opportunities that fit our
technological capabilities and strategies.
33 TechnipFMC
U.K. Annual Report and Accounts Consolidated Results of Operations
Management’s report of the consolidated results of operations is provided on the basis of comparing actual results of
operations for the year ended December 31, 2020 to actual results of operations for the year ended December 31, 2019.
Year Ended
December 31,
(In millions, except percentages)
2020
2019
$
Revenue
$
13,057.4 $ 13,426.2 $
(368.8)
Costs and expenses
Cost of sales
11,192.1
10,915.8
Selling, general and administrative expense
1,067.6
1,230.0
Research and development expense
119.8
162.9
276.3
(162.4)
(43.1)
Impairment, restructuring and other expenses
3,436.9
2,436.6
1,000.3
Separation costs
Merger transaction and integration costs
39.5
—
72.1
31.2
(32.6)
(31.2)
Change
%
(2.7)%
2.5 %
(13.2)%
(26.5)%
41.1%
n/a
(100.0)%
Total costs and expenses
15,855.9
14,848.6
1,007.3
6.8%
Other expense, net
Income from equity affiliates
Net interest expense
Loss before income taxes
Provision for income taxes
Net loss
(0.8)
69.4
(267.2)
12.3
(330.2)
(498.5)
(3,060.1)
(2,175.8)
148.6
275.1
(3,208.7)
(2,450.9)
266.4
57.1
168.3
(884.3)
(126.5)
(757.8)
99.7%
464.2%
33.8%
(40.6)%
(46.0)%
(30.9)%
Net profit attributable to non-controlling interests
(49.7)
(3.1)
(46.6)
(1,503.2)%
Net loss attributable to TechnipFMC plc
$ (3,258.4) $ (2,454.0) $
(804.4)
(32.8)%
34 TechnipFMC
U.K. Annual Report and Accounts Revenue
Revenue decreased by $368.8 million in 2020 compared to 2019. Subsea revenue decreased year-over-year primarily
due to decreased project activity in the Gulf of Mexico and the North Sea. Increased revenue in Technip Energies was
primarily driven by the continued ramp-up of Arctic LNG 2, increased activity on downstream projects and in the Process
Technology business, which more than offset the decline in revenue from Yamal LNG. Technip Energies revenue was
also favorably impacted by the result of a $113.2 million litigation settlement. Surface Technologies revenue decreased,
primarily as a result of the significant decline in operator activity in North America, with partial positive impact from
order intake timing in international markets. In addition, our consolidated revenues were negatively impacted by
operational challenges associated with the COVID-19 related disruptions.
Gross profit
Gross profit (revenue less cost of sales) as a percentage of sales decreased to 14.3% in 2020 compared to 18.7% in 2019.
Subsea gross profit decreased due to a more competitively priced backlog and the negative operational impacts related
to COVID-19. Gross profit declined in Technip Energies due in large part to a reduced contribution from Yamal LNG as the
project reached physical completion last year and is progressing through the warranty phase. Surface Technologies’ gross
profit was negatively impacted by the year-over-year decline in North American drilling and completions activity, which
was partially offset by the lower costs from our accelerated cost reduction initiative implemented during 2020.
Selling, general and administrative expense
Selling, general and administrative expense decreased by $162.4 million year-over-year, primarily as a result of decreased
corporate expenses. During the beginning of 2020, in response to the deteriorated market environment, driven in part
by the COVID-19 pandemic, we implemented a series of cost reduction initiatives that resulted in significant savings and
extended to all business segments and support functions.
Impairment, restructuring and other expense
Due to the substantial decline in global demand for oil caused by the COVID-19 pandemic in 2020, we incurred $3,436.9
million of restructuring, impairment and other expenses in 2020. These charges primarily included $2,997.7 million
of goodwill impairment, $172.3 million of property, plant and equipment, $33.5 million of right-of-use assets, $101.8
million of COVID-19 related expenses and $125.7 million for restructuring and severance expenses. COVID-19 related
expenses represent unplanned, one-off, incremental and non-recoverable costs incurred solely as a result of the
COVID-19 pandemic situation, which would not have been incurred otherwise. COVID-19 related expenses primarily
included (a) employee payroll and travel, operational disruptions associated with quarantining, personnel travel
restrictions to job sites, and shutdown of manufacturing plants and sites; (b) supply chain and related expediting costs
of accelerated shipments for previously ordered and undelivered products; (c) costs associated with implementing
additional information technology to support remote working environments; and (d) facilities-related expenses to
ensure safe working environments. COVID-19 related expenses exclude costs associated with project and/or operational
inefficiencies, time delays in performance delivery, indirect costs increases and potentially reimbursable or recoverable
expenses. During 2019, we incurred $2,436.6 million of restructuring, impairment and other expenses, which included
$2,018.7 million and $411.3 million of goodwill and property, plant and equipment impairments, respectively. See Note
10, Note 11 and Note 22 to our consolidated financial statements included in this U.K. Annual Report.
35 TechnipFMC
U.K. Annual Report and Accounts Separation costs
During the year ended December 31, 2020, we incurred $39.5 million of separation costs associated with the preparation
of the separation transaction. During the first quarter of 2020, we incurred $27.1 million of separation costs associated
with the separation transaction, which was postponed due to the COVID-19 pandemic, the significant decline in
commodity prices, and the heightened volatility in global equity markets. During the fourth quarter of 2020, we incurred
$12.4 million of separation costs associated with the January 2021 announcement of the resumption of activities toward
the separation of Technip Energies. During the year ended December 31, 2019, we incurred $72.1 million of separation
costs associated with the separation transaction. See Note 33 to our consolidated financial statements included in this
U.K. Annual Report.
Merger transaction and integration costs
Prior to the initial announcement of the planned separation transaction in August 2019, we incurred merger transaction
and integration costs of $31.2 million during the first half of 2019 relating to the continuation of the integration activities
following the Merger. No such costs were incurred subsequently in 2019 or in 2020.
Other income (expense), net
Other income (expense), net, primarily reflects foreign currency gains and losses, including gains and losses associated
with the remeasurement of net cash positions, gains and losses on sales of property, plant and equipment and other
non-operating gains and losses. During 2020, we recognized $0.8 million of other expense, which primarily included
$53.3 million of net foreign exchange losses and $23.1 million of gains on sales of property, plant and equipment and
other assets. During 2019, we recognized $267.2 million of other expenses, which primarily included $167.3 million of net
foreign exchange losses and $91.3 million of legal provision, net of settlements. The change in foreign exchange losses is
primarily due to a reduction in foreign exchange losses from unhedged currencies, more favorable hedging costs, and the
effects of a weakened U.S. dollar on naturally hedged projects.
Net interest expense
Net interest expense decreased $168.3 million in 2020 compared to 2019, primarily due to the change in the fair value
of the redeemable financial liability. We revalued the Yamal mandatorily redeemable financial liability to reflect current
expectations about the obligation and recognized a charge of $202.0 million, as compared to $423.5 million recognized in
2019. See Note 27 for further information regarding the fair value measurement assumptions of the Yamal mandatorily
redeemable financial liability and related changes in its fair value. Net interest expense, excluding the fair value
measurement of the mandatorily redeemable financial liability, and including interest income increased by $52.8 million
during 2020.
Provision for income taxes
Our income tax provisions for 2020 and 2019 reflected effective tax rates of (4.9)% and (12.6)%, respectively. The
year-over-year change in the effective tax rate was primarily due to the impact of nondeductible goodwill impairments,
increase in adjustment on prior year taxes, offset in part by the amount of tax expense associated with movements in
valuation allowances. Our effective tax rate can fluctuate depending on our country mix of earnings, since our foreign
earnings are generally subject to higher tax rates than in the United Kingdom.
36 TechnipFMC
U.K. Annual Report and Accounts Operating Results of Business Segments
Segment operating profit is defined as total segment revenue less segment operating expenses. Certain items have been
excluded in computing segment operating profit and are included in corporate items. See Note 3 to our consolidated
financial statements included in this U.K. Annual Report for further information.
We report our results of operations in U.S. dollars; however, our earnings are generated in various currencies worldwide.
In order to provide worldwide consolidated results, the earnings of subsidiaries functioning in their local currencies
are translated into U.S. dollars based upon the average exchange rate during the period. While the U.S. dollar results
reported reflect the actual economics of the period reported upon, the variances from prior periods include the impact of
translating earnings at different rates.
Subsea
(In millions, except %)
Revenue
Operating loss
Year Ended
December 31,
2020
2019
$
$
5,471.4
(2,890.5)
$
$
5,419.9
(1,412.1)
$
$
Favorable/(Unfavorable)
$
51.5
%
1.0%
(1,478.4)
(104.7)%
Operating loss as a percentage of revenue
(52.8)%
(26.1)%
(26.7)pts
Subsea revenue increased $51.5 million, or 1.0% year-over-year. Despite COVID-19 pandemic challenges and related
disruptions, we continued to demonstrate strong execution of our backlog.
Subsea operating loss is primarily due to significant impairment and other non-recurring charges. The operating
loss included $3,031.7 million of goodwill, property, plant and equipment and right-of-use impairments, restructuring
and other charges and COVID-19 related expenses compared to $1,693.8 million in 2019. Non-recurring charges
incurred related to COVID-19 disruptions during 2020 were $50.1 million. See Note 10, Note 11 and Note 22 to our
consolidated financial statements included in this U.K. Annual Report for additional information related to these
asset impairments.
37 TechnipFMC
U.K. Annual Report and Accounts Technip Energies
Year Ended
December 31,
Favorable/(Unfavorable)
(In millions, except %)
2020
2019
$
Revenue
Operating profit
$
$
6,520.0 $
6,458.9 $
61.1
673.1 $
966.0 $
(292.9)
(30.3)%
%
0.9%
Operating profit as a percentage of revenue
10.3 %
15.0 %
(4.7) pts.
Technip Energies revenue increased $61.1 million, or 0.9% year-over-year. Revenue benefited from the continued ramp-
up of Arctic LNG 2 and higher activity on downstream projects in Africa, North America and India, which more than
offset the decline in revenue from Yamal LNG. COVID-19 related operational efficiencies and business disruption also
impeded revenue growth during 2020. Revenue during the period benefited from a $113.2 million litigation settlement.
Operating profit decreased year-over-year, primarily due to a reduced contribution from Yamal LNG and lower margin
realization on early stage projects, including Arctic LNG 2. Project execution remained strong across the portfolio.
Non-recurring charges incurred related to COVID-19 disruptions during the period were $44.0 million. Subsequent to
the Spin-off, we operate under two reporting segments: Subsea and Surface Technologies, for further details see Note 33
to our consolidated financial statements included in this U.K. Annual Report.
Surface Technologies
(In millions, except %)
2020
2019
$
Revenue
Operating loss
$
$
1,066.0 $
1,547.4 $
(481.4)
(284.5)
$
(661.4) $
376.9
%
(31.1)%
57.0%
Year Ended
December 31,
Favorable/(Unfavorable)
Operating loss as a percentage of revenue
(26.7)%
(42.7)%
16.0 pts.
Surface Technologies revenue decreased $481.4 million, or (31.1)% year-over-year, primarily driven by the significant
reduction in operator activity in North America. Revenue outside of North America displayed resilience, with a more
modest decline due to reduced activity levels. Nearly 64% of total segment revenue was generated outside of North
America in the period.
Surface Technologies operating loss was primarily due to impairment and other non-recurring charges. The operating loss
included $301.6 million of goodwill, property, plant and equipment and right-of-use impairments, restructuring and other
charges and COVID-19 related expenses compared to $708.4 million incurred in 2019. Operating loss was also negatively
impacted by the reduced demand in North America driven by the significant decline in rig count and completions-related
activity, which was partially offset by lower costs from our accelerated cost reduction actions initiated in the first quarter
of 2020. Non-recurring charges incurred related to COVID-19 disruptions during the period were $7.7 million. See Note
10, Note 11 and Note 22 to our consolidated financial statements included in this U.K. Annual Report for additional
information related to these impairments.
38 TechnipFMC
U.K. Annual Report and Accounts Corporate Items
(In millions, except %)
Corporate expense
Year Ended
December 31,
Favorable/(Unfavorable)
2020
2019
$
%
$
(125.2) $
(227.3) $
102.1
44.9%
Corporate expenses decreased by $102.1 million during 2020. The reduction in corporate expenses is primarily due to
$38.6 million decrease due to lower activity and the impact of cost reductions implemented in 2020.
Inbound Orders and Order Backlog
Inbound orders – Inbound orders represent the estimated sales value of confirmed customer orders received during the
reporting period. The significant decline in commodity prices, due in part to the lower demand resulting from COVID-19
contributed to the decrease in the inbound orders during 2020.
(In millions)
Subsea
Technip Energies
Surface Technologies
Total inbound orders
Inbound Orders
Year Ended December 31,
2020
2019
$
4,003.0 $
7,992.6
5,001.3
13,080.5
1,061.2
1,619.9
$ 10,065.5 $ 22,693.0
Order backlog – Order backlog is calculated as the estimated sales value of unfilled, confirmed customer orders at the
reporting date. Backlog reflects the current expectations for the timing of project execution. The scheduling of some
future work included in our order backlog has been impacted by COVID-19 related disruptions and remains subject to
future adjustment. See “Transaction Price Allocated to the Remaining Unsatisfied Performance Obligations” in Note 5 to
our consolidated financial statements contained in this U.K. Annual Report for more information on order backlog.
(In millions)
Subsea
Technip Energies
Surface Technologies
Total order backlog
Order Backlog
December 31,
2020
2019
$
6,876.0 $
8,472.8
14,098.7
15,365.8
413.5
412.5
$ 21,388.2 $
24,251.1
Subsea – Order backlog for Subsea as of December 31, 2020, decreased by $1.6 billion from December 31, 2019.
Subsea backlog of $6.9 billion as of December 31, 2020, was composed of various subsea projects, including Total
Mozambique LNG; Eni Coral and Merakes; Petrobras Mero I and Mero II; Energean Karish; ExxonMobil Payara;
Reliance MJ-1; Equinor Johan Sverdrup Phase 2; Husky West White Rose; BP Platina; Chevron Gorgon Stage 2;
and Woodside Pyxis and Lambert Deep.
39 TechnipFMC
U.K. Annual Report and Accounts Technip Energies – Technip Energies order backlog as of December 31, 2020, decreased by $1.3 billion compared to
December 31, 2019. Technip Energies backlog of $14.1 billion as of December 31, 2020 was composed of various
projects, including Arctic LNG 2, Yamal LNG; Midor refinery expansion; BP Tortue FPSO; Long Son Petrochemicals;
ExxonMobil Beaumont refinery expansion; HURL fertilizer plants; Petronas Kasawari; Energean Karish; Neste bio-diesel
expansion; and Motor Oil Hellas New Naphtha Complex. Subsequent to the Spin-off, we will operate under two reporting
segments: Subsea and Surface Technologies. See Note 33 to our consolidated financial statements included in this U.K.
Annual Report for additional information on the Spin-off transaction.
Surface Technologies – Order backlog for Surface Technologies as of December 31, 2020, remained flat. Given the
short-cycle nature of the business, most orders are quickly converted into sales revenue; longer contracts are typically
converted within twelve months.
Non-consolidated backlog – Non-consolidated backlog reflects the proportional share of backlog related to joint ventures
that is not consolidated due to our minority ownership position.
(In millions)
Subsea
Technip Energies
Total order backlog
Non-consolidated order
backlog
December 31,
2020
2019
$
640.2 $
799.2
1,890.3
2,976.0
$
2,530.5 $ 3,775.2
Liquidity and Capital Resources
Most of our cash is managed centrally and flows through centralized bank accounts controlled and maintained by
TechnipFMC globally and in many operating jurisdictions to best meet the liquidity needs of our global operations.
Net (Debt) Cash – Net (Debt) Cash is a non-IFRS financial measure reflecting cash and cash equivalents, net of debt.
Management uses this non-IFRS financial measure to evaluate our capital structure and financial leverage. We believe net
debt, or net cash, is a meaningful financial measure that may assist investors in understanding our financial condition and
recognizing underlying trends in our capital structure. Net (debt) cash should not be considered an alternative to, or more
meaningful than, cash and cash equivalents as determined in accordance with IFRS or as an indicator of our operating
performance or liquidity.
The following table provides an IFRS reconciliation of our cash and cash equivalents to net (debt) cash, utilizing details of
classifications from our consolidated statements of financial position:
(In millions)
Cash and cash equivalents
Short-term debt and current portion of long-term debt
Long-term debt, less current portion
Lease liabilities
Net (debt) cash
40 TechnipFMC
December
31, 2020
December
31, 2019
$
4,807.7 $
5,190.1
(2,161.6)
(2,462.2)
(1,792.5)
(2,013.2)
(1,154.9)
(956.8)
$
(301.3) $
(242.1)
U.K. Annual Report and Accounts Cash Flows
Cash flows for each of the years in the two-year period ended December 31, 2020 and 2019, were as follows:
(In millions)
Cash provided by operating activities
Cash required by investing activities
Cash required by financing activities
Effect of exchange rate changes on cash and cash equivalents
(Decrease) in cash and cash equivalents
Working capital
Free cash flow
Year Ended December 31,
2020
2019
$
934.4 $
1,182.1
(180.6)
(419.8)
(1,359.7)
(1,120.2)
223.5
5.8
(382.4) $
(352.1)
61.3 $
(64.3)
642.6 $
727.7
$
$
$
Operating cash flows – During 2020, we generated $934.4 million in cash flows from operating activities as compared to
$1,182.1 million generated in 2019, resulting in a $247.7 million decrease compared to 2019. The decrease in operating
cash flows is primarily driven by the decrease in cash generated by our operations during the year due to the overall
decline in activity.
Investing cash flows – Investing activities used $180.6 million and $419.8 million of cash in 2020 and 2019, respectively.
The decrease in cash used by investing activities was due primarily to decreased capital expenditures, decreased
payments to acquire debt securities and increased proceeds from sale of assets and debt securities during 2020. In
2019, we purchased a deepwater dive support vessel, Deep Discoverer for $116.8 million, that was subsequently funded
through a sale-leaseback transaction.
Financing cash flows – Financing activities used $1,359.7 million and $1,120.2 million in 2020 and 2019, respectively.
The increase of $239.5 million in cash required for financing activities was due primarily to the increased debt pay
down activity during 2020 of $856.4 million, partially offset by $338.6 million reduction in settlements of mandatorily
redeemable financial liability and our efforts and commitment to preserve cash, which included reduction in cash
dividends of $173.6 million and reduction in share repurchases of $92.7 million.
Working capital represents total changes in operating current assets and liabilities.
Free cash flow is defined as operating cash flows less capital expenditures. The following table reconciles cash provided
by operating activities, which is directly comparable financial measure determined in accordance with IFRS, to free cash
flow (non-IFRS measure).
(In millions)
Cash provided by operating activities
Capital expenditures
Free cash flow
41 TechnipFMC
Year Ended December 31,
2020
2019
934.4 $
1,182.1
(291.8)
(454.4)
642.6 $
727.7
$
$
U.K. Annual Report and Accounts
Debt and Liquidity
Significant Funding and Liquidity Activities – During 2020, we completed the following transactions in order to enhance
our total liquidity position:
` Repaid $233.9 million of 5.00% 2010 private placement notes;
` Repaid the remaining outstanding balance of $190.0 million of the term loan assumed in connection with the
acquisition of the remaining 50% interest in TOP CV.
` Issued €200 million aggregate principal amount of 4.500% Private Placement Notes due June 30, 2025. Within three
months of the effective date of the Spin-off of Technip Energies, if there is a downgrade by a nationally recognized
rating agency of the corporate rating of TechnipFMC from an investment grade to a non-investment grade rating or a
withdrawal of any such rating, the interest rate applicable to the Private Placement Notes will be increased to 5.75%;
` Entered into a new, six-month €500 million senior unsecured revolving credit facility agreement, which may be
extended for two additional three-month periods (the “Euro Facility”); and
` Entered into the Bank of England’s COVID Corporate Financing Facility program (the “CCFF Program”), which allows us
to issue up to £600 million of unsecured commercial paper notes.
Total borrowings as of December 31, 2020 and 2019 were as follows:
December 31,
December 31,
2020
2019
$
1,525.2 $
1,967.0
551.1
500.0
—
184.0
159.0
153.3
241.1
91.9
119.0
119.5
310.0
1,154.9
491.7
500.0
224.4
168.4
145.4
140.2
—
84.2
108.6
109.2
536.3
956.8
$
5,109.0 $
5,432.2
(In millions)
Commercial paper
Synthetic bonds due 2021
3.45% Senior Notes due 2022
5.00% Notes due 2020
3.40% Notes due 2022
3.15% Notes due 2023
3.15% Notes due 2023
4.50% Notes due 2025
4.00% Notes due 2027
4.00% Notes due 2032
3.75% Notes due 2033
Bank borrowings and other
Lease liabilities
Total borrowings
42 TechnipFMC
U.K. Annual Report and Accounts Credit Facilities – The following is a summary of our credit facilities as of December 31, 2020:
(In millions)
Description
Amount
Debt
Outstanding
Commercial
Paper
Outstanding
(a)
Revolving credit facility
CCFF Program
Euro Facility
Bilateral credit facility
$
£
€
€
2,500.0 $
— $
708.0
600.0 £
— £
600.0
500.0 €
100.0 €
— €
— €
—
—
Letters
of Credit
Unused
Capacity
Maturity
$
£
€
€
— $ 1,792.0
January 2023
— £
—
March 2021
— €
500.0
February 2021
— €
100.0
May 2021
(a) Under our commercial paper program, we have the ability to access up to $1.5 billion and €1.0 billion of financing through our commercial paper
dealers. Our available capacity under our revolving credit facility is reduced by any outstanding commercial paper.
Committed credit available under our revolving credit facilities provides the ability to issue our commercial paper
obligations on a long-term basis. We had $708.0 million of commercial paper issued under our facilities as of December
31, 2020. In addition, we had $817.9 million of Notes outstanding under the CCFF Program.
On June 12, 2020, we entered into Amendment No. 1 to the Facility Agreement and into an Amendment and Restatement
Agreement to our Euro Facility. The amendments, which are effective through the respective expirations of the Facility
Agreement and Euro Facility, permit us to include the gross book value of $3.2 billion of goodwill (fully impaired in
the quarter ended March 31, 2020) in the calculation of consolidated net worth, which is used in the calculation of our
quarterly compliance with the total capitalization ratio under the Facility Agreement and Euro Facility.
The amended and restated Facility Agreement and Euro Facility contain usual and customary covenants, representations
and warranties, and events of default for credit facilities of this type, including financial covenants requiring that our
total capitalization ratio not exceed 60% at the end of any financial quarter. The Facility Agreement and Euro Facility also
contain covenants restricting our ability and our subsidiaries’ ability to incur additional liens and indebtedness, enter into
asset sales, or make certain investments.
At December 31, 2020, we were in compliance with all restrictive covenants under our credit facilities.
See Note 19 and Note 27 to the consolidated financial statements contained in this U.K. Annual Report, for further
information related to our credit facility and our mandatorily redeemable liability, respectively.
Credit Ratings - Our credit ratings with Standard and Poor’s (S&P) are BB+ for our long-term secured debt and B for our
commercial paper program. Our credit ratings with Moody’s are Ba1 for our long-term secured debt.
Credit Risk Analysis
For the purposes of mitigating the effect of the changes in exchange rates, we hold derivative financial instruments.
Valuations of derivative assets and liabilities reflect the fair value of the instruments, including the values associated
with counterparty risk. These values must also take into account our credit standing, thus including the valuation of the
derivative instrument and the value of the net credit differential between the counterparties to the derivative contract.
Adjustments to our derivative assets and liabilities related to credit risk were not material for any period presented.
The income approach was used as the valuation technique to measure the fair value of foreign currency derivative
instruments on a recurring basis. This approach calculates the present value of the future cash flow by measuring the
change from the derivative contract rate and the published market indicative currency rate, multiplied by the contract
notional values. Credit risk is then incorporated by reducing the derivative’s fair value in asset positions by the result
of multiplying the present value of the portfolio by the counterparty’s published credit spread. Portfolios in a liability
43 TechnipFMC
U.K. Annual Report and Accounts position are adjusted by the same calculation; however, a spread representing our credit spread is used. Our credit
spread, and the credit spread of other counterparties not publicly available, are approximated using the spread of similar
companies in the same industry, of similar size, and with the same credit rating. Additional information about credit risk is
incorporated herein by reference to Note 30 to the consolidated financial statements contained in this U.K. Annual Report.
At this time, we have no credit-risk-related contingent features in our agreements with the financial institutions that
would require us to post collateral for derivative positions in a liability position.
Financial Position Outlook
Overview
We are committed to a strong balance sheet and ample liquidity that will enable us to avoid distress in cyclical troughs
and access capital markets throughout the cycle. We believe our liquidity has and continues to exceed the level required
to achieve this goal.
Our objective in financing our business is to maintain sufficient liquidity, adequate financial resources and financial
flexibility in order to fund the requirements of our business. Our capital expenditures can be adjusted and managed to
match market demand and activity levels. Based on current market conditions and our future expectations, our capital
expenditures for 2021 are estimated to be approximately $250.0 million. Projected capital expenditures do not include
any contingent capital that may be needed to respond to a contract award.
Spin-off
In connection with the Spin-off, we executed a series of refinancing transactions, in order to provide a capital structure
with sufficient cash resources to support future operating and investment plans. As of December 31, 2020, the Spin-off
was dependent upon on new capital structure negotiations and related new financing. See Note 33 to our consolidated
financial statements included in this U.K. Annual Report for additional information on the Spin-off transaction.
Debt Issuance
On February 16, 2021, we entered into Revolving Credit Facility that provides for aggregate revolving capacity of up
to $1.0 billion. Availability of borrowings under the Revolving Credit Facility is reduced by any outstanding letters of
credit issued against the facility. At February 25, 2021, there were no outstanding letters of credit and availability of
borrowings under the Revolving Credit Facility was $800 million.
On January 29, 2021, we issued $1.0 billion of 6.5% senior notes due 2026 (the “2021 Notes”). The interest on the 2021
Notes is paid semi-annually on February 1 and August 1 of each year, beginning on August 1, 2021. The 2021 Notes are
senior unsecured obligations and are guaranteed on a senior unsecured basis by substantially all of our wholly-owned
U.S. subsidiaries and non-U.S. subsidiaries in Brazil, the Netherlands, Norway, Singapore and the United Kingdom.
Repayment of Debt
The proceeds from the debt issuance described above along with the available cash on hand were used to fund:
` The repayment of all $522.8 million of the outstanding Synthetic Convertible Bonds that matured in January 2021.
` The repayment of all $500.0 million aggregate principal amount of outstanding 3.45% Senior Notes due 2022.
` The termination of the $2.5 billion senior unsecured revolving credit facility we entered into on January 17, 2017; the
termination of the €500.0 million Euro Facility and the CCFF Program we entered into on May 19, 2020. In connection
with the termination of these credit facilities, we repaid most of the outstanding commercial paper borrowings, which
were $1,525.9 million as of December 31, 2020.
We will continue to be strategically focused on cash and liquidity preservation. Subsequent to the completion of the
Spin-off, we own 49.9% of the outstanding shares of Technip Energies. On March 31, 2021, pursuant to the Share
Purchase Agreement, BPI exercised its right and purchased from TechnipFMC 7.5 million shares in Technip Energies N.V.
44 TechnipFMC
U.K. Annual Report and Accounts for $100.0 million. The ownership percentage was further reduced by the sale of shares to BPI, for further details
see Note 33 to the consolidated financial statements contained in this U.K. Annual Report. We intend to conduct an
orderly sale of our stake in Technip Energies over time and will use the proceeds from future sales to further reduce
our net leverage.
Market Risk
We are subject to financial market risks, including fluctuations in foreign currency exchange rates and interest rates. In
order to manage and mitigate our exposure to these risks, we may use derivative financial instruments in accordance
with established policies and procedures. We do not use derivative financial instruments where the objective is to
generate profits solely from trading activities. At December 31, 2020 and 2019, substantially all of our derivative
holdings consisted of foreign currency forward contracts and foreign currency instruments embedded in purchase and
sale contracts.
These forward-looking disclosures only address potential impacts from market risks as they affect our financial
instruments and do not include other potential effects that could impact our business as a result of changes in foreign
currency exchange rates, interest rates, commodity prices or equity prices.
Foreign Currency Exchange Rate Risk
We conduct operations around the world in a number of different currencies. Many of our significant foreign subsidiaries
have designated the local currency as their functional currency. Our earnings are therefore subject to change due to
fluctuations in foreign currency exchange rates when the earnings in foreign currencies are translated into U.S. dollars.
We do not hedge this translation impact on earnings. A 10% increase or decrease in the average exchange rates of
all foreign currencies as of December 31, 2020, would have changed our revenue and income before income taxes
attributable to TechnipFMC by approximately $813.0 million and $38.0 million, respectively.
When transactions are denominated in currencies other than our subsidiaries’ respective functional currencies, we
manage these exposures through the use of derivative instruments. We primarily use foreign currency forward contracts
to hedge the foreign currency fluctuation associated with firmly committed and forecasted foreign currency denominated
payments and receipts. The derivative instruments associated with these anticipated transactions are usually designated
and qualify as cash flow hedges, and as such the gains and losses associated with these instruments are recorded in
other comprehensive income until such time that the underlying transactions are recognized. Unless these cash flow
contracts are deemed to be ineffective or are not designated as cash flow hedges at inception, changes in the derivative
fair value will not have an immediate impact on our results of operations since the gains and losses associated with these
instruments are recorded in other comprehensive income. When the anticipated transactions occur, these changes in
value of derivative instrument positions will be offset against changes in the value of the underlying transaction. When
an anticipated transaction in a currency other than the functional currency of an entity is recognized as an asset or
liability on the balance sheet, we also hedge the foreign currency fluctuation of these assets and liabilities with derivative
instruments after netting our exposures worldwide. These derivative instruments do not qualify as cash flow hedges.
Occasionally, we enter into contracts or other arrangements containing terms and conditions that qualify as embedded
derivative instruments and are subject to fluctuations in foreign exchange rates. In those situations, we enter into
derivative foreign exchange contracts that hedge the price or cost fluctuations due to movements in the foreign exchange
rates. These derivative instruments are not designated as cash flow hedges.
For our foreign currency forward contracts hedging anticipated transactions that are accounted for as cash flow hedges,
a 10% increase in the value of the U.S. dollar would have resulted in an additional loss of $68.4 million in the net fair
value of cash flow hedges reflected in our consolidated balance sheet as of December 31, 2020.
45 TechnipFMC
U.K. Annual Report and Accounts Interest Rate Risk
As of December 31, 2020, we had commercial paper of approximately $1.5 billion with a weighted average interest rate
of 0.26%. Using sensitivity analysis to measure the impact of a 10% adverse movement in the interest rate, or three basis
points, would result in an increase to interest expense of $0.5 million.
We assess effectiveness of forward foreign currency contracts designated as cash flow hedges based on changes in fair
value attributable to changes in spot rates. We exclude the impact attributable to changes in the difference between
the spot rate and the forward rate for the assessment of hedge effectiveness and recognize the change in fair value of
this component immediately in earnings. Considering that the difference between the spot rate and the forward rate is
proportional to the differences in the interest rates of the countries of the currencies being traded, we have exposure in
the unrealized valuation of our forward foreign currency contracts to relative changes in interest rates between countries
in our results of operations.
46 TechnipFMC
U.K. Annual Report and Accounts Corporate Responsibility and Sustainability –
Non-financial Information Statement
TechnipFMC is a leading technology provider to the traditional and new energy industries, delivering fully integrated
projects, products, and services. Our vision to enhance the performance of the world’s energy industry is supported by
a relentless drive of every individual at TechnipFMC.
Our decisions regarding corporate responsibility, governance, and sustainability are founded on the principles that
guide our Company. Our core values provide the framework for all of our decision making and are based on our
Foundational Beliefs.
In 2020, to better reflect our focus on corporate responsibility and sustainability at the Board level, the Nominating and
Corporate Governance Committee’s charter was substantially expanded to include oversight of the Company’s policies,
programs, and strategies related to environmental stewardship, responsible investment, corporate citizenship, human
rights, human capital management, ESG risk management, and other ESG matters, as well as other social and public
matters of significance to the Company. This committee, now renamed our ESG Committee, also reviews and monitors
the development and implementation of ESG targets, standards, metrics or methodologies, and reviews the Company’s
public disclosures with respect to ESG matters.
Core Values and Foundational Beliefs
Our core values are the drivers that guide how we act in a distinctly TechnipFMC way so we can deliver on our purpose
and achieve our vision. We bring our values to life through our behaviors—specific, observable, and measurable actions.
Our core values
Realizing possibilities
Achieving together
Building trust
The heart of everything we do
` We strive for ever better
` We work as one team
` We listen to improve
` We take initiative
` We share knowledge
` We partner constructively
` We learn from success and failure
` We embrace diversity of thought
` We seek to outperform
47 TechnipFMC
U.K. Annual Report and Accounts Our Foundational Beliefs are the cornerstone of our values that describe how we fundamentally do business and what
we never compromise on, no matter the circumstances.
Safety
Respect
We will not
compromise on health,
safety, and security.
We treat everyone
honestly, fairly, and
courteously.
Integrity
Sustainability
We hold ourselves to
the highest moral and
ethical principles.
Quality
We deliver the
highest quality in
everything we do.
We act responsibly,
always considering our
impact on the planet,
people, and communities
in which we operate.
Code of Business Conduct
Our Code of Business Conduct is built on our Foundational Beliefs and gives our directors, officers, and employees
a common language and playbook for decisions and actions that help us live our core values. We are committed to
establishing and maintaining an effective compliance program that is intended to increase the likelihood of preventing,
detecting, and correcting violations of Company policy and the law. Moreover, we have a hotline in place for employees,
officers, directors, and external parties to anonymously report violations of our Code of Business Conduct or complaints
regarding accounting and auditing practices. Reports of possible violations of financial or accounting policies are reported
to our Audit Committee.
We will disclose amendments to, or waivers of, our Code of Business Conduct that are required to be disclosed under
the U.S. Securities and Exchange Commission (“SEC”) and NYSE rules or any other applicable laws, rules, and regulations.
Any waiver of our Code of Business Conduct for our officers and directors must be approved by the Board or a relevant
Board committee. We have not made any such waivers, and do not anticipate making any such waiver.
48 TechnipFMC
U.K. Annual Report and Accounts Corporate Responsibility and Sustainability 2018-2020
We believe corporate responsibility and sustainability is a key element of our Company’s long-term success and is,
therefore, one of our Foundational Beliefs. To ensure that the Company is collectively focused on making meaningful and
tangible changes, we focused our sustainability efforts under three pillars for the years 2018-2020.
Corporate Responsibility and Sustainability Pillars
Supporting communities
Advancing gender diversity
Respecting the environment
Main objectives
We make a long-term positive
impact in the communities where
we live and work through active
engagement in health, education,
and local employment
` Go beyond our commercial
obligations to create in-country
value through initiatives in health,
education, and local employment
` Enable employees to volunteer
and support initiatives
` Support and develop Science,
Technology, Engineering, and Math
(STEM) initiatives
We create an environment
that encourages everyone
to reach their full potential
We develop solutions
and operations to minimize
carbon intensity and the
impact on the planet
` Ensure gender pay equity
everywhere we operate
` Reduce the carbon footprint of our
facilities, products, and solutions
` Improve gender balance in the
organization, across all functions
and levels
` Provide the carbon footprint of all
our deliverables to clients through
conceptual studies
` Promote women fairly and
equally through the career
development process
` Set up an internal carbon price
for the entire Company, projects,
and operations to impact
investment decisions
Over the last three years, we have set key performance targets for each of these pillars and measure our performance
against these targets. In addition to these annual objectives, the Company demonstrates its commitment in other ways
as it relates to energy efficiency, renewable resources, water management, material and waste management, and air
emissions, all of which are described further below.
For instance, in 2020, TechnipFMC reaffirmed its support of the Ten Principles of the United Nations (“UN”) Global
Compact in the areas of Human Rights, Labor, Environment, and Anti-Corruption. The UN Global Compact requires an
annual Communication on Progress, which is submitted and made publicly available on the UN Global Compact website.
The UN Global Compact is also a call for action to achieve its 17 Sustainable Development Goals (“SDGs”). These societal
49 TechnipFMC
U.K. Annual Report and Accounts goals are at the heart of the UN’s 2030 Agenda for Sustainable Development and are aimed at ending poverty, protecting
the planet, and ensuring that all people enjoy peace and prosperity by 2030.
After evaluation, we have selected certain UN SDGs for which we believe we can achieve the greatest positive impact,
given their relevance to our business and sustainability strategy. The application of these SDGs throughout this section
are identified by the SDG icon labels.
Additionally, our Code of Business Conduct requires that we, among other things:
` Design sustainable development initiatives with a focus on long-term added value;
` Engage with local communities impacted by our activities in close coordination with our clients and contribute to
social and economic self-sustainability;
` Anticipate and minimize potential disruptions to the community;
` Mitigate any negative impacts to local communities from our activities;
` Contribute to local employment growth by fostering training and transfer of skills and technology; and
` Respect local cultures and be aware of local practices and traditions, legislation, and cultural factors that may impact
behaviors and decisions.
Our Code of Business Conduct also covers many sustainability issues, from fair employment practices and equal
opportunity to Health, Safety, and Environment (“HSE”), human rights, and community involvement. We also have a
Quality, Health, Safety, Environment, and Security (“QHSES”) program aimed at preventing accidents and incidents,
ensuring personal and corporate accountability, and simplifying practices and processes across our Company. Backed
by our Foundational Beliefs, our QHSES teams create a culture of engagement to develop the leadership behaviors that
deliver enhanced performance and business results. Regarding human rights, the Company is specifically advancing
compliance in recruitment, working conditions, and supply chain practices. Since 2018, we have been a proud member
of Building Responsibly, an industry-led initiative enabling construction and engineering companies to collaborate around
their shared values, advance their compliance programs, and agree on common approaches regarding worker welfare
and human rights.
In addition, we have three specific networking groups involving subject matter experts from all of our business units: the
Sustainability Network, the Inclusion & Diversity Network, and the Environmental Working Group (“EWG”). These groups
implement our sustainability strategy, share knowledge and best practices, develop global and local initiatives and report
on results.
50 TechnipFMC
U.K. Annual Report and Accounts Supporting Communities
Supporting Communities is our first sustainability pillar. Our Code of Business Conduct encourages employees to engage
with local communities where we live and work, to contribute to their social and economic self-sustainability, and to
ensure that TechnipFMC is a responsible corporate citizen in our communities. It is the foundation of that responsibility
that forges our commitment to local communities.
Supporting Communities – Objectives
TechnipFMC supports and encourages its employees to volunteer and support their community development
programs in line with our Code of Business Conduct and our Supporting Communities pillar. Objectives of the pillar
included the following:
` Go beyond our commercial
obligations to create in-country
value through initiatives in health,
education, and local employment
` Support and develop initiatives
related to Science, Technology,
Engineering, and Mathematics
(STEM)
` Enable employees to volunteer
and support initiatives
51 TechnipFMC
U.K. Annual Report and Accounts Go beyond our commercial obligations to create in-country value
Keeping our initiatives and commitment
to support local communities
346
in 33
countries
340
in 33
countries
245
in 27
countries
2018
2019
2020
In 2020, 340 volunteer initiatives were organized in 33 countries where TechnipFMC operates, compared to 346
initiatives in 33 countries in 2019. Employees spent approximately 27,700 volunteer hours in 2020, versus 26,500 in
2019, creating in-country value through actions in health, education, STEM, local employment, environment, gender
diversity, and other relevant and impactful local issues. Despite the impact of the COVID-19 pandemic and lockdown in
many countries where we operate, our teams were creative and resilient, even designing remote volunteering initiatives,
and committed to our continuous support of local communities.
In the resource-strained environment around COVID-19, our teams donated personal protection equipment, facemasks,
sanitizers, cleaning products, food, medical supplies, and other products to local hospitals, local communities around our
facilities, and other charitable organizations. In the United Kingdom, Brazil, and Norway, we also used internal resources
to develop and print face shields that were donated to hospitals and medical facilities. In total, we organized more than
100 initiatives in 19 countries and donated more than 100,000 facemasks from our employees and through partnerships
with our clients and suppliers.
52 TechnipFMC
U.K. Annual Report and Accounts Support and develop STEM initiatives
73
STEM initiatives organized
(vs 58 in 2019)
in 15 countries
90%
of entities
organized STEM
initiatives in 2020
In 2020, we continued to focus on holding at least one STEM initiative in each Company entity with more than 300
employees. Initiatives developed in 2019 and 2020 can be grouped into three main areas: working with schools and/
or organizations to promote STEM for children, promoting STEM careers for students and young professionals, and
promoting STEM for employees’ children. Although 2020 brought unique challenges to our traditional STEM format,
our employees’ innovative ideas allowed us to offer STEM initiatives that met necessary health protocols and further
advanced the Company’s emphasis on STEM topics. For 2020, 73 STEM initiatives were organized in 15 countries.
Enable employees to volunteer and support initiatives
iVolunteer
10,000
hours volunteered
2018
2019
2020
26,500
hours volunteered
27,700
hours volunteered
In 2020, we continued our global volunteering program, iVolunteer, which we launched in 2019. iVolunteer enables
employees to support initiatives in the communities where they live and work to promote positive, tangible, and
collective impact on these communities. Globally, in 2020, our employees participated in local initiatives and spent
approximately 27,700 hours volunteering, demonstrating their commitment to our communities despite the COVID-19
pandemic.
53 TechnipFMC
U.K. Annual Report and Accounts Below are some examples of our community outreach in 2020:
United States
In February 2020, TechnipFMC hosted the third annual STEM Day in Houston, Texas. The
initiative is part of our active engagement in the education of our community. The event
presented 270 students an exciting, hands-on experience related to STEM projects, including
experiments and stations related to our industry. We also participate regularly in numerous
charitable events, including Women’s Initiative Day of Caring, Target Hunger Day of Caring,
and the Veterans’ Program.
Other initiatives included being part of the Houston Heart Walk, an annual fundraising
event dedicated to spreading awareness about cardiovascular health. Approximately 850
employees participated in a Virtual Heart Walk in 2020.
United Kingdom
Our team in Newcastle promoted volunteering month, putting together a suite of eleven
virtual volunteering activities. For every Newcastle-based employee who took part, a
donation was made to NHS Charities Together. Our teams from Dunfermline, Westhill, and
vessels also organized several virtual volunteering initiatives.
France
Brazil
Our team in France supports the non-profit organization, Elles Bougent (Girls on the
Move). Elles Bougent promotes gender diversity in STEM, as well as making technical and
industrial careers accessible for young female students. Our team in Sens also organized
19 volunteering initiatives to support its community and organized a STEM Day, meeting
approximately 700 students in two high schools close to our site.
In Brazil, we sponsor social and environmental programs for underprivileged children
and young students from neighboring communities to help them develop and have equal
opportunities, like the “Música Encantada” project where we have sponsored music
classes for 250 children in the local community. Also, in 2020, our volunteers organized a
beach cleaning activity in Macaé and Vitória, where 360 kg of waste was collected, and a
Christmas campaign to donate food and toys to underprivileged communities.
Colombia
In Colombia, we implemented a new virtual volunteering initiative to enable our employees
to use their knowledge to create courses for colleagues and their families.
Italy
TechnipFMC in Italy, in collaboration with Technical School Enrico Fermi based in Rome,
is involved in the Alternanza Scuola-Lavoro (Education-Work Rotation) project. This
collaboration enriches school programs with energy sector experience focused on oil and
gas, enabling students to better understand the added value offered by working in our
industry and at TechnipFMC.
54 TechnipFMC
U.K. Annual Report and Accounts Azerbaijan
India
Malaysia
Australia
Ghana
TechnipFMC is promoting opportunities for students who aspire to work in the energy
sector and who have a particular interest in our industry or related sectors through the
Baku Master Program organized in collaboration with Heydar Aliyev Foundation. More
than 53 students attending Baku Higher Oil School and Azerbaijan State Oil and Industrial
University have enrolled and benefitted from the Baku Master Program, which is structured
in seven industry modules and managed by our experts.
In India, our impact-driven sustainable initiative, Seed of Hope, has benefited more
than 90,000 people over the years. It has enabled STEM education for girls, provided
development workshops for youths, sponsored school fees for underprivileged children,
supported communities after natural disasters, and promoted livelihood opportunities, clean
energy, and a circular economy.
In Malaysia, our Go Success Program is a year-long holistic program that encompasses all
branches of knowledge in education, including power motivation, technical education, soft
skills, entrepreneurship, and public speaking. The program targets students but also teachers
and parents as part of the students’ overall development. In Johor, our employees built a
”recycled park” at a school near our site as part of our iVolunteer program.
In Australia, we have been developing a Reconciliation Action Plan and indigenous
engagement activities. Since 2018, we have joined more than 1,000 government, corporate,
and not-for-profit organizations in committing to build higher trust, lower prejudice, and
increased pride in Aboriginal and Torres Strait Islander people and culture.
TechnipFMC in Ghana handed over a 150-bed capacity Female Hostel to the Ellembelle
District and the Charlotte Dolphyne Training Institute, located in the Western region of
Ghana, fulfilling a need to provide adequate and safe accommodations for female students
and improve their attendance in classes.
55 TechnipFMC
U.K. Annual Report and Accounts TechnipFMC Relief and Development Fund (“TRDF”)
The TRDF is a Company endowment fund created in 2011 to support social and charitable initiatives. Its main goals are
to reinforce our corporate social responsibility and our local presence in the countries where we operate and to support
not-for-profit social or general interest projects.
Every year, we select certain social projects, proposed and carried out by an association or a non-governmental
organization, in a country where TechnipFMC has a long-term presence. In 2020, the TRDF helped:
` Asedeme in Senegal to purchase a new school bus to transport children with mental disabilities to specialized
daycare centers.
` Asmae-Sister Emmanuelle to deliver aid related to COVID-19 in Egypt and the Philippines. We also supported
a program on inclusive education for children and young adults with disabilities in Egypt.
` Essor in Mozambique to improve the employability of the most vulnerable youth from Pemba,
Cabo Delgado Province.
` Inter Aide in Mozambique to improve maternal and child health in the rural populations of Monapo and Memba
districts, Napula province.
` Samu Social International in Angola to provide medical and psychological assistance to homeless youth in Luanda.
56 TechnipFMC
U.K. Annual Report and Accounts Advancing Gender Diversity
Advancing Gender Diversity is our second sustainability pillar, and we believe it is not only a matter of responsibility, but
also a business imperative for our success. We do not tolerate unlawful discrimination related to employment, and our
Code of Business Conduct requires that employment decisions related to recruitment, selection, evaluation, compensation,
and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexual
orientation, marital status, or disability. We also ensure that our suppliers, customers, and business partners are aware of
our goal of creating a diverse and tolerant workforce.
Our global framework and key performance indicators for 2018 through 2020 and beyond aim to promote and
accelerate the development of women in all functions of our global organization.
Advancing Gender Diversity — Objectives
Our Advancing Gender Diversity objectives included the following:
` Ensure gender pay equity
` Improve gender balance in the
everywhere we operate and
review all jobs to ensure gender
pay equity and monitor them
through a full review every
three years
organization, across all functions
and levels
` Promote women fairly and
equally through the career
development process
57 TechnipFMC
U.K. Annual Report and Accounts Ensure gender pay equity
100% of jobs reviewed to ensure pay equity;
salary adjustments completed in 2019
U
TI N
N
O
C
G
N
I
R
O
O U S MO
N
I
T
O
R
I
N
G
C
O
N
TIN
U
T
I
N
OUS MO
In 2018, we reviewed 100% of our Company job functions to ensure pay equity. We identified areas for improvement
and completed all necessary salary adjustments in 2019 to ensure fair compensation for all of our employees.
For 2020 and beyond, we will continuously monitor our compensation programs with respect to pay equity. During our
annual salary review process, we review average salary adjustments by gender, taking into account performance ranking
and salary market competitiveness, in order to identify and address any discrepancies by gender. We perform similar
analyses for the annual individual performance payout under the annual cash incentive plan, as well as long-term equity
grants. For long-term equity grants, we aim for the gender distribution to reflect the gender distribution in the Company.
As part of our commitment to inclusion and diversity, employee well-being, and work-life balance, we announced a
Global Parental Leave Policy in 2020 that became effective in 2021. Our core values and Foundational Beliefs support
an atmosphere where employees can thrive professionally without sacrificing essential family obligations and well-being.
For parents, we recognize and support the need to care for and bond with a newborn or newly adopted child. Through
our Global Parental Leave Policy, our aim is that our employees experience an inclusive working environment and feel
welcome and comfortable working at TechnipFMC as a parent.
Guidelines in the Global Parental Leave Policy include minimum levels of caregiver leave for birth/adoption,
compensation, benefits and career development during caregiver leave, job protection during leave, working schedule
and workplace adaptation, support of breastfeeding mothers, and time off for infant care. The policy is designed
with gender equity and same-sex parents in mind and is defined using the terms “primary caregiver” and “secondary
caregiver” in lieu of more traditional definitions. We recognize that every family is different and believe that our policies
should apply consistently, whoever the primary caregiver is in a given family.
The policy provides global principles aimed at helping the countries design their own local parental leave policies,
compliant with local legislation. The policy sets a minimum standard across the Company, and where local guidelines
require additional benefits, the local guidelines are implemented.
58 TechnipFMC
U.K. Annual Report and Accounts Improve gender balance
The launch of
“Diversity & Inclusion
– it Matters!” learning module
40%
of all graduates
hired globally
were women
In 2019, to foster a diverse and inclusive culture, we launched our “Diversity & Inclusion – it Matters!” e-learning module
with an aim to raise awareness of our differences and help our employees improve as people and professionals. This
e-learning module was added to New Hire Orientation in 2020 to promote our commitment to advancing gender
diversity and an inclusive culture where all employees can reach their full potential. We also continued to improve gender
balance in 2020 with a focus on increasing the representation of women hired as new graduates. 40% of all graduates
hired globally in 2020 were women, surpassing our goal of 30%.
CEO
FOR DIVERSITY
& INCLUSION
Diversity in STEM:
7 employee resource groups
with ~1,800 members
23%
women
employees
in 2020
TechnipFMC has developed a culture that is based on the values of trust, mutual respect, and dialogue. In accordance
with local legislation, regular meetings with trade union-appointed and/or works council representatives are organized for
information and/or consultation. The European Works Council (“EWC”) meets at least twice a year and all of our European
entities had joined the EWC by the end of 2019 with the EWC agreement signed by participants’ representatives by the
end of 2019. In the first quarter of 2020, the EWC elected its new member and held two meetings in 2020, the first in
May and the second in December.
The Company also fosters Employee Resource Groups (“ERGs”), which are voluntary, employee-led focus groups
dedicated to a diverse and inclusive work environment. We currently have seven active ERGs with approximately
1,800 members in the United States, the United Kingdom, and Australia, covering IDEA – Inclusion, Development, and
Equality for All; Parents Network; Supporting TechnipFMC to Reach Its Vision of Equity; Black Organization for Leadership
& Development; Young Professionals Group; Military Veterans & Friends Network; and Organization of Networking
Employees. ERGs discuss and promote topics related to inclusion and diversity, develop and organize events internally
and externally, support local initiatives, and propose actions to improve accessibility and inclusivity for all at the
workplace. TechnipFMC provides executive support to our ERGs to help strengthen employee relations and improve the
well-being of our people.
59 TechnipFMC
U.K. Annual Report and Accounts In 2020, our Chairman and CEO made the pledge to CEO Action for Diversity and Inclusion™, committing to create
a trusting environment where all ideas are welcome and employees feel comfortable and empowered to draw on
their unique experiences and backgrounds. CEO Action for Diversity & Inclusion™ is the largest CEO-driven business
commitment to advance diversity and inclusion in the workplace.
As of December 31, 2020, TechnipFMC had the following number of non-executive directors and employees:
Male
Female
Total
% Female
2019
2020
2019
2020
2019
2020
2019
2020
Directors (non-executive directors)
Executive officers (including
Douglas J. Pferdehirt)
Senior managers
10
7
84
10
5
92
3
4
4
3
13
11
14
8
24
19
108
111
Employees on payroll (overall)
28,760 26,948
8,407
8,135
37,167
35,083
23%
36%
22%
23%
28%
38%
19%
23%
Promote women fairly and equally
76%
of succession plans
included at least one
woman in 2020
Continuous discussions around improving representation of women in the organization helps us promote women fairly and
equally throughout their career development process within our Company. In 2020, our People and Culture team reviewed
all senior management succession plans to ensure that female candidates were considered and included. As a result, 76% of
our succession plans in 2020 included at least one woman, which exceeded our 2020 objective to increase representation
of women in succession plans by 5%.
The representation of women executives in 2020 increased by 2% compared to 2019. The representation of women in senior
managers dropped from 22% to 19% in 2020 compared to 2019, respectively. We are committed to improving this dimension
and took necessary steps in strengthening our succession plans and graduate intake in 2020. We have also developed an
inclusive leadership curriculum, which, along with our executives’ commitment and systemic changes to policy and talent
standards, should help improve female representation in senior manager roles in the medium to long term.
60 TechnipFMC
U.K. Annual Report and Accounts Respecting the Environment
Respecting the Environment is the third of our three sustainability pillars. We believe our environmental responsibility
requires us to operate in a manner that minimizes the impact of our operations on the environment, develop sustainable
solutions to reduce carbon emissions within our overall environmental footprint, and avoid any environmental incidents
in our operations and activities.
Environmental Governance
Sustainability is one our Foundational Beliefs. Respecting the Environment is one of the three pillars of our sustainability
strategy, described above.
As defined in our global QHSES policy, QHSES is managed as an integral part of our business, based on a genuine care
and concern for people and the environment. We do not compromise on quality, safety, health, security, or environmental
sustainability to achieve our financial, project, service, and manufacturing objectives. Our overall objectives regarding
environmental responsibility are (i) to operate in a manner that minimizes the impact of our operations on the
environment and develop sustainable solutions to reduce carbon emissions and our overall environmental footprint, and
(ii) to avoid causing any environmental incidents.
We continue to commit resources and expertise to eliminate hazards, reduce risks, and prevent injury, ill health, and
environmental pollution related to our activities through design, process improvement, and technologies.
A key element of our environmental management is our Global Environmental Management Standard, applicable to all
our locations and projects globally. The standard and linked guidelines are an integral part of our global HSE management
system. The standard and guidelines describe the minimum requirements and set the baseline for identifying potential
environmental risk and opportunities, managing the environmental impact of our activities and projects during our
business development, and improving our environmental performance. As part of our risk management process,
environmental risks are regularly identified, monitored, and mitigated at every business level. The Company operates
in a manner that minimizes the environmental impact of, and risks associated with, our activities, through effective
environmental management standards that are implemented in an extended lifecycle context and perspective, fully in
line with the latest ISO 14001 requirements and in compliance with all applicable marine environmental regulations.
We seek to prevent and reduce our impact on the environment in accordance with legal requirements, ISO 14001
requirements, and international and internal standards. Environmental performance, including environmental incidents,
rates, and risks, are consolidated monthly and reported to senior management.
61 TechnipFMC
U.K. Annual Report and Accounts Responsibility and Organization
The Company is committed to operating in compliance with all applicable environmental regulations, laws, and
international codes and standards in the countries in which we operate. As such, environmental management is the
responsibility of everyone at TechnipFMC, starting with our Board of Directors and ESG Committee. Our ESG Committee
advises and recommends to the Board appropriate ESG practices and initiatives and oversees the Company’s progress
in implementing its ESG practices and programs. The effective implementation of environmental policy depends upon
management’s commitment, the accountability of every entity, an ongoing dialog with key stakeholders, and a chain of
responsibility that extends to the workforce of the Company.
All entities and projects within the Company are managed by dedicated QHSES managers and directors, with a team of
QHSES engineers and supervisors responsible for the application of the environmental rules in their respective areas to
ensure that our environmental requirements are well implemented. Our Code of Business Conduct requires managers to
inform employees, contractors, and suppliers of applicable environmental rules, procedures, and expected behaviors, and
that people reporting to them receive the required environmental training.
A specific EWG reports to the Corporate QHSES team and coordinates a network of environmental specialists from
all regions and business units. The EWG sets environmental programs, supports the enhancement of environmental
performance, and develops global environmental initiatives involving all our regions and projects.
Respecting the Environment – Objectives
Our Respecting the Environment objectives included the following:
` Reduce the carbon footprint
of our facilities, products,
and solutions and reduce our
greenhouse gas emissions
` Provide the carbon footprint of all
our deliverables to clients
` Establish an internal carbon price
for the entire Company, including
projects and operations, to inform
and impact investment decisions
62 TechnipFMC
U.K. Annual Report and Accounts Reduce our carbon footprint
We have focused on reducing our greenhouse gas (“GHG”) emissions, with an objective of reducing our Scope 1 and
Scope 2 emissions by 5% each year since 2017. In addition, we have set clear ambitions to enhance our technological
and service skills to serve our clients and to encourage them to make carbon-conscious choices and to drive our capital
expenditure and operating expenditure decisions with a structured internal carbon price mechanism.
Greenhouse
Gas Emissions
t
n
e
l
a
v
i
u
q
e
2
O
C
s
e
n
n
o
t
-4.9%
676,651
643,469
-27% -9.1%
469,955
427,003
2017
2018
2019
2020
Total Greenhouse Gas Emissions
Scope 1 & Scope 2
TechnipFMC is committed to reducing carbon emissions and its overall environmental footprint by developing new,
innovative, and sustainable solutions in the oil and gas market. In 2018, the Company adopted a Global Greenhouse Gas
Management standard to enhance the Company’s capabilities in GHG reduction in the Company’s business with focus on
Scope 3 GHG emissions.
By December 31, 2020, approximately 80 carbon footprint studies had been completed, covering a review of Scope 1,
Scope 2, and Scope 3 emissions in our supply chains in key countries.
Since 2018, total GHG emissions have decreased in line with Company objectives. In 2020, the total GHG Scope 1 and
Scope 2 emissions were 427,003 tonnes of CO2 equivalent versus 469,955 tonnes of CO2 equivalent reported in 2019,
representing a 9% annual reduction and a 37% overall reduction compared to our baseline year of 2017. The reduction in
GHG is mainly linked to trends in our business activities and to our Energy Transition program.
In addition to our efforts in reducing our carbon emissions within our operations, TechnipFMC is also working to ensure
our next generation of products are less carbon intensive. For example, our Subsea 2.0TM design included a lifecycle GHG
analysis that demonstrated how our innovations for the production of trees may allow up to a 46% reduction in our
carbon footprint as compared to the previous design.
63 TechnipFMC
U.K. Annual Report and Accounts
40+
Carbon Footprint Training
Program sessions for engineers
and managers completed in 2020
Finally, the Carbon Footprint Training Program launched by the Company’s QHSES department for all business levels and
projects in 2019 continued in 2020. By December 31, 2020, more than 40 training sessions for engineers and managers
had been delivered in locations where we have a material presence. This program is focused on extending knowledge
transfer, from the lifecycle perspective, and carbon footprint concepts to empower engineers in the implementation of
a complete GHG analysis for all business lines and to increase managers’ competencies on the reduction of our carbon
footprint across the organization.
GHG Emissions
The table below describes the annual quantity of GHG emissions resulting from activities the Company is responsible for
and has operational control over (including the combustion of fuel and the operation of any facility), measured in tonnes
of CO2 equivalent:
2018
2019
2020
Total GHG Emissions
(in metric tonnes CO2
equivalent)
Direct
emissions
Scope 1
Indirect
emissions
Scope 2
Direct
emissions
Scope 1
Indirect
emissions
Scope 2
Direct
emissions
Scope 1
Indirect
emissions
Scope 2
Our Assets
Industrial sites
Fleet
Offices
254,535
60,401
283,545
39,932
278,628
35,583
10,968
40,778
9,701
21,375
10,641
15,712
242,117
21
272,292
0
266,471
-
1,450
19,602
1,551
18,558
1,516
19,871
Our Projects
319,523
9,010
132,572
13,906
68,188
44,604
including Construction
sites and Yards/Bases:
Onshore/Offshore
Subsea
Other
284,055
29,658
5,810
3,898
2,840
2,272
51,780
76,023
4,769
9,128
2,873
1,905
24,491
42,110
37,477
1,736
6,220
759
GHG Emissions by Scope
574,058
69,411
416,117
53,838
346,816
80,187
Total GHG Emissions
643,469
469,955
427,003
64 TechnipFMC
U.K. Annual Report and Accounts 2% of the Company’s annual GHG emissions resulting from activities the Company is responsible for and has operational
control over (including the combustion of fuel and the operation of any facility) for the year ended December 31, 2020
related to energy consumed in the United Kingdom and offshore area.
To ease yearly comparison and trend analysis, industrial sites, offices, and fleet are presented under Our Assets, as
they are TechnipFMC’s permanent sites fully owned and operationally managed. Construction sites and Yards/Bases
are aggregated under Our Projects and presented separately as they are usually temporary sites that are not owned by
TechnipFMC but operationally managed during the construction phase. They are subject to variations from year to year,
depending on the number and type of ongoing projects and the type of construction activities (e.g., early site work, civil
work, construction, pre-commissioning, commissioning, or start-up).
Within Our Projects, Scope 1, direct emissions, and Scope 2, indirect emissions, decreased by 23% compared to 2019
due to reduced onshore and offshore construction and yard activities dedicated to major engineering, procurement, and
construction (“EPC”) activities.
For Company assets, our Energy Transition program in place in different countries contributed to saving 4,661 tonnes of
CO2 equivalent by using renewable energy in offices and manufacturing areas.
The annual quantity of emissions from the purchase of electricity, heat, steam, or cooling by the Company for its own use
is described in the table below:
Total GHG emissions from the purchase of electricity, heat,
steam, or cooling by the Company for its own use
(in metric tons CO2 equivalent):
Electricity
Heat
Steam
Cooling
Total Emissions
2018
69,304
87
0
20
69,411
2019
53,725
0
0
113
53,838
2020
80,059
0
0
128
80,187
5% of the Company’s annual GHG emissions of electricity, heat, steam, or cooling by the Company for its own use for the
year ended December 31, 2020 related to energy consumed in the United Kingdom and offshore area.
GHG Emissions Intensity
The Company’s GHG emissions intensity factor is calculated by dividing total Scope 1 and Scope 2 emissions by the
environmental hours worked (corresponding to sites that contributed to environmental data reporting). Hours worked
has been acknowledged as being most representative of the Company’s overall activity and is frequently used in HSE
standards in the industry.
(in kg eq. CO2/hours worked)
Total GHG Emissions Intensity
2018
4.07
2019
2.99
2020
2.40
Energy Consumption
The aggregate of (i) the annual energy consumed from activities for which the Company is responsible (including the
combustion of fuel and the operation of any facility) and (ii) the annual quantity of energy consumed resulting from the
purchase of electricity, heat, steam, or cooling by the Company for its own use for the year ended December 31, 2020
was 1,624 GwH, of which 2% related to energy consumed in the United Kingdom and offshore area.
65 TechnipFMC
U.K. Annual Report and Accounts Methodology
Environmental data is collected through our QHSES reporting system, Synergi, which is a global, integrated software
solution. Each of the Company’s reporting entities is required to consolidate and record its environmental data in Synergi
every month. This data reflects the environmental performance of entities involved in the offices, construction sites,
yards and spoolbases, manufacturing, and fleet operations when we own or manage the site in question and when we
are responsible for managing the work.
Environmental data is aggregated for the analysis in Asset and Projects categories: industrial sites, fleet, and offices are
consolidated as Our Assets since these three categories represent TechnipFMC’s permanent sites (owned or leased) under
full operational control, while the EPC Construction sites and Yards/Bases are not all owned sites but are all under the
operational control and responsibility of the Company for short- to medium-term periods (less than five years).
The reporting period is the financial year ending December 31, 2020. Figures for environmental indicators have been
extracted from the Company reporting tool.
To calculate Scope 1 and Scope 2 GHG emissions, sites’ registered electricity consumption and fuel consumption are
converted using emission factors from the IPCC Guidelines for National Greenhouse Gas Inventories, 2006 and from CAIT
v8.0, 2011. Emission factors differ depending on fuel type, method of generating electricity, and country. The reporting
tool calculates the resulting CO2 emissions.
9
carbon footprint
studies completed
using our technology
Provide the carbon footprint to our clients
Our second Respecting the Environment objective aims to provide the carbon footprint of all our deliverables to clients
through conceptual studies to help introduce our clients to new, low-carbon options in the early stages of projects and
highlight the carbon footprint differences between each concept as early as possible. In 2019, carbon footprint calculation
modules were developed and were implemented in our Technip Energies and Subsea conceptual studies.
In 2020, we launched proprietary Carbon Assessment Tools to enable the business to better understand how much
carbon a facility or operation might produce. Our consultants offer proprietary Carbon Assessment Tools that provide a
comparative carbon footprint of various design alternatives to support concept selection. In 2020, nine carbon footprint
studies were performed in conceptual phase providing carbon-conscious solutions to our clients.
66 TechnipFMC
U.K. Annual Report and Accounts Internal carbon price
2020
Internal Carbon
Price weaved into
investment metrics
CO2
In 2019, TechnipFMC began developing a mechanism to establish an internal carbon price for the Company, focused on
our assets, which should be implemented as part of the future Company’s investment decisions for capital expenditures.
We followed the highest international standards on this topic, and, in 2019, we formed a business-integrated Internal
Carbon Price Workgroup with the participation of our QHSES, EWG, Strategy, Finance, and Sustainability experts. The
purpose of the workgroup was to assess the potential impact of an internal carbon price on TechnipFMC’s capital
expenditures. A case study was performed and several internal carbon price methodologies were applied. The case study
emphasized the improvement of the Company’s cumulative cash flow, internal rate of return, and the reduction of the
payback period, and valorized the most sustainable solutions in terms of carbon emission reduction.
As a result, in 2020, we further progressed with the development of a process to assess which capital investments take
into account our internal carbon price, and we have also established a financial model for obtaining capital investment
metrics. We defined an Internal Carbon Price and added related elements into our investment decision policy.
2020 Other Environmental Initiatives
Single-Use Plastics Elimination
TechnipFMC has also joined global initiatives for the
protection of the oceans from plastics pollution. Plastics
are recognized as valuable resources, and the Company is
committed to reducing its use of single-use plastics in day-
to-day working activities. A Single-Use Plastics Elimination
(“SUPE”) project was launched in 2018 in 52 locations,
comprising 28% of Company locations, and in the fleet with
the aim of eliminating single-use plastics or substituting
them with more sustainable and reusable items.
67 TechnipFMC
50% reduction of
plastics in
our assets
40+ countries
76%
of the Company
30+ vessels and projects
completed the elimination of single-use
plastic bottles and cups in 2019
U.K. Annual Report and Accounts In 2018, the SUPE project saved approximately 167,000
plastic bottles and 2.3 million plastic cups.
In 2019, the SUPE project was extended to more than
40 countries. Approximately 139 locations, comprising
76% of the Company, and more than 30 vessels and projects
completed the elimination of single-use plastic bottles
and cups in 2019.
In 2020, we reduced plastics in our assets from 1,500
tonnes to 700 tonnes, with more than 86% of the
Company participating in the SUPE project, encompassing
approximately 159 locations.
n
o
i
t
a
t
n
e
m
e
l
p
m
i
f
o
%
Environmental Certifications
Single-Use Plastics Elimination Project
86%
76%
159
28%
139
52
2018
2019
2020
No. of Locations
74
entities
ISO 14001:2015
certified in 2020
Despite operating in a complex industry, we are committed to successfully managing our environmental impacts. We
measure our environmental performance and seek to operate through effective environmental management standards
that are implemented in an extended lifecycle context and perspective.
The Company maintains a policy of seeking to implement environmental certification ISO 14001 where practicable. To
meet this commitment, TechnipFMC has implemented an environmental management framework. By December 31, 2020,
74 entities were ISO 14001 certified, including all head offices and managed projects, industrial sites, and the Company
fleet. For each of these entities, the environmental management system was verified and certified by an independent
third party.
Climate Change
We created TechnipFMC with the vision to drive real change in the energy industry. Our corporate strategy has always
been focused on the successful delivery of this vision, while our Foundational Beliefs represent our fundamental view
that how we do business is as important as why we do business. Together, our strategy and our beliefs drive our ESG
practices to reshape the industry for a sustainable future.
Our Environmental focus is built upon reducing the carbon footprint of both TechnipFMC and our clients, as well as
a focus on waste management. In our business activities and projects, we give priority to renewable energies and
sustainable materials and we promote water reuse and encourage recycling.
68 TechnipFMC
U.K. Annual Report and Accounts
Energy Efficiency
TechnipFMC has an absolute commitment towards improving energy efficiency in assets and projects, and in consuming
less energy. As we help our customers transition to cleaner energy, we deliver renewable energy infrastructure and
sustainable energy solutions, while helping decarbonize the oil and gas production of our clients over time.
We offer many carbon-advantaged solutions. Our commercial models and technologies such as iProductionTM, iEPCITM,
Subsea 2.0TM, robotics and Subsea StudioTM offer significant environmental and economic benefits. We already have
a leading position in hydrogen and carbon capture, as well as technologies and solutions that support our growth in
sustainable chemistry, including biofuels and circular economy. We will further leverage our leading capabilities in LNG,
as natural gas will continue to play a critical role in energy transition.
Longer term, we see opportunities in lower carbon and carbon-free energy, notably in the emerging market for green
hydrogen, as well as an all-electric subsea system that can be powered by renewable sources.
Renewable Resources
We use renewable resources for our own energy consumption. Since 2011, we have generated electricity using a wind
turbine to power our manufacturing operations in Dunfermline, Scotland. Our facilities in Brazil are utilizing electricity
generated from the country’s vast hydro-based resources, with our Macae facility running on 100% renewable power
and our Rio facility at almost 90%.
As more resources become available, we will look to utilize hybrid battery and biofuel solutions as transportation fuel,
with the potential for significant conversion of our offshore fleet.
Water Management
At TechnipFMC, we prioritize water conservation and circular water management. We have stringent internal
requirements for wastewater management and we promote internal wastewater treatment and reuse in our projects and
assets.
Material and Waste Management
Reducing waste and promoting recycling is a key part of our management system and operating strategy. We strive
for circularity in our business and operations by reducing material use at source, minimizing the volume of waste, and
increasing recycling and reuse. We apply a lifecycle assessment to our products and projects to determine how we can
maximize use while reducing waste: we have launched a number of initiatives to prioritize the use of recycled materials
for project activities, and promote their reuse before being allocated for end-of-life treatment.
Air Emissions
As part of our environmental management approach, we monitor other air emissions, in addition to GHG, on a monthly
basis, including:
` Sulphur oxides (SOx);
` Nitrogen oxides (NOx); and
` Volatile organic compounds (VOCs).
We monitor air emissions from our projects and assets in line with our commitment to manage and minimize the impact
of our operations on local air quality.
69 TechnipFMC
U.K. Annual Report and Accounts Environmental Events
We strive to operate responsibly and protect the environment everywhere we operate, and particularly when operating
near sensitive areas. We have a consistent procedure for recording, reporting, and investigating environmental incidents,
using our QHSES incident management and analysis tool.
In case of an unexpected environmental event, containment and mitigation measures are immediately initiated. Incidents
are immediately recorded and assigned an “actual” and “potential” impact rating. We formally investigate any potential
or actual event then implement corrective actions to prevent reoccurrence. Events deemed as having high-level
consequences are notified to the management team through a “first alert” process and all high-potential consequence
incidents are subject to in-depth investigation.
In order to manage our environmental incidents effectively, we also monitor our total environmental incident rate (by
reference to 200,000 worked hours) and our relevant incidents rate (by reference to 200,000 worked hours). The total
Relevant Environmental Incidents Rate (“REIR”) captures all environmental incidents within our responsibility. Although
the number of incidents is low, this indicator enables us to understand the effectiveness of our incident management.
The REIR also assists us in monitoring our actual risk in terms of environmental incident management. It covers all
incidents of a certain environmental impact, triggering management attention, including incidents which:
` involve a discharge/release above regulatory or client limits;
` impact work;
` reach warning levels provided by regulatory agencies;
` require external support for containment or clean-up; and
` may cause public concern.
70 TechnipFMC
U.K. Annual Report and Accounts Corporate Responsibility and Sustainability 2021-2023
Environmental, Social, and Governance
The industry as a whole is focused on ESG issues. For TechnipFMC, our approach to ESG will be measured and will
have one clear goal: To drive real and sustainable change that favorably impacts our Company, our industry, and our
communities.
These are some of the actions we are undertaking:
` In June 2020, the Company expanded its commitment to diversity across our organization. As a result, we adopted
an Inclusion and Diversity objective, which includes not only gender but also underrepresented minorities, including
those differentiated by religion, sexual orientation, and disability. This focus empowers our people to be the
difference through inclusion and embracing the value of diversity.
` In November 2020, we made our 50 by 30 commitment. This is our roadmap to reduce CO2 emissions under Scopes 1
and 2 by 50% by 2030.
` At the same time, we defined our ESG Strategy for 2021-2023 and the way we will track our performance using a
three-year scorecard, which will be updated annually. This improved transparency and accountability will help us
deliver tangible results in the short term.
2021-2023 ESG Strategy
Environment: We will play our role in reducing carbon footprint from the upstream oil and gas industry.
Environmental
Our carbon footprint
Our clients’ carbon footprint
Waste management
` Targeting 50% reduction of CO2 by
` 33% of order intake linked to lower
2030 (Scope 1 and 2)
carbon intensity offerings
` Establish Scope 3
reduction targets
` Establish target reduction in carbon
intensity for our clients’ offerings
–establish baseline in 2020
` 10% of waste from our
assets and projects is
recycled and reused
` 10% reduction of
water consumption
` 50 by 30 sets out our Scope 1 and 2 CO2 reduction targets (covering fuel combustion, Company vehicles, fugitive
emissions, as well as purchased electricity, heat, and steam). By 2023, we will establish our Scope 3 targets
(covering purchased goods and services, business travel, employee commuting, waste disposal, use of sold products,
transportation and distribution, investments, and leased assets and franchises).
` We will help reduce our clients’ carbon footprint. We want 33% of our orders to be linked to lower carbon intensity
offerings and will establish carbon reduction targets for our clients, baselined to 2020.
` We will waste less. We will cut water consumption by 10% and reduce waste from our assets and projects by 10%,
with a focus on recycling and reuse.
71 TechnipFMC
U.K. Annual Report and Accounts Social: We will drive sustainable change in the communities where we live and work.
Social
Awareness and culture
Fair representation
Community
` 100% of all senior managers trained
` 45% of graduates hired are women
` Increase the number of global
in inclusive leadership learning
` Inclusion & Diversity lens applied to
employee benefits and policies
` 20% improvement in under-
represented populations in
senior management
STEM initiatives by 20%
` Increase the number of employees
engaged globally
in volunteering by 20%
` All senior managers will go through inclusive leadership learning, and we will apply an inclusion and diversity lens to
our employee benefits and policies.
` We will underline the importance of fair representation. We will increase the number of people from
underrepresented populations in senior management by 20%, while women will make up 45% of graduates hired.
Governance: How we do business is as important as why we do business.
Governance
Leadership in HSE
Responsible business behavior
Responsible business behavior
` Continued implementation
` Implement third-party risk
` Define remuneration
of SIF prevention projects, with
goal of reaching 400 projects
` Industry advocate for IOGP
Lifesaving Rules
management program, with
focus on human rights due
diligence and audits, on 100%
of high-risk suppliers
of leadership and senior
managers to include linkage
to net carbon footprint
` Governance model established
` Yearly ethics and compliance
training for all managerial levels
and reviewed with Board
ESG committee
We never compromise on safety and we are committed to raising the bar on workers’ welfare.
` We will implement 400 SIF (Serious Injuries and Fatalities) Prevention projects. We will also be an industry advocate
for the International Association of Oil & Gas Producers Lifesaving Rules.
` Our decisions have ethical dimensions. Managers will continue to receive yearly ethics and compliance training, and
we will audit high-risk suppliers for their human rights practices.
` Our leaders and senior managers’ compensation will be linked to our net carbon footprint, and our governance model
will be reviewed by the Board’s ESG Committee.
Beyond the scorecard
Beyond the defined ESG scorecard, we will continue to make a difference in the communities where we live and work
and to support their efforts through initiatives such as iVolunteer.
72 TechnipFMC
U.K. Annual Report and Accounts Employee and Social Matters
People and culture are at the heart of our development strategy. People are our wealth and strength. We are committed
to our employees, and our employee guidelines are specified in our Code of Business Conduct, which applies to all
employees, regardless of their roles, and no matter where they work.
We believe that all of our employees are entitled to fair treatment, courtesy, and respect, wherever they work: in the
office, on vessels, on industrial and construction sites, or in client offices. We do not tolerate any form of abuse or
harassment, and we will not tolerate any action, conduct, or behavior that is humiliating, intimidating, or hostile.
Furthermore, our hiring and employee development decisions are fair and objective. Employment decisions are based
only on relevant qualifications, performance, demonstrated skills, experience, and other job-related factors, with our goal
of creating a diverse, tolerant, and inclusive workforce.
Workforce Overview
Our workforce consists of the following:
Permanent employees
Temporary employees (fixed-term)
Employees on payroll
Contracted workforce
Total Workforce
December 31,
2018
December 31,
2019
December 31,
2020
33,528
3,616
37,144
3,458
40,602
34,454
2,713
37,167
5,310
42,477
31,395
3,691
35,086
2,880
37,966
Developing and Keeping Talent
We simplified the design and process of identifying key talents in the organization in 2020 and the new process helped
us achieve significant and quality progress in a remote working world. We also strengthened the depth of our succession
planning for leadership roles in the organization.
Following the 2019 enhancement of our processes and practices, in 2020 we continued our journey of offering best-in-
class development opportunities to our people:
` We introduced a new process called ‘Talking Talents’ in 2020 to identify and flag talents to develop in the key areas of
Leadership, Technology and Project Management. This population represented 6% of our global population and will be
the primary focus for development initiatives.
73 TechnipFMC
U.K. Annual Report and Accounts ` Our new and improved performance appraisal process kicked off for all TechnipFMC employees in October 2020 and
we concluded with 98% completion. A stronger focus was put on employees’ behaviors, as part of our core values
framework, and a simplified workflow for employees and managers for an efficient performance appraisal process.
` We continued to support our talent acquisition efforts by reinforcing the TechnipFMC employer brand in 2020,
reflecting what our people say about TechnipFMC: we work on breakthrough projects, in a global playground and, as a
result, our people live inspiring experiences. This is the key message we want potential future employees to associate
with TechnipFMC. Initiatives, such as #technipfmcproud, launched in 2020 comprised of a series of webinars, inviting
employees to share their own inspiring TechnipFMC experiences. This, along with other initiatives and onboarding of
brand ambassadors, helped us put our employer brand into operation in 2020.
Enabling our people to grow and develop is a significant priority and during 2020 we launched and improved upon a
number of learning and knowledge management initiatives to enhance the capabilities of our employees. While our ambition
is to create a learning environment and tools and resources for everyone to succeed – some of our content is indeed
focused on the three development pathways of Leadership, Technology, and Project Management mentioned earlier.
` In October 2020, we launched the global Technical Expertise program, onboarding more than 650 technical experts in
the company and laying the foundation for identifying and nurturing more technical experts who help us in creating
differentiated technologies.
` Engagement in the iLearn learning platform gained significant traction in 2020 as we embraced a digital
transformation of learning. This hub is a learning experience platform with a modern and easy-to-use interface. In
2020, there were more than 6,860 pieces of creative and innovative learning content available, with ongoing releases
of new and meaningful courses, to support skills development for our employees and enhance their performance in
their job. 50% of our training hours and 95% of our course completions were done in a digital or virtual environment
which resulted in 5.85 training hours per employee. The top five areas of learning in 2020 were HSES, Engineering,
Manufacturing, Quality and Surface.
` 2020 also saw significant progress in the knowledge management space with our knowledge repository “The Well”
having over 646,000 visits with 16,674 employees having utilized it. Our second knowledge-sharing platform, The
Bridge, which aligns with The Well, enables chartered global knowledge-sharing networks. It was soft launched in May
2020, and now has 17 enterprise-wide business and technical communities with the expectation that there will be
more than 50 by the end of 2021.
“We work on breakthrough projects,
in a global playground and, as a result,
our people live inspiring experiences”
Employee attrition in 2020 was 2.5% compared to 6.2% in 2019 attributable to a major extent to our continued focus on
learning and talent development.
Promoting Cultural and Ethnic Diversity
We focus on our broad cultural and ethnic diversity, which we constantly promote and develop
throughout the Company and our subsidiaries, through the internationalization of our teams, multicultural programs,
and international mobility.
74 TechnipFMC
U.K. Annual Report and Accounts Providing Employment to People with Disabilities
Three of our Foundational Beliefs – integrity, respect, and sustainability – are tangibly embedded in fair employment
practices and equal opportunity. The Company’s policy is that our employment decisions related to recruitment, selection,
evaluation, compensation, and development, among others, are not influenced by unlawful or unfair discrimination on the
basis of race, religion, gender, age, ethnic origin, nationality, sexual orientation, gender or gender reassignment, marital
status, or disability.
It is our policy to encourage and give full and fair consideration to applications for employment from disabled people,
and to assist with their training and development in light of their aptitudes and abilities. If an existing employee becomes
disabled, it is the Company’s policy wherever practicable to provide continuing employment under our usual terms and
conditions, and to provide training, career development, and promotion opportunities to disabled employees employed
by the Company to the fullest extent possible.
Strengthening Social Dialogue
The Company has developed a culture that is based on the values of trust, mutual respect, and dialogue. In accordance
with local legislation, regular meetings with trade union-appointed and/or works council representatives are organized
for information and/or consultation. The Company’s European Works Council (“EWC”) meets at least twice a year and
all of our European entities had joined the EWC by the end of 2019 with the EWC agreement signed by participants’
representatives by the end of 2019. In the first quarter of 2020, the EWC elected its new member and held two meetings
in 2020, first in May and the second in December.
Employee Well-being
In light of the global challenges faced in 2020 due to COVID-19, we ran a global employee well-being survey in May to
understand how our employees were coping with social distancing and other related domestic challenges during the
pandemic. We received a strong response, with 19,954 (55%) employees responding globally which helped us to develop
policies to assist in the challenges our people are facing in these unprecedented times. 74% of responding employees
answered favorably to the question on their overall well-being. The survey also gave us insights on other topics that
helped in improving overall communication and employee engagement.
Internal Communication
We have a robust internal communications strategy and supports communication channels that ensure that all employees
are communicated to within a timely and relevant way. The effectiveness of internal communication is continually
monitored and adjusted based on a focus group feedback program that reaches multiple levels across the Company.
Employees are regularly consulted and provided with information on changes and events that may affect them through
channels such as regular meetings, employee representatives, and the Company’s intranet site. These consultations
and meetings ensure that employees are kept informed of the financial and economic factors affecting the Company’s
performance and matters of concern to them as employees.
75 TechnipFMC
U.K. Annual Report and Accounts Labor Relations and Collective Agreements
We seek to maintain constructive relationships with works councils and trade unions, and to comply with relevant
local laws and collective agreements in relation to collective or individual labor relations. The Company also operates
through local subsidiaries in many countries, a number of which, including France, Germany, Norway, and Italy, have legal
requirements for works councils, which include employee representatives.
We send regular information to all employees to share information about business success, change to the organizational
structure, and any major impact to the business or the company. The same approach of sharing information and
maintaining a regular dialogue with employees exists at a local level through the action of the local communications
teams and the managers. In countries where staff representatives or works councils are in place, the Company seeks to
maintain an effective and regular dialogue. To get the direct feedback of employees, employees surveys are performed
in some countries or business, such as Norway, the Surface Americas Business Unit, and the Asia Pacific region. Every
quarter, all employees receive a direct communication from the Chairman and CEO about the financial results of the
Company and main business information. While travelling to a Company center, the Executive Leadership Team members
take this as an opportunity to engage with employees, either through town halls or informal meetings.
76 TechnipFMC
U.K. Annual Report and Accounts Our Compliance Program
How TechnipFMC conducts its business across the world is as important as why TechnipFMC does business. We act
in accordance with our core values and our Foundational Beliefs in all that we do. We aspire to develop business
relationships with like-minded partners who are guided by a similar set of principles of business conduct. Integrity is one
of the most critical cornerstones of the way we conduct business, and we hold ourselves to the highest moral and ethical
principles, which drive our compliance program.
Our Code of Business Conduct is built on our Foundational Beliefs of safety, integrity, quality, respect, and sustainability,
and gives us a common language and playbook for decisions and actions that help us live our core values. Available in
13 languages, our Code of Business Conduct helps us recognize and address the ethical dimensions to our everyday
decisions. In addition to our Code of Business Conduct, we maintain a world-class compliance program that is designed on
a risk-based approach and focuses on the following priorities:
` Human rights: The protection of human rights is an essential business principle we promote for our employees in the
workplace and across our supply chain.
` Trade controls and foreign boycotts: We implement policies and procedures pertaining to international trade laws and
regulations imposed by applicable authorities.
` Data privacy: We implement appropriate security and access measures to protect personal data stored
in information systems.
` Anti-bribery and corruption: Our standards and processes provide a clear and comprehensive framework for our
business in all of the countries in which we operate, in compliance with all applicable laws.
Our compliance program is supported by a global team of professionals embedded across our organization, who are
responsible for the provision of advice, counsel and training, as well as auditing of our program and its controls. This is
designed to mitigate and monitor compliance risk in support of our operations. Our program is led by a Chief Compliance
Officer, who reports dually to our Executive Vice President and Chief Legal Officer, and to the Chair of the Board of
Directors’ Environmental, Social, and Governance Committee. Our Chief Compliance Officer regularly reports compliance
matters to management and formally reports to the Committee quarterly. These reports include continuous enhancements
to our compliance program and allegations regarding potential non-compliance with our Code of Business Conduct.
We believe it is up to all of us to uphold the principles in our Code of Business Conduct. We encourage employees and
others to raise questions and concerns to ensure that we are leading by example. Suspected breaches of our Code
of Business Conduct can be reported through various means, including through an independent third party via the
dedicated reporting hotline. TechnipFMC has a zero-tolerance policy on retaliation against employees for reporting
suspected violations of our policies or Code of Business Conduct.
77 TechnipFMC
U.K. Annual Report and Accounts
Code of Business Conduct
Our Code of Business Conduct is built on our Foundational Beliefs and gives our directors, officers, and employees
a common language and playbook for decisions and actions that help us live our core values. We are committed to
establishing and maintaining an effective compliance program that is intended to increase the likelihood of preventing,
detecting, and correcting violations of Company policy and the law. Moreover, we have a hotline in place for employees,
officers, directors, and external parties to anonymously report violations of our Code of Business Conduct or complaints
regarding accounting and auditing practices. Reports of possible violations of financial or accounting policies are reported
to our Audit Committee.
We will disclose amendments to, or waivers of, our Code of Business Conduct that are required to be disclosed under
the U.S. Securities and Exchange Commission (“SEC”) and NYSE rules or any other applicable laws, rules, and regulations.
Any waiver of our Code of Business Conduct for our officers and directors must be approved by the Board or a relevant
Board committee. We have made no such waivers, and do not anticipate making any such waivers.
Human Rights
Respect is one of our Foundational Beliefs. It guides how we fundamentally do business and what we never compromise
on, no matter the circumstances. We believe that everyone is entitled to honest, fair, and courteous treatment. We do not
tolerate any form of modern slavery and we express a strong commitment for respecting human rights and are against
the use of child, forced, indentured, or involuntary labor, regardless of where we conduct business.
Our Code of Business Conduct reflects our commitment to acting ethically and lawfully and recognizing human rights on
a global basis. It is our policy that our Code of Business Conduct be shared and discussed with our clients, suppliers, and
business partners to better explain our rules of conduct and reinforce our culture of accountability. We aim to develop
business relationships with like-minded subcontractors, suppliers, and business partners who are guided by a similar
set of principles of business conduct and aspire to only do business with counterparties who respect human rights and
uphold labor laws.
TechnipFMC has published its statement on slavery and human trafficking for the financial year ending December 31,
2019 in accordance with section 54 of the U.K. Modern Slavery Act 2015. This document is available on our website at
www.technipfmc.com under the heading “About us > Ethics and Compliance > Slavery and Human Trafficking Statement”.
Our employees are encouraged and expected to report violations or suspected violations of our Code of Business
Conduct. Various channels are available, including the option to report concerns to their managers, to anyone in the
corporate compliance or legal department, the employee’s human resources representative, or an independent third
party via a dedicated reporting helpline and website.
We treat all reports of suspected violations of our Code of Business Conduct confidentially and will share the information
only with those who have the responsibility and authority to investigate and properly resolve the issue. In addition, we
have a zero-tolerance policy on retaliation against employees for reporting suspected violations of our policies or Code
of Business Conduct or for cooperating with an investigation. We encourage employees and others to raise questions and
concerns to ensure that we are leading by example.
The Company endeavors to ensure compliance with human rights within the scope of our operations and in accordance
with the following international human rights regulations and principles:
` The United Nations Guiding Principles on Business and Human Rights
` The 1948 Universal Declaration of Human Rights
` The International Labour Organization’s Fundamental Conventions regarding the freedom of association, the
eradication of discrimination and forced labor and the abolition of child labor
78 TechnipFMC
U.K. Annual Report and Accounts The Company also remains a member of the United Nations Global Compact.
The Company also adopted a Human Rights Standard setting forth recognized human rights principles to ensure our
operations are executed in compliance with the same and to ensure everyone with whom we work is treated with
respect and dignity. Our Standard codifies the Worker Welfare Principles developed by Building Responsibly. The Company
remains a proud member of this group of leading engineering and construction companies that are working together
to promote the rights and welfare of workers across the industry, representing more than 573,000 employees and
operating in about 100 countries. We continue working on our human rights strategy to embed respect for human
rights in our operations and business relationships and promote the protection of human rights for our employees in
the workplace and across our supply chain as a foundational business practice. We have created an internal Human
Rights Working Group, bringing together our support functions and operations to foster and ensure a better working
environment for our employees and our suppliers. The group conducted an internal human rights risk assessment to
assess our processes against international standards, Building Responsibly principles, and our clients’ human rights
expectations. The assessment also looked at the standardization of our processes across the Company and at our human
rights expectations towards our suppliers. For example, we have developed Suppliers and Subcontractors Integrity
expectations including commitment to human rights principles and have started deploying these expectations with our
partners, requiring adherence to the same in the execution of their operations. Also, we continue to assess how our
company-wide due diligence processes and monitoring processes could be reinforced in this area.
Anti-Corruption and Anti-Bribery Compliance Controls
The Company is committed to conducting business across the world ethically, lawfully, and in accordance with our core
values and our Foundational Beliefs. Therefore, all employees, as well as our business partners and supply chain, are
expected to conduct their activities in an ethical and lawful manner on a day-to-day basis.
All acts of fraud and corruption (including bribes, kickbacks, and self-dealing) are strictly forbidden. We compete fairly
on the strength of our technology, service, and execution excellence. We do not tolerate corruption in any form and
do not make or accept improper payments to obtain or retain business with those in government or the private sector,
or as a reward for awarding subcontractor or supplier contracts. We are committed to complying with all international
and national legislation against illegal payments, including prohibitions on facilitation payments (to expedite routine and
administrative government action) except in extraordinary circumstances where the safety or security of an employee is
in immediate danger.
To ensure that our partners share our commitment to ethical business practices, and to ensure that our partners’ other
relationships (including family relationships) do not create the appearance of a potential conflict of interest, we conduct
detailed due diligence of all potential business partners before entering into a relationship. Our Code of Business Conduct
highlights our commitment to integrity, and in conjunction with our standards and procedures, we have implemented a
variety of anti-bribery and corruption-related operational standards that translate our general principles into concrete
operating procedures.
We have also developed an Anti-Bribery and Corruption Standard, which applies to all our directors, officers, employees,
and contracted personnel, aimed at providing a clear and comprehensive operational framework for the conduct of our
business in all of the countries in which we operate. The Anti-Bribery and Corruption Standard sets out the Company’s
principles for strict compliance with applicable anti-bribery and corruption laws.
The Company pays particular attention to indicators that could cast doubt on the honesty and integrity of third parties
involved in our business. We have developed a Business Partner Standard, which applies to all our directors, officers,
employees, and contracted personnel. It establishes the due diligence requirements and procedures for third-party
government intermediaries and joint ventures/consortia partners, and enables us to assess and manage bribery and
corruption risks while conducting business globally.
79 TechnipFMC
U.K. Annual Report and Accounts We have a Gifts, Hospitality, and Travel Standard, which applies to all our directors, officers, employees, and contracted
personnel, setting forth our rules related to the receipt or provision of gifts, hospitality, or travel, and establishing
procedures for the approval, reporting, and accounting of such. The Gifts, Hospitality, and Travel Standard serves to assist
employees in ensuring that gifts and hospitality, whether given or received as part of a usual courtesy of business, are
not and cannot be considered as bribes.
We also have a Social Donations, Sponsorships, and Charitable Contributions Standard, which applies to all our directors,
officers, employees, and contracted personnel, setting forth our rules related to the making of contributions to our
communities. As a responsible corporate citizen, TechnipFMC believes in contributing to the communities where
we conduct business around the world by supporting worthy causes, donations, and activities. Under appropriate
circumstances, social donations, sponsorships, and charitable contributions provide an important way for TechnipFMC
to play a constructive role in the societies and communities in which we live, work, and conduct business. This standard,
which applies to all our directors, officers, employees, and contracted personnel, sets forth our rules associated with
these activities to ensure our contributions are not misused for improper purposes, such as to disguise illegal payments
to government officials.
Our Code of Business Conduct and its related standards are applicable to all employees, business partners, and supply
chain members, as well as all of our business transactions, and all of our majority-owned or controlled subsidiaries. We
will also use our best efforts to induce our joint venture and consortium members to adopt the standards or agree to
abide by an equivalent set of standards. In sum, our compliance program is designed to effectively mitigate and monitor
risks relevant to our enterprise to ensure we are preserving the interests of our stakeholders in accordance with our core
values and Foundational Beliefs.
80 TechnipFMC
U.K. Annual Report and Accounts Supply Chain and Customer Matters
In line with our aspiration to develop business relationships with like-minded clients, sub-contractors, suppliers, and
business partners who are guided by a similar set of principles of business conduct, it is our policy that our Code of
Business Conduct be shared and discussed with clients, suppliers, and our business partners to better explain our rules
of conduct and reinforce our culture of accountability. We will do business only with those suppliers who respect human
rights and uphold labor laws. In undertaking sourcing, we focus on sustainability and consider our impact on the planet,
people, and communities in which we operate.
Our Code of Business Conduct requires directors, officers, and employees to ensure that:
` Our suppliers, customers, and business partners are aware of our commitment to creating a diverse and tolerant
workforce.
` Managers make contractors and suppliers aware of applicable Health, Safety, Environment, and Security (“HSES”)
rules, procedures, and expected behaviors, and their role in HSES culture wherever we operate.
` Our business partners and suppliers do not engage in inappropriate labor practices, including child or indentured labor.
` Appropriate due diligence is conducted on all consultants, suppliers, business partners, and agents, and ensures that
third parties understand TechnipFMC’s policy of zero tolerance for corruption.
` We exercise appropriate due diligence on subcontractors, suppliers, and other vendors to prevent money laundering.
` All payments to subcontractors, suppliers, consultants, and agents are made in accordance with our financial
standards, including the requirement that payment be made in the country in which the work was performed.
Our goal is to build and sustain long-lasting relationships with governments, customers, partners, suppliers, and local
communities where we have operations. Stakeholder considerations are embedded throughout our discussions and
decisions, including in the discussions and decisions of our board of directors during the past financial year. The supply
of goods and services is critical to our success as a business. We implement processes and procedures to enable us to
manage our supply chain and supplier relationships effectively. As part of these processes and procedures, we work to
identify and engage suppliers who can meet the demands of our business at a competitive cost.
Our local procurement teams are essential in this process and facilitate regular dialogue with our suppliers, while
navigating local cultural, language, and time zone differences.
We regularly assess the performance of our suppliers to ensure they meet our standards and expectations in the
delivery, quality, and response to supply chain matters. We are committed to operating our business with a focus on
safety, integrity, quality, respect, and sustainability and we aspire to work with suppliers who are guided by a similar
set of principles of business conduct. We actively assess and monitor our suppliers’ compliance with rules, regulations,
principles, and guidelines relating to modern slavery, sustainability, human rights, anti-bribery, tax evasion, and data
protection, amongst others.
81 TechnipFMC
U.K. Annual Report and Accounts Health and Safety
Health and safety is as an integral part of our business, based on a genuine care and concern for the people and
environment. Safety is one of our foundational beliefs and is at the heart of everything we do. At TechnipFMC we are all
responsible for creating a safe and secure workplace.
We believe that all injuries are preventable. By fostering an incident-free environment, we drive our clients’ success
without compromising safety, health, security, or environmental sustainability. We act responsibly and openly at every
step, assuring our customers and partners of our competence and inspiring their trust.
Protecting people at all times
All our employees, partners and contractors have the responsibility and the authority to stop the work if they consider
conditions are unsafe. Pulse, our global HSE culture and engagement program, provides our people with the right skills,
tools and behaviors to maintain and strengthen our HSE culture. It empowers our people to foster an incident-free
working environment. Our safety rules are aligned with our HSE management system. Our programs aim to de-risk our
operations with focus on Dropped Objects, Energy Release and Uncontrolled Moves, which are the most common causes
of work-related incidents.
We monitor and report on key safety metrics in line with industry standards. We include in our data both employees and
contractors in joint arrangements where we directly manage the performance of these operations.
Tragically, we suffered one fatality in 2020. In January, a worker in our onshore segment in India was fatally injured
during hydro testing of a pipe spool. As a result, we have revised our pressure testing standards to strengthen
requirements around pressure containment and control measures while working with pressure.
Safety Performance
In 2020, 184,4 million hours were worked at the Company’s facilities and project sites worldwide.
Safety Performance
2018
2019
2020
Total Recordable Incident Rate (TRIR)1
Lost Time Injury Frequency (LTIF)1
0.26
0.06
0.17
0.04
Leadership & Management Walkthrough Frequency1
16.03
12.76
0.11
0.04
9.40
Fatal Accident Frequency1
0.0012
0.0012
0.0011
(1) The rates are calculated across 200,000 hours worked. Incidents as defined by the U.S. Department of Labor’s Occupational Safety and Health
Administration standards are considered. The cut-off date is December 31, 2020.
82 TechnipFMC
U.K. Annual Report and Accounts
The total number of Recordable Incidents reduced by 25% in 2020 mainly reflecting important actions we have taken to
de-risk our operations through prevention mindset and Hierarchy of Control. Serious Incident Reviews are conducted by
TechnipFMC leadership teams. As a consequence, multiple hidden precursors for serious incidents were uncovered and
mitigated, and the overall number of registered cases in 2020 achieved 57 SIF.
Our leading indicator rate decreased because of travel restrictions due to COVID-19. Remote Leadership Engagement has
been successfully deployed and trends are recovering since mid-year. We will continue to stay focused and strive toward
zero serious injuries or fatalities for today and the future.
Strong Health & Safety Culture
Our Pulse program is designed to drive the development or our people to adopt safety leadership behaviors. A key
principle is to align mindsets to develop a single, global health and safety culture. The program is summarized by the
Pulse formula for success: Inspire, Interact, Intervene. Each element of the formula integrates the principles of human
performances: lead by example, actively listen to others and promote safety conversations, collaborate with colleagues,
welcome and praise all interventions you receive or observe. 47 sessions were delivered in 2020 and we will continue
the journey in future with development of targeted e-learning.
Prevention mindset
Risks are managed as an integral part of our business. As part of our risk management process, risks are regularly
identified, monitored and mitigated at every business level. We continuously focus on assessing and lowering risks to
prevent incidents in all the work we do. We regularly evaluate the Company’s safety risk profile within the context of our
operations, our contractors, subcontractors, and customer relationships.
We investigate incidents including those near misses with potential to harm people or the environment. We implement
lessons learned and we strive for continual improvement of our health and safety management and work practices.
In 2020, we have taken several important actions to reduce our risk profile and to prevent serious injuries.
` We have accelerated our Serious Incident and Fatality Prevention (“SIFP”) Program by ensuring deployment within all
businesses and sites. 249 SIFP have been launched in 2020. SIFP is a proactive, high-impact risk prevention program
which aims to shift the organization’s mindset from reactive to proactive risk reduction. The objectives are to prevent
serious injuries, to proactively de-risk our overall risk profile by putting mitigation strategies in place, and to bring
visibility to critical issues requiring the support of leadership.
` The Global Hand and Finger Injury Prevention program was rolled out. The goal is for employees to develop an
understanding of the risks of hand and finger injuries and how to identify the right controls to put in place to prevent
such injuries. As a result more than 70 Hand & Finger Injury Site Risk Assessments were completed, 58 Hand Tool
Substitutions were identified during the five-week campaign, and more than 5,000 employees throughout the
company completed the Hand & Finger Injury Prevention Training.
` TechnipFMC adopted the new set of the International Association of Oil & Gas Producers’ Life-Saving Rules in 2018,
working with the rest of industry to prevent serious incidents in the workplace. E-Learning module was released in
2020. It provides an opportunity for all our employees, partners and subcontractors to improve general awareness
and understanding of, as well as compliance with, the Life-Saving Rules. A series of specific e-learnings showcasing
each rule in the context of TechnipFMC operations is under development and will be rolled out in 2021.
83 TechnipFMC
U.K. Annual Report and Accounts COVID-19 impact on Health & Safety
As COVID-19 continues to impact the global community, we are continually monitoring and responding to the situation,
always ensuring first and foremost the health and safety of our employees, clients and partners. We activated a global
COVID-19 Incident Management Team that has authority to determine company policies, coordinate infection prevention
measures, direct local Incident Management Teams, and ensure continuity of operations in full compliance with guidance
provided by the World Health Organization and governmental and regulatory authorities.
The situation is constantly evolving. As such, we are constantly updating our guidelines and policies to ensure that we
always act in the best interests of our employees, and our clients and partners.
This year in particular, the COVID-19 pandemic brought uncertainty and extra stresses in both the personal and
professional lives of our employees. As a company, we have adapted the way we work and leveraged digital tools to
ensure business continuity. TechnipFMC will continue to emphasize the importance of mental health by promoting new
and existing well-being initiatives, with the overall objective of raising awareness of mental health issues and mobilizing
efforts in support of it.
84 TechnipFMC
U.K. Annual Report and Accounts Decision making and section 172 of the Companies Act
Our success depends on our ability to engage effectively with our stakeholders. Accordingly, our Board processes are
structured to support our directors in discharging their duties under the Companies Act, particularly in relation to the
Board’s decision-making functions. Our Board considers, both individually and collectively, that they have acted in a
way they consider in good faith and would be most likely to promote the success of the company for the benefit of its
members as a whole, having regard to matters set out in section 172(1)(a) to (f) of the Companies Act in the decisions
taken during the financial year ending December 31, 2020. In particular, we refer to:
` Likely consequences of any decision in the long term: We operate a sophisticated, global business in a highly
competitive industry that has been negatively impacted by low commodity prices and the global COVID-19 pandemic.
Enhancement of our performance and competitiveness is a key component of our strategy, and this is achieved
through technology innovation and differentiation, seamless execution, and simplification that drives cost down
including the completed Spin-off of Technip Energies. We are targeting profitable and sustainable growth, seizing
market growth opportunities, expanding our range of services, and managing our assets efficiently to ensure that we
are well-positioned to benefit from the opportunities we see in many of the segments we serve in order to deliver
a long-term beneficial impact on the company and our clients (further details are set out in the paragraph entitled
“Shareholder Engagement” of this Strategic Report).
` Interests of employees: In 2020, each of our more than 35,000 employees was critical to delivering the strategy
and success of the company. We are committed to our employees, and our employee guidelines are specified in our
Code of Business Conduct, which applies to all employees, regardless of their roles, and no matter where they work.
Employee matters is one of our primary considerations in the way we do business and we take our responsibility
to provide a fair and inclusive work environment seriously. With this in mind, we simplified the design and process
of identifying key talents in the organization in 2020 to further achieve significant and quality progress in a virtual
world. Further, in light of the global challenges faced in 2020 due to COVID-19, we ran a global employee well-being
survey which helped us develop policies to support our employees in these unprecedented times (further details are
set out in the paragraph entitled “Employee and Social Matters” of this Strategic Report).
` Fostering business relationships with suppliers, customers, and others: In line with our aspiration to develop
business relationships with like-minded clients, sub-contractors, suppliers, and business partners who are guided
by a similar set of principles of business conduct, it is our policy that our Code of Business Conduct be shared and
discussed with clients, suppliers, and our business partners to better explain our rules of conduct and reinforce our
culture of accountability. Our goal is to build and sustain long-lasting relationships with governments, customers,
partners, suppliers, and local communities where we have operations. Even during the lockdown amidst the global
COVID-19 pandemic, we partnered with our clients and suppliers to organize more than 100 relief initiatives in
19 countries and donated more than 100,000 facemasks (further details are set out in the paragraphs entitled
“Supporting Communities” and “Supply Chain and Customer Matters” of this Strategic Report).
` Impact of operations on the community and the environment: Respecting the Environment is the first of our three
Sustainability pillars. We believe our environmental responsibility requires us to operate in a manner that minimizes
the impact of our operations on the environment, develop sustainable solutions to reduce carbon emissions within
our overall environmental footprint, and avoid any environmental incidents in our operations and activities. We also
support and encourage our employees to volunteer and support their community development programs in line
with our Code of Business Conduct and our Supporting Communities pillar. Since the formation of TechnipFMC, we
have adopted company-wide, consecutive 3-year sustainability road maps, most recently in November 2020 when
we unveiled our new commitments in terms of Environmental, Social and Governance for the period 2021-2023
through our Environmental, Social and Governance Scorecard (further details are set out in the paragraphs entitled
“Sustainability”, “Respecting the Environment” and “Supporting Communities” of this Strategic Report).
85 TechnipFMC
U.K. Annual Report and Accounts ` Maintaining a reputation for high standards of business conduct: Our Code of Business Conduct is built on our
Foundational Beliefs of safety, integrity, quality, respect, and sustainability, and gives us, including our directors
and each and every employee, a common language and playbook for decisions and actions that help us live our
core values. Available in 13 languages, our Code of Business Conduct helps us recognize and address the ethical
dimensions to our everyday decisions (further details are set out in the paragraph entitled “Our Compliance Program”
of this Strategic Report).
` The need to act fairly as between shareholders of the company: To provide the opportunity to better understand
shareholder views, our Board and executive team maintain a shareholder engagement program to solicit feedback
across a number of shareholder matters. We believe this engagement is important as we seek to develop long-term
relationships with our shareholders and ensure that they fully understand our strategy and the ways in which we
seek to unlock value across our business portfolio. Our intention is to ensure that our shareholders are kept updated
on significant matters and relevant emerging trends. Our 2020 Off-Season Shareholder Outreach Campaign involved
our active outreach to 20 shareholders representing approximately 42% of TechnipFMC’s ordinary shares in issue
with respect to our board leadership and governance, executive compensation, and corporate responsibility and
sustainability. Through our shareholder engagement efforts, the Board is able to consider different perspectives,
including shareholders’ input, within the context of company-wide matters including our pay-for-performance
philosophy, business, and strategies. While we are unable to interact in person with our shareholders at our
annual general meeting this year due to the global COVID-19 pandemic, we will continue our efforts to engage
with our shareholders through meaningful and ongoing dialogue as an important part of our Board’s corporate
governance commitment (further details are set out in the paragraph entitled “Shareholder Engagement” of the
Remuneration Report).
86 TechnipFMC
U.K. Annual Report and Accounts Principal Risks and Uncertainties
Principal risks and uncertainties that could impact our ability to achieve our anticipated operating results and growth
plan goals are presented below. The following principal risks and uncertainties should be read in conjunction with
discussions of our business and the factors affecting our business located elsewhere in this U.K Annual Report and in
our other public filings.
Summary Risk Factors
The following is a summary of some of the risks and uncertainties that could materially adversely affect our business,
financial condition and results of operations. You should read this summary together with the more detailed description
of each risk factor contained below.
Risks Related to Our Business and Industry
` Demand for our products 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.
` We operate in a highly competitive environment and unanticipated changes relating to competitive factors in our
industry, including ongoing industry consolidation, may impact our results of operations.
` Our success depends on our ability to develop, implement, and protect new technologies and services.
` Cumulative loss of several major contracts, customers, or alliances may have an adverse effect on us.
` The COVID-19 pandemic, the United Kingdom’s withdrawal from the European Union, disruptions in the political,
regulatory, economic, and social conditions of the countries in which we conduct business, could adversely affect our
business or results of operations.
` DTC and Euroclear may cease to act as depository and clearing agencies for our shares.
` Our existing and future debt may limit cash flow available to invest in the ongoing needs of our business and could
prevent us from fulfilling our obligations under our outstanding debt.
` A downgrade in our debt rating could restrict our ability to access the capital markets.
` Our acquisition and divestiture activities involve substantial risks.
Risks Related to Our Operations
` We may lose money on fixed-price contracts.
` New capital asset construction projects for vessels and manufacturing facilities are subject to risks, including delays
and cost overruns.
` Our failure to timely deliver our backlog could affect future sales, profitability, and customer relationships.
` We face risks relating to our reliance on subcontractors, suppliers, and our joint venture partners.
` A failure of our IT infrastructure, including as a result of cyber-attacks, could adversely impact our business and
results of operations.
` Pirates endanger our maritime employees and assets.
87 TechnipFMC
U.K. Annual Report and Accounts Risks Related to Legal Proceedings, Tax, and Regulatory Matters
` The industries in which we operate or have operated expose us to potential liabilities, including the installation or use
of our products, which may not be covered by insurance or may be in excess of policy limits, or for which expected
recoveries may not be realized.
` Our operations require us to comply with numerous laws and regulations, including those related to environmental
protection and climate change, health and safety, privacy, data protection and data security, labor and employment,
import/export controls, currency exchange, bribery and corruption, and taxation, violations of which could have a
material adverse effect on our financial condition, results of operations, or cash flows.
` As an English public limited company, we must meet certain additional financial requirements before we may declare
dividends or repurchase shares and certain capital structure decisions may require stockholder approval which may
limit our flexibility to manage our capital structure.
` Uninsured claims and litigation against us, including intellectual property litigation, could adversely impact our
financial condition, results of operations, or cash flows.
` The IRS may not agree that we should be treated as a foreign corporation for U.S. federal tax purposes and may seek
to impose an excise tax on gains recognized by certain individuals;
` U.S. tax laws and/or guidance could also affect our ability to engage in certain acquisition strategies and certain
internal restructurings.
` We are subject to the tax laws of numerous jurisdictions; challenges to the interpretation of, or future changes to, such
laws could adversely affect us.
` We intend to be treated exclusively as a resident of the United Kingdom for tax purposes, but French or other tax
authorities may seek to treat us as a tax resident of another jurisdiction, and we may not qualify for benefits under
tax treaties entered into between the United Kingdom and other countries.
Risks Related to the Spin-off and the Related Transactions
` The Spin-off may subject us to future liabilities and may not achieve some or all of the anticipated benefits.
` We are a significant shareholder of Technip Energies and the value of our investment in Technip Energies may
fluctuate substantially and may result in a significant impact to our results of operations.
General Risk Factors
` Our businesses are dependent on the continuing services of our key managers and employees.
` Seasonal and weather conditions could adversely affect demand for our services and operations.
` Currency exchange rate fluctuations could adversely affect our financial condition, results of operations,
or cash flows.
` We are exposed to risks in connection with our defined benefit pension plan commitments.
88 TechnipFMC
U.K. Annual Report and Accounts Risks Related to Our Business and Industry
Demand for our products 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.
We are substantially dependent on conditions in the oil and gas industry, including (i) the level of exploration,
development and production activity and (ii) capital spending. Any substantial or extended decline in these expenditures
may result in the reduced pace of discovery and development of new reserves of oil and gas and the reduced
exploration of existing wells, which could adversely affect demand for our products and services and, in certain
instances, result in the cancellation, modification, or re-scheduling of existing orders in our backlog. These factors could
have an adverse effect on our revenue and profitability. The level of exploration, development, and production activity
is directly affected by trends in oil and natural gas prices, which historically have been volatile and are likely to continue
to be volatile in the future.
Factors affecting the prices of oil and natural gas include, but are not limited to, the following:
` demand for hydrocarbons, which is affected by worldwide population growth, economic growth rates, and general
economic and business conditions, including reductions in travel and commerce relating to the COVID-19 pandemic;
` costs of exploring for, producing, and delivering oil and natural gas;
` political and economic uncertainty, and socio-political unrest;
` governmental laws, policies, regulations and subsidies related to or affecting the production, use, and exportation/
importation of oil and natural gas;
` the ability or willingness of the Organization of Petroleum Exporting Countries and the 10 other oil producing
countries, including Russia, Mexico and Kazakhstan (“OPEC+”) to set and maintain production level for oil;
` oil refining and transportation capacity and shifts in end-customer preferences toward fuel efficiency and the use of
natural gas;
` technological advances affecting energy consumption;
` development, exploitation, relative price, and availability of alternative sources of energy and our customers’ shift of
capital to the development of these sources;
` volatility in, and access to, capital and credit markets, which may affect our customers’ activity levels, and spending
for our products and services;
` decrease in investors’ interest in hydrocarbon producers because of environmental and sustainability initiatives; and
` natural disasters.
The oil and gas industry has historically experienced periodic downturns, which have been characterized by diminished
demand for oilfield services and downward pressure on the prices we charge. The oil and natural gas market remains
quite volatile, and price recovery and business activity levels are dependent on variables beyond our control, such as
geopolitical stability, increasing attention to global climate change resulting in pressure upon shareholders, financial
institutions and/or financial markets to modify their relationships with oil and gas companies and to limit investments
and/or funding to such companies, increasing likelihood of governmental investigations and private litigation due to
increasing attention to global climate change, OPEC+’s actions to regulate its production capacity, changes in demand
patterns, and international sanctions and tariffs. Continued volatility or any future reduction in demand for oilfield
services could further adversely affect our financial condition, results of operations, or cash flows.
89 TechnipFMC
U.K. Annual Report and Accounts We operate in a highly competitive environment and unanticipated changes relating to competitive factors in our
industry, including ongoing industry consolidation, may impact our results of operations.
We compete on the basis of a number of different factors, such as product offerings, project execution, customer service,
and price. In order to compete effectively we must develop and implement innovative technologies and processes,
and execute our clients’ projects effectively. We can give no assurances that we will continue to be able to compete
effectively with the products and services or prices offered by our competitors.
Our industry, including our customers and competitors, has experienced unanticipated changes in recent years. Moreover,
the industry is undergoing consolidation to create economies of scale and control the value chain, which may affect
demand for our products and services because of price concessions for our competitors or decreased customer capital
spending. This consolidation activity could impact our ability to maintain market share, maintain or increase pricing for
our products and services or negotiate favorable contract terms with our customers and suppliers, which could have
a significant negative impact on our financial condition, results of operations or cash flows. We are unable to predict
what effect consolidations and other competitive factors in the industry may have on prices, 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.
The COVID-19 pandemic has significantly reduced demand for our products and services, and has had, and may
continue to have, an adverse impact on our financial condition, results of operations, and cash flows.
The COVID-19 pandemic, including actions taken by governments and businesses, has resulted in a significant reduction
in global economic activity, including increased volatility in global oil and natural gas markets. Measures taken to address
and limit the spread of the disease-such as stay-at-home orders, social distancing guidelines, and travel restrictions have
adversely affected the economies and financial markets of many countries. The resulting disruption to our operations,
communications, travel, and supply chain may continue or increase in the future, and could limit the ability of our
employees, partners, or vendors to operate efficiently or at all, and has had, and is reasonably likely to continue to have,
an adverse impact on our financial condition, operating results, and cash flows.
Significant uncertainty remains as to the potential impact of the COVID-19 pandemic on our operations, and we are
closely monitoring the effects of the pandemic on commodity demands and on our customers. These effects may
include adverse revenue and net income effects; disruptions to our operations; potential project delays or cancellations;
employee impacts from illness, school closures, and other community response measures, which may lead to disruptions
and decreased productivity; and temporary closures of our facilities or the facilities of our customers and suppliers.
Beginning in the first quarter of 2020, we have experienced operational impacts including supply chain disruptions,
productivity declines and logistics constraints. We have also experienced incremental, direct costs as a result of
COVID-19.
COVID-19, and the volatile regional and global economic conditions stemming from the pandemic, could also aggravate
the other risk factors discussed herein, including but not limited to risks related to the demand for oil and gas, which
may not recover immediately. The full extent to which the COVID-19 pandemic will impact our results is unknown and
evolving and will depend on various factors and consequences beyond our control, such as the severity, duration, and
spread of COVID-19; the success of actions taken by governments and health organizations to combat the disease and
treat its effects, including vaccine acceptance, distribution and effectiveness; decisions by our alliance partners and
customers regarding their business plans and capital expenditures; and the extent to which, and the timing of, general
economic and operating conditions recover.
90 TechnipFMC
U.K. Annual Report and Accounts Our success depends on our ability to develop, implement, and protect new technologies and services and the
intellectual property related thereto.
Our success depends on the ongoing development and implementation of new product designs, including the processes
used by us to produce and market our products, and on our ability to protect and maintain critical intellectual property
assets related to these developments. If we are not able to obtain patents, maintain trade secrets or obtain other
protection of our intellectual property rights, if our patents are unenforceable or the claims allowed under our patents
are not sufficient to protect our technology, or if we are not able to adequately protect our patents or trade secrets, we
may not be able to continue to develop our services, products and related technologies. Additionally, our competitors
may be able to independently develop technology that is similar to ours without infringing on our patents or gaining
access to our trade secrets. If any of these events occurs, we may be unable to meet evolving industry requirements or
do so at prices acceptable to our customers, which could adversely affect our financial condition, results of operations, or
cash flows.
Due to the types of contracts we enter into and the markets in which we operate, the cumulative loss of several major
contracts, customers, or alliances may have an adverse effect on our results of operations.
We often enter into large, long-term contracts that, collectively, represent a significant portion of our revenue. These
agreements, if terminated or breached, may have a larger impact on our operating results or our financial condition
than shorter-term contracts due to the value at risk. Moreover, the global market for the production, transportation,
and transformation of hydrocarbons and by-products, as well as the other industrial markets in which we operate, is
dominated by a small number of companies. As a result, our business relies on a limited number of customers. If we
were to lose several key contracts, customers, or alliances over a relatively short period of time, we could experience a
significant adverse impact on our financial condition, results of operations, or cash flows.
Disruptions in the political, regulatory, economic, and social conditions of the countries in which we conduct business
could adversely affect our business or results of operations.
We operate in various countries across the world. Instability and unforeseen changes in any of the markets in which we
conduct business, including economically and politically volatile areas could have an adverse effect on the demand for
our services and products, our financial condition, or our results of operations. These factors include, but are not limited
to, the following:
` nationalization and expropriation;
` potentially burdensome taxation;
` inflationary and recessionary markets, including capital and equity markets;
` civil unrest, labor issues, political instability, disease outbreaks, terrorist attacks, cyber terrorism, military activity, and
wars;
` supply disruptions in key oil producing countries;
` the ability of OPEC+ to set and maintain production levels and pricing;
` trade restrictions, trade protection measures, price controls, or trade disputes;
` sanctions, such as prohibitions or restrictions by the United States against countries that are the targets of economic
sanctions, or are designated as state sponsors of terrorism;
` foreign ownership restrictions;
` import or export licensing requirements;
` restrictions on operations, trade practices, trade partners, and investment decisions resulting from domestic and
foreign laws, and regulations;
91 TechnipFMC
U.K. Annual Report and Accounts ` regime changes;
` changes in, and the administration of, treaties, laws, and regulations including in response to public health issues;
` inability to repatriate income or capital;
` reductions in the availability of qualified personnel;
` foreign currency fluctuations or currency restrictions; and
` fluctuations in the interest rate component of forward foreign currency rates.
DTC and Euroclear may cease to act as depository and clearing agencies for our shares.
Our shares were issued into the facilities of The Depository Trust Company (“DTC”) with respect to shares listed on
the NYSE and Euroclear with respect to shares listed on Euronext Paris (DTC and Euroclear being referred to as the
“Clearance Services”). The Clearance Services are widely used mechanisms that allow for rapid electronic transfers of
securities between the participants in their respective systems, which include many large banks and brokerage firms. The
Clearance Services have general discretion to cease to act as a depository and clearing agencies for our shares. If either
of the Clearance Services determine at any time that our shares are not eligible for continued deposit and clearance
within its facilities, then we believe that our shares would not be eligible for continued listing on the NYSE or Euronext
Paris, as applicable, and trading in our shares would be disrupted. Any such disruption could have a material adverse
effect on the trading price of our shares.
The United Kingdom’s withdrawal from the European Union may have a negative effect on global economic conditions,
financial markets, and our business.
We are based in the United Kingdom and have operational headquarters in Paris, France; Houston, Texas, United States;
and in London, United Kingdom, with worldwide operations, including material business operations in Europe. The United
Kingdom withdrew from the European Union on January 31, 2020 (“Brexit”). In connection with Brexit, the United
Kingdom and the European Union agreed on the Trade and Cooperation Agreement (“TCA”) that governs the future
trading relationship between the United Kingdom and the European Union in specified areas. The TCA took effect on
January 1, 2021. The United Kingdom is no longer in the European Union customs union and is outside of the European
Union single market. The TCA addresses trade, economic arrangements, law enforcement, judicial cooperation and a
governance framework including procedures for dispute resolution, among other things. Because the agreement merely
sets forth a framework in many respects and will require complex additional bilateral negotiations between the United
Kingdom and the European Union as both parties continue to work on the rules for implementation, significant political
and economic uncertainty remains about whether the terms of the relationship will differ materially from the terms
before withdrawal.
These developments could have a material adverse effect on global economic conditions and the stability of the global
financial markets and could significantly reduce global market liquidity and restrict the ability of key market participants
to operate in certain financial markets. Asset valuations, currency exchange rates, and credit ratings may be especially
subject to increased market volatility. In addition, there is a lack of clarity about the future United Kingdom laws and
regulations as the United Kingdom determines which European Union laws to replicate or replace, including financial laws
and regulations, tax and free trade agreements, intellectual property rights, supply chain logistics, environmental, health
and safety laws and regulations, immigration laws, employment laws, and other rules that would apply to us and our
subsidiaries, could increase our costs, restrict our access to capital within the United Kingdom and the European Union,
depress economic activity, and further decrease foreign direct investment in the United Kingdom. For example, any
divergence in the United Kingdom from European Union law could eliminate the benefit of certain tax-related European
Union directives currently applicable to United Kingdom companies such as us, including the Parent-Subsidiary Directive
and the Interest and Royalties Directive, which could, subject to any relief under an available tax treaty, raise our tax cost.
Any of these factors could have a material adverse effect on our business, financial condition, or results of operations.
92 TechnipFMC
U.K. Annual Report and Accounts Our existing and future debt may limit cash flow available to invest in the ongoing needs of our business and could
prevent us from fulfilling our obligations under our outstanding debt.
We have substantial existing debt. As of December 31, 2020, our total debt was $4.0 billion. In addition, in connection with
Spin-off, we obtained commitments from a syndicate of financial institutions for a senior secured revolving credit facility
of up to $1.0 billion. We will also have the capacity under our debt agreements to incur substantial additional debt.
Our level of debt could have important consequences. For example, it could:
` make it more difficult for us to make payments on our debt;
` require us to dedicate a substantial portion of our cash flow from operations to the payment of debt service, reducing
the availability of our cash flow to fund working capital, capital expenditures, acquisitions, distributions, and other
general partnership purposes;
` increase our vulnerability to adverse economic or industry conditions;
` limit our ability to obtain additional financing to react to changes in our business; or
` place us at a competitive disadvantage compared to businesses in our industry that have less debt.
Additionally, any failure to meet required payments on our debt or to comply with any covenants in the instruments
governing our debt, could result in an event of default under the terms of those instruments. In the event of such default,
the holders of such debt could elect to declare all the amounts outstanding under such instruments to be due and
payable. Such default could also trigger a cross default or our other debt.
The London Interbank Offered Rate (“LIBOR”), the Euro Interbank Offered Rate and certain other interest “benchmarks”
may be subject to further regulatory guidance and/or reform that could cause interest rates under our current or
future debt agreements to perform differently than in the past or cause other unanticipated consequences. The United
Kingdom’s Financial Conduct Authority, which regulates LIBOR, has announced that the continuation of LIBOR on the
current basis cannot and will not be guaranteed after 2021 and it is unclear if LIBOR will cease to exist or if new methods
of calculating LIBOR will evolve. If LIBOR ceases to exist or if the methods of calculating LIBOR change from their current
form, interest rates on our current or future debt obligations may be adversely affected.
The terms of the agreements governing our existing indebtedness restrict our current and future operations,
particularly our ability to respond to changes or to take certain actions.
The terms of the agreements governing our indebtedness contain a number of restrictive covenants that limit our
flexibility in conducting our business and restrict our ability to take specific actions, including (subject to various
exceptions) restrictions on incurring indebtedness, paying dividends, making certain loans and investments, selling assets
or incurring liens which may limit our ability to compete effectively, or to take advantage of new business opportunities.
In addition, the restrictive covenants in the credit agreement, dated February 16, 2021, that governs our $1,000,000,000
three-year senior secured multicurrency revolving credit facility (the “Revolving Credit Facility”) require us to maintain
specified financial ratios and satisfy other financial condition tests.
A breach of the covenants or restrictions under our existing indebtedness could result in an event of default under
the applicable indebtedness. Such default may allow the creditors to accelerate the related debt and may result in the
acceleration of any other debt to which a cross-acceleration or cross-default provision applies. An event of default under
our Revolving Credit Facility would also permit the lenders to terminate all commitments to extend further credit under
that facility. Furthermore, if we were unable to repay the amounts due and payable under our Revolving Credit Facility,
lenders thereunder could proceed against the collateral granted to them to secure that indebtedness. In the event our
lenders or noteholders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient
assets to repay that indebtedness.
These restrictions may affect our ability to grow in accordance with our strategy. In addition, our financial results, our
substantial indebtedness and our credit ratings could adversely affect the availability and terms of our financing.
93 TechnipFMC
U.K. Annual Report and Accounts Our acquisition and divestiture activities involve substantial risks.
We have made and expect to continue to pursue acquisitions, dispositions, or other investments that may strategically fit
our business and/or growth objectives. We cannot provide assurances that we will be able to locate suitable acquisitions,
dispositions, or investments, or that we will be able to consummate any such transactions on terms and conditions
acceptable to us. Even if we do successfully execute such transactions, they may not result in anticipated benefits, which
could have a material adverse effect on our financial results. If we are unable to successfully integrate and develop
acquired businesses, we could fail to achieve anticipated synergies and cost savings, including any expected increases in
revenues and operating results. We may not be able to successfully cause a buyer of a divested business to assume the
liabilities of that business or, even if such liabilities are assumed, we may have difficulties enforcing our rights, contractual
or otherwise, against the buyer. We may invest in companies or businesses that fail, causing a loss of all or part of our
investment. In addition, if we determine that an other-than-temporary decline in the fair value exists for a company in
which we have invested, we may have to write down that investment to its fair value and recognize the related write-
down as an investment loss.
In connection with the Spin-off, we agreed to indemnify Technip Energies for certain liabilities and Technip Energies
agreed to indemnify us for certain liabilities. If we are required to act on these indemnities to Technip Energies, our
financial results could be negatively impacted. Additionally, any indemnity from Technip Energies may not be sufficient
to insure us against the full amount of liabilities for which we are responsible and Technip Energies may not be able to
satisfy its indemnification obligations in the future.
Risks Related to Our Operations
We may lose money on fixed-price contracts.
As customary for some of our projects, we often agree to provide products and services under fixed-price contracts.
We are subject to material risks in connection with such fixed-price contracts. It is not possible to estimate with complete
certainty the final cost or margin of a project at the time of bidding or during the early phases of its execution. Actual
expenses incurred in executing these fixed-price contracts can vary substantially from those originally anticipated for
several reasons including, but not limited to, the following:
` unforeseen additional costs related to the purchase of substantial equipment necessary for contract fulfillment or
labor shortages in the markets where the contracts are performed;
` mechanical failure of our production equipment and machinery;
` delays caused by local weather conditions and/or natural disasters (including earthquakes, floods and public health
crises such as the COVID-19 pandemic); and
` a failure of suppliers, subcontractors, or joint venture partners to perform their contractual obligations.
The realization of any material risks and unforeseen circumstances could also lead to delays in the execution schedule of
a project. We may be held liable to a customer should we fail to meet project milestones or deadlines or to comply with
other contractual provisions. Additionally, delays in certain projects could lead to delays in subsequent projects that were
scheduled to use equipment and machinery still being utilized on a delayed project.
Pursuant to the terms of fixed-price contracts, we are not always able to increase the price of the contract to reflect
factors that were unforeseen at the time our bid was submitted, and this risk may be heightened for projects with longer
terms. Depending on the size of a project, variations from estimated contract performance, or variations in multiple
contracts, could have a significant impact on our financial condition, results of operations or cash flows.
94 TechnipFMC
U.K. Annual Report and Accounts New capital asset construction projects for vessels and manufacturing facilities are subject to risks, including delays
and cost overruns, which could have a material adverse effect on our financial condition, or results of operations.
From time to time, we carry out capital asset construction projects to maintain, upgrade, and develop our asset base, and
such projects are subject to risks of delay and cost overruns that are inherent in any large construction project, resulting
from numerous factors including, but not limited to, the following:
` shortages of key equipment, materials or skilled labor;
` delays in the delivery of ordered materials and equipment;
` design and engineering issues; and
` shipyard delays and performance issues.
Failure to complete construction in time, or the inability to complete construction in accordance with design
specifications, may result in the loss of revenue. Additionally, capital expenditures for construction projects could
materially exceed the initially planned investments, or there could be delays in putting such assets into operation.
Our failure to timely deliver our backlog could affect future sales, profitability, and relationships with our customers.
Many of the contracts we enter into with our customers require long manufacturing lead times due to complex technical
and logistical requirements. These contracts may contain clauses related to liquidated damages or financial incentives
regarding on-time delivery, and a failure by us to deliver in accordance with customer expectations could subject us to
liquidated damages or loss of financial incentives, reduce our margins on these contracts, or result in damage to existing
customer relationships. The ability to meet customer delivery schedules for this backlog is dependent upon a number
of factors, including, but not limited to, access to the raw materials required for production, an adequately trained and
capable workforce, subcontractor performance, project engineering expertise and execution, sufficient manufacturing
plant capacity, and appropriate planning and scheduling of manufacturing resources. Failure to deliver backlog in
accordance with expectations could negatively impact our financial performance.
We face risks relating to our reliance on subcontractors, suppliers, and our joint venture partners.
We generally rely on subcontractors, suppliers, and our joint venture partners for the performance of our contracts.
Although we are not dependent upon any single supplier, certain geographic areas of our business or a project or group
of projects may depend heavily on certain suppliers for raw materials or semi-finished goods.
Any difficulty in engaging suitable subcontractors or acquiring equipment and materials could compromise our ability to
generate a significant margin on a project or to complete such project within the allocated time frame. If subcontractors,
suppliers or joint venture partners refuse to adhere to their contractual obligations with us or are unable to do so due
to a deterioration of their financial condition, we may be unable to find a suitable replacement at a comparable price, or
at all. Moreover, the failure of one of our joint venture partners to perform their obligations in a timely and satisfactory
manner could lead to additional obligations and costs being imposed on us as we may be obligated to assume our
defaulting partner’s obligations or compensate our customers.
Any delay, failure to meet contractual obligations, or other event beyond our control or not foreseeable by us, that
is attributable to a subcontractor, supplier or joint venture partner, could lead to delays in the overall progress of the
project and/or generate significant extra costs. Even if we are entitled to make a claim for these extra costs against the
defaulting supplier, subcontractor or joint venture partner, we may be unable to recover the entirety of these costs and
this could materially adversely affect our business, financial condition or results of operations.
A failure of our IT infrastructure, including as a result of cyber-attacks, could adversely impact our business
and results of operations.
The efficient operation of our business is dependent on our IT systems. Accordingly, we rely upon the capacity, reliability,
and security of our IT hardware and software infrastructure and our ability to expand and update this infrastructure
in response to changing needs. We have been subject to cyber-attacks in the past, including phishing, malware, and
95 TechnipFMC
U.K. Annual Report and Accounts ransomware. No such attack has had a material adverse effect on our business, however this may not be the case with
future attacks. Our systems may be vulnerable to damages from such attacks, as well as from natural disasters, failures in
hardware or software, power fluctuations, unauthorized access to data and systems, loss or destruction of data (including
confidential customer information), human error, and other similar disruptions, and we cannot give assurance that any
security measures we have implemented or may in the future implement will be sufficient to identify and prevent or
mitigate such disruptions. In response to the COVID-19 pandemic, we have transitioned many of our employees to remote
working arrangements which presents increased cybersecurity risks. If a cyber-attack, power outage, connectivity issue,
or other event occurred that impacted our employees’ ability to work remotely, it may be difficult or, in certain cases,
impossible, for us to continue our business for a substantial period of time.
We rely on third parties to support the operation of our IT hardware, software infrastructure, and cloud services, and
in certain instances, utilize web-based and software-as-a-service applications. The security and privacy measures
implemented by such third parties, as well as the measures implemented by any entities we acquire or with whom we do
business, may not be sufficient to identify or prevent cyber-attacks, and any such attacks may have a material adverse
effect on our business. While our IT vendor agreements typically contain provisions that seek to eliminate or limit our
exposure to liability for damages from a cyber attack, we cannot ensure such provisions will withstand legal challenges or
cover all or any such damages.
Threats to our IT systems arise from numerous sources, not all of which are within our control, including fraud or malice
on the part of third parties, accidental technological failure, electrical or telecommunication outages, failures of computer
servers or other damage to our property or assets, outbreaks of hostilities, or terrorist acts. The failure of our IT systems
or those of our vendors to perform as anticipated for any reason or any significant breach of security could disrupt our
business and result in numerous adverse consequences, including reduced effectiveness and efficiency of operations,
inappropriate disclosure of confidential and proprietary information, including personal data, regulatory action and fines
included for a breach of data protection laws, reputational harm, regulatory fines or investigations, increased overhead
costs, and loss of important information, which could have a material adverse effect on our business and results of
operations. In addition, we may be required to incur significant costs to protect against or to mitigate damage caused by
these disruptions or security breaches in the future. Our insurance coverage may not cover all of the costs and liabilities
we incur as the result of any disruptions or security breaches, and if our business continuity and/or disaster recovery
plans do not effectively and timely resolve issues resulting from a cyber-attack, we may suffer material adverse effects
on our business.
Pirates endanger our maritime employees and assets.
We face material piracy risks in the Gulf of Guinea, the Somali Basin, and the Gulf of Aden, and, to a lesser extent, in
Southeast Asia, Malacca, and the Singapore Straits. Piracy represents a risk for both our projects and our vessels, which
operate and transport through sensitive maritime areas. Such risks have the potential to significantly harm our crews
and to negatively impact the execution schedule for our projects. If our maritime employees or assets are endangered,
additional time may be required to find an alternative solution, which may delay project realization and negatively impact
our business, financial condition, or results of operations.
96 TechnipFMC
U.K. Annual Report and Accounts Risks Related to Legal Proceedings, Tax, and Regulatory Matters
The industries in which we operate or have operated expose us to potential liabilities, including the installation or use
of our products, which may not be covered by insurance or may be in excess of policy limits, or for which expected
recoveries may not be realized.
We are subject to potential liabilities arising from, among other possibilities, equipment malfunctions, equipment misuse,
personal injuries, and natural disasters, any of which may result in hazardous situations, including uncontrollable flows
of gas or well fluids, fires, and explosions. Our insurance against these risks may not be adequate to cover our liabilities.
Further, the insurance may not generally be available in the future or, if available, premiums may not 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 were not able to obtain liability insurance, such potential liabilities could
have a material adverse effect on our business, results of operations, financial condition or cash flows.
Our operations require us to comply with numerous regulations, violations of which could have a material adverse
effect on our financial condition, results of operations, or cash flows.
Our operations and manufacturing activities are governed by international, regional, transnational, and national laws and
regulations in every place where we operate relating to matters such as environmental protection, health and safety,
labor and employment, import/export controls, currency exchange, bribery and corruption, and taxation. These laws
and regulations are complex, frequently change, and have tended to become more stringent over time. In the event the
scope of these laws and regulations expand in the future, the incremental cost of compliance could adversely impact our
financial condition, results of operations, or cash flows.
Our international operations are subject to anti-corruption laws and regulations, such as the U.S. Foreign Corrupt Practices
Act (“FCPA”), the U.K. Bribery Act of 2010 (the “Bribery Act”), the anti-corruption provisions of French law n° 2016-1691
dated December 9, 2016 relating to Transparency, Anti-corruption and Modernization of the Business Practice (“Sapin II
Law”), the Brazilian law nº 12,846/13, or the Brazilian Anti-Bribery Act (also known as the Brazilian Clean Company Act),
and economic and trade sanctions, including those administered by the United Nations, the European Union, the Office
of Foreign Assets Control of the U.S. Department of the Treasury (“U.S. Treasury”), and the U.S. Department of State.
The FCPA prohibits corruptly providing anything of value to foreign officials for the purposes of obtaining or retaining
business or securing any improper business advantage. We may deal with both governments and state-owned business
enterprises, the employees of which are considered foreign officials for purposes of the FCPA. The provisions of the
Bribery Act extend beyond bribery of foreign public officials and are more onerous than the FCPA in a number of other
respects, including jurisdiction, non-exemption of facilitation payments, and penalties. Economic and trade sanctions
restrict our transactions or dealings with certain sanctioned countries, territories, and designated persons.
As a result of doing business in countries throughout the world, including through partners and agents, we are exposed
to a risk of violating anti-corruption laws and sanctions regulations. Some of the international locations in which we
currently operate or may, in the future, operate, have developing legal systems and may have higher levels of corruption
than more developed nations. Our continued expansion and worldwide operations, including in developing countries, our
development of joint venture relationships worldwide, and the employment of local agents in the countries in which we
operate increases the risk of violations of anti-corruption laws and economic and trade sanctions. Violations of anti-
corruption laws and economic and trade sanctions are punishable by civil penalties, including fines, denial of export
privileges, injunctions, asset seizures, debarment from government contracts (and termination of existing contracts), and
revocations or restrictions of licenses, as well as criminal fines and imprisonment. In addition, any major violations could
have a significant impact on our reputation and consequently on our ability to win future business.
We have implemented internal controls designed to minimize and detect potential violations of laws and regulations in
a timely manner but we can provide no assurance that such policies and procedures will be followed at all times or will
effectively detect and prevent violations of the applicable laws by one or more of our employees, consultants, agents, or
partners. The occurrence of any such violation could subject us to penalties and material adverse consequences on our
business, financial condition, results of operations, or cash flows.
97 TechnipFMC
U.K. Annual Report and Accounts Compliance with environmental and climate change-related laws and regulations may adversely affect our business
and results of operations.
Environmental laws and regulations in various countries affect the equipment, systems, and services we design,
market, and sell, as well as the facilities where we manufacture our equipment and systems, and any other operations
we undertake. We are required to invest financial and managerial resources to comply with environmental laws
and regulations, and believe that we will continue to be required to do so in the future. Failure to comply with these
laws and regulations may result in the assessment of administrative, civil, and criminal penalties, the imposition of
remedial obligations, the issuance of orders enjoining our operations, or other claims and complaints. Additionally, our
insurance and compliance costs may increase as a result of changes in environmental laws and regulations or changes in
enforcement. These laws and regulations, as well as any new laws and regulations affecting exploration and development
of drilling for crude oil and natural gas, are becoming increasingly strict and could adversely affect our business and
operating results by increasing our costs, limiting the demand for our products and services, or restricting our operations.
Regulatory requirements related to Environmental, Social and Governance (ESG) (including sustainability) matters have
been, and are being, implemented in the European Union in particular in relation to financial market participants. Such
regulatory requirements are being implemented on a phased basis. We expect regulatory requirements related to, and
investor focus on, ESG (including sustainability) matters to continue to expand in the EU, the United States, and more
globally. We establish ESG objectives that align with our foundational beliefs and corporate strategy with an aim toward
reducing our carbon footprint, raising awareness and making advancements in inclusion and diversity. If, in relation to
ESG (including sustainability) matters, we are not able to meet current and future regulatory requirements, the reporting
requirements of regulators, or the current and future expectations of investors, customers or other stakeholders, our
business and ability to raise capital may be adversely affected.
Existing or future laws and regulations relating to greenhouse gas emissions and climate change may adversely affect
our business.
Climate change continues to attract considerable public and scientific attention. As a result, numerous laws, regulations,
and proposals have been made and are likely to continue to be made at the international, national, regional, and state
levels of government to monitor and limit emissions of carbon dioxide, methane, and other “greenhouse gases” (“GHGs”).
These efforts have included cap-and-trade programs, carbon taxes, GHG reporting and tracking programs and regulations
that directly limit GHG emissions from certain sources. Such existing or future laws, regulations, and proposals concerning
the release of GHGs or that concern climate change (including laws, regulations, and proposals that seek to mitigate the
effects of climate change) may adversely impact demand for the equipment, systems and services we design, market and
sell. For example, oil and natural gas exploration and production may decline as a result of such laws, regulations, and
proposals, and as a consequence, demand for our equipment, systems and services may also decline. In addition, such
laws, regulations, and proposals may also result in more onerous obligations with respect to our operations, including the
facilities where we manufacture our equipment and systems. Such decline in demand for our equipment, systems and
services and such onerous obligations in respect of our operations may adversely affect our financial condition, results of
operations, or cash flows.
As an English public limited company, we must meet certain additional financial requirements before we may declare
dividends or repurchase shares and certain capital structure decisions may require stockholder approval which may
limit our flexibility to manage our capital structure. We may not be able to pay dividends or repurchase shares of our
ordinary shares in accordance with our announced intent, or at all.
Under English law, we will only be able to declare dividends, make distributions, or repurchase shares (other than out
of the proceeds of a new issuance of shares for that purpose) out of “distributable profits.” Distributable profits are a
company’s accumulated, realized profits, to the extent that they have not been previously utilized by distribution or
capitalization, less its accumulated, realized losses, to the extent that they have not been previously written off in a
reduction or reorganization of capital duly made. In addition, as a public limited company incorporated in England and
Wales, we may only make a distribution if the amount of our net assets is not less than the aggregate of our called-up
98 TechnipFMC
U.K. Annual Report and Accounts share capital and non-distributable reserves and to the extent that the distribution does not reduce the amount of those
assets to less than that aggregate.
Our articles of association permit us by ordinary resolution of the stockholders to declare dividends, provided that the
directors have made a recommendation as to its amount. The dividend shall not exceed the amount recommended by the
Board of Directors. The directors may also decide to pay interim dividends if it appears to them that the profits available
for distribution justify the payment. When recommending or declaring payment of a dividend, the directors are required
under English law to comply with their duties, including considering our future financial requirements.
In addition, the Board of Directors’ determinations regarding dividends and share repurchases will depend on a variety
of other factors, including our net income, cash flow generated from operations or other sources, liquidity position, and
potential alternative uses of cash, such as acquisitions, as well as economic conditions and expected future financial
results. Our ability to declare and pay future dividends and make future share repurchases will depend on our future
financial performance, which in turn depends on the successful implementation of our strategy and on financial,
competitive, regulatory, technical, general economic conditions, demand and selling prices for our products and services,
and other factors specific to our industry or specific projects, many of which are beyond our control. Therefore, our
ability to generate cash depends on the performance of our operations and could be limited by decreases in our
profitability or increases in costs, regulatory changes, capital expenditures, or debt servicing requirements.
Any failure to pay dividends or repurchase shares of our ordinary shares could negatively impact our reputation, harm
investor confidence in us, and cause the market price of our ordinary shares to decline.
Uninsured claims and litigation against us, including intellectual property litigation, could adversely impact our financial
condition, results of operations, or cash flows.
We could be impacted by the outcome of pending litigation, as well as unexpected litigation or proceedings. We have
insurance coverage against operating hazards, including product liability claims and personal injury claims related to our
products or operating environments in which our employees operate, to the extent deemed prudent by our management
and to the extent insurance is available. However, our insurance policies are subject to exclusions, limitations, and other
conditions and may not apply in all cases, for example where willful wrongdoing on our part is alleged. Additionally, the
nature and amount of that insurance may not be sufficient to fully indemnify us against liabilities arising out of pending
and future claims and litigation. Additionally, in individual circumstances, certain proceedings or cases may also lead to our
formal or informal exclusion from tenders or the revocation or loss of business licenses or permits. Our financial condition,
results of operations, or cash flows could be adversely affected by unexpected claims not covered by insurance.
In addition, the tools, techniques, methodologies, programs, and components we use to provide our services may infringe
upon the intellectual property rights of others. Infringement claims generally result in significant legal and other costs.
The resolution of these claims could require us to pay damages, enter into license agreements or develop alternative
technologies. The development of these technologies or the payment of royalties under licenses from third parties, if
available, would increase our costs. If a license were not available, or we are not able to develop alternative technologies,
we might not be able to continue providing a particular service or product, which could adversely affect our financial
condition, results of operations, or cash flows.
We are subject to governmental regulation and other legal obligations related to privacy, data protection, and data
security. Our actual or perceived failure to comply with such obligations could harm our business.
We are subject to international data protection laws, such as the General Data Protection Regulation, or GDPR, in the
European Economic Area, or EEA, and the United Kingdom (“UK”) GDPR and Data Protection Act 2018 in the UK.
The GDPR and implementing legislation in the EEA and UK impose several stringent requirements for controllers and
processors of personal data which have increased our obligations, including, for example, by requiring more robust
disclosures to individuals, notifications, in some cases, of data breaches to regulators and data subjects, and a record of
processing and other policies and procedures to be maintained to adhere to the accountability principle. In addition, we
are subject to the GDPR’s rules on transferring personal data outside of the EEA and UK (including to the United States),
99 TechnipFMC
U.K. Annual Report and Accounts and recent legal developments in Europe have created complexity and uncertainty regarding such transfers. In addition,
the UK’s withdrawal from the European Union may mean that in future we are required to find alternative solutions for
the compliant transfer of personal data into the UK.
Failure to comply with the requirements of GDPR and the local laws implementing or supplementing the GDPR could
result in fines of up to €20,000,000 or up to 4% of the total worldwide annual turnover of the preceding financial year,
whichever is higher, as well as other administrative penalties. The UK GDPR mirrors the fines under the GDPR. In addition,
a breach of the GDPR or UK GDPR could result in regulatory investigations and enforcement action, reputational damage,
and civil claims including representative actions and other class action type litigation.
We are likely to be required to expend significant capital and other resources to ensure ongoing compliance with the
GDPR and UK GDPR and other applicable data protection legislation, and we may be required to put in place additional
control mechanisms which could be onerous and adversely affect our business, financial condition, results of operations,
or cash flows.
The IRS may not agree that we should be treated as a foreign corporation for U.S. federal tax purposes and may seek to
impose an excise tax on gains recognized by certain individuals.
Although we are incorporated in the United Kingdom, the U.S. Internal Revenue Service (the “IRS”) may assert that
we should be treated as a U.S. “domestic” corporation (and, therefore, a U.S. tax resident) for U.S. federal income tax
purposes pursuant to Section 7874 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). For U.S. federal
income tax purposes, a corporation (i) is generally considered a “domestic” corporation (or U.S. tax resident) if it is
organized in the United States or of any state or political subdivision therein, and (ii) is generally considered a “foreign”
corporation (or non-U.S. tax resident) if it is not considered a domestic corporation. Because we are a U.K. incorporated
entity, we would be considered a foreign corporation (and, therefore, a non-U.S. tax resident) under these rules. Section
7874 of the Code (“Section 7874”) provides an exception under which a foreign incorporated entity may, in certain
circumstances, be treated as a domestic corporation for U.S. federal income tax purposes.
We do not believe this exception applies. However, the Section 7874 rules are complex and subject to detailed
regulations, the application of which is uncertain in various respects. It is possible that the IRS will not agree with our
position. Should the IRS successfully challenge our position, it is also possible that an excise tax under Section 4985 of the
Code (the “Section 4985 Excise Tax”) may be assessed against certain “disqualified individuals” (including former officers
and directors of FMC Technologies, Inc.) on certain stock-based compensation held thereby. We may, if we determine that
it is appropriate, provide disqualified individuals with a payment with respect to the Section 4985 Excise Tax, so that, on
a net after-tax basis, they would be in the same position as if no such Section 4985 Excise Tax had been applied.
In addition, there can be no assurance that there will not be a change in law or interpretation, including with retroactive
effect, that might cause us to be treated as a domestic corporation for U.S. federal income tax purposes.
U.S. tax laws and/or guidance could affect our ability to engage in certain acquisition strategies and certain internal
restructurings.
Even if we are treated as a foreign corporation for U.S. federal income tax purposes, Section 7874, U.S. Treasury
regulations, and other guidance promulgated thereunder may adversely affect our ability to engage in certain future
acquisitions of U.S. businesses or to restructure the non-U.S. members of our group. These limitations, if applicable, may
affect the tax efficiencies that otherwise might be achieved in such potential future transactions or restructurings.
In addition, the IRS and the U.S. Treasury have issued final and temporary regulations providing that, even if we are
treated as a foreign corporation for U.S. federal income tax purposes, certain intercompany debt instruments issued on
or after April 4, 2016 will be treated as equity for U.S. federal income tax purposes, therefore limiting U.S. tax benefits
and resulting in possible U.S. withholding taxes. Although recent guidance from the U.S. Treasury removes certain
documentation requirements that would otherwise be imposed with respect to covered debt instruments, announces an
intention to further modify and possibly withdraw certain classification rules relating to covered debt instruments, and
100 TechnipFMC
U.K. Annual Report and Accounts further indicates that these rules generally are the subject of continuing study and may be further materially modified,
the current regulations may adversely affect our future effective tax rate and could also impact our ability to engage in
future restructurings if such transactions cause an existing intercompany debt instrument to be treated as reissued for
U.S. federal income tax purposes.
We are subject to the tax laws of numerous jurisdictions; challenges to the interpretation of, or future changes to, such
laws could adversely affect us.
We and our subsidiaries are subject to tax laws and regulations in the United Kingdom, the United States, France, and
numerous other jurisdictions in which we and our subsidiaries operate. These laws and regulations are inherently
complex, and we are, and will continue to be, obligated to make judgments and interpretations about the application
of these laws and regulations to our operations and businesses. The interpretation and application of these laws and
regulations could be challenged by the relevant governmental authorities, which could result in administrative or judicial
procedures, actions, or sanctions, which could be material.
On December 22, 2017, the Tax Cuts and Jobs Act was signed into law in the United States, which made extensive
changes to the U.S. taxation of multinational companies, and is subject to continuing regulatory and possible legislative
changes, especially given the new Administration and Congress in the United States. In addition, the U.S. Congress, the
U.K. Government, the European Union, the Organization for Economic Co-operation and Development (the “OECD”),
and other government agencies in jurisdictions where we and our affiliates do business have had an extended focus on
issues related to the taxation of multinational corporations. New tax initiatives, directives, and rules, such as the U.S. Tax
Cuts and Jobs Act, the OECD’s Base Erosion and Profit Shifting initiative, and the European Union’s Anti-Tax Avoidance
Directives, may increase our tax burden and require additional compliance-related expenditures. As a result, our financial
condition, results of operations, or cash flows may be adversely affected. Further changes, including with retroactive
effect, in the tax laws of the United States, the United Kingdom, the European Union, or other countries in which we and
our affiliates do business could also adversely affect us.
We may not qualify for benefits under tax treaties entered into between the United Kingdom and other countries.
We operate in a manner such that we believe we are eligible for benefits under tax treaties between the United Kingdom
and other countries. However, our ability to qualify for such benefits will depend on whether we are treated as a U.K.
tax resident, the requirements contained in each treaty and applicable domestic laws, on the facts and circumstances
surrounding our operations and management, and on the relevant interpretation of the tax authorities and courts. For
example, because of Brexit, we may lose some or all of the benefits of tax treaties between the United States and the
remaining members of the European Union, and face higher tax liabilities, which may be significant. Another example is
the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the
“MLI”), which entered into force for participating jurisdictions on July 1, 2018. The MLI recommends that countries adopt
a “limitation-on-benefit” (“LOB”) rule and/or a “principal purpose test” (“PPT”) rule with regards to their tax treaties. The
application of the LOB rule or the PPT rule could deny us treaty benefits (such as a reduced rate of withholding tax) that
were previously available and as such there remains uncertainty as to whether and, if so, to what extent such treaty
benefits will continue to be available. The position is likely to remain uncertain for a number of years.
The failure by us or our subsidiaries to qualify for benefits under tax treaties entered into between the United Kingdom
and other countries could result in adverse tax consequences to us (including an increased tax burden and increased
filing obligations) and could result in certain tax consequences of owning and disposing of our shares.
We intend to be treated exclusively as a resident of the United Kingdom for tax purposes, but French or other tax
authorities may seek to treat us as a tax resident of another jurisdiction.
We are incorporated in the United Kingdom. English law currently provides that we will be regarded as a U.K. resident
for tax purposes from incorporation and shall remain so unless (i) we are concurrently a resident in another jurisdiction
(applying the tax residence rules of that jurisdiction) that has a double tax treaty with the United Kingdom and (ii) there is
a tiebreaker provision in that tax treaty which allocates exclusive residence to that other jurisdiction.
101 TechnipFMC
U.K. Annual Report and Accounts In this regard, we have a permanent establishment in France to satisfy certain French tax requirements imposed by
the French Tax Code with respect to the Merger. Although it is intended that we will be treated as having our exclusive
place of tax residence in the United Kingdom, the French tax authorities may claim that we are a tax resident of France
if we were to fail to maintain our “place of effective management” in the United Kingdom. Any such claim would be
settled between the French and U.K. tax authorities pursuant to the mutual assistance procedure provided for by the tax
treaty concluded between France and the United Kingdom. There is no assurance that these authorities would reach an
agreement that we will remain exclusively a U.K. tax resident; an adverse determination could materially and adversely
affect our business, financial condition, results of operations, or cash flows. A failure to maintain exclusive tax residency
in the United Kingdom could result in adverse tax consequences to us and our subsidiaries and could result in certain
adverse changes in the tax consequences of owning and disposing of our shares.
102 TechnipFMC
U.K. Annual Report and Accounts Risks Related to the Spin-off and the Other Transactions
The Spin-off may subject us to future liabilities.
On February 16, 2021, we completed the Spin-off, resulting in Technip Energies, which holds our former Technip Energies
business segment, becoming a stand-alone publicly traded corporation. Pursuant to agreements we entered into with
Technip Energies in connection with the Spin-off, we and Technip Energies are each generally responsible for the
obligations and liabilities related to our respective businesses. Pursuant to those agreements, we and Technip Energies
each agreed to cross-indemnities principally designed to allocate financial responsibility for the obligations and liabilities
of our business to us and those of Technip Energies’ business to it. However, third parties, including governmental
agencies, could seek to hold us responsible for obligations and liabilities that Technip Energies agreed to retain or assume,
and there can be no assurance that the indemnification from Technip Energies will be sufficient to protect us against
the full amount of such obligations and liabilities, or that Technip Energies will be able to fully satisfy its indemnification
obligations. Additionally, if a court were to determine that the Spin-off or related transactions were consummated with
the actual intent to hinder, delay or defraud current or future creditors or resulted in Technip Energies receiving less than
reasonably equivalent value when it was insolvent, or that it was rendered insolvent, inadequately capitalized or unable
to pay its debts as they become due, then it is possible that the court could disregard the allocation of obligations and
liabilities agreed to between us and Technip Energies, impose substantial obligations and liabilities on us and void some
or all of the transactions related to the Spin-off. Any of the foregoing could adversely affect our results of operations and
financial position.
The Spin-off may not achieve some or all of the anticipated benefits.
We may not realize some or all of the anticipated strategic, financial, operational or other benefits from the Spin-off.
As independent publicly-traded companies, we and Technip Energies are smaller, less diversified companies with a
narrower business focus, and may be more vulnerable to changing market conditions, which could materially adversely
affect our and its results of operations, cash flows and financial position.
In addition, other events outside of our control, including, but not limited to, political climate, the severity and duration
of the pandemic, and regulatory or legislative changes, could also adversely affect our ability to realize the anticipated
benefits from the Spin-off. Any such difficulties could have an adverse effect on our business, financial condition, or
results of operations, and cause the combined market value of us and Technip Energies after the Spin-off to fall short of
the market value of our shares prior to the Spin-off.
We are a significant shareholder of Technip Energies and the value of our investment in Technip Energies
may fluctuate substantially.
Following completion of the Spin-off, we own approximately 49.9% of the outstanding shares of common stock of Technip
Energies. The value of our investment in Technip Energies may be adversely affected by negative changes in its results
of operations, cash flows and financial position, which may occur as a result of the many risks attendant with operating in
the onshore/offshore industry, including the effect of laws and regulations on the operation of Technip Energies’ business
and the development of its assets, increased competition, loss of contract commitments, delays in the timing of or the
failure to complete projects, lack of access to capital and operating risks and hazards. The value of our investment in
Technip Energies may fluctuate substantially and may result in a significant impact to our results of operations.
We intend to significantly reduce our shareholding in Technip Energies over the 18 months following the Spin-off,
including in connection with the sale of Technip Energies shares to BPI (as defined herein) pursuant to the Investment
(as defined herein). However, we can offer no guarantee that we will be able to complete such disposition or, if completed,
the extent to which we will reduce our shareholding or the value that we will realize in connection with such disposition.
The occurrence of any of these and other risks faced by Technip Energies could adversely affect the value of our
investment in Technip Energies.
103 TechnipFMC
U.K. Annual Report and Accounts General Risk Factors
Our businesses are dependent on the continuing services of our key managers and employees.
We depend on key personnel. The loss of any key personnel could adversely impact our business if we are unable
to implement key strategies or transactions in their absence. The loss of qualified employees or failure to retain and
motivate additional highly-skilled employees required for the operation and expansion of our business could hinder our
ability to successfully conduct research activities and develop marketable products and services.
Seasonal and weather conditions could adversely affect demand for our services and operations.
Our business may be materially affected by variation from normal weather patterns, such as cooler or warmer summers
and winters. Adverse weather conditions, such as hurricanes in the Gulf of Mexico or extreme winter conditions in
Canada, Russia, and the North Sea, may interrupt or curtail our operations, or our customers’ operations, cause supply
disruptions or loss of productivity, and may result in a loss of revenue or damage to our equipment and facilities, which
may or may not be insured. Increasing concentrations of greenhouse gases in the Earth’s atmosphere may produce
climate changes that increase variation from normal weather patterns, such as increased frequency and severity of
storms, floods, droughts, and other climatic events, which could further impact our operations. Significant physical effects
of climate change could also have a direct effect on our operations and an indirect effect on our business by interrupting
the operations of those with whom we do business. Any of these events or outcomes could have a material adverse
effect on our business, financial condition, cash flows, or results of operations.
Currency exchange rate fluctuations could adversely affect our financial condition, results of operations, or cash flows.
We conduct operations around the world in many different currencies. Because a significant portion of our revenue is
denominated in currencies other than our reporting currency, the U.S. dollar, changes in exchange rates will produce
fluctuations in our revenue, costs, and earnings, and may also affect the book value of our assets and liabilities and
related equity. We hedge transaction impacts on margins and earnings where a transaction is not in the functional
currency of the business unit, but we do not hedge translation impacts on earnings. Our efforts to minimize our currency
exposure through such hedging transactions may not be successful depending on market and business conditions.
Moreover, certain currencies in which we conduct operations, specifically currencies in countries such as Angola and
Nigeria, do not actively trade in the global foreign exchange markets and may subject us to increased foreign currency
exposures. As a result, fluctuations in foreign currency exchange rates may adversely affect our financial condition,
results of operations, or cash flows.
We are exposed to risks in connection with our defined benefit pension plan commitments.
We have funded and unfunded defined benefit pension plans, which provide defined benefits based on years of service
and salary. We are required to recognize the funded status of defined benefit post-retirement plans as an asset or
liability in the consolidated balance sheet and recognize changes in that funded status in comprehensive income in the
year in which the changes occur. Further, we are required to measure each plan’s assets and its obligations that determine
its funded status as of the date of the consolidated balance sheet. Each defined benefit pension plan’s assets are invested
in different asset classes and their value may fluctuate in accordance with market conditions. Any deterioration in the
value of the defined benefit pension plan assets could therefore increase our obligations. Any such increases in our net
pension obligations could adversely affect our financial condition due to increased additional outflow of funds to finance
the pension obligations.
104 TechnipFMC
U.K. Annual Report and Accounts In addition, applicable law and/or the terms of the relevant defined benefit pension plan may require us to make cash
contributions or provide financial support upon the occurrence of certain events. We cannot predict whether, or to
what extent, changing market or economic conditions, regulatory changes or other factors will further increase our
pension expense or funding obligations. For further information regarding our pension liabilities, see Note 22 for further
information.
On behalf of the Board
Douglas J. Pferdehirt
Chairman and CEO
April 9, 2021
105 TechnipFMC
U.K. Annual Report and Accounts
Directors’ Report
The Board of Directors (the “Board”) presents its report together with the audited financial statements of the Company
and our consolidated subsidiaries for the year ended December 31, 2020.
The Company complies with the U.K. Companies Act 2006 (the “Companies Act”) reporting requirements provided by
Companies (Miscellaneous Reporting) Regulations 2018 (SI 2018/860). All information required has been incorporated in
the Strategic report and this Directors’ Report
Directors
The directors of the Company who held office during the year ended December 31, 2020, and at the date of this
Directors’ Report, were as follows:
Executive Directors
Chairman and CEO
Douglas J. Pferdehirt
Non-Executive Directors
Eleazar de Carvalho Filho
Margareth Øvrum (from October 1, 2020)
Arnaud Caudoux*
Pascal Colombani*
Marie-Ange Debon*
Claire S. Farley
Didier Houssin*
Peter Mellbye
John O’Leary
Olivier Piou*
Kay G. Priestly
Joseph Rinaldi*
James M. Ringler
John Yearwood
Sophie Zurquiyah (from April 1, 2021)
*Resigned on February 15, 2021, in connection with the Spin-Off
The appointment and replacement of the directors is governed by the Companies Act and the Company’s articles of
association (the “Articles of Association”).
The Board is responsible for promoting the long-term success of the Company. The Board is responsible for
implementation, understanding, and pursuit of a sound strategy for the success of the Company, relying upon a
framework of corporate governance and internal controls that are designed to protect the Company’s assets. The day-to-
day management of the business is delegated to the executive leadership team apart from matters specifically reserved
for the Board’s decision. The Board delegates some of its duties and powers to Board committees, each of which has a
written charter, available on the Company’s website.
The current directors of the Company have been appointed pursuant to the Articles of Association. Subject to the Articles
of Association and the Companies Act, a director may be appointed by an ordinary resolution at an annual meeting of
shareholders or by a decision of the Board.
Subject to the provisions of the Companies Act, the Articles of Association, the business of the Company is managed by
the Board, which may exercise all the powers of the Company whether relating to the management of the business of the
Company or not. The Board may delegate authorities to committees, and may delegate the day-to-day management and
decision making to the Chief Executive Officer.
106 TechnipFMC
U.K. Annual Report and Accounts
Share Capital and Articles of Association
of the Company
As at the close of business on March 31, 2021, being the latest practicable date prior to the publication of this Directors’
Report, the issued and fully paid share capital of the Company was as follows:
Class of shares
Ordinary
Number of shares
450,668,293
Nominal value
$450,668,293
There are no specific restrictions on the size of a holding, voting rights, or on the transfer of shares. No person has any
special rights of control over the Company’s share capital and all issued shares are fully paid. The Board is not aware of
any agreements between holders of the Company’s shares that may result in restrictions on the transfer of securities or
voting rights.
Following the Merger, the reserves arising out of the Merger were capitalized by the allotment and issuance by
TechnipFMC of a bonus share, which was paid up using such reserves, such that the amount of reserves so applied,
less the nominal value of the bonus share, applied as share premium and accrued to our share premium account. We
implemented a court-approved reduction of our capital by way of a cancellation of the bonus share and share premium
account which completed on June 29, 2017, to create distributable profits to support the payment of future dividends
or future share repurchases. On November 27, 2019, the Company redeemed 50,000 redeemable shares of £1 each and
cancelled one deferred ordinary share of £1 in the capital of the Company.
Specific powers relating to the allotment, issuance and the ability of the Company to repurchase ordinary shares are
included within the Articles of Association. Under the Articles of Association, the Directors have the authority to allot
shares up to a maximum aggregate nominal amount representing 20% of the shares in the capital of the Company in
issue on January 16, 2017 with a five-year validity period from January 12, 2017. This is in addition to an authority to
allot shares in accordance with the provisions of section 570 of the Companies Act, as if section 561(1) of that Act did
not apply, pursuant to a shareholders’ resolution dated January 11, 2017 with a five-year validity period from January
12, 2017. These authorities will expire on January 12, 2022. New authorities are being recommended by the Board of
Directors for approval by shareholders at our 2021 Annual Meeting.
Shareholders shall not be entitled to vote at any shareholders’ meetings or at a separate meeting of the holders of any
class of shares, either in person or by representative or proxy, in respect of any share held by them unless all amounts
presently payable by them in respect of that share have been paid.
Subject to the Articles of Association and the Companies Act, a shareholder (or any person appearing to be interested
in any such shareholder’s shares) may be served with a notice under section 793 of the Companies Act. If the Board
is satisfied that such shareholder or person has failed to supply to the Company the required information for the
prescribed period, or in purported compliance with the section 793 notice, has made a statement that is materially
false or inadequate, the Board may direct that the shareholder shall not be entitled to attend or vote in respect of
these shares.
The Company operates a TechnipFMC Incentive Award Plan for which certain employees are eligible. Details are
set out in Note 18 to the consolidated financial statements contained in this U.K. Annual Report, and in the Proxy
Statement available on our website at www.technipfmc.com under the heading “Investors > Events and presentations >
Shareholders’ meeting”.
The process of amending the Articles of Association is subject to the procedure outlined in the Companies Act.
107 TechnipFMC
U.K. Annual Report and Accounts Share Repurchases
A share repurchase program authorization was granted by our then shareholder on January 11, 2017 with a five-
year validity period from that date. These authorities will expire on January 12, 2022. New authorities are being
recommended by the Board of Directors for approval by shareholders at our 2021 Annual Meeting.
In April 2017, our Board authorized the repurchase of up to $500 million of ordinary shares. The Company implemented
the share repurchase program in September 2017, and it was completed on December 18, 2018. In December 2018, our
Board authorized an additional share repurchase program to repurchase up to $300 million of ordinary shares through
open market purchases, granted under the same shareholder authority. The Company terminated its share repurchase
program on July 3, 2019.
In 2019, the Company purchased a total of 4,012,752 of our own ordinary shares with a nominal value of $1.00 each,
representing almost 0.9% of the issued share capital on December 31, 2019 for a total amount of $68,740,031.25 and
€20,848,802.55 on the NYSE and on Euronext Paris, respectively. All weekly reports on share repurchases can be found
at: https://investors.technipfmc.com/stock-information/share-repurchase-program. The Company does not currently
hold any treasury shares and all ordinary shares repurchased under the share repurchase program were cancelled and
not held as treasury shares. The objective of the share repurchase program was to reduce the Company’s issued share
capital. Purchases of the Company’s ordinary shares under the share repurchase program were carried out on the NYSE
and Euronext Paris. The Company did not purchase any of its own ordinary shares during the financial year ending
December 31, 2020.
The Company established our Employee Benefit Trust (“EBT”), an offshore discretionary employee benefit trust, in 2017,
for the purposes of administering the Company’s share-based awards granted under shareholder approved incentive
plans. As at the close of business on March 31, 2021, being the latest practicable date prior to the publication of this
Directors’ Report, the EBT held 7,457 ordinary shares of the Company.
108 TechnipFMC
U.K. Annual Report and Accounts Significant Shareholdings
As at the close of business on March 31, 2021, being the latest practicable date prior to the publication of this Directors’
Report, the Company’s significant shareholders who had notified the Company that they hold 5% or more of the
Company’s ordinary shares were as follows:
Name and Address of Beneficial Owner
The Vanguard Group, Inc.
100 Vanguard Boulevard
Malvern, Pennsylvania 19355
Bpifrance Participations S.A. and affiliated entities
27–31, avenue du Général Leclerc
94710 Maisons-Alfort Cedex
France
Pzena Investment Management, LLC
320 Park Avenue, 8th Floor
New York, New York 10022
Shares
Percent of
Class1
30,198,9692
6.70%
26,167,6443
5.81%
24,671,0254
5.47%
(1) The calculation of percentage of ownership of each listed beneficial owner is based on 450,668,293 Ordinary Shares outstanding on March 31,
2021.
(2) Based solely on a Schedule 13G/A filed with the SEC on February 10, 2021, The Vanguard Group, Inc. and its subsidiaries have shared voting
power over 1,913,791 Ordinary Shares, sole dispositive power over 26,616,366 Ordinary Shares, and shared dispositive power over 3,582,603
Ordinary Shares.
(3) Based solely on a Schedule 13D/A filed with the SEC on February 19, 2021, Bpifrance Participations S.A., jointly with Caisse des Dépôts et
Consignations, EPIC Bpifrance, and Bpifrance S.A., have shared voting and dispositive power over 24,688,691 Ordinary Shares held directly
by Bpifrance Participations S.A.. In addition, Caisse des Dépôts et Consignations directly holds, and has sole voting and dispositive power over,
1,144,237 Ordinary Shares and has shared voting and dispositive power over 334,716 Ordinary Shares held directly by CNP Assurances, S.A., its
indirect subsidiary.
(4) Based solely on a Schedule 13G filed with the SEC on February 2, 2021, Pzena Investment Management, LLC (“Pzena”) has sole voting power over
18,923,986 Ordinary Shares and sole dispositive power over 24,671,025 Ordinary Shares. Pzena, an investment adviser registered under Section
203 of the Investment Advisers Act (or under the laws of any State), is deemed to be the beneficial owner of 24,671,025 Ordinary Shares as a
result of acting as investment adviser to various clients. Pzena reports that its clients have the right to receive and the ultimate power to direct
the receipt of dividends from, or the proceeds from, the sale of Ordinary Shares, but no interest of any one of such client relates to more than
5% of the total outstanding Ordinary Shares.
Directors’ Indemnities
Each of our directors is covered by appropriate directors’ and officers’ liability insurance, and there are also deeds of
indemnity in place between the Company and each director. These were executed in 2017 upon the closing of the Merger
and provide for the Company to indemnify the directors in respect of any proceedings brought by third parties against
them personally in their capacity as directors of the Company. The Company would also fund ongoing costs in defending
a legal action as they are incurred rather than after judgment has been given. In the event of an unsuccessful defense in
an action against directors in a criminal or civil action, individual directors would be liable to repay defense costs to the
extent funded by the Company.
109 TechnipFMC
U.K. Annual Report and Accounts Company Details and Branches
Outside the United Kingdom
The Company is a public limited company incorporated in England and Wales with registered number 09909709, and
with our registered office at One St. Paul’s Churchyard, London EC4M 8AP.
The Company has one branch outside of the United Kingdom, which is located in Paris, France.
Dividend
During the year ended December 31, 2020, the Board declared one interim quarterly dividend of $0.13 per share.
Employee Engagement and Business Relationship
Further information on our work on strengthening social dialogue and internal communication, as part of our labor
relations, along with information on how we promote cultural and ethnic diversity, including the provision of employment
to people with disabilities, is described in the section entitled “Employee and Social Matters” of the Strategic Report.
Advancing gender diversity is a strategic objective for the Company. More information can be found in the section
entitled “Advancing Gender Diversity” of the Strategic Report as well as in the section entitled “Corporate Responsibility
and Sustainability – Non-financial Information Statement” of the Strategic Report. More information on how we take into
consideration the need to engage with our employees and foster business relationships, can be found in the section
entitled “Decision making and section 172 of the Companies Act” of the Strategic Report.
Greenhouse Gas Emissions and Energy Consumption
The annual quantity of GHG emissions measured in tonnes of CO2 equivalent resulting from activities for which the
Company is responsible and has operational control over (including the combustion of fuel and the operation of any
facility), is described in the section entitled “Respecting the Environment” of the Strategic Report.
The annual quantity of emissions from the purchase of electricity, heat, steam, or cooling by the Company for its own use
is described is described in the section entitled “Respecting the Environment” of the Strategic Report.
The annual energy measured in kWh consumed from activities for which the Company is responsible (including the combustion
of fuel and the operation of any facility) and the annual quantity of energy consumed resulting from the purchase of electricity,
heat, steam, or cooling by the Company for its own use, is described in the section entitled “Respecting the Environment”
of the Strategic Report.
Events since December 31, 2020
On February 16, 2021, the Company distributed 50.1% of the issued share capital of Technip Energies to its shareholders,
with a further 20% of its issued share capital acquired by Bpifrance, to become an independent public company. As part of
the Spin-off, the Group’s Onshore/Offshore business was transferred out of the Group to Technip Energies.
No other significant events since December 31, 2020 are reported.
110 TechnipFMC
U.K. Annual Report and Accounts Future Developments
Expected future developments of the Company and our subsidiaries are set out in the Strategic Report.
Change in Control
The Companies Act requires the Company to identify (i) those significant arrangements to which the Company is party
that take effect, alter, or terminate upon a change of control of the Company following a takeover bid, (ii) the effects of
any such agreements, and (iii) any agreements with the Company and our directors or employees for compensation for
loss of office or employment that occurs because of a takeover bid.
Provisions under executive severance agreements entered into by each of the Company’s executives, except for our
Executive Chairman, may be triggered in the event of a change of control if certain conditions are met.
The impact of a change in control on the remuneration of the directors of the Company is set out in the paragraph
entitled “Potential Payments upon Change in Control” of the Directors’ Remuneration Policy.
Political Donations
The Company has not made any political donations or incurred any political expenditure during the year ended
December 31, 2020. In addition, the Company has not made any contributions to a non-E.U. political party during the
year ended December 31, 2020.
Financial Risk Management Objectives/Policies
and Hedging Arrangements
The Board believes that one of its most important roles is the oversight of the Company’s management of risk, which
the Board accomplishes through its Enterprise Risk Management program. Management presents to the Board the
risk areas that it believes to be the most significant and the plan for the assessment, monitoring and management of
those risks. The Board has ultimate responsibility for overall risk management oversight; however, it has designated the
Audit Committee with oversight of financial risk. The Audit Committee discusses with management on a regular basis
financial reporting, liquidity, contract management, legal and regulatory compliance, information-related risks, including
cybersecurity, taxes, and foreign exchange. The Audit Committee reviews the potential financial impacts of these risks,
the steps the Company takes to ensure that appropriate processes are in place to identify, manage, and control financial
and business risks and that the Company has adequate insurance coverage to mitigate these risks. In cases where a
practice or procedure is identified, or an operational incident occurs that could heighten the possibility of a negative
impact on our operations or financial results, our management reports to the Board the steps to be taken to ensure that
the risk is appropriately managed.
Please refer to Note 30 of the consolidated financial statements contained in this U.K. Annual Report for information on
the Company’s financial risk management objectives and policies and hedging policies and arrangements.
111 TechnipFMC
U.K. Annual Report and Accounts Research and Development
Please refer to the paragraph entitled “Research and Development” of the Strategic Report.
Directors’ Responsibility Statements
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable
law and regulation.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors
have prepared the group financial statements in accordance with international accounting standards in conformity with
the requirements of the Companies Act and international financial reporting standards adopted pursuant to Regulation
(EC) No 1606/2002 as it applies in the European Union and company financial statements in accordance with United
Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 “Reduced
Disclosure Framework”, and applicable law).
Under company law, directors must not approve the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Company and the group and of the profit or loss of the Company and the
group for that period.
In preparing these financial statements, the directors are required to:
` Select suitable accounting policies and then apply them consistently.
` Make judgments and accounting estimates that are reasonable and prudent.
` State whether applicable international accounting standards in conformity with the requirements of the Companies
Act and international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies
in the European Union have been followed for the group financial statements and United Kingdom Accounting
Standards, comprising FRS 101 have been followed for the company financial statements, subject to any material
departures disclosed and explained in the financial statements.
` Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company
and the group will continue in business.
The directors are responsible for ensuring that the Company keeps adequate accounting records that are sufficient to
show and explain the Company’s and the group’s transactions and disclose with reasonable accuracy at any time the
financial position of the Company and the group and enable them to ensure that the financial statements and the U.K.
Annual Report comply with the Companies Act. They are also responsible for safeguarding the assets of the Company
and the group and for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
Directors’ confirmations
The directors consider that the annual report and accounts, taken as a whole, is fair, balanced and understandable and
provides the information necessary for shareholders to assess the Company’s and the group’s position and performance,
business model and strategy. Each of the current directors, whose names and functions are listed in the section entitled
“Directors” of this Report confirm that, to the best of their knowledge:
112 TechnipFMC
U.K. Annual Report and Accounts ` the group financial statements, which have been prepared in accordance with international accounting standards
in conformity with the requirements of the Companies Act and international financial reporting standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union, give a true and fair view of the assets,
liabilities, financial position and loss of the group;
` the company financial statements, which have been prepared in accordance with United Kingdom Accounting
Standards, comprising FRS 101, give a true and fair view of the assets, liabilities, financial position and loss of the
company; and
` the Directors’ Report and Strategic Report includes a fair review of the development and performance of the business
and the position of the Company and the group, together with a description of the principal risks and uncertainties
that it faces.
Statement as to Disclosure to the Auditor
In the case of each director in office at the date the directors’ report is approved:
` So far as they are each aware, there is no relevant audit information of which the Company’s and the group’s auditor
is unaware.
` They have each taken all the steps that they ought to have taken as a director in order to make themselves aware
of any relevant audit information and to establish that the Company’s and the group’s auditor is aware of that
information.
On behalf of the Board
Douglas J. Pferdehirt
Chairman and CEO
April 9, 2021
113 TechnipFMC
U.K. Annual Report and Accounts Directors’ Remuneration
Report
Introduction and Compliance Statement
The purpose of this Directors’ Remuneration Report is to inform shareholders of the remuneration of the directors of
TechnipFMC for the period ended December 31, 2020. This report is divided into three sections:
i.
The letter from the Chair of the Compensation Committee
ii. The Annual Report on Remuneration for 2020 including an upfront “At-a-Glance” section to highlight the key
aspects of remuneration policy
iii. The Directors’ Remuneration Policy
Pursuant to English law, the Directors’ Remuneration Report forms part of the statutory annual report of the Company
for the year ended December 31, 2020, and has been prepared by the Compensation Committee on behalf of the Board
in accordance with the laws, rules, and regulations applicable to the Company.
The Annual Report on Remuneration (elements of which are audited) describes the directors’ fixed and variable pay,
share awards, benefits, and pension arrangements, as required by Schedule 8 of the Large and Medium-sized Companies
and Groups (Accounts and Reports) Regulations 2008, as amended. At the 2021 Annual Meeting on May 20, 2021, the
Directors’ Remuneration Report will be subject to a non-binding advisory shareholder vote and the Remuneration Policy
will be subject to a binding shareholder vote.
Letter from the Chairman of the
Compensation Committee
Dear Shareholders,
On behalf of the Board, I am pleased to present the Directors’ Remuneration Report of the Company, covering the period
from January 1, 2020 to December 31, 2020.
In 2020, the global COVID-19 pandemic and sharp decline in oil prices created exceptional circumstances for our industry.
During this time, the executive leadership team of TechnipFMC remained focused on the execution of our vision and
strategy, and continued to deliver strong operational results. We remained focused on strengthening our market-leading
positions and leveraging our financial flexibility to pursue growth opportunities. We are fully committed to further
our business transformation through new business models, innovative technologies, and digital solutions across the
organization.
Our executive compensation program continued to be focused on alignment with shareholder interests and pay for
performance. The Compensation Committee made several changes to the operation of the program in response to the
changed market conditions, the key highlights of which are summarized below.
114 TechnipFMC
U.K. Annual Report and Accounts Our Compensation Philosophy and How that Informs Decision Making
We are a global leader in oil and gas projects, technologies, systems, and services and provide our clients with deep
expertise across subsea, onshore/offshore, and surface projects. Our vision to enhance the performance of the world’s
energy industry is supported by the relentless drive of every individual at TechnipFMC. We are united by one single
purpose: to bring together the scope, knowledge, and determination to transform our clients’ project economics. Our
executive compensation is designed to help us achieve our vision by:
` Motivating our executive officers to achieve and exceed our short-term and long-term goals and objectives
` Aligning the interest of our executive officers with the interests of our shareholders by focusing our executive
compensation program on drivers of sustainable shareholder value and by ensuring a majority of executive
compensation is at-risk
` Providing market competitive levels of compensation to help us retain and attract exceptionally talented individuals
who can deliver on our vision
Shareholder Engagement
Our Compensation Committee values shareholder feedback, carefully reflecting on the results of shareholder advisory
votes and input received during shareholder engagement. At our 2020 Annual Meeting, 86.4% of votes cast approved our
2019 Remuneration Report with 13.6% voting against the report.
Our Board and executive leadership were pleased with this increase in support of our executive compensation
program and will continue a dialogue with our shareholders to receive valuable input within the context of our pay-for-
performance philosophy, business, and strategies.
Impact of the COVID-19 Pandemic and Oil Price Decline on our Executive Compensation Program
In the first quarter of 2020, the global COVID-19 pandemic, sharp decline in oil prices, and equity market volatility
materially changed the business environment and outlook for TechnipFMC. Our Board and management took decisive
action at the outset of the pandemic — first and foremost to protect, support, and ensure the health, safety, and well-
being of our people — and to continue to serve our clients at the highest level while focusing on business continuity and
executing our strategic priorities.
In March 2020, we announced that while the rationale for the Spin-off of Technip Energies remained unchanged, we
would delay the Spin-off until markets sufficiently recovered. We also decided to accelerate our cost reduction and
efficiency efforts worldwide to continue to focus on operating profitability through the downturn.
In addition, our Compensation Committee took swift and decisive actions in response to the unprecedented global health
and economic crisis, and made changes to our executive compensation program, including the following:
` Reduced the annual base salary for our Chairman and CEO by 30% for the remainder of 2020, effective May 1, 2020.
` Reduced annual cash retainers for the Board of Directors by 30% for the remainder of 2020, effective May 1, 2020.
` Updated our annual cash incentive plan measures effective April 1, 2020, and applied a cap on payout:
` Due to the COVID-19 pandemic and business downturn, the Company’s strategic priorities shifted to a
significantly greater focus on cash flow, liquidity and business sustainability. To better align our executives’
compensation with these critical priorities, the financial measures for the 2020 annual cash incentive plan
were changed from EBITDA, EBITDA as a Percentage of Revenue, and Working Capital Days to Incremental
Cost Savings (37.5% weighting) and Free Cash Flow Conversion (37.5%), for the last three quarters of 2020.
The Incremental Cost Savings metric measures our performance against our publicly disclosed Cost Reduction
Program. The Free Cash Flow Conversion metric (ratio of Free Cash Flow to Adjusted Net Income) measures the
quality of our earnings and is important for liquidity.
115 TechnipFMC
U.K. Annual Report and Accounts ` 25% of our 2020 annual cash incentive plan continued to be based on individual performance indicators
that included specific objectives regarding sustainability in our business performance, further reinforcing
the Company’s commitment to our Foundational Beliefs while we focused on responding to the challenging
business environment.
` Due to the volatility in the oil and gas market, the annual incentive plan targets set at the beginning of 2020
were no longer considered applicable. Accordingly, performance and payout for the Q1 2020 business
performance indicators were set at 0%.
` In addition to updating our Q2-Q4 2020 performance metrics to swiftly respond to changing short-term
business priorities, we also capped the payout for the business performance indicators under the 2020 annual
cash incentive plan at target (100%), with no upside for above-target performance. Limiting payouts at target
(compared to 200% in prior years) in a volatile business environment helps align with shareholder interests.
` No changes were made to the annual equity awards previously granted and not vested.
In addition to the changes to executive compensation above, the cost reduction program completed by the Company in
2020 also included the following changes to global, broad-based employee compensation and benefits programs:
` Significant reduction in global headcount;
` Furlough programs instituted in certain locations and businesses;
` A global salary freeze for all employees, other than salary increases mandated by union agreements or local
regulations; and
` Changes to the annual cash incentive plan for eligible employees mirrored the changes for our executives, namely:
changing the annual cash incentive plan’s business performance indicators for Q2-Q4 2020 to Incremental Cost Savings
and Free Cash Flow Conversion, as well as capping payout for business performance indicators at target (100%).
Changes to Our Executive Compensation Program in Response to Shareholder Feedback
Listed below are the key changes made to our executive compensation program in 2020 and 2021, both as part of our
annual review process, as well as in response to shareholder feedback:
` Discontinued the use of stock options, based on feedback from shareholders that stock options are not
performance-based. A majority of our long-term equity plan continues to be performance-based, consisting
of 70% Performance Share Unit awards (“PSUs”) and 30% Restricted Stock Unit awards (“RSUs”).
` In 2019, the long-term equity award grant was based on two performance measures, Return on Invested Capital
(“ROIC”) and relative TSR). However, for 2020, the volatility in the oil and gas business environment, as well as our
Spin-off, made it challenging to set meaningful ROIC targets, and as a result, a single performance measure, relative
TSR, was selected. We believe that this measure is strongly aligned with shareholder interests and is a meaningful
measure of our long-term performance.
` Continued to base a portion of our Chairman and CEO’s annual cash incentive on certain sustainability measures
to further reinforce the Company’s commitment to our Foundational Beliefs. For 2021, we have included an ESG
metric (25% weighting) in our annual cash incentive plan; to drive accountability and strengthen the link between our
compensation program and our ESG commitments and objectives.
` Updated our Compensation Peer Group and Relative TSR peer groups to reflect changes in our business environment.
` Enhanced disclosures in our Remuneration Report, including descriptions of the individual performance component of
our annual cash incentive plan, our PSU plan performance, our target-setting process, and our peer group
selection rationale.
116 TechnipFMC
U.K. Annual Report and Accounts Remuneration Arrangements in 2020
Details of Mr. Pferdehirt’s remuneration are provided in our Annual Report on Remuneration and summarized in the
section below. The Committee reviewed and approved Mr. Pferdehirt’s remuneration and all payments were in line with
our shareholder approved Remuneration Policy.
Proposed Remuneration Arrangements in 2021
The current Remuneration Policy was approved by shareholders at the Annual Meeting in 2018 for a period of up to
three years. As a result, and in line with U.K. requirements, we are submitting our Remuneration Policy for shareholder
approval at the forthcoming Annual Meeting.
In doing so, the Committee has taken the opportunity to review the continued appropriateness of the current
arrangements. Recognizing that the current Policy was intentionally designed with operational flexibility, and aligned with
North American market practices, as well as U.K./European market practices; and taking into account the current global
and industry challenges, as well as the Spin-off of Technip Energies, the Committee has concluded that the Policy remains
appropriate and as result is not proposing any substantive changes.
Looking Ahead - 2021 Changes to Our Executive Compensation Program
In January 2021, due to increased clarity in market outlook, coupled with a demonstrated ability to successfully execute
projects during a unique and challenging year, we announced the resumption of activities towards separation into two
industry-leading, independent, publicly traded companies, TechnipFMC and Technip Energies, which was completed on
February 16, 2021. Each of the two separated companies, TechnipFMC and Technip Energies will set their respective
executive compensation programs, practices, and compensation levels based on their respective business objectives and
as approved by the Compensation Committee of the Board of Directors for each company.
The Compensation Committee anticipates certain changes to the TechnipFMC executive compensation program in 2021,
based on continued feedback from shareholders, as well as a review of our business and competitive strategy, following
the Spin-off.
2021 Annual Incentive Plan Performance Measures
Long-Term Equity Mix
EBITDA as
a Percentage
of Revenue
25%
Annual
Individual
Performance
Indicators
25%
ESG
Performance
25%
Free Cash
Flow from
Operations
25%
RSUs
30%
PSUs
70%
117 TechnipFMC
U.K. Annual Report and Accounts ` We anticipate a review of our 2021 Compensation Peer Group and Relative TSR Peer Group, to reflect our post
Spin-off business strategy and competitive landscape as a fully integrated technology and services provider.
` Our 2021 annual cash incentive plan will include the following performance measures: EBITDA as a Percentage of
Revenue (25%), Free Cash Flow from Operations (25%), ESG Performance (25%), and individual annual performance
indicators (25%).
` In 2020, we provided a comprehensive overview of our ESG efforts to our investors including new initiatives
to be realized through 2023 and a commitment to deliver a 50% reduction in Scope 1 and 2 equivalent GHG
emissions by 2030. In order to directly link our compensation program to our ESG commitments and objectives,
we will include an ESG measure in our 2021 annual cash incentive plan at 25% weighting. Performance for this
measure will be based on an ESG scorecard that includes environmental (carbon footprint, waste recycling), social
(fair representation, awareness and culture, community initiatives), and governance (HSE leadership, human rights
due diligence, ethics and compliance) measures.
` We will continue to include EBITDA as a Percentage of Revenue and Free Cash Flow from Operations as measures
in the annual cash incentive plan, with an objective to increase our operating profitability, leverage cost
efficiencies, maintain the financial health and liquidity of the Company, and drive shareholder value creation.
` Our annual long-term equity incentive award will continue to comprise 70% PSUs (payout based on relative TSR
performance) and 30% RSUs, as we believe a higher weighting of performance-based equity aligns more closely with
shareholder interests.
We look forward to hearing your views on our executive compensation arrangements, and your continued support at the
2021 Annual Meeting.
Yours sincerely,
James M. Ringler
Director and Compensation Committee Chairman
April 9, 2021
118 TechnipFMC
U.K. Annual Report and Accounts Annual Report on Remuneration:
At-a-Glance – 2020 Highlights
TechnipFMC 2020 Performance
The record inbound orders and solid execution of 2019 gave us strong momentum into the new year, but 2020 abruptly
shifted to a year of unprecedented global challenges due to the COVID-19 pandemic and the sharp drop in demand for oil
and natural gas. Throughout this period, the health and well-being of our people and those of the communities in which
we work remained our top priority. Still, there were many notable accomplishments in 2020 as a result of the tireless
efforts and unwavering commitment of the women and men of TechnipFMC. Through their determination, innovation,
and resilience, we also protected our backlog and remained focused on project execution, enabling us to deliver strong
performance and achieve our financial guidance across all segments.
Through collaboration, we found solutions that allowed us to move projects forward safely, earning recognition from
clients, and others in the industry. Our solutions add value to some of the largest capital investments in the world. With
the introduction of our Subsea integrated engineering, procurement, construction, and installation (“iEPCI™”) business
model, we are changing the way projects are conceived and executed by lowering project costs and accelerating the
delivery of initial hydrocarbon production.
The integrated business model is unlocking incremental opportunities and materially expanding the deepwater
opportunity set. Since the first iEPCI™ project was awarded in 2016, market adoption of the business model has grown,
and in 2019, we secured more than 70% of the industry’s integrated project awards. We received additional integrated
awards in 2020, all of which came from repeat iEPCI™ customers.
Our Subsea front-end engineering teams remained very active, with an acceleration in front-end studies as we
progressed through the second half of the year. More than 50% of these studies today are utilizing an integrated
approach, leveraging the benefits of our digital Subsea Studio™ offering and positioning us well for future iEPCI™ awards.
Our commitments
to a brighter future
50 by
30
Targeting 50% reduction in
Scope 1 and 2 emissions by 2030
(versus 2017 baseline)
In November, we provided a comprehensive overview of our ESG efforts, including new initiatives to be realized through
2023 and a bold commitment to deliver a 50% reduction in Scope 1 and 2 equivalent GHG emissions by 2030. As part of
our efforts to drive sustainable change, we introduced key elements of our digital transformation, including Subsea Studio™
and iComplete™, both of which will improve project economics, enhance performance, and reduce emissions.
TechnipFMC is well-positioned for the Energy Transition, with significant offshore opportunities in Subsea including novel
wind, wave energy, carbon storage, and green hydrogen. Deep Purple™ is one such initiative, where we are leveraging
our core capabilities: iEPCI™, proprietary technologies, and partner alliances. Additionally, we see future opportunities
driven by our investments in early phase projects and solutions that accelerate the role of our technologies in the Energy
Transition as we continue to redefine offshore energy.
Throughout 2020, we continued our work to separate TechnipFMC into two industry-leading, pure-play companies, with
the transaction now completed through the Spin-off of Technip Energies on February 16, 2021.
119 TechnipFMC
U.K. Annual Report and Accounts TechnipFMC shareholders received, as a dividend, one ordinary share of Technip Energies N.V. for every five ordinary
shares of TechnipFMC held at the close of business on the record date. Technip Energies is now an independent public
company. Its ordinary shares are traded under the ticker symbol “TE” on the Euronext Paris Exchange and its Level 1
ADRs trade over-the-counter in the United States.
TechnipFMC is a leading technology provider to the
traditional and new energy industries, delivering fully
integrated projects, products, and services.
With our proprietary technologies and
comprehensive solutions, we are transforming our
clients’ project economics, helping them unlock
new possibilities to develop energy resources while
reducing carbon intensity and supporting their
energy transition ambitions.
TechnipFMC will continue to advance the industry
with our pioneering integrated ecosystems (such
as iEPCI™, iFEED™ and iComplete™), technology
leadership, and digital innovation.
Technip Energies is a leading engineering and
technology company, with leadership positions in
LNG, hydrogen, and ethylene, as well as growing
market positions in blue and green hydrogen,
sustainable chemistry, and CO2 management.
The company benefits from its robust project
delivery model supported by an extensive
technology, products, and services offering.
The new company includes Genesis – a leader in
advisory services and front-end engineering.
Creating Two Industry Leaders
Distinct and expanding market
opportunities and specific
customer bases
Robust backlogs
supporting future revenue
Enhanced focus
of management,
resources and capital
Compelling and distinct
investment profiles
Continuing to reshape the energy industry and create value for all stakeholders
The executive compensation programs for these two companies will continue to emphasize performance and will be
tailored to each company’s business and strategy.
120 TechnipFMC
U.K. Annual Report and Accounts Key Strategic Achievements in 2020
We have summarized some of our key 2020 results and achievements below.
Subsea
Technip Energies
Surface Technologies
` Inbound orders of $4 billion, supported
by higher mix of service and small
project activity
$4bn
inbound orders
` Additional integrated awards all from
repeat iEPCI™ customers
Backlog
$6.9bn
` Second consecutive year of
revenue growth, driven by LNG and
downstream projects
` Approximately 60% of total order
backlog linked to energy transition,
including LNG
$5bn
inbound orders
Backlog
$14.1bn
` International revenue more than
60% of total segment, with increased
revenue in technology-driven
businesses
` Significant decline in North America
market activity partially mitigated by
aggressive cost reduction
$1.1bn
inbound orders
Backlog
$0.4bn
(1) Reported financial results for the twelve months ended December 31, 2020 and inbound and backlog as of December 31, 2020 are as reported in
this U.K. Annual Report.
121 TechnipFMC
U.K. Annual Report and Accounts Market Leadership
Subsea
Technip Energies
122 TechnipFMC
` Achieved inbound orders of $4 billion, including contract awards for:
`ExxonMobil Payara project in Guyana
`Libra Consortium’s Mero 2 project in Brazil
`BP Platina iEPCI™ project in Angola
` Introduced Subsea Studio™, a digital front-end design offering that will be extended to
incorporate the execution and field management phases of a project
` Identified opportunity set for all-electric subsea production solution that may exceed
$8 billion through 2030, benefiting from reduced infrastructure requirements while
generating incremental tieback opportunities with a lower carbon footprint
` In collaboration with Halliburton, introduced Odassea™, the first distributed acoustic sensing
solution for subsea wells, enabling operators to reduce total cost ownership while improving
reservoir knowledge
` Introduced Deep Purple™, a collaboration with clients and partners to integrate offshore
renewable electricity and subsea hydrogen storage to provide power to subsea infrastructure
and clean energy to consumers when at scale
` Inbound orders more than doubled versus the prior-year driven by EPC contract awards for:
`Sempra LNG’s and IEnova’s Energía Costa Azul LNG Facility in Mexico
`Assiut National Oil Processing Company project for a new hydrocracking complex in Egypt
`Shell’s Moerdijk Plant in the Netherlands to modernize ethylene furnaces and reduce total
site emissions
` Strong momentum in sustainable chemistry across our three core areas:
`Biofuels: Further strengthening of existing alliance with Neste for Future NEXBTL™
technology based projects
`Bio-chemicals: Partnership with Carbios to build demonstration plant for depolymerization
of waste PET plastics to monomers
`Circular economy: Extended alliance with BP to include Infinia technology for difficult-to-
recycle plastic waste
` Announced a strategic partnership and investment with McPhy to accelerate the
development of large scale and competitive green hydrogen solutions
` Introduced Genesis’ new and expanded scope. which includes advisory services in both the
upstream and downstream domains
U.K. Annual Report and Accounts Surface Technologies
` International contract award highlights:
`New 5-year frame agreement with Petrogas Rima in the Middle East
`Award for high-pressure gas equipment and in-country services in Kuwait
`Orders for high-specification, clad equipment onshore and annular safety valves offshore
in the United Arab Emirates
`Contracted to supply wellheads, tree systems, and controls for a re-development project
in Norway
`Orders for 20,000 psi pressure control flowlines and well service pumps in China
` North America business highlights:
`Commercialization of iComplete™ ecosystem as we secured awards from operators in all
major U.S. basins
`Installation of our first iProduction™ system with a leading operator in the Permian basin
`Continued transformation of our North America operations through client collaboration to
drive wellsite operational efficiencies and lower GHG emissions
Response to a difficult operating environment
Reduced capital outlays for 2020:
Implemented cost reduction plan:
Revised compensation for 2020:
` Dividend distribution reduced
75% versus the prior year to
$59 million
` Capital expenditures reduced
36% versus the prior year to
$292 million
` Achieved annualized run-rate cost
savings of more than $350 million
` Included $100+ million in
annualized cost reductions for
Surface Technologies and $30
million in Corporate expenses
` 30% reduction to both the
Chairman and CEO salary and in
the Board of Directors’ retainer
` 20% reduction to our other
executive officers’ salaries
We also took aggressive actions to mitigate the impacts of the COVID-19 virus on our business. The health, safety, and
well-being of our employees remained our top priority as we focused on maintaining business continuity and adopting
leading-edge safety practices. The Company activated a COVID-19 Incident Management Team in order to administer a
consistent response throughout our global operations and provide coordinated support to localized events. Our COVID-19
management response was recognized by customers including Shell and BP as “best in class” to emulate. Specific actions
included the following:
` Established a thorough Business Continuity Planning process, which included a work from home initiative, when
practical, to support continuity of operations;
` Adopted enhanced sanitation practices across all offices and facilities, implemented measures to restrict non-essential
business travel, and restricted non-essential visitors from visiting our offices and facilities;
` Provided personal protective equipment and performed proactive health screening and testing of offshore personnel;
required employees to self-quarantine when they may have been exposed to, or shown any symptoms of, COVID-19;
123 TechnipFMC
U.K. Annual Report and Accounts ` Collaborated more closely with clients to mitigate COVID-19 impacts in order to advance projects and meet customer
requirements, albeit at reduced productivity in some instances;
` Engaged with critical vendors regarding their own pandemic preparedness plans to minimize the impact to our
business operations;
` Implemented global initiatives on mental health, including a mental health month in October, mental health and
well-being webinars on our learning portal, mental health campaign of “it’s OK not to be OK,” and reinforcement of
employee assistance programs and flex work policies; and
` Established a global Incident Management Team sponsored by our executive officers and including representatives
from HSE, Security, People & Culture, Legal, Communications, Finance, Medical, and major projects teams to assist in
regularly updating our Board on COVID-19 impacts.
124 TechnipFMC
U.K. Annual Report and Accounts 2020 Performance Impact on Compensation
The table below outlines the elements of our compensation program that are directly tied to Company performance,
along with 2020 performance and resulting payouts.
Compensation
Element
Long-Term
Equity
(70% PSUs and
30% RSUs)
Annual Cash
Incentive
Objective
2020 Measures
50% PSUs:
3-year Relative TSR
50% PSUs:
3-Year ROIC
To drive and
reward the
achievement of
long-term results
and align interests
of the Chairman
and CEO with
shareholders’
interests
2020
Performance
2018-2020
performance of
25th percentile1
2018-2020
performance of
3.3%1
>
>
2020 Payout
50% of target1
0% of target1
>
>
30% of the long-term equity incentive was delivered in the form of RSUs, the delivered value of which will also depend
on share price appreciation, and thus is aligned with shareholder interests.
To drive and
reward the
achievement
of short-term
Company
strategic goals
and individual
contributions
1Q 2020
EBITDA
25%
EBITDA as a
Percentage of
Revenue
25%
Working Capital Days
25%
Annual Individual
Performance
25%
2Q-4Q 2020
Q2 - Q4 Incremental
Cost Savings
37.5%
Q2 - Q4 Free Cash
Flow Conversion Ratio
37.5%
Annual Individual
Performance
25%
>
>
>
>
>
>
>
N/A2
N/A2
N/A2
Ranging from
100% to 175%
performance
Exceeded $400
million - Exceeded
maximum
performance
Exceeded 75% -
Exceeded maximum
performance
Ranging from
100% to 175%
performance
>
>
>
>
>
>
>
0% of target
0% of target
0% of target
100% to 175% of
target
100% of target3
100% of target3
100% to 175% of
target
(1) Payout for the 2018 grant has been provided instead of payout for the 2020 grant, since payout for the latter is not yet determined based on a
2020-2022 performance period..
(2) Due to the COVID-19 pandemic and the volatility in the oil and gas market, the Compensation Committee set the payout for the Q1 targets at 0%.
(3) Payout for business performance indicators was capped at a maximum of target (100%) for 2020.
125 TechnipFMC
U.K. Annual Report and Accounts
Our pay-for-performance program aims to motivate our Chairman and CEO to achieve and exceed both our short-term
and long-term goals and objectives by including an appropriate mix of long-term equity compensation and annual cash
incentive compensation. As intended by our program, our Chairman and CEO compensation was directly impacted by our
performance.
2020 Performance Impact on Long-Term Equity
The majority of our Chairman and CEO’s variable compensation is in the form of long-term equity compensation,
comprising 85% of 2020 total target variable compensation. Our Chairman and CEO achieved a payout of 25% of target
on his 2018 performance-based, long-term equity incentive award, based on the following::
` For the three-year relative TSR measure, we achieved 25th percentile performance for relative TSR for the 2018-
2020 performance period based on our performance relative to our 2018 Relative TSR Peer Group, and as a result,
the relative TSR component of the 2018 PSU awards paid out at 50%.
` For the ROIC measure, we did not meet the threshold performance for the 2018-2020 performance period, and as a
result, the ROIC component of the 2018 PSU awards paid out at 0%.
2020 Performance Impact on Annual Cash Incentive
The annual cash incentive comprises 15% of 2020 total target variable compensation for our Chairman and CEO. Our
Chairman and CEO achieved a payout of 100% of target for the annual cash incentive, based on the following:
` The payout for the business performance indicators (which makes up 75% of the annual cash incentive plan) was 75%.
` For Q1 2020, our performance for EBITDA, EBITDA as a Percentage of Revenue, and Working Capital Days was
set at 0% by the Compensation Committee.
` In Q2-Q4 2020, our performance far exceeded the maximum of the performance range for the Incremental Cost
Savings and Free Cash Flow Conversion measures. Therefore, payout for the business performance indicators
was 100% for Q2-Q4 (payouts were capped at 100% for Q2 through Q4, even for above target performance).
` The payout for the individual annual performance indicators (which makes up 25% of the annual incentive plan) was
175% for the Chairman and CEO.
126 TechnipFMC
U.K. Annual Report and Accounts Overview of our Compensation Practices
What We Do:
What We Don’t Do
` Pay for performance by aligning performance
measures with our strategy and shareholder
interests
` Provide the majority of Chairman and CEO
compensation as performance-based, “at-risk”
compensation
` No single-trigger vesting upon a change-in-control
` No guaranteed bonuses
` No uncapped incentives
` No tax gross-ups on any severance payments
` No excessive perquisites, benefits, or pension
` Maintain a clawback policy in the event of
payments
malfeasance or fraud
` No discounting, reloading, or repricing of stock
` Require robust executive and director share
options
ownership requirements
` No hedging and pledging of Company securities
` Engage an independent, external compensation
consultant
` Benchmark compensation against relevant global
and industry peer groups
` Cap PSU payout at target when relative TSR exceeds
peers’ TSR but absolute TSR is negative
127 TechnipFMC
U.K. Annual Report and Accounts Annual Report on Remuneration: Report for the Year
Ended December 31, 2020
The Compensation Committee presents the Annual Report on Remuneration and the statement of the Chairman of the
Compensation Committee, which will be submitted to shareholders as an advisory vote at the 2021 Annual Meeting.
Some of the information contained in the Annual Report on Remuneration is subject to audit. Where the information is
subject to audit, the information is identified in the relevant heading.
As intended by our pay-for-performance program, and as outlined in the sections below, our 2020 compensation for our
Chairman and CEO was directly impacted by our performance against key financial, operational, and individual metrics.
Below is an illustration of the Chairman and CEO’s remuneration.
CEO
All Other NEOs1
Base
Salary
8%
Annual
Incentive
13%
RSU
24%
PSU
55%
RSU
18%
Base
Salary
18%
Annual
Incentive
21%
PSU
43%
92% Variable
82% Variable
Fixed1
Variable2
Cash
Equity
Short-Term Performance
Long-Term Performance
8%
92%
21%
79%
15%
85%
Fixed1
Variable2
Cash
Equity
Short-Term Performance
Long-Term Performance
18%
82%
39%
61%
25%
75%
(1) Base salary includes the pay reduction from May 1, 2020 to December 31, 2020 in response to the COVID-19 pandemic and associated
industry downturn.
(2) RSUs are included in variable pay because their delivered value is based on share price at vesting.
128 TechnipFMC
U.K. Annual Report and Accounts
Executive Director’s Single Figure Table (Audited Information)
The below table sets forth the single figure of remuneration for the Chairman and CEO for the periods ended December
31, 2020 and 2019.
A proportion of the annual incentive and long-term incentive awards (the variable and at-risk element) – 78% – is subject
to share price appreciation. During 2020, we did not exercise the use of discretion as a result of share price appreciation
or depreciation.
Year
Salary(1)
Taxable
Benefits(2)
Annual
Incentive
Awards(3)
Long-Term
Incentive
Awards (4)
Pension-
Related
Benefits (5)
Total Fixed
Remuneration
Total Variable
Remuneration
Total
Chairman and CEO: Douglas J. Pferdehirt
2020
$988,800
$48,659 $4,578,600
$354,027
$247,770
$988,800
$5,229,056 $6,217,856
2019 $1,236,000
$84,989 $4,843,364 $1,455,003
$241,779
$1,236,000
$6,625,135
$7,861,135
(1) Salary provides a fixed level of market competitive compensation to our executive director that reflects his major responsibilities. Base pay is set
with reference to market median, based on responsibility, experience, individual performance, and contributions to the business. Salary for our
Chairman and CEO is unchanged since March 1, 2018. The salary provided for 2020 includes a 30% temporary pay reduction for the Chairman
and CEO effective May 1, 2020, and ending December 31, 2020.
(2)The taxable benefits for 2020 for the Chairman and CEO includes: (i) personal use of Company automobile of $6,727 (ii) financial planning services
of $18,000 (iii) UK tax preparation fees of $5,204, (iv) company paid life insurance fees of $578, (v) club dues of $8,863 and (vi) security services
of $9,287.
The taxable benefits for 2019 for the Chairman and CEO includes: (i) personal use of Company automobile of $4,977; (ii) spouse travel for
Company business functions of $42,699; (iii) financial planning of $20,935; and (iv) security services of $16,378.
(3) The amount disclosed in the Annual Incentive Awards column for 2020 for our Chairman and CEO represents the sum of annual cash incentive
and time-based (non-performance based) RSUs awarded in 2020. In 2020, our Chairman and CEO’s annual cash incentive was $1,668,600,
calculated using a target bonus of 135% of salary, a BPI rating of 75%, and an API rating of 175%. The time-based (non-performance based) RSUs
awarded in 2020 were valued at $2,910,000, comprising 30% of the Chairman and CEO’s long-term equity incentive target value of $9,700,000.
The amount disclosed in the Annual Incentive Awards column for 2019 for our Chairman and CEO represents the sum of annual cash incentive and
time-based (non-performance based) RSUs awarded in 2019. In 2019, our Chairman and CEO’s annual cash incentive was $2,903,364 calculated
using a target bonus of 135% of salary, a BPI rating of 172%, and an API rating of 180%. The time-vested (non-performance based) RSUs awarded
in 2019 were valued at $1,940,000, comprising 20% of the Chairman and CEO’s long-term equity incentive target value of $9,700,000.
(4) The amount disclosed in the Long-Term Incentive Awards column for 2020 for our Chairman and CEO represents the value of performance-based
RSUs subject to performance (ROIC) and market-based (TSR) vesting conditions with a performance period ending December 31, 2020. The value
was calculated using a performance percentage of 25% and share price on date of vesting. Dividend equivalents of $64,218 attributable to the
vested shares are not included in the table above.
The amount disclosed in the Long-Term Incentive Awards column for 2019 for our Chairman and CEO represent the value of performance-based
RSUs subject to performance (ROIC) and market-based (TSR) vesting conditions with a performance period ending December 31, 2019. The value
was calculated using a performance percentage of 50% and share price on date of vesting. Dividend equivalents of $229,429 attributable to the
vested shares are not included in the table above.
(5) The amount disclosed in the Pension Related Benefits column represents the value of Company contributions to the U.S. 401(K) and non-qualified
defined contribution plans.
129 TechnipFMC
U.K. Annual Report and Accounts
Executive Director Remuneration Received in Respect of 2020
One of the Compensation Committee’s primary goals in establishing our Executive Director compensation philosophy
and designing our compensation program is to ensure that compensation incentivizes Executive Directors to achieve
key strategic goals, deliver strong operational and sustainable financial performance, and deliver long-term value for our
shareholders. With this as a guiding principle, the Compensation Committee adopted a program that links a significant
percentage of an Executive Director’s compensation to key performance objectives that, if achieved, would result in the
creation of shareholder value over both the short- and long-term.
Base salary
Base salary is set with reference to a competitive range around the size-adjusted market median data, reflecting
factors such as individual performance, experience and business conditions within the parameters of our Directors’
Remuneration Policy.
The Compensation Committee reviews base salary for the Chairman and CEO on an annual basis, and determines and
approves any changes, with input from the committee’s independent compensation consultant.
For the Chairman and CEO, base salary has been frozen since March 1, 2018. In 2020, in response to the change in
business environment due to the COVID-19 pandemic and sharp decline in oil prices, the Compensation Committee
reduced the annual base salary for the CEO by 30% for the remainder of 2020, effective May 1, 2020.
Pension
Retirement benefits for 2020 have been calculated in line with the U.K. reporting regulations. Details of the aggregate
pension accrued in the U.S. Qualified Savings Plan and the U.S. Non-Qualified Savings Plan by the Chairman and CEO are
shown below.
The value of the pension under the pension schemes is calculated based on the Company’s contributions which are based
on a percentage of employee salary. Retirement contributions for the Chairman and CEO relate to our U.S. Qualified
Savings Plan and U.S. Non-Qualified Savings Plan.
Values relating
to DC Schemes
Accrued Pension at Year End1
$000
Company Contributions Over Year2
$000
Normal Retirement
Age3
Chairman and CEO
4,6931
248
N/A
(1) Accrued balance at 2020 year end in the U.S. Qualified Savings Plan and the U.S. Non-Qualified Savings Plan (which are defined
contribution schemes)
(2) Company contributions in 2020 to the U.S. Qualified Savings Plan and the U.S. Non-Qualified Savings Plan
(3) Benefits under the qualified plan can be withdrawn at termination from the company, and benefits under the U.S. Non-Qualified Savings Plan can
be withdrawn after 6 months post-termination, therefore retirement age does not apply.
130 TechnipFMC
U.K. Annual Report and Accounts Benefits
The Company also provides limited perquisites to the Chairman and CEO, facilitating the performance of their roles and
to ensure a competitive total compensation package. The perquisites we provide to our Chairman and CEO may include
financial planning and personal tax assistance, personal use of Company automobiles, dining club memberships and
country club memberships, executive physicals and other minor expenses associated with their business responsibilities.
The value of perquisites deemed to be personal is imputed as income to an executive officer, and we do not gross up for
the taxes due on such imputed income. Additional allowances or benefits may be granted to our Chairman and CEO, if
considered appropriate and reasonable.
Reflecting the safety concerns associated with their roles, the Company provides a security program for our Chairman
and CEO. The Compensation Committee believes this is in the best interests of shareholders as the personal safety and
security of our executive officers is critical to the stability of the Company. The security program was developed based
on a risk assessment determined to be appropriate by our security team and an outside consultant. We do not consider
the security measures provided to our Chairman and CEO to be a personal benefit, but rather reasonable and necessary
expenses for the benefit of the Company.
131 TechnipFMC
U.K. Annual Report and Accounts Elements of 2020 Executive Compensation
Our executive compensation program comprises three primary elements of base salary, annual cash incentive, and long-
term equity awards, along with the provision of market competitive benefits and perquisites.
In the first quarter of 2020, the global COVID-19 pandemic, sharp decline in oil prices, and equity market volatility
materially changed the business environment and outlook for TechnipFMC. In March 2020, we announced that while the
rationale for the Spin-off remained unchanged, we would delay the Spin-off until markets sufficiently recovered. We also
decided to accelerate our cost reduction and efficiency efforts worldwide to reinforce the Company through the downturn.
The Compensation Committee took swift and decisive actions in response to these events, and made changes to our
executive director compensation program, including the following:
` Reduced the annual base salary for our Chairman and CEO by 30% and for the remainder of 2020,
effective May 1, 2020.
` Reduced annual cash retainers for the Board of Directors by 30% for the remainder of 2020, effective May 1, 2020.
` Due to the COVID-19 pandemic and business downturn and shift in the Company’s strategic priorities, updated our
annual cash incentive plan measures effective April 1, 2020 and applied a cap on payout under the plan.
` No changes were made to the annual equity awards previously granted and not vested.
132 TechnipFMC
U.K. Annual Report and Accounts The table below summarizes these elements, along with their purpose and key characteristics. However, a more detailed
explanation is available in further sections.
Element
Purpose
Key Characteristics
Base Salary
To provide market
competitive
compensation for the
role
Annual Cash Incentive
To drive and reward
the achievement
of short-term
Company strategic
goals and individual
contributions
` Fixed cash compensation
` Reflects major responsibilities of the Chairman and CEO’s role
` Set with reference to market median, based on responsibility,
experience, and performance
` Effective May 1, 2020 to the end of the year, base pay was
reduced by 30% for our Chairman and CEO.
` Variable cash compensation
` Target value based on role, set with reference to market
median
` Paid based on achievement of business performance targets
(75%) and achievement of individual performance targets
(25%)
` 2020 business performance targets modified effective Q2
2020 due to the COVID-19 business impact:
`For Q1 2020:
` EBITDA
` EBITDA as a Percentage of Revenue
` Working Capital Days
` Measures are equally weighted
` Actual payout can range from 0% to 200% of target
`For Q2-Q4 2020:
` Incremental Cost Savings
` Free Cash Flow Conversion
` Measures are equally weighted
` Actual payout can range from 0% to 100% of target;
payout capped at target to limit payouts in a volatile
business environment
133 TechnipFMC
U.K. Annual Report and Accounts Element
Purpose
Key Characteristics
Long-Term Equity
Incentives
To drive and reward
the achievement of
long-term results
and shareholder
value creation while
encouraging retention
Health and Welfare
Benefits, Retirement
Benefits, and
Perquisites
To facilitate the
performance of the
role and ensure a
market competitive
total compensation
package
` Granted as combination of two vehicles: PSUs (70%) and RSUs
(30%)
` Target value based on role, set with reference to market median
` PSUs (70% of total long-term equity grant) subject to one
performance condition measured over three years: relative TSR
` 50% of after-tax RSUs must be retained for at least one year
following vesting
` All long-term incentive awards are subject to three-year
cliff vesting
` Health and welfare benefits, the same as benefits offered to
other employees of the Company in the respective countries
` Retirement savings offered through participation in our 401(k)
and non-qualified defined contribution plans, similar to plans
offered to other U.S. employees
` Limited perquisites including financial planning, tax assistance,
use of company cars, club memberships, executive physicals,
and security services where necessary
Compensation Peer Groups
In making decisions about target compensation levels, the Compensation Committee reviews data from two distinct peer
groups. We believe that it is important to consider both global companies of similar size, complexity, and capital-intensive
nature, as well as companies within the same industry with significant U.S. operations, for a comprehensive view of who
we compete with for talent.
These two peer groups are combined to provide a holistic view of the market for compensation benchmarking, but the
Compensation Committee also looks at each peer group separately in order to gain insight into variations between the
two groups.
` The Global Peer Group comprises a broadly equal weighting of U.S. and European headquartered companies, of
similar size to the Company (in terms of revenue) who compete for executive talent in capital intensive industries
similar to the Company, including the oil and gas industry, construction and engineering, and industrial manufacturing.
` The Industry Peer Group is focused more closely on our sub-industry and is drawn from companies in the oilfield
services and oil exploration and production sectors, as well as heavy engineering organizations with greater (but not
exclusive) focus on North America.
The Compensation Committee does not place a specific weight on the data from either peer group, but considers the data in
light of all the circumstances relevant to each executive under review, as well as the Company’s compensation philosophy.
For both sets of peers, we use a range of selection criteria that include, among other factors, financial indicators such as
revenue and market capitalization, number of employees, company size, industry, end markets, complexity, geographic
footprint, and headquarters location.
134 TechnipFMC
U.K. Annual Report and Accounts Peer Group
Purpose
Global Peer
Group
Similarly sized, complex, and capital-intensive global companies, including those based outside the
United States
Industry Peer
Group
Companies within the same industry, with a greater (but not exclusive) emphasis on oilfield
services companies in North America.
The Compensation Committee reviewed our 2019 Compensation Peer Group as defined in our 2020 Proxy Statement,
and the following companies were removed from the Peer Group: Chicago Bridge & Iron Company N.V. (due to merger/
acquisition activity), Anadarko Petroleum Corporation (due to acquisition), and Weatherford International plc (due to
Chapter 11 bankruptcy).
Accordingly, the companies below comprised the 2020 Compensation Peer Group, including both global and industry peers.
2020 Combined Compensation Peer Group Constituents
Air Liquide S.A
Alstom S.A.
Apache Corporation
Baker Hughes Company
Caterpillar Inc.
ConocoPhillips
Cummins Inc.
Devon Energy Corporation
Dover Corporation
Enbridge, Inc.
Fluor Corporation
Halliburton Company
Ingersoll-Rand plc
Jacobs Engineering Group Inc.
John Wood Group plc
McDermott International, Inc.
National Oilwell Varco, Inc.
Petrofac Limited
Repsol, S.A.
Saipem S.p.A.
Schlumberger Limited
Subsea 7 S.A.
Transocean Ltd.
VINCI S.A.
Companies in blue bold comprise the Industry Peer Group.
For 2020 compensation decisions, McDermott International, Inc. was included; however, we anticipate that it will be
removed from our peer groups for 2021 compensation decisions due to its Chapter 11 bankruptcy filing in January 2020.
When 2020 compensation decisions were made, the median revenue and median market capitalization for each of the
peer groups used and the Company’s relative ranking are provided below:
Peer Group
Median Revenue
TechnipFMC
Revenue Ranking
Median Market
Capitalization
TechnipFMC Market
Capitalization
Ranking
Global Peer Group
$18.4 billion
44th percentile
$14.3 billion
31st percentile
Industry Peer Group
$10.1 billion
63rd percentile
$9.8 billion
40th percentile
135 TechnipFMC
U.K. Annual Report and Accounts Accordingly, the Compensation Committee agreed that this group of companies was reasonable in terms of size for
market median comparisons. Where possible, the Compensation Committee’s consultant size-adjusts data to account for
differences in size between the Company and the Compensation Peer Group.
In 2021, following the completed separation of TechnipFMC and Technip Energies, the Compensation Committee
anticipates a review of TechnipFMC’s peer group based on its industry peers as a standalone, fully integrated technology
and services provider.
Base Salary
We provide our Chairman and CEO with a market competitive base salary to compensate him for services performed
during the year. We set base salary by referencing market median total target compensation. When setting the Chairman
and CEO’s base salary, we consider factors such as individual performance, experience, and contributions to the business,
while staying within an appropriate range of the market median for the role.
The Compensation Committee reviews base salary for the Chairman and CEO on an annual basis. For the CEO, the
Compensation Committee determines and approves any changes, with input from the committee’s independent
compensation consultant.
In 2020, in response to the change in business environment due to the COVID-19 pandemic and sharp decline in
oil prices, the Compensation Committee reduced the annual base salary for the Chairman and CEO by 30% for the
remainder of 2020, effective May 1, 2020.
Changes in salary are shown in the table below:
Chairman & CEO
Douglas J. Pferdehirt
Base Salary
(December 31, 2019)
Base Salary
(December 31, 2020)
$1,236,000
$865,200
Change %1
-30%
(1) The temporary salary reduction ended on January 1, 2021.
Annual Cash Incentive (Audited Information)
2020 Annual Cash Incentive Target
We provide our Chairman and CEO with an annual cash incentive in order to drive and reward the achievement of short-
term Company strategic goals and individual contributions. Our Chairman and CEO has an annual cash incentive target,
set as a percentage of base salary. The Chairman and CEO can earn 0% to 200% of his annual cash incentive target,
depending on Company and individual performance. However, in 2020, in response to the COVID-19 pandemic and
business downturn, the payout for business performance indicators, which make up 75% of the annual cash incentive,
was capped at 100%. Limiting payouts at target (compared to 200% in prior years) in a volatile business environment
helps align with shareholder interests.
The Compensation Committee reviews and approves target annual cash incentive percentages for the Chairman and CEO
annually, based on a review of market median total compensation data for our peers. The targets are set at appropriate
levels to incentivize the Chairman and CEO to achieve the short-term financial and operational goals for the Company, as
well as to provide him with market-competitive levels of total compensation.
136 TechnipFMC
U.K. Annual Report and Accounts The following were the 2020 annual cash incentive targets for our Chairman and CEO:
Chairman and CEO
Douglas J. Pferdehirt
2019
135%
2020
135%
Increase
0%
Annual Cash Incentive Performance Indicators
75% of the annual cash incentive is based on business performance indicators (“BPI”), and 25% of the plan is based on
individual annual performance indicators (“API”).
75% BPI
Assessment of overall Company performance
based on business performance indicators
25% API
+
Assessment of individual performance based
on qualitative factors reflected in the executive
directors’ annual performance objectives
The payout under both the BPI and API components may range from 0% to 200% of target depending on performance.
BPI Component – 75% of Annual Cash Incentive
The Compensation Committee annually establishes BPI targets and reviews the performance measures at its February meeting.
For the first quarter of 2020, EBITDA, EBITDA as a Percentage of Revenue, and Working Capital Days were the BPI
measures for our annual cash incentive plan. These measures were designed to focus our executive officers on operating
profitability and efficiency of using operating capital.
Due to the COVID-19 pandemic and business downturn, the Company’s strategic priorities shifted to a significantly
greater focus on cash flow, liquidity, and business sustainability. To better align the Chairman and CEO’s compensation
with these critical priorities, the financial measures for the 2020 annual cash incentive plan were changed to Incremental
Cost Savings (37.5% weighting) and Free Cash Flow Conversion (37.5%), for the remainder of 2020. The Incremental Cost
Savings metric measures our performance against our publicly stated Cost Reduction program. The Free Cash Flow
Conversion metric (ratio of Free Cash Flow to Adjusted Net Income) measures the quality of our earnings and is important
for liquidity. 25% of the annual cash incentive plan continued to be based on API measures, including specific objectives
regarding sustainability in our business performance, further reinforcing the Company’s commitment to our Foundational
Beliefs. Finally, payout for the 2020 annual cash incentive plan was capped at target payout.
Target Setting for BPI Measures
Performance targets related to our annual cash incentive are set at “stretch” targets that are considered difficult and
challenging but achievable with superior execution based on our long-range plans. Given the cyclical nature of our
industry sector, as well as the variability in some of our metrics caused by the lifecycle progression of a few very
large projects, our targets can vary in absolute terms when compared to prior year targets but are set to ensure that
achievement will require the same or improved execution to achieve the targets.
In setting performance goals, the Compensation Committee considers the Company’s annual financial plans, strategic
initiatives, and projections, which are impacted by the following factors:
` The overall business climate and the cyclical nature of our business
` Underlying market conditions for our products and services
137 TechnipFMC
U.K. Annual Report and Accounts ` Volatility in commodity prices
` Our competitors’ performance
` Anticipated changes in customer activity
` Our prior-year performance
These inputs inform discussions regarding both the targets and the ranges around the target to ensure the goals are
sufficiently difficult without incentivizing inappropriate risk taking.
Q1 Target Setting and Result
Targets were set for the EBITDA, EBITDA as a Percentage of Revenue, and Working Capital Days metrics in Q1 2020,
considering the market outlook for each of our business segments and for the Company as a whole at the time the
targets were set.
` In April 2020, due to the volatility in the oil and gas market caused by the COVID-19 pandemic and oil price decline,
the targets previously set were no longer considered applicable, and the Compensation Committee set the payout for
Q1 2020 BPI at 0%.
Q2-Q4 Target Setting and Result
As described above, as a result of the COVID-19 pandemic, worsening oil and gas macro outlook, and cutbacks in
customer activity, there was an urgent and critical need to focus on cash flow and liquidity, as well as cost reduction.
Accordingly, our BPI metrics for Q2-Q4 2020 were changed to Incremental Cost Savings and Free Cash Flow Conversion.
The targets for these measures were set at a level needed to manage the business through the downturn and to achieve
the appropriate cost structure to drive shareholder value.
` In Q2-Q4 2020, our performance exceeded the maximum of the performance range for our Incremental Cost Savings
and Free Cash Flow Conversion metrics.
` The Incremental Cost Savings achievement was supported by decisive actions to reduce the Company cost
structure by eliminating underperforming business lines, reducing structural overcapacity, and right-sizing the
business for the future.
` Free Cash Flow Conversion was achieved through disciplined management of capital expenditures within
targeted reductions, preservation of cash by deferral of non-essential spending, and effective working capital
management.
` Although our performance exceeded the maximum of the performance range, payout was capped at 100% to support
the Company and align with shareholder interests in a volatile business environment.
138 TechnipFMC
U.K. Annual Report and Accounts Full-Year Result
With Q1 2020 payout percentage at 0% and Q2-Q4 2020 payout percentage at 100%, our weighted overall BPI result for
2020 was 75%.
Q1 2020 (January - March)
BPI Measure Weighting
2020 Goal
(Annual)
Definition
Why It Matters
EBITDA
($M)
25%
$1,639
million
Earnings before interest,
taxes, depreciation, and
amortization
Indicative of our operating profitability
and a driver of shareholder value
creation; facilitates comparisons with
peer companies by excluding the effect
of different capital structures and
financing decisions
EBITDA
as a
Percentage
of Revenue
Working
Capital
Days
25%
10.3%
Earnings before interest,
taxes, depreciation, and
amortization, calculated as a
percentage of revenue
Reflects the performance and
sustainability of the business, leveraging
cost efficiencies and driving profitability
improvement
25%
(78)
Average number of days to
convert working capital into
revenue
Measures our efficiency of using
operating capital to operate the business;
our contract arrangements typically
result in negative working capital due
to advance payments and milestone
payments
Q2-Q4 2020 (April - December)
BPI Measure Weighting
2020 Goal
(Annual)
Definition
Why It Matters
Incremental
Cost
Savings
37.5%
$350
million
Cost savings targets
established in response to
COVID-19 and commodity
price impacts on operations
Measures our performance against
our disclosed Cost Reduction Program,
with targeted savings of more than
$350 million
Measures the quality of our earnings and
is important for liquidity
37.5%
52.5%
Free Cash
Flow
Conversion
Ratio of free cash flow
divided by adjusted net
income. Free cash flow is
defined as cash provided
by operating activities
less capital expenditures.
Adjusted net income is
defined as net income,
excluding charges and credits.
139 TechnipFMC
U.K. Annual Report and Accounts The 2020 performance goals and the 2020 results achieved are outlined below. Although the payouts apply to the
quarter(s), goals and results are annual.
2020 Goals
2020 Performance
Threshold
Performance
Target
Performance
Maximum
Performance
Performance
%
Payout %1
BPI Measure
Q1 2020 (January - March)
EBITDA ($M)2
$1,366
$1,639
$1,831
EBITDA as a
Percentage of
Revenue2
Working Capital Days
Payout Percentage
8.3%
10.3%
12.3%
(71)
0%
(78)
100%
(82)
200%
N/A3
N/A3
N/A3
Final BPI Payout Percentage for Q1 2020 (25% Weighting)
Q2-Q4 2020 (April - December)
Free Cash Flow
Conversion2
Incremental Cost
Savings
30%
52.5%
75%
$300 million
$350 million
$400 million
Greater than
75%
Greater than
$400 million
Payout Percentage
0%
100%
100%4
Final BPI Payout Percentage for Q2-Q4 2020 (75% Weighting)
Final Weighted Payout Percentage (BPI)
0%
0%
0%
0%
100%
100%
100%
75%
(1) Payout for performance between the threshold, target, and maximum payouts are interpolated on a straight-line basis. The final weighted payout
percentage for BPI is rounded to the nearest whole percent for calculating the annual cash incentive payout.
(2) Financial targets and actual performance based on EBITDA exclude non-recurring charges and credits, such as impairments, restructuring costs,
integration costs, as well as other items identified in TechnipFMC’s quarterly and annual financial statements. Free Cash Flow Conversion is
defined as the ratio of free cash flow to adjusted net income. Free cash flow is defined as cash provided by operating activities less capital
expenditures. Adjusted net income is defined as net income, excluding charges and credits. Please refer to “Non-GAAP Measures” beginning on
page 60 of our Form 10-K and “Liquidity and Capital Resources” beginning on page 65 for a reconciliation of EBITDA, free cash flow, and adjusted
net income to the most directly comparable GAAP measures.
(3) Due to the COVID-19 pandemic and the resulting volatility in the oil and gas market, the Compensation Committee set the payout for the Q1
targets at 0%.
(4) Although our performance exceeded the maximum of the performance range, payout was capped at 100% (compared to 200% in prior years) to
support the Company and align with shareholder interests in a volatile business environment.
In accordance with established guidelines, the goals are adjusted for the cumulative effect of changes in accounting
principles, significant acquisitions and divestitures, and foreign exchange movements. These changes are intended to
ensure that performance is measured on a like-for-like basis relative to the goals that were set.
140 TechnipFMC
U.K. Annual Report and Accounts API Component – 25% of Annual Cash Incentive
Each February the individual performance goals are established for the Chairman and CEO.
These objectives are set at “stretch” levels (i.e., objectives that are difficult and challenging but should be achievable with
superior execution) and are set using a rigorous evaluation process. If the Chairman and CEO failed to achieve any of his
or her objectives, the API multiple would likely be 0%, absent any mitigating factors. If the Chairman and CEO met some,
but not all of the objectives, the API multiple would fall between the range of 0% to 200%, depending upon the number of
objectives accomplished, their relative importance and difficulty as determined by the Compensation Committee, and any
factors that may have prevented achievement of certain objectives.
For 2020, the Chairman and CEO received an API rating of 175%.
In determining the 2020 API rating for our Chairman and CEO, the Compensation Committee took into account a
comprehensive view of his performance and contributions, including performance on key objectives and results,
in light of the unprecedented global health and economic crisis caused by the COVID-19 pandemic. In addition to
individual goals related to Company strategy, profitable growth, and safety, his objectives also included the three pillars
of our corporate responsibility and sustainability efforts to ensure that the Company makes meaningful and tangible
achievements in this area. The Compensation Committee considered the Chairman and CEO’s overall performance relative
to the achievement of his key objectives, the importance of each objective, as well as the challenging market conditions
that impacted our industry.
141 TechnipFMC
U.K. Annual Report and Accounts Performance Assessment
Below
Expectations
Meets
Expectations
Exceeds
Expectations
Objectives
Key Achievements
Mr. Pferdehirt
Strategy & Growth
` Spin-off of Technip Energies
` Technip Energies Spin-off
completed in Q1 2021
` ESG objectives
` Digital - commercialize Subsea
StudioTM
` Technology - qualify Flexibles 2.0
(HFP) and commercialize Gemini
` Foster strategic alliances and
relationships
` 2021-2023 ESG objectives and
scorecard delivered in November
2020
` Commercialized Subsea Studio™:
+50% of all Subsea FEED studies
utilized Subsea Studio™
` Flexibles 2.0: qualification on-track
` Gemini: successful
commercialization and technology
introduction
` Key strategic alliances: enhanced
and expanded
Execute on Key Deliverables
` Cost Reduction Program objectives
` Exceeded Cost Reduction Program
objectives
` Expand LNG market
` Secured two LNG awards
` Strengthen market position in
` Expanded international market
Surface Technologies
presence
` Board member for Advancing
Women Executives in Energy, CEO
Action for Diversity & Inclusion™,
American Heart Association,
United Way, Energy Workforce
Transformation
` Engagement re-focus on well-being
and mental health in line with
the pandemic environment, all
Company well-being survey with
actionable results, Company-wide
mental health support program
implemented
Team & Company Culture
` External leadership
` Succession planning
` Engagement & culture
142 TechnipFMC
U.K. Annual Report and Accounts Objectives
Key Achievements
Performance Assessment
Below
Expectations
Meets
Expectations
Exceeds
Expectations
Mr. Pferdehirt
ESG & Foundational Beliefs
` Focus on gender diversity,
community engagement, and
environment
` Promoted gender diversity
through Company programs
and key external recruitment
` Promoted Company Energy
` Expand QHSES transformation
Transition position
` Zero fatalities
` Zero fatalities not achieved –
one fatality
Overall Rating for Mr. Pferdehirt
175%
143 TechnipFMC
U.K. Annual Report and Accounts
Determination of 2020 Annual Cash Incentive Payout for the Chairman and CEO
The Chairman and CEO’s 2020 annual cash incentive payout was calculated to be $1,668,600 based on the following
table:
Chairman and CEO
Target
Bonus
(% of
Salary)
BPI Rating
(75%
Weight)
API Rating
(25%
Weight)
Overall
Weighted
Rating
Actual
Bonus (%
of salary)
Actual Bonus ($)
Douglas J. Pferdehirt
135%
75%
175%
100%
135%
$1,668,600
Scheme Interests Awarded in the Financial Year (Long-Term Equity Incentives)
Long-term equity incentive awards, granted in the form of TechnipFMC equity, represent the largest component of the
Chairman and CEO’s annual target compensation opportunity, grounded in our compensation philosophy of paying for
performance and aligning executives’ interests with those of our shareholders. Awards are made in the form of two
complementary vehicles, PSU awards and RSU awards, providing a balanced focus on performance, sustainable long-term
value creation, and retention.
In 2020, we discontinued the use of stock option awards in our long-term equity incentive plan, based on feedback from
shareholders that stock options are not performance-based.
Long-Term Equity Mix
Awards vest at the end of three
years subject to continued
employment, with 50% of
after-tax RSUs held for at least
one year following vesting.
RSUs
30%
PSUs
70%
Awards vest based on relative
TSR performance measured
over three years.
The Compensation Committee reviews and approves equity awards for our Chairman and CEO on an annual basis. The awards
are based on market competitiveness on total target compensation and aim to provide appropriate levels of retention and
incentives for achieving the Company’s long-term goals.
For 2020, the Compensation Committee set the target value of equity awards for our Chairman and CEO reference to
market median total compensation data.
Chairman and CEO
Douglas J. Pferdehirt
144 TechnipFMC
2020 Long-Term Incentive Target Award
$9,700,000
U.K. Annual Report and Accounts 2020 Performance Stock Unit Awards (70% of Equity Award) - Conditional Share
Awards - (Audited Information)
The Compensation Committee sets the performance targets associated with PSU awards prior to the beginning of each
three-year performance period. For awards in 2020, PSU awards comprised 70% of the total long-term equity award and
payout will be based on relative TSR performance for the three-year period.
In 2019, the long-term equity award grant was based on two performance measures, ROIC and relative TSR. For 2020,
the volatility in the oil and gas business environment, as well as our Spin-off made it challenging to set meaningful ROIC
targets. Therefore, in 2020, a single performance measure, relative TSR, was selected.
We believe that relative TSR is a meaningful measure of our long-term performance, and motivates our Chairman and
CEO to achieve superior share price compared to our key competitors, thus aligning their interests with shareholder
interests. We further reinforce this by requiring a minimum threshold of relative TSR performance for payout and capping
payout at 100% if the Company’s absolute TSR is negative.
PSU Measure
Weighting
Definition
Why It Matters
Relative TSR
70% of total long-
term equity
Cumulative three-
year increase in
volume-weighted
average price
and reinvested
dividends relative
to peers
Assesses our overall performance in the
eyes of our shareholders and the broader
stock market, relative to companies with
whom we compete for customers and
investors that are subject to similar macro-
economic factors
The relative TSR performance for our 2020 PSU awards will be measured against a group of 10 companies (“Relative
TSR Peer Group”) that the Compensation Committee believes best reflects the companies that we compete with for both
investments and customers. The financial and operational performance of these companies is therefore most directly relevant
to TechnipFMC, and we are all subject to similar macro-economic factors.
The Compensation Committee reviewed our 2019 Relative TSR Peer Group as defined in our 2020 Proxy Statement,
and the following companies were removed from the Peer Group: Chicago Bridge & Iron Company N.V. (due to merger/
acquisition activity), McDermott International, Inc. (due to Chapter 11 bankruptcy filing), and Weatherford International
plc (due to Chapter 11 bankruptcy filing).
Accordingly, for awards made in 2020, the Relative TSR Peer Group comprised the following:
2020 Relative TSR Peer Group
Baker Hughes Company
National Oilwell Varco, Inc.
Schlumberger Limited
Fluor Corporation
Oceaneering International, Inc.
Saipem S.p.A.
Halliburton Company
Oil States International, Inc.
Subsea 7 S.A.
John Wood Group plc
The vesting date for these PSU awards is March 9, 2023, with a performance period of January 1, 2020 through
December 31, 2022.
145 TechnipFMC
U.K. Annual Report and Accounts The Compensation Committee approved the following targets in relation to the 2020 PSU awards:
Performance Achievement
Relative TSR Performance
Payout (% of earned PSUs)
Below Threshold
Threshold
Target
Below 25th percentile
25th percentile
42nd percentile
Maximum or above
75th percentile or greater
0%
50%
100%
200%
Note: If the Company’s absolute TSR is negative for the performance period, the payout in respect of the TSR element will be capped at target,
regardless of our relative performance.
For performance achievement between the levels identified above, payout percentage will be interpolated on a straight-
line basis.
Number of PSUs/ conditional share awards awarded
Share Price on Grant Date
Fair Value on the date of award1
Fair Value of award as a % salary
Face Value on the date of award at maximum performance1
Face Value of award at maximum performance as a % salary
2020 PSU Grant
730,893
$9.29
$6,789,996
687%
$13,579,992
1373%
(1) Calculated using the grant price, equal to the closing price on the New York Stock Exchange on the date of grant, March 9, 2020.
2020 Time-Based RSU Awards (30% of Equity Award) - Conditional Share Awards
(Audited Information)
Time-based RSU awards further align our Chairman and CEO’s interests with the interests of our shareholders by
incentivizing them to increase share price, while reinforcing the retention impact of our compensation program.
RSUs are subject to three-year cliff vesting terms, with no phased vesting, meaning our Chairman and CEO must remain
employed through the vesting date of March 9, 2023, with exceptions only for retirement, death, and disability. Once vested,
our Chairman and CEO receives ownership and the voting rights of the underlying Ordinary Shares.
The number of RSUs granted to our Chairman and CEO was determined by dividing the target value set for our Chairman
and CEO by the closing price of the Company’s Ordinary Shares on the NYSE on the grant date.
On vesting, 50% of the after-tax number of RSUs must be held for a period of at least one year to incentivize our
Chairman and CEO to retain the shares and increase share price, further aligning our Chairman and CEO’s interests with
our shareholders.
146 TechnipFMC
U.K. Annual Report and Accounts Number of RSUs/ conditional share awards
Share Price on Grant Date
Face Value on the date of award1
Award as a % salary
2020 RSU Grant
313,240
$9.29
$2,910,000
294%
(1) Calculated using the grant price, equal to the closing price on the New York Stock Exchange on the date of grant, March 9, 2020.
Vesting of 2018 PSU Awards (Audited Information)
In 2018, the Compensation Committee approved PSU awards subject to a three-year performance period. Vesting of these
awards was contingent on performance delivered in two areas: ROIC and relative TSR.
As a result of our 2018-2020 performance, our Chairman and CEO achieved a payout of 25% of target on his 2018 PSUs.
Performance Goals:
Goal/Weightings
Performance Measure
ROIC (30% of total long-term equity)
Achievement of stated target
Relative TSR (30% of total long-term equity)
Percentile Ranking versus the 2018 Performance Peer Group
The following are the targets and payout scale for the 2018-2020 PSU awards:
Performance
Achievement
Below Threshold
Threshold
Target
ROIC Performance
Relative TSR Performance
Below 6%
Below 25th percentile
6%
7%
25th percentile
42nd percentile
Maximum or above
8% or above
75th percentile or greater
Payout
(% of earned PSUs)
0%
50%
100%
200%
Note: If the Company’s absolute TSR is negative for the performance period, the payout in respect of the TSR element will be capped at target,
regardless of our relative performance.
The overall achievement for the performance element of our 2018 PSU awards was 25% based on the following:
` Three-year ROIC performance for 2018-2020 was 3.3%. This ROIC performance was below the threshold for payout
based on the payout scale provided above, and therefore, the ROIC component of the 2018 PSU awards paid out
at 0%.
` Three-year relative TSR performance for the Company for 2018-2020 was -67.9%, which placed the Company at the
25th percentile relative to the 2018 Performance Peer Group. This resulted in a payout for the relative TSR measure
of 50%, based on the payout scale above. 43,069 shares were vested at the price on date of vesting of $8.22 per
share, resulting in a long-term incentive of $354,027.
147 TechnipFMC
U.K. Annual Report and Accounts 2018-2020 ROIC
2018-2020 TSR
Target:
7% ROIC
6% ROIC
Result:
25% percentile
50%
percentile
Threshold:
<6% ROIC
Result:
3.3% ROIC
100%
50%
200%
0%
Max:
8% ROIC
<25%
percentile
Max:
75% percentile
Target performance: 7% ROIC
Actual result: 3.3% ROIC (0%)
FTI Rank:
Payout:
Above 75%+
200%
75%-25%
180-50%
Below 25%
0%
Actual result: 25% percentile (50%)
*If absolute TSR is less than 0%, achievement cannot be greater than 100%
60% of Equity Grant (PSUs)
Three-Year Performance Period Two Equally Weighted Performance Measures
Treatment of Outstanding Long-Term Equity Incentives at Spin-off
On February 16, 2021, TechnipFMC completed its Spin-off and separated into two independent, publicly traded
companies, TechnipFMC and Technip Energies.
Pursuant to the Spin-off, all outstanding 2018, 2019, and 2020 TechnipFMC PSU, RSU, and stock option awards for
the Chairman and CEO were adjusted based on the ratio of the closing price of TechnipFMC on the NYSE on the date
immediately prior to the Spin-off to the closing price of TechnipFMC on the NYSE on the date immediately after the Spin-
off. The vesting dates remained the same and the number of 2019 and 2020 PSUs were set at target performance, as
measurement of performance against the set goals was not possible following the Spin-off.
Statement of Directors’ Shareholding
and Share Interests
Share Ownership and Retention Requirements (Audited Information)
The Compensation Committee oversees the Company’s directors’ share ownership and retention policy to ensure a
continuing alignment of executive and shareholder interests.
None of the Directors exercised stock options in 2020.
Share Ownership Requirement
Our Chairman and CEO is required to own shares in an amount equal to six times his base salary. Qualifying shares
include ordinary shares, time-based RSU awards, and performance-based RSUs where the performance period is final
and approved. Unexercised stock options, performance-based RSUs where the performance period is not final, and
shares held in Company retirement plans are not included in the ownership calculation. An executive director has five
years to satisfy an ownership multiple, pro-rated 20% each year, from the effective date of appointment.
Our Chairman and CEO met his pro-rated share ownership requirement as of December 31, 2020.
148 TechnipFMC
U.K. Annual Report and Accounts Share Retention Requirements
An Executive Director is required to retain, for a period of at least one year after the vesting date, shares equivalent
to at least one-half of the net after-tax number of shares deposited in his or her account for RSUs. The purpose of this
additional requirement is to impose a holding period during which an Executive Director must retain ownership of a
significant portion of vested equity compensation.
We believe that the combination of the share ownership and share retention requirements more closely aligns the interests
of an Executive Director with the long-term interest of our shareholders. We regularly evaluate and monitor compliance
with our share ownership and retention policy, and the Board will review compliance on at least an annual basis. All
Executive Directors met their pro rata ownership and retention requirements under the Company’s policy in 2020.
The table below sets forth the beneficial interests in the share capital of the Company held by our Chairman and CEO and
his connected persons for the period ending December 31, 2020:
Share
Number
Ownership
of Shares
Number of
Shares Owned
Outright
(including
Vested but
Unvested and
Weighted
Average
Exercise
Price of
RSUs
Subject to
Weighted
Average
Name
(% of salary)
to Hold
Persons)
Stock Options
Stock Options
RSUs
Conditions
Options
of RSUs
Requirements
Required
Connected
Unexercised
Unexercised
Performance
Vested
Period to Vest
Chairman and CEO
600%
473,362
571,225
224,835
536,738
463,134
1,180,577
26.62
19.95 months
(1) Number of Shares Required to Hold is based on the share price as at December 31, 2020 of $9.40. The Executive Directors have five years
from appointment to meet the full ownership requirements. Unexercised Stock Options and RSUs Subject to Performance Conditions where the
performance period is not final are not used to meet ownership requirements.
Payments to Past Directors (Audited Information)
Mr. Richard Pattarozzi, a former Director who resigned from the Board on May 1, 2019, had his charitable contributions
matched by the Company. In total $10,000 was paid in 2020 to match his contribution to five charities as this was a
commitment under a legacy charitable donation matching program.
Payments for Loss of Office (Audited Information)
There were no payments for loss of office in 2020, since there were no Directors who left the Company.
149 TechnipFMC
U.K. Annual Report and Accounts 2017-2020 TSR Performance Graphs and Table for the Chairman and CEO
70% of our long-term equity incentive plan is based on relative TSR performance versus the Relative TSR Peer Group
for the year of grant. As such, the figures below indicate the Company’s TSR performance against our Relative TSR Peer
Group and against the Philadelphia Oil Service Sector (OSX) index. Note that the OSX index is not used for plan payout, but
provided as a reference point to demonstrate TSR performance for the oil service industry as a whole during this period.
The OSX index is an index of companies in the oil services sector and we consider it an appropriate benchmark for our
performance.
For the 2017-2020 performance period, our TSR performance has been above the median for the OSX index. For the
same period, our TSR performance has been above the median of our Relative TSR Peer Group for the 2017-2019 period,
and below the median of our Relative TSR Peer Group in 2020.
This TSR performance is reflected in the payout under the relative TSR component of our PSU awards.
` Although our 2017-2019 relative TSR performance was above median, the payout for the relative TSR component
was capped at 100% (due to negative absolute TSR performance). Payout for the ROIC component was at 0%, and
therefore, the overall payout for PSU awards was 50%.
` Our 2018-2020 relative TSR performance was at the 25th percentile of the Relative TSR Peer Group, and the resulting
payout for the relative TSR component was 50%. Payout for the ROIC component was at 0%, and therefore, the
overall payout for PSU awards was 25%.
Jan 17
Jul 17
Jan 18
Jul 18
Jan 19
Jul 19
Jan 20
Jul 20
Jan 21
TechnipFMC
TSR Peer Group
e
c
n
a
m
r
o
f
r
e
P
R
S
T
e
c
n
a
m
r
o
f
r
e
P
R
S
T
120
100
80
60
40
20
0
120
100
80
60
40
20
0
Jan 17
Jul 17
Jan 18
Jul 18
Jan 19
Jul 19
Jan 20
Jul 20
Jan 21
TechnipFMC
PHLX Oil Service Sector Index
150 TechnipFMC
U.K. Annual Report and Accounts
Summary of Chairman and CEO Pay1
Total Single Figure of Remuneration
Annual Cash Incentive Award Paid as a % of Maximum
Long-Term Incentive Award Paid as a % of Maximum
2019
2020
$7,861,135
$6,217,856
87%
25%
50%
12.5%
(1) For more details on the calculation of the Total Single Figure of Remuneration, please see the paragraph entitled “Executive Director’s Single
Figure Table”.
Percentage of Change in Remuneration of the Chairman and CEO, non-executive
directors and employees
The following table shows the percentage change in base salary, annual cash incentive and benefits for our Chairman and
CEO, non-executive directors, and for the average of all employees of the Company in the United States was as follows.
The Company considers that the remuneration of employees in the United States is an appropriate comparator against
that of the Chairman and CEO, rather than of the whole Company, on the basis that the Chairman and CEO’s remuneration
tracks market practice and the regulatory environment in the United States. TechnipFMC plc has a limited number of
employees, and comparison versus this group would not provide meaningful information.
Chairman and CEO
Douglas P. Pferdehirt
Non-Executive Directors
Arnaud Caudoux
Eleazar de Carvalho Filho
Pascal Colombani
Marie-Ange Debon
Claire S. Farley
Didier Houssin
Peter Mellbye
John O’Leary
Margaret Ovrum
Olivier Piou
Kay G. Priestly
Joseph Rinaldi
James M. Ringler
John Yearwood
Percentage Change
2019-2020
Base Salary1
Annual Cash Incentive
Taxable Benefits2
-20%
N/A
-20%
-2%
-17%
-20%
-22%
-20%
-20%
n/a
-20%
-20%
-20%
-16%
-20%
-43%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-9%
N/A
230%
230%
230%
N/A
230%
281%
230%
N/A
N/A
230%
36%
69%
N/A
United States employees - Average
20.5%3
-11.5%
-11.1%
(1) For Non-Executive Directors, amount provided is annual cash retainer and meeting fees, and includes a temporary 30% reduction in annual
retainer from May 1, 2020 to December 31, 2020. The reduction in base salary for the Chairman and CEO includes a temporary 30% reduction
in base salary for the Chairman and CEO from May 1, 2020 to December 31, 2020.
(2) Non-Executive DIrectors are not eligible for any taxable benefits other than UK tax preparation assistance - the cost of UK tax preparation
increased from an average cost of $1,366 for 2019 to an average cost of $3,382 in 2020.
(3) There was a 36% headcount reduction in the United States in 2020, average base salary was impacted by change in salary distribution.
151 TechnipFMC
U.K. Annual Report and Accounts CEO Pay Ratio Reporting
The table below sets out the ratio at median, 25th and 75th percentile of the total remuneration received by our
Chairman and CEO compared to the total remuneration received by our U.K. employees — as well as comparing to base
salary only. Total remuneration reflects all remuneration received by an individual in respect of the relevant years, and
includes salary, benefits, pension, and value received from incentive plans. We believe that the median pay ratio shown
in the table below is representative of pay and progression policies of the Company in the U.K.
Total Remuneration
Base Salary Only
Financial
year
Option
P25
(Lower Quartile)
P50
(Median)
P75
(Upper
Quartile)
P25
(Lower
Quartile)
2020
2019
C
C
113:1
133:1
89:1
115:1
64:1
80:1
21:1
24:1
P50
(Median)
16:1
22:1
P75
(Upper
Quartile)
12:1
15:1
Financial
year
2020
2019
CEO
P25
P50
P75
Base Salary
Total
Remuneration
Base Salary
Total
Remuneration
Base Salary
Total
Remuneration
Base Salary
Total
Remuneration
$988,800 $6,217,856
$46,983
$54,863
$61,060
$69,891
$83,737
$96,782
$1,236,000 $7,861,135
$51,039
$59,251
$57,292
$68,203
$81,636
$97,830
UK Employees
The Company has decided to use Option C to select the P25, P50 and P75 employees. This option was chosen since this
provided the most reliable and accurate data to be used for pay ratio reporting, based on our system capabilities. The
data used was as of December 31, 2020. We used a database that includes base salary, benefits, pensions, and incentive
plans and selected the employees by comparing them on a full-time equivalent basis among 2,319 employees. For each
of the percentiles, we selected a sample of 20 employees around the percentile, added overtime and shift allowance, and
used the median of that sample. Overtime and shift allowance has the highest impact in this quartile. Due to operational
constraints, we are not able to build a database including those extra elements for all employees. There has been no
deviation from the single figure methodology in calculating the total remuneration for employees, and the methodology
applied is the same as 2019.
The CEO pay ratios in 2020 are lower than the pay ratios in 2019, this is attributable to smaller payouts on the annual
incentive and long-term incentive plans, which make up a larger percentage of the Chairman and CEO’s total remuneration
compared to other employees.
Pursuant to Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of
Regulation S-K as promulgated by the SEC, we also submit the following information in our Notice of 2021 Annual
Meeting and Proxy Statement, available on our website. This illustrates the ratio of the total annual compensation of our
Chairman and CEO to the total annual compensation of our median global employee for our last completed fiscal year,
2020. For 2020, the annual total compensation of our Chairman and CEO for purposes of determining the pay ratio was
$12,920,601, and the annual total compensation of our median global employee was $69,891. As a result, for 2020, the
ratio of the annual total compensation of our Chairman and CEO to the total annual compensation of our median global
employee was approximately 185:1.
152 TechnipFMC
U.K. Annual Report and Accounts Relative Importance of Spend on Pay
The table below sets out data for 2019 and 2020.
Relative spend information
2019
2020
% Change
Remuneration for All Global Employees
$2,552,670,000
$2,546,164,680
Distributions to Shareholders
$232,794,756
$58,279,193
-0.3%
-75.0%
Remuneration of Non-Executive Directors
The following table presents the fees paid to the Company’s non-executive directors for the year ended 31 December
2020, pursuant to our Directors’ Remuneration Policy, which was approved at our 2018 Annual Meeting. Our current
Chairman and CEO, Mr. Pferdehirt, is not included in the table below as he was an employee during 2020 and did not
receive any additional compensation for his service as a director.
Non-Executive Directors’ Single Figure Table (Audited Information)
2020 ($000s)
Non-Executive
Base
Additional
Stock
Taxable
Base
Additional
Stock
Director
fees1
fees2
Awards3
benefits4
Total
fees
fees
Awards
Arnaud Caudoux5
Eleazar de
Carvalho Filho
Pascal Colombani
Marie-Ange Debon
Claire S. Farley
Didier Houssin
Peter Mellbye
John O’Leary
0
80
80
80
80
80
80
80
Margaret Øvrum6
17.5
0
10
67.5
30
17.5
17.5
27.5
10
2.5
0
175
175
175
175
175
175
175
0
Olivier Piou7
Kay G. Priestly
Joseph Rinaldi
James M. Ringler
John Yearwood7
80
80
80
80
80
17.5
306.2
10
20
25
20
175
175
175
306.2
0
0
0
3.6
268.6
100
3.6
3.6
3.6
4.2
3.6
0
2
3.6
3.6
3.6
1.9
326.1
288.6
272.5
276.1
286.7
268.6
20
100
100
100
100
100
100
N/A
405.8
58.3
268.6
278.6
283.6
100
100
100
408.1
58.3
0
12.5
50
32.5
20
25
35
12.5
N/A
12.5
12.5
25
25
15
0
175
175
175
175
175
175
175
N/A
0
175
175
175
0
2019 ($000s)
Taxable
benefits
0
Total
0
1.1
288.60
1.1
326.10
1.1
308.60
1.1
296.10
1.1
1.1
301.10
311.10
1.1
288.60
N/A
N/A
1.1
71.90
2.67
290.17
2.16
302.16
0
0
300.00
73.3
(1) Includes temporary 30% reduction in annual cash retainer from May 1, 2020 to December 31, 2020.
(2) Includes the amount of fees paid for attendance at committee meetings and additional fees paid to the Chair of each Board committee and to the
Lead Independent Director.
(3) Restricted stock unit grants were made on March 9, 2020, valued at $9.29 per share, the closing price on the NYSE of the Company’s Ordinary
Shares on such date. The amount provided in this column reflects the face value of the RSU grants. The annual RSU grant vests after one year of
service but is settled in Ordinary Shares on a date elected by the non-executive director that is either (a) after a period of 1 to 10 years from the
153 TechnipFMC
U.K. Annual Report and Accounts grant date or (b) upon their separation from Board service. RSUs granted prior to 2020 vested after one year of service and will be settled upon
separation from Board service. The RSUs are forfeited if a director ceases service on the Board prior to the vesting date of the RSUs, except in
the event of death or disability. Unvested RSUs will be settled and are payable in Ordinary Shares upon the death or disability of a director or in
the event of a change in control of the Company. The aggregate outstanding RSUs held by each of the Company’s non-executive directors, other
than Ms. Øvrum and Messrs. Piou and Yearwood on December 31, 2020 was 38,033 RSUs (19,196 of which were vested but not yet settled in
Ordinary Shares as of December 31, 2020). Messrs. Piou and Yearwood held 32,965 RSUs as of December 31, 2020, which were unvested. Ms.
Øvrum joined the Board of Directors on October 1, 2020. She will receive a pro-rated grant of RSUs for her service in 2020 as part of her annual
grant in 2021. Dividend equivalents will accumulate on the RSUs to the extent the Company pays dividends on its Ordinary Shares.
(4) Includes assistance for annual individual U.K. tax return.
(5) Mr. Caudoux waived his cash and equity remuneration because of the policies of his employer, Bpifrance.
(6) Ms. Ovrum joined the Board of Directors on October 1, 2020. She will receive a prorated grant of RSUs for her service in 2020 as part of her
annual grant in 2021.
(7) Messrs. Piou and Yearwood joined the Board of Directors of the Company on June 1, 2019. They each received a prorated grant of restricted
stock units for their service in 2019 as part of their grant in 2020.
Non-Executive Director Share Ownership (Audited Information)
To further align the interests of non-executive directors with the interests of the Company’s shareholders, each non-
executive director is subject to a share ownership requirement of five times the annual cash retainer. The following table
shows, as of 31 December 2020, the number of our Ordinary Shares owned by each of our non-executive director.
Non-Executive Director
Arnaud Caudoux
Eleazar de Carvalho Filho
Pascal Colombani
Marie-Ange Debon
Claire S. Farley
Didier Houssin
Peter Mellbye
John O’Leary
Margaret Ovrum2
Olivier Piou
Kay G. Priestly
Joseph Rinaldi
James M. Ringler
John Yearwood
Share
ownership
requirements
Number
of shares
required to
hold
Number of
shares owned
outright1
Interest in
shares
Total number
of shares held
-
$500,000
$500,000
$500,000
$500,000
$500,000
$500,000
$500,000
-
$500,000
$500,000
$500,000
$500,000
$500,000
-
31,915
31,915
31,915
31,915
31,915
31,915
31,915
-
10,638
31,915
31,915
-
43,401
20,016
20,026
73,705
19,996
30,189
32,796
-
33,000
28,357
19,996
-
18,837
18,837
18,837
18,837
18,837
18,837
18,837
-
32,965
18,837
18,837
-
62,238
38,853
38,863
92,542
38,833
49,026
51,633
-
65,965
47,194
38,833
31,915
188,653
18,837
207,490
10,638
-
32,965
32,965
(1) Includes Ordinary Shares owned by the individual and Ordinary Shares subject to RSUs credited to individual accounts of non-executive directors
as part of the annual equity grant. As of 31 December 2020, the number of Ordinary Shares subject to RSUs credited to each non-executive
director as part of the annual equity grant was 19,196, except for Messrs. Piou and Yearwood, who joined the Board in June 2019, and Mr.
Caudoux who waived his cash and equity remuneration because of the policies of his employer, Bpifrance. The annual RSU grant vests after one
year of service but is settled in Ordinary Shares on a date elected by the non-executive director that is either (a) after a period of 1 to 10 years
from the grant date or (b) upon their separation from Board service. RSUs granted prior to 2020 vested after one year of service and will be
settled upon separation from Board service. Directors have no power to vote or dispose of shares underlying the RSUs until they are distributed.
Until such distribution, these directors have an unsecured claim against us for such units.
(2) Ms. Øvrum joined the Board in October 2020. As such, she was not subject to share ownership requirements as of December 31, 2020.
154 TechnipFMC
U.K. Annual Report and Accounts All of our Directors met their pro-rated share ownership requirements as of December 31, 2020.
Mses. Øvrum and Zurquiyah joined the Board in October 2020 and April 2021, respectively, and therefore, did not hold
any equity awards as of December 31, 2020. Mr. Caudoux waived his annual cash and equity remuneration because of
the policies of his employer, Bpifrance, and accordingly, he was not subject to any share ownership requirements.
Impact of Spin-off on Non-Executive Director Stock Awards
On February 16, 2021, TechnipFMC separated into two independent, publicly traded companies, TechnipFMC and Technip
Energies. Upon the completion of the Spin-off, Ms. Debon and Messrs. Caudoux, Colombani, Houssin, and Rinaldi resigned
from our Board and joined the Board of Directors of Technip Energies. Mr. Piou also resigned from our Board, effective
February 16, 2021.
For Ms. Debon and Messrs. Colombani, Houssin, and Rinaldi, vesting for their RSUs granted on March 9, 2020 was
accelerated to a date two weeks prior to the Spin-off date (February 2, 2021). All of their vested equity awards were
distributed to them on February 2, 2021, upon separation from service from our Board.
For our current Board, their RSUs granted on March 9, 2020 were adjusted using an adjustment ratio, calculated as the
ratio of the closing price of TechnipFMC on the NYSE on the date immediately prior to the Spin-off to the closing price
of TechnipFMC on the NYSE on the date immediately after the Spin-off. The vesting date of March 9, 2021 remained the
same. Our current directors’ vested 2017, 2018, and 2019 RSUs were also adjusted using the adjustment ratio.
Application of the policy in 2021
Compensation for directors is recommended annually by the Compensation Committee with the assistance of Willis Towers
Watson and approved by the Board.
The Directors’ Remuneration will be implemented with effect from the 2021 Annual Meeting (May 20, 2021) as follows:
Salary and Benefits
Chairman and CEO
Douglas J. Pferdehirt
2020 Base Salary1
2021 Base Salary
$1,236,000
$1,236,000
Increase
0%
(1) The 2020 base salary provided does not include the temporary pay reduction of 30% from May 1, 2020 to December 31, 2020.
155 TechnipFMC
U.K. Annual Report and Accounts Benefits and Pension
No changes are being made.
Annual Bonus
The bonus opportunity and operation for 2021 will be in line with the Directors’ Remuneration Policy. The measures and
weightings for the year will be as follows:
BPI
EBITDA as a Percentage of Revenue
Free Cash Flow Conversion
ESG Performance
API
Total
75%
25%
25%
25%
25%
100%
The 2021 annual incentive performance targets will be disclosed in our 2021 U.K. Annual Report.
Long-term Incentive Plan
The grant of any of these awards is always subject to the discretion of the Compensation Committee. Our annual 2021
Long-Term Equity grant (excluding any exceptional, one-time grants) will be based on the measures outlined in the table
below.
Long-Term
Equity
Performance
Stock Units
Weighting
Vesting
Performance Measure
Why It Matters
70% of total
long-term
equity
Three-
year cliff
vesting
Relative TSR: Cumulative
three-year increase
in volume-weighted
average price and
reinvested dividends
relative to peers
Assesses our overall performance
in the eyes of our shareholders and
the broader stock market, relative to
companies with whom we compete for
customers and investors that are subject
to similar macro-economic factors
Restricted
Stock Units
30% of total
long-term
equity
Three-
year cliff
vesting
N/A
Further align our Chairman and
CEOs’ interests with the interests of
our shareholders by incentivizing
them to increase share price, while
reinforcing the retention impact of our
compensation program
We believe that relative TSR is a meaningful measure of our long-term performance and motivates our Chairman and CEO
to achieve superior share price compared to our key competitors, thus aligning their interests with shareholder interests.
We further reinforce this by requiring a minimum threshold of relative performance for payout and by capping payout in
the case of negative TSR.
156 TechnipFMC
U.K. Annual Report and Accounts The relative TSR performance for our 2021 PSU awards will be measured against a Relative TSR Peer Group that
the Compensation Committee believes best reflects the companies that we compete with for both investments and
customers. The financial and operational performance of these companies are most directly relevant to TechnipFMC,
and we are all subject to similar macro-economic factors.
The following are the targets in relation to the 2021 PSU awards:
Performance Achievement
Relative TSR Performance
Below Threshold
Threshold
Target
Below 25th percentile
25th percentile
42nd percentile
Maximum or above
75th percentile or greater
Payout
(% of earned PSUs)
0%
50%
100%
200%
Note: If the Company’s absolute TSR is negative for the performance period, the payout in respect of the TSR element will be capped at target,
regardless of our relative performance.
For performance achievement between the levels identified above, payout percentage will be interpolated on a straight-
line basis.
157 TechnipFMC
U.K. Annual Report and Accounts Non-Executive Director fees
For the year ending December 31, 2021, our non-executive director compensation program consists of cash
consideration and restricted stock unit awards. The following table describes the components of our non-executive
director compensation program.
In April 2020, as a result of the global COVID-19 pandemic, sharp decline in oil prices, and the resulting impact on our
business, the annual cash retainers for our Board of Directors was reduced by 30% for the remainder of 2020, effective
May 1, 2020. The annual cash retainer was reinstated to 100% effective January 1, 2021.
Compensation Element
Compensation 2020
Compensation 2021
% increase
Annual Retainer
$100,000 paid in cash.1
$100,000 paid in cash.
Annual Equity Grant
$175,000 in RSUs, vesting after one
year of service.
$175,000 in RSUs, vesting after one
year of service.
Non-executive directors can elect
the year in which they will take
receipt of the equity grants from
either (a) a period of 1 to 10 years
from the grant date or (b) upon
their separation from Board service.
The elections are made prior to the
beginning of the grant year and are
irrevocable after December 31st of
the year prior to grant.
Non-executive directors can elect the
year in which they will take receipt
of the equity grants from either (a)
a period of 1 to 10 years from the
grant date or (b) upon their separation
from Board service. The elections are
made prior to the beginning of the
grant year and are irrevocable after
December 31st of the year prior to
grant.
RSUs granted prior to 2020 vested
after one year of service and will
be settled upon separation from
Board service.
Annual Chair Fee
$20,000 for Audit Committee
$20,000 for Audit Committee
$15,000 for Compensation
Committee
$15,000 for Compensation Committee
$10,000 for Environmental, Social,
and Governance Committee
$10,000 for Environmental, Social, and
Governance Committee
Annual Lead Independent
Director Fee
$50,000
$50,000
Meeting Fee
$2,500 per committee meeting
$2,500 per committee meeting
Stock Ownership
Requirement
Five times annual retainer
Five times annual retainer
0%
0%
0%
0%
0%
0%
0%
0%
(1) The 2020 Annual Retainer provided does not include the temporary reduction of 30% from May 1, 2020 to December 31, 2020.
Our Chairman and CEO is an employee and does not receive any additional compensation for his service as a director.
Each non-executive director receives reimbursement for reasonable incidental expenses incurred in connection with the
attendance at Board and committee meetings.
158 TechnipFMC
U.K. Annual Report and Accounts Activities of the Compensation Committee in 2020
Our Compensation Committee comprising independent non-executive directors oversees our executive compensation
program and determines the compensation for our executive officers on behalf of the Board. The Compensation
Committee is responsible for, among other things, reviewing, evaluating, and approving:
` The agreements, plans, policies, and programs of the Company to compensate its independent directors, Chairman
and CEO, and other officers, as applicable; and
` All awards of equity securities or equity derivatives to executive officers of the Company, as well as the total number
of equity securities or equity derivatives to be allocated to all other employees at the discretion of the CEO, consistent
with equity plans approved by the Company’s shareholders.
The Compensation Committee also reviews the Company’s incentive compensation arrangements to ensure that they do
not incentivize excessive risk-taking and evaluates compensation policies and practices that could mitigate any such risk.
The Compensation Committee’s charter may be viewed on our website at www.technipfmc.com under the heading
“About us > Governance.”
Under its charter, the Compensation Committee has the sole authority to retain and terminate a compensation consultant,
outside counsel, or any other advisors engaged to assist in the evaluation of compensation of directors, as well as
the sole authority to approve the consultant’s fees and its terms, which are then paid by the Company (within any
budgetary constraints imposed by the Board). Our Chairman and CEO does not discuss compensation matters with the
Compensation Committee’s consultant, except as needed to respond to questions from the consultant.
In 2020, in order to ensure our compensation programs are aligned with peer group and industry best practices, the
Compensation Committee retained Willis Towers Watson as its principal compensation consultant to provide information
and advice to the Compensation Committee on executive and director compensation and related governance matters. The
firm was engaged in 2016, through a tender process, to advise on our 2017 merger and then subsequently confirmed
in 2017 as compensation advisors to the Compensation Committee. Fees are based on a fixed fee offset, based on an
assumed set of activities. Services carried out by Willis Towers Watson in 2020 included evaluating our director and
executive compensation programs against general market and peer data, and providing updates on current executive
compensation trends and applicable legislative and governance activity. In 2020, Willis Towers Watson was paid
approximately $313,000 in fees related to executive compensation services. In addition, Willis Towers Watson provided
non-executive compensation services in 2020, totaling $1,694,000 in fees, which included retirement benefit consultant
services, health and group benefits consulting services, and corporate risk and brokering services to management.
In February 2021, the Compensation Committee considered the independence of Willis Towers Watson in accordance
with applicable law. At the request of the Compensation Committee, Willis Towers Watson prepared a letter providing
data on the following factors relevant to assessing independence: (a) other services provided to the Company by Willis
Towers Watson; (b) fees paid by the Company as a percentage of Willis Towers Watson’s total revenue; (c) policies and
procedures maintained by Willis Towers Watson that are designed to prevent a conflict of interest; (d) any business
or personal relationships between the individual consultants involved in the engagement and a member of the
Compensation Committee; (e) any ordinary shares owned by the individual consultants involved in the engagement or
their immediate family members; and (f) any business or personal relationships between our executive officers and Willis
Towers Watson or the individual consultants involved in the engagement. The Compensation Committee also considered
that the Willis Towers Watson consultants advising the Compensation Committee derived no economic benefit from the
fees paid for the non-executive compensation services. The Compensation Committee discussed these considerations
and concluded that the work of Willis Towers Watson and the consultants involved in the engagement did not raise any
conflict of interest.
159 TechnipFMC
U.K. Annual Report and Accounts Compensation Committee Members
All members of the Compensation Committee are independent. The Compensation Committee met five times in 2020 and
all members attended each meeting. The Compensation Committee currently comprises James Ringler (Chair), Claire S.
Farley, John O’Leary and John Yearwood.
The Compensation Committee’s Activities during the Year Ended December 31, 2020
Each year, the Compensation Committee approves an annual calendar which sets out the key activities in accordance
with its charter. The key activities of the committee in 2020 were as follows:
Q1
Q2–Q3
Q4
Approve compensation decisions
and equity awards for directors and
officers
Review executive officer share
ownership guidelines and
compliance
Discuss shareholder engagement
outcomes and review annual
meeting vote results
Approve Company performance
achievements for prior year in
relation to annual and long-term
incentive plans
Review and discuss executive
compensation strategy, structure,
and programs
Approve annual compensation
disclosures in Company proxy
statement and U.K. annual report
Review internal governance policies
(e.g., clawback, insider trading
policy, anti-hedging, pledging) and
compliance
Approve equity programs, annual
equity budget for non-executives,
and impact on shareholder dilution
Review of peer compensation
practices
160 TechnipFMC
U.K. Annual Report and Accounts Statement of Voting at Annual Shareholders’ Meeting
At our 2020 annual general meeting of shareholders, 86.4% of votes cast approved our 2019 Remuneration Report with
13.6% voting against the report (percentages subject to rounding), and 414,793 abstaining. At our 2019 annual general
meeting of shareholders, our Remuneration Policy was approved by 76.7% of shareholders, with 23.3% of votes cast
against the policy and 487,136 votes abstaining. The Compensation Committee has carefully considered the results of the
advisory votes as it completed its annual review of our compensation program. An integral component in the evaluation
and review of our compensation program is our shareholder engagement initiatives, explained in further detail in the
letter from our Compensation Committee Chairman.
At the 2021 annual general meeting of shareholders, the Directors’ Remuneration Policy will be subject to a binding
shareholder vote and will be effective upon approval by shareholders. The proposed Directors’ Remuneration policy is
provided in the section below.
We have continued our shareholder engagement program of soliciting feedback on our director compensation program
structure and decisions, and our Compensation Committee considers shareholder feedback as it evaluates and reviews
the compensation program each year.
On behalf of the Board
James M. Ringler
Director and Compensation Committee Chairman
April 9, 2021
161 TechnipFMC
U.K. Annual Report and Accounts Remuneration Policy
This section of the report sets out the remuneration policy for the executive and non-executive directors which
shareholders are asked to approve at the Annual General Meeting of Shareholders in 2021.
Decision Making Process for Remuneration
Our Compensation Committee comprising independent non-executive directors oversees our executive compensation
program and determines the compensation for our executive officers on behalf of the Board. The Compensation
Committee is responsible for, among other things, reviewing, evaluating, and approving the agreements, plans, policies,
and programs of the Company to compensate its Chairman and CEO and its independent directors. The Compensation
Committee also reviews the Company’s incentive compensation arrangements to ensure that they do not incentivize
excessive risk-taking and evaluates compensation policies and practices that could mitigate any such risk.
In 2020, the Compensation Committee retained Willis Towers Watson as its principal compensation consultant to provide
information and advice to the Compensation Committee on executive and director compensation and related governance
matters. This included evaluating our director and executive compensation programs against general market and peer
data and providing updates on current executive compensation trends and applicable legislative and governance activity.
In determining the target compensation package for the Chairman and CEO, the Compensation Committee compares
each element and combined total of the Chairman and CEO’s compensation to data for relevant roles within the
Compensation Peer Group. In setting target compensation, the Compensation Committee also considers market median
data, as well as other factors including the experience, tenure, role criticality, and performance of the Chairman and CEO.
The Compensation Committee, in partnership with its independent compensation consultant, determines and approves
any changes to compensation for the Chairman and CEO, who is not present during these discussions. In addition, any
changes to the Chairman and CEO’s target compensation are in accordance with the shareholder-approved Directors’
Remuneration Policy.
To avoid conflicts of interest, no board member is present in the discussion of their own remuneration and independent
advice is provided by our Committee advisors.
162 TechnipFMC
U.K. Annual Report and Accounts Future Policy Table for Executive Directors
The table and accompanying notes below describe each component of the Company’s executive directors’
remuneration package.
Base Salary
Purpose and link to strategy
Operation
Maximum payment
To attract and retain exceptionally talented individuals who deliver superior
operational performance in the Company’s businesses and create an
environment that fosters the innovation necessary for continued growth of
the Company’s revenue, earnings and shareholder returns.
Normally reviewed annually or following a change in responsibilities with
changes usually taking effect from March 1.
The Compensation Committee considers the following parameters when
setting and reviewing base salary levels:
` pay increases for other employees across the Company;
` economic conditions and governance trends;
` the individual’s performance, skills, and responsibilities;
` base salaries of companies of a similar size and international scope; and
` market pay levels.
Salaries are normally paid in the currency of the executive director’s
home country.
Salary increases will ordinarily be in line with increases awarded to other
employees in the Company. The Compensation Committee reserves the
discretion to increase salary levels in appropriate circumstances such as
where the nature or scope of the executive director’s role or responsibilities
changes or in order to be competitive at the median level of peer companies.
Salary adjustments may also reflect wider market conditions in the geography
in which the executive director is based.
Performance assessment
Overall performance of the executive director is considered by the
Compensation Committee when setting salaries annually.
Provisions to recover sums paid
or the withholding of payments
Not applicable.
163 TechnipFMC
U.K. Annual Report and Accounts Pension and Other Retirements Benefits
Purpose and link to strategy
Provides competitive post-retirement benefits.
Operation
Maximum payment
Provision of market competitive retirement benefits, inclusive of cash in
lieu, that may vary based on the location. The Chairman and CEO currently
participates in the Company’s U.S. Qualified Savings Plan and U.S. Non-
Qualified Savings Plan. These plans are also offered to other U.S. employees.
Further detail on current pension provisions for executive directors is
disclosed in the Annual Report on Remuneration.
Retirement or pension benefits vary by geography and this makes it difficult
to provide a maximum payment level. Based on the single figure valuation
approach, for the 2020 financial year, the employer contributions to the
U.S. 401(K) and non-qualified pension plan for the Chairman and CEO was
$247,770.
However, it is recognized that this value may fluctuate yearly.
Performance assessment
None.
Provisions to recover sums paid
or the withholding of payments
Not applicable.
164 TechnipFMC
U.K. Annual Report and Accounts Annual Performance Bonus
Purpose and link to strategy
Incentivizes achievement of the Company’s annual financial and strategic
targets. Provides focus on key financial metrics and the individual’s
contributions to the Company’s performance.
Operation
` Performance measures and stretching targets are set annually in advance by
the Compensation Committee by reference to the annual operating plan.
` The majority of the bonus will be based on financial performance. However,
operational, strategic and individual targets may also be used.
` 75% of the bonus is based on a BPI comprising financial and ESG metrics,
and 25% of the bonus is based on an API comprising personal targets.
` The award is usually paid out in cash after the end of the financial year.
` The Compensation Committee has discretion to amend the level of payment
if it is not deemed to reflect appropriately the individual’s contribution or
the overall business performance. Any discretionary adjustments will be
detailed in the following year’s annual report on remuneration.
` The Compensation Committee retains the discretion to make other bonus
payments on an exceptional basis when it considers this to be appropriate
in the context of Company and executive performance, and when it is
considered to be in the best interests of our shareholders. Where such
bonuses are paid, we would seek to restrict the value to the limit in this policy.
Maximum payment
` The maximum annual bonus target for 2021 is currently set at 270% of base
salary for the Chairman and CEO. This equates to 200% of target value.
` For threshold performance, the bonus pays out from 0% of target value.
` For “on-target” performance up to 100% of target value may be earned.
` For maximum performance up to 200% of target value may be earned.
The Compensation Committee retains the discretion to increase the bonus target
in circumstances it deems appropriate, such as for a change in market levels.
Performance assessment
` Performance measures and stretching targets are set annually by the
Compensation Committee by reference to the annual operating plan and
renewed throughout the year by the Compensation Committee and the
Environmental, Social, and Governance Committee.
` The Compensation Committee has discretion to vary the weighting of these
measures over the life of this remuneration policy.
Further details are set out in the annual report on remuneration.
Provisions to recover sums paid
or the withholding of payments
Clawback provisions apply as described on page 63 of the 2017 U.K. Annual
Report on Remuneration.
165 TechnipFMC
U.K. Annual Report and Accounts Long-term Incentive Schemes
Purpose and link to strategy
Incentivizes executives to deliver superior long-term returns to shareholders.
Operation
Long-term incentives are granted under the TechnipFMC plc Incentive Award
Plan (the “Incentive Plan”). This is an omnibus arrangement whereby a variety
of award types may be granted, including: performance stock units, restricted
stock units, stock options, cash settled awards, and share appreciation rights.
For 2021, long-term award grants comprise:
` Performance Stock Units (“PSUs”): an award of shares subject to
performance conditions assessed over a period of 3 years; and
` Restricted Stock Units (“RSUs”): an award of shares that vest 3 years
from grant.
Stock options have been excluded from the long-term award grants since
2020. However, the Committee retains the right to issue stock options in the
future should it consider it to be appropriate.
The type and weighting of awards granted each year is determined annually
by the Compensation Committee at its discretion. A minimum of 50% will be
performance based. However, it is the current intention of the Compensation
Committee for the weighting for the Chairman and CEO based on the fair
value at the grant date to be, for 2021:
` 60% Performance Stock Units; and
` 40% Restricted Stock Units.
The Compensation Committee has discretion to vary the weighting of the
performance measures over the life of this remuneration policy.
Executive directors will be eligible for any dividends paid and accumulated
on RSUs and PSUs during the performance or vesting period. No dividend
equivalents will be payable on Stock Options.
Maximum payment
` The maximum grant date fair value of long-term incentive awards granted to
the Chairman and Chief Executive Officer will be $18 million per annum.
` PSUs pay out at 25% of target for achievement of threshold performance.
` The Compensation Committee retains the discretion to adjust the actual
value of awards granted under the Plan in circumstances it deems
appropriate but in no way should the total exceed $18 million.
Continued overleaf >
166 TechnipFMC
U.K. Annual Report and Accounts Performance Assessment
(applicable to performance based
RSUs only)
` Long-term incentive awards except PSUs are not subject to achievement of
performance targets other than vesting periods. This is in line with market
practice in the U.S.
` For PSUs, the vesting of awards is linked to a range of performance
measures that may include, but are not limited to:
` a growth measure (for example, net sales, EPS);
` a measure of the Company performance on environmental, social, and
governance metrics;
` a measure of efficiency (for example, operating margin, operating cash
conversion, ROIC); and
` a measure of the Company’s relative performance in relation to its peers (for
example, relative total shareholder return).
` Measures and targets will be determined by the Compensation Committee
annually at its discretion prior to grant and will be set out in the annual
report on remuneration.
` The Compensation Committee has discretion to amend the performance
conditions in exceptional circumstances if it considers it appropriate to do
so. Any such amendments would be disclosed and explained in the following
year’s annual report on remuneration.
Provisions to recover sums paid
or the withholding of payments
Clawback provisions apply as described on page 63 of the 2017 U.K. Annual
Report on Remuneration.
All Employee Share Scheme
Purpose and link to strategy
Operation
To enable executive directors to participate in share purchase schemes
applicable to all-employees on the same basis as other employees.
Whilst the Company does not currently operate all employee share purchase
schemes were it to obtain shareholder approval to do so during the term of
the remuneration policy executive directors would be eligible to participate
in such a plan on the same terms as other eligible employees not inconsistent
with this policy.
Maximum payment
Subject to the terms of any such Plan approved and consistent with all
employee limits.
Performance assessment
Provisions to recover sums paid
or the withholding of payments
None
None
167 TechnipFMC
U.K. Annual Report and Accounts Benefits and Perquisites
Purpose and link to strategy
Operation
Maximum payment
To provide market competitive benefits and to facilitate the performance of
executive directors in their duties.
Executive directors are eligible to receive benefits, that may include, but are
not limited to: financial planning, personal tax assistance, use of company cars
and club memberships (primarily business related), medical, vision and dental
benefits, sickness, death and dismemberment benefits, work related travel,
and security expenses for the director and spouse and matching charity
contributions. Benefits may vary by location.
The Compensation Committee has discretion to offer additional allowances
or benefits to executive directors, if considered appropriate and reasonable.
These may include relocation expenses, housing allowance and school fees
where an executive director has to relocate from his/her home location as
part of his/her duties.
The actual value of benefits and perquisites varies year on year depending on
the cost to the business and individual director’s circumstances. The benefits
package is set at a level that the Compensation Committee considers:
` provides an appropriate level of benefits depending on the role and
individual circumstances; and
` in line with comparable benefits in companies of a similar size and
complexity in the market.
Performance assessment
None.
Provisions to recover sums paid
or the withholding of payments
Not applicable.
Legacy Obligations
The Compensation Committee reserves the right to make any remuneration payments that are outside of this
remuneration policy if they were agreed to prior to this remuneration policy being enacted, provided that the terms of
payment were consistent with any applicable shareholder approved remuneration policy in force at the time they were
agreed or were otherwise approved by shareholders. The Compensation Committee also reserves the right to make
any remuneration payments that were agreed to prior to the relevant individual becoming an executive director of the
Company. Payments include share-based and cash-based incentives and/or salary, benefits, pension and other payments.
Performance Target Selection
The performance targets for the annual bonus and long-term incentive plan are set each year prior to the grant date,
taking into account: market practice at peer companies; practice within the wider group; and our strategic and financial
business plan over the short and long-term.
The measures we select are chosen due to their link and importance to the strategy and our Key Performance Indicators.
We select measures intended to provide a balance between growth, efficiency and relative outperformance.
168 TechnipFMC
U.K. Annual Report and Accounts Non-Qualified Deferred Compensation
Our U.S.-based executives, including our Chairman and CEO, are eligible to participate in the U.S. Non-Qualified Savings
Plan, which provides executives and other eligible employees with the opportunity to participate in a tax advantaged
savings plan comparable to the U.S. Qualified Savings Plan. The investment options offered to participants in the U.S. Non-
Qualified Savings Plan are similar to those offered in our U.S. Qualified Savings Plan. Participants may elect to defer up to
90% of their base pay and/or annual cash incentive into the U.S. Non-Qualified Savings Plan. The Company contributes 5%
of the employee’s contributions to the U.S. Non-Qualified Savings Plan. Participants are 100% vested in their contributions
and the employer contributions. For those participants in the U.S. Non-Qualified Savings Plan eligible to receive the non-
elective contribution, we will contribute an additional 2% of the employee’s contributions to the U.S. Non-Qualified Savings
Plan. Similar to the U.S. Qualified Savings Plan, eligible participants in the U.S. Non-Qualified Savings Plan become vested in
their non-elective contributions after three years of service with the Company. In addition, for these eligible participants,
we will make a contribution on annual compensation that exceeds the maximum compensation limit required by the U.S.
Internal Revenue Code of 1986, as amended, for our U.S. Qualified Savings Plan. The intent of our contributions to the U.S.
Non-Qualified Savings Plan is so that eligible employees receive the same contribution as a percentage of eligible earnings
from the company regardless of compensation level. All vested funds must be distributed upon an employee’s termination
or retirement from the Company.
Approach to Recruitment Remuneration
` The Compensation Committee’s approach to recruitment remuneration is to pay no more than is necessary to attract
appropriate candidates to the role.
` The Compensation Committee will seek to structure pay for any new director in line with the remuneration policy.
The Compensation Committee does not envisage paying above the levels set out in the policy for a new executive’s
ongoing package.
` Where it is necessary to “buy out” an individual’s awards from a previous employer, the Compensation Committee
will seek to match the expected value of the awards and to grant awards that vest over a time frame similar to
those given up, with a commensurate reduction in quantum where the new awards will be subject to performance
conditions that are not as stretching as those on the awards given up. Where recruitment payments or awards are
intended to replace pay forfeited by the individual, the value of such awards will not be limited to those limits set out
in the remuneration policy, but will be determined by the Compensation Committee at its discretion.
` The Compensation Committee may agree to relocation expenses and other associated expenses when negotiating the
employment conditions.
` For an internal promotion, any outstanding incentive awards or bonuses may be permitted to continue, or be adjusted
to reflect the new position.
169 TechnipFMC
U.K. Annual Report and Accounts Service Agreements
Our Chairman and CEO and non-executive directors have not entered into service agreements. Our Chairman and CEO has
severance and change in control protections as detailed in relation to potential loss of office payments are set out below.
If an Executive Director were to be subsequently appointed under a Service Agreement during the term of the Policy it is
intended that the Service Agreement would likely contain provisions in relation to the following:
ITEM
Remuneration
Provision (not definitive) *
Base salary
Pension and retirement benefits
Healthcare and life insurance benefits
Annual leave
Financial planning assistance
Miscellaneous – car benefits, club membership, security arrangements, etc.
Eligibility for the annual cash incentive plan and long-term equity awards, subject to
the terms of the Incentive Plan
Change of control
The extent to which there any specific provisions and their source
Term and Notice Period
Term of agreement and minimum notice period from employer and employee
Severance /Termination period
Form and level
Restrictive covenants
During employment and period post-employment as applicable
*Summary details to be subsequently confirmed post appointment in the following year’s Annual Report on Remuneration.
170 TechnipFMC
U.K. Annual Report and Accounts Illustrations of Application of Directors’
Remuneration Policy
The charts below illustrate the potential value of total remuneration that could be received by the Chairman and CEO
under the proposed 2021 Policy. The charts illustrate remuneration payable at minimum, target and maximum payouts
along with maximum payout incorporating an illustrative share price appreciation on shares granted under the long-
term variable pay plan. The total remuneration under each scenario is made up of fixed pay (base pay, taxable benefits
and retirement benefits per the single figure of remuneration, as well as face value of restricted stock awards at
grant), annual variable pay (annual bonus at minimum, target and maximum performance) and long-term variable pay
(performance stock awards at minimum, target and maximum performance, and including 50% share price appreciation).
Chairman and CEO 2021 Potential Total Remuneration ($000)
$32,612
$25,046
$35000
$30000
$25000
$20000
$15000
$10000
$5000
$0
$15,811
$6,576
Below minimum
performance
On-target
performance
Maximum
performance
Maximum performance
+ 50% share price growth
The table below sets out the elements and approach to calculation for the above chart:
Fixed pay
Annual bonus
PSUs
PSUs + share price
appreciation
171 TechnipFMC
U.K. Annual Report and Accounts
Performance
Fixed pay
Annual variable pay
Long-term variable pay
Threshold
performance
/ Minimum
pay-out
On-target /
“expected”
performance
Chairman and CEO Base pay for
2021: $1,236,000
n/a
n/a
Chairman and CEO taxable
benefits as per the single figure of
remuneration: $48,659
Chairman and CEO retirement
benefits as per the single figure of
remuneration: $247,770
Chairman and CEO face value of
restricted stock awards at grant:
$5,044,000
Fixed Pay (see above)
On-target bonus (100% of
target).
Performance Stock Units at
100% of target.
For 2021: 135% of salary
for the Chairman and CEO.
For 2021: face value
of $7,566,000 for the
Chairman and CEO.
Maximum
performance
Fixed Pay (see above)
Maximum bonus (200% of
target).
Performance Stock Units at
200% of target.
For 2021: 270% of salary
for the Chairman and CEO.
For 2021: face value
of $15,132,000 for the
Chairman and CEO.
172 TechnipFMC
U.K. Annual Report and Accounts Policy on Payment for Loss of Office
The Compensation Committee will seek to ensure that all payments for loss of office are reasonable and in the long-
term interests of shareholders and the business. The Compensation Committee will generally take into account the
circumstance of the loss of office and performance of the director.
The Compensation Committee reserves the right to:
` pay legal fees, financial planning or outplacement costs;
` pay an annual bonus for the year of cessation;
` retain or accelerate vesting of outstanding long-term incentive awards; and
` continue taxable benefits and retirement benefits during the period.
It is our policy to offer severance benefits to our executive directors because we believe that severance benefits provide
important financial protection to directors in the event of involuntary job loss, are consistent with the practices of peer
companies and are appropriate for the retention of executive talent. Under our executive severance plan, if our Chairman
and CEO is terminated without cause, he is entitled to receive 18 months of severance pay (limited to base pay and the
target annual cash incentive), his pro-rated target annual cash bonus through the date of termination, the continuation
of medical and dental benefits for 18 months at the employee premium rate, outplacement assistance, and financial
planning and tax preparation assistance for the last calendar year of employment. The availability of these severance
benefits is conditioned on the Chairman and CEO’s compliance with non-disclosure, non-compete, and non-solicitation
covenants.
In the event of a termination without cause, termination for good reason, or voluntary retirement, any performance-
based incentive payments are subject to our actual attainment of performance goals. The terms of our executive
severance plan are consistent with the market practice of large public companies surveyed by Willis Towers Watson.
Change in control severance benefits, as described below, and severance benefits are exclusive of one another, and in no
circumstance, would any executive director receive benefits under both a change in control and the executive severance
plan.
Non-executive directors may be terminated early by either the Company or the non-executive director giving one
month’s written notice. Non-executive directors are not entitled to any severance compensation on termination.
However, all vested share awards will be settled at the discretion of the Compensation Committee and the Compensation
Committee retains the right to accelerate vesting for any outstanding share awards.
173 TechnipFMC
U.K. Annual Report and Accounts Potential Payments upon Change in Control
It is the Company’s policy to operate change in control benefits to ensure that directors have an incentive to continue to
work in the Company’s best interest during the period of time when a change in control transaction is taking place and
in order to ensure continuity of management. The benefits payable upon a change in control are comparable to benefits
offered to director positions at peer companies.
The Company has entered into an executive severance agreement with our Chairman and CEO. Pursuant to this
agreement, in the event of termination following a qualifying change in control and a qualifying adverse change in
employment circumstances, the Chairman and CEO will be entitled to the following benefits:
` full vesting of any share awards;
` three times his annual base pay and annual target bonus;
` a pro-rated payment equal to the amount of his annual target bonus for the year which he is terminated;
` accrued but unpaid base pay and unused paid time off;
` elimination of ownership and retention guidelines;
` awards granted under the Company’s Incentive Plan and other incentive arrangements adopted by the Company’s will
be treated pursuant to the terms of the applicable plan;
` an amount equal to the total monthly premium payable for his coverage (and if applicable spouse and dependent
coverage) under the Company’s health, dental, vision, prescription drug life, accidental death and dismemberment
insurance and long-term disability insurance coverage for 36 months;
` reimbursement for the costs of all outplacement services obtained by him within 18 months of the termination date
(limited to the lesser of 15% of his base pay on termination and $50,000); and
` reimbursement for legal fees and other litigation costs incurred in good faith by the Chairman and CEO as a result
of the Company’s refusal to provide severance benefits under the executive severance agreement, contesting the
validity, enforceability or interpretation of the agreement or as a result of any conflict between the parties pertaining
to the agreement.
The severance payment is required to be paid in a single lump sum payment no later than 30 days after the date of termination.
A “qualifying termination” includes: (a) an involuntary termination of the Chairman and CEO’s employment by the Company
and our subsidiaries for reasons other than “cause,” disability or death within 24 months of the change in control; (b) a
voluntary termination by the Chairman and CEO for “good reason” within 24 months of the change in control; or (c) a breach
by the Company or any successor of any provision in the executive severance agreement.
Under the executive severance agreements, an executive will be considered terminated for “cause” for:
` willful and continued failure to substantially perform the executive officer’s employment duties in any material
respect (other than any such failure resulting from physical or mental incapacity or occurring after an executive
officer has provided notification to the Company of a voluntary termination for a “good reason”) after proper written
demand has been provided to the executive officer and the executive officer fails to resume substantial performance
of the executive officer’s duties on a continuous basis within 30 days of receipt of such demand;
` willfully engaging in conduct which is demonstrably and materially injurious to the Company or an affiliate; or
` conviction for, or pleading guilty or not contesting, a felony charge under federal or state law.
It is intended that any new executive director would be retained on similar loss of office terms to the current executive
directors. Non-executive directors are not entitled to any compensation on termination and have a one-month notice
period. However, all share awards will automatically be accelerated on a change of control of the Company.
174 TechnipFMC
U.K. Annual Report and Accounts Future Policy Table for Non-Executive Directors
Directors Fees
Purpose and link to
strategy
Non-executive directors’ compensation is designed to reward the time and talent required
to serve on the board of a company of our size, complexity, and geographical spread,
acknowledging the significant international travel required to discharge their duties to the
Company. The Board seeks to provide sufficient flexibility in the form of compensation
delivered to meet the needs of individuals who are located in different countries, while
ensuring that a substantial portion of directors’ compensation is linked to the long-term
success of the Company.
Operation and
maximum payment
Our Incentive Plan allows the non-executive members of our Board to receive up to $500,000
annually in cash and grant date fair value of equity. The Incentive Plan, however, grants the
Board the authority to pay less than the amount provided under the Incentive Plan.
Non-executive directors are compensated in both cash and restricted stock units which
reflects practice amongst peer companies. Fees are reviewed periodically against
market levels.
The table below sets out the policy for 2021:
Compensation Element
Annual Retainer
Annual Equity Grant
Compensation
$100,000 paid in cash
$175,000 in RSUs that vest after one year
(Non-executive directors will be eligible for
any dividends paid and accumulated on RSU
during the vesting period).
Annual Chair Fee
$20,000 for Audit Committee
$15,000 for Compensation Committee
$10,000 for Environmental, Social, and
Governance Committee
Annual Lead Independent Director Fee
$50,000
Committee Meeting Fee
$2,500 per committee meeting
Share Ownership Requirement
Five times annual retainer (over 5 years)
The Compensation Committee retains the discretion to increase the value of compensation or alter the weighting of
share awards and cash at its discretion, should this be considered appropriate. Where any discretion is exercised, the
basis of this exercise should be disclosed in the next remuneration report.
175 TechnipFMC
U.K. Annual Report and Accounts Directors Fees
Performance assessment
None, although overall performance of the non-executive director is
considered by the Compensation Committee when setting fee levels.
Provisions to recover sums paid
or the withholding of payments
Not applicable.
Other Benefits
Each non-executive director receives reimbursement for reasonable incidental expenses incurred in connection
with the attendance at Board and committee meetings. Directors who are not the Company’s employees do not
participate in any employee benefit plans.
Share Ownership Requirements
To further align the interests of non-executive directors with the interests of the Company’s shareholders, each
non-executive director is expected to acquire and retain the Company’s Ordinary Shares and/or RSUs having a value
equal to at least five times the amount of each director’s annual cash retainer. A director has five years from his or
her initial appointment date as a director to meet this requirement. The ownership requirement is pro-rated over the
five-year period. Each of the Company’s non-executive directors met their pro-rata ownership requirements.
The annual RSU grant vests after one year of service but is settled in Ordinary Shares on a date following vesting
and previously elected by the director. The RSUs are forfeited if a director ceases service on the Board prior to the
vesting date of the RSUs, except in the event of death or disability. Unvested RSUs will be settled and are payable in
Ordinary Shares upon the death or disability of a director or in the event of a change in control of the Company. Non-
executive Directors have the opportunity to elect the year in which they will take receipt of the equity grants from
either (a) a period of 1 to 10 years from the grant date or (b) upon their separation from Board service. The elections
are made prior to the beginning of the grant year and are irrevocable after 31 December of the year prior to grant.
Other Provisions
The directors’ appointment letters provide for a one-month notice period, unless the director is terminated for cause
in which case the Company is not required to give notice. All of our non-executive directors have been be subject to
annual re-election since 2019. No compensation payable if required to stand down.
176 TechnipFMC
U.K. Annual Report and Accounts Differences between Remuneration Policy for
Executive Directors and Other Employees
The Remuneration Policy for the executive directors is designed with regard to the employee remuneration policy across
the Company. However, there are some differences in the structure of the remuneration policy for the executive directors
and other senior employees, which the Compensation Committee believes are necessary to reflect the different levels of
responsibility and market practices.
Statement of consideration of employment conditions
elsewhere in the Company
The Compensation Committee generally considers pay and employment conditions elsewhere in the Company when
considering the Chairman and CEO’s remuneration. While the Compensation Committee gave consideration to these
factors, there was no consultation with employees when the Remuneration Policy was developed. When considering base
salary increases, the Compensation Committee considers levels of base pay increases offered to other employees. The
section “CEO Pay Ratio Reporting” in this Report provides comparisons of the remuneration received by our Chairman
and CEO to the remuneration received by our U.K. employees as well as our global employees.
Statement of consideration of shareholder views
Our relationship and ongoing dialogue with our shareholders is an important part of our Board’s corporate governance
commitment. Our Lead Independent Director and Compensation Committee Chair, or our executives and management
from our Legal, People and Culture, and Investor Relations groups, meet with shareholders regularly on a variety
of topics. Management provides reports to the Board and its committees regarding the key themes and results of
these conversations, including typical investor concerns and questions, and emerging issues related to governance,
compensation, safety, and sustainability.
At our 2020 annual general meeting of shareholders, 86.4% of votes cast approved our 2019 Remuneration Report with
13.6% voting against the report. This vote outcome prompted us to engage with shareholders and proxy advisory firms
earlier than usual to connect and understand the reasons behind the support.
As such, we contacted shareholders and proxy advisory firms after our 2020 Annual Meeting to seek their views
specifically on our executive compensation program and any governance-related feedback, including those related to
negative votes for some of our directors. These transparent and productive discussions allowed us to better understand
potential disconnects between our disclosure and how our compensation program actually operates.
Furthermore, in early 2020, we further engaged our shareholders in order to discuss more broadly our announced spin-
off transaction, our Board leadership structure, our general Board practices, our executive compensation program, and
our sustainability efforts. We welcomed our shareholders’ feedback and suggestions in maintaining the balance between
strengthening the link between pay and performance, retaining and motivating our executives, and appropriately
compensating our executives for outperformance, while increasing long-term shareholder value.
Overall, for our 2020-2021 engagement, we contacted proxy advisory firms and our top shareholders representing
approximately 42% of our Ordinary Shares outstanding. Management, and in some instances, our Lead Independent
Director or our Compensation Committee Chair, held meetings with proxy advisory firms and shareholders representing
approximately 18% of our Ordinary Shares outstanding.
177 TechnipFMC
U.K. Annual Report and Accounts Changes in the Remuneration Policy
In seeking a renewal of the 2018 remuneration policy, the Remuneration Committee reviewed the policy in the context
of its implementation and considered the views of shareholders as well considering evolving governance and market
practices. The policy was found to continue to be fit for purpose with minor changes intended to provide the Committee
with enough flexibility to act in the best interests of the business and its stakeholders over the next three years. These
changes include:
` Introduction of an ESG measure into the annual cash incentive plan, in order to directly link our compensation
program to our ESG commitments and objectives
` Increase in the maximum grant date fair value of annual long-term equity award granted to the Chairman and CEO
from $15 million per annum to $18 million per annum, to provide flexibility for the future to adjust compensation
mix and proportion of equity-based compensation during a period of volatility in the oil and gas sector. However, this
change does not impact the 2021 long-term equity grant, which will remain below $15 million.
` Adjustment to the balance of performance based long-term equity to be a minimum of 50% (from a minimum of 60%),
to reflect continuing volatility in the sector and to reflect market norms in North America. However, the weighting for
the 2021 long-term equity grant for the Chairman and CEO will be 60% performance-based.
178 TechnipFMC
U.K. Annual Report and Accounts Independent auditors’ report to the
members of TechnipFMC plc
Report on the audit of the financial statements
Opinion
In our opinion:
•
• TechnipFMC plc’s group financial statements and company financial statements (the “financial statements”) give a
true and fair view of the state of the group’s and of the company’s affairs as at 31 December 2020 and of the group’s
and company’s loss and the group’s cash flows for the year then ended;
the group financial statements have been properly prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006;
the company financial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 “Reduced Disclosure
Framework”, and applicable law); and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
•
•
We have audited the financial statements, included within the U.K. Annual Report and Accounts (the “Annual Report”),
which comprise: the Consolidated Statements of Financial Position and Company Statement of Financial Position as at
31 December 2020; Consolidated Statements of Income and Consolidated Statements of Other Comprehensive Income,
the Consolidated Statements of Cash Flows, and the Consolidated Statements of Changes in Stockholders’ Equity and
Company Statement of Changes in Shareholders’ Equity for the year then ended; and the notes to the financial
statements, which include a description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit Committee.
Separate opinion in relation to international financial reporting standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union
As explained in note 1.1 to the financial statements, the group, in addition to applying international accounting standards
in conformity with the requirements of the Companies Act 2006, has also applied international financial reporting
standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
In our opinion, the group financial statements have been properly prepared in accordance with international financial
reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities,
and we have fulfilled our other ethical responsibilities in accordance with these requirements.
179 TechnipFMC
U.K. Annual Report and Accounts
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard
were not provided.
Other than those disclosed in note 31 to the financial statements, we have provided no non-audit services to the company
or its controlled undertakings in the period under audit.
Our audit approach
Overview
Audit scope
● We conducted full scope audits on 5 components and the audit of specified balances and classes of transactions on
a further 29 components. The scope of work at each component was determined by its contribution to the group’s
overall financial performance and its risk profile.
● We engaged our network firms in Brazil, France, Italy, India, Malaysia, Norway, Singapore, UK and the US to perform
the audit procedures in those respective locations.
● The components where audit work was performed accounted for approximately 69% of group revenue.
Key audit matters
● Risk of fraud in revenue recognition on long-term construction contracts (group)
● Carrying value of investments (company)
● COVID-19 impact (group and company)
Materiality
● Overall group materiality: US$80 million (2019: US$90 million) based on 0.6% of Revenue.
● Overall company materiality: US$70 million (2019: US$80 million) based on 0.5% of Total assets.
● Performance materiality: US$60 million (group) and US$52.5 million (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements.
Capability of the audit in detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined in the Auditors’ responsibilities for the audit of the financial statements section, to detect
material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws
and regulations related to unethical and prohibited business practices and the wide variety of jurisdictions in which the
group operates, and we considered the extent to which non-compliance might have a material effect on the financial
statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial
statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks
were related to posting inappropriate journal entries to manipulate revenue or profit, and management bias in accounting
estimates. The group engagement team shared this risk assessment with the component auditors so that they could
include appropriate audit procedures in response to such risks in their work. Audit procedures performed by the group
engagement team and/or component auditors included:
● Discussions with management and group General Counsel, including consideration of known or suspected instances
of non-compliance with laws and regulation and fraud;
● Evaluation of management’s controls designed to prevent and detect irregularities;
● Review of minutes of meetings of the Board of Directors;
● Challenging assumptions and judgements made by management in their significant accounting estimates, in particular
in relation to the accounting for contracts which recognize revenue under the over-time recognition method; and
180 TechnipFMC
U.K. Annual Report and Accounts
●
Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations or
posted by senior management and legal letters were obtained where necessary.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances
of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the
financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit
of the financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit and directing the efforts of the engagement team. These matters, and
any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
This is not a complete list of all risks identified by our audit.
COVID-19 impact is a new key audit matter this year. Carrying value of goodwill - Subsea Operating Segment, which
was a key audit matter last year, is no longer included because the goodwill balance related to Subsea has been fully
written off following the annual impairment assessment. Otherwise, the key audit matters below are consistent with last
year.
Key audit matter
How our audit addressed the key audit matter
Risk of fraud in revenue recognition on long-term
construction contracts (group)
The group has a significant number of material lump sum
construction contracts which accounts for approximately
80% of the group’s total revenue. Contract revenue is
recognized over the term of the contract with reference to
the percentage stage of completion at each reporting
date.
The judgement involved in assessing the percentage of
completion calculation can be complex and requires an
accurate forecast of total contract costs. This is
particularly important in respect of large contracts
(contract value greater than US$250 million) with low
margins (0 to 2%), where management could manipulate
the estimates in the cost to complete forecast to avoid
recognizing a loss on the contract.
Additional complexity arises through assessing the
revenue recognition for any contract contingencies. For
contracts where there are contract contingencies in
excess of US$60 million we consider there to be a risk of
fraud as management could manipulate revenue by not
releasing these contingencies when no longer required.
We tested key internal financial controls, including the
review and approval of project margin calculation and
review of technical contingencies.
For a sample of contracts, we obtained the percentage of
completion calculations, agreed key contractual terms back
to signed contracts, tested the mathematical accuracy of
the cost to complete calculations and re-performed the
calculation of revenue taken in the year based on the
percentage of completion.
We discussed the sample of contracts selected with project
managers and other members of senior management to
understand the status of the contract, any changes from
previous years, the key assumptions underpinning the
revenue and costs, and the existence of any claims or
litigation.
For costs incurred to date, we tested a sample to
appropriate supporting documentation. To test the forecast
cost to complete, we obtained the breakdown of forecasted
costs and tested elements of the forecast by obtaining
executed purchase orders and agreements, comparing
estimated costs to other similar projects and corroborating
management’s judgements and assumptions to
appropriate supporting documentation.
We assessed the competency and objectivity of the project
engineers and performed look-back tests to assess the
accuracy of forecasts in previous reporting periods. For a
sample of variation orders, we obtained the signed contract
amendments.
We assessed the adequacy of contingency provisions
against contract specific risks and management’s
assessment of the technical contingencies and the
potential for liquidated damages on projects with delays.
Overall, we are satisfied that the group’s accounting
policies for construction contract revenue recognition are
reasonable and have been appropriately applied.
181 TechnipFMC
U.K. Annual Report and Accounts
We reviewed management’s impairment indicator
assessment and concluded that it was reasonable. We
obtained management’s impairment model and tested its
mathematical accuracy.
We performed audit procedures over the assumptions
used in respect of forecast growth rates and discount rates.
We involved our valuation specialists to corroborate the
appropriateness of the discount rate used by forming an
independent view of the rate using third party source data
to calculate a range of acceptable rates and comparing this
to the rate used in the analysis. We also assessed the
work performed by management and their experts on the
valuation models.
We agreed the underlying cash flow forecasts used in the
models to the approved budgets and forecasts. We
evaluated the budgets and forecasts used within the model
against current trading conditions and corroborated the
reasonableness of certain key assumptions with external
third-party data and historical results of the company,
including the projected revenue growth over the next three
years.
We reviewed the disclosures provided in the financial
statements to ensure compliance with IAS 36 ‘Impairment
of Assets’.
The procedures that we performed to evaluate
management’s going concern assessment and our
conclusions are included in the “Conclusions relating to
going concern” section below.
Based on the work performed, we consider that
management’s conclusion on going concern to be
appropriate.
We increased the frequency and extent of our oversight
over component audit teams, using video conferencing and
remote working paper reviews, to satisfy ourselves as to
the appropriateness of audit work performed.
We also assessed the adequacy of the disclosure provided
in notes 1.2 of the financial statements in relation to the
impact of the pandemic on the relevant accounting
estimates and going concern and considered this to be
acceptable.
Carrying value of investments (company)
The total carrying value of investments presented within
the company financial statements as at 31 December
2020 is US$11,110 million.
In line with IAS 36, at the reporting date, management
assessed whether there was any indication that the
investments in subsidiaries may be impaired. Where an
impairment trigger was identified, management performed
an exercise to determine the recoverable amount of the
underlying investments.
This resulted in an impairment charge of US$4,487
million. We focused on this area given the significant
judgements involved, and complexity of valuation
methodologies requiring the use of estimates.
COVID-19 impact (group and company)
The significant decline in crude oil prices and the COVID-
19 pandemic have caused a significant decline in the
performance of the group. The COVID-19 pandemic has
stressed financial systems and significant parts of the
world’s major economies are being negatively impacted.
As part of its going concern assessment, management
performed a risk assessment of the potential ongoing
impact of COVID-19 on the business and a return to low
crude oil prices. As part of this assessment, management
prepared a cash flow until June 2022 which included a
number of severe but plausible downside sensitivities. In
accordance with the FRC guidelines management have
also prepared a severe but plausible downside sensitivity
assuming that the business generates nil operating cash
flows until June 2022. The group has three debt
covenants, being the Interest coverage ratio (>3.0), Total
leverage ratio (<5.5) and First Lien Leverage Ratio (<2.5).
Management have calculated the debt covenants on a
quarterly basis from Q1’21 until Q2’22 for the base case
scenario as well as stress tested the covenants against a
severe but plausible downside scenario. There are no
breaches in either cases.
Based on this analysis management concluded that there
is no material uncertainty in respect of the group’s going
concern assessment and disclosed the above
assessment within the related disclosure.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the group and the company, the accounting processes and
controls, and the industry in which they operate.
We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the group and the company, the accounting processes and
controls, and the industry in which they operate. The group financial statements are a consolidation of a large number of
components which make up the group’s operating businesses within the three business unit segments: Subsea, Technip
Energies and Surface Technologies. In establishing the overall approach to the group audit, we determined the type of
work that needed to be performed at the components either by us, as the group engagement team, or component auditors
182 TechnipFMC
U.K. Annual Report and Accounts
from other PwC network firms operating under our instruction. The group’s components vary significantly in size and we
identified 5 components that, in our view, required a full scope audit due to their relative size or risk characteristics. Where
component audits were performed by teams other than the group engagement team, members of the group engagement
team were involved in their work throughout the audit. We maintained regular communication and conducted formal
interim and year-end conference calls with all full and specified procedure component teams. Of the 34 components in
scope, we deemed two to be financially significant to the group: Arctic LNG and Technip France. Together these full and
specific scope components audits gave appropriate coverage of all material balances at a group level. On a consolidated
basis, these provided coverage of 69% of revenue.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating
the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall
materiality
How we
determined it
Rationale for
benchmark
applied
Financial statements - group
Financial statements - company
US$80 million (2019: US$90 million).
US$70 million (2019: US$80 million).
0.6% of Revenue
0.5% of Total assets
We considered the following benchmarks when
approaching the calculation of overall materiality – total
revenues, total assets, adjusted pre-tax income and
EBITDA. We concluded that the most appropriate
benchmark was total revenue given profitability measures
continue to be depressed as a result of the pricing
environment in the global oil and gas industry and not
reflective of the scale of the operations of TechnipFMC.
Revenue is a key measure used by shareholders in
assessing the performance of the group.
We considered a benchmark of total
assets when approaching the calculation
of overall materiality for the company. We
concluded that this was the most
appropriate benchmark given the principal
activity of the company is a holding
company carrying the investment in
subsidiaries.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group
materiality. The range of materiality allocated across components was between US$15 million and US$55 million. Certain
components were audited to a local statutory audit materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining
the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and
disclosures, for example in determining sample sizes. Our performance materiality was 75% of overall materiality,
amounting to US$60 million for the group financial statements and US$52.5 million for the company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls - and concluded that an amount in the middle of our
normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above US$7.2
million (group audit) (2019: US$7.5 million) and US$6.3 million (company audit) (2019: US$4 million) as well as
misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group's and the company’s ability to continue to adopt the going concern
basis of accounting included:
•
• obtaining and reviewing the group's cashflow forecasts for the going concern period, challenging management’s
assumptions used and verifying that it is consistent with our existing knowledge and understanding of the business;
reviewing the group's cashflow forecasts under severe but plausible downside scenario, evaluating the assumptions
used, and verifying that the group is able to maintain liquidity and comply with the covenants within the going concern
period under these scenarios;
testing the model for mathematical accuracy; and
•
183 TechnipFMC
U.K. Annual Report and Accounts
• assessing the adequacy of the disclosure provided in note 1.2 of the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the group's and the company’s ability to continue as a going
concern for a period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group's
and the company's ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements
does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent
otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial
statements or a material misstatement of the other information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We have nothing to
report based on these responsibilities.
With respect to the Strategic report and Directors’ Report, we also considered whether the disclosures required by the
UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Strategic report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and
Directors’ Report for the year ended 31 December 2020 is consistent with the financial statements and has been prepared
in accordance with applicable legal requirements.
In light of the knowledge and understanding of the group and company and their environment obtained in the course of
the audit, we did not identify any material misstatements in the Strategic report and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance
with the Companies Act 2006.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Directors’ Responsibility Statements, the directors are responsible for the preparation of
the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair
view. The directors are also responsible for such internal control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
184 TechnipFMC
U.K. Annual Report and Accounts
basis of accounting unless the directors either intend to liquidate the group or the company or to cease operations, or
have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In
other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is
selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance
with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept
or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands
it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
● we have not obtained all the information and explanations we require for our audit; or
● adequate accounting records have not been kept by the company, or returns adequate for our audit have not been
received from branches not visited by us; or
● certain disclosures of directors’ remuneration specified by law are not made; or
●
the company financial statements and the part of the Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the members on 11 January 2017 to audit
the financial statements for the year ended 31 December 2017 and subsequent financial periods. The period of total
uninterrupted engagement is 4 years, covering the years ended 31 December 2017 to 31 December 2020.
Richard Spilsbury (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Aberdeen
9 April 2021
185 TechnipFMC
U.K. Annual Report and Accounts
CONSOLIDATED FINANCIAL STATEMENTS
TECHNIPFMC PLC
AS OF DECEMBER 31, 2020
Company No. 09909709
186 TechnipFMC
79
U.K. Annual Report and Accounts 1. CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
Revenue:
Service revenue from customer contracts
Product revenue from customer contracts
Lease revenue
Total revenue
Costs and expenses:
Cost of service revenue
Cost of product revenue
Cost of lease revenue
Selling, general and administrative expense
Research and development expense
Impairment, restructuring and other expenses
Separation costs
Merger transaction and integration costs
Total costs and expenses
Other expense, net
Income from equity affiliates
Loss before net interest expense and income taxes
Financial income
Financial expense
Loss before income taxes
Provision for income taxes
Net loss
Net profit attributable to non-controlling interests
Net loss attributable to TechnipFMC plc
Earnings (loss) per share attributable to TechnipFMC plc
Basic
Diluted
Weighted average shares outstanding
Basic
Diluted
Year Ended December 31,
Note
2020
2019
5
22
1
6
6
9
6
6
7
8
$
9,709.6
$
3,202.6
145.2
13,057.4
8,297.9
2,777.1
117.1
1,067.6
119.8
3,436.9
39.5
—
9,793.1
3,359.2
273.9
13,426.2
7,784.4
2,963.9
167.5
1,230.0
162.9
2,436.6
72.1
31.2
15,855.9
14,848.6
(0.8)
69.4
(267.2)
12.3
(2,729.9)
(1,677.3)
56.6
(386.8)
(3,060.1)
148.6
(3,208.7)
(49.7)
115.8
(614.3)
(2,175.8)
275.1
(2,450.9)
(3.1)
$
(3,258.4) $
(2,454.0)
$
$
(7.26) $
(7.26) $
(5.48)
(5.48)
448.7
448.7
448.0
448.0
The accompanying notes are an integral part of the consolidated financial statements.
187 TechnipFMC
80
U.K. Annual Report and Accounts
U.K. Annual Report and Accounts
2. CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME
(In millions)
Net loss
Exchange differences on translating entities operating in foreign currency
Reclassification adjustment for net gains included in net loss
Net gains (losses) on hedging instruments, net of income tax
Other comprehensive income (loss) to be reclassified to statement of income in subsequent
years, net of tax
Net remeasurement losses on defined benefit plans, net of income tax
Other comprehensive loss not being reclassified to statement of income in subsequent years,
net of tax
Other comprehensive loss, net of income tax
Comprehensive loss, net of tax
Comprehensive income attributable to non-controlling interest
Comprehensive loss attributable to TechnipFMC plc
Year Ended December 31,
2020
2019
$
(3,208.7) $
(2,450.9)
(170.9)
—
38.3
(132.6)
(83.5)
(83.5)
(216.1)
(3,424.8)
(50.3)
11.6
(12.0)
28.2
27.8
(49.6)
(49.6)
(21.8)
(2,472.7)
(2.4)
$
(3,475.1) $
(2,475.1)
The accompanying notes are an integral part of the consolidated financial statements.
188 TechnipFMC
81
U.K. Annual Report and Accounts
3. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In millions, except par value data)
Assets
Investments in equity affiliates
Property, plant and equipment, net
Right-of-use assets, lease
Goodwill
Intangible assets, net
Deferred income taxes
Derivative financial instruments
Other assets
Total non-current assets
Cash and cash equivalents
Trade receivables, net
Contract assets
Inventories
Derivative financial instruments
Income taxes receivable
Advances paid to suppliers
Other current assets
Total current assets
Total assets
Liabilities and equity
Ordinary shares
Retained earnings, net income and other reserves
Accumulated other comprehensive loss
Total TechnipFMC plc shareholders’ equity
Non-controlling interest
Total equity
Long-term debt, less current portion
Lease liabilities
Deferred income taxes
Accrued pension and other post-retirement benefits, less current portion
Derivative financial instruments
Non-current provisions
Other liabilities
Total non-current liabilities
Short-term debt and current portion of long-term debt
Lease liabilities
Accounts payable, trade
Contract liabilities
Accrued payroll
Derivative financial instruments
Income taxes payable
Current provisions
Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
Note
December 31,
2020
2019
9
10
4
11
11
7
27
12
13
14
5
15
27
7
16
17
17
17
17
19
4
7
20
27
21
23
19
4
24
5
27
7
21
23
$
354.3 $
2,845.2
989.3
2,654.7
981.1
225.9
35.9
243.4
8,329.8
4,807.7
2,389.4
1,266.8
1,281.5
301.4
334.4
203.6
893.2
300.4
3,155.4
864.9
5,654.6
1,086.6
267.0
39.5
299.2
11,667.6
5,190.1
2,281.4
1,519.1
1,423.9
101.9
285.7
242.9
862.6
11,478.0
19,807.8 $
11,907.6
23,575.2
$
$
449.5 $
4,847.8
(1,154.1)
4,143.2
103.8
4,247.0
1,792.5
881.0
125.4
447.1
23.3
52.2
258.5
3,580.0
2,161.6
273.9
2,741.1
4,725.0
418.8
167.2
68.1
443.2
981.9
11,980.8
15,560.8
447.1
8,104.9
(937.4)
7,614.6
69.9
7,684.5
2,013.2
681.7
184.0
386.8
52.7
47.7
433.9
3,800.0
2,462.2
275.1
2,660.7
4,571.4
411.7
141.3
73.6
476.6
1,018.1
12,090.7
15,890.7
23,575.2
$
19,807.8 $
The accompanying notes are an integral part of the consolidated financial statements.
189 TechnipFMC
82
U.K. Annual Report and Accounts
The consolidated financial statements were approved by the Board of Directors and signed on its behalf by
Douglas J. Pferdehirt
Director and Chief Executive Officer
April 9, 2021
190 TechnipFMC
83
U.K. Annual Report and Accounts
4. CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Cash provided by operating activities
Net loss
Adjustments to reconcile net profit (loss) to cash provided (required) by operating activities
Year Ended December 31,
Note
2020
2019
$
(3,208.7) $
(2,450.9)
Depreciation
Amortization
Impairments
Employee benefit plan and share-based compensation costs
Deferred income tax benefit, net
Unrealized (gain) loss on derivative instruments and foreign exchange
Income (loss) from equity affiliates, net of dividends received
Other
Changes in operating assets and liabilities, net of effects of acquisitions
Trade receivables, net and contract assets
4, 10
11
10, 11
626.7
123.7
3,210.1
55.8
(7.3)
(3.0)
(64.5)
200.8
249.2
77.7
12.5
(72.6)
(56.4)
(209.6)
934.4
(291.8)
(3.9)
51.5
(17.9)
—
8.8
46.0
26.7
—
712.5
126.0
2,430.0
93.0
(66.0)
33.2
(8.2)
353.7
(36.8)
(171.7)
16.5
522.5
4.5
(376.2)
1,182.1
(454.4)
(71.6)
18.9
—
16.0
(2.1)
7.8
62.0
3.6
(180.6)
(419.8)
(24.4)
(554.5)
223.2
(423.9)
(277.5)
—
(59.2)
(7.4)
(224.2)
(11.8)
(49.6)
57.3
96.2
—
(335.8)
(92.7)
(232.8)
—
(562.8)
—
(1,359.7)
(1,120.2)
223.5
(382.4)
5,190.1
$
4,807.7
$
5.8
(352.1)
5,542.2
5,190.1
19
19
19
19
4
17
17
23
13
13
Inventories, net
Accounts payable, trade
Contract liabilities
Income taxes payable, net
Other assets and liabilities, net
Cash provided by operating activities
Cash required by investing activities
Capital expenditures
Payment to acquire debt securities
Proceeds from sale of debt securities
Acquisition of equity securities
Acquisitions, net of cash acquired
Cash received from divestiture
Proceeds from sale of assets
Proceeds from repayment of advances to joint venture
Other
Cash required by investing activities
Cash required by financing activities
Net decrease in short-term debt
Net (decrease)/increase in commercial paper
Proceeds from issuance of long-term debt
Repayments of long-term debt
Payments for the principal portion of lease liabilities
Purchase of treasury shares
Dividends paid
Payments related to taxes withheld on share-based compensation
Settlements of mandatorily redeemable financial liability
Acquisition of non-controlling interest
Cash required by financing activities
Effect of changes in foreign exchange rates on cash and cash equivalents
Decrease in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
191 TechnipFMC
84
U.K. Annual Report and Accounts
(In millions)
Supplemental disclosures of cash flow information
Cash paid for interest on debt
Cash paid for income taxes (net of refunds received)
Year Ended December 31,
2020
2019
$
$
107.0 $
219.7 $
109.4
374.5
The accompanying notes are an integral part of the consolidated financial statements.
192 TechnipFMC
85
U.K. Annual Report and Accounts
5. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In millions)
Ordinary
Shares Held in
Treasury and
Employee
Benefit
Trust
Ordinary
Shares
Retained
Earnings, Net
Income and
Other Reserves
Accumulated
Other
Comprehensive
Income (Loss)
Non-controlling
Interest
Total
Shareholders’
Equity
Balance as of December 31, 2018
$
450.5 $
(2.4) $
10,788.0 $
(916.3) $
69.8 $
10,389.6
Cumulative effect of initial application of
IFRS 16
Net (loss)/profit
Other comprehensive loss
Cash dividends declared (Note 17)
Cancellation of treasury shares (Note 17)
Issuance of ordinary shares (Note 17)
Net sales of ordinary shares for
employee benefit trust (Note 17)
Share-based compensation (Note 18)
Other
—
—
—
—
(4.0)
0.6
—
—
—
—
—
—
—
—
—
2.4
—
—
1.8
(2,454.0)
—
—
—
3.1
—
(21.1)
(0.7)
(232.8)
(88.7)
—
—
74.5
16.1
—
—
—
—
—
—
—
—
—
—
—
(2.3)
1.8
(2,450.9)
(21.8)
(232.8)
(92.7)
0.6
2.4
74.5
13.8
Balance as of December 31, 2019
$
447.1 $
— $
8,104.9 $
(937.4) $
69.9 $
7,684.5
Net (loss)/profit
Other comprehensive (loss)/profit
Cash dividends declared (Note 17)
Cancellation of treasury shares (Note 17)
Issuance of ordinary shares (Note 17)
Share-based compensation (Note 18)
Acquisition of non-controlling interest
Other
—
—
—
—
2.4
—
—
—
—
—
—
—
—
—
—
—
(3,258.4)
—
—
(216.7)
(59.2)
—
(9.4)
69.0
(9.4)
10.3
—
—
—
—
—
—
49.7
0.6
—
—
—
—
(2.1)
(14.3)
(3,208.7)
(216.1)
(59.2)
—
(7.0)
69.0
(11.5)
(4.0)
Balance as of December 31, 2020
$
449.5 $
— $
4,847.8 $
(1,154.1) $
103.8 $
4,247.0
The accompanying notes are an integral part of the consolidated financial statements.
193 TechnipFMC
86
U.K. Annual Report and Accounts
6. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. ACCOUNTING PRINCIPLES
Nature of operations - TechnipFMC plc and consolidated subsidiaries (“TechnipFMC”, the "Company", “we”, “us” or
“our”) is a global leader in oil and gas project execution, technology innovation, systems manufacturing and services
provider through our business segments: Subsea, Technip Energies and Surface Technologies. We have
manufacturing operations worldwide, strategically located to facilitate delivery of our products, systems and services
to our customers. On February 16, 2021, we completed the separation of Technip Energies segment (the “Spin-off”).
Subsequent to the Spin-off, we will operate under two reporting segments: Subsea and Surface Technologies.
Details of the Company's activities during the year are provided in the Strategic Report. TechnipFMC is a public
limited company by shares, incorporated and domiciled in England and Wales (United Kingdom) and listed on the
New York Stock Exchange (“NYSE”) and on Euronext Paris, in each case trading under the “FTI” symbol. The
address of the registered office is One St. Paul’s Churchyard, London, England, EC4M 8AP.
1.1. Basis of preparation
The consolidated financial statements of TechnipFMC as of December 31, 2020 and for the two years then ended
(the "consolidated financial statements") were prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006 and international financial reporting standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
The consolidated financial statements are expressed in millions of U.S. dollars and all values are rounded to the
nearest thousand, unless specified otherwise.
TechnipFMC’s consolidated financial statements have been prepared on a going concern basis under the historical
cost convention as modified by the revaluation of financial assets and liabilities at fair value through profit or loss.
TechnipFMC’s significant accounting policies adopted in the preparation of these consolidated financial statements
are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Reclassifications – During the year ended December 31, 2020, in anticipation of our separation transaction, we
renamed our Onshore/Offshore operating segment to Technip Energies, which includes our Loading Systems
business that was previously reported in the Surface Technologies segment and our process automation business,
Cybernetix, that was previously reported in the Subsea segment. Accordingly, our reportable segments comparative
information has been restated and Technip Energies operating segment includes $86.6 million and $103.5 million of
segment revenue attributable to Loading Systems and Cybernetix businesses, respectively. Certain presentation
improvements were made in the prior year comparative information in Note 17 to the consolidated financial
statements. Management considers the changes to be more relevant to users in understanding the nature of the
transactions.
1.2. Going concern
As required by IAS 1 "Presentation of Financial Statements" in determining the basis of preparation for the
consolidated financial statements, we have considered the Company’s business activities, together with the factors
likely to affect its future development, performance and position in order to assess whether the Company may adopt
the going concern basis in preparing its consolidated financial statements.
Spin-off
On February 16, 2021, we completed the separation of the Technip Energies business segment (the “Spin-off”). In
connection with the Spin-off, we executed a series of refinancing transactions, in order to provide a capital structure
with sufficient cash resources to support future operating and investment plans.
On February 16, 2021, we entered into a new senior secured revolving credit facility that provides for aggregate
revolving capacity of up to $1.0 billion. Availability of borrowings under the Revolving Credit Facility is reduced by
any outstanding letters of credit issued against the facility.
On January 29, 2021, we issued $1.0 billion of 6.5% senior notes due 2026. The Notes are senior secured
obligations of the Company and are guaranteed on a senior unsecured basis by substantially all of the Company’s
194 TechnipFMC
87
U.K. Annual Report and Accounts
wholly-owned U.S. subsidiaries and non-U.S. subsidiaries in Brazil, the Netherlands, Norway, Singapore and the
United Kingdom.
The proceeds from the debt issuance described above along with the available cash on hand were used to fund:
•
•
•
The repayment of all $522.8 million of the outstanding Synthetic Convertible Bonds that matured in January
2021.
The repayment of all $500.0 million aggregate principal amount of outstanding 3.45% Senior Notes due 2022.
The termination of the $2.5 billion senior unsecured revolving credit facility agreement dated January 17, 2017
and the termination of the €500.0 million revolving credit facility dated May 19, 2020. In connection with the
termination of these credit facilities, we repaid all of the outstanding borrowings.
We will continue to be strategically focused on cash and liquidity preservation. Subsequent to the completion of the
Spin-off, we own 49.9% of the outstanding shares of Technip Energies. On March 31, 2021 pursuant to the Share
Purchase Agreement BPI exercised its right and purchased from TechnipFMC 7.5 million shares in Technip
Energies N.V. for $100.0 million. See Note 33 for further details. We also intend to conduct an orderly sale of our
stake in Technip Energies over time and will use the proceeds from future sales to further reduce our net leverage.
Operating and investing activities
We continue to actively monitor the impact of the COVID-19 pandemic and oil price volatility, including the impact on
economic activity and financial reporting. Whilst the situation is uncertain and evolving, the Company has modelled
potential severe but plausible impacts on revenues, profits and cash flows in its assessment. In preparing its
assessment, we have considered the impact that COVID-19 and oil price reduction has had on the business and the
related decline in revenues.
In reaction to the fall in revenues we reduced our expectations for capital expenditures in 2020 by more than 30% to
approximately $250.0 million. We also announced a series of cost reduction initiatives that will result in annualized
savings of more than $350.0 million that extend to all business segments and support functions. We anticipate
achieving the targeted savings run-rate by the end of the 2021.
Additionally, we announced revisions to compensation through the end of the year which include a 30% reduction to
the Chairman and Chief Executive Officer’s salary; a 30% reduction in the Board of Directors’ retainer; and a 20%
reduction to the Executive Leadership team’s salaries.
In April 2020, our Board of Directors announced its decision to lower the annual dividend by 75% to $0.13 per
share. We paid a dividend of $0.13 per share in April 2020, and this fulfilled the annual dividend distribution for
2020. The revised dividend policy reduced the annual cash outflow by $175.0 million when compared to the
previous year’s distribution.
The Company continues to maintain sufficient liquidity and meets its covenants under the revolving credit facilities
as of December 31, 2020. See Note 19 for further details. As part of our assessment of going concern we have
modelled our projected cash flows under a severe but plausible downside scenario, as well as testing our covenants
against this scenario. Under all the scenarios modelled, after taking mitigating actions as needed, our forecasts did
not indicate breach within the going concern period of review on any of the future dates through June 2022.
Most of our cash is managed centrally and flowed through centralized bank accounts controlled and maintained by
TechnipFMC globally and in many operating jurisdictions to best meet the liquidity needs of our global operations.
We expect to meet the continuing funding requirements of our global operations with cash generated by such
operations and our existing revolving credit facility. We expect cash flow from our operating activities to be positive
for the full 2021 year.
Following its assessment of going concern, the Company has formed a judgement that there are no material
uncertainties that cast doubt on the Company’s going concern status and that it is a reasonable expectation that the
Company has adequate resources to continue in operational existence for the foreseeable future. For this reason,
the Company continues to adopt the going concern basis in preparing the consolidated financial statements.
1.3. Changes in accounting policies and disclosures
195 TechnipFMC
88
U.K. Annual Report and Accounts
a. Standards, amendments and interpretations effective in 2020
The Company has applied the following standards and amendments for the first time in its consolidated financial
statements for the year ended December 31, 2020:
•
•
•
•
Definition of a Business - Amendments to IFRS 3 “Business Combinations” (“IFRS 3”);
Definition of Material - Amendments to IAS 1 "Presentation of Financial Statements" ("IAS 1") and IAS 8
“Accounting Policies, Changes in Accounting Estimates and Errors” (“IAS 8”);
Interest Rate Benchmark Reform (Phase 1) - Amendments to IFRS 9 “Financial instruments” (“IFRS 9”), IAS 39
“Financial Instruments: Recognition and Measurement” (“IAS 39”) and IFRS 7 "‘Financial Instruments:
Disclosures" ("IFRS 7");
Revised Conceptual Framework for Financial Reporting.
The new standards and amendments did not have any impact on the Company's accounting policies and did not
require retrospective adjustments.
b. Standards, amendments and interpretations to existing standards that are issued, not yet effective and
have not been early adopted as of December 31, 2020
Certain new accounting standards and interpretations have been published that are not mandatory for
December 31, 2020 reporting periods and have not been early adopted by the Company. The assessment of the
impact of these new standards and interpretations is set out below.
IFRS 17 “Insurance Contracts”
This standard replaces IFRS 4, which currently permits a wide variety of practices in accounting for insurance
contracts. IFRS 17 “Insurance Contracts” (“IFRS 17”) will change the accounting by all entities that issue insurance
contracts and investment contracts with discretionary participation features. The new standard will be effective for
annual periods beginning on or after January 1, 2023 subject to endorsement by the U.K. and the European Union.
We are currently evaluating the impact of this standard on our consolidated financial statements and do not expect
that the adoption of the standard will have a significant impact on our consolidated financial statements.
Amendments to IAS 1 "Presentation of financial statements" on classification of liabilities
These narrow-scope amendments to IAS 1, clarify that liabilities are classified as either current or non-current,
depending on the rights that exist at the end of the reporting period. Classification is unaffected by the expectations
of the entity or events after the reporting date (for example, the receipt of a waiver or a breach of covenant). The
amendment also clarifies what IAS 1 means when it refers to the ‘settlement’ of a liability. The new amendments will
be effective for annual periods beginning on or after January 1, 2023 subject to endorsement by the U.K. and the
European Union. We are currently evaluating the impact of this amendment on our consolidated financial
statements and do not expect that the adoption of the amendment will have a significant impact on our consolidated
financial statements.
A number of narrow-scope amendments to IFRS 3, IAS 16, IAS 37 and some annual improvements on IFRS 1,
IFRS 9, IAS 41 and IFRS 16
The new amendments will be effective for annual periods beginning on or after January 1, 2022 subject to
endorsement by the U.K. and the European Union. We are currently evaluating the impact of these amendments on
our consolidated financial statements and do not expect that the adoption of these amendments will have a
significant impact on our consolidated financial statements.
Amendments to IAS 1 and IAS 8
The new amendments will be effective for annual periods beginning on or after January 1, 2023 subject to
endorsement by the U.K. and the European Union. We are currently evaluating the impact of these amendments on
our consolidated financial statements and do not expect that the adoption of these amendments will have a
significant impact on our consolidated financial statements.
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
196 TechnipFMC
89
U.K. Annual Report and Accounts
Amendments address issues arising during the Phase 2 reform of benchmark interest rates. The amendments are
effective from January 1, 2021. We are currently evaluating the impact of these amendments on our consolidated
financial statements and do not expect that the adoption of these amendments will have a significant impact on our
consolidated financial statements.
1.4. Summary of significant accounting policies
a) Consolidation principles
In accordance with IFRS 10 “Consolidated Financial Statements” ("IFRS 10"), subsidiaries are all entities (including
structured entities) over which TechnipFMC has control. TechnipFMC controls an entity where TechnipFMC has all
the following:
•
•
•
the power over the company subject to the investment;
an exposure or rights to the company’s variable returns; and
the ability to use its power over the entity to affect these returns.
The power to direct the activities of the entity usually exists when holding more than 50% of voting rights in the
entity and these rights are substantive.
As per IFRS 11 “Joint Arrangements” (“IFRS 11”), joint arrangements classified as joint operations should be
recognized to the extent of TechnipFMC’s assets and its liabilities, including its share of any assets held jointly or
liabilities incurred jointly.
The equity method is used for joint ventures and for investments over which TechnipFMC exercises a significant
influence on operational and financial policies. Unless otherwise indicated, such influence is deemed to exist for
investments in companies in which TechnipFMC’s ownership is between 20% and 50%.
Companies in which our ownership is less than 20% or which do not represent material investments (such as
dormant companies) are recorded under the “Other Non-Current Financial Assets” and classified as “Financial
Assets at Fair Value through Profit or Loss”.
The list of TechnipFMC’s related undertakings as of December 31, 2020 is provided in Note 32.
The main affiliates of TechnipFMC close their accounts as of December 31 and all consolidated companies apply
TechnipFMC’s accounting policies as set in the Global Accounting Manual.
All intercompany balances and transactions, as well as internal income and expenses, are fully eliminated.
Subsidiaries are consolidated as of the date of acquisition, being the date on which TechnipFMC obtains control,
and continue to be consolidated until the date control ceases.
b) Recognition of revenue from customer contracts
TechnipFMC accounts for revenue in accordance with IFRS 15 “Revenues from Contracts with Customers” (“IFRS
15”). Revenue is measured based on the consideration specified in a contract with a customer. TechnipFMC
recognizes revenue when or as it transfers control over a good or service to a customer.
Allocation of transaction price to performance obligations - A contract’s transaction price is allocated to each distinct
performance obligation and recognized as revenue, when, or as, the performance obligation is satisfied. To
determine the proper revenue recognition method, we evaluate whether two or more contracts should be combined
and accounted for as one single contract and whether the combined or single contract should be accounted for as
more than one performance obligation. This evaluation requires significant judgment; some of our contracts have a
single performance obligation as the promise to transfer the individual goods or services is not separately
identifiable from other promises in the contracts and, therefore, not distinct. For contracts with multiple performance
obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of
the standalone selling price of each distinct good or service in the contract.
Variable consideration - Due to the nature of the work required to be performed on many of our performance
obligations, the estimation of total revenue and cost at completion is complex, subject to many variables and
197 TechnipFMC
90
U.K. Annual Report and Accounts
requires significant judgment. It is common for our long-term contracts to contain variable considerations that can
either increase or decrease the transaction price. Variability in the transaction price arises primarily due to liquidated
damages. TechnipFMC considers its experience with similar transactions and expectations regarding the contract in
estimating the amount of variable consideration to which it will be entitled, and determining whether the estimated
variable consideration should be constrained. We include estimated amounts in the transaction price to the extent it
is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty
associated with the variable consideration is resolved. Our estimates of variable consideration are based largely on
an assessment of our anticipated performance and all information (historical, current and forecasted) that is
reasonably available to us.
Payment terms - Progress billings are generally issued upon completion of certain phases of the work as stipulated
in the contract. Payment terms may either be fixed, lump-sum or driven by time and materials (i.e., daily or hourly
rates, plus materials). Because typically the customer retains a small portion of the contract price until completion of
the contract, our contracts generally result in revenue recognized in excess of billings which we present as contract
assets on the statement of financial position. Amounts billed and due from our customers are classified as
receivables on the statement of financial position. The portion of the payments retained by the customer until final
contract settlement is not considered a significant financing component because the intent is to protect the
customer. For some contracts, we may be entitled to receive an advance payment. We recognize a liability for these
advance payments in excess of revenue recognized and present it as contract liabilities on the statement of
financial position. The advance payment typically is not considered a significant financing component because it is
used to meet working capital demands that can be higher in the early stages of a contract and to protect us from the
other party failing to adequately complete some or all of its obligations under the contract.
Warranty - Certain contracts include an assurance-type warranty clause, typically between 18 to 36 months, to
guarantee that the products comply with agreed specifications. A service-type warranty may also be provided to the
customer; in such a case, management allocates a portion of the transaction price to the warranty based on the
estimated stand-alone selling price of the service-type warranty.
Revenue recognized over time - Performance obligations are satisfied over time as work progresses or at a point in
time when performance obligations are fulfilled and control transfers to the customer. Revenue from products and
services transferred to customers over time accounted for approximately 86% of our revenue for the year ended
December 31, 2020. Typically, revenue is recognized over time using an input measure (e.g., costs incurred to date
relative to total estimated costs at completion) to measure progress.
Cost-to-cost method - For long-term contracts, because of control transferring over time, revenue is recognized
based on the extent of progress towards completion of the performance obligation. The cost-to-cost measure of
progress for contracts is generally used because it best depicts the transfer of control to the customer which occurs
as costs on the contracts incur. Under the cost-to-cost measure of progress, the extent of progress towards
completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the
performance obligation. Revenues, including estimated fees or profits, are recorded proportionally as costs are
incurred. Any expected losses on contracts in progress are charged to earnings, in total, in the period the losses are
identified.
Right to invoice practical expedient - The right-to-invoice practical expedient can be applied to a performance
obligation satisfied over time if we have a right to invoice the customer for an amount that corresponds directly with
the value transferred to the customer for our performance completed to date. When this practical expedient is used,
we do not estimate variable consideration at the inception of the contract to determine the transaction price or for
disclosure purposes. We have contracts which have payment terms dictated by daily or hourly rates where some
contracts may have mixed pricing terms which include a fixed fee portion. For contracts in which we charge the
customer a fixed rate based on the time or materials spent during the project that correspond to the value
transferred to the customer, we recognize revenue in the amount to which we have the right to invoice.
Contract modifications - Contracts are often modified to account for changes in contract specifications and
requirements. We consider contract modifications to exist when the modification either creates new, or changes the
existing, enforceable rights and obligations. Most of our contract modifications are for goods or services that are not
distinct from the existing contract due to the significant integration service provided in the context of the contract and
are accounted for as if they were part of that existing contract. The effect of a contract modification on the
transaction price and our measure of progress for the performance obligation to which it relates is recognized as an
adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis.
198 TechnipFMC
91
U.K. Annual Report and Accounts
c) Foreign currency transactions
Foreign currency transactions are translated into the functional currency at the exchange rate applicable on the
transaction date.
At the closing date, monetary assets and liabilities stated in foreign currencies are translated into the functional
currency at the exchange rate prevailing on that date. Resulting exchange gains or losses are directly recorded in
the statement of income, except exchange gains or losses on cash accounts eligible for future cash flow hedging
and for hedging on net foreign currency investments.
Translation of financial statements of subsidiaries in foreign currency
The income statements of foreign subsidiaries are translated into U.S. dollars at the average exchange rate
prevailing during the year. Statements of financial position are translated at the exchange rate at the closing date.
Differences arising in the translation of financial statements of foreign subsidiaries are recorded in other
comprehensive income (loss) as foreign currency translation reserve. Items that are recognized directly in equity are
translated using the historical rates. The functional currency of the foreign subsidiaries is most commonly the local
currency.
d) Business combinations
Business combinations are accounted for using the acquisition method of accounting. Under the acquisition method,
assets acquired and liabilities assumed are recorded at their respective fair values as of the acquisition date.
Determining the fair value of assets and liabilities involves significant judgment regarding methods and assumptions
used to calculate estimated fair values. The purchase price is allocated to the assets, acquired, including identifiable
intangible assets, and liabilities based on their estimated fair values. Any excess of the purchase price over the
estimated fair values of the net assets acquired is recorded as goodwill. Identifiable assets are depreciated over
their estimated useful lives.
Acquisition-related costs are expensed as incurred and included in the statement of income line item “Selling,
general and administrative expenses”.
Adjustments recorded for a business combination on the provisional values of assets, liabilities and contingent
liabilities are recognized as a retrospective change in goodwill when occurring within a 12-month period after the
acquisition date and resulting from facts or circumstances that existed as of the acquisition date. After this
measurement period ends, any change in valuation of assets, liabilities and contingent liabilities is accounted for in
profit and loss statement, with no impact on goodwill.
e) Merger transaction and integration costs
Merger transaction and integration costs are expensed as incurred and include fees and expenses as a result of
business combination transactions. Merger transaction and integration costs are included in the statement of
income line item “Merger transaction and integration costs”.
f) Separation costs
Separation costs are expensed as incurred and include fees and expenses associated with the separation
transaction. The costs include legal and tax advice expenses, consulting services and other separation activities
related costs. Separation costs are included in the statement of income line item “Separation costs”.
g) Segment information
Information by operating segment
Management’s determination of the reporting segments was made on the basis of strategic priorities within each
segment and the differences in the products and services TechnipFMC provides, which corresponds to the manner
in which TechnipFMC’s Chief Executive Officer, as a Chief Operating Decision Maker (“CODM”), reviews and
evaluates operating performance to make decisions about resources to be allocated to the segment. TechnipFMC
reports the results of operations in the following segments: Subsea, Technip Energies and Surface Technologies.
199 TechnipFMC
92
U.K. Annual Report and Accounts
TechnipFMC’s reportable segments are:
•
•
•
Subsea - manufactures and designs products and systems, performs engineering, procurement and project
management and provides services used by oil and gas companies involved in deepwater exploration and
production of crude oil and natural gas.
Technip Energies - designs and builds onshore facilities related to the production, treatment and transportation
of oil and gas; and designs, manufactures and installs fixed and floating platforms for the production and
processing of oil and gas reserves for companies in the oil and gas industry; and
Surface Technologies - designs and manufactures systems and provides services used by oil and gas
companies involved in land and offshore exploration and production of crude oil and natural gas; designs,
manufactures and supplies technologically advanced high pressure valves and fittings for oilfield service
companies; and also provides flowback and well testing services for exploration companies in the oil and gas
industry.
Total revenue by segment includes intersegment sales, which are made at prices approximating those that the
selling entity is able to obtain on external sales. Segment operating profit (loss) is defined as total segment revenue
less segment operating expenses. Income (loss) from equity method investments is included in calculation the
segment operating profit (loss). The following items have been excluded in calculating the segment operating profit
(loss): corporate staff expense, foreign exchange gains (losses), net interest income (expense) associated with
corporate debt facilities, income taxes, and other revenue and other expense, net.
Information by country
Operating activities and performances of TechnipFMC are reported on the basis of the following countries:
•
•
•
•
•
•
•
•
Russia;
United States;
Norway;
Brazil;
United Kingdom;
Angola;
Egypt; and
all other countries.
The items related to segment results disclosed by TechnipFMC in its geographical segment information are the
‘‘Revenue’’ and the ‘‘Property, Plant and Equipment’’.
Geographical areas are defined according to the following criteria: specific risks associated with activities performed
in a given area, similarity of economic and political framework, regulation of exchange control, and underlying
monetary risks. The geographical breakdown is based on the contract delivery within the specific country.
h) Earnings per share
As per IAS 33 “Earnings per Share” (“IAS 33”), Earnings Per Share (“EPS”) are based on the average number of
outstanding shares over the year, after deducting treasury shares.
Diluted earnings per share amounts are calculated by dividing the net profit of the year, restated if need be for the
after-tax financial cost of dilutive financial instruments, by the sum of the weighted average number of outstanding
shares, the weighted average number of share subscription options not yet exercised, the weighted average
number of performance shares granted calculated using the share purchase method, and the weighted average
number of shares of the convertible bonds and, if applicable, the effects of any other dilutive instrument.
In accordance with the share purchase method, only dilutive instruments are used in calculating EPS. Dilutive
instruments are those for which the option exercise price plus the future share-based compensation expense not yet
recognized is lower than the average share price during the EPS calculation period.
200 TechnipFMC
93
U.K. Annual Report and Accounts
i) Goodwill
Goodwill is measured at the acquisition date as the total of the fair value of consideration transferred, plus the
proportionate amount of any non-controlling interest, plus the fair value of any previously held equity interest in the
acquiree, if any, less the net recognized amount (generally at fair value) of the identifiable assets acquired and
liabilities assumed. If those amounts are less than the fair value of the net identifiable assets of the business
acquired, the difference is recognized directly in profit or loss as a bargain purchase. Acquisition-related costs are
expensed as incurred.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously
held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising
from such remeasurement are recognized in profit or loss.
Goodwill is allocated to a group of cash-generating units (“GCGU”) that are expected to benefit from the business
combination in which the goodwill arose and in all cases is at the operating segment level, which represents the
lowest level at which goodwill is monitored for internal management purposes.
Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
j) Property, plant and equipment
In compliance with IAS 16 “Property, Plant and Equipment” (“IAS 16”), an asset is recognized only if the cost can be
measured reliably and if future economic benefits are expected from its use.
Property, plant and equipment could be initially recognized at cost or at their fair value in case of business
combinations.
Depreciation is provided on a straight-line basis over the estimated useful lives of the assets. TechnipFMC uses
different depreciation periods for each of the significant components of a single property, plant and equipment asset
where the useful life of the component differs from that of the main asset. The following are the useful lives most
commonly applied by TechnipFMC:
•
•
Buildings 10 to 50 years
Vessels 10 to 30 years
• Machinery and Equipment 3 to 20 years
• Office Fixtures and Furniture 5 to 10 years
•
•
Vehicles 3 to 7 years
IT Equipment 3 to 5 years
If the residual value of an asset is material and can be measured, it is taken into account in calculating its
depreciable amount.
On a regular basis, TechnipFMC reviews the useful lives of its assets. That review is based on the effective use of
the assets.
As per IAS 16, dry-dock expenses are capitalized as a separate component of the principal asset. They are
depreciated over a period of three to five years.
Depreciation costs are recorded in the statement of income as a function of the fixed assets’ use, split between the
following line items: cost of sales, research and development costs, selling, general and administrative costs.
In accordance with IAS 36 “Impairment of Assets” (“IAS 36”), the carrying value of property, plant and equipment is
reviewed for impairment whenever internal or external events indicate that there may be impairment, in which case,
an impairment test is performed. Impairment indicators / triggering events are changes in circumstances that
indicate the carrying amount of property, plant and equipment may not be recoverable include but are not limited to:
•
A significant decrease in the market value of property, plant and equipment;
201 TechnipFMC
94
U.K. Annual Report and Accounts
•
•
•
•
•
A significant adverse change in the extent or manner in which property, plant and equipment is used or in its
physical condition;
A significant adverse change in legal factors or in the business climate that could affect the value of a property,
plant and equipment, including an adverse action or assessment by a regulator or the increase of risk-adjusted
discount rates;
An accumulation of costs significantly in excess of the amount originally expected for the acquisition or
construction of property, plant and equipment;
A current period operating or cash flow loss combined with a history of operating or cash flow losses or a
projection or forecast that demonstrates continuing losses associated with the use of property, plant and
equipment; and
A current expectation that property, plant and equipment will become idle, a significant decrease in utilization of
the asset, the operation to which the asset belongs will be discontinued or restructured, sold, or otherwise
disposed of significantly before the end of its previously estimated useful life.
As an example, indications of impairment loss used for vessels and analyzed together are mainly the asset
workload scheduling, the change in its daily invoicing rate, its age as well as the frequency of its dry-docking.
k) Leases
Lessee arrangements
TechnipFMC leases real estate, including land, buildings and warehouses, machinery/equipment, vessels, vehicles,
and various types of manufacturing and data processing equipment, from a lessee perspective. Leases of real
estate generally provide for payment of property taxes, insurance, and repairs by TechnipFMC.
TechnipFMC determines if an arrangement is a lease at inception by assessing whether an identified asset exists
and if we have the right to control the use of the identified asset. Leases are included in right-of-use assets, lease
liabilities (current), and lease liabilities (non-current) on the statement of financial position. Right-of-use assets
represent the right to use an underlying asset for the lease term and lease liabilities represent TechnipFMC’s
obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the
commencement date based on the present value of the remaining lease payments over the lease term. With the
exception of rare cases in which the implicit rate is readily determinable, TechnipFMC uses its incremental
borrowing rate based on the information available at the commencement date in determining the present value of
lease payments. The right-of-use assets also includes any lease prepayments made and excludes lease incentives
we received from the lessor. Depreciation of right-of-use assets is recognized on a straight line basis over the lease
term. Several of TechnipFMC’s leases provide for certain guarantees of residual value. TechnipFMC estimates and
includes in the determination of lease payments any amount probable of being owed under these residual value
guarantees. The leases do not contain any material restrictive covenants.
Lease terms within the lessee arrangements may include options to extend/renew or terminate the lease and/or
purchase the underlying asset when it is reasonably certain that we will exercise that option. TechnipFMC applies a
portfolio approach by asset class to determine lease term renewals. The leases within these portfolios are
categorized by asset class and have initial lease terms that vary depending on the asset class. The renewal terms
range from 60 days to 5 years for asset classes such as temporary residential housing, forklifts, vehicles, vessels,
office and IT equipment, and tool rentals, and up to 15 years or more for commercial real estate. Short-term leases
with an initial term of 12 months or less that do not include a purchase option are not recorded on the statement of
financial position. Lease costs for short-term leases are recognized on a straight-line basis over the lease term and
amounts related to short-term leases are disclosed within the consolidated financial statements.
TechnipFMC has variable lease payments, including adjustments to lease payments based on an index or rate
(such as the Consumer Price Index), fair value adjustments to lease payments, and common area maintenance,
real estate taxes, and insurance payments in triple-net real estate leases. Variable lease payments that depend on
an index or a rate (such as the Consumer Price Index or a market interest rate) are included when measuring initial
lease liability of the lease arrangements using the payments’ base rate or index. We remeasure the lease liability
when there is a change in future lease payments resulting from a change in such index or rate. Variable payments
that do not depend on an index or rate are recognized in profit or loss and are disclosed as ‘variable lease cost’ in
the period they are incurred.
202 TechnipFMC
95
U.K. Annual Report and Accounts
TechnipFMC adopted the practical expedient to not separate lease and non-lease components for all asset classes
except for vessels, which have significant non-lease components.
TechnipFMC currently subleases certain of its leased real estate and vessels to third parties. The subleases are
classified as operating leases by the sublessor.
Lessor arrangements
TechnipFMC leases real estate including land, buildings and warehouses, machinery/equipment, and vessels from a
lessor perspective. TechnipFMC determines if an arrangement is a lease at inception by assessing whether an
identified asset exists and if the customer has the right to control the use of the identified asset. TechnipFMC uses
the implicit rate for its lessor arrangements. TechnipFMC estimates the amount it expects to derive from the
underlying asset following the end of the lease term based on remaining economic life. The lessor arrangements
generally do not include any residual value guarantees. TechnipFMC recognizes lessee payments of lessor costs
such as taxes and insurance on a net basis when the lessee pays those costs directly to a third party or when the
amount paid by the lessee is not readily determinable.
l)
Intangible assets
Internally generated research and development costs
Research costs are expensed when incurred. In compliance with IAS 38 “Intangible Assets” (“IAS 38”), development
costs are capitalized if all of the following criteria are met:
•
•
•
•
•
•
the projects are clearly identified;
TechnipFMC is able to reliably measure expenditures incurred by each project during its development;
TechnipFMC is able to demonstrate the technical and industrial feasibility of the project;
TechnipFMC has the financial and technical resources available to achieve the project;
TechnipFMC can demonstrate its intention to complete, to use or to commercialize products resulting from the
project; and
TechnipFMC is able to demonstrate the existence of a market for the output of the intangible asset, or, if it is
used internally, the usefulness of the intangible asset.
Other intangible assets
Intangible assets other than goodwill (including those acquired in a business combination) are amortized on a
straight-line basis over their expected useful lives, as follows:
•
•
•
•
•
Acquired technology: 7 to 10 years
Backlog: as per the timeframe of the outstanding orders (usually less than 3 years)
Customer relationships: lower of 10 years or the terms of the customer contracts
Trade names; Licenses, Patents and Trademarks: lower of 20 years or the period set forth in the legal
conditions
Software (including software rights, proprietary IT tools, such as the E-procurement platform, or TechnipFMC’s
management applications): 3 to 7 years
In accordance with IAS 36, the carrying value of intangible assets is reviewed for impairment whenever internal or
external events indicate that there may be impairment, in which case, an impairment test is performed.
203 TechnipFMC
96
U.K. Annual Report and Accounts
m) Impairment of non-financial assets
Non-financial assets, property, plant and equipment, and identifiable intangible assets being amortized are reviewed
for impairment whenever events or changes in circumstances indicate the carrying amount of the asset or cash-
generating unit (“CGU”) may not be recoverable. If any indication exists, or when annual impairment testing for an
asset is required, TechnipFMC estimates the asset’s recoverable amount. An asset’s recoverable amount is the
higher of an asset’s or CGU’s fair value less costs of disposal and its value in use. The recoverable amount is
determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of
those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset,
including growth rates in revenues, costs, estimates of future expected changes in operating margins, tax rates and
cash expenditures. Future revenues are also adjusted to match changes in the business strategy. Factors that could
trigger a lower value in use estimate include sustained price declines of a CGU’s products and services, cost
increases, regulatory or political environment changes, changes in customer demand, and other changes in market
conditions, which may affect certain market participant assumptions used in the discounted future cash flow model.
In determining the fair value less costs of disposal, recent market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation model is used.
Goodwill is not amortized but it is tested for impairment annually as of October 31 or more frequently if events or
changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment
losses. Impairment of goodwill is determined by assessing the recoverable amount of each CGU (or group of
CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an
impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods.
n) Fair value measurement
TechnipFMC measures certain financial instruments (including derivatives) at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use.
TechnipFMC uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are
categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to
the fair value measurement as a whole:
•
•
•
Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active
markets;
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either
directly or indirectly; and
Level 3: Unobservable inputs (e.g., a reporting entity’s own data).
For assets and liabilities that are recognized in the consolidated financial statements at fair value on a recurring
basis, TechnipFMC determines whether transfers have occurred between levels in the hierarchy by re-assessing
categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the
end of each reporting period.
204 TechnipFMC
97
U.K. Annual Report and Accounts
o) Financial assets
Financial assets are categorized at initial recognition, as subsequently measured at either amortized cost, at fair
value through other comprehensive income (“FVOCI”), or at fair value through profit or loss (“FVTPL”).
For debt instruments this classification depends on the financial asset’s contractual cash flow characteristics as well
as business model according to which TechnipFMC is managing them. Financial assets are initially measured at
their fair values plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade
receivables that do not contain a significant financing component are measured at the transaction price determined
under IFRS 15.
A financial asset is classified and measured at amortized cost or fair value through other comprehensive income
(“OCI”) if and only if it gives rise to cash flows that are ‘solely payments of principal and interest (“SPPI”), i.e. the
asset meets the SPPI test criteria, which are assessed at an instrument level.
The business model applied by TechnipFMC determines whether the cash flows from the instruments will be
realized through collecting contractual cash flows, selling the financial assets, or both.
Transactions on financial assets that require delivery of assets within a time frame legally or contractually (regular
way trades) are recognized on the trade date, being the date when TechnipFMC commits to acquire or sell the
asset.
For purposes of subsequent measurement, financial assets are classified in three categories:
•
•
•
Financial assets at amortized cost
Financial assets at fair value through OCI, either with recycling or no recycling of cumulative gains and losses
Financial assets at fair value through profit or loss
TechnipFMC currently has no financial assets at fair value through OCI.
Financial assets at amortized cost
A financial asset is measured at amortized cost if both of the following conditions are met:
•
•
The financial asset is held within a business model with the objective to hold financial assets in order to collect
contractual cash flows; and
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding
Financial assets at amortized cost are subsequently measured using the effective interest rate and are also subject
to impairment. Gains and losses are recognized in profit or loss within the Other Income (Expense) line when the
asset is derecognized, impaired or contractual cash-flows change.
TechnipFMC’s financial assets at amortized cost include trade receivables, loans issued to third or related parties
and debt notes receivable presented under other non-current financial assets or other current assets, as applicable.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include:
•
•
•
Financial assets held for trading (i.e., those which are acquired for the purpose of selling or repurchasing in the
near term).
Financial assets designated upon initial recognition at fair value through profit or loss (in order to eliminate, or
significantly reduce, an accounting mismatch), or
Financial assets required to be measured at fair value (i.e. assets with cash flows that are not solely payments
of principal and interest, irrespective of the business model).
Derivatives, including separated embedded derivatives, are also classified as held for trading except for those
designated as effective hedging instruments. Financial assets at fair value through profit or loss are carried in the
205 TechnipFMC
98
U.K. Annual Report and Accounts
statement of financial position at fair value with net changes in fair value recognized in the statement of profit or
loss.
This category includes derivative instruments, listed and non-quoted equity investments which TechnipFMC had not
irrevocably elected to classify at fair value through OCI, as well as certain liquid, frequently traded debt instruments
such as treasury bills.
Dividends on listed equity investments are also recognized in the statement of profit or loss when the right of
payment has been established.
Impairment of financial assets
An allowance for Expected Credit Losses (“ECL”) is recognized for all debt instruments not held at fair value through
profit or loss. As opposed to the incurred loss approach, ECL is based on the difference between the carrying
amount (as per the contractual cash flows of the instruments) and all the cash flows that TechnipFMC expects to
receive, discounted at the original effective interest rate. The expected cash flows reflect the cash flows expected
from collateral or other credit enhancements that are part of the contractual terms and are not separately
recognized by TechnipFMC. The estimate of expected cash shortfalls on a collateralized financial instrument reflects
the amounts and timing of cash flows that are expected from foreclosure on the collateral less the costs of obtaining
and selling the collateral, irrespective of whether foreclosure is probable.
In case of instruments for which there has not been a significant increase in credit risk since initial recognition, ECL
is applied for default events that are possible within the next 12-months (a 12-month ECL). In case there has been a
significant increase in credit risk since initial recognition, a ECL is applied over the remaining life of the exposure
(lifetime ECL).
For trade receivables and contract assets TechnipFMC applies a simplified approach permitted by IFRS 9.
Therefore, TechnipFMC recognizes lifetime ECL at initial recognition and at each reporting date. TechnipFMC has
considered historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the
economic environment to determine lifetime expected losses.
For short-term notes receivable an expected credit loss is calculated assuming the maximum possible loss in the
event of a default (that is, the loan is fully drawn and no amount is recovered). Management established a
probability of default based on the counterparty’s credit risk as determined by external credit rating agencies and the
maximum loss given default (average recovery rate of sovereign bond issuers as published by credit rating
agencies). Based on these factors management determines the ECL for TechnipFMC’s short-term loans receivable.
For debt instruments recognized at amortized cost, as permitted by IFRS 9, TechnipFMC considers the low credit
risk simplification. Accordingly, TechnipFMC evaluates whether the debt instrument is considered to have low credit
risk at the reporting date, using available, reasonable and supportable information. TechnipFMC considers its
internal credit rating of the debt instrument, and also considers that there has been a significant increase in credit
risk when contractual payments are more than 30 days past due. For debt instruments that continue to have low
credit risk after the evaluation, TechnipFMC assumes that there is no significant increase in the credit risk of the
instrument.
ECL on such instruments is measured on a 12-month basis. However, when there has been a significant increase in
credit risk since origination, the allowance will be based on the lifetime ECL. TechnipFMC uses the ratings from
credit rating agencies both to determine whether the debt instrument has significantly increased in credit risk and to
estimate ECLs.
Based on customer experience, customer relationships and the nature of the long term projects, TechnipFMC
considers a financial asset in default when contractual payments are 30 days past due. Also, in cases when internal
or external information indicates that it is unlikely to receive the outstanding contractual cash flows before
considering any credit enhancements, TechnipFMC also considers a financial asset to be in default. A financial
asset is written off when there is no reasonable expectation of recovering the contractual cash flows.
206 TechnipFMC
99
U.K. Annual Report and Accounts
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
primarily derecognized when:
•
•
The rights to receive cash flows from the asset have expired; or
TechnipFMC has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement and
either (a) TechnipFMC has transferred substantially all the risks and rewards of the asset, or (b) TechnipFMC
has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred
control of the asset
When TechnipFMC has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has
neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the
asset, TechnipFMC continues to recognize the transferred asset to the extent of its continuing involvement. In that
case, TechnipFMC also recognizes an associated liability. The transferred asset and the associated liability are
measured on a basis that reflects the rights and obligations that TechnipFMC has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum amount of consideration that TechnipFMC could be required
to repay.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of
financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an
intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.
p) Derivative financial instruments and hedging
Initial recognition and subsequent measurement
TechnipFMC uses derivative financial instruments, such as forward contracts, swaps and options to hedge its risks,
in particular foreign exchange risks. Such derivative financial instruments are initially recognized at fair value on the
date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are
carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
Every derivative financial instrument held by TechnipFMC is aimed at hedging future cash inflows or outflows
against exchange rate fluctuations during the period of contract performance. Derivative instruments and in
particular forward exchange transactions are aimed at hedging future cash inflows or outflows against exchange
rate fluctuations in relation to awarded commercial contracts, or material, labor and overhead expenses.
To hedge its exposure to exchange rate fluctuations during the bid-period of construction contracts, TechnipFMC
occasionally enters into insurance contracts under which foreign currencies are exchanged at a specified rate and
at a specified future date only if the new contract is awarded. The premium that TechnipFMC pays to enter into such
an insurance contract is charged to the income statement when paid. If the commercial bid is not successful, the
insurance contract is automatically terminated without any additional cash settlements or penalties.
In some cases, TechnipFMC may enter into foreign currency options for some proposals during the bid-period.
These options are not designated for hedge accounting.
For the purpose of hedge accounting, instruments qualifying as hedges are classified as:
•
•
Fair value hedges when hedging the exposure to changes in the fair value of a recognized asset or liability or an
unrecognized firm commitment (TechnipFMC currently has no financial instruments designated for such hedging
relationship)
Cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a particular
risk associated with a recognized asset or liability or a highly probable forecast transaction or the foreign
currency risk in an unrecognized firm commitment
207 TechnipFMC
100
U.K. Annual Report and Accounts
•
Hedges of a net investment in a foreign operation (TechnipFMC currently has no financial instruments
designated for such hedging relationship)
Foreign currency treasury accounts designated for a contract and used to finance its future expenses in foreign
currencies may qualify as a foreign currency cash flow hedge. Cash as a hedging instrument is determined as cash
less accounts payables (including debts contracted on projects) plus accounts receivable (including loans
contracted on projects) on reimbursable, services and completed contracts at closing date.
An economic hedging may occasionally be obtained by offsetting cash inflows and outflows on a single contract
(“natural hedging”).
When implementing hedging transactions, each of TechnipFMC’s subsidiaries enters into forward exchange
contracts with banks or with Technip Eurocash SNC, the company that performs centralized treasury management
for TechnipFMC. However, under treasury center accounting only instruments backed by a third party outside of
TechnipFMC are designated as hedging instruments.
At the inception of a hedge relationship, TechnipFMC formally designates and documents the hedge relationship to
which it wishes to apply hedge accounting and the risk management objective and strategy for undertaking the
hedge.
The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being
hedged and how TechnipFMC will assess whether the hedging relationship meets the hedge effectiveness
requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A
hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:
•
•
•
There is ‘an economic relationship’ between the hedged item and the hedging instrument.
The effect of credit risk does not ‘dominate the value changes’ that result from that economic relationship.
The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item
that TechnipFMC actually hedges and the quantity of the hedging instrument that TechnipFMC actually uses to
hedge that quantity of hedged item.
Hedges that meet all the qualifying criteria for hedge accounting are accounted for as described below. The fair
value of derivative financial instruments is estimated on the basis of valuations provided by bank counterparties or
financial models commonly used in financial markets, using market data as of the statement of financial position
date.
A derivative instrument qualifies for hedge accounting (fair value hedge or cash flow hedge) when there is a formal
designation and documentation of the hedging relationship, and of the effectiveness of the hedge throughout the life
of the contract. A fair value hedge aims at reducing risks incurred by changes in the market value of some assets,
liabilities or firm commitments. A cash flow hedge aims at reducing risks incurred by variations in the value of future
cash flows that may impact net profit (loss) in the statement of income.
All derivative instruments are recorded and disclosed in the statement of financial position at fair value. Derivative
instruments not considered for hedge accounting are also classified as current assets and liabilities.
Changes in fair value are recognized as follows:
208 TechnipFMC
101
U.K. Annual Report and Accounts
•
•
•
regarding cash flow hedges, the effective portion of the gain or loss of the hedging instrument is recorded
directly in other comprehensive income, and the ineffective portion of the gain or loss on the hedging instrument
is recorded in the income statement. The amounts accumulated in other comprehensive income (“OCI”) are
accounted for depending on the nature of the underlying hedged transaction. If the hedged transaction
subsequently results in the recognition of a non-financial item, the amount accumulated and included in the
initial cost or other carrying amount of the hedged asset or liability. This is not a reclassification adjustment and
will not be recognized in OCI for the period. For any other cash flow hedges, the amount accumulated in OCI is
reclassified to profit or loss as a reclassification adjustment in the same period or periods during which the
hedged cash flows affect profit or loss. If cash flow hedge accounting is discontinued, the amount that has been
accumulated in OCI must remain in accumulated OCI if the hedged future cash flows are still expected to occur.
Otherwise, the amount will be immediately reclassified to profit or loss as a reclassification adjustment. After
discontinuation, once the hedged cash flow occurs, any amount remaining in accumulated OCI must be
accounted for depending on the nature of the underlying transaction as described above.
the changes in fair value of derivative financial instruments that qualify as fair value hedge are recorded as
financial income or expenses. The ineffective portion of the gain or loss is immediately recorded in the income
statement. The carrying amount of a hedged item is adjusted by the gain or loss on this hedged item which may
be allocated to the hedged risk and is recorded in the income statement; and
the changes in fair value of derivative financial instruments that do not qualify as hedging in accounting
standards are directly recorded in the income statement.
TechnipFMC designates only the spot element of forward contracts as a hedging instrument. The forward element
of contracts receiving hedge accounting is recognized in the income statement in the same line item as the
underlying hedged item.
See Note 27 for further details.
q)
Inventories
Inventories are recognized at the lower of cost and net realizable value with cost being principally determined on a
weighted-average cost basis.
Write-down of inventories are recorded when the net realizable value of inventories is lower than their net book
value.
r) Advances paid to suppliers
Advance payments made to suppliers under long-term contracts are shown under the “Advances Paid to Suppliers”
line item, on the asset side of the statement of financial position.
s) Trade receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of
business. Trade receivables are recognized initially at the amount of consideration that is unconditional unless they
contain significant financing components, when they are recognized at fair value. TechnipFMC holds the trade
receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at
amortized cost using the effective interest method.
Impairment of trade receivables
TechnipFMC applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables and contract assets. TechnipFMC’s trade receivables and
contracts assets constitute a homogeneous portfolio, therefore, to measure the expected credit losses, trade
receivables and contract assets have been grouped based on a selection of TechnipFMC’s entities that cover a
representative part of TechnipFMC’s combined trade receivables and contract assets at each period end. The
contract assets relate to unbilled work in progress and have substantially the same risk characteristics as the trade
receivables for the same types of contracts. TechnipFMC has therefore concluded that the expected loss rates for
trade receivables are a reasonable approximation of the loss rates for the contract assets.
209 TechnipFMC
102
U.K. Annual Report and Accounts
t) Cash and cash equivalents
Cash and cash equivalents consist of cash in bank and in hand, fixed term deposits and securities fulfilling the
following criteria: an original maturity of less than three months, highly liquid, a fixed exchange value and an
insignificant risk of loss of value. Securities are measured at their market value at year-end. Any change in fair value
is recorded in the statement of income.
u) Share-based compensation
The measurement of share-based compensation expense on restricted share awards is based on the market price
at the grant date and the number of shares awarded. TechnipFMC utilizes the Black-Scholes options pricing model
to measure the fair value of share options granted, excluding from such valuation the service and non-market
performance conditions (which are considered in the expected number of awards that will ultimately vest) but
including market conditions (Note 18). The share-based compensation expense for each award is recognized during
the vesting period (i.e. the period in which the service and, where applicable, the performance conditions are
fulfilled). The cumulative expense recognized for share-based employee compensation at each reporting date
reflects the already expired portion of the vesting period and TechnipFMC’s best estimate of the number of awards
that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement
in cumulative expense recognized as of the beginning and end of that period.
v) Provisions
Provisions are recognized if and only if the following criteria are simultaneously met:
•
•
•
TechnipFMC has an ongoing obligation (legal or constructive) as a result of a past event;
the settlement of the obligation will likely require an outflow of resources embodying economic benefits without
expected counterpart; and
the amount of the obligation can be reliably estimated: provisions are measured according to the risk
assessment or the exposed charge, based upon best-known elements.
Contingencies related to contracts
These provisions relate to claims and litigation on contracts.
Restructuring
Once a restructuring plan has been decided and the interested parties have been informed, the plan is scheduled
and valued. Restructuring provisions are recognized in accordance with IAS 37 “Provisions, Contingent Liabilities
and Contingent Assets” (“IAS 37”) and presented within Impairment, Restructuring and Other Expenses (Income) in
the Statements of Income.
w) Pensions and other long-term benefits
TechnipFMC sponsors various end-of-service and retirement employee benefit plans. Payments under such
employee benefit plans are made either at the date of the employee’s termination of service with TechnipFMC or at
a subsequent date or dates in accordance with the laws and practices of each country in which a participant
resides. Depending on the employing entity, the main defined benefit plans can be:
•
•
•
end-of-career benefits, to be paid at the retirement date;
deferred compensation, to be paid when an employee leaves TechnipFMC;
retirement benefits to be paid in the form of a pension.
TechnipFMC assesses its obligations in respect of employee pension plans and other long-term benefits such as
“jubilee benefits”, post-retirement medical benefits, special termination benefits and cash incentive plans. The plan
assets are recorded at fair value.
The defined benefits obligations are estimated by independent actuaries using the projected unit credit actuarial
valuation method as per IAS 19 “Employee Benefits” (“IAS 19”). The actuarial assumptions used to determine the
210 TechnipFMC
103
U.K. Annual Report and Accounts
obligations may vary depending on the country. The actuarial estimation is based on usual parameters such as
future wage and salary increases, life expectancy, staff turnover rate and inflation rate.
The defined benefit liability equals the present value of the defined benefit obligation after deducting the plan
assets. Present value of the defined benefit obligation is determined using present value of future cash
disbursements based on interest rates of corporate bonds, in the currency used for benefit payment, and whose
term is equal to the average expected life of the defined benefit plan.
The actuarial gains and losses resulting from adjustments related to experience and changes in actuarial
assumptions are recorded in other comprehensive income. See Note 20 for further details.
x) Deferred income tax
Deferred income taxes are recognized in accordance with IAS 12 “Income Taxes” (“IAS 12”), measured at the tax
rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates
(and tax laws) that have been enacted or substantively enacted by the end of the reporting period on all temporary
differences at the closing date, between the tax bases of assets and liabilities and their carrying amounts for each
TechnipFMC’s company.
Deferred income taxes are reviewed at each closing date to take into account the effect of any changes in tax law
and in the prospects of recovery.
Deferred income tax assets are recognized for all deductible temporary differences, unused tax credits carry-
forwards and unused tax losses carry-forwards, to the extent that it is probable that taxable profit will be available.
To properly estimate the existence of future taxable income on which deferred tax assets could be allocated, the
following items are taken into account:
•
•
•
•
existence of temporary differences which will cause taxation in the future;
forecasts of taxable results;
analysis of the past taxable results; and
existence of significant and non-recurring income and expenses, included in the past tax results, which
should not repeat in the future.
Deferred income tax liabilities are recognized for all taxable temporary differences, except restrictively enumerated
circumstances, in accordance with the provisions of IAS 12.
Tax assets and liabilities are not discounted.
y) Financial liabilities
Financial liabilities are classified, at initial recognition, as:
•
•
•
•
financial liabilities at fair value through profit or loss (i.e., instruments held for trading including derivatives not
designated as hedging instruments and also instruments designated upon initial recognition as of fair value
through profit or loss),
financial debt,
trade and other payables, or
derivatives designated as hedging instruments in an effective hedge.
Financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs.
Financial liabilities at fair value through profit or loss
Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near
term.
211 TechnipFMC
104
U.K. Annual Report and Accounts
Gains or losses on liabilities held for trading are recognized in the statement of profit or loss.
TechnipFMC has not elected to designate any financial liability as of fair value through profit or loss.
Financial debts (current and non-current)
Current and non-current financial debts include bond loans, commercial paper programs and other borrowings. After
initial recognition, debt is measured at amortized cost using the effective interest rate method. Transaction costs,
such as issuance fees and redemption premium are included in the cost of debt on the liability side of the statement
of financial position, as an adjustment to the nominal amount of the debt. The difference between the initial debt and
redemption at maturity is amortized at the effective interest rate.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying
amounts is recognized in the statement of income.
z) Non-current assets held for sale or distribution to equity holders
TechnipFMC classifies non-current assets and disposal groups as held for sale/or distribution to equity holders of
the parent if their carrying amounts will be recovered principally through a sale transaction or a distribution rather
than through continuing use. Such non-current assets and disposal groups classified as held for sale/or distribution
are measured at the lower of their carrying amount and fair value less costs to sell or distribute. Costs to sell/or
distribute are the incremental costs directly attributable to the sale or distribution, excluding finance costs and
income tax expense.
The criteria for held for sale/or distribution classification is regarded as met only when the sale/or distribution is
highly probable and the asset or disposal group is available for immediate sale/ or distribution in its present
condition. Actions required to complete the sale/or distribution should indicate that it is unlikely that significant
changes to the sale/or distribution will be made or that the decision to sale/or distribute will be withdrawn.
Management must be committed to the sale/or distribution expected within one year from the date of the
classification.
aa) Cash dividend and non-cash distribution to equity holders
TechnipFMC recognizes a liability to make cash or non-cash distributions to its equity holders when the distribution
is approved by its shareholders. A corresponding amount is recognized directly in the statement of equity.
ab) Current/ non-current distinction
The distinction between current assets and liabilities, and non-current assets and liabilities is based on the
operating cycle of contracts. If related to contracts, assets and liabilities are classified as “current”; if not related to
contracts, assets and liabilities are classified as “current” if their maturity is less than 12 months or “non-current” if
their maturity exceeds 12 months.
1.5. Use of critical accounting estimates, judgments and assumptions
The preparation of the consolidated financial statements requires the use of critical accounting estimates,
judgments and assumptions and may affect the assessment and disclosure of assets and liabilities at the date of
the financial statements, as well as the income and the reported expenses regarding this financial year. Estimates
may be revised if the circumstances and the assumptions on which they were based change, if new information
becomes available, or as a result of greater experience. Consequently, the actual result from these operations may
differ from these estimates.
Other disclosures relating to TechnipFMC’s exposure to risks and uncertainties includes:
•
Capital management (Note 17)
• Market related exposures (Note 30)
212 TechnipFMC
105
U.K. Annual Report and Accounts
a) Judgments
Areas of judgment that have the most significant effect on the amounts recognized in the consolidated financial
statements relate to the separation transaction and revenue recognition.
Separation transaction
On August 26, 2019, we announced our intention to separate into two diversified pure-play market leaders –
TechnipFMC, focused on subsea and surface hydrocarbon production, and Technip Energies, focused on
downstream engineering, procurement, and construction project execution. Due to the COVID-19 pandemic, a
significant decline in commodity prices, and the heightened volatility in global equity markets, on March 15, 2020,
we announced the postponement of the completion of the transaction until the markets sufficiently recover. On
January 7, 2021, we announced the resumption of activity toward completion of the transaction based on increased
clarity in the market outlook and our demonstrated ability to successfully execute projects.
As discussed above, on February 16, 2021, we completed the previously announced separation of the Technip
Energies business segment. The transaction was structured as a spin-off, which occurred by way of a pro rata
dividend (the “Distribution”) to our shareholders of 50.1 percent of the outstanding shares in Technip Energies N.V.
Each of our shareholders received one ordinary share of Technip Energies N.V. for every five ordinary shares of
TechnipFMC held at 5:00 p.m., New York City time on the record date, February 17, 2021. Technip Energies N.V. is
now an independent public company and its shares trade under the ticker symbol “TE” on the Euronext Paris stock
exchange.
Under IFRS, the reclassification of assets (and any associated liabilities) as 'held for distribution' can only be
triggered once the assets are available for distribution in their present condition and the distribution is 'highly
probable'. The highly probable criteria is met when the distribution is expected to be completed within a year. As of
December 31, 2020, we had no such expectation as the Spin-off was dependent upon on new capital structure
negotiations and related new financing in connection with the Spin-off. This only came into effect on January 29,
2021, upon completion by TechnipFMC of its private offering of $1.0 billion in aggregate principal amount of senior
unsecured notes due 2026.
In connection with the Spin-off, as of December 31, 2020 we were also in a process of completing a separation of
the Technip Energies business from the other TechnipFMC operations. This involved separation of activities in
relation to operational processes, information technologies and support functions, such as finance, human
resources and the separation of certain legal entities, which host several business activities.
Revenue recognition
The majority of our revenue is derived from long-term contracts that can span several years. TechnipFMC accounts
for revenue in accordance with IFRS 15. The unit of account in IFRS 15 is a performance obligation. A contract’s
transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the
performance obligation is satisfied. The performance obligations are satisfied over time as work progresses or at a
point in time.
A significant portion of our total revenue recognized over time relates to our Technip Energies and Subsea
segments, primarily for the entire range of onshore facilities, fixed and floating offshore oil and gas facilities, and
subsea exploration and production equipment projects that involve the design, engineering, manufacturing,
construction, and assembly of complex, customer-specific systems. Because of control transferring over time,
revenue is recognized based on the extent of progress towards completion of the performance obligation. The
selection of the method to measure progress towards completion requires judgment and is based on the nature of
the products or services to be provided. We generally use the cost-to-cost measure of progress for our contracts
because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts. Under
the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of
costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues, including
estimated fees or profits, are recorded proportionally as costs are incurred.
213 TechnipFMC
106
U.K. Annual Report and Accounts
Due to the nature of the work required to be performed on many of performance obligations, the estimation of total
revenue and cost at completion is complex, subject to many variables, and requires significant judgment. It is
common for the long-term contracts to contain award fees, incentive fees, or other provisions that can either
increase or decrease the transaction price. We include estimated amounts in the transaction price when we believe
we have an enforceable right to the modification, the amount can be estimated reliably, and its realization is
probable. The estimated amounts are included in the transaction price to the extent it is probable that a significant
reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable
consideration is resolved.
TechnipFMC executes contracts with its customers that clearly describe the equipment, systems, and/or services.
After analyzing the drawings and specifications of the contract requirements, the project engineers estimate total
contract costs based on their experience with similar projects and then adjust these estimates for specific risks
associated with each project, such as technical risks associated with a new design. Costs associated with specific
risks are estimated by assessing the probability that conditions arising from these specific risks will affect the total
cost to complete the project. After work on a project begins, assumptions that form the basis for the calculation of
total project cost are examined on a regular basis and the estimates are updated to reflect the most current
information and management’s best judgment.
Adjustments to estimates of contract revenue, total contract cost, or extent of progress toward completion are often
required as work progresses under the contract and as experience is gained, even though the scope of work
required under the contract may not change. The nature of accounting for long-term contracts is such that
refinements of the estimating process for changing conditions and new developments are continuous and
characteristic of the process. Consequently, the amount of revenue recognized over time is sensitive to changes in
estimates of total contract costs. There are many factors, including, but not limited to, the ability to properly execute
the engineering and design phases consistent with customers’ expectations, the availability and costs of labor and
material resources, productivity, and weather, all of which can affect the accuracy of cost estimates, and ultimately,
the future profitability.
Our operating loss for the year ended December 31, 2020 was positively impacted by approximately $457.9 million,
as a result of changes in contract estimates related to projects that were in progress as of December 31, 2019.
During the year ended December 31, 2020, we recognized changes in our estimates that had an impact on our
margin in the amounts of $519.5 million, $(56.5) million and $(5.1) million in our Technip Energies, Subsea and
Surface Technologies segments, respectively. The changes in contract estimates are attributed to better than
expected performance throughout our execution of our projects.
Our operating loss for the year ended December 31, 2019 was positively impacted by approximately $1,114.3
million, as a result of changes in contract estimates related to projects that were in progress as of December 31,
2018. During the year ended December 31, 2019, we recognized changes in our estimates that had an impact on
our margin in the amounts of $797.2 million, $324.7 million and $(7.6) million in our Technip Energies, Subsea and
Surface technologies segments, respectively. The changes in contract estimates are attributed to better than
expected performance throughout our execution of our projects.
See Note 1 for further details.
b) Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date,
that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the
next financial year relate to income taxes, pension accounting, determination of fair value in business combinations,
impairment of non-financial assets and estimates related to fair value for purposes of assessing goodwill for
impairment and are described below.
Income taxes
Our income tax expense, deferred tax assets and liabilities, and reserves for uncertain tax positions reflect
management’s best assessment of estimated future taxes to be paid. We are subject to income taxes in the United
Kingdom and numerous foreign jurisdictions. Significant judgments and estimates are required in determining the
consolidated income tax expense.
In determining the current income tax provision, we assess temporary differences resulting from differing treatments
of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are
214 TechnipFMC
107
U.K. Annual Report and Accounts
recorded in our consolidated balance sheets. When we maintain deferred tax assets, we must assess the likelihood
that these assets will be recovered through adjustments to future taxable income. To the extent we believe recovery
is not probable, no deferred tax asset is recognized. We believe this assessment is a critical accounting estimate
because it is highly susceptible to change from period to period, requires management to make assumptions about
our future income, and can be potentially material to the results of operations.
Forecasting future income requires us to use a significant amount of judgment. In estimating future income, we use
our internal operating budgets and long-range planning projections. We develop our budgets and long-range
projections based on recent results, trends, economic and industry forecasts influencing the segments’
performance, our backlog, planned timing of new product launches and customer sales commitments. Significant
changes in our judgment related to the expected realizability of a deferred tax asset results in an adjustment to the
recorded balance of that asset.
The calculation of income tax expense involves dealing with uncertainties in the application of complex tax laws and
regulations in numerous jurisdictions in which we operate. We recognize tax benefits related to uncertain tax
positions when, in our judgment, it is more likely than not that such positions will be sustained on examination,
including resolutions of any related appeals or litigation, based on the technical merits. We adjust our liabilities for
uncertain tax positions when our judgment changes as a result of new information previously unavailable. Due to
the complexity of some of these uncertainties, their ultimate resolution may result in payments that are materially
different from our current estimates. Any such differences will be reflected as adjustments to income tax expense in
the periods in which they are determined.
See Note 7 for further details.
Accounting for pension and other post-retirement benefit plans
Pension and other post-retirement (health care and life insurance) obligations are described in Note 20 to the
consolidated financial statements.
The determination of the projected benefit obligations of TechnipFMC’s pension and other post-retirement benefit
plans are important to the recorded amounts of such obligations on our consolidated statement of financial position
and to the amount of pension expense in our consolidated statements of income. In order to measure the
obligations and expense associated with our pension benefits, management must make a variety of estimates,
including discount rates used to value certain liabilities, rate of compensation increase, employee turnover rates,
retirement rates, mortality rates and other factors. Management updates these estimates on an annual basis or
more frequently upon the occurrence of significant events. These accounting estimates bear the risk of change due
to the uncertainty and difficulty in estimating these measures. Different estimates used by management could result
in recognition of different amounts of expense over different periods of time.
The discount rate affects the interest cost component of net periodic pension cost and the calculation of the
projected benefit obligation. The discount rate is based on rates at which the pension benefit obligation could be
effectively settled on a present value basis. Discount rates are derived by identifying a theoretical settlement
portfolio of long-term, high quality (“AA” rated) corporate bonds at the determination date that is sufficient to provide
for the projected pension benefit payments. An application of a determined discount rate results in a discounted
value of the pension benefit payments that equate to the market value of the selected bonds. The resulting discount
rate is reflective of both the current interest rate environment and the pension’s distinct liability characteristics.
Significant changes in the discount rate, such as those caused by changes in the yield curve, the mix of bonds
available in the market, the duration of selected bonds and the timing of expected benefit payments, may result in
volatility in pension expense and pension liabilities.
Due to the specialized and statistical nature of these calculations which attempt to anticipate future events,
management engages third-party specialists to assist evaluating the assumptions as well as appropriately
measuring the costs and obligations associated with these pension benefits.
The actuarial assumptions and estimates made by management in determining TechnipFMC’s pension benefit
obligations may materially differ from actual results as a result of changing market and economic conditions and
changes in plan participant assumptions. While management believes the assumptions and estimates used are
appropriate, differences in actual experience or changes in plan participant assumptions may materially affect the
financial position or results of operations.
215 TechnipFMC
108
U.K. Annual Report and Accounts
Impairment of non-financial assets
Property, plant and equipment, including vessels, identifiable intangible assets being amortized and capitalized
software costs are reviewed for impairment whenever events or changes in circumstances indicate the carrying
amount of the non-financial assets may not be recoverable. The carrying amount of a non-financial asset is not
recoverable if it exceeds the recoverable amount determined as the higher of and asset’s fair vale less costs of
disposal and its value in use. If it is determined that an impairment loss has occurred, the loss is measured as the
amount by which the carrying amount of the non-financial asset exceeds its recoverable amount. The determination
of future value in use as well as the estimated fair value of non-financial assets involves significant estimates on the
part of management. Because there usually is a lack of quoted market prices for non-financial assets, fair value of
impaired assets is generally determined based on the present values of expected future cash flows using discount
rates believed to be consistent with those used by principal market participants, or based on a multiple of operating
cash flow validated with historical market transactions of similar assets where possible. To assess the fair value of
our vessels we utilize external broker valuation reports.
The expected future cash flows used for impairment reviews and related fair value calculations are based on
judgmental assessments of future productivity of the asset, operating costs, capital decisions and possible
additional impacts from emerging risks such as those related to climate change and the transition to a lower carbon
economy and pandemics. Oil and gas price assumptions have a significant impact on impairment assessments of
non-financial assets and are inherently uncertain. Furthermore, the estimation of future oil and gas prices is subject
to increased uncertainty, given climate change and the global energy transition. If future market conditions
deteriorate beyond the current expectations and assumptions, impairments of non-financial assets may be identified
if management concludes that the carrying amounts are no longer recoverable.
See Note 10 for further details.
Impairment of goodwill
Goodwill represents the excess of cost over the fair market value of net assets acquired in business combinations.
Goodwill is not subject to amortization but is tested for impairment at the level of GCGUs the goodwill has been
allocated to, on an annual basis, or more frequently if impairment indicators arise. TechnipFMC established
October 31 as the date of the annual test for impairment of goodwill. TechnipFMC identifies a potential impairment
by comparing the recoverable amount of the applicable GCGU to its net book value, including goodwill. If the net
book value exceeds the recoverable amount of the GCGU, management measures the impairment by comparing
the carrying value of the GCGU to its recoverable amount. GCGU with goodwill are tested for impairment using a
quantitative impairment test.
When using the quantitative impairment test, determining the fair value of a GCGU is judgmental in nature and
involves the use of significant estimates and assumptions. TechnipFMC estimates the fair value of its GCGUs using
a discounted future cash flow model. The majority of the estimates and assumptions used in a discounted future
cash flow model involve unobservable inputs reflecting management’s own assumptions about the assumptions
market participants would use in estimating the fair value of a business. These estimates and assumptions include
revenue growth rates and operating margins used to calculate projected future cash flows, discount rates and future
economic and market conditions. The transition to a lower carbon global economy may potentially lead to a lower oil
and gas price scenario in the future due to declining demand. Management took into account considerations of
uncertainty over the pace of the transition to lower-carbon supply and demand and the social, political and
environmental actions that will be taken to meet the goals of the Paris climate change agreement when determining
their future revenue growth rates assumptions and revised the future revenue growth rates assumptions downwards
when compared with the prior year assumptions. The estimates are based upon assumptions believed to be
reasonable, but which are inherently uncertain and unpredictable and do not reflect unanticipated events and
circumstances that may occur.
A lower recoverable amount estimate in the future for any of GCGUs could result in goodwill impairments. Factors
that could trigger a lower recoverable amount estimate include sustained price declines of the GCGU’s products
and services, cost increases, regulatory or political environment changes, changes in customer demand, and other
changes in market conditions, which may affect certain market participant assumptions used in the discounted
future cash flow model based on internal forecasts of revenues and expenses over a specified period plus a
terminal value (the income approach). When assessing triggering factors, on a quarterly and also on an annual
basis, TechnipFMC also analyzes the relationship between its market capitalization and its consolidated book value
of equity.
216 TechnipFMC
109
U.K. Annual Report and Accounts
The income approach estimates recoverable amount by discounting each GCGU’s estimated future cash flows
using a weighted-average cost of capital that reflects current market conditions and the risk profile of the GCGU. To
arrive at the future cash flows, management uses estimates of economic and market assumptions, including growth
rates in revenues, costs, estimates of future expected changes in operating margins, tax rates and cash
expenditures. Future revenues are also adjusted to match changes in TechnipFMC’s business strategy.
Management believes this approach is an appropriate valuation method. Under the market multiple approach,
management determines the estimated fair value of each of GCGUs by applying transaction multiples to each
GCGU’s projected EBITDA and then averaging that estimate with similar historical calculations using either a one,
two or three year average. The GCGU valuations were determined primarily by utilizing the income approach, with a
lesser weighting attributed the market multiple approach.
See Note 11 for further details.
NOTE 2. BUSINESS COMBINATIONS AND OTHER TRANSACTIONS
2.1 Business combinations
Year ended December 31, 2020 - Significant business combinations and other changes
TechnipFMC did not have any significant acquisitions during the year ended December 31, 2020.
Year ended December 31, 2019 - Significant business combinations and other changes
On December 30, 2019, we completed the acquisition of the remaining 50% interest in Technip Odebrecht PLSV CV
(“TOP CV”). TOP CV was formed as a joint venture between Technip SA and Ocyan SA to provide pipeline
installation ships to Petroleo Brasileiro SA (“Petrobras”) for their work in oil and gas fields offshore Brazil with results
reported in our Subsea segment using the equity method of accounting. In connection with the acquisition, we
acquired $391.0 million in assets, including two vessels valued at $335.2 million. In addition, we assumed $239.9
million of liabilities, including a $203.1 million term loan. As a result of the acquisition, we recorded a gain of $59.5
million, the net results of the impairment charge of $23.8 million included within Income from Equity Affiliates and a
bargain purchase gain of $83.3 million included within Impairment, Restructuring and Other Expenses. The bargain
purchase gain, caused by the distressed sale, represents the excess fair value of the net assets acquired over the
consideration exchanged. No significant adjustments were made to the provisional fair values of the identifiable
assets and liabilities acquired when those values were finalized.
2.2 Subsidiaries, joint venture undertakings and equity affiliates
TechnipFMC’s subsidiaries, joint venture undertakings and equity affiliates as of December 31, 2020 are listed in
Note 32. All subsidiaries are fully consolidated in the financial statements. Ownership interests noted in the table
reflect holdings of ordinary shares.
All consolidated companies close their accounts as of December 31 except (i) Technip India which closes their
statutory accounts as of March 31st, (ii) Technipetrol AG which closes their statutory accounts as of November 30th
and (iii) Technip South Africa (Pty.) Ltd which closes their statutory accounts as of June 30th. However, these
entities perform an interim account closing as of December 31 for the purpose of TechnipFMC consolidation.
217 TechnipFMC
110
U.K. Annual Report and Accounts
NOTE 3. SEGMENT INFORMATION
3.1 Information by business segment
Segment revenue and segment operating profit (loss)
(In millions)
Segment revenue
Subsea
Technip Energies
Surface Technologies
Total revenue
Segment operating profit (loss)
Subsea
Technip Energies
Surface Technologies
Total segment operating loss
Corporate items
Impairment, restructuring and other expenses
Separation costs
Merger transaction costs
Legal expenses
Other corporate expense (a)
Corporate expense
Interest income
Interest expense
Foreign exchange losses
Total corporate items
Loss before income taxes (b)
Year Ended December 31,
2019 (c)
2020
$
5,471.4 $
6,520.0
1,066.0
5,419.9
6,458.9
1,547.4
$
13,057.4 $
13,426.2
$
(2,890.5) $
(1,412.1)
673.1
(284.5)
966.0
(661.4)
(2,501.9)
(1,107.5)
(10.0)
(39.5)
—
—
(125.2)
(174.7)
56.6
(386.8)
(53.3)
(558.2)
(17.4)
(72.1)
(31.2)
(54.6)
(227.3)
(402.6)
115.8
(614.3)
(167.2)
(1,068.3)
$
(3,060.1) $
(2,175.8)
(a) Other corporate expenses primarily include corporate staff expenses, stock-based compensation expenses, and other employee benefits.
(b)
Includes amounts attributable to non-controlling interests.
(c) As discussed in Note 1, our reportable segments 2019 comparative information have been restated and Technip Energies operating
segment includes $86.6 million and $103.5 million of segment revenue attributable to Loading Systems and Cybernetix businesses,
respectively. Subsequent to the Spin-off, we operate under two reportable segments: Subsea and Surface Technologies.
During the years ended December 31, 2020 and 2019, revenue from Arctic LNG and JSC Yamal LNG, respectively,
exceeded 10% of TechnipFMC’s consolidated revenue.
Segment assets
(In millions)
Segment assets
Subsea
Technip Energies
Surface Technologies
Total segment assets
Corporate (a)
Total assets
December 31,
2020
December 31,
2019
$
7,030.6 $
10,837.3
5,052.0
1,612.1
13,694.7
6,113.1
4,446.7
2,249.8
17,533.8
6,041.4
$
19,807.8 $
23,575.2
(a) Corporate includes cash, deferred income tax balances, property, plant and equipment, intercompany eliminations not associated with a
specific segment, pension assets and the fair value of derivative financial instruments.
218 TechnipFMC
111
U.K. Annual Report and Accounts
Other business segment information:
(In millions)
Subsea
Technip Energies
Surface Technologies
Corporate
Total
3.2 Information by geography
Capital Expenditures
Depreciation and
Amortization
Research and
Development Expense
Year Ended December 31,
Year Ended December 31,
Year Ended December 31,
2020
2019
2020
2019
2020
2019
$
213.6 $
287.7 $
451.5 $
574.5 $
66.5 $
134.4
13.0
38.5
26.7
22.6
96.6
47.5
89.0
173.6
36.3
82.4
145.7
35.9
44.5
8.8
—
13.2
15.3
—
$
291.8 $
454.4 $
750.4 $
838.5 $
119.8 $
162.9
Sales by geography were identified based on the location where TechnipFMC’s products and services were
delivered.
(In millions)
Revenue
Russia
United States
Norway
Brazil
United Kingdom
Angola
Egypt
Mozambique
India
Senegal
Vietnam
Israel
Guyana
Australia
Singapore
Indonesia
Malaysia
France
China
United Arab Emirates
All other countries
Total revenue
Property, plant and equipment, net by geography is as follows:
(In millions)
United Kingdom
United States
Netherlands
Norway
Brazil
All other countries
Year Ended December 31,
2020
2019
$
2,451.5 $
2,141.4
1,393.5
698.8
513.8
488.5
445.9
391.4
386.4
353.0
340.7
333.6
330.1
320.8
312.2
286.9
281.7
186.9
151.4
147.9
2,378.0
1,931.2
1,371.1
1,100.1
540.8
447.8
177.6
166.1
518.0
176.5
72.1
757.0
7.2
372.8
64.9
237.6
283.8
92.8
272.9
327.2
1,101.0
2,130.7
$
13,057.4 $
13,426.2
December 31,
2020
2019
$
936.2 $
467.5
402.5
312.2
260.0
466.8
957.1
558.1
474.9
333.0
313.2
519.1
Total property, plant and equipment, net
$
2,845.2 $
3,155.4
219 TechnipFMC
112
U.K. Annual Report and Accounts
NOTE 4. LEASES
Lessee arrangements
The following table shows the summary of amounts relating to leases recognized in the statement of income:
(In millions)
Depreciation of right-of-use assets
Interest expense on lease liabilities
Short-term lease costs
Sublease income
Year Ended December 31,
2020
2019
304.3 $
329.2
35.1
13.7
7.3 $
44.4
20.8
8.9
$
$
The following table shows the carrying amounts and depreciation charge of right-of-use assets by types of assets:
(In millions)
Real estate
Vessels
Machinery and equipment
IT equipment
Office furniture and equipment
Total
Depreciation
Year Ended December 31,
Net Book Value
December 31,
2020
2019
2020
2019
$
205.4 $
189.3 $
891.4 $
85.7
9.5
2.3
1.4
129.9
5.6
2.7
1.7
77.5
14.7
3.7
2.0
743.5
101.2
13.2
5.5
1.5
$
304.3 $
329.2 $
989.3 $
864.9
Additions to the right-of-use assets during the year ended December 31, 2020 were $535.9 million.
The statement of financial position shows the following amounts relating to lease liabilities:
(In millions except for discount rate)
Current lease liabilities
Non-current lease liabilities
Total lease liabilities
December 31,
2020
2019
$
$
273.9
$
881.0
1,154.9
$
275.1
681.7
956.8
Weighted average discount rate
5.1 %
4.4 %
The following table shows the supplemental cash outflow information related to leases:
(In millions)
Payments for the principal portion of lease liabilities
Cash paid for interest on lease liabilities
Right-of-use assets obtained in exchange for lease obligations
Year Ended December 31,
2020
2019
$
$
277.5 $
36.7
535.9 $
335.8
48.9
125.4
220 TechnipFMC
113
U.K. Annual Report and Accounts
The following table shows the summary of the maturity of lease liabilities:
(In millions)
Less than a year
Between 1 and 2 years
Between 2 and 3 years
Between 3 and 4 years
Between 4 and 5 years
Thereafter
Total lease payments
Less: Imputed interest (1)
Total lease liabilities (2)
December 31,
2020
2019
$
279.4 $
191.5
137.1
117.6
79.2
471.4
1,276.2
121.3
$
1,154.9 $
305.3
184.6
128.0
101.9
89.7
330.4
1,139.9
183.1
956.8
(1) Calculated using the interest rate for each lease.
(2) Includes the current portion of $273.9 million and $275.1 million for lease liabilities as of December 31, 2020 and 2019, respectively.
In December 2020, TechnipFMC sold its leased office building at Gremp Campus in Houston, Texas on behalf of the
existing lessor to Oak Street Real Estate Capital, LLC (“New Lessor”). TechnipFMC also sold the land underneath
Gremp Campus which the Company owns to New Lessor. TechnipFMC concurrently executed a new lease
agreement for both land and the office building (collectively, “Gremp Campus Properties”) with New Lessor.
The new lease agreement of Gremp Campus Properties commenced on December 11, 2020 and the initial term
ends on December 31, 2042. TechnipFMC has four renewal periods of ten years each after the expiration of initial
term. At inception of the new lease agreement, TechnipFMC did not consider any renewal period as probable of
being exercised.
TechnipFMC paid net cash of $1.8 million in connection with the new lease agreement, and recognized a loss of
$3.1 million from derecognition of the existing lease. There was no gain or loss from sale of the land at Gremp
Campus.
Lessor arrangements
The total lease revenue from lessor arrangements was $145.2 million and $273.9 million for the year ended
December 31, 2020 and 2019, respectively.
The following table is a summary with the maturity analysis of operating lease payments, showing the undiscounted
lease payments to be received on an annual basis for a minimum of each of the first five years and a total of the
amounts for the remaining years:
(In millions)
Less than a year
Between 1 and 2 years
Between 2 and 3 years
Between 3 and 4 years
Thereafter
December 31,
2020
2019
$
21.4 $
14.3
1.0
—
—
Total undiscounted cash flows
$
36.7 $
29.4
17.5
14.3
1.0
—
62.2
221 TechnipFMC
114
U.K. Annual Report and Accounts
NOTE 5. REVENUE
5.1 Revenue recognition by segment
The majority of our revenue is from long-term contracts associated with designing and manufacturing products and
systems and providing services to customers involved in exploration and production of crude oil and natural gas.
The following is a description of principal activities separated by reportable segments from which TechnipFMC
generates its revenue.
Subsea - Our Subsea segment manufactures and designs products and systems, performs engineering,
procurement and project management and provides services used by oil and gas companies involved in offshore
exploration and production of crude oil and natural gas.
Systems and services may be sold separately or as combined integrated systems and services offered within one
contract. Many of the systems and products TechnipFMC supplies for subsea applications are highly engineered to
meet the unique demands of our customers’ field properties and are typically ordered one to two years prior to
installation. We often receive advance payments and progress billings from our customers in order to fund initial
development and working capital requirements.
Under Subsea engineering, procurement, construction and installation contracts, revenue is principally generated
from long term contracts with customers. We have determined these contracts generally have one performance
obligation as the delivered product is highly customized to customer and field specifications. We generally recognize
revenue over time for such contracts as the customized products do not have an alternative use for TechnipFMC
and we have an enforceable right to payment plus a reasonable profit for performance completed to date.
Our Subsea segment also performs an array of subsea services including (i) installation services, (ii) asset
management services (iii) product optimization, (iv) inspection, maintenance and repair services, and (v) well
access and intervention services, where revenue is generally earned through the execution of either installation-
type or maintenance-type contracts. For either contract-type, management has determined that the performance of
the service generally represents one single performance obligation. We have determined that revenue from these
contracts is recognized over time as the customer simultaneously receives and consumes the benefit of the
services.
Technip Energies - Technip Energies Business designs and builds onshore facilities related to the production,
treatment, transformation and transportation of hydrocarbons and renewable feedstock; and designs, manufactures
and installs fixed and floating platforms for the offshore production and processing of oil and gas reserves.
The onshore business combines the design, engineering, procurement, construction and project management of the
entire range of onshore facilities. The onshore activity covers all types of onshore facilities related to the production,
treatment and transportation of oil and gas, as well as transformation with petrochemicals such as ethylene,
polymers and fertilizers. Some of the onshore activities include the development of onshore fields, refining, natural
gas treatment and liquefaction, and design and construction of hydrogen and synthesis gas production units.
Many of these contracts provide a combination of engineering, procurement, construction, project management and
installation services, which may last several years. Management has determined that contracts of this nature have
generally one performance obligation. In these contracts, the final product is highly customized to the specifications
of the field and the customer’s requirements. Therefore, the customer obtains control of the asset over time, and
thus revenue is recognized over time.
The offshore business combines the design, engineering, procurement, construction and project management
within the entire range of fixed and floating offshore oil and gas facilities, many of which were the first of their kind,
including the development of floating liquefied natural gas (“FLNG”) facilities. Similar to onshore contracts, contracts
grouped under this segment provide a combination of services, which may last several years.
Management has determined that contracts of this nature have one performance obligation. In these contracts, the
final product is highly customized to the specifications of the field and the customer’s requirements. Management
has determined that the customer obtains control of the asset over time, and thus revenue is recognized over time
as the customized products do not have an alternative use for us and we have an enforceable right to payment plus
reasonable profit for performance completed to date.
222 TechnipFMC
115
U.K. Annual Report and Accounts
Surface Technologies - Our Surface Technologies segment designs, manufactures and supplies technologically
advanced wellhead systems and high pressure valves and pumps used in stimulation activities for oilfield service
companies and provides installation, flowback and other services for exploration and production companies.
We provide a full range of drilling, completion and production wellhead systems for both standard and custom-
engineered applications. Under pressure control product contracts, we design and manufacture flowline products,
under the Weco®/Chiksan® trademarks, articulating frac arm manifold trailers, well service pumps, compact valves
and reciprocating pumps used in well completion and stimulation activities by major oilfield service companies.
Performance obligations within these systems are satisfied either through delivery of a standardized product or
equipment or the delivery of a customized product or equipment.
For contracts with a standardized product or equipment performance obligation, management has determined that
because there is limited customization to products sold within such contracts and the asset delivered can be resold
to another customer, revenue should be recognized as of a point in time, upon transfer of control to the customer
and after the customer acceptance provisions have been met.
For contracts with a customized product or equipment performance obligation, the revenue is recognized over time,
as the manufacturing of our product does not create an asset with an alternative use for us.
This segment also designs, manufactures and services measurement products globally. Contract-types include
standard product or equipment and maintenance-type services where we have determined that each contract under
this product line represents one performance obligation.
Revenue from standard measurement equipment contracts is recognized at a point in time, while maintenance-type
contracts are typically priced at a daily or hourly rate. We have determined that revenue for these contracts is
recognized over time because the customer simultaneously receives and consumes the benefit of the services.
5.2 Disaggregation of revenue
We disaggregate revenue by geographic location and contract types. The following table presents products and
services revenue by geography for each reportable segment for the year ended December 31, 2020 and 2019:
Reportable Segments
Reportable Segments
Year Ended December 31, 2020
Year Ended December 31, 2019
(In millions)
Subsea
Technip
Energies
Surface
Technologies
Subsea
Technip
Energies
Surface
Technologies
Europe, Russia, Central Asia
$
1,641.9 $
3,111.6 $
188.2 $
1,635.0 $
3,009.9 $
America
Asia Pacific
Africa
Middle East
1,957.7
753.2
893.9
169.8
982.6
1,094.3
884.4
447.1
376.7
123.4
45.8
241.6
1,770.4
667.1
824.3
407.1
766.2
1,145.3
526.5
1,011.0
150.1
741.4
189.3
61.1
247.6
Total products and services revenue
$
5,416.5 $
6,520.0 $
975.7 $
5,303.9 $
6,458.9 $
1,389.5
The following table represents revenue by contract type for each reportable segment for the year ended December
31, 2020 and 2019:
(In millions)
Services
Products
Total products and services revenue
Lease and other(1)
Year Ended December 31, 2020
Year Ended December 31, 2019
Subsea
Technip
Energies
Surface
Technologies
Subsea(2)
Technip
Energies
Surface
Technologies
$
3,121.1 $
6,436.9 $
151.6 $
3,141.4 $
6,458.9 $
2,295.4
5,416.5
54.9
83.1
6,520.0
—
824.1
975.7
90.3
2,162.5
5,303.9
116.0
—
6,458.9
—
192.8
1,196.7
1,389.5
157.9
Total revenue
$
5,471.4 $
6,520.0 $
1,066.0 $
5,419.9 $
6,458.9 $
1,547.4
(1) Represents revenue not subject to IFRS15.
5.3 Contract balances
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, costs and
estimated earnings in excess of billings on uncompleted contracts (contract assets), and billings in excess of costs
223 TechnipFMC
116
U.K. Annual Report and Accounts
and estimated earnings on uncompleted contracts (contract liabilities) on the consolidated statement of financial
position.
Contract Assets - Include unbilled amounts typically resulting from sales under long-term contracts when revenue is
recognized over time and revenue recognized exceeds the amount billed to the customer, and right to payment is
not just subject to the passage of time. Amounts may not exceed their net realizable value. Costs and estimated
earnings in excess of billings on uncompleted contracts are generally classified as current.
Contract Liabilities - We receive advances or deposits from our customers, before revenue is recognized, resulting
in contract liabilities.
The following table provides information about net contract assets (liabilities) as of December 31, 2020 and 2019,
respectively:
(In millions)
Contract assets
Contract (liabilities)
Net contract (liabilities)
December 31,
2020
December 31,
2019
$ change
% change
$
$
1,266.8 $
1,519.1 $
(4,725.0)
(4,571.4)
(3,458.2) $
(3,052.3) $
(252.3)
(153.6)
(405.9)
(16.6)
(3.4)
(13.3)
The decrease in our contract assets from December 31, 2019 to December 31, 2020 was primarily due to the timing
of milestones. The increase in our contract liabilities was primarily due to additional cash received, excluding
amounts recognized as revenue during the period.
In order to determine revenue recognized in the period from contract liabilities, we allocate revenue to the individual
contract liability balance outstanding at the beginning of the period until the revenue exceeds that balance. Revenue
recognized for the year ended December 31, 2020 that were included in the contract liabilities balance as of
December 31, 2019 was $1,267.5 million. Revenue recognized for the year ended December 31, 2019 that were
included in the contract liabilities balance as of December 31, 2018 was $2,414.0 million.
In addition, net revenue recognized for the year ended December 31, 2020 and 2019 from our performance
obligations satisfied in previous periods has favorable impact of $470.8 million and $1,176.5 million, respectively.
This primarily relates to the changes in the estimate of the stage of completion that impacted revenue.
5.4 Transaction price allocated to the remaining unsatisfied performance obligations
Remaining unsatisfied performance obligations (“RUPO” or “order backlog”) represent the transaction price for
products and services for which we have a material right but work has not been performed. Transaction price of the
order backlog includes the base transaction price, variable consideration and changes in transaction price. The
order backlog table does not include contracts for which we recognize revenue at the amount to which we have the
right to invoice for services performed. The transaction price of order backlog related to unfilled, confirmed customer
orders is estimated at each reporting date. As of December 31, 2020, the aggregate amount of the transaction price
allocated to order backlog was $21,388.2 million. TechnipFMC expects to recognize revenue on approximately
51.2% of the order backlog through 2021 and 48.8% thereafter.
The following table details the consolidated order backlog for each business segment as of December 31, 2020:
(In millions)
Subsea
Technip Energies
Surface Technologies
2021
2022
Thereafter
$
3,585.4 $
2,217.2 $
7,016.2
343.6
4,081.7
69.4
1,073.4
3,000.8
0.5
Total remaining unsatisfied performance obligations
$
10,945.2 $
6,368.3 $
4,074.7
The following table details the consolidated order backlog for each business segment as of December 31, 2019:
(In millions)
Subsea
Technip Energies
Surface Technologies
2020
2021
Thereafter
$
4,499.5 $
2,472.4 $
6,649.0
351.0
5,127.8
61.5
1,500.9
3,589.0
—
Total remaining unsatisfied performance obligations
$
11,499.5 $
7,661.7 $
5,089.9
224 TechnipFMC
117
U.K. Annual Report and Accounts
NOTE 6. OTHER INCOME AND EXPENSE ITEMS, EXPENSES BY NATURE, FINANCIAL INCOME AND
EXPENSES
6.1 Other income (expense), net
Other income (expense), net is as follows:
(In millions)
2020
2019
Net gain (loss) from disposal of property, plant and equipment
$
7.8 $
Reinsurance income
Legal provision (Note 21)
Unrealized loss on cost method investments
Foreign currency translation losses
Other
Total other income (expense), net
6.2 Expenses by nature
An analysis of operating expenses by nature is as follows:
(In millions)
Impairment and other (1)
Wages and salaries
Social security costs
Depreciation and amortization
Right-of-use lease amortization
Other pension costs
Separation costs (2)
Merger, transaction and integration costs
Purchases, external charges and other expenses
Total costs and other expenses
6.3
—
(6.3)
(53.3)
44.7
(25.5)
4.8
(91.3)
—
(167.3)
12.1
$
(0.8) $
(267.2)
2020
2019
$
3,210.1 $
2,546.2
563.9
446.1
304.3
48.7
39.5
—
2,430.0
2,552.7
552.1
509.3
329.2
54.5
72.1
31.2
8,697.1
8,317.5
$
15,855.9 $
14,848.6
(1)
In 2019 we have recorded a bargain purchase gain of $83.3 million in connection with the acquisition of the remaining 50% interest in TOP
CV. See Note 2.1 for further details.
(2) We have incurred $39.5 million and $72.1 million of Separation costs associated with the Separation transaction related to Technip Energies
operating segment for the year ended December 31, 2020 and 2019, respectively. See Note 33 for further details.
6.3 Financial income
Financial income consists of the follows:
(In millions)
Interest income from treasury management (1)
Net proceeds from disposal of financial assets
Financial income related to long-term employee benefit plans
Dividends from non-consolidated investments
Total financial income
(1) Mainly consists of interest income from short-term security deposits.
6.4 Financial expenses
Financial expenses consist of the follows:
225 TechnipFMC
118
2020
2019
50.0 $
4.8
1.5
0.3
101.4
13.1
1.0
0.3
56.6 $
115.8
$
$
U.K. Annual Report and Accounts
(In millions)
Redeemable financial liability fair value remeasurement
Interest expenses on bonds and private placements
Interest expenses on commercial papers, bank borrowings and overdrafts
Interest expenses on lease liabilities
Financial expenses related to long-term employee benefit plans
Other
Total financial expenses
Net financial expenses
2020
2019
$
(203.1) $
(423.5)
(78.4)
(47.8)
(35.1)
(2.7)
(19.7)
$
$
(386.8) $
(330.2) $
(75.1)
(49.9)
(44.4)
(4.6)
(16.8)
(614.3)
(498.5)
Net financial expenses for the year ended December 31, 2020 amounted to a loss of $330.2 million compared to
$498.5 million in 2019.
NOTE 7. INCOME TAX
7.1 Income tax expense
The income tax expense recognized in the statements of income is $148.6 million and $275.1 million in 2020 and
2019 respectively, explained as follows:
(In millions)
Current income tax expense
Deferred income tax credit
Income tax expense, net as recognized in the consolidated statements of income
Deferred income tax related to items booked directly to opening equity
Deferred income tax related to items booked to equity during the year
Income tax expense as recognized in the consolidated statements of other comprehensive
income
7.2 Income tax reconciliation
2020
2019
(155.9) $
7.3
(148.6) $
(341.1)
66.0
(275.1)
2020
2019
(14.1) $
19.8
(12.9)
(1.2)
5.7 $
(14.1)
$
$
$
$
The reconciliation between the tax calculated using the standard tax rate applicable to TechnipFMC and the amount
of tax effectively recognized in the accounts is detailed as follows:
(In millions)
Net loss
Income tax expense
Loss before income taxes
At TechnipFMC plc statutory income tax rate of 19.0%
Differences between TechnipFMC plc and foreign income tax rates
Net change in uncertain tax positions
Deferred tax assets not recognized
Adjustments on prior year taxes
Deferred tax relating to changes in tax rates
Impairments
Non-deductible legal provision
Other
Effective income tax expense
Tax rate
2020
2019
$
(3,208.7)
$
(2,450.9)
(148.6)
(3,060.1)
(275.1)
(2,175.8)
581.4
(50.9)
5.3
13.6
(38.7)
10.8
(676.7)
—
6.6
(148.6)
(4.9) %
413.4
(0.8)
28.3
(187.0)
(9.7)
(12.2)
(467.3)
(17.3)
(22.5)
(275.1)
(12.6) %
Income tax expense as recognized in the consolidated statements of income
$
(148.6)
$
(275.1)
7.3 Deferred income tax
226 TechnipFMC
119
U.K. Annual Report and Accounts
Significant components of deferred tax assets and liabilities are as follows:
December 31,
2019
Recognized in
Statement of
Income
Recognized in
Statement of
OCI
December 31,
2020
(In millions)
Accrued expenses
Net operating loss carryforwards
Inventories
Non-deductible interest
Other tax credits
Foreign exchange
Provisions for pensions and other long-term employee benefits
Contingencies related to contracts
Other contingencies
Leasing
Other
Total deferred income tax assets
Revenue in excess of billings on contracts accounted for under the
percentage of completion method
U.S. tax on foreign subsidiaries’ undistributed earnings not indefinitely
reinvested
Property, plant and equipment, goodwill and other assets
Margin recognition on construction contracts
Leasing
Total deferred income tax liabilities
$
(61.8) $
116.7 $
— $
101.6
5.5
22.8
113.2
(2.6)
5.0
25.1
2.1
219.8
(4.1)
426.6
20.6
10.4
190.4
(93.1)
215.3
343.6
18.7
(1.9)
(11.0)
(112.8)
(14.0)
(18.4)
17.0
1.5
26.1
(7.9)
14.0
23.6
(6.2)
(35.3)
14.6
19.6
16.3
—
—
—
—
(5.7)
25.5
—
—
—
—
19.8
—
—
—
—
—
—
Deferred income tax assets (liabilities), net
$
83.0 $
(2.3) $
19.8 $
December 31,
2018
Recognized in
Statement of
Income
Recognized in
Statement of
OCI
December 31,
2019
(In millions)
Accrued expenses
Net operating loss carryforwards
Inventories
Non-deductible interest
Other tax credits
Foreign exchange
Provisions for pensions and other long-term employee benefits
Contingencies related to contracts
Other contingencies
Capital loss
Leasing
Other
Total deferred income tax assets
Revenue in excess of billings on contracts accounted for under the
percentage of completion method
U.S. tax on foreign subsidiaries’ undistributed earnings not indefinitely
reinvested
Property, plant and equipment, goodwill and other assets
Margin recognition on construction contracts
Leasing
Total deferred income tax liabilities
$
116.2 $
(178.0) $
— $
33.6
3.2
—
—
25.7
39.0
71.1
28.7
21.1
—
15.0
353.6
20.8
9.4
350.1
(34.4)
—
345.9
68.0
2.3
22.8
113.2
(21.7)
(39.4)
(46.0)
(26.6)
(21.1)
219.8
(19.1)
74.2
(0.2)
1.0
(159.7)
(58.7)
215.3
(2.3)
—
—
—
—
(6.6)
5.4
—
—
—
—
—
(1.2)
—
—
—
—
—
—
Deferred income tax assets (liabilities), net
$
7.7 $
76.5 $
(1.2) $
54.9
120.3
3.6
11.8
0.4
(22.3)
12.1
42.1
3.6
245.9
(12.0)
460.4
44.2
4.2
155.1
(78.5)
234.9
359.9
100.5
(61.8)
101.6
5.5
22.8
113.2
(2.6)
5.0
25.1
2.1
—
219.8
(4.1)
426.6
20.6
10.4
190.4
(93.1)
215.3
343.6
83.0
As of December 31, 2020, the net deferred tax asset of $100.5 million is broken down into a deferred tax asset of
$225.9 million and a deferred tax liability of $125.4 million as recorded in the statement of financial position.
As of December 31, 2019, the net deferred tax asset of $83.0 million is broken down into a deferred tax asset of
$267.0 million and a deferred tax liability of $184.0 million as recorded in the statement of financial position.
227 TechnipFMC
120
U.K. Annual Report and Accounts
7.4 Tax loss carry-forwards and tax credits
As of December 31, 2020 and 2019, deferred tax assets excluded U.S. foreign tax credit carryforwards of $145.8
million and $135.3 million, which, if not utilized, will begin to expire in 2024. Realization of these deferred tax assets
is dependent on the generation of sufficient U.S. taxable income prior to the above date. Based on long-term
forecasts of operating results, management believes that it is more likely than not that our U.S. earnings over the
forecast period will not result in sufficient U.S. taxable income to fully realize these deferred tax assets. In its
analysis, management has considered the effect of deemed dividends and other expected adjustments to U.S.
earnings that are required in determining U.S. taxable income. Non-U.S. earnings subject to U.S. tax, including
deemed dividends for U.S. tax purposes, were $61.0 thousand in 2020 and $3.8 million in 2019, respectively.
As of December 31, 2020, deferred tax assets excluded tax benefits related to net operating loss carryforwards. If
not utilized, these net operating loss carryforward will begin to expire in 2021. Except in Norway (net operating
losses of $373.7 million), management believes it is more likely than not that we will not be able to utilize these
operating loss carryforwards before expiration. Except in Canada, Mexico, and Netherlands, all of these tax loss
carryforwards extend indefinitely.
As of December 31, 2020, deferred tax assets excluded tax benefits related to certain intercompany interest costs
which are not currently deductible, but which may be deductible in future periods. If not utilized, these costs will
become permanently non-deductible beginning in 2025. Management believes that it is more likely than not that we
will not be able to deduct these costs before expiration of the carry forward period.
See Note 1 for discussion on estimates and uncertainties. There are no income tax consequences attached to the
payment of dividends in either 2020 or 2019 by TechnipFMC to its shareholders.
NOTE 8. EARNINGS PER SHARE
Diluted earnings per share are computed in accordance with Note 1. Reconciliation between earnings per share
before dilution and diluted earnings per share is as follows:
(In millions, except per share data)
Net loss attributable to TechnipFMC plc
Weighted average number of shares outstanding
Total shares and dilutive securities
(In U.S. dollars)
Basic earnings (loss) per share attributable to TechnipFMC plc
Diluted earnings (loss) per share attributable to TechnipFMC plc
Year Ended December 31,
2020
2019
$
(3,258.4) $
(2,454.0)
448.7
448.7
448.0
448.0
$
$
(7.26) $
(7.26) $
(5.48)
(5.48)
In 2020, the average annual share price amounted to $9.48 and the closing price to $9.40. In 2019, the average
annual share price amounted to $23.06 and the closing price to $21.32.
For the years ended December 31, 2020 and 2019, we incurred net losses; therefore, the impact of any incremental
shares from our share-based compensation awards would be anti-dilutive. For the years ended December 31, 2020
and 2019, 3.80 million shares and 4.3 million shares, respectively, were anti-dilutive due to net loss position.
228 TechnipFMC
121
U.K. Annual Report and Accounts
Weighted average shares of the following share-based compensation awards were excluded from the calculation of
diluted weighted average number of shares where the assumed proceeds exceed the average market price from
the calculation of diluted weighted average number of shares, because their effect would be anti-dilutive:.
(millions of shares)
Share option awards
Restricted share units
Performance shares
Total
Year Ended December 31,
2020
2019
4.6
1.8
1.9
8.3
4.0
—
1.6
5.6
NOTE 9. EQUITY METHOD INVESTMENTS
Our equity investments were as follows as of December 31, 2020 and 2019:
(In millions, except %)
Dofcon Brasil AS
Serimax Holdings SAS
Magma Global Limited
TTSJV WLL
Other
December 31, 2020
December 31, 2019
Percentage
Owned
Carrying
Value
Percentage
Owned
Carrying
Value
50 % $
234.9
50 % $
167.4
20 %
25 %
36 %
—
18.8
51.4
—
49.2
20 %
25 %
36 %
—
21.5
50.2
—
61.3
Investments in equity affiliates
$
354.3
$
300.4
For certain construction joint operations, our assets in such operations, including those held jointly, and our
liabilities, including those incurred jointly are recognized in the consolidated financial statements. None of joint
operations, individually or in the aggregate, are significant to our consolidated results for 2020 or 2019.
Our total net profit from equity affiliates included in each of our reporting segments was as follows:
(In millions)
Subsea
Technip Energies
Income from equity affiliates
Year Ended December 31,
2020
2019
$
$
61.5 $
7.9
69.4 $
9.2
3.1
12.3
Our major equity method investments are as follows:
Dofcon Brasil AS (“Dofcon”) - is an affiliated company in the form of a joint venture between Technip SA and DOF
Subsea and was founded in 2006. Dofcon provides Pipe-Laying Support Vessels (PLSVs) for work in oil and gas
fields offshore Brazil. We have accounted for our 50% investment using the equity method of accounting with results
reported in our Subsea segment.
Serimax Holdings SAS (“Serimax”) - is an affiliated company in the form of a joint venture between Technip SA and
Vallourec SA and was founded in 2016. Serimax is headquartered in Paris, France and provides rigid pipes welding
services for work in oil and gas fields around the world. We have accounted for our 20% investment using the equity
method of accounting with results reported in our Subsea segment.
Magma Global Limited (“Magma Global”) - is an affiliated company in the form of a collaborative agreement signed
in 2018 between Technip-Coflexip UK Holdings Limited and Magma Global to develop hybrid flexible pipe for use in
offshore applications. As part of the collaboration, TechnipFMC holds a minority stake. We have accounted for our
25% investment using the equity method investment of accounting with results reported in our Subsea segment.
TTSJV W.L.L. (“TTSJV W.L.L.”) - is an affiliated company in the form of a joint venture between Technip Italy S.p.A.
Technip USA, Inc., Tecnicas Reunidas Saudia for Services and Contracting Co. Ltd and Samsung Engineering Co.
Ltd was founded in in October 2018 for the BAPCO Modernization Program. We have accounted for our 36%
investment using the equity method of accounting with results reported in our Technip Energies segment.
229 TechnipFMC
122
U.K. Annual Report and Accounts
TOP CV - is an affiliated company in the form of a joint venture between Technip SA and Ocyan SA. TOP CV was
formed in 2011 when awarded a contract to provide pipeline installation ships to state controlled Petrobras for their
work in oil and gas fields offshore Brazil. On December 30, 2019, we completed the acquisition of the remaining
50% interest in TOP CV. Prior to the acquisition, we accounted for our 50% investment using the equity method of
accounting with results reported in our Subsea segment. See Note 2.1 for further details.
Reconciliation of carrying amount in TechnipFMC’s equity affiliates is as follows:
(In millions)
Carrying amount of investments as of January 1
2020
2019
$
300.4 $
Acquisitions / contributions
Divestiture (1)
Share of profit of equity affiliates
Distributed dividends
Other comprehensive loss
Other
0.4
—
69.4
(5.1)
(10.6)
(0.2)
359.1
0.7
(67.8)
12.3
(4.1)
(1.1)
1.3
Carrying amount of investments as of December 31
$
354.3 $
300.4
(1) On December 30, 2019, we completed the acquisition of the remaining 50% interest in TOP CV. See Note 2.1 for further details.
The tables below provide summarized financial information for Dofcon and TTSJV W.L.L that are material to
TechnipFMC. The information disclosed reflects the amounts presented in the financial statements of Dofcon and
TTSJV W.L.L and not TechnipFMC’s share of those amounts. They have been amended to reflect adjustments
made by TechnipFMC when using the equity method, including fair value adjustments. On December 30, 2019, we
completed the acquisition of the remaining 50% interest in TOP CV. See Note 2.1 for further details.
(In millions)
Data at 100%
Cash and cash equivalents
Other current assets
Total current assets
Non-current assets
Total assets
Equity
Financial non-current liabilities
Total non-current liabilities
Financial current liabilities
Other current liabilities
Total current liabilities
Total equity and liabilities
TTSJV W.L.L
December 31,
Dofcon
December 31,
2020
2019
2020
2019
$
534.0 $
548.7 $
124.3 $
86.0
110.3
644.3
1.6
32.5
581.2
125.9
250.2
101.1
187.1
3.5
1,671.1
1,715.9
$
645.9 $
584.7 $ 1,921.3 $ 1,903.0
$
— $
(18.6) $
469.8 $
334.8
—
—
—
645.9
645.9
—
—
—
603.3
603.3
1,031.7
1,031.7
326.4
93.4
419.8
671.4
671.4
374.5
522.3
896.8
$
645.9 $
584.7 $ 1,921.3 $ 1,903.0
230 TechnipFMC
123
U.K. Annual Report and Accounts
(In millions)
Data at 100%
Revenue
TTSJV W.L.L
Dofcon
TOP CV
Year Ended December 31,
Year Ended December 31,
Year Ended December 31,
2020
2019
2020
2019
2020
2019
$ 1,053.6 $ 1,107.3 $
290.8 $
273.5 $
— $
120.5
Depreciation and amortization
(3.1)
(0.3)
Interest income
Interest expense
Income tax expense (benefit)
Profit (loss) for the period
Other comprehensive income (loss)
1.3
—
—
18.7
—
2.1
—
—
(85.0)
11.2
(34.5)
19.4
(19.3)
138.9
—
(3.9)
(85.2)
10.1
(61.1)
(4.9)
81.4
1.0
—
—
—
—
—
—
(190.4)
2.4
(21.0)
—
(66.6)
(2.2)
Total comprehensive income (loss)
$
18.7 $
(19.3) $
135.0 $
82.4 $
— $
(68.8)
(In millions)
Data at 100%
TTSJV W.L.L
Dofcon
TOP CV
2020
2019
2020
2019
2020
2019
Carrying amount of investment as of January 1
$
(18.7)
$
0.6
$
334.8
$
252.4
$
Divestiture
Profit (loss) for the period
Other comprehensive income (loss)
Distributed dividends
Carrying amount of investment as of December 31
$
—
18.7
—
—
—
—
(19.3)
—
—
—
138.9
(3.9)
—
—
81.4
1.0
—
$
(18.7)
$
469.8
$
334.8
$
—
—
—
—
—
—
TechnipFMC’s share in %
TechnipFMC’s share in investment
Carrying amount
36.0 %
36.0 %
$
$
—
—
$
$
—
—
$
$
50.0 %
234.9
234.9
50.0 %
167.4
167.4
$
$
$
$
— %
—
—
$
204.4
(135.6)
(66.6)
(2.2)
—
—
— %
—
—
$
$
$
In addition to the interest in Dofcon and TTSJV W.L.L disclosed above, TechnipFMC also has interests in a number
of individually immaterial associates that are accounted for using the equity method. None of the investments in joint
ventures and associates is individually material, therefore summarized financial information (at 100%) are presented
below:
(In millions)
Data at 100%
Non-current assets
Current assets
Total assets
Total equity
Non-current liabilities
Current liabilities
Total equity and liabilities
December 31,
2020
2019
346.1 $
1,449.8
305.5
823.4
1,795.9 $
1,128.9
483.4 $
16.2
1,296.3
1,795.9 $
530.7
—
598.2
1,128.9
$
$
$
$
Summarized statement of total comprehensive income (at 100%) are presented below:
(In millions)
Data at 100%
Revenue
Interest income
Depreciation and amortization
Interest expense
Income tax expense (benefit)
(Loss) profit for the period
Other comprehensive income
Total comprehensive income (loss)
231 TechnipFMC
124
Year Ended December 31,
2020
2019
$
622.5 $
4.8
(11.8)
(2.4)
(5.2)
(25.5) $
9.8
(15.7) $
$
$
702.5
18.7
(13.7)
(7.0)
(1.8)
18.7
2.9
21.6
U.K. Annual Report and Accounts
NOTE 10. PROPERTY, PLANT AND EQUIPMENT
The following tables include the costs, the accumulated depreciation and impairment losses by type of tangible
assets:
(In millions)
Land
Buildings
Vessels
Machinery
and
Equipment
Assets under
Construction
Other
Total
Net book value as of December 31, 2018
$
151.1 $
711.8 $ 1,143.8 $
1,181.1 $
179.1 $
203.2 $ 3,570.1
Costs
Accumulated depreciation
Accumulated impairment
Net book value as of December 31, 2019
Costs
Accumulated depreciation
Accumulated impairment
112.9
699.8
2,742.7
2,254.1
130.7
569.3
6,509.5
(7.1)
(3.4)
(225.5)
(767.4)
(74.5)
(675.0)
(892.2)
(316.7)
—
(1.8)
(389.8)
(2,282.0)
(0.7)
(1,072.1)
$
$
102.4 $
399.8 $ 1,300.3 $
1,045.2 $
128.9 $
178.8 $ 3,155.4
97.6 $
703.1 $ 2,528.8 $
2,360.8 $
148.1 $
554.0 $ 6,392.4
(7.8)
(8.1)
(242.1)
(740.1)
(1,016.8)
(93.7)
(585.0)
(441.2)
—
(2.5)
(394.1)
(2,400.9)
(15.8)
(1,146.3)
Net book value as of December 31, 2020
$
81.7 $
367.3 $ 1,203.7 $
902.8 $
145.6 $
144.1 $ 2,845.2
In connection with TechnipFMC annual test for impairment of goodwill as of October 31, property, plant and
equipment was also tested for impairment at that date. In estimating property, plant and equipment value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset (or cash-generating unit). For an
asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is
determined for the cash-generating unit to which the asset belongs. If the recoverable amount of an asset (or cash-
generating unit) is estimated to be less than its carrying amount, an impairment loss is recognized. An impairment
loss is recognized as an expense immediately as part of operating profit (loss) in the consolidated statements of
income.
In estimating certain vessels’ recoverable amounts, TechnipFMC obtained independent valuations. Since vessels
were valued using the broker valuations in 2020 and 2019, the valuation is considered to be Level 2 in the fair value
hierarchy.
2020
Due to the substantial decline in global demand for oil caused by the COVID-19 pandemic in 2020 we reviewed the
future utilization of our vessels and the service potential of our subsea service and surface equipment and
determined that the carrying amount of certain properties, plant and equipment exceeded their respective
recoverable amounts. Assessing these asset groups for recoverability required the use of unobservable inputs that
involves significant judgment. Such judgments include expected future asset utilization while taking into account
reduced future capital spending by certain customers in response to market conditions.
The $172.3 million of property, plant and equipment impairments during the year ended December 31, 2020
consisted of $92.9 million attributable to plant, equipment and various machinery infrastructure in our Subsea
operating segment; $79.4 million mainly related to building and surface equipment in our Surface Technologies
reportable segment. As of December 31, 2020, these impaired assets were recorded at their recoverable amount of
$464.7 million. We measured the recoverable amount by estimating the amount and timing of net future cash flows,
which are Level 3 unobservable inputs, and discounting them using a risk-adjusted rate of interest of 10.8%.
In December 2020, we announced our intent to sell our G1200 vessel as part of our overall strategy to optimize the
profile and size of our Subsea fleet. As of December 31, 2020 we evaluated the vessel’s book value and adjusted it
by $8.3 million to the lower of its carrying amount or estimated fair value less cost to sell. An impairment charge of
$8.3 million was recorded within Impairment, Restructuring and Other Expenses in our consolidated statement of
income for the year ended December 31, 2020. In March 2021, we entered into a Memorandum of Agreement to
sell the vessel. The agreement is subject to certain conditions precedent to complete the transaction. We expect to
complete the sale in the first half of 2021.
2019
232 TechnipFMC
125
U.K. Annual Report and Accounts
During 2019, the prolonged downturn in the energy market and its corresponding impact on our business outlook
led us to conclude the carrying amount of certain of our assets in our Subsea operating segment exceeded their
recoverable amount. For the long-lived assets which we impaired in 2019, we measured their recoverable amount
using a fair valuation model by estimating the amount and timing of net future cash flows, which are Level 3
unobservable inputs, and discounting them using a risk-adjusted rate of interest of 10.8%.
We recorded $153.8 million impairment loss on vessels and vessels equipment in our Subsea segment during the
year ended December 31, 2019. Additionally, in 2019 an impairment charge of $168.9 million related to our flexible
pipe and umbilical manufacturing facilities was recorded by our Surface Technologies operating segments.
In December 2019, we completed the sale of our G1201 vessel as part of our overall strategy to optimize the profile
and size of our subsea fleet. Due to the intent to sell our G1201 vessel and subsequently signed Memorandum of
Agreement (MOA) with a third party, we reviewed the carrying value of its sister vessel, the G1200, as of September
30, 2019. As a result of this assessment, an impairment charge of $125.1 million was recorded on the two vessels
to bring their carrying value to a combined fair value of $104.0 million as of September 30, 2019. The fair value
measurements of these vessels were based on the transaction price in the MOA, which is a Level 2 observable
input as per the fair value hierarchy. As a result of the sale, a net loss of $7.1 million is included in Other Income
(Expense), net in our consolidated statements of income.
In January 2019, we purchased a deepwater dive support vessel, Deep Discoverer, for $116.8 million. The purchase
of this vessel was funded through debt. See Note 19 for further details.
On December 30, 2019, we completed the acquisition of the remaining 50% interest in TOP CV. In connection with
the acquisition, we assumed assets and liabilities that included two vessels and loan that is fully collateralized
against the two vessels. See to Note 2 for further details. There were no other pledged property, plant and
equipment as of December 31, 2020 and 2019.
A reconciliation of the carrying amount of property, plant and equipment is as follows:
(In millions)
Land
Buildings
Vessels
Machinery
and
Equipment
Assets under
Construction
Other
Total
Net book value as of December 31, 2018
$
151.1 $
711.8 $ 1,143.8 $ 1,181.1 $
179.1 $
203.2 $ 3,570.1
33.6
118.4
224.2
25.3
33.4
435.5
Additions
Acquisitions through
business combinations
Disposals
0.6
—
—
Transfer to right-of-use
(48.4)
(262.8)
Depreciation expense for the year
Impairment
Net foreign exchange differences
Other
Net book value as of December 31, 2019
Additions
Disposals
Depreciation expense for the year
Impairment
Net foreign exchange differences
Other
(0.8)
(1.8)
(0.4)
2.1
102.4
1.7
(11.5)
(0.6)
(4.7)
(1.4)
(4.2)
—
(2.7)
(26.7)
(39.6)
(2.5)
(11.3)
335.2
(45.8)
—
(99.5)
(125.1)
18.2
(44.9)
—
(3.1)
(10.1)
(216.5)
(243.7)
1.8
111.5
399.8
1,300.3
1,045.2
21.1
(8.9)
(23.4)
—
(5.2)
(16.1)
32.1
(1.2)
(98.3)
(16.4)
23.2
(36.0)
143.6
(5.9)
(166.0)
(150.5)
(10.4)
46.8
—
0.4
—
—
—
(1.3)
(74.6)
128.9
63.9
—
—
(0.7)
(7.6)
(38.9)
—
(2.5)
—
335.2
(53.7)
(321.3)
(39.8)
(383.3)
(1.1)
(4.8)
(9.6)
(411.3)
11.0
(26.8)
178.8
3,155.4
34.6
0.7
297.0
(26.8)
(34.1)
(322.4)
—
(172.3)
(16.6)
(19.3)
(18.0)
(67.7)
Net book value as of December 31, 2020
$
81.7 $
367.3 $ 1,203.7 $
902.8 $
145.6 $
144.1 $ 2,845.2
NOTE 11. GOODWILL AND INTANGIBLE ASSETS, NET
11.1 Intangible assets, net
The components of intangible assets were as follows:
233 TechnipFMC
126
U.K. Annual Report and Accounts
(In millions)
Goodwill
Acquired
Technology
Backlog
Customer
Relationships
Tradenames
Licenses,
Patents and
Trademarks
Software
Other
Total
Net book value as of
December 31, 2018
Costs
Accumulated
amortization
Accumulated
impairment
Net book value as of
December 31, 2019
Costs
Accumulated
amortization
Accumulated
impairment
Net book value as of
December 31, 2020
$
7,693.9 $
191.1 $
— $
227.6 $
572.6 $
51.5 $
72.1 $
61.8 $ 8,870.6
9,040.5
240.0
175.0
285.4
636.6
181.2
226.4
105.6
10,890.7
—
(73.9)
(175.0)
(85.9)
(95.8)
(131.5)
(150.0)
(50.3)
(762.4)
(3,385.9)
—
—
—
—
—
(1.2)
—
(3,387.1)
$
$
5,654.6 $
166.1 $
9,038.3 $
240.0 $
— $
— $
199.5 $
540.8 $
49.7 $
75.2 $
55.3 $ 6,741.2
285.4 $
636.7 $
187.3 $
253.0 $ 106.7 $ 10,747.4
—
(98.9)
(6,383.6)
—
—
—
(114.4)
(127.7)
(135.5)
(178.9)
(65.2)
(720.6)
—
—
—
(7.4)
—
(6,391.0)
$
2,654.7 $
141.1 $
— $
171.0 $
509.0 $
51.8 $
66.7 $
41.5 $ 3,635.8
A reconciliation of the carrying amount of intangible assets is as follows:
(In millions)
Goodwill
Acquired
Technology
Backlog
Customer
Relationships
Tradenames
Licenses,
Patents and
Trademarks
Software
Other
Total
Impairment
(2,018.7)
Net book value as of
December 31, 2018
Additions
Disposals - write-off
Amortization charge
for the year
Net foreign exchange
differences (1)
Other
Net book value as of
December 31, 2019
Additions
Disposals - write-off
Amortization charge
for the year
Net foreign exchange
differences (1)
Other
Net book value as of
December 31, 2020
$
7,693.9 $
191.1 $
— $
227.6 $
572.6 $
51.5 $
72.1 $
61.8 $ 8,870.6
9.9
—
—
(12.8)
(17.7)
—
—
—
(2.2)
—
—
—
(25.0)
—
—
—
—
—
(25.0)
—
—
—
5,654.6
166.1
—
—
—
—
—
—
—
—
—
—
—
—
—
0.4
—
0.1
—
(28.5)
(31.9)
—
—
—
—
—
—
199.5
540.8
—
—
—
—
(28.5)
(31.8)
—
—
—
—
—
—
—
—
(1.9)
—
0.1
—
49.7
2.7
—
(1.8)
—
1.0
0.2
27.3
(0.4)
(19.8)
(0.2)
(0.6)
(3.2)
75.2
16.3
—
10.0
3.6
47.7
3.2
(18.9)
(126.0)
—
(2,018.9)
0.2
(1.4)
(13.1)
(22.3)
55.3
6,741.2
(0.1)
—
18.9
—
(22.4)
(6.0)
(14.2)
(123.7)
—
(3,003.7)
3.3
0.3
0.5
—
2.6
0.5
$
2,654.7 $
141.1 $
— $
171.0 $
509.0 $
51.8 $
66.7 $
41.5 $ 3,635.8
Impairment
(2,997.7)
(1) Goodwill is partially denominated in Euro.
TechnipFMC recognized identifiable intangible assets acquired in business combinations. All of the acquired
identifiable intangible assets are subject to amortization and, where applicable, foreign currency translation
adjustments. There are no intangible assets with indefinite useful life.
234 TechnipFMC
127
U.K. Annual Report and Accounts
11.2 Goodwill
A reconciliation of carrying amounts of goodwill by reporting segment are as follows:
(In millions)
December 31, 2018
Additions due to business combinations
Impairment
Other
Translation
December 31, 2019
Transfers
Impairment
Translation
December 31, 2020
Subsea
Technip
Energies
Surface
Technologies
(a)
Total
$
4,220.9 $
2,447.7 $
1,025.3 $
7,693.9
—
(1,347.7)
—
(6.4)
2,866.8
(21.2)
(2,800.2)
(45.4)
—
—
(17.7)
(6.4)
2,423.6
46.1
—
42.8
9.9
9.9
(671.0)
(2,018.7)
—
—
364.2
(24.9)
(197.5)
0.4
(17.7)
(12.8)
5,654.6
—
(2,997.7)
(2.2)
$
— $
2,512.5 $
142.2 $
2,654.7
(a) Surface Technologies includes Surface Americas and Surface International operating segments. While the CODM receives separate reports
for each of the Surface region, the Surface Americas and Surface International operating segments have been aggregated into one
reportable segment Surface Technologies as they have similar characteristics.
Goodwill was tested for impairment utilizing the methodology in accordance with the accounting policy in Note 1. In
2020, for the purpose of goodwill impairment test, the recoverable amount of the GCGUs was primarily determined
by estimating value in use. In 2019, for the purpose of goodwill impairment test, the recoverable amount of the
GCGUs was primarily determined by estimating value in use with a lesser weighting attributed the market multiple
approach. The income approach estimates the value in use by discounting each GCGU’s estimated future cash
flows using a weighted-average cost of capital that reflects current market conditions and the risk profile of the
GCGU. To calculate the future cash flows, TechnipFMC used estimates of economic and market assumptions,
including growth rates in revenues, costs, estimates of future expected changes in operating margins, tax rates and
cash expenditures. The future revenues are adjusted to match changes in TechnipFMC’s business strategy and
management's judgmental assessments as discussed in Note 1. Under the market multiple approach, we determine
the estimated fair value of each of our GCGUs by applying transaction multiples to each GCGU’s projected EBITDA
and then averaging that estimate with similar historical calculations using either a one, two or three year average.
During the first half of 2020, triggering events were identified which led to performing interim goodwill impairment
testing in our Subsea, Surface Americas and Surface International operating segments as of June 30, 2020. These
events included the COVID-19 pandemic breakout, commodity price declines, and a significant decrease in our
market capitalization as well as those of our peers and customers. The estimation of recoverable amounts of our
Subsea, Surface Americas and Surface International operating segments was determined based on value in use
calculations. An interim impairment test during the first quarter of 2020 resulted in $2,800.2 million, $12.2 million and
$185.3 million of goodwill impairment charges in our Subsea, Surface Americas and Surface International operating
segments, respectively. The goodwill at our Subsea and Surface Americas operating segments was fully impaired at
June 30, 2020.
The following table sets out the key assumptions for the operating segments where the impairment calculations
were updated during the first half of 2020:
Year of cash flows before terminal value
Risk-adjusted post-tax discount rate
June 30, 2020
4
12.0% to 14.0%
During our annual impairment tests the following significant estimates were used by management in determining the
fair values of reporting units in order to test the goodwill as of October 31:
235 TechnipFMC
128
U.K. Annual Report and Accounts
Year of cash flows before terminal value
Risk-adjusted post-tax discount rate
EBITDA multiples
December 31,
2020
December 31,
2019
4
4
9.5% to 18.0%
12.5% to 15.0%
N/A
6.0 - 8.5x
During the year ended December 31, 2020, the significant estimates used by management in determining the
recoverable amount described above relate to Technip Energies and Surface International operating segments only.
The recoverable amount over carrying amount for our Technip Energies and Surface International operating
segments was in excess of 300% and 100% of their carrying amounts at October 31, 2020, respectively. No
reasonably possible change in any of the significant estimates would cause the Technip Energies and Surface
International carrying amounts to exceed their recoverable amounts.
Based on the impairment tests performed during the year ended December 31, 2020, no further goodwill
impairment charges were recorded during the second half of 2020 in our Subsea, Surface Americas and Surface
International operating segments.
During the year ended December 31, 2019, we recorded $1,347.7 million and $671.0 million of goodwill impairment
charges in our Subsea and Surface Americas operating segments, respectively.
NOTE 12. OTHER NON-CURRENT ASSETS
Other non-current assets consisted of the following:
(In millions)
December 31,
2020
2019
Non-current financial assets at amortized cost, gross
$
186.9 $
Loss allowance
Non-current financial assets at amortized cost, net
Non-quoted equity instruments at Fair Value Through Profit or Loss (“FVTPL”)
Quoted equity instruments at FVTPL
Total non-current assets, net
(11.7)
175.2
2.6
65.6
$
243.4 $
252.6
(11.8)
240.8
3.6
54.8
299.2
236 TechnipFMC
129
U.K. Annual Report and Accounts
NOTE 13. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consisted of the following:
(In millions)
Cash at bank and in hand
Cash equivalents
Total cash and cash equivalents
U.S. dollar
Euro
Malaysian ringgit
Pound sterling
Norwegian krone
Japanese yen
Australian dollar
Brazilian real
Other
Total cash and cash equivalents by currency
Fixed term deposits
Other
Total cash equivalents by nature
December 31,
2020
2019
$
$
$
$
$
$
3,159.4 $
1,648.3
4,807.7 $
1,880.8 $
1,724.7
138.4
110.6
77.8
35.3
34.6
—
805.5
4,807.7 $
1,634.7 $
13.6
1,648.3 $
3,320.6
1,869.5
5,190.1
2,359.6
1,514.5
274.5
136.3
83.5
56.1
44.7
40.8
680.1
5,190.1
1,617.3
252.2
1,869.5
A substantial portion of cash and securities are recorded or invested in either Euro or U.S. dollar which are
frequently used by TechnipFMC within the framework of its commercial relationships. Cash and securities in other
currencies correspond either to deposits retained by subsidiaries located in countries where such currencies are the
national currencies in order to ensure their own liquidity, or to amounts received from customers prior to the
payment of expenses in these same currencies or the payment of dividends. Short-term deposits are classified as
cash equivalents along with the other securities.
NOTE 14. TRADE RECEIVABLES, NET AND CONTRACT ASSETS
Trade receivables, net and contract assets include trade accounts receivable from completed contracts, contract
assets and other miscellaneous invoices (e.g. trading, procurement services). TechnipFMC’s trade receivables and
contracts assets mainly constitute a homogeneous portfolio of major oil and gas, petrochemical or oil-related
companies.
TechnipFMC applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables and contract assets. On that basis, the all potential uncollectible
receivables as of December 31, 2020 and 2019 were determined as follows for both trade receivables and contract
assets:
(In millions)
Gross amount
Opening loss allowance
Increase in loss allowance
Used allowance reversals
Unused allowance reversals
Effects of foreign exchange and other
Closing loss allowance
Total, net
December 31, 2020
December 31, 2019
Trade
Receivables
Contract
Assets
Trade
Receivables
Contract
Assets
2,498.3 $
1,267.8 $
2,382.5 $
1,521.6
(101.1) $
(2.5) $
(125.2) $
(69.1)
55.5
9.6
(3.8)
1.1
—
—
0.4
(39.5)
3.5
39.8
20.3
(3.7)
1.2
—
—
—
(108.9) $
(1.0) $
(101.1) $
(2.5)
2,389.4 $
1,266.8 $
2,281.4 $
1,519.1
$
$
$
$
237 TechnipFMC
130
U.K. Annual Report and Accounts
See Note 30 for further information on impairment losses of trade receivables and TechnipFMC’s exposure to credit
risk and foreign currency risk.
NOTE 15. INVENTORIES
Inventories consisted of the following:
(In millions)
Raw materials
Work in process
Finished goods
Total inventories, net
December 31,
2020
2019
$
$
272.4 $
245.2
763.9
347.5
290.2
786.2
1,281.5 $
1,423.9
All amounts in the table above are reported net of obsolescence reserves of $162.8 million and $135.7 million as of
December 31, 2020 and 2019, respectively.
NOTE 16. OTHER CURRENT ASSETS
Other current assets consisted of the following:
(In millions)
Current financial assets at amortized cost
Current financial assets, total
Value added tax receivables
Prepaid expenses
Other tax receivables
Assets held for sale
Other
Other current assets, total
Total other current assets, net
December 31,
2020
2019
$
64.2 $
64.2
450.5
111.7
90.7
47.3
128.8
829.0
$
893.2 $
91.7
91.7
395.2
66.8
100.7
25.8
182.4
770.9
862.6
NOTE 17. STOCKHOLDERS’ EQUITY
17.1 Changes in TechnipFMC’s ordinary shares and treasury shares
As of December 31, 2020, TechnipFMC’s share capital was 449,466,233 ordinary shares. As of December 31, 2019,
TechnipFMC’s share capital was 447,064,767 ordinary shares. On November 27, 2019, TechnipFMC redeemed
50,000 redeemable shares of £1 each and cancelled one deferred ordinary share of £1 in the capital of
TechnipFMC.
The movements in share capital were as follows:
238 TechnipFMC
131
U.K. Annual Report and Accounts
(In millions of shares)
December 31, 2018
Stock awards
Treasury stock purchases
Treasury stock cancellations
Net stock sold from employee benefit trust
December 31, 2019
Stock awards
December 31, 2020
Ordinary
Shares
Ordinary
Shares held in
Employee
Benefit Trust
Treasury
Shares
450.5
0.6
—
(4.0)
—
447.1
2.4
449.5
0.1
—
—
—
(0.1)
—
—
—
—
—
4.0
(4.0)
—
—
—
—
The plan administrator of the Non-Qualified Plan purchases shares of our ordinary shares on the open market. Such
shares are placed in a trust owned by a subsidiary.
17.2 Dividends
As an English public limited company, we are required under U.K. law to have available “distributable reserves” to
conduct share repurchases or pay dividends to shareholders. Distributable reserves are a statutory requirement and
are not linked to a IFRS reported amount (e.g. retained earnings, net income and other reserves). The declaration
and payment of dividends require the authorization of our Board of Directors, provided that such dividends on
issued share capital may be paid only out of our “distributable reserves” on our statutory balance sheet. Therefore,
we are not permitted to pay dividends out of share capital, which includes share premium
Our articles of association permit us by ordinary resolution of the shareholders to declare dividends, provided that
the directors have made a recommendation as to its amount. The dividend shall not exceed the amount
recommended by the directors. The directors may also decide to pay interim dividends if it appears to them that the
profits available for distribution justify the payment. When recommending or declaring payment of a dividend, the
directors are required under English law to comply with their duties, including considering our future financial
requirements.
Dividends declared and paid during the year ended December 31, 2020 were $59.2 million.
Dividends declared and paid during the year ended December 31, 2019 were $232.8 million.
17.3 Capital management
For the purpose of our equity capital management, equity capital includes issued ordinary shares, share premium
and all other equity reserves attributable to the equity holders of TechnipFMC. The primary objective of our capital
management is to maximize the shareholder value.
We monitor our capital structure and take actions in light of economic conditions and the requirements of our
financial covenants. To manage our capital structure, from time to time we may adjust the return capital to
shareholders or issue new share. We have also met all our financial covenants set forth by our loans and
borrowings.
In 2017, the Board of Directors authorized a share repurchase program of up to $500.0 million in ordinary shares. In
December 2018, the Board of Directors authorized an extension of the share repurchase program of up to $300.0
million of additional shares. During the years ended December 31, 2020, 2019 and 2018, we repurchased nil, $92.7
million and $442.8 million of shares, respectively. As of December 31, 2020, we had $207.8 million of shares
authorized for repurchase. Repurchased shares are canceled and not held in treasury.
239 TechnipFMC
132
U.K. Annual Report and Accounts
As of December 31, 2020, our securities authorized for issuance under equity compensation plans were as follows:
Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options, Warrants
and Rights
Weighted Average
Exercise Price of
Outstanding
Options, Warrants
and Rights (in $)
Number of Securities
Remaining Available for
Future Issuance under
Equity Compensation
Plans
Equity compensation plans approved by security holders
Equity compensation plans not approved by security holders
Total
4,598.4 $
—
4,598.4 $
29.77
—
29.77
14,250.2
—
14,250.2
We had no unregistered sales of equity securities during the years ended December 31, 2020 and 2019.
17.4 Accumulated other comprehensive income (loss)
Accumulated other comprehensive income (loss) are as follows:
(In millions)
December 31, 2018
Gains
(Losses) on
Defined
Benefit
Pension Plans
Foreign
Currency
Translation
Accumulated
Other
Comprehensive
Income (Loss) –
TechnipFMC plc
Cash Flow
Hedges (1)
Accumulated
Other
Comprehensive
Income (Loss) –
Non-Controlling
Interests
Total
Accumulated
Other
Comprehensive
Income (Loss)
$
(67.9) $
(23.6) $
(824.8) $
(916.3) $
(4.9) $
(921.2)
Net effect before reclassification to
profit or loss
51.9
(49.6)
12.3
14.6
Reclassification to profit or loss
December 31, 2019
(23.7)
(39.7)
—
(12.0)
(73.2)
(824.5)
(35.7)
(937.4)
Net effect before reclassification to
profit or loss
59.7
(83.5)
(172.9)
(196.7)
Reclassification to profit or loss
(20.0)
—
—
(20.0)
(0.7)
—
(5.6)
0.6
—
13.9
(35.7)
(943.0)
(196.1)
(20.0)
December 31, 2020
$
— $
(156.7) $
(997.4) $
(1,154.1) $
(5.0) $
(1,159.1)
(1) Recorded under this heading is the effective portion of the change in fair value of the financial instruments qualified as cash flow hedging, as
well as foreign exchange gains and losses corresponding to the effective portion of non-derivative financial assets or liabilities that are
designated as a hedge of a foreign currency risk.
17.5 Non-controlling interests
Non-controlling interests amounting to $103.8 million and $69.9 million as of December 31, 2020 and 2019,
respectively, did not represent a material component of TechnipFMC’s consolidated financial statements in the years
ended December 31, 2020, and 2019.
NOTE 18. SHARE-BASED COMPENSATION
Incentive compensation and award plan
On January 11, 2017, we adopted TechnipFMC’s Incentive Award Plan (the “Plan”). The Plan provides certain
incentives and awards to officers, employees, non-employee directors and consultants of TechnipFMC and its
subsidiaries. The Plan allows our Board of Directors to make various types of awards to non-employee directors
and the Compensation Committee (the “Committee”) of the Board of Directors to make various types of awards to
other eligible individuals. Awards may include share options, share appreciation rights, performance share units,
restricted share units, restricted shares or other awards authorized under the Plan. All awards are subject to the
Plan’s provisions, including all share-based grants previously issued by FMC Technologies and Technip prior to
consummation of the Merger. Under the Plan, 24.1 million ordinary shares were authorized for awards. As
of December 31, 2020, 8.5 million ordinary shares were available for future grant.
240 TechnipFMC
133
U.K. Annual Report and Accounts
The exercise price for options is determined by the Committee but cannot be less than the fair market value of our
ordinary shares at the grant date. Restricted share and performance share unit grants generally vest after three
years of service.
Under the Plan, our Board of Directors has the authority to grant non-employee directors share options, restricted
shares, restricted share units and performance shares. Unless otherwise determined by our Board of Directors,
awards to non-employee directors generally vest one year from the date of grant. Restricted share units are settled
when a director ceases services to the Board of Directors. As of December 31, 2020, outstanding awards to active
and retired non-employee directors included 254.3 thousand of share units. As of December 31, 2019, outstanding
awards to active and retired non-employee directors included 83.4 thousand of share units.
We recognize compensation expense and the corresponding tax benefits for awards under the Plan. The
compensation expense under the Plan was as follows:
(In millions)
Share-based compensation expense
Income tax benefits related to share based compensation expense
Year Ended December 31,
2020
2019
$
69.0 $
18.6
74.5
20.1
Share-based compensation expense is recognized over the lesser of the stated vesting period of three years or the
period until the employee reaches age 62 (the retirement eligible age under the plan).
As of December 31, 2020 and 2019, the portion of share-based compensation expense related to outstanding
awards to be recognized in future periods is as follows:
Share-based compensation expense not yet recognized (In millions)
Weighted-average recognition period (in years)
Restricted share units
December 31,
2020
2019
$
68.1 $
1.8
76.9
1.7
We began issuing restricted share units in 2017. A summary of the non-vested restricted share units activity is as
follows:
(Shares in thousands)
Non-vested as of January 1
Granted
Vested
Cancelled/forfeited
Non-vested as of December 31
2020
2019
Weighted-
Average
Grant Date
Fair Value
27.44
9.27
27.16
15.71
18.43
Shares
4,525.9 $
3,836.0 $
(1,909.1) $
(330.9) $
6,121.9 $
Weighted-
Average
Grant Date
Fair Value
30.1
21.24
29.44
27.79
27.44
Shares
2,977.4 $
1,969.1 $
(347.1) $
(73.5) $
4,525.9 $
The total grant date fair value of restricted stock share units vested during the years ended December 31, 2020 and
2019 was $51.8 million and $10.2 million, respectively.
Performance share Units
The Board of Directors has granted certain employees, senior executives and Directors or Officers performance
share units that vest subject to achieving satisfactory performances. For performance share units issued on or after
January 1, 2017, performance is based on results of return on invested capital and total shareholder return (“TSR”).
241 TechnipFMC
134
U.K. Annual Report and Accounts
For the performance share units which vest based on TSR, the fair value of performance shares is estimated using
a combination of the closing stock price on the grant date and the Monte Carlo simulation model. The weighted-
average fair value and the assumptions used to measure the fair value of performance share units subject to
performance-adjusted vesting conditions in the Monte Carlo simulation model were as follows:
Weighted-average fair value (1)
Expected volatility (2)
Risk-free interest rate (3)
Expected performance period in years (4)
Year Ended December 31,
2020
2019
$
10.02
$
38.30 %
0.40 %
3.0
29.04
34.00 %
2.42 %
3.0
(1) The weighted-average fair value was based on performance share units granted during the period.
(2) Expected volatility is based on normalized historical volatility of our shares over a preceding period commensurate with the expected term of
the performance share units.
(3) The risk-free rate for the expected term of the performance share units is based on the U.S. Treasury yield curve in effect at the time of
grant.
(4) For awards subject to service-based vesting, due to the lack of historical exercise and post-vesting termination patterns of the post-Merger
employee base, the expected term was estimated using a simplified method for all awards granted in 2019 and 2018.
A summary of the non-vested performance share units activity is as follows:
(Shares in thousands)
Non-vested as of January 1
Granted
Vested
Cancelled/forfeited
Non-vested as of December 31
2020
2019
Weighted-
Average
Grant Date
Fair Value
28.52
10.02
31.65
20.62
17.55
Shares
3,817.7 $
2,828.4 $
(1,364.4) $
(441.0) $
4,840.7 $
Weighted-
Average
Grant Date
Fair Value
27.02
24.99
22.30
27.94
28.52
Shares
3,043.8 $
1,514.7 $
(597.6) $
(143.2) $
3,817.7 $
The total grant date fair value of performance shares vested during years ended December 31, 2020 and 2019
was $43.2 million and $13.3 million, respectively.
Share option awards
The fair value of each share option award is estimated as of the date of grant using the Black-Scholes options
pricing model or the Cox Ross Rubinstein binomial model.
Share options awarded prior to 2017 were granted subject to performance criteria based upon certain targets, such
as total shareholder return, return on capital employed, and operating profit (loss) from recurring activities.
Subsequent share options granted are time based awards vesting over three years.
242 TechnipFMC
135
U.K. Annual Report and Accounts
The weighted-average fair value and the assumptions used to measure fair value are as follows:
Weighted-average fair value (1)
Expected volatility (2)
Risk-free interest rate (3)
Expected dividend yield (4)
Expected term in years (5)
Year Ended December 31
2020
2019
$
—
$
— %
— %
— %
0.0
5.64
32.5 %
2.5 %
2.6 %
6.5
(1) The weighted-average fair value was based on stock options granted during the period.
(2) Expected volatility is based on normalized historical volatility of our shares over a preceding period commensurate with the expected term of
the option.
(3) The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.
(4) Share options awarded in 2020 and 2019 were valued using an expected dividend yield of 0.0% and 2.6%, respectively.
(5) For awards subject to service-based vesting, due to the lack of historical exercise and post-vesting termination patterns of the post-Merger
employee base, the expected term was estimated using a simplified method for all awards granted in 2020 and 2019.
The following is a summary of share option transactions during year ended December 31, 2020:
(Shares in thousands)
December 31, 2019
Granted
Exercised
Cancelled
December 31, 2020
Exercisable as of December 31, 2020
Number of
Shares
Weighted
average
exercise price
Weighted
average
remaining life
(in years)
4,842.4 $
29.68
5.3
— $
— $
(244.0) $
4,598.4 $
3,460.8 $
—
—
28.08
29.77
31.47
4.2
3.0
The aggregate intrinsic value of stock options outstanding and stock options exercisable as of December 31, 2020
was nil and nil, respectively.
Cash received from the share option exercises was nil during each of the years ended December 31, 2020 and
2019. The total intrinsic value of share options exercised during each of the years ended December 31, 2020 and
2019 was nil. To exercise share options, an employee may choose (1) to pay, either directly or by way of the group
savings plan, the share option strike price to obtain shares, or (2) to sell the shares immediately after having
exercised the share option (in this case, the employee does not pay the strike price but instead receives the intrinsic
value of the share options in cash).
243 TechnipFMC
136
U.K. Annual Report and Accounts
The following summarizes significant ranges of outstanding and exercisable share options as of December 31,
2020:
Exercise Price Range
$20.00-$33.00
$45.00-$51.00
$55.00-$57.00
Total
Options Outstanding
Options Exercisable
Number of
options (in
thousands)
Weighted
average
remaining life
(in years)
Weighted
average
exercise price
(in $)
Number of
options
(in thousands)
Weighted
average
exercise price
(in $)
4,087.2
33.0
478.2
4,598.4
4.6
1.0
0.4
4.2
$
$
$
$
26.68
45.49
56.93
29.77
2,949.5 $
33.0 $
478.3 $
3,460.8 $
26.90
45.49
56.93
31.47
The following summarizes significant ranges of outstanding and exercisable options as of December 31, 2019:
Exercise Price Range
$20.00-$33.00
$45.00-$51.00
$55.00-$57.00
Total
Options Outstanding
Options Exercisable
Number of
options (in
thousands)
Weighted
average
remaining life
(in years)
Weighted
average
exercise price
(in $)
Number of
options
(in thousands)
Weighted
average
exercise price
(in $)
4,330.4
33.0
479.0
4,842.4
5.7
2.0
1.4
5.3
$
$
$
$
26.55
45.49
56.93
29.68
1,105.7 $
33.0 $
479.0 $
1,617.7 $
26.54
45.49
56.93
35.92
244 TechnipFMC
137
U.K. Annual Report and Accounts
NOTE 19. DEBT
19.1 Debt
Short-term debt and current portion of long-term debt consisted of the following:
(In millions)
Commercial papers
Synthetic bonds due 2021
Bank borrowings
5.00% Notes due 2020
Other
December 31, 2020
December 31, 2019
Carrying
Amount
Fair Value
Carrying
Amount
Fair Value
$
1,525.2 $
1,527.7 $
1,967.0 $
1,966.9
551.1
56.5
—
28.8
552.0
56.5
—
28.5
—
247.8
224.4
23.0
—
248.0
230.0
23.0
Total short-term debt and current portion of long-term
$
2,161.6 $
2,164.7 $
2,462.2 $
2,467.9
Long-term debt––Long-term debt consisted of the following:
(In millions)
Synthetic bonds due 2021
3.45% Senior Notes due 2022
3.40% Notes due 2022
3.15% Notes due 2023
3.15% Notes due 2023
4.50% Notes due 2025
4.00% Notes due 2027
4.00% Notes due 2032
3.75% Notes due 2033
Bank borrowings and other
Total long-term debt
Commercial paper
Synthetic bonds due 2021
Bank borrowings and other
5.00% Notes due 2020
December 31, 2020
December 31, 2019
Carrying
Amount
Fair Value
Carrying
Amount
Fair Value
$
— $
—
$
491.7 $
500.0
184.0
159.0
153.3
241.1
91.9
119.0
119.5
224.7
1,792.5
1,525.2
551.1
85.3
—
513.2
188.8
163.7
161.8
256.8
99.7
136.8
126.4
224.8
1,872.0
1,527.7
552.0
85.0
—
500.0
168.4
145.4
140.2
—
84.2
108.6
109.2
265.5
2,013.2
1,967.0
—
270.8
224.4
513.1
499.2
180.6
156.8
150.5
—
96.4
127.8
123.8
265.4
2,113.6
1,966.9
—
271.0
230.0
2,467.9
4,581.5
Total short-term debt and current portion of long-term
2,161.6
2,164.7
2,462.2
Total debt
$
3,954.1 $
4,036.7
$
4,475.4 $
Significant Funding and Liquidity Activities
During 2020, we completed the following transactions in order to enhance our total liquidity position:
•
•
•
•
•
Repaid $233.9 million of 5.00% 2010 private placement notes;
Repaid the remaining outstanding balance of $190.0 million of the term loan assumed in connection with
the acquisition of the remaining 50% interest in TOP CV.
Issued €200 million aggregate principal amount of 4.500% 2020 Private Placement Notes due June 30,
2025. Within three months of the effective date of the Spin-off of Technip Energies, if there is a downgrade
by a nationally recognized rating agency of the corporate rating of TechnipFMC from an investment grade to
a non-investment grade rating or a withdrawal of any such rating, the interest rate applicable to the 2020
Private Placement Notes will be increased to 5.75%;
Entered into a new, six-month €500 million senior unsecured revolving credit facility agreement, which may
be extended for two additional three-month periods (the “Euro Facility”); and
Entered into the Bank of England’s COVID Corporate Financing Facility program (the “CCFF Program”),
which allows us to issue up to £600 million of unsecured commercial paper notes.
245 TechnipFMC
138
U.K. Annual Report and Accounts
Credit Facilities and Debt
Revolving credit facility - On January 17, 2017, we acceded to a new $2.5 billion senior unsecured revolving credit
facility agreement (“facility agreement”) between FMC Technologies, Inc., Technip Eurocash SNC (the “Borrowers”),
and TechnipFMC plc (the “Additional Borrower”) with JPMorgan Chase Bank, National Association (“JPMorgan”), as
agent and an arranger, SG Americas Securities LLC as an arranger, and the lenders party thereto.
The facility agreement provides for the establishment of a multicurrency, revolving credit facility, which includes a
$1.5 billion letter of credit subfacility. Subject to certain conditions, the Borrowers may request the aggregate
commitments under the facility agreement be increased by an additional $500.0 million. On November 26, 2018, we
entered into an extension which extends the expiration date to January 2023.
Borrowings under the facility agreement bear interest at the following rates, plus an applicable margin, depending
on currency:
•
•
•
U.S. dollar-denominated loans bear interest, at the Borrowers’ option, at a base rate or an adjusted rate
linked to the London interbank offered rate (“Adjusted LIBOR”);
sterling-denominated loans bear interest at Adjusted LIBOR; and
euro-denominated loans bear interest at the Euro interbank offered rate (“EURIBOR”).
Depending on the credit rating of TechnipFMC, the applicable margin for revolving loans varies (i) in the case of
Adjusted LIBOR and EURIBOR loans, from 0.820% to 1.300% and (ii) in the case of base rate loans, from 0.000%
to 0.300%. The “base rate” is the highest of (a) the prime rate announced by JPMorgan, (b) the greater of the
Federal Funds Rate and the Overnight Bank Funding Rate plus 0.50% or (c) one-month Adjusted LIBOR plus 1.0%.
As of December 31, 2020, there were no outstanding borrowings under our revolving credit facility.
Euro Facility – On May 19, 2020, we entered into the Euro Facility with HSBC France, as agent, and the lenders
party thereto, which provides for the establishment of a six-month revolving credit facility denominated in Euros with
total commitments of €500.0 million, which may be extended by us for two additional three-month periods.
Borrowings under the Euro Facility bear interest at the Euro interbank offered rate for a period equal in length to the
interest period of a given loan (which may be three or six months), plus an applicable margin. As of December 31,
2020, there were no outstanding borrowings under Euro Facility.
On June 12, 2020, we entered into Amendment No. 1 to the Facility Agreement and into an Amendment and
Restatement Agreement to our Euro Facility. The amendments, which are effective through the respective
expirations of the Facility Agreement and Euro Facility, permit us to include the gross book value of $3.2 billion of
goodwill (fully impaired in the quarter ended March 31, 2020) in the calculation of consolidated net worth, which is
used in the calculation of our quarterly compliance with the total capitalization ratio under the Facility Agreement
and Euro Facility.
The facility agreement and Euro Facility contain usual and customary covenants, representations and warranties,
and events of default for credit facilities of this type, including financial covenants requiring that our total
capitalization ratio not exceed 60% at the end of any financial quarter. The facility agreement and Euro Facility also
contain covenants restricting our ability and our subsidiaries’ ability to incur additional liens and indebtedness, enter
into asset sales, or make certain investments.
As of December 31, 2020, we were in compliance with all restrictive covenants under our credit facilities.
CCFF Program - On May 19, 2020, we entered into a dealer agreement (the “Dealer Agreement”) with Bank of
America Merrill Lynch International DAC (the “Dealer”) and an Issuing and Paying Agency Agreement (the “Agency
Agreement”, and together with the Dealer Agreement, the “Agreements”) with Bank of America, National
Association, London Branch, relating to the European commercial paper program established under the CCFF
Program as a source of additional liquidity.
The Agreements provide the terms under which we may issue, and the Dealer will arrange for, the sale of short
term, unsecured commercial paper notes (the “Notes”) to reduce existing debt or decrease overall borrowing costs.
The Notes contain customary representations, warranties, covenants, defaults, and indemnification provisions, and
will be sold at such discounts from their face amounts as shall be agreed between us and the Dealer. The Notes will
be fully payable at maturity, and the maturities of the Notes will vary but may not exceed 364 days. The principal
246 TechnipFMC
139
U.K. Annual Report and Accounts
amount of outstanding Notes may not exceed £600.0 million. The Agency Agreement provides for the terms of
issuance and payment of the Notes. As of December 31, 2020, our commercial paper borrowings under the CCFF
Program had a weighted average interest rate of 0.43%. The commercial paper borrowings under the CCFF
Program were repaid during the first quarter of 2021.
Bilateral credit facilities - We have access to a €100.0 million bilateral credit facility expiring in May 2021. The
bilateral credit facility contains usual and customary covenants, representations and warranties and events of
default for credit facilities of this type.
As of December 31, 2020, there were no outstanding borrowings under our bilateral credit facility.
Commercial paper - Under our commercial paper program, we have the ability to access $1.5 billion and €1.0 billion
of short-term financing through our commercial paper dealers, subject to the limit of unused capacity of our facility
agreement. Commercial paper borrowings are issued at market interest rates. As of December 31, 2020, our
commercial paper borrowings had a weighted average interest rate of 0.34% on the U.S. dollar denominated
borrowings and (0.06)% on the Euro denominated borrowings.
Synthetic bonds - On January 25, 2016, we issued €375.0 million principal amount of 0.875% convertible bonds
with a maturity date of January 25, 2021 and a redemption at par of the bonds which have not been converted. On
March 3, 2016, we issued additional convertible bonds for a principal amount of €75.0 million issued on the same
terms, fully fungible with and assimilated to the bonds issued on January 25, 2016. The synthetic bonds were repaid
in January 2021.
Senior Notes - We have outstanding 3.45% $500.0 million senior notes due October 1, 2022 (the “Senior Notes”).
The terms of the Senior Notes are governed by the indenture, dated as of March 29, 2017 between TechnipFMC
and U.S. Bank National Association, as trustee (the “Trustee”), as amended and supplemented by the First
Supplemental Indenture between TechnipFMC and the Trustee (the “First Supplemental Indenture”) relating to the
issuance of the 2017 Notes and the Second Supplemental Indenture between TechnipFMC and the Trustee (the
“Second Supplemental Indenture”) relating to the issuance of the 2022 Notes.
At any time prior to July 1, 2022, in the case of the 2022 Notes, we may redeem some or all of the Senior Notes at
the redemption prices specified in the First Supplemental Indenture and Second Supplemental Indenture,
respectively. At any time on or after July 1, 2022, we may redeem the 2022 Notes at the redemption price equal to
100% of the principal amount of the 2022 Notes redeemed. The Senior Notes are our senior unsecured obligations.
The Senior Notes will rank equally in right of payment with all of our existing and future unsubordinated debt, and
will rank senior in right of payment to all of our future subordinated debt.
Private Placement Notes
2020 Issuances:
During 2020, we completed the private placement of €200.0 million aggregate principal amount of the 2020 Private
Placement Notes. The 2020 Private Placement Notes bear interest of 4.500% and are due June 2025. Interest on
the notes is payable annually in arrears on June 30 of each year beginning June 30, 2020. The 2020 Private
Placement Notes contain usual and customary covenants and events of default for notes of this type. In addition,
within three months of the effective date of the Spin-off of Technip Energies, if there is a downgrade by a nationally
recognized rating agency of the corporate rating of TechnipFMC from an investment grade to a non-investment
grade rating or a withdrawal of any such rating, the interest rate applicable to the 2020 Private Placement Notes will
be increased to 5.75%.
2013 Issuances:
247 TechnipFMC
140
U.K. Annual Report and Accounts
In October 2013, we completed the private placement of €355.0 million aggregate principal amount of senior notes.
The notes were issued in three tranches with €100.0 million bearing interest at 3.75% and due October 2033 (the
“Tranche A 2033 Notes”), €130.0 million bearing interest of 3.15% and due October 2023 (the “Tranche B 2023
Notes) and €125.0 million bearing interest of 3.15% and due October 2023 (the “Tranche C 2023 Notes” and,
collectively with the “Tranche A 2033 Notes” and the “Tranche B 2023 Notes”, the “2013 Private Placement Notes”).
Interest on the Tranche A 2033 Notes is payable annually in arrears on October 7 each year, beginning October 7,
2014. Interest on the Tranche B 2023 Notes is payable annually in arrears on October 16 of each year beginning
October 16, 2014. Interest on the Tranche C 2023 Notes is payable annually in arrears on October 18 of each year,
beginning October 18, 2014.
2012 Issuances:
In June 2012, we completed the private placement of €325.0 million aggregate principal amount of notes. The notes
were issued in three tranches with €150.0 million bearing interest at 3.40% and due June 2022 (the “Tranche A
2022 Notes”), €75.0 million bearing interest of 4.0% and due June 2027 (the “Tranche B 2027 Notes”) and €100.0
million bearing interest of 4.0% and due June 2032 (the “Tranche C 2032 Notes” and, collectively with the “Tranche
A 2022 Notes and the “Tranche B 2027 Notes”, the “2012 Private Placement Notes”). Interest on the Tranche A
2022 Notes and the Tranche C 2032 Notes is payable annually in arrears on June 14 of each year beginning
June 14, 2013. Interest on the Tranche B 2027 Notes is payable annually in arrears on June 15 of each year,
beginning June 15, 2013.
The 2013 and 2012 Private Placement Notes contain usual and customary covenants and events of default for
notes of this type. In the event of a change of control resulting in a downgrade in the rating of the notes below BBB-,
the 2013 and 2012 Private Placement Notes may be redeemed early by any bondholder, at its sole discretion. The
2013 and 2012 Private Placement Notes are our unsecured obligations. The 2013 and 2012 Private Placement
Notes will rank equally in right of payment with all of our existing and future unsubordinated debt.
Bank borrowings and other
Bank borrowings - In January 2019, we executed a sale-leaseback transaction to finance the purchase of a
deepwater dive support vessel, Deep Discoverer (the “Vessel”) for the full transaction price of $116.8 million. The
sale-leaseback agreement (“Charter”) was entered into with a French joint-stock company, owned by Credit
Industrial et Commercial (“CIC”) which was formed for the sole purpose to purchase and act as the lessor of the
Vessel. It is a variable interest entity, which is fully consolidated in our consolidated financial statements. The
transaction was funded through debt of $96.2 million which is primarily long-term, expiring on January 8, 2031.
Term loan - In December 2016, we entered into a £160.0 million term loan agreement to finance the Deep Explorer,
a diving support vessel (“DSV”), maturing December 2028. Under the loan agreement, interest accrues at an annual
rate of 2.813%. This loan agreement contains usual and customary covenants and events of default for loans of this
type.
Foreign committed credit - We have committed credit lines at many of our international subsidiaries for immaterial
amounts. We utilize these facilities for asset financing and to provide a more efficient daily source of liquidity. The
effective interest rates depend upon the local national market.
Analysis by type of interest rate after yield management is described in Note 30.
248 TechnipFMC
141
U.K. Annual Report and Accounts
19.2 Secured financial debts excluding finance leases
Secured debts are as follows:
(In millions)
December 31, 2020
December 31, 2019
Guarantee
Without
Guarantee
Total
Guarantee
Without
Guarantee
Total
Bank overdrafts, current facilities and other
$
— $
10.7 $
10.7 $
232.1 $
4.1 $
236.2
Short-term portion of long-term debt
Total short-term debt and current portion of long-
term
Total long-term debt, less current portion and finance
leases
38.7
38.7
633.9
672.6
34.4
2,191.6
2,226.0
644.6
683.3
266.5
2,195.7
2,462.2
201.7
3,069.1 $ 3,270.8
190.0
1,823.2
2,013.2
Total debt excluding finance leases
$
240.4 $ 3,713.7 $ 3,954.1 $
456.5 $ 4,018.9 $ 4,475.4
NOTE 20. PENSIONS AND OTHER LONG-TERM EMPLOYEE BENEFIT PLANS
20.1 Description of TechnipFMC’s current benefit plans
We have funded and unfunded defined benefit pension plans which provide defined benefits based on years of
service and final average salary.
We are required to recognize the funded status of defined benefit post-retirement plans as an asset or liability in the
consolidated statement of financial position and recognize changes in that funded status in comprehensive income
in the year in which the changes occur. Further, we are required to measure the plan’s assets and its obligations
that determine its funded status as of the date of the consolidated statement of financial position. We have applied
this guidance to our domestic pension and other post-retirement benefit plans as well as for many of our non-U.S.
plans, including those in the United Kingdom, Germany, France and Canada.
In the case of funded plans, we ensure that the investment positions are managed to achieve long-term investments
that are in line with the obligations under the pension schemes. Our objective is to match assets to the pension
obligations by investing in long-term fixed interest securities with maturities that match the benefit payments as they
fall due and in the appropriate currency.
We actively monitor how the duration and the expected yield of the investments are matching the expected cash
outflows arising from the pension obligations. We have not changed the processes used to manage its risks from
previous periods. Investments are well diversified, such that the failure of any single investment would not have a
material impact on the overall level of assets.
Our pension investment strategy emphasizes maximizing returns consistent with balancing risk. Excluding our
international plans with insurance-based investments, 86% of our total pension plan assets represent the U.S.
qualified plan, the U.K. plan and the Netherlands plan. These plans are primarily invested in equity securities to
maximize the long-term returns of the plans.
On December 31, 2017, we amended the U.S. retirement plans (the “Plans”) to freeze benefit accruals for all
participants of the Plans as of December 31, 2017. After that date, participants in the Plans will no longer accrue
any further benefits and participants’ benefits under the Plans will be determined based on credited service and
eligible earnings as of December 31, 2017.
Foreign-based employees are eligible to participate in TechnipFMC-sponsored or government-sponsored benefit
plans to which we contribute. Several of the foreign defined benefit pension plans sponsored by us provide for
employee contributions; the remaining plans are noncontributory. The most significant of these plans are in the
Netherlands, France and the United Kingdom.
We have other post-retirement benefit plans covering substantially all of our U.S. unionized employees. The post-
retirement health care plans are contributory; the post-retirement life insurance plans are noncontributory.
249 TechnipFMC
142
U.K. Annual Report and Accounts
We expect to contribute approximately $20.7 million to our international pension plans, representing primarily the
Netherlands qualified pension plans and U.K. qualified pension plans. We do not expect to make any contributions
to our U.S. Qualified Pension Plan and our U.S. Non-Qualified Defined Benefit Pension Plan in 2021. All of the
contributions are expected to be in the form of cash.
The following table summarizes expected benefit payments from our various pension and post-retirement benefit
plans through 2030 as of December 31, 2020. Actual benefit payments may differ from expected benefit payments.
(In millions)
2021
2022
2023
2024
2025
2026-2030
Total
20.2 Net benefit expense recognized in the statement of income
The net benefit expense recognized in the statement of income is as follows:
(In millions)
Current service cost
Financial cost
Interest income
Net actuarial loss (gain) recognized on long-term benefits
Settlement loss (gain)
Special events (curtailment/settlement)
Administration costs and taxes
Expected
benefit
payments
$
$
2020
2019
$
18.3 $
37.5
(28.3)
0.2
0.2
0.3
5.5
92.9
65.9
65.5
71.3
69.0
380.2
744.8
16.2
45.0
(34.6)
(0.2)
—
1.5
3.6
31.5
Net benefit expense as recorded in the statement of income
$
33.7 $
250 TechnipFMC
143
U.K. Annual Report and Accounts
20.3 Defined benefit asset (liability) recognized in the consolidated statements of financial position
The amounts recognized in the statement of financial position and the movements in the net defined benefit
obligation over the year are as follows:
(In millions)
December 31, 2018
Acquisitions / disposals
Expense as recorded in the statement of income
Total current service cost
Net financial costs
Actuarial gains of the year
Administrative costs and taxes
Actuarial loss recognized in other comprehensive income
Actuarial loss on defined benefit obligation
- Experience
- Financial assumptions
- Demographic assumptions
Actuarial loss on plan assets
Change in irrecoverable surplus other than interest
Contributions and benefits paid
Contributions by employer
Contributions by employee
Benefits paid by employer
Benefits paid from plan assets
Exchange difference and other
Other
December 31, 2019
Acquisitions / disposals
Expense as recorded in the statement of income
Total current service cost
Net financial costs
Actuarial losses of the year
Settlement loss of the year
Administrative costs and taxes
Actuarial loss recognized in other comprehensive income
Actuarial loss on defined benefit obligation
- Experience
- Financial assumptions
- Demographic assumptions
Actuarial loss on plan assets
Change in irrecoverable surplus other than interest
Contributions and benefits paid
Contributions by employer
Contributions by employee
Benefits paid by employer
Benefits paid from plan assets
Exchange difference and other
Settlements
Other
December 31, 2020
Defined
Benefit
Obligation
Fair Value of
Plan Assets
Net Defined
Benefit
Obligation
$
1,394.3 $
1,035.4 $
358.9
—
66.1
17.7
45.0
(0.2)
3.6
185.3
185.3
(2.7)
204.2
(14.9)
—
(1.3)
(69.2)
—
1.1
(17.0)
(53.3)
11.0
5.0
—
34.6
—
34.6
—
—
129.5
129.5
—
—
—
129.5
—
(45.3)
6.9
1.1
—
(53.3)
13.5
0.2
—
31.5
17.7
10.4
(0.2)
3.6
55.8
55.8
(2.7)
204.2
(14.9)
(129.5)
(1.3)
(23.9)
(6.9)
—
(17.0)
—
(2.5)
4.8
$
1,592.5 $
1,167.9 $
424.6
—
62.0
18.6
37.5
0.2
0.2
5.5
107.3
107.3
(20.7)
133.4
(5.1)
—
(0.3)
(84.6)
—
1.1
(28.9)
(56.8)
47.4
(21.3)
3.2
—
28.3
—
28.3
—
—
—
39.0
39.0
—
—
—
39.0
—
(27.0)
28.7
1.1
—
(56.8)
33.6
(21.5)
0.2
—
33.7
18.6
9.2
0.2
0.2
5.5
68.3
68.3
(20.7)
133.4
(5.1)
(39.0)
(0.3)
(57.6)
(28.7)
—
(28.9)
—
13.8
0.2
3.0
$
1,706.5 $
1,220.5 $
486.0
In 2020 and 2019, the discounted defined benefit obligation included $1,469.3 million and $1,378.2 million for
funded plans and $238.3 million and $215.8 million for unfunded plan assets, respectively.
251 TechnipFMC
144
U.K. Annual Report and Accounts
Below are the details of the principal categories of plan assets by country in terms of percentage of their total fair
value:
(In %)
Eurozone
United Kingdom
United States
(In %)
Eurozone
United Kingdom
United States
20.4 Actuarial assumptions
Eurozone
United Kingdom
United States
Eurozone
United Kingdom
United States
December 31, 2020
Bonds
Shares
Real Estate
Cash
Other
Total
— %
11 %
— %
— %
71 %
92 %
— %
7 %
— %
— %
11 %
8 %
100 %
— %
— %
100 %
100 %
100 %
December 31, 2019
Bonds
Shares
Real Estate
Cash
Other
Total
— %
11 %
— %
— %
82 %
90 %
— %
— %
— %
— %
7 %
10 %
100 %
— %
— %
100 %
100 %
100 %
December 31, 2020
Discount Rate
Future Salary
Increase
(above Inflation Rate)
Healthcare Cost
Increase Rate
Inflation
Rate
From 0.30% to 0.70%
From 1.50% to 3.90%
3.0 % From 1.50% to 1.90%
1.5 %
2.5 %
2.9 %
4.0 %
NA From 2.50% to 2.90%
NA
NA
December 31, 2019
Discount Rate
Future Salary
Increase
(above Inflation
Rate)
Healthcare Cost
Increase Rate
Inflation
Rate
From 0.90% to 1.00% From 2.30% to 3.60%
3.0 % From 1.60% to 1.80%
2.0 %
3.6 %
3.9 %
4.0 %
NA
NA
From 2.40% to 3.10%
NA
Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and
experience in each territory. These assumptions translate into an average life expectancy in years for a pensioner
retiring at age 65:
(in years)
Eurozone
United Kingdom
United States
252 TechnipFMC
December 31, 2020
Assumed life expectations for a retiree age 65
Retiring at the end of the reporting
period
Retiring 15 years after the end of the
reporting period
Male
Female
Male
Female
27
23
23
28
23
19
31
25
21
24
21
21
145
U.K. Annual Report and Accounts
(in years)
Eurozone
United Kingdom
United States
December 31, 2019
Assumed life expectations for a retiree age 65
Retiring at the end of the reporting
period
Retiring 15 years after the end of the
reporting period
Male
Female
Male
Female
23
21
21
27
23
23
28
23
19
31
25
21
The sensitivity analysis is based on a change in an assumption while holding all other assumptions constant.
The discount rates as of December 31, 2020 of the Eurozone, United Kingdom and the United States zones are
determined by holding the benefit flows of services expected from the plans and by using a curve of yield built from
a wide basket of bonds of companies of high quality (rated AA). In the countries where the market bonds of
companies of high quality is insufficiently deep, the discount rates are measured in reference to governmental rates.
The references used to determine the discount rates and mortality assumptions as of December 31, 2020 remain
unchanged compared to 2019. A 25% decrease in the discount rate would increase the defined benefit obligation by
approximately 98.7%. A 25% increase in the discount rate would decrease the defined benefit obligation by
approximately (3.8)%. A one year decrease in the life expectancy would decrease the defined benefit obligation by
approximately (3.7)%. A one year increase in the life expectancy would increase the defined benefit obligation by
approximately 3.7%.
20.5 Other plans
Savings plans - The TechnipFMC Retirement Savings Plan (“Qualified Plan”), a qualified salary reduction plan under
Section 401(k) of the Internal Revenue Code, is a defined contribution plan. Additionally, we have a non-qualified
deferred compensation plan, the Non-Qualified Plan, which allows certain highly compensated employees the
option to defer the receipt of a portion of their salary. We match a portion of the participants’ deferrals to both plans.
Both plans relate to FMC Technologies, Inc.
Participants in the Non-Qualified Plan earn a return based on hypothetical investments in the same options as our
401(k) plan, including TechnipFMC plc stock (“FTI Stock Fund”). In March 2019, the FTI Stock Fund was removed
from the Non-Qualified Plan. Changes in the market value of these participant investments are reflected in other
income (expense), net. The deferred compensation obligation is measured based on the actuarial present value of
the benefits owed to the employee. As of December 31, 2020 and 2019, our liability for the Non-Qualified Plan was
$36.4 million and $36.6 million, respectively, and was recorded in other non-current liabilities. We hedge the
financial impact of changes in the participants’ hypothetical investments by purchasing the investments that the
participants have chosen. Changes in the fair value of these investments are recognized as an offset to other
income (expense), net. As of December 31, 2020 and 2019, we had investments for the Non-Qualified Plan totaling
$22.8 million and $26.3 million at fair market value, respectively.
We recognized expense of $29.9 million and $34.0 million for matching contributions to these plans in 2020 and
2019, respectively. Additionally, we recognized expense of $12.1 million and $13.2 million for non-elective
contributions in 2020 and 2019, respectively.
253 TechnipFMC
146
U.K. Annual Report and Accounts
NOTE 21. PROVISIONS (CURRENT AND NON-CURRENT)
Movements in each class of provision as of December 31, 2019 are as follows:
(In millions)
Tax
Litigation
Restructuring obligations (2)
Provisions for claims
Other non-current provisions
Total non-current provisions
Contingencies related to contracts
Tax
Litigation (1)
Restructuring obligations (2)
Provisions for claims
Other current provisions
Total current provisions
Total provisions
December
31, 2018
Increase
Used
Reversals
Unused
Reversals
Net foreign
exchange
differences
Other
December
31, 2019
$
0.7 $
— $
— $
— $
— $
— $
5.8
10.8
6.4
19.0
42.7
148.8
30.0
388.2
28.6
15.2
215.5
826.3
5.2
2.2
2.4
1.0
10.8
36.5
8.8
84.0
30.3
5.7
124.1
289.4
(2.2)
(0.6)
—
(13.3)
(16.1)
(20.7)
(1.1)
(293.9)
(17.3)
(20.0)
(115.6)
(468.6)
—
(2.0)
—
(0.2)
(2.2)
(10.4)
(2.6)
(27.5)
(1.3)
—
(73.2)
(115.0)
(3.2)
0.2
(0.1)
(0.2)
(3.3)
(0.4)
0.3
(6.9)
—
(0.6)
(2.9)
(10.5)
2.0
5.0
—
8.8
15.8
(37.1)
(11.6)
16.2
(7.2)
—
(5.3)
(45.0)
0.7
7.6
15.6
8.7
15.1
47.7
116.7
23.8
160.1
33.1
0.3
142.6
476.6
$
869.0 $
300.2 $
(484.7) $
(117.2) $
(13.8) $
(29.2) $
524.3
Movements in each class of provision as of December 31, 2020 are as follows:
(In millions)
Tax
Litigation
Restructuring obligations (2)
Provisions for claims
Other non-current provisions
Total non-current provisions
Contingencies related to contracts
Tax
Litigation (1)
Restructuring obligations
Provisions for claims
Other current provisions
Total current provisions
Total provisions
December
31, 2019
Increase
Used
Reversals
Unused
Reversals
Net foreign
exchange
differences
Other
December
31, 2020
$
0.7 $
— $
— $
(0.6) $
0.1 $
— $
7.6
15.6
8.7
15.1
47.7
116.7
23.8
160.1
33.1
0.3
142.6
476.6
—
20.6
0.4
0.2
21.2
69.3
1.3
33.8
105.8
—
89.5
299.7
—
(4.8)
(0.1)
(0.2)
(5.1)
(8.1)
—
(12.8)
(77.0)
—
(104.1)
(202.0)
—
(1.1)
(0.5)
(0.6)
(2.8)
(61.1)
(4.9)
(6.7)
(12.7)
—
(31.9)
(117.3)
0.4
(1.1)
0.9
—
0.3
1.4
—
(4.9)
2.8
—
(9.2)
(9.9)
(1.5)
(2.1)
—
(5.5)
(9.1)
(7.3)
—
(1.1)
3.7
—
0.8
0.2
6.5
27.1
9.4
9.0
52.2
110.9
20.2
168.4
55.7
0.3
87.7
(3.9)
443.2
$
524.3 $
320.9 $
(207.1) $
(120.1) $
(9.6) $
(13.0) $
495.4
(1) Litigation - The balance includes provision of $51.5 million and $128.6 million as of December 31, 2020 and
2019, respectively. U.S. Department of Justice performed investigation of offshore platform projects awarded
between 2003 and 2007, performed in Brazil by a joint venture company in which Technip S.A. was a minority
participant, and also certain other projects performed by Technip S.A. subsidiaries in Brazil between 2002 and
2013. On June 25, 2019, we announced a global resolution to pay a total of $301.3 million. As part of this
resolution, we entered into a three-year Deferred Prosecution Agreement. See Note 26 for further details.
(2) Restructuring obligations - In December 2019, we initiated a company-wide reduction in workforce intended to
reduce costs and better align our workforce with current and anticipated activity levels, which resulted in the
recognition of severance costs relating to termination benefits and other restructuring charges. The initial plan
254 TechnipFMC
147
U.K. Annual Report and Accounts
included a workforce reduction of approximately 1,600 employees. Restructuring charges related to this global
initiative were $32.4 million. In 2020, due to prolonged uncertainty in energy markets related to COVID-19 we
also incurred additional restructuring and other expenses. See Note 22 for more details.
The accounting policy principles utilized to evaluate the amounts and types of provisions for liabilities and charges
are described in Note 1.
NOTE 22. IMPAIRMENT, RESTRUCTURING AND OTHER EXPENSES
Impairment, restructuring and other expenses were as follows:
(In millions)
Subsea
Technip Energies
Surface Technologies
Corporate and other
Year Ended December 31,
2020
2019
$
3,031.7 $
1,693.8
93.6
301.6
10.0
17.0
708.4
17.4
Total impairment, restructuring and other expenses
$
3,436.9 $
2,436.6
Goodwill, property, plant and equipment and right-of-use impairments
During the years ended December 31, 2020 and 2019, triggering events were identified which led to impairments of
certain property, plant and equipment, including goodwill.
Goodwill impairment charges of $2,800.2 million and $197.5 million were recorded during the year ended December
31, 2020 in our Subsea and Surface Technologies operating segments, respectively. Goodwill impairment charges
of $1,347.7 million and $671.0 million were recorded during the year ended December 31, 2019 in our Subsea and
Surface Technologies operating segments, respectively. See Note 11 for further details.
For property, plant and equipment, as a result of impairment assessments, during the year ended December 31,
2020, impairment charges of $92.9 million and $79.4 million were recorded in our Subsea and Surface Technologies
operating segments, respectively. During the year ended December 31, 2019, we recorded $411.3 million of
property, plant and equipment impairment charges primarily consisted of $153.8 million related to vessels and
vessels equipment in our Subsea operating segment and $168.9 million related to the pipe and umbilical
manufacturing facilities in our Surface Technologies operating segments. See Note 10 for further details.
For right-of-use assets, as a result of impairment assessments, during the year ended December 31, 2020,
impairment charges of $18.8 million, $1.8 million, $10.3 million and $2.6 million were recorded in our Subsea,
Surface Technologies, Technip Energies operating segments and Corporate, respectively. No impairment charges
for right-of-use assets were recorded in 2019.
Restructuring and other expenses
In addition, during the year ended December 31, 2020, we recorded restructuring and other charges of $227.5
million. Restructuring and other charges primarily consisted of severance and other employee related costs and
COVID-19 related expenses across all segments. Restructuring and other charges were as follows:
(In millions)
Subsea
Technip Energies
Surface Technologies
Corporate and other
Total
Year Ended December 31,
2020
Restructuring and
other charges
COVID-19 expenses
66.5 $
50.1 $
39.3
13.2
6.7
44.0
7.7
—
125.7 $
101.8 $
$
$
2019
Restructuring and
other charges
(46.4)
17.0
18.7
17.4
6.7
255 TechnipFMC
148
U.K. Annual Report and Accounts
COVID-19 related expenses represent unplanned, one-off, incremental and non-recoverable costs incurred solely
as a result of COVID-19 pandemic situation, which would not have been incurred otherwise. COVID-19 related
expenses primarily included (a) employee payroll and travel, operational disruptions associated with quarantining,
personnel travel restrictions to job sites and shutdown of manufacturing plants and sites; (b) supply chain and
related expediting costs of accelerated shipments for previously ordered and undelivered products; (c) costs
associated with implementing additional information technology to support remote working environments; and (d)
facilities-related expenses to ensure safe working environments.
Prolonged uncertainty in energy markets could lead to further future reductions in capital spending from our
customer base. In turn, this may lead to changes in our strategy. We will continue to take actions designed to
mitigate the adverse effects of the rapidly changing market environment and expect to continue to adjust our cost
structure to market conditions. If market conditions continue to deteriorate, we may record additional restructuring
charges and additional impairments of our property, plant and equipment and equity method investments.
NOTE 23. OTHER LIABILITIES (CURRENT AND NON-CURRENT)
Other current liabilities are as follows:
(In millions)
Redeemable financial liability
Current financial liabilities at Fair Value Through Profit or Loss, total
Other taxes payable
Accruals on completed contracts
Social security liability
Payable on litigation settlement
Other
Other current liabilities, total
Total other current liabilities
Other non-current liabilities are as follows:
(In millions)
Redeemable financial liabilities
Non-current financial liabilities at Fair Value through Profit or Loss, total
Uncertain tax positions
Obligations on non-qualified employee retirement plans
Subsidies
Payable on litigation settlement
Payable on property, plant and equipment
Other
Other non-current liabilities
Total other non-current liabilities
December 31,
2020
2019
$
184.2 $
184.2
221.3
174.9
108.9
51.5
241.1
797.7
129.0
129.0
240.4
193.5
116.5
62.9
275.8
889.1
$
981.9 $
1,018.1
December 31,
2020
2019
$
104.7 $
104.7
51.9
36.4
4.9
—
—
60.6
153.8
258.5 $
$
181.0
181.0
60.6
36.6
4.4
62.9
12.2
76.2
252.9
433.9
A mandatorily redeemable financial liability was recognized in 2016 to account for the fair value of the non-
controlling interests in the equity of legal onshore/offshore contract entities which own and account for the design,
engineering and construction of the Yamal LNG plant. This financial liability is periodically revalued to its fair value,
in order to reflect current expectations about the obligation. TechnipFMC recognized a loss of $202.0 million and
$423.1 million in 2020 and 2019, respectively. Pursuant to payments of $224.2 million and $562.8 million during the
year in 2020 and 2019, respectively. The carrying amount of Yamal LNG redeemable financial liability as of
December 31 was $246.6 million and $268.8 million in 2020 and 2019, respectively.
256 TechnipFMC
149
U.K. Annual Report and Accounts
NOTE 24. ACCOUNTS PAYABLE, TRADE
Trade payables amounted to $2,741.1 million as of December 31, 2020 as compared to $2,660.7 million as of
December 31, 2019. Trade payables maturities are linked to the operating cycle of supply contracts and mature
within 12 months.
NOTE 25. WARRANTY OBLIGATIONS
Warranty obligations are included within "Other current liabilities" in our consolidated statements of financial position
as of December 31, 2020 and 2019. A reconciliation of warranty obligations for the years ended December 31, 2020
and 2019 as follows:
(In millions)
Balance at beginning of period
Warranty expenses
Adjustment to existing accruals
Claims paid
Balance at end of period
Year Ended December 31,
2020
2019
$
193.5 $
95.6
(86.2)
(28.1)
$
174.8 $
234.4
78.8
(57.5)
(62.2)
193.5
NOTE 26. COMMITMENTS AND CONTINGENT LIABILITIES
Contingent liabilities associated with guarantees - In the ordinary course of business, we enter into standby letters
of credit, performance bonds, surety bonds and other guarantees with financial institutions for the benefit of our
customers, vendors and other parties. The majority of these financial instruments expire within five years.
Management does not expect any of these financial instruments to result in losses that, if incurred, would have a
material adverse effect on our consolidated financial position, results of operations or cash flows.
Guarantees consisted of the following:
(In millions)
Financial guarantees (1)
Performance guarantees (2)
Maximum potential undiscounted payments
December 31,
2020
2019
$
$
310.1 $
4,659.6
4,969.7 $
945.5
4,916.0
5,861.5
(1) Financial guarantees represent contracts that contingently require a guarantor to make payments to a guaranteed party based on changes
in an underlying agreement that is related to an asset, a liability, or an equity security of the guaranteed party. These tend to be drawn down
only if there is a failure to fulfill our financial obligations.
(2) Performance guarantees represent contracts that contingently require a guarantor to make payments to a guaranteed party based on
another entity’s failure to perform under a nonfinancial obligating agreement. Events that trigger payment are performance-related, such as
failure to ship a product or provide a service.
Management believes the ultimate resolution of our known contingencies will not materially affect our consolidated
financial position, results of operations, or cash flows.
Contingent liabilities associated with legal matters - We are involved in various pending or potential legal and tax
actions or disputes in the ordinary course of our business. Management is unable to predict the ultimate outcome of
these actions because of their inherent uncertainty. However, management believes that the most probable,
ultimate resolution of these matters will not have a material adverse effect on our consolidated financial position,
results of operations or cash flows.
On March 28, 2016, FMC Technologies received an inquiry from the U.S. Department of Justice (“DOJ”) related to
the DOJ’s investigation of whether certain services Unaoil S.A.M. provided to its clients, including FMC
Technologies, violated the U.S. Foreign Corrupt Practices Act (“FCPA”). On March 29, 2016, Technip S.A. also
received an inquiry from the DOJ related to Unaoil. We cooperated with the DOJ’s investigations and, with regard to
FMC Technologies, a related investigation by the SEC.
257 TechnipFMC
150
U.K. Annual Report and Accounts
In late 2016, Technip S.A. was contacted by the DOJ regarding its investigation of offshore platform projects
awarded between 2003 and 2007, performed in Brazil by a joint venture company in which Technip S.A. was a
minority participant, and we have also raised with DOJ certain other projects performed by Technip S.A. subsidiaries
in Brazil between 2002 and 2013. The DOJ has also inquired about projects in Ghana and Equatorial Guinea that
were awarded to Technip S.A. subsidiaries in 2008 and 2009, respectively. We cooperated with the DOJ in its
investigation into potential violations of the FCPA in connection with these projects. We contacted and cooperated
with the Brazilian authorities (Federal Prosecution Service (“MPF”), the Comptroller General of Brazil (“CGU”) and
the Attorney General of Brazil (“AGU”)) with their investigation concerning the projects in Brazil and have also
contacted and are cooperating with French authorities (the Parquet National Financier (“PNF”)) with their
investigation about these existing matters.
On June 25, 2019, we announced a global resolution to pay a total of $301.3 million to the DOJ, the SEC, the MPF,
and the CGU/AGU to resolve these anti-corruption investigations. We will not be required to have a monitor and will,
instead, provide reports on our anti-corruption program to the Brazilian and U.S. authorities for two and three years,
respectively.
As part of this resolution, we entered into a three-year Deferred Prosecution Agreement (“DPA”) with the DOJ
related to charges of conspiracy to violate the FCPA related to conduct in Brazil and with Unaoil. In addition, Technip
USA, Inc., a U.S. subsidiary, pled guilty to one count of conspiracy to violate the FCPA related to conduct in Brazil.
We will also provide the DOJ reports on our anti-corruption program during the term of the DPA.
In Brazil, our subsidiaries Technip Brasil - Engenharia, Instalações E Apoio Marítimo Ltda. and Flexibrás Tubos
Flexíveis Ltda. entered into leniency agreements with both the MPF and the CGU/AGU. We have committed, as
part of those agreements, to make certain enhancements to their compliance programs in Brazil during a two-year
self-reporting period, which aligns with our commitment to cooperation and transparency with the compliance
community in Brazil and globally.
In September 2019, the SEC approved our previously disclosed agreement in principle with the SEC Staff and
issued an Administrative Order, pursuant to which we paid the SEC $5.1 million, which was included in the global
resolution of $301.3 million.
To date, the investigation by PNF related to historical projects in Equatorial Guinea and Ghana has not reached
resolution. We remain committed to finding a resolution with the PNF and will maintain a $70.0 million provision
related to this investigation. As we continue to progress our discussions with PNF towards resolution, the amount of
a settlement could exceed this provision.
There is no certainty that a settlement with PNF will be reached or that the settlement will not exceed current
accruals. The PNF has a broad range of potential sanctions under anticorruption laws and regulations that it may
seek to impose in appropriate circumstances including, but not limited to, fines, penalties, and modifications to
business practices and compliance programs. Any of these measures, if applicable to us, as well as potential
customer reaction to such measures, could have a material adverse impact on our business, results of operations,
and financial condition. If we cannot reach a resolution with the PNF, we could be subject to criminal proceedings in
France, the outcome of which cannot be predicted.
Legal proceedings -A purported shareholder class action filed in 2017 and amended in January 2018 and captioned
Prause v. TechnipFMC, et al., No. 4:17-cv-02368 (S.D. Texas) is pending in the U.S. District Court for the Southern
District of Texas against the Company and certain current and former officers and employees of the Company. The
suit alleged violations of the federal securities laws in connection with the Company's restatement of our first quarter
2017 financial results and a material weakness in our internal control over financial reporting announced on July 24,
2017. On January 18, 2019, the District Court dismissed claims under Section 10(b) and 20(a) of the Securities
Exchange Act of 1934, as amended, and Section 15 of the Securities Act of 1933, as amended (“Securities Act”). A
remaining claim for alleged violation of Section 11 of the Securities Act in connection with the reporting of certain
financial results in the Company’s Form S-4 Registration Statement filed in 2016 is pending and seeks unspecified
damages. The Company is vigorously contesting the litigation and cannot predict its duration or outcome.
258 TechnipFMC
151
U.K. Annual Report and Accounts
Contingent liabilities associated with liquidated damages - Some of our contracts contain provisions that require us
to pay liquidated damages if we are responsible for the failure to meet specified contractual milestone dates and the
applicable customer asserts a conforming claim under these provisions. These contracts define the conditions
under which our customers may make claims against us for liquidated damages. Based upon the evaluation of our
performance and other commercial and legal analysis, management believes we have appropriately recognized
probable liquidated damages as of December 31, 2020 and 2019, and that the ultimate resolution of such matters
will not materially affect our consolidated financial position, results of operations, or cash flows.
NOTE 27. FINANCIAL INSTRUMENTS
27.1 Financial assets and liabilities by category
Financial assets and financial liabilities are as follows:
(In millions)
Financial assets
Trade receivables, net
Other financial assets
Derivative financial instruments
Cash and cash equivalents
Total financial assets
Financial liabilities
Long-term debt, less current portion
Non-current lease liabilities
Other non-current financial liabilities
Short-term debt and current portion of long-term debt
Accounts payable, trade
Derivative financial instruments
Current lease liabilities
Other financial liabilities
Total financial liabilities
December 31, 2020
Analysis by Category of Financial Instruments
Carrying
Amount
At Fair Value
through Profit
or Loss
Assets/
Liabilities at
Amortized cost
At Fair Value
through OCI
$
2,389.4 $
— $
2,389.4 $
307.6
337.3
68.2
85.9
4,807.7
4,807.7
239.4
—
—
7,842.0 $
4,961.8 $
2,628.8 $
1,792.5 $
— $
1,792.5 $
$
$
881.0
104.7
2,161.6
2,741.1
190.5
273.9
184.2
—
104.7
—
—
15.6
—
184.2
881.0
—
2,161.6
2,741.1
—
273.9
—
—
—
251.4
—
251.4
—
—
—
—
—
174.9
—
—
$
8,329.5 $
304.5 $
7,850.1 $
174.9
259 TechnipFMC
152
U.K. Annual Report and Accounts
(In millions)
Financial assets
Trade receivables, net
Other financial assets
Derivative financial instruments
Cash and cash equivalents
Total financial assets
Financial liabilities
Long-term debt, less current portion
Non-current lease liabilities
Other non-current financial liabilities
Short-term debt and current portion of long-term debt
Accounts payable, trade
Derivative financial instruments
Current lease liabilities
Other current financial liabilities
Total financial liabilities
December 31, 2019
Analysis by Category of Financial Instruments
Carrying
Amount
At Fair Value
through Profit
or Loss
Assets/
Liabilities at
Amortized cost
At Fair Value
through OCI
$
2,281.4 $
— $
2,281.4 $
390.9
141.4
58.4
12.3
5,190.1
5,190.1
332.5
—
—
8,003.8 $
5,260.8 $
2,613.9 $
2,013.2 $
— $
2,013.2 $
$
$
681.7
181.0
2,462.2
2,660.7
194.0
275.1
129.0
—
181.0
—
—
21.0
—
129.0
681.7
—
2,462.2
2,660.7
—
275.1
—
—
—
129.1
—
129.1
—
—
—
—
—
173.0
—
—
$
8,596.9 $
331.0 $
8,092.9 $
173.0
The following explains the judgments and estimates made in determining the fair values of the financial instruments
that are recognized and measured at fair value in the consolidated financial statements. To provide an indication
about the reliability of the inputs used in determining fair value, TechnipFMC has classified its financial instruments
into the three levels prescribed under the accounting standards. An explanation of each level follows underneath the
table.
(In millions)
Financial assets
Investments:
Non-Qualified Plan:
Traded securities (1)
Money market fund
Stable value fund
Derivative financial instruments:
Foreign exchange contracts
Total financial assets
Financial liabilities
Redeemable financial liability
Derivative financial instruments:
Foreign exchange contracts
Total financial liabilities
December 31, 2020
Level 1
Level 2
Level 3
Total
$
65.6 $
— $
— $
—
—
—
1.7
0.9
337.3
—
—
—
65.6 $
339.9 $
— $
65.6
1.7
0.9
—
337.3
405.5
— $
— $
288.9 $
288.9
—
190.5
—
— $
190.5 $
288.9 $
190.5
479.4
$
$
$
260 TechnipFMC
153
U.K. Annual Report and Accounts
(In millions)
Financial assets
Investments:
Non-Qualified Plan:
Traded securities (1)
Money market fund
Stable value fund
Derivative financial instruments:
Synthetic bonds - call option premium
Foreign exchange contracts
Total financial assets
Financial liabilities
Redeemable financial liability
Derivative financial instruments:
Synthetic bonds - embedded derivatives
Foreign exchange contracts
Total financial liabilities
December 31, 2019
Level 1
Level 2
Level 3
Total
$
54.8 $
— $
— $
—
—
—
—
1.5
2.1
4.3
137.1
—
—
—
—
54.8 $
145.0 $
— $
54.8
1.5
2.1
4.3
137.1
199.8
— $
— $
310.0 $
310.0
—
—
4.3
189.7
—
—
— $
194.0 $
310.0 $
4.3
189.7
504.0
$
$
$
(1)
Includes equity securities, fixed income and other investments measured at fair value.
During the financial years 2020 and 2019, there were no transfer between Level 1 and Level 2 fair value
measurements, and no transfers into or out of Level 3 fair value measurements.
Non-Qualified Plan––The fair value measurement of our traded securities is at FVTPL and is based on quoted
prices that we have the ability to access in public markets. Our stable value fund and money market fund are valued
at the net asset value of the shares held at the end of the quarter, which is based on the fair value of the underlying
investments using information reported by our investment adviser at period-end.
Redeemable financial liabilities––The following redeemable financial liabilities were recognized during the financial
year 2020 and 2019:
•
•
Yamal redeemable financial liability - The mandatorily redeemable financial liability relates to our voting
control interests in legal Technip Energies contract entities which own and account for the design,
engineering and construction of the Yamal LNG plant. The fair value is determined using a discounted cash
flow model. The key assumptions used in applying the income approach are the selected discount rates
and the expected dividends to be distributed in the future to the non-controlling interest holders. Expected
dividends to be distributed are based on the non-controlling interests’ share of the expected profitability of
the underlying contract, a 15% discount rate and the overall timing of completion of the project. See Note 23
for further details. A decrease of one percentage point in the discount rate would have increased the liability
by $2.0 million as of December 31, 2020.
TIOS redeemable financial liability - In 2018, we acquired a 51% share in TIOS. On acquisition date a
redeemable financial liability was recorded at fair value of a written put option. On acquisition date we
determined the fair value of the put option over non-controlling interest as the present value of the expected
redemption price of the written put option. TIOS redeemable financial liability is classified as a current
financial liability and stated at its redemption value totaling $42.3 million as of December 31, 2020.
261 TechnipFMC
154
U.K. Annual Report and Accounts
The fair value measurement of our redeemable financial liabilities is based upon significant unobservable inputs not
observable in the market and is consequently classified as a Level 3 fair value measurement.
Changes in the fair value of our Level 3 mandatorily redeemable financial liabilities is recorded as interest expense
in the consolidated statements of income and is presented below.
(In millions)
Balance as of January 1
Expenses recognized in the statements of income
Settlements of mandatorily redeemable financial liability
Balance as of December 31
Yamal
TIOS
2020
2019
2020
2019
$
$
268.8 $
408.5 $
(202.0)
224.2
(423.1)
562.8
41.2 $
(1.1)
—
246.6 $
268.8 $
42.3 $
40.8
(0.4)
—
41.2
Fair value of debt—The fair values (based on Level 2 inputs) of our debt, carried at amortized cost, are presented in
Note 19 Debts.
27.2 Derivative financial instruments
For purposes of mitigating the effect of changes in exchange rates, we hold derivative financial instruments to
hedge the risks of certain identifiable and anticipated transactions and recorded assets and liabilities in our
consolidated statement of financial position. The types of risks hedged are those relating to the variability of future
earnings and cash flows caused by movements in foreign currency exchange rates. Our policy is to hold derivatives
only for the purpose of hedging risks associated with anticipated foreign currency purchases and sales created in
the normal course of business and not for trading purposes where the objective is solely or partially to generate
profit.
Generally, we enter into hedging relationships such that changes in the fair values or cash flows of the transactions
being hedged are expected to be offset by corresponding changes in the fair value of the derivatives. For derivative
instruments that qualify as a cash flow hedge, the effective portion of the gain or loss of the derivative, which does
not include the time value component of a forward currency rate, is reported as a component of OCI and reclassified
into earnings in the same period or periods during which the hedged transaction affects earnings. For derivative
instruments not designated as hedging instruments, any change in the fair value of those instruments are reflected
in earnings in the period such change occurs.
See Note 30 for further details.
We hold the following types of derivative instruments:
Foreign exchange rate forward contracts—The purpose of these instruments is to hedge the risk of changes in
future cash flows of highly probable purchase or sale commitments denominated in foreign currencies and recorded
assets and liabilities in our consolidated statement of financial position.
We held the following material net positions as of December 31, 2020 and 2019:
(In millions except for rates)
1-12 months
12-24 months
Beyond 24
months
Total
December 31, 2020
Maturity
Australian dollar
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Brazilian real
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
British pound
Notional amount (LC)
27.3
1.3
21.1
45.2
1.3
34.9
(951.4)
1,632.8
5.2
(183.1)
5.2
314.2
5.7
1.3
4.4
—
5.2
—
78.2
1.3
60.4
681.4
5.2
131.1
653.5
96.0
22.1
771.6
262 TechnipFMC
155
U.K. Annual Report and Accounts
Average forward rate (LC/USD)
USD equivalent
Canadian dollar
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Columbian peso
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Euro
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Hong Kong dollar
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Indian rupee
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Indonesian rupiah
Notional amount (LC)
3,432.5
3,432.5
0.7
892.9
0.7
131.3
(4.4)
1.3
(3.4)
37,142.2
3,432.5
10.8
1,406.1
0.8
1,725.2
(95.1)
7.8
(12.3)
2,694.3
73.1
36.9
(2.7)
1.3
(2.2)
—
—
367.6
0.8
451.0
(2.5)
7.8
(0.3)
478.0
73.1
6.5
0.7
30.1
—
1.3
—
—
—
20.8
0.8
25.5
—
7.8
—
0.7
1,054.3
(7.1)
1.3
(5.6)
37,142.2
3,432.5
10.8
1,794.5
0.8
2,201.7
(97.6)
7.8
(12.6)
(0.3)
3,172.0
73.1
—
73.1
43.4
(201,679.0)
—
—
(201,679.0)
Average forward rate (LC/USD)
14,105.0
14,105.0
14,105.0
14,105.0
USD equivalent
Japanese yen
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Malaysian ringgit
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Mexican peso
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Norwegian krone
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Singapore dollar
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Yuan Renminbi
Notional amount (LC)
Average forward rate (LC/USD)
(14.3)
—
1,300.0
103.1
12.6
745.0
4.0
185.2
(26.3)
19.9
(1.3)
501.5
3.2
156.0
165.8
1.3
125.4
35.9
6.54
(175.6)
103.1
(1.7)
146.0
4.0
36.3
843.7
19.9
42.3
149.9
3.2
(79.7)
5.4
1.3
4.1
—
—
—
—
—
—
—
4.0
—
470.6
19.9
23.6
(14.3)
1,124.4
103.1
10.9
891.0
4.0
221.5
1,288.0
19.9
64.6
1,070.2
1,721.6
3.2
125.4
—
—
—
—
—
3.2
201.7
171.2
1.3
129.5
35.9
—
263 TechnipFMC
156
U.K. Annual Report and Accounts
USD equivalent
U.S. dollar
5.5
—
—
5.5
(1,847.1)
(989.0)
(86.0)
(2,922.1)
(In millions except for rates)
1-12 months
12-24 months
Beyond 24
months
Total
December 31, 2019
Maturity
Australian dollar
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Brazilian real
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
British pound
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Canadian dollar
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Columbian peso
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Euro
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Hong Kong dollar
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Indian rupee
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Indonesian rupiah
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Japanese yen
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Malaysian ringgit
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Mexican peso
154.5
1.4
108.4
1,089.7
4.0
270.3
233.4
0.8
307.8
(89.6)
1.3
(68.9)
—
—
—
908.0
0.9
1,019.8
—
—
—
—
—
—
—
—
—
(50.1)
108.5
(0.5)
52.6
4.1
12.9
(103.1)
1.4
(72.4)
—
—
—
(101.1)
(190.0)
4.0
4.0
(25.1)
(47.1)
116.7
0.8
154.1
(0.3)
1.3
(0.2)
—
—
—
99.0
0.9
111.1
(138.0)
7.8
(17.7)
74.3
71.3
1.0
240,584.6
13,901.0
17.3
(130.5)
108.5
(1.2)
(0.2)
4.1
—
(235.3)
0.8
(310.4)
—
—
—
(7.0)
6.7
(1.1)
102.3
0.9
114.8
—
—
—
302.2
71.3
4.2
—
—
—
4,557.2
108.5
42.0
361.2
4.1
88.3
51.4
1.4
36.0
798.6
4.0
198.1
114.8
0.8
151.5
(89.9)
1.3
(69.1)
(7.0)
6.7
(1.1)
1,109.3
0.9
1,245.7
(138.0)
7.8
(17.7)
376.5
71.3
5.2
240,584.6
13,901.0
17.3
4,376.6
108.5
40.3
413.6
4.1
101.2
264 TechnipFMC
157
U.K. Annual Report and Accounts
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Norwegian krone
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Singapore dollar
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Swedish Krona
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Kuwaiti dinar
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Yuan Renminbi
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
U.S. dollar
(300.0)
18.9
(15.9)
834.0
8.8
94.9
192.2
1.4
142.9
90.0
9.3
9.7
(2.0)
0.3
(6.5)
—
—
—
(578.7)
—
—
—
1,573.9
8.8
179.2
15.1
1.4
11.2
15.7
9.3
1.7
(0.2)
0.3
(0.6)
31.6
7.0
4.5
(432.6)
—
—
—
275.1
8.8
31.3
0.9
1.4
0.6
—
—
—
—
—
—
(300.0)
18.9
(15.9)
2,683.0
8.8
305.4
208.2
1.4
154.7
105.7
9.3
11.4
(2.2)
0.3
(7.1)
—
—
—
(67.4)
31.6
7.0
4.5
(1,078.7)
265 TechnipFMC
158
U.K. Annual Report and Accounts
Foreign exchange rate instruments embedded in purchase and sale contracts—In general embedded derivative
instrument are separated from the host contract if the economic characteristics and risks of the embedded
derivative instrument are not clearly and closely related to those of the host contract and the host contract is not
marked-to-market at fair value. The purpose of these instruments is to match offsetting currency payments and
receipts for particular projects, or comply with government restrictions on the currency used to purchase goods in
certain countries.
As of December 31, 2020 and 2019, our portfolio of these instruments included the following material net positions:
(In millions except rates)
Brazilian real
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Euro
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Norwegian krone
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
U.S. dollar
(In millions except rates)
Brazilian real
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Euro
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Norwegian krone
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
U.S. dollar
December 31, 2020
1-12 months
12-24 months
Beyond 24
months
Total
35.5
5.2
6.8
(6.8)
0.8
(8.3)
(143.5)
8.5
(16.8)
10.7
42.4
5.2
8.2
(1.9)
0.8
(2.4)
0.7
8.5
0.1
(5.5)
—
—
—
—
—
—
—
—
—
—
77.9
5.2
15.0
(8.7)
0.8
(10.7)
(142.8)
8.5
(16.7)
5.2
December 31, 2019
1-12 months
12-24 months
Beyond 24
months
Total
20.4
0.3
5.1
(2.0)
1.1
(2.2)
(55.2)
0.1
(6.3)
3.1
37.2
0.3
9.2
(4.8)
1.1
(5.4)
(69.5)
0.1
(7.9)
4.5
—
—
—
—
—
—
—
—
—
—
57.6
0.3
14.3
(6.8)
1.1
(7.6)
(124.7)
0.1
(14.2)
7.6
Fair value amounts for all outstanding derivative instruments have been determined using available market
information and commonly accepted valuation methodologies. Accordingly, the estimates presented may not be
indicative of the amounts that we would realize in a current market exchange and may not be indicative of the gains
or losses we may ultimately incur when these contracts are settled.
266 TechnipFMC
159
U.K. Annual Report and Accounts
The following table presents the location and fair value amounts of derivative instruments reported in the
consolidated statement of financial position:
(In millions)
Derivatives designated as hedging instruments
Foreign exchange contracts
December 31, 2020
December 31, 2019
Assets
Liabilities
Assets
Liabilities
Current - Derivative financial instruments
$
215.8 $
151.6 $
94.3 $
Long-term - Derivative financial instruments
Total derivatives designated as hedging instruments
Derivatives not designated as hedging instruments
Foreign exchange contracts
Current - Derivative financial instruments
Long-term - Derivative financial instruments
Total derivatives not designated as hedging instruments
Long-term - Derivative financial instruments - Synthetic Bonds -
Call Option Premium
Long-term - Derivative financial instruments - Synthetic Bonds -
Embedded Derivatives
35.6
251.4
23.3
174.9
34.8
129.1
85.6
0.3
85.9
—
—
15.6
—
15.6
—
—
7.6
0.4
8.0
4.3
—
125.0
48.0
173.0
16.3
0.4
16.7
—
4.3
Total derivatives
$
337.3 $
190.5 $
141.4 $
194.0
Cash flow hedges
Foreign exchange forward contracts listed above are designated as hedging instruments in cash flow hedges of
forecast sales and forecast purchases in different local currencies. These forecast transactions are highly probable.
The foreign exchange forward contract balances vary with the level of expected foreign currency sales and
purchases and changes in foreign exchange forward rates.
There is an economic relationship between the hedged items and the hedging instruments as the terms of the
foreign exchange forward contracts match the terms of the expected highly probable forecast transactions (i.e.,
notional amount and expected payment date). We have established a hedge ratio of 1:1 for the hedging
relationships as the underlying risk of the foreign exchange forward contracts are identical to the hedged risk
components. To test the hedge effectiveness, the Group uses the hypothetical derivative method and compares the
changes in the fair value of the hedging instruments against the changes in fair value of the hedged items
attributable to the hedged risks.
Hedge ineffectiveness can arise from:
•
•
•
Differences in the timing of the cash flows of the hedged items and the hedging instruments
Different indexes (and accordingly different curves) linked to the hedged risk of the hedged items and
hedging instruments
Changes to the forecasted amount of cash flows of hedged items and hedging instruments
We recognized loss of $0.2 million and gain of $3.2 million for the year ended December 31, 2020 and 2019,
respectively, due to discontinuance of hedge accounting as it was probable that the original forecasted transaction
would not occur. Cash flow hedges of forecasted transactions, net of tax, resulted in accumulated other
comprehensive loss of Nil million and $39.7 million as of December 31, 2020 and 2019, respectively. We expect to
transfer an approximately 107.6 million gain from accumulated OCI to earnings during the next 12 months when the
anticipated transactions actually occur. All anticipated transactions currently being hedged are expected to occur by
the second half of 2025.
267 TechnipFMC
160
U.K. Annual Report and Accounts
The following represents the effect of cash flow hedge accounting on the consolidated statements of income for the
year ended December 31, 2020 and 2019:
(In millions)
Year Ended December 31, 2020
Year Ended December 31, 2019
Revenue
Cost of
sales
Selling,
general
and
administrative
expense
Other
income
(expense)
, net
Revenue
Cost of
sales
Selling,
general
and
administrative
expense
Other
income
(expense)
, net
Total amount of income
(expense) presented in the
consolidated statements of
income associated with
hedges and derivatives
Cash Flow hedge gain (loss)
recognized in income
Foreign Exchange Contracts
Amounts reclassified from
accumulated OCI to income
(loss)
$
(83.7) $ 68.5
(0.4) $
(4.4) $
(26.6) $ 12.0 $
— $
Ineffective amounts
—
—
—
(0.2)
—
—
Total cash flow hedge gain
(loss) recognized in income
Gain (loss) recognized in
income on derivatives not
designated as hedging
instruments
(83.7)
68.5
(0.4)
(4.6)
(26.6)
12.0
(0.8)
3.4
—
22.7
(1.6)
0.2
Total
$
(84.5) $ 71.9 $
(0.4) $
18.1 $
(28.2) $ 12.2 $
Impact of hedging on equity
A reconciliation of cash flow hedge reserves in OCI attributable to TechnipFMC plc are as follows:
—
—
(9.1)
3.2
(5.9)
—
— $
(10.2)
(16.1)
(In millions)
Balance at beginning of period
Effective portion of changes in fair value
Amount reclassified to profit or loss
Tax effect
Balance at end of period
Cash flow hedge reserve
Year Ended December 31,
2020
2019
$
(39.7) $
65.4
(20.0)
(5.7)
$
— $
(67.9)
58.6
(23.7)
(6.7)
(39.7)
27.3 Offsetting financial assets and financial liabilities
We execute derivative contracts with counterparties that consent to a master netting agreement, which permits net
settlement of the gross derivative assets against gross derivative liabilities. Each instrument is accounted for
individually and assets and liabilities are not offset. As of December 31, 2020 and 2019, we had no collateralized
derivative contracts.
The following tables present both gross information and net information of recognized derivative instruments:
December 31, 2020
December 31, 2019
Gross
Amounts Not
Offset
Permitted
Under Master
Netting
Agreements
Gross
Amount
Recognized
Net Amount
Gross
Amount
Recognized
Gross
Amounts Not
Offset
Permitted
Under Master
Netting
Agreements
Net Amount
$
$
337.3 $
190.5 $
(134.0) $
(134.0) $
203.3 $
56.5 $
141.4 $
194.0 $
(112.5) $
(112.5) $
28.9
81.5
(In millions)
Derivative assets
Derivative liabilities
NOTE 28. PAYROLL STAFF
As of December 31, 2020, TechnipFMC had approximately 35,000 full-time employees.
268 TechnipFMC
161
U.K. Annual Report and Accounts
The average monthly number of employees (including executive directors) employed by TechnipFMC during the
years ended December 31, 2020 and 2019 are as follows:
By function:
Production / Services
Selling and distribution
General and administrative
Total
2020
2019
26,670
3,168
6,520
36,358
27,512
3,368
7,146
38,026
NOTE 29. RELATED PARTIES DISCLOSURES
29.1 Transactions with related parties and equity affiliates
Receivables, payables, revenues and expenses which are included in our consolidated financial statements for all
transactions with related parties, defined as entities related to our directors and main shareholders as well as the
partners of our consolidated joint ventures, were as follows.
Trade receivables consisted of receivables due from following related parties:
(In millions)
TP JGC Coral France SNC
Equinor ASA
TTSJV W.L.L.
Novarctic SNC
Dofcon Navegacao
Techdof Brasil AS
Storengy
Others
Total trade receivables
December 31,
2020
2019
$
38.1 $
24.1
14.9
9.7
4.2
8.0
6.1
8.4
40.1
—
22.4
—
—
4.3
3.1
6.9
$
113.5 $
76.8
TP JGC Coral France SNC, TTSJV W.L.L., Dofcon Navegacao, and Novarctic SNC are equity method affiliates.
Techdof Brasil AS is a wholly owned subsidiary of Dofcon Brasil AS, our equity method affiliate. A member of our
Board of Directors serves on the Board of Directors for Storengy. In October 2020, we added a new member of our
Board of Directors who is an executive of Equinor ASA.
Trade payables consisted of payables due to following related parties:
(In millions)
Chiyoda
Nipigas
Saipem
JGC Corporation
IFP Energies nouvelles
Dofcon Navegacao
Others
Total trade payables
December 31,
2020
2019
$
14.2 $
14.2
23.7
1.9
—
1.5
5.7
$
61.2 $
24.8
—
—
15.1
2.4
2.1
6.7
51.1
Chiyoda and JGC Corporation are joint venture partners on our Yamal project. Saipem and Nipigas are joint venture
partners on our Arctic LNG project. A member of our Board of Directors serve as an executive officer of IFP
Energies nouvelles until June 2020.
269 TechnipFMC
162
U.K. Annual Report and Accounts
Additionally, we have note receivable balance of $40.3 million and $65.2 million as of December 31, 2020 and 2019,
respectively. The note receivables balance includes $37.6 million and $62.5 million with Dofcon Brasil AS at
December 31, 2020 and 2019, respectively. Dofcon Brasil AS is an associate and accounted for as an equity
method investment. These are included in other assets on our consolidated statements of financial position.
Revenue consisted of amount from following related parties:
(In millions)
TTSJV W.L.L.
TP JGC Coral France SNC
Equinor ASA
Equinor Brasil
Anadarko Petroleum Company
TOP CV
Storengy
Novarctic SNC
Dofcon Navegacao
Techdof Brasil AS
JGC Corporation
Others
Total revenue
Year Ended December 31,
2020
2019
$
47.2 $
44.2
81.1
38.5
—
—
10.7
10.7
3.4
11.2
—
27.2
$
274.2 $
127.9
110.4
—
—
67.1
11.9
8.8
0.4
8.4
8.3
6.7
29.7
379.6
A member of our Board of Directors (the “Director”) served on the Board of Directors of Anadarko Petroleum
Company (“Anadarko”) until August 2019. In August 2019, Anadarko was acquired by Occidental Petroleum
Corporation (“Occidental”). As a result, the Director no longer serves as a member of the Board of Directors of
Anadarko. The Director is not an officer or director of Occidental.
Techdof Brasil AS is a wholly owned subsidiary of Dofcon Brasil AS, our equity method affiliate.
TOP CV was previously an equity method affiliate that became a fully consolidated subsidiary on December 30,
2019. See Note 2.1 for further details.
Novarctic SNC is our equity method affiliate.
Expenses consisted of amount to following related parties:
(In millions)
Chiyoda
JGC Corporation
Arkema S.A.
Serimax Holdings SAS
Saipem
Nipigas
Magma Global Limited
TP JGC Coral France SNC
Jumbo Shipping
Dofcon Navegacao
Others
Total expenses
Year Ended December 31,
2020
2019
$
1.4 $
0.4
5.3
0.4
26.8
36.8
14.0
—
16.0
24.0
24.6
$
149.7 $
25.1
20.8
18.9
17.7
—
—
7.3
5.0
4.5
1.8
41.3
142.4
Serimax Holdings SAS and Magma Global Limited are equity method affiliates. Members of our Board of Directors
serve on the Board of Directors for Arkema S.A. and Jumbo Shipping.
270 TechnipFMC
163
U.K. Annual Report and Accounts
29.2 Executive compensation
The below table sets forth the single figure of remuneration for the years ended December 31, 2020 and 2019 for
each of TechnipFMC’s executive directors; the Chief Executive Officer and the Executive Chairman. In May 2019,
our Chief Executive Officer assumed the role of Executive Chairman when the former Executive Chairman retired.
(In U.S. dollars)
Salary (1)
Taxable benefits (2)
Annual incentive (3)
Long-term incentive awards (4)
Pension-related benefits (5)
Total remuneration
Chief Executive Officer
Executive Chairman
2020
2019
2020
2019
$
988,800 $
1,236,000 $
— $
335,391
48,659
84,989
4,578,600
4,843,364
354,027
247,770
1,455,003
241,779
—
—
—
—
46,193
402,470
901,545
9,665
$
6,217,856 $
7,861,135 $
— $
1,695,264
(1) Salary provides a fixed level of market competitive compensation to our executive director that reflects his major
responsibilities. Base pay is set with reference to market median, based on responsibility, experience,
individual performance, and contributions to the business.
Salary for our Chairman and CEO is unchanged since March 1, 2018. The salary provided for 2020 includes a
30% temporary pay reduction to the Chairman and CEO effective May 1, 2020 and ending December 31, 2020.
(2) The taxable benefits for 2020 for the Chairman and CEO includes: (i) personal use of Company automobile of
$6,727; (ii) financial planning services of $18,000; (iii) UK tax preparation fees of $5,204; (iv) company paid life
insurance fees of $578; (v) club dues of $8,863; and (vi) security services of $9,287.
The taxable benefits for 2019 for the Chairman and CEO includes: (i) personal use of Company automobile of
$4,977; (ii) spouse travel for Company business functions of $42,699; (iii) financial planning of $20,935; and (iv)
security services of $16,378.
(3) The amount disclosed in the Annual Incentive Awards line for 2020 for our Chairman and CEO represents the
sum of annual cash incentive and time-based (non-performance based) RSUs awarded in 2020. In 2020, our
Chairman and CEO's annual cash incentive was $1,668,600, calculated using a target bonus of 135% of salary,
a BPI rating of 75%, and an API rating of 175%. The time-based (non-performance based) RSUs awarded in
2020 were valued at $2,910,000, comprising 30% of the Chairman and CEO's long-term equity incentive target
value of $9,700,000.
The amount disclosed in the Annual Incentive Awards line for 2019 for our Chairman and CEO represents the
sum of annual cash incentive and time-based (non-performance based) RSUs awarded in 2019. In 2019, our
Chairman and CEO’s annual cash incentive was $2,903,364 calculated using a target bonus of 135% of salary,
a BPI rating of 172%, and an API rating of 180%. The time-vested (non-performance based) RSUs awarded in
2019 were valued at $1,940,000, comprising 20% of the Chairman and CEO's long-term equity incentive target
value of $9,700,000.
(4) The amount disclosed in the Long-Term Incentive Awards line for 2020 for our Chairman and CEO represents
the value of performance-based RSUs subject to performance (ROIC) and market-based (TSR) vesting
conditions with a performance period ending December 31, 2020. The value was calculated using a
performance percentage of 25% and share price on date of vesting. Dividend equivalents attributable to the
vested shares are not included.
The amount disclosed in the Long-Term Incentive Awards line for 2019 for our Chairman and CEO represent the
value of performance-based RSUs subject to performance (ROIC) and market-based (TSR) vesting conditions
with a performance period ending December 31, 2019. The value was calculated using a performance
percentage of 25% and share price on date of vesting. Dividend equivalents attributable to the vested shares
are not included.
The amount disclosed in the Long-term Incentive Awards line for our former Executive Chairman represent the
value of performance-based RSUs subject to performance (ROIC) and market-based (TSR) vesting conditions
with a performance period ending December 31, 2019.
271 TechnipFMC
164
U.K. Annual Report and Accounts
(5) The amount disclosed in the Pension-Related Benefits line represents the value of Company contributions to
the U.S. 401(K) and non-qualified defined contribution plans.
Note: The amounts reported as Salary, Taxable Benefits, Annual Incentive Awards, and Pension-Related
Benefits to our former Executive Chairman were paid in Euros. These amounts were converted to U.S. dollars
utilizing an average of the Euro to U.S. dollar exchange rates on the last day of each month during each
reporting year (for 2019: EUR 1 to USD 1.117971). For 2019, the table includes all compensation paid during
the period he served as Executive Chairman, from January 1 to May 1, 2019.
NOTE 30. MARKET RELATED EXPOSURE
30.1 Liquidity risk
Most of our cash is managed centrally and flows through centralized bank accounts controlled and maintained by
TechnipFMC globally and in many operating jurisdictions to best meet the liquidity needs of our global operations.
Net (debt) cash
Net (debt) cash, is a non-IFRS financial measure reflecting cash and cash equivalents, net of debt. Management
uses this non-IFRS financial measure to evaluate our capital structure and financial leverage. We believe net debt,
or net cash, is a meaningful financial measure that may assist investors in understanding our financial condition and
recognizing underlying trends in our capital structure. Net (debt) cash should not be considered an alternative to, or
more meaningful than, cash and cash equivalents as determined in accordance with IFRS or as an indicator of our
operating performance or liquidity.
The following table provides a reconciliation of our cash and cash equivalents to net (debt) cash, utilizing details of
classifications from our consolidated statement of financial position:
(In millions)
Cash and cash equivalents
Less: Short-term debt and current portion of long-term debt
Less: Long-term debt, less current portion
Less: Lease liabilities
Net (debt) cash
Cash flows
December 31,
2020
December 31,
2019
$
4,807.7 $
2,161.6
1,792.5
1,154.9
$
(301.3) $
5,190.1
2,462.2
2,013.2
956.8
(242.1)
Operating cash flows - During 2020, we generated $934.4 million in cash flows from operating activities as
compared to $1,182.1 million used in 2019, resulting in a $247.7 million decrease compared to 2019. The decrease
in operating cash flows is primarily driven by the decrease in cash generated by our operations during the year due
to the overall decline in activity.
Investing cash flows - Investing activities used $180.6 million and $419.8 million of cash in 2020 and 2019,
respectively. The decrease in cash used by investing activities was due primarily to decreased capital expenditures,
decreased payments to acquire debt securities and increased proceeds from sale of assets and debt securities
during 2020. In 2019, we purchased a deepwater dive support vessel, Deep Discoverer for $116.8 million, that was
subsequently funded through a sale-leaseback transaction.
Financing cash flows - Financing activities used $1,359.7 million and $1,120.2 million in 2020 and 2019,
respectively. The increase of $239.5 million in cash required for financing activities was due primarily to the
increased debt pay down activity during 2020, partially offset by $338.6 million reduction in settlements of
mandatorily redeemable financial liability and our efforts and commitment to preserve cash, which included
reduction in cash dividends and share repurchases.
Debt and Liquidity
272 TechnipFMC
165
U.K. Annual Report and Accounts
Significant Funding and Liquidity Activities - During 2020, we completed the following transactions in order to
enhance our total liquidity position:
•
•
•
•
•
Repaid $233.9 million of 5.00% 2010 private placement notes;
Repaid the remaining outstanding balance of $190.0 million of the term loan assumed in connection with
the acquisition of the remaining 50% interest in TOP CV.
Issued €200.0 million aggregate principal amount of 4.500% Private Placement Notes due June 30, 2025.
Within three months of the effective date of the Spin-off of Technip Energies, if there is a downgrade by a
nationally recognized rating agency of the corporate rating of TechnipFMC from an investment grade to a
non-investment grade rating or a withdrawal of any such rating, the interest rate applicable to the Private
Placement Notes will be increased to 5.75%;
Entered into a new, six-month €500.0 million senior unsecured revolving credit facility agreement, which
may be extended for two additional three-month periods (the “Euro Facility”); and
Entered into the Bank of England’s COVID Corporate Financing Facility program (the “CCFF Program”),
which allows us to issue up to £600.0 million of unsecured commercial paper notes.
Total borrowings as of December 31, 2020 and 2019 were as follows:
(In millions)
Commercial paper
Synthetic bonds due 2021
3.45% Senior Notes due 2022
5.00% Notes due 2020
3.40% Notes due 2022
3.15% Notes due 2023
3.15% Notes due 2023
4.50% Notes due 2025
4.00% Notes due 2027
4.00% Notes due 2032
3.75% Notes due 2033
Bank borrowings and other
Total borrowings
December 31,
2020
2019
$
1,525.2 $
1,967.0
551.1
500.0
—
184.0
159.0
153.3
241.1
91.9
119.0
119.5
310.0
491.7
500.0
224.4
168.4
145.4
140.2
—
84.2
108.6
109.2
536.3
$
3,954.1 $
4,475.4
Credit facilities - The following is a summary of our credit facilities as of December 31, 2020:
(In millions)
Revolving credit facility
CCFF Program
Euro Facility
Bilateral credit facility
Amount
Debt
Outstanding
Commercial
Paper
Outstanding
(a)
Letters of
Credit
Unused
Capacity
Maturity
$
£
€
€
2,500.0 $
600.0 £
500.0 €
100.0 €
— $
— £
— €
— €
708.0 $
600.0 £
— €
— €
— $
— £
— €
— €
1,792.0
January 2023
—
March 2021
500.0 February 2021
100.0
May 2021
(a) Under our commercial paper program, we have the ability to access up to $1.5 billion and €1.0 billion of financing through our commercial
paper dealers. Our available capacity under our revolving credit facility is reduced by any outstanding commercial paper.
Committed credit available under our revolving credit facilities provides the ability to issue our commercial paper
obligations on a long-term basis. We had $708.0 million of commercial paper issued under our facilities as of
December 31, 2020. In addition, we had $817.9 million of Notes outstanding under the CCFF Program.
273 TechnipFMC
166
U.K. Annual Report and Accounts
On June 12, 2020, we entered into Amendment No. 1 to the Facility Agreement and into an Amendment and
Restatement Agreement to our Euro Facility. The amendments, which are effective through the respective
expirations of the Facility Agreement and Euro Facility, permit us to include the gross book value of $3.2 billion of
goodwill (fully impaired in the quarter ended March 31, 2020) in the calculation of consolidated net worth, which is
used in the calculation of our quarterly compliance with the total capitalization ratio under the Facility Agreement
and Euro Facility.
The Facility Agreement and Euro Facility contain usual and customary covenants, representations and warranties,
and events of default for credit facilities of this type, including financial covenants requiring that our total
capitalization ratio not exceed 60% at the end of any financial quarter. The Facility Agreement and Euro Facility also
contain covenants restricting our ability and our subsidiaries’ ability to incur additional liens and indebtedness, enter
into asset sales, or make certain investments.
As of December 31, 2020, we were in compliance with all restrictive covenants under our credit facilities. See Note
19 for further details.
Credit Ratings - As of April 9, 2021 our credit ratings with Standard and Poor’s (S&P) are BB+ for our long-term
secured debt and B for commercial paper program. Our credit ratings with Moody’s are Ba1 for our long-term
secured debt.
The contractual, undiscounted repayment schedule of financial liabilities are as follows:
(In millions)
Debt
Interest on debt
Accounts payable, trade
Derivative financial instruments
Redeemable financial liability
Finance lease liabilities
2021
2022
2023
2024
2025
2026 and
beyond
Total
$ 2,161.6 $
717.7 $
346.1 $
26.3 $
267.6 $
434.8 $ 3,954.1
58.1
2,741.1
167.2
184.2
279.4
51.0
—
21.9
66.3
191.5
32.1
—
1.4
43.5
137.1
24.2
18.7
73.3
257.4
—
—
33.1
117.6
—
—
—
—
—
—
2,741.1
190.5
327.1
79.2
471.4
1,276.2
Total financial liabilities as of December
31, 2020
$ 5,591.6 $ 1,048.4 $
560.2 $
201.2 $
365.5 $
979.5 $ 8,746.4
(In millions)
Debt
Interest on debt
Accounts payable, trade
Derivative financial instruments
Redeemable financial liability
Finance lease liabilities
2020
2021
2022
2023
2024
2025 and
beyond
Total
$ 2,462.2 $
624.4 $
801.2 $
285.6 $
— $
302.0 $ 4,475.4
54.9
2,660.7
141.3
138.7
305.3
44.4
—
37.3
119.8
184.6
24.2
—
13.2
65.0
128.0
19.3
—
2.2
40.0
101.9
12.1
77.7
232.6
—
—
15.0
89.7
—
—
—
2,660.7
194.0
378.5
330.4
1,139.9
Total financial liabilities as of December
31, 2019
$ 5,763.1 $ 1,010.5 $ 1,031.6 $
449.0 $
116.8 $
710.1 $ 9,081.1
30.2 Foreign currency exchange rate risk
We conduct operations around the world in a number of different currencies. Many of our significant foreign
subsidiaries have designated the local currency as their functional currency. Our earnings are therefore subject to
change due to fluctuations in foreign currency exchange rates when the earnings in foreign currencies are
translated into U.S. dollars. We do not hedge this translation impact on earnings. A 10% increase or decrease in the
average exchange rates of all foreign currencies as of December 31, 2020, would have changed our revenue and
profit (loss) before income taxes attributable to TechnipFMC by approximately $813.0 million and $38.0 million,
respectively. A 10% increase or decrease in the average exchange rates of all foreign currencies as of
December 31, 2019, would have changed our revenue and income before income taxes attributable to TechnipFMC
by approximately $733.5 million and $19.1 million, respectively.
274 TechnipFMC
167
U.K. Annual Report and Accounts
When transactions are denominated in currencies other than our subsidiaries’ respective functional currencies, we
manage these exposures through the use of derivative instruments. We primarily use foreign currency forward
contracts to hedge the foreign currency fluctuation associated with firmly committed and forecasted foreign currency
denominated payments and receipts. The derivative instruments associated with these anticipated transactions are
usually designated and qualify as cash flow hedges, and as such the gains and losses associated with these
instruments are recorded in other comprehensive income until such time that the underlying transactions are
recognized. Unless these cash flow contracts are deemed to be ineffective or are not designated as cash flow
hedges at inception, changes in the derivative fair value will not have an immediate impact on our results of
operations since the gains and losses associated with these instruments are recorded in other comprehensive
income. When the anticipated transactions occur, these changes in value of derivative instrument positions will be
offset against changes in the value of the underlying transaction. When an anticipated transaction in a currency
other than the functional currency of an entity is recognized as an asset or liability on the statement of financial
position, we also hedge the foreign currency fluctuation of these assets and liabilities with derivative instruments
after netting our exposures worldwide. These derivative instruments do not qualify as cash flow hedges.
Occasionally, we enter into contracts or other arrangements containing terms and conditions that qualify as
embedded derivative instruments and are subject to fluctuations in foreign exchange rates. In those situations, we
enter into derivative foreign exchange contracts that hedge the price or cost fluctuations due to movements in the
foreign exchange rates. These derivative instruments are not designated as cash flow hedges.
For our foreign currency forward contracts hedging anticipated transactions that are accounted for as cash flow
hedges, a 10% increase in the value of the U.S. dollar would have resulted in an additional loss of $68.4 million and
$83.8 million in the net fair value of cash flow hedges reflected in our consolidated statement of financial position as
of December 31, 2020 and 2019, respectively.
30.3 Interest rate risk
We assess effectiveness of forward foreign currency contracts designated as cash flow hedges based on changes
in fair value attributable to changes in spot rates. We exclude the impact attributable to changes in the difference
between the spot rate and the forward rate for the assessment of hedge effectiveness and recognize the change in
fair value of this component immediately in earnings. Considering that the difference between the spot rate and the
forward rate is proportional to the differences in the interest rates of the countries of the currencies being traded, we
have exposure in the unrealized valuation of our forward foreign currency contracts to relative changes in interest
rates between countries in our results of operations.
Our interest-bearing loans and borrowings were split between fixed and floating rate as follows:
(In millions)
Fixed Rate
Floating Rate
Total debt
Sensitivity analysis as of December 31, 2020
December 31,
2020
December 31,
2019
$
$
3,927.0 $
27.1
3,954.1 $
4,432.3
43.1
4,475.4
TechnipFMC’s floating rate debt amounted to $27.1 million compared to an aggregate total debt of $3,954.1 million.
To ensure liquidity, cash is invested on a short-term basis. Financial products are subject to fluctuations in currency
interest rates.
As of December 31, 2020, the net short-term cash position of TechnipFMC (cash and cash equivalents, less short-
term financial debts) amounted to $2,372.2 million.
As of December 31, 2020, a 1% (100 basis points) increase in interest rates would lower the fair value of the fixed
rate synthetic bonds, senior notes and private placements by $40.9 million before tax. A 1% (100 basis points)
decrease in interest rates would raise the fair value by $43.8 million before tax.
A 1% (100 basis points) increase in interest rates would generate an additional profit of $26.4 million before tax in
the net cash position. A 1% (100 basis points) decrease in interest rates would generate a loss of the same amount.
275 TechnipFMC
168
U.K. Annual Report and Accounts
Sensitivity analysis as of December 31, 2019
TechnipFMC’s floating rate debt amounted to $43.1 million compared to an aggregate total debt of $4,475.4 million.
To ensure liquidity, cash is invested on a short-term basis. Financial products are subject to fluctuations in currency
interest rates.
As of December 31, 2019, the net short-term cash position of TechnipFMC (cash and cash equivalents, less short-
term financial debts) amounted to $2,452.8 million.
As of December 31, 2019, a 1% (100 basis points) increase in interest rates would lower the fair value of the fixed
rate synthetic bonds, senior notes and private placements by $53.7 million before tax. A 1% (100 basis points)
decrease in interest rates would raise the fair value by $56.6 million before tax.
A 1% (100 basis points) increase in interest rates would generate an additional profit of $27.3 million before tax in
the net cash position. A 1% (100 basis points) decrease in interest rates would generate a loss of the same amount
30.4 Credit risk
Valuations of derivative assets and liabilities reflect the value of the instruments, including the values associated
with counterparty risk. These values must also take into account our credit standing, thus including in the valuation
of the derivative instrument the value of the net credit differential between the counterparties to the derivative
contract. Our methodology includes the impact of both counterparty and our own credit standing. Adjustments to our
derivative assets and liabilities related to credit risk were not material for any period presented.
By their nature, financial instruments involve risk, including credit risk, for non-performance by counterparties.
Financial instruments that potentially subject us to credit risk primarily consist of trade receivables, contract assets,
contractual cash flows from our debt instruments (primarily loans), cash equivalents and deposits with banks, as
well as derivative contracts. We manage the credit risk on financial instruments by transacting only with what
management believes are financially secure counterparties, requiring credit approvals and credit limits, and
monitoring counterparties’ financial condition. Our maximum exposure to credit loss in the event of non-
performance by the counterparty is limited to the amount drawn and outstanding on the financial instrument. We
mitigate credit risk on derivative contracts by executing contracts only with counterparties that consent to a master
netting agreement, which permits the net settlement of gross derivative assets against gross derivative liabilities.
We apply the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all trade receivables and contract assets. TechnipFMC’s trade receivables and contracts assets
constitute a homogeneous portfolio. The contract assets relate to unbilled work in progress and have substantially
the same risk characteristics as the trade receivables for the same types of contracts. TechnipFMC has therefore
concluded that the expected loss rates for trade receivables are a reasonable approximation of the loss rates for
the contract assets. To measure the expected credit losses, trade receivables and contract assets have been
grouped based on a selection of TechnipFMC’s subsidiaries that cover a representative part of TechnipFMC’s
consolidated trade receivables and contract assets at each period end.
The expected loss rates are based on the payment profiles of sales over a period of 36 month before December 31,
2020 or December 31, 2019, respectively, and the corresponding historical credit losses experienced within this
period.
Credit risk exposure on our trade receivables and contract assets using a provision matrix are set out as follows:
(In millions)
Carrying amount - Gross
Current
Less than 3
months
3 to 12
months Over 1 year
Total Trade
Receivables
Contract
Assets
$
1,526.4 $
411.4 $
259.8 $
300.7 $
2,498.3
$ 1,267.8
Weighted average expected credit loss rate
—
—
—
—
0.18 %
0.18 %
December 31, 2020
Days past due
(In millions)
Carrying amount - Gross
Current
Less than 3
months
3 to 12
months
Over 1 year
Total Trade
Receivables
Contract
Assets
$
1,539.5 $
366.1 $
232.0 $
244.9 $
2,382.5
$ 1,521.6
Weighted average expected credit loss rate
—
—
—
—
0.16 %
0.16 %
December 31, 2019
Days past due
276 TechnipFMC
169
U.K. Annual Report and Accounts
NOTE 31. AUDITORS’ REMUNERATION
Fees payable to TechnipFMC’s auditors and its associates are as follows:
(In millions)
Audit services
Fees payable to TechnipFMC plc’s auditors for the audit of its annual financial statements including 404B
internal control and separation related audit fees
Fees payable to TechnipFMC plc’s auditors and its associates for the audit of its subsidiaries
Total fees payable for audit services
Other services
Audit related services
Legal and tax compliance services
Other services
Total fees payable for other services
2020
2019
$
$
$
$
17.3 $
4.7
22.0 $
3.5 $
0.2
0.2
3.9 $
11.2
4.5
15.7
8.4
0.1
—
8.5
NOTE 32. SUBSIDIARIES, JOINT VENTURE UNDERTAKINGS AND EQUITY AFFILIATES
TechnipFMC’s subsidiaries, joint venture undertakings and equity affiliates as of December 31, 2020 are listed
below:
32.1 Directly owned subsidiaries
Company Name
Address
Share Class
AUSTRALIA
Group
interest held
in %
Technip Australia Pty
1120 Hay Street, Perth WA 6000
Ordinary shares
100
CHINA
Technip Chemical Engineering (Tianjin)
Co., Ltd.
521 Jingjin, Road Tianjin
Equity interest
100
FRANCE
Clecel SAS
6-8 Allée de l'Arche - Faubourg de l'Arche - ZAC Danton
92400 Courbevoie
Compagnie Française De Réalisations
Industrielles, Cofri SAS
6-8 Allée de l'Arche - Faubourg de l'Arche - ZAC Danton
92400 Courbevoie
Ordinary shares
Ordinary shares
Cybernetix SAS
Technopôle de Château-Gombert 13382 Marseille Cedex 13 Ordinary shares
Middle East Projects International
(Technip Mepi)
6-8 Allée de l'Arche - Faubourg de l'Arche - ZAC Danton
92400 Courbevoie
Safrel SAS
6-8 Allée de l'Arche - Faubourg de l'Arche - ZAC Danton
92400 Courbevoie
Ordinary shares
Ordinary shares
Seal Engineering SAS
19, Avenue Feuchères 30000 Nîmes
Ordinary shares
Technip Corporate Services SAS
6-8 Allée de l'Arche - Faubourg de l'Arche - ZAC Danton
Ordinary shares
Technip Eurocash SNC
6-8 Allée de l'Arche - Faubourg de l'Arche - ZAC Danton
Equity interest
92400 Courbevoie
92400 Courbevoie
100
100
100
100
100
100
100
961
Technip France SAS
6-8 Allée de l'Arche - Faubourg de l'Arche - ZAC Danton
Ordinary shares
100
92400 Courbevoie
Technip Ingenierie Defense SAS
6-8 Allée de l'Arche - Faubourg de l'Arche - ZAC Danton
Ordinary shares
100
Technip N-Power SAS
6-8 Allée de l'Arche - Faubourg de l'Arche - ZAC Danton
Ordinary shares
77.791
92400 Courbevoie
92400 Courbevoie
277 TechnipFMC
170
U.K. Annual Report and Accounts
Company Name
Technip Offshore International SAS
Address
Share Class
Group
interest held
in %
6-8 Allée de l'Arche - Faubourg de l'Arche - ZAC Danton
92400 Courbevoie
Ordinary shares
100
Technipnet SAS
6-8 Allée de l'Arche - Faubourg de l'Arche - ZAC Danton
Ordinary shares
100
GERMANY
Technip Zimmer GmbH
ITALY
Technip Italy S.P.A.
92400 Courbevoie
Friesstrasse 20
60388 Frankfurt am Main
68, Viale Castello della Magliana
00148 Rome
TPL - Tecnologie Progetti Lavori S.P.A.
In Liquidazione
68, Viale Castello della Magliana
00148 Rome
MALAYSIA
Technip Far East Sdn Bhd
NETHERLANDS
Technip Benelux B.V.
Technip Energies BV
Suite 13.03, 13th Floor
207 Jalan Tun Razak
Kuala Lumpur
50400
Afrikaweg 30
Zoetermeer 2713 AW
6-8 Allée de l'Arche - Faubourg de l'Arche - ZAC Danton
92400 Courbevoie
Technip Holding Benelux B.V.
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
Technip Oil & Gas B.V.
Afrikaweg 30
Zoetermeer 2713 AW
NEW-CALEDONIA - FRENCH OVERSEAS TERRITORY
Ordinary shares
100
Ordinary shares
Ordinary shares
100
100
Ordinary shares
100
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
100
100
100
100
Technip Nouvelle-Caledonie
27 bis Avenue du Maréchal Foch - Galerie CENTER FOCH -
Centre-Ville
B.P. 4460
98847 NOUMEA
Ordinary shares
100
NORWAY
Kanfa AS
PANAMA
Philip Pedersens vei 7
1366 Lysaker
Ordinary shares
100
Technip Overseas S.A.
East 53rd Street, Marbella,
Humboldt Tower, 2nd Floor, Panama
Ordinary shares
100
278 TechnipFMC
171
U.K. Annual Report and Accounts
Company Name
RUSSIAN FEDERATION
Technip Rus JSC
SINGAPORE
Address
Share Class
Group
interest held
in %
266 Litera O, Ligovsky Prospect
196084 St Petersburg
Ordinary shares
99.9
Technip Energies Singapore Pte Ltd
149 Gul Circle
629605 Singapore
Ordinary shares
100
SPAIN
Technip Iberia, S.A.
SWITZERLAND
Engineering Re AG
UNITED KINGDOM
Technip E&C Limited
Technip PMC Services Limited
TechnipFMC Corporate Holdings
Limited
VENEZUELA
Inversiones Dinsa, C.A.
Building n° 8 - Floor 4th Plaça de la Pau s/n
World Trade Center - Almeda Park - Cornellà de Llobregat
08940 Barcelone
Ordinary shares
100
Vulkanstrasse 106 8048 Zurich
Ordinary shares
100
One St Paul’s Churchyard
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
Ordinary shares
Ordinary shares
100
100
Ordinary shares
88.031
Avenida Principal de La Urbina, calle 1 con calle 2
Centro Empresarial INECOM, piso 1, oficina 1-1 La Urbina,
Minicipio Sucre
1070 Caracas
Ordinary shares
100
Technip Bolivar, C.A. en liquidation
523 Zona Industrial Matanzas, Planta De Bauxilum
Puerto Ordaz Ciudad Bolivar
Ordinary shares
99.881
VIETNAM
Technip Vietnam Co., Ltd.
7F, Centec Tower Building
72-74 Nguyen Thi Minh Khai Street and 143-145B Hai Ba
Trung Street,
Ward 6, District 3, Ho Chi Minh City
Equity interest
100
1 Subsidiary fully and indirectly owned by TechnipFMC, plc.
32.2 Indirectly owned subsidiaries
Company Name
Address
Share Class
Group
interest held
in %
ALGERIA
FMC Technologies Algeria SARL
ANGOLA
Rue Shakespeare
BT 08/10 Commune d’El Mouradia
Algiers
Ordinary Shares
100
Angoflex Industrial Limitada
Rua 1 de Dezembro nº 15, Lobito, Província de Benguela
Ordinary Shares
Technip Angola-Engenharia, Limitada
Rua Rei Katyavala, N.°43-45,
Edificio Avenca Plaza, 5°. Andar
5364 Luanda
Ordinary Shares
70
60
TechnipFMC Angola, Limitada
Rua Rei Katyavala, n.º 41-43, Edifício Avenca Plaza, 12.º
Andar, Bairro e Distrito Urbano da Ingombota, Luanda,
Angola
Ordinary Shares
49
ARGENTINA
FMC Technologies Argentina S.R.L.
AUSTRALIA
c/o Allende & Brea
Maipú 1300, 10th Floor
Buenos Aires C1006ACT
Equity interest
100
FMC Technologies Australia Limited
66 Sparks Road - Henderson WA 6166
Genesis Oil & Gas Consultants (Pty) Ltd 1120 Hay St, West Perth WA 6005
Ordinary shares
Ordinary shares
100
100
279 TechnipFMC
172
U.K. Annual Report and Accounts
Company Name
Address
Share Class
Group
interest held
in %
Technip Oceania Pty Ltd
1120 Hay St, West Perth WA 6005
Ordinary shares
100
BAHAMAS
AMC Angola Offshore Ltd
BELARUS
Technip Bel
BRAZIL
c/o Trident Corporate Services Limited
Provident House
East Hill Street, Nassau
Ordinary shares
100
Pobediteley avenue, 17, room 1009
220004 Minsk
Ordinary shares
100
Cybernétix Produtos E Serviços Do
Brasil Ltda. (In Liquidation)
Rua Dom Marcos Barbosa, nº 2, sala 402
20211-178, Cidade Nova, Rio de Janeiro
FMC Technologies do Brasil Ltda
Rodovia Presidente Dutra 2660
Pavuna - RJ - Brazil
CEP 21535-900
Equity interest
Equity interest
100
100
Genesis Oil & Gás Brasil Engenharia
Ltda.
Rua Paulo Emídio Barbosa, 485, quadra 4 (parte), Cidade
Universitária cidade e estado do Rio de Janeiro, CEP:
21941-615
Equity interest
100
GLBL Brasil Oleodutos E Serviços Ltda. Rua Dom Marcos Barbosa, nº 2, sala 602 (parte)
Equity interest
20211-178, Cidade Nova, Rio de Janeiro
Technip Brasil - Engenharia, Instalações
e Apoio Marítimo Ltda.
Rua Dom Marcos Barbosa, nº 2, salas 202 (parte), 203,
204, 302, 303, 304, 403, 404, 503, 504, 603 e 604
20211-178, Cidade Nova, Rio de Janeiro
Equity interest
100
100
BRUNEI DARUSSALAM
Technip Engineering (B) Sendirian
Berhad
CAMEROON
B6, Second Floor, Block B
Shakirin Complex, Kampong Kiulap
BE1518 Bandar Seri Begawan
Ordinary shares
93.10
FMC Technologies Cameroon SARL
Zone Portuaire/Place de l’Udeac,
P.B. 12804, Bonanjo, Douala
Equity interest
100
CANADA
TechnipFMC Canada Limited
c/o McInnes Cooper
5th Floor, 10 Fort William Place
P.O. Box 5939, St John's, NL A1C 5X4
Newfoundland and Labrador
CHILE
FMC Technologies Chile Limitada
Callao 2910, Office 704
Las Condes, Santiago
CHINA
FMC Technologies Energy (Hong Kong)
Limited
FMC Technologies Energy Holdings
(Shanghai) Ltd.
Suite 1106-8, 11/F.,
Tai Yau Building, No. 181 Johnston Road,
Wanchai
Hong Kong
Suite 1106-8, 11/F.,
Tai Yau Building, No. 181 Johnston Road,
Wanchai
Hong Kong
FMC Technologies (Shanghai) Co., Ltd Room 1903
No. 55 Ding’an Road
Xuhui District, Shanghai
FMC Technologies (Shenzhen) Co., Ltd. Room H, 12/F, Times Plaza, 1 Taizi Road,
Shekou, Nanshan District
518607 Shenzhen
Gydan Yard Management Services
(Shanghai) Co., Ltd.
ARCTIC LNG 2 18F N°1329 Middle Huaihai Road,
Shanghai 200031
Shanghai Technip Trading Company
Room 1903, 55 Ding’An Road, Shanghai
Technip Engineering Consultant
(Shanghai) Co., Ltd.
CYPRUS
Subtec Marine Services Limited
EGYPT
Room 1902, 55 Ding’An Road, Shanghai
3 Chrysanthou Mylona,
P.C.3030 Limassol
Ordinary shares
100
Equity interest
100
Ordinary shares
100
Ordinary shares
100
Equity interest
100
Equity interest
100
Ordinary shares
84.9
Equity interest
Equity interest
100
100
Ordinary shares
100
280 TechnipFMC
173
U.K. Annual Report and Accounts
Company Name
FMC Technologies Egypt LLC
EQUATORIAL GUINEA
Address
Share Class
Group
interest held
in %
2nd floor, building No. 80 located at Road 250 Maadi El
Sarayat, Maadi
Ordinary shares
100
Technipfmc Equatorial Guinea SARL
Carretera de Aeropuerto, KM 5, APDO 925, Malabo
Ordinary shares
65
FRANCE
Angoflex SAS
Consorcio Intep SNC
Cyxplus SAS
Flexi France SAS
FMC Loading Systems SAS
FMC Technologies Overseas, SAS
FMC Technologies SAS
Gydan LNG SNC
Gygaz SNC
SCI les Bessons
Technip Normandie SAS
GABON
ZAC Danton
92400 Courbevoie
Ordinary shares
6-8 Allée de l'Arche - Faubourg de l'Arche - ZAC Danton
92400 Courbevoie
Equity interest
Technopôle de Château-Gombert
13382 Marseille Cedex 13
Rue Jean Huré
76580 Le Trait
Route des Clérimois
89100 Sens
Ordinary shares
Ordinary shares
Ordinary shares
Bâtiment C, Rue Nelson Mandela, Zone ECOParc, 89100
Sens
Ordinary shares
Bâtiment C, Rue Nelson Mandela, Zone ECOParc, 89100
Sens
Ordinary shares
6-8 Allée de l'Arche - Faubourg de l'Arche - ZAC Danton
92400 Courbevoie
Ordinary shares
100
90
100
100
100
100
100
84
6-8 Allée de l'Arche - Faubourg de l'Arche - ZAC Danton
92400 Courbevoie
Ordinary shares
84.85
Technopôle de Château-Gombert
13382 Marseille Cedex 13
14 rue Linus Carl Pauling
PAT La Vatine
76130 Mont-Saint-Aignan
Equity interest
Ordinary shares
FMC Technologies Gabon S.A.R.L.
Boite Postale (B.P) 277
Port Gentil
Equity interest
GERMANY
F.A. Sening GmbH
Smith Meter GmbH
GHANA
Regentstraße 1
25474 Ellerbek
Regentstraße 1
25474 Ellerbek
FMC Technologies (Ghana) Limited
Commercial Port Gate 2 Takoradi
P.O. Box CT 42, Cantonments, Accra
Ordinary shares
Ordinary shares
Ordinary shares
GNPC-TechnipFMC Engineering
Services Limited
6th Floor, One Airport Square, Airport City, Accra
PMB CT 305 Cantonments, Accra
Ordinary shares
GUYANA
TechnipFMC Guyana INC.
INDIA
c/o Cameron & Shepherd
2 Avenue of the Republic,
Georgetown
FMC Technologies India Private Limited Plot No.27(Part) Survey No. 124, Road No 12,
Commerzone,
Raheja IT Park, Opp. Institute of Preventive Medicine,
Industrial Park, IDA Nacharam, Hyderabad, Telangana 500
076
Technip Global Business Services
Private Limited
Technip India Limited
INDONESIA
9th Floor, World Trade Tower (WTT)
Tower-B
C-1, Sector 16, Noida - 201301, U.P
201301 Noida
B-22, Okhla Phase, 1 Industrial Area
110020 New Delhi
Ordinary shares
100
Ordinary shares
100
Ordinary shares
100
Ordinary shares
100
PT FMC Santana Petroleum Equipment
Indonesia
Jalan Cakung Cilincing Raya KM 2.5
Semper, Jakarta 14130
Ordinary shares
60
281 TechnipFMC
174
100
100
90
100
100
100
70
U.K. Annual Report and Accounts
Company Name
PT FMC Technologies Subsea
Indonesia
IRAQ
Address
Share Class
Metropolitan Tower Lantai 15 Unit B, JL RA Kartini
TB Simatupang Kav 14 RT/RW 010/04, Cilandak Barat,
Cilandak, Jakarta Selatan 12430
Ordinary shares
F.M.C Petroleum Services Ltd.
English Village Compound House 161 - Gulan Street - Erbil Ordinary shares
Advanced Oil Services LLC
Al Mansour - District 609 - Alley 23, Building 70 - Office 15,
Baghdad
Equity interest
Group
interest held
in %
100
100
100
ISLE OF MAN
Subtec Asia Ltd
ITALY
Burleigh Manor, Peel Road
Douglas IM1 5EP
Consorzio Technip Italy Procurement
Services - TIPS
68, Viale Castello della Magliana
00148 Rome
FMC Technologies S.r.l. a socio unico
Technip Italy Direzione Lavori S.P.A.
Via Thomas Alva Edison n.110 ed. A
20099 Sesto San Giovanni (MI),
68, Viale Castello della Magliana
00148 Rome
Ordinary shares
100
Equity interest
Equity interest
Ordinary shares
100
100
100
JERSEY
CSO Oil & Gas Technology (West
Africa) Ltd
KAZAKHSTAN
FMC Technologies Kazakhstan LLP
TKJV LLP
LUXEMBOURG
26 New Street, St. Helier, Jersey, JE2 3RA
Ordinary shares
100
43/5 building, industrial zone 3
Birlik residential area, 130006
Kyzyltobe village, Munaily district
Mangistau Region
Equity interest
100
Karagandy district, Karaganda city, Kazybek bi district,
av.Abdirova, bld. 3, postal index 100009
Participatory Interest
49.5
FMC Technologies Global Rental Tools
S.a r.l
8-10 avenue de la Gare
1610 Luxembourg
FMC Technologies Tool Holdings S.ar.l
8-10 avenue de la Gare
1610 Luxembourg
MALAYSIA
Asiaflex Products Sdn. Bhd.
Flexiasia Sdn Bhd
FMC Petroleum Equipment (Malaysia)
Sdn. Bhd.
FMC Technologies Global Supply Sdn.
Bhd.
Genesis Oil & Gas Consultants
Malaysia Sdn. Bhd.
MAURITIUS
Suite 13.03, 13th Floor
207 Jalan Tun Razak
50400 Kuala Lumpur
Suite 13.03, 13th Floor
207 Jalan Tun Razak
50400 Kuala Lumpur
Suite 13.03, 13th Floor
207 Jalan Tun Razak
50400 Kuala Lumpur
Suite 13.03, 13th Floor
207 Jalan Tun Razak
50400 Kuala Lumpur
Suite 13.03, 13th Floor
207 Jalan Tun Razak
50400 Kuala Lumpur
Coflexip Stena Offshore (Mauritius) Ltd. 33, Edith Cavell Street
11324 Port Louis
GIL Mauritius Holdings Ltd
33, Edith Cavell Street
11324 Port Louis
Global Construction Mauritius Services
Ltd (In Liquidation)
33, Edith Cavell Street
11324 Port Louis
Global Vessels Mauritius, Ltd. (In
Liquidation)
33, Edith Cavell Street
11324 Port Louis
MEXICO
FMC Technologies de México S.A. de
R.L de C.V.
FMC Technologies de Mexico, S.A. de C.V.
Laurel Lote 41, Manzana 19, Col. Bruno Pagliai
Veracruz, Veracruz
C.P. 91697
282 TechnipFMC
175
Ordinary shares
Ordinary shares
100
100
Ordinary shares
65.75
Ordinary shares
48.89
Ordinary shares
100
Ordinary shares
100
Ordinary shares
100
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
100
100
100
100
Ordinary shares
100
Address
Share Class
Group
interest held
in %
U.K. Annual Report and Accounts
Company Name
FMC Technologies Servicios
Corporativos, S. de R.L de C.V.
Global Industries Mexico Holdings S. de
R.L. de C.V.
Global Industries Services, S. de R.L.
de C.V.
Global Offshore Mexico, S. de R.L. de
C.V.
Global Vessels Mexico, S. de R.L. de
C.V.
Technip De Mexico S. de R.L. de C.V.
TP Energies Servicios Mexico, S. de
R.L. de C.V.
FMC Technologies de Mexico, S.A. de C.V.
Laurel Lote 41, Manzana 19, Col. Bruno Pagliai
Veracruz, Veracruz
C.P. 91697
Vasco de Quiroga 3000
Edificio Calakmul piso 6
Colonia Santa Fe CP 01210
México, D.F. México
Vasco de Quiroga 3000
Edificio Calakmul piso 6
Colonia Santa Fe CP 01210
México, D.F. México
Vasco de Quiroga 3000
Edificio Calakmul piso 6
Colonia Santa Fe CP 01210
México, D.F. México
Vasco de Quiroga 3000
Edificio Calakmul piso 6
Colonia Santa Fe CP 01210
México, D.F. México
Blvd. Manuel Ávila Camacho 36, Piso 10, Oficina 1058
Lomas De Chapultepec I Sección.
C. P. 11000, Alcaldía Miguel Hidalgo
Ciudad de México, México
Blvd. Manuel Ávila Camacho 36, Piso 10, Oficina 01
Lomas De Chapultepec I Sección.
C. P. 11000, Alcaldía Miguel Hidalgo
Ciudad de México, México
TP Oil & Gas Mexico, S. de R.L. de C.V. Avenida de la Marina
Oficina 1
Baja California 22800
MOZAMBIQUE
Technip Mozambique Lda
FMC Technologies Mozambique Lda
MYANMAR
Technip Myanmar Co. Ltd
Distrito Urbano 1, Bairro Central
Avenida da Vladmir Lénine
n.˚1123 Ed. Topázio 8˚ andar
Maputo
Distrito Urbano 1,
Av. Zedequias Manganhela no 257,
5 Andar (5th floor),
Maputo Cidade
No. 18 G/F, Ground Floor
Tha Pyay Nyo Street, Shin Saw Pu Quarter
Sanchaung Township
11201
NETHERLANDS
FMC Separation Systems B.V.
FMC Technologies B.V.
FMC Technologies Brazil Finance B.V.
FMC Technologies Global B.V.
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
FMC Technologies International
Services B.V.
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
FMC Technologies Surface Wellhead
B.V.
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
TSLP B.V.
Technip EPG B.V.
TechnipFMC PLSV BV
TechnipFMC PLSV CV
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
Barbizonlaan 50
Capelle aan den Ijssel
2908 ME
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
283 TechnipFMC
176
Ordinary shares
100
Ordinary shares
100
Class A, B and N
100
Ordinary shares
100
Ordinary shares
99
Ordinary shares
100
Ordinary shares
100
Ordinary shares
100
Ordinary Shares
100
Ordinary Shares
100
Ordinary shares
100
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
100
100
100
100
100
100
100
100
100
100
Share Class
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Preferred shares
Ordinary shares
Group
interest held
in %
100
100
100
100
100
100
100
Ordinary shares
Ordinary shares
99.99
66.91
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
100
100
51
100
100
100
100
100
100
100
U.K. Annual Report and Accounts
Company Name
Technip Offshore Contracting B.V.
Technip Offshore N.V.
Technip Ships (Netherlands) B.V.
TechnipFMC Cash B.V.
Address
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
TechnipFMC International Holdings B.V. Zuidplein 126, WTC, Tower H, 15th Fl.
TechnipFMC Pipelaying BV
NIGERIA
Amsterdam 1077XV
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
Global Pipelines Plus Nigeria Ltd.
7 Town Planning way, Ilupeju, Lagos
Neptune Maritime Nigeria Ltd.
TechnipFMC Nigeria Limited
Technip Offshore (Nigeria) Ltd
NORWAY
Agat Technology AS
FMC Kongsberg Subsea AS
FMC Technologies Norway AS
Neptune Base, Rumuolumeni
PMB 017 (Trans Amadi), Rivers State
Port Harcourt
22A Gerrard Road
Ikoyi Lagos
22A, Gerrard Road,
Ikoyi, Lagos.
Lagerveien 23
4033 Stavanger
Kirkegårdsveien 45
3616 Kongsberg
Kirkegårdsveien 45
3616 Kongsberg
Technip - FMC IEPCI DA (In liquidation) Philip Pedersens vei 7
Equity interest
1366 Lysaker
Genesis Oil & Gas Consultants Norway
AS
Moseidsletta 122
4033 Stavanger
Ordinary shares
Technip Chartering Norge AS
Technip Norge AS
TechnipCoflexip Norge AS
POLAND
FMC Technologies Sp.z.o.o.
Technip Polska Sp. Z o.o.
PORTUGAL
Angoltech, SGPS, LDA.
Lusotechnip Engenharia, Sociedade
Unipessoal Lda.
RUSSIAN FEDERATION
FMC Eurasia LLC
Rus Technip LLC
Arctic Energies LLC
SAUDI ARABIA
Philip Pedersens vei 7
1366 Lysaker
Philip Pedersens vei 7
1366 Lysaker
Philip Pedersens vei 7
1366 Lysaker
Ordinary shares
Ordinary shares
Ordinary shares
al. Gen. Tadeusza Bora-Komorowskiego 25b
Buma Quattro Complex Buidling B
31-476 Krakow
ul. Promyka No.13, suíte 4,
01-604 Warsaw
Centro Empresarial Torres de Lisboa, Rua Tomás da
Fonseca, Torre E, Piso 9
1600-209 Lisboa
Centro Empresarial Torres de Lisboa, Rua Tomás da
Fonseca, Torre E, Piso 9
1600-209 Lisboa
Ordinary shares
100
Ordinary shares
100
Ordinary shares
100
Ordinary shares
100
31 Bolshaya Yakimanka, 31, office 401, 119180 Moscow
Ordinary shares
Prechistenka, str. 40/2, building 1, office XXVII, 4th floor,
119034 Moscow
The site 1, territory TOR “Stolica Arctiki” Kolsky District,
Murmansk Region
Ordinary shares
Ordinary shares
100
51
100
FMC Technologies Saudi Arabia Limited PO Box 3076
Ordinary shares
100
2nd Industrial City
Dammam 34326, Eastern Province
284 TechnipFMC
177
U.K. Annual Report and Accounts
Company Name
Technip Saudi Arabia Limited
TPL Arabia
Address
Share Class
Group
interest held
in %
Dhahran Center Building - 5th Floor, Suite #501
Dharan Street, P.O. Box 30893
31952 Al-Khobar
Dhahran Center Building - 5th Floor, Suite #501
Dharan Street, P.O. Box 30893
31952 Al-Khobar
Ordinary shares
76
Ordinary shares
90
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
100
100
100
100
Ordinary shares
100
SINGAPORE
Coflexip Singapore Pte Ltd
149 Gul Circle
629605 Singapore
FMC Technologies Global Services Pte.
Ltd.
149 Gul Circle
629605 Singapore
FMC Technologies Singapore Pte. Ltd.
Technip Singapore Pte. Ltd.
TP-NPV Singapore Pte Ltd
SOUTH AFRICA
149 Gul Circle
629605 Singapore
149 Gul Circle
629605 Singapore
149 Gul Circle
629605 Singapore
FMC Technologies (Pty.) Ltd.
Koper Street Brackenfell 7560, Kape Town
Technip South Africa (Pty.) Ltd
13, Sloane Street, Epsom Downs OfficePark, Optimum
House, Bryanston, 2021, Johannesburg
Ordinary shares
Ordinary shares
100
100
SPAIN
Global Industries Offshore Spain, S.L.
Arturo Soria 263B
28003 Madrid
SWITZERLAND
FMC Kongsberg International GmbH
FMC Technologies GmbH
Technipetrol AG
THAILAND
Bahnofstrasse 10
6300 Zurich
Bahnofstrasse 10
6300 Zug
Industriestrasse 13c
CH-6304 Zug
Ordinary shares
100
Ordinary shares
Ordinary shares
Ordinary shares
100
100
100
Global Industries Offshore (Thailand),
Ltd.
18th Floor, Sathorn Thani Building 2, No. 92/52,
North Sathorn Road, Kwaeng Silom, Khet Bangrak,
Bangkok 10500
Ordinary shares
100
Technip Engineering (Thailand) Co. Ltd
20th Floor - Suntowers Building A
123 Vibhavadee - Rangsit Road
Chatuchak, Bangkok 10900
Ordinary shares
74
TUNISIA
FMC Technologies Service SARL
UNITED ARAB EMIRATES
Multi Phase Meters FZE
Technip Middle East FZCO
Rue Lac Tanganyika, Immeuble Junior, Bureaux 2-3, Les
Berges du Lac, 1053, La Marsa,Tunis
Ordinary shares
100
Office LB14414, P.O. Box 262274
Jebel Ali Free Zone, Dubai
Office LB15310, P.O. Box 17864
Jebel Ali Free Zone Dubai
Ordinary shares
Ordinary shares
TechnipFMC Gulf FZE
Office LB15325, Jebel Ali Free Zone Dubai
Ordinary shares
UNITED KINGDOM
AABB Limited
One St Paul's Churchyard
London EC4M 8AP
Coflexip (UK) Ltd
One St Paul's Churchyard
London EC4M 8AP
48,880 Ordinary
(equity) of 1p each
4,937,630 Ordinary
deferred of 10p each
Ordinary shares
Control Systems International (UK)
Limited
One St. Paul’s Churchyard, London, EC4M 8AP
Ordinary shares
Crosby Services International Ltd.
Enterprise Drive, Westhill, Aberdeenshire, AB32 6TQ
Ordinary shares
285 TechnipFMC
178
100
100
100
100
100
100
100
100
U.K. Annual Report and Accounts
Company Name
Cybernetix S.R.I.S. Limited
Forsys Subsea Limited (In liquidation)
Genesis Oil & Gas Consultants Ltd
Genesis Oil & Gas Ltd
Address
One St Paul's Churchyard
London EC4M 8AP
Birchin Court
20 Birchin Lane
London, EC3V 9DU
One St Paul's Churchyard
London EC4M 8AP
One St Paul's Churchyard
London EC4M 8AP
Share Class
Ordinary shares
Share A
Share B
Share A
Share B
Ordinary shares
FMC Kongsberg Services Limited
One St Paul's Churchyard
London EC4M 8AP
Ordinary shares
FMC/KOS West Africa Limited
FMC Technologies Global Business
Services Ltd. (In liquidation)
FMC Technologies Limited
FMC Technologies Pension Plan Ltd
Spoolbase UK Limited
Subsea I & C Services Limited
Subsea Maritime Services Limited
Subsea Offshore Services Limited
Schilling Robotics Limited
Technip Maritime UK Limited
Technip Offshore Holdings Limited
One St Paul's Churchyard
London EC4M 8AP
C/o Johnston Carmichael LLP
Bishop's Court
29 Albyn Place
Aberdeen, AB10 1YL
One St Paul's Churchyard
London EC4M 8AP
One St Paul's Churchyard
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
Technip Offshore Manning Services Ltd One St Paul’s Churchyard
Technip Services Limited
Technip Ships One Ltd
Technip UK Limited
Technip-Coflexip UK Holdings Ltd
TechnipFMC DSV3 Limited
TechnipFMC (Europe) Limited
TechnipFMC Finance ULC
TechnipFMC Holdings Limited
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
TechnipFMC International Finance
Limited
One St Paul’s Churchyard
London EC4M 8AP
TechnipFMC International UK Limited
TechnipFMC Umbilicals Ltd
West Africa Subsea Services Limited
One St Paul’s Churchyard
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
One St Paul’s Churchyard
London EC4M 8AP
UNITED STATES
286 TechnipFMC
179
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares A
Ordinary shares B
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Group
interest held
in %
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Address
Share Class
Group
interest held
in %
U.K. Annual Report and Accounts
Company Name
Badger Licensing LLC
Badger Technologies, LLC
Badger Technology Holdings, LLC
Control Systems International, Inc.
Deepwater Technologies Inc
FMC Subsea Service, Inc.
FMC Technologies Energy LLC
FMC Technologies, Inc.
FMC Technologies Measurement
Solutions, Inc.
FMC Technologies Overseas Ltd.
Corporation Service Company
251 Little Falls Drive
Wilmington, DE 19808
c/o CT Corporation System
3867 Plaza Tower
Baton Rouge, Louisiana, 70816
c/o CT Corporation System
3867 Plaza Tower
Baton Rouge, Louisiana, 70816
c/o CT Corporation Company, Inc.
3800 North Central Avenue, Suite 460
Topeka, Kansas 66603
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
FMC Technologies Separation Systems,
Inc.
c/o CT Corporation System 1999 Bryan Street, Suite 900
Dallas, Texas 75201
FMC Technologies Surface Integrated
Services, Inc.
c/o The Corporation Company
7700 E Arapahoe Road, Suite 220
Centennial, Colorado 80112-1268
FMX, LLC
Schilling Robotics, LLC
Subtec Middle East Ltd
Technip E&C, Inc.
Technip Energy & Chemicals
International, Inc.
Technip Process Technology, Inc.
Technip S&W Abu Dhabi, Inc.
Technip S&W International, Inc.
c/o CT Corporation System
1999 Bryan Street, Suite 900
Dallas, Texas 75201
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
c/o CT Corporation System
1999 Bryan Street, Suite 900
Dallas, Texas 75201
c/o CT Corporation System
3867 Plaza Tower
Baton Rouge, Louisiana, 70816
c/o CT Corporation System
3867 Plaza Tower
Baton Rouge, Louisiana, 70816
c/o CT Corporation System
3867 Plaza Tower
Baton Rouge, Louisiana, 70816
c/o CT Corporation System
3867 Plaza Tower
Baton Rouge, Louisiana, 70816
Technip Stone & Webster Process
Technology, Inc
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
287 TechnipFMC
180
Membership interest
100
Membership interest
100
Membership interest
100
Ordinary shares
100
Ordinary shares
75
Ordinary shares
100
Membership interest
100
Ordinary shares
100
Ordinary shares
100
Ordinary shares
100
Ordinary shares
Ordinary shares
100
100
Membership interest
100
Membership interest
100
Ordinary shares
100
Ordinary shares
100
Ordinary shares
100
Ordinary shares
100
Ordinary shares
100
Ordinary shares
100
Ordinary shares
100
U.K. Annual Report and Accounts
Company Name
Technip USA, Inc.
TechnipFMC Umbilicals, Inc.
TechnipFMC USA, Inc
TechnipFMC US Holdings Inc.
TechnipFMC US LLC 1
TechnipFMC US LLC 2
The Red Adair Company, L.L.C.
VENEZUELA
FMC Wellhead de Venezuela, S.A.
Technip Velam, S.A
VIETNAM
FMC Technologies (Vietnam) Co., Ltd.
32.3 Joint ventures
Address
Share Class
Group
interest held
in %
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
c/o CT Corporation System
3867 Plaza Tower
Baton Rouge, Louisiana, 70816
Av. 62 # 147-35, Zona Industrial,
Maracaibo, Zulia State, 4001
Av. Principal con Calle 1 y Calle 2
Centro Empresarial Inecom
Piso 1 - La Urbina
1060 Caracas
No. 29, Le Duan Street
Ben Nghe Ward, Distric 1
Ho Chi Minh City
Ordinary shares
100
Ordinary shares
100
Ordinary shares
100
Ordinary shares
100
Membership Interest
100
Membership Interest
100
Membership interest
100
Ordinary shares
Ordinary shares
100
100
Equity interest
100
Company Name
Address
Share Class
Group
interest held
in %
BAHRAIN
TTSJV W.L.L.
ESTONIA
Ingenium Baltic OU
FRANCE
South Tambey LNG
TP JGC Coral France SNC
Yamgaz SNC
ITALY
P.O. Box 28110 Muharraq – Block 215, Rd 1531, Bldg 1130,
Flt.12, Kingdom of Bahrain
Ordinary shares
36
Teaduspargi 8,
12618 Tallinn
5 place de la Pyramide
92088 La Défense Cedex
6-8 Allée de l'Arche - Faubourg de l'Arche - ZAC Danton
92400 Courbevoie
6-8 Allée de l’Arche - Faubourg de l’Arche - ZAC Danton
92400 Courbevoie
Ordinary shares
70
Equity interest
Equity interest
Equity interest
Equity interest
Equity interest
50
50
50
90
51
Consorzio Technip Italy Worley Parsons Viale Castello della Magliana, 68 00148 Roma
TP - HQC S.R.L.
MOZAMBIQUE
68, Viale Castello della Magliana
00148 Rome
ENHL- TechnipFMC Mozambique, LDA Av. Vladimir Lenine, 1123, 7° Andar | Edifício Topázio |
Ordinary shares
51
Maputo
JGC Fluor TechnipFMC Moçambique,
LDA
Av. Vladimir Lenine, 1123, 7° Andar | Edifício Topázio |
Maputo
Ordinary shares
33.33
288 TechnipFMC
181
U.K. Annual Report and Accounts
Company Name
TP JGC Coral Mozambique
NETHERLANDS
Etileno XXI Holding B.V.
NIGERIA
B7JV(Nigeria) Limited
NORWAY
Anchor Contracting AS
Dofcon Brasil AS
Inocean AS
Inocean Marotec AS
Marine Offshore AS
TechDOF Brasil AS
Technip-DeepOcean PRS JV DA
TIOS AS
TIOS Crewing AS
POLAND
Inocean Poland Sp Z.o.o
PORTUGAL
Address
Share Class
Group
interest held
in %
Av. Vladimir Lenine, 1123, 7° Andar | Edifício Topázio |
Maputo
Ordinary shares
50
Kleine Houtweg 33
Haarlem
2012 CB
Ordinary shares
50
3rd Floor, WAEC Office Complex, 10,
Zambezi Crescent, Maitama, Abuja, FCT
Maitama
Ordinary shares
33.33
Bryggegata 9
0250 Oslo
Thormohlens Gate 53 C
5006 Bergen
Bryggegata 3
0250 Oslo
Bryggegata 9
0250 Oslo
Vollsveien 17A
1327 Lysaker
ThormØhlens Gate
53C, 5006
Bergen
Killingøy
5515 Haugesund
Lagerveien 23
4033 Stavanger
Lagerveien 23
4033 Stavanger
ul. Dubois 20
71-610 Szczecin
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
No capital
Ordinary shares
Ordinary shares
51
50
51
46
51
50
50
51
51
Ordinary shares
51
TSKJ - Serviços De Engenharia, Lda.
Avenida Arriaga, n.º 30, 1.º andar - H
Funchal (Sé) 9000 064, Ilha da Madeira
Ordinary shares
25
SAUDI ARABIA
Global Al Rushaid Offshore Ltd
P O Box No 31685
31952 Al Khobar
Technip Italy S.p.A. & Dar Al Riyadh for
Engineering Consulting
Khobar Business Gate, Tower B, 7th Floor, King Faisal Bin
Abdul-Aziz Road
34423 Al-Khobar
Ordinary shares
Ordinary shares
50
60
SWEDEN
Inocean AB
THAILAND
Technip (Thailand) Ltd
UNITED ARAB EMIRATES
Yemgas FZCO
UNITED KINGDOM
B7JV(UK) Limited
Gårdatorget 1
SE-412 50 Gothenburg
Ordinary shares
51
20th Floor - Suntowers Building A
123 Vibhavadee - Rangsit Road
Chatuchak, Bangkok 10900
Ordinary shares
49
Office LB03031
P.O. Box No.17891
Jebel Ali Free Zone - Dubai
Ordinary shares
33.33
Hill Park Court Springfield Drive, Leatherhead, Surrey, KT22
7NL
Ordinary shares
33.33
TechnipFMC Island Offshore Subsea
UK Ltd
Pavilion 2, Aspect 32 Prospect Road,
Arnhall Business Park, Westhill AB32 6FE Aberdeenshire
Ordinary shares
51
UNITED STATES
289 TechnipFMC
182
U.K. Annual Report and Accounts
Company Name
FMC Technologies Offshore, LLC
Spars International Inc.
Address
c/o The Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801 USA
c/o CT Corporation System
1999 Bryan Street, Suite 900
Dallas, Texas 75201 USA
32.4 Associated undertakings
Share Class
Ownership based on
Contributions
Class A Common
Stock
Group
interest held
in %
50
50
Company Name
BOSNIA AND HERZEGOVINA
Petrolinvest, D.D. Sarajevo
BRAZIL
FSTP Brasil Ltda.
CHINA
HQC - TP Co. Ltd
COLOMBIA
Tipiel, S.A.
FINLAND
Creowave Oy
FRANCE
Novarctic SNC
Oceanide
Serimax Holdings SAS
GHANA
TechnipFMC Ghana Limited
INDONESIA
PT Technip Indonesia
Address
Share Class
Group
interest held
in %
Tvornicka 3
71000 Sarajevo
Ordinary shares
33
Rua Visconde de Inhaúma, n.º 83, 17 e 18 andares, Centro,
Cidade e Estado do Rio de Janeiro
Ordinary shares
25
n° 7 Yinghuayuan Dongjie, Chaoyang District
Pechino
Equity interest
49
Calle 38 # 8-62 Piso 3
Santafe De Bogota D.C.
Yrttipellontie 10 H
90230 Oulu
Ordinary shares
56.5
Ordinary shares
24.9
6-8 Allée de l'Arche - Faubourg de l'Arche - ZAC Danton
92400 Courbevoie
Ordinary shares
33.33
Port de Brégaillon
83502 La Seyne sur Mer
346 rue de la Belle Etoile
95700 Roissy en France
6th Floor, One Airport Square
00233 Accra
Metropolitan Tower, 15th Florr, JL. R. A.
Kartini Kav.
14 (T.B Simatupang), Cilandak
Jakarta Selatan 12430
Ordinary shares
23.10
Ordinary shares
20
Ordinary shares
49
Ordinary shares
42.1
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
49
25
31
49
Ordinary shares
40
MALAYSIA
FMC Wellhead Equipment Sdn. Bhd.
Technip Consultant (M) Sdn. Bhd
Technip Geoproduction (M) Sdn. Bhd.
Technip Marine (M) Sdn Bhd
NETHERLANDS
Etileno XXI Services B.V.
NORWAY
Suite 13.03, 13th Floor
207 Jalan Tun Razak
50400 Kuala Lumpur
Suite 13.03, 13th Floor
207 Jalan Tun Razak
50400 Kuala Lumpur
Suite 13.03, 13th Floor
207 Jalan Tun Razak
50400 Kuala Lumpur
Suite 13.03, 13th Floor
207 Jalan Tun Razak
50400 Kuala Lumpur
Prins Bernhardplein 200
Amsterdam 1097 JB
290 TechnipFMC
183
U.K. Annual Report and Accounts
Company Name
Address
Share Class
Group
interest held
in %
Kongsberg Technology Training Centre
AS
Kirkegårdsveien 45
3616 KONGSBERG
Ordinary shares
33.33
RUSSIA
LNG Nova Engineering LLC
SINGAPORE
FSTP Pte Ltd
UNITED ARAB EMIRATES
CTEP Free Zone Company
UNITED KINGDOM
Magma Global Limited
Room 1,2
Premises XXXV, ul. Akademika Pilyugina 22
Moscow 117393
Ordinary shares
34.90
50 Gul road
629351 Singapore
Ordinary shares
25
Jebel Ali Free Zone - Office 10007
P.O. Box 261645
Dubaï
Ordinary shares
40
Magma House, Trafalgar Wharf, Hamilton Road,
Portsmouth, PO6 4PX
Ordinary shares
25
NOTE 33. SUBSEQUENT EVENTS
On February 16, 2021, we completed the Spin-off. In connection with the Spin-off, on January 7, 2021, Bpifrance
Participations SA (“BPI”), which has been one of our substantial shareholders since 2009, entered into a share
purchase agreement with us (the “Share Purchase Agreement”) pursuant to which BPI agreed to purchase a portion
of our retained stake in Technip Energies N.V. (the “BPI Investment”) for $200.0 million (the “Purchase Price”). On
February 25, 2021, BPI paid 200.0 million in connection with the Share Purchase Agreement. The Purchase Price
was subject to adjustment, and BPI’s ownership stake was determined based upon a thirty day volume-weighted
average price of Technip Energies N.V.’s shares (with BPI’s ownership collared between an 11.82 percentage floor
and a 17.25 percentage cap), less a six percent discount. The BPI Investment was subject to customary conditions
and regulatory approval.
On March 31, 2021 pursuant to the Share Purchase Agreement BPI exercised its right and purchased from
TechnipFMC 7.5 million shares in Technip Energies N.V. for $100.0 million. On April 8, 2021 we refunded $100.0
million to BPI as a result of their revised level of investment. We intend to significantly reduce our remaining
shareholding in Technip Energies N.V. over the 18 months following the Spin-off.
Pursuant to the Separation and Distribution Agreement, signed between TechnipFMC and Technip Energies in
connection with the Spin-off, we and Technip Energies each agreed to cross-indemnities principally designed to
allocate financial responsibility for the obligations and liabilities of our business to us and those of Technip Energies’
business to it.
In connection with the Spin-off, we executed a series of refinancing transactions, in order to provide a capital
structure with sufficient cash resources to support future operating and investment plans.
On February 16, 2021, we entered into a new senior secured revolving credit facility (the “Revolving Credit Facility”)
that provides for aggregate revolving capacity of up to $1.0 billion. Availability of borrowings under the Revolving
Credit Facility is reduced by any outstanding letters of credit issued against the facility.
On January 29, 2021, we issued $1.0 billion of 6.5% senior notes due 2026 (the “2021 Notes”). The interest on the
2021 Notes is paid semi-annually on February 1 and August 1 of each year, beginning on August 1, 2021. The 2021
Notes are senior unsecured obligations and are guaranteed on a senior unsecured basis by substantially all of our
wholly-owned U.S. subsidiaries and non-U.S. subsidiaries in Brazil, the Netherlands, Norway, Singapore and the
United Kingdom.
The proceeds from the debt issuance described above along with the available cash on hand were used to fund the
repayment of all $522.8 million of the outstanding Synthetic Convertible Bonds that matured in January 2021 and
the repayment of all $500.0 million aggregate principal amount of outstanding 3.45% Senior Notes due 2022.
In addition, we terminated the $2.5 billion senior unsecured revolving credit facility we entered into on January 17,
2017 and terminated the €500.0 million Euro Facility and CCFF Program we entered into on May 19, 2020. In
291 TechnipFMC
184
U.K. Annual Report and Accounts
connection with the termination of these credit facilities, we repaid most of the outstanding commercial paper
borrowings, which were $1,525.2 million as of December 31, 2020.
NOTE 34. RECONCILIATION OF US GAAP TO IFRS
In accordance with the Securities and Exchange Commission (“SEC”), TechnipFMC is required to prepare its
Annual Report on Form 10-K for the three years ended December 31, 2020 in accordance with accounting
principles generally accepted in the United States of America (“US GAAP”) and SEC rules and regulations
pertaining to annual financial information.
To assist TechnipFMC’s shareholders in understanding the differences in the basis of preparation of the
TechnipFMC’s consolidated financial statements, the tables below set out reconciliations from US GAAP to IFRS for
Net Loss attributable to TechnipFMC plc for the years ended December 31, 2020 and 2019, respectively, together
with a reconciliation of Total Equity from US GAAP to IFRS as of December 31, 2020 and 2019. These
reconciliations set out all significant differences which are expected to result from the conversion from US GAAP to
IFRS.
In the consolidated financial statements as of December 31, 2020 and for the two years then ended, the main
differences between US GAAP and IFRS for TechnipFMC relate to the following:
(In millions)
December 31,
2020
2019
Total TechnipFMC plc stockholders’ equity in accordance with US GAAP
$
4,214.3 $
7,688.1
Leases
Goodwill
Impairment of property, plant and equipment
Defined benefit plans
Hedge accounting
LIFO adjustments
Expected credit losses
Equity method investments
Other
(50.9)
142.2
(24.9)
(42.6)
3.8
11.6
—
—
(6.5)
(25.0)
56.2
(18.1)
(32.6)
8.5
10.9
(9.6)
—
6.1
Total equity in accordance with IFRS
$
4,247.0 $
7,684.5
(In millions)
Year Ended
2020
2019
Net loss attributable to TechnipFMC plc in accordance with US GAAP
$
(3,287.6) $
(2,415.2)
Leases
Goodwill
Impairment of property, plant and equipment
Defined benefit plans
Hedge accounting
LIFO adjustments
Expected credit losses
Equity method investments
Other
(25.8)
86.0
(6.9)
(10.3)
(4.7)
0.7
(1.7)
—
(8.1)
(8.6)
(30.0)
(8.5)
(25.5)
(3.6)
3.0
(2.6)
33.7
3.3
Net loss attributable to TechnipFMC plc in accordance with IFRS
$
(3,258.4) $
(2,454.0)
Leases
Under the US GAAP leasing accounting guidance at lease commencement, a lessee classifies a lease as a finance
lease or an operating lease. Under the IFRS accounting guidance, almost all leases are treated under a single
model that is similar to a finance lease model under US GAAP. TechnipFMC classified majority of its leases as
operating lease under US GAAP that resulted in significant accounting differences between the two standards.
292 TechnipFMC
185
U.K. Annual Report and Accounts
Goodwill
In 2020 due to a different valuation methodology applied to calculate the goodwill impairment charge under US
GAAP and IFRS, the difference in fair values of our Surface International operating segment resulted in a higher
goodwill impairment charge under US GAAP.
Impairment of property, plant and equipment
US GAAP has a higher hurdle for impairment of long-lived assets (property, plant and equipment) than IFRS,
meaning it is less likely for impairment charges to be recognized. Therefore, the US GAAP impairment test had
yielded different results in the past years that subsequently resulted in an impact to IFRS earnings.
Defined benefit plans
There are differences between the methodologies for defined benefits under IFRS compared to US GAAP. The most
notable differences relate to accounting for actuarial gains and losses, recognition of prior service costs, special
event accounting and calculation of the expected return on plan assets.
Under US GAAP all actuarial gains and losses are deferred in OCI and subsequently amortized to net income
through a corridor approach as elected by TechnipFMC. Under IFRS actuarial gains and losses are recognized
immediately in OCI for long-term benefit plans. Gains and losses are not subsequently recognized in net income in
subsequent periods for these plans. Several small short-term plans (such as jubilee plans) do expense gains and
losses directly in net income in the year incurred.
Under US GAAP prior service costs or credits from plan amendments are initially deferred in OCI and subsequently
recognized in net income over the average remaining service period of active employees affected by the plan
amendment. Under IFRS all past service costs and credits are immediately recognized in profit or loss at the earlier
of when the amendment occurs or when the related restructuring or termination costs are recognized.
Under US GAAP special events such as settlements and curtailments are recognized differently from IFRS. Under
US GAAP settlements are triggered through lump sums exceeding a specified threshold in a given year, resulting in
accelerated recognition of actuarial gains and losses. Under IFRS, settlements are triggered based on non-routine
lump sum payments, with the settlement impact calculated as the difference between the cash payout and the
present value of the benefit held on the balance sheet. Curtailments have different definitions of when to recognize,
with US GAAP triggering a curtailment when an event causes a significant decrease in the plan’s future service and
IFRS triggering a curtailment based on a significant reduction in employee headcount based on a specific event.
The net income impact under IFRS is calculated as the change in present value due to the curtailment, and US
GAAP using a more complicated formula depending on whether the curtailment is a gain or loss, and whether any
outstanding prior service cost exists.
The US GAAP expected return on plan assets is calculated using the expected long-term rate of return on invested
assets in the underlying portfolio. Under IFRS, a “net interest” expense (income) on the net defined benefit liability
(asset) is recognized as a component of defined benefit cost, based on the discount rate used to determine the
obligation.
Hedge accounting
Using cash as natural hedge instrument is not allowed under US GAAP. An adjustment to reclassify natural hedging
results from income statement to OCI is recorded under IFRS.
LIFO adjustments
TechnipFMC has several subsidiaries that utilize LIFO cost accounting method under US GAAP. While LIFO is an
allowable method under US GAAP, it is prohibited under IFRS. TechnipFMC records an adjustment to reverse the
impact from LIFO costing method under IFRS in its consolidated financial statements.
Expected credit losses
Effective January 1, 2020, under US GAAP we adopted ASU No. 2016-13, “Financial Instruments—Credit Losses
(Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU introduces a new model for
recognizing credit losses on financial instruments based on an estimate of current expected credit losses. After
adoption of the new standard TechnipFMC do not have material US GAAP to IFRS conversion differences in
293 TechnipFMC
186
U.K. Annual Report and Accounts
accounting for expected credit losses for trade and other receivables, debt securities, loans receivable and other
financial assets.
Equity method investments
US GAAP and IFRS have different methodologies in assessment of impairment on equity method investments.
Other
TechnipFMC recorded other various insignificant differences including differences from deferred taxes.
294 TechnipFMC
187
U.K. Annual Report and Accounts
COMPANY FINANCIAL STATEMENTS
TECHNIPFMC PLC
AS OF DECEMBER 31, 2020
Company No. 09909709
295 TechnipFMC
188
U.K. Annual Report and Accounts
1. COMPANY STATEMENT OF FINANCIAL POSITION
(In millions)
Assets
Investments in subsidiaries
Property, plant and equipment, net
Right-of-use assets
Intangible assets, net
Loan receivables – related parties
Other non-current financial assets
Deferred income taxes
Total non-current assets
Cash and cash equivalents
Trade and other receivables, net
Loan receivables – related parties
Derivative financial instruments
Income taxes receivable
Other current assets
Total current assets
Total assets
Equity and Liabilities
Ordinary shares
Retained earnings, net income and other reserves
Total shareholders’ equity
Long-term debt
Loan payables – related parties
Lease liabilities
Derivative financial instruments
Other non-current liabilities
Total non-current liabilities
Short term debt
Trade and other payables
Lease liabilities
Income taxes payable
Total current liabilities
Total liabilities
Total equity and liabilities
As of January 1
Loss for the year
Other changes in retained earnings
Retained earnings
Note
December 31,
2020
December 31,
2019
3
4
5
6
7
5
11
8
$
11,110.2 $
14,475.5
0.3
—
1.5
156.8
15.0
5.1
0.3
42.6
1.3
1,551.9
28.9
0.6
11,288.9
16,101.1
2.3
205.0
1,035.2
69.9
154.3
16.7
1,483.4
5.5
195.0
—
4.3
180.6
23.5
408.9
$
12,772.3 $
16,510.0
9
$
449.5 $
1,618.8
2,068.3
1,535.1
5,701.7
—
1.1
123.9
7,361.8
1,387.0
1,917.6
—
37.6
10
12
4
11
4
10
13
4
8
447.1
5,935.7
6,382.8
1,707.5
5,599.5
9.9
4.3
113.9
7,435.1
244.6
2,327.2
35.5
84.8
3,342.2
10,704.0
12,772.3 $
2,692.1
10,127.2
16,510.0
5,935.7 $
(4,556.4)
239.5
1,618.8 $
8,317.7
(2,068.0)
(314.0)
5,935.7
$
$
$
The accompanying notes are an integral part of the financial statements.
296 TechnipFMC
189
U.K. Annual Report and Accounts
The financial statements were approved by the Board of Directors and signed on its behalf by
Douglas J. Pferdehirt
Director and Chief Executive Officer
April 9, 2021
297 TechnipFMC
190
U.K. Annual Report and Accounts
2. COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
(In millions)
Ordinary
Shares
Share
Premium
Merger
Reserve
Retained
Earnings,
Net Income
and Other
reserves
Total
Shareholders’
Equity
Balance as of December 31, 2018
$
450.5 $
— $
— $
8,317.7 $
8,768.2
Cumulative effect of initial application of IFRS 16
Net loss
Other comprehensive income/(loss)
Dividends (Note 9)
Issuance of ordinary shares (Note 9)
Cancellation of treasury shares (Note 9)
Share-based compensation (Note 9)
—
—
—
—
0.6
(4.0)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(1.2)
(1.2)
(2,068.0)
(2,068.0)
(65.8)
(232.8)
—
(88.7)
74.5
(65.8)
(232.8)
0.6
(92.7)
74.5
Balance as of December 31, 2019
$
447.1 $
— $
— $
5,935.7 $
6,382.8
Net loss
Other comprehensive income/(loss)
Dividends (Note 9)
Issuance of ordinary shares (Note 9)
Share-based compensation (Note 9)
Balance as of December 31, 2020
—
—
—
2.4
—
—
—
—
—
—
—
—
—
—
—
(4,556.4)
(4,556.4)
239.1
(59.2)
(9.4)
69.0
239.1
(59.2)
(7.0)
69.0
$
449.5 $
— $
— $
1,618.8 $
2,068.3
The accompanying notes are an integral part of the financial statements.
298 TechnipFMC
191
U.K. Annual Report and Accounts
3. NOTES TO THE COMPANY FINANCIAL STATEMENTS
NOTE 1 - GENERAL CORPORATE INFORMATION
TechnipFMC plc (the “Company” or “TechnipFMC”) is a global leader in subsea, onshore/offshore, and surface
projects. TechnipFMC is a public limited company limited by shares. The company is incorporated under the laws of
England and Wales. The Company’s registered address is One St. Paul’s Churchyard, London, EC4M 8AP.
NOTE 2 - ACCOUNTING PRINCIPLES
2.1 Basis of preparation
The financial statements for the year ended December 31, 2020 have been prepared in accordance with United
Kingdom Accounting Standards –
in particular Financial Reporting Standard 101 “Reduced Disclosure
Framework” (“FRS 101”) – and with the Act. FRS 101 sets out a reduced disclosure framework for a qualifying entity
as defined in the Standards which addresses the financial reporting requirements and disclosure exemptions in the
individual financial statements of qualifying entities that otherwise apply the recognition, measurement and
disclosure requirements of EU-adopted International Financial Reporting Standards (“IFRS”).
The Company is a qualifying entity for the purposes of FRS 101. The application of FRS 101 has enabled the
Company to take advantage of certain disclosure exemptions that would have been required had the Company
adopted IFRS in full. The only such exemptions that the directors considered to be significant are:
•
•
•
•
•
•
•
No detailed disclosures in relation to financial instruments;
No cash flow statement;
No disclosure of related party transactions with subsidiaries;
No statement regarding the potential impact of forthcoming changes in financial reporting standards;
No disclosure of “key management compensation” for key management other than the Directors;
No disclosures relating to the Company’s policy on capital management, and
No disclosure of requirements of paragraph 45b and 46-52 of IFRS 2 Share based charges.
The Company's functional currency was determined to be U.S. dollars ("USD") as this is the primary economic
environment in which the entity operates.
The financial statements have been prepared under the historical cost convention, except for certain financial
assets and liabilities, which are measured at fair value. Accounting policies have been consistently applied
throughout the reporting period. The financial statements of the Company for the year ended December 31, 2020
are presented in U.S. dollars, the presentation and functional currency of the Company, and all values are rounded
to the nearest million included to one decimal place.
The directors have a reasonable expectation that the Company has adequate resources to continue in existence for
the foreseeable future. Therefore, the financial statements have been prepared on a going concern basis.
The directors have taken advantage of the exemption available under Section 408 of the Act and have not
presented a profit and loss account for the Company.
Going concern
Following its assessment of going concern, the Company has formed a judgement that there are no material
uncertainties that cast doubt on the Company’s going concern status and that it is a reasonable expectation that the
Company has adequate resources to continue in operational existence for the foreseeable future. For this reason,
the Company continues to adopt the going concern basis in preparing its financial statements. Details of going
concern assessment are provided in Note 1 of TechnipFMC consolidated financial statements.
2.2 Standards, amendments and interpretations effective in 2020
299 TechnipFMC
192
U.K. Annual Report and Accounts
The Company has applied the following standards and amendments for the first time in its financial statements for
the year ended December 31, 2020:
•
•
•
•
Definition of a Business - Amendments to IFRS 3 “Business Combinations” (“IFRS 3”);
Definition of Material - Amendments to IAS 1 "Presentation of Financial Statements" ("IAS 1") and IAS 8
“Accounting Policies, Changes in Accounting Estimates and Errors” (“IAS 8”);
Interest Rate Benchmark Reform (Phase 1) - Amendments to IFRS 9 “Financial instruments” (“IFRS 9”), IAS
39 “Financial Instruments: Recognition and Measurement” (“IAS 39”) and IFRS 7 "‘Financial Instruments:
Disclosures" ("IFRS 7");
Revised Conceptual Framework for Financial Reporting.
The new standards and amendments did not have any impact on the Company's accounting policies and did not
require retrospective adjustments.
2.3 Summary of significant accounting policies
The significant accounting policies, which have been used in the preparation of the Company financial statements,
are set out below. These policies have been consistently applied to all years presented.
a)
Investments
Investments are measured initially at cost, including transaction costs, less any provision for impairment.
At each balance sheet date, the Company reviews the carrying amounts of its investments to assess whether there
is an indication that those assets may be impaired. If any such indication exists, the Company makes an estimate of
the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s fair value less costs to
sell and its value in use.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the
asset is reduced to its recoverable amount. An impairment loss is recognized immediately in the income statement.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised
estimate of its recoverable amount, to the extent that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognized for the asset in prior periods. A
reversal of an impairment loss is recognized immediately in the income statement.
Dividend income is recognized when the right to receive payment is established.
b)
Trade receivable and loans issued to related parties
Trade receivables are recognized initially at the amount of consideration that is unconditional unless they contain
significant financing components, when they are recognized at fair value. The Company holds the trade receivables
with the objective to collect the contractual cash flows and therefore measures them subsequently at amortized cost
using the effective interest method.
Loans issued to related parties are initially measured at their fair values plus transaction costs and subsequently
carried at amortized cost net of impairment allowance.
Interest income on loans issued to related parties is calculated by applying the effective interest rate to the gross
carrying amount of a loan receivable.
c)
Share-based employee compensation
The measurement of share-based compensation expense on restricted share awards is based on the market price
at the grant date and the number of shares awarded. The share-based compensation expense for each award is
recognized during the vesting period (i.e., the period in which the service and, where applicable, the performance
conditions are fulfilled). The cumulative expense recognized for share-based employee compensation at each
reporting date reflects the already expired portion of the vesting period and the Company’s best estimate of the
number of awards that will ultimately vest. The expense or credit in the statement of profit or loss for a period
represents the movement in cumulative expense recognized as of the beginning and end of that period.
300 TechnipFMC
193
U.K. Annual Report and Accounts
d)
Long term debt
Current and non-current financial debts include bond loans, commercial paper programs and other borrowings. After
initial recognition, debt is measured at amortized cost using the effective interest rate method. Transaction costs,
such as issuance fees and redemption premium are included in the cost of debt on the liability side of the statement
of financial position, as an adjustment to the nominal amount of the debt. The difference between the initial debt and
redemption at maturity is amortized at the effective interest rate.
e)
Foreign currency transactions
Foreign currency transactions are translated into the functional currency at the exchange rate applicable on the
transaction date.
At the closing balance sheet date, monetary assets and liabilities stated in foreign currencies are translated into the
functional currency at the exchange rate prevailing on that date. Resulting exchange gains or losses are directly
recorded in the income statement, except exchange gains or losses on cash accounts eligible for future cash flow
hedging and for hedging on net foreign currency investments.
Translation of financial statements of the Company’s branch in foreign currency
The income statements of the Company’s branch are translated into USD at the average exchange rate prevailing
during the year. Statements of financial position are translated at the exchange rate at the closing date. Differences
arising in the translation of financial statements of the branch are recorded in other comprehensive income as
foreign currency translation reserve. The functional currency of the branch is the local currency (euro).
f)
Derivative financial instruments and hedging
The Company uses derivative financial instruments, such as forward contracts, swaps and options to hedge its
risks, in particular foreign exchange risks. Currently, every derivative financial instrument held by the Company is
aimed at hedging future inflows or outflows against exchange rate fluctuations during the period of contract
performance. Derivative instruments and in particular forward exchange transactions are aimed at hedging future
cash inflows or outflows against exchange rate fluctuations in relation with awarded commercial contracts.
See Note 27 of TechnipFMC consolidated financial statements for further details.
g)
Cash and cash equivalents
Cash and cash equivalents consist of cash in bank and in hand, fixed term deposits and securities fulfilling the
following criteria: an original maturity of less than three months, highly liquid, a fixed exchange value and an
insignificant risk of loss of value. Securities are measured at their market value at year-end. Any change in fair value
is recorded in the statement of income.
h)
Share capital and dividend distribution
Ordinary shares and redeemable shares are classified as equity. The redeemable shares may be redeemed by the
Company for nil consideration at any time and are therefore recognized within equity.
Dividend distribution to the Company’s shareholders is recognized as a liability in the Company’s financial
statements in the period in which the dividends are approved by the Company’s shareholders. A corresponding
amount is recognized directly in the statement of equity. Interim dividends are recognized when paid.
i)
Taxation
Corporate tax is payable on taxable profits at amounts expected to be paid, or recovered, under the tax rates and
laws that have been enacted or substantively enacted at the balance sheet date.
Deferred tax is recognized to take account of temporary differences between the treatment of transactions for
financial reporting purposes and their treatment for tax purposes. A deferred tax asset is only recognized when it is
regarded as more likely than not there will be a suitable taxable profit from which the future reversal of the
underlying temporary differences can be deducted.
301 TechnipFMC
194
U.K. Annual Report and Accounts
Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the temporary
differences are expected to reverse based on the tax rates and laws that have been enacted or substantively
enacted at the balance sheet date.
j)
Non-current assets held for sale or distribution to equity holders
TechnipFMC classifies non-current assets as held for sale/or distribution to equity holders of the parent if their
carrying amounts will be recovered principally through a sale transaction or a distribution rather than through
continuing use. Such non-current assets classified as held for sale/or distribution are measured at the lower of their
carrying amount and fair value less costs to sell or distribute. Costs to sell/or distribute are the incremental costs
directly attributable to the sale or distribution, excluding finance costs and income tax expense.
The criteria for held for sale/or distribution classification is regarded as met only when the sale/or distribution is
highly probable and the asset is available for immediate sale/ or distribution in its present condition. Actions required
to complete the sale/or distribution should indicate that it is unlikely that significant changes to the sale/or
distribution will be made or that the decision to sale/or distribute will be withdrawn. Management must be committed
to the sale/or distribution expected within one year from the date of the classification.
k) Cash dividend and non-cash distribution to equity holders
The Company recognizes a liability to make cash or non-cash distributions to its equity holders when the distribution
is approved by its shareholders. A corresponding amount is recognized directly in the statement of equity.
l)
Related parties
The Company is a qualifying entity for the purposes of FRS 101 and took an advantage of the disclosure exemption
not to provide a disclosure on the following:
•
•
related party transactions with subsidiaries;
“key management compensation” for key management other than the Directors.
2.4 Use of critical accounting estimates, judgments and assumptions
The preparation of the financial statements requires the use of critical accounting estimates, judgments and
assumptions that may affect the assessment and disclosure of assets and liabilities at the date of the financial
statements, as well as the income and the reported expenses regarding this financial year. Estimates may be
revised if the circumstances and the assumptions on which they were based change, if new information becomes
available, or as a result of greater experience. Consequently, the actual result from these operations may differ from
these estimates.
a)
Judgments
Area of judgment that has the most significant effect on the amounts recognized in the Company’s financial
statements relate to the separation transaction.
On February 16, 2021, we completed the previously announced separation of the Technip Energies business
segment. The transaction was structured as a spin-off, which occurred by way of a pro rata dividend (the
“Distribution”) to our shareholders of 50.1 percent of the outstanding shares in Technip Energies N.V. Each of our
shareholders received one ordinary share of Technip Energies N.V. for every five ordinary shares of TechnipFMC
held at 5:00 p.m., New York City time on the record date, February 17, 2021. Technip Energies N.V. is now an
independent public company and its shares trade under the ticker symbol “TE” on the Euronext Paris stock
exchange.
Under IFRS, the reclassification of assets (and any associated liabilities) as 'held for distribution' can only be
triggered once the assets are available for distribution in their present condition and the distribution is 'highly
probable'. The highly probable criteria is met when the distribution is expected to be completed within a year. As of
December 31, 2020, we had no such expectation as the Spin-off was dependent upon on new capital structure
negotiations and related new financing in connection with the Spin-off. This only came into effect on January 29,
2020, upon completion by TechnipFMC its private offering of $1.0 billion in aggregate principal amount of senior
unsecured notes due 2026. Therefore, the assets and liabilities associated with our Technip Energies business are
not classified as held for distribution as of December 31, 2020. The "highly probable" criteria was not met as of
302 TechnipFMC
195
U.K. Annual Report and Accounts
December 31, 2020 since both TechnipFMC and Technip Energies were in process of negotiation on capital
structure that was conditional on issuance of new financing in connection with the Spin-off.
b)
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date
relate to the following:
•
•
estimates on provision for expected credit losses on trade receivable and loans issued to related parties,
and
impairment of investments in subsidiaries.
The loss allowances for trade receivable and loans issued to related parties are based on assumptions about risk of
default and expected credit loss rates. The Company uses judgement in making these assumptions and selecting
the inputs to the impairment calculation, based on the past history and existing market conditions, as well as
forward-looking estimates at the end of each reporting period. The Company’s historical credit loss experience and
forecast of economic conditions may also not be representative of customer’s actual default in the future.
The Company assesses whether there are any indicators of impairment of investments at each reporting date.
Investments are tested for impairment when there are both external and internal indicators that the carrying amount
may not be recoverable. Details of impairment recorded during the year and the carrying value of investments are
contained in Note 3.
There have been no other critical judgments made in applying the Company’s accounting policies.
NOTE 3 - INVESTMENTS IN SUBSIDIARIES
The movement in investments account balances are described below:
(In millions)
Cost as of January 1
Capital increase
Additions due to the spin-off of Technip Energies (2)
Net foreign exchange difference
Total cost as of December 31,
Impairment as of January 1
Impairments (1)
Net foreign exchange difference
Total impairment as of December 31,
Net book value as of December 31,
2020
2019
$
18,497.7 $
18,581.6
6.8
886.8
227.6
—
—
(83.9)
19,618.9 $
18,497.7
4,022.2 $
4,486.5
—
1,996.9
2,035.8
(10.5)
8,508.7 $
4,022.2
11,110.2 $
14,475.5
$
$
$
$
(1)
Impairments relate to the carrying value of intermediate holding company investments. The methodology and assumptions used in
reviewing the investments for impairment were the same as those used in the Goodwill review. See Note 11 of TechnipFMC consolidated
financial statements for further details.
(2) During 2020, the Company executed a series of transactions to restructure and realign the ownership of its group entities in connection with
the Spin-off. The transactions included the acquisition of additional ownership interest from 77.8% to 100.0% in its investment in Technip
France for $194.2 million. The Company also restructured ownership of underlying investments and acquired a 100.0% direct interest in
existing subsidiaries including Clecel SAS for $109.2 million, Technip E&C Limited for $188.3 million, and Kanfa AS for $52.1 million.
Creation of new subsidiaries included a 77.79% direct interest in Technip N-Power for $38.5 million and a 100.0% direct interest in Technip
Benelux B.V. for $223.0 million. See Note 33 of TechnipFMC consolidated financial statements for further details on the Spin-off transaction.
The Company’s direct subsidiaries as of December 31, 2020 are listed below. Ownership interests reflect holdings
of ordinary shares. Details of other related undertakings are provided in Note 32 of TechnipFMC consolidated
financial statements.
303 TechnipFMC
196
U.K. Annual Report and Accounts
Company Name
Address
Share Class
The
Company
interest held
in %
AUSTRALIA
Technip Australia Pty
BRAZIL
Technip Cleplan Empreendimentos E
Projetos Industriais Ltda.
CHINA
1120 Hay Street, Perth WA 6000
Ordinary shares
100
Rua Dom Marcos Barbosa, nº 2, sala 202 (parte)
Equity interest
58.29
20211-178 Rio de Janeiro
Technip Chemical Engineering (Tianjin)
Co., Ltd.
10th Floor - Yunhai Mansion
200031 Shanghai
Calle 38 # 8-62 Piso 3
Santafe de Bogota D.C.
COLUMBIA
Tipiel, S.A.
FRANCE
Clecel, SAS
Equity interest
100
Equity interest
7.2
6-8 Allee de l'Arche - Faubourg de l'Arche - ZAC Danton
Ordinary shares
100
92400 Courbevoie
Technip Corporate Services SAS
89, avenue de la Grande Armée
Ordinary shares
100
75116 Paris
TechnipFMC Corporate Services SAS
89, avenue de la Grande Armee
Ordinary shares
77.97
Technip Eurocash SNC
89, avenue de la Grande Armée
Equity interest
96
75116 Paris
75116 Paris
Technip France SA
6-8 Allée de l’Arche - Faubourg de l’Arche - ZAC Danton
Ordinary shares
78
Compagnie Française De Réalisations
Industrielles, Cofri SAS
92400 Courbevoie
6-8 Allée de l’Arche - Faubourg de l’Arche - ZAC Danton
Ordinary shares
100
92400 Courbevoie
Cybernetix SAS
Technopôle de Château-Gombert
Ordinary shares
100
Genesis Nimes SAS
13382 Marseille Cedex 13
19, Avenue Feuchères
30000 Nîmes
Serimax Holdings SAS
95700 Roissy en France
Technip Ingenierie Defense SAS
6-8 Allée de l’Arche - Faubourg de l’Arche - ZAC Danton
92400 Courbevoie
Ordinary shares
100
Ordinary shares
Ordinary shares
20
100
Technip N-Power SAS
6-8 Allée de l’Arche - Faubourg de l’Arche - ZAC Danton
Ordinary shares
77.79
Technip Offshore International SAS
89, avenue de la Grande Armée
Ordinary shares
100
92400 Courbevoie
Technipnet SAS
6-8 Allée de l’Arche - Faubourg de l’Arche - ZAC Danton
Ordinary shares
100
75116 Paris
GERMANY
92400 Courbevoie
Technip Zimmer GmbH
Friesstrasse 20
Ordinary shares
100
INDONESIA
PT Technip Indonesia
ITALY
60388 Frankfurt am Main
Metropolitan Tower, 15th Florr, JL. R. A.
Kartini Kav.
14 (T.B Simatupang), Cilandak
Jakarta Selatan 12430
Equity interest
9
Technip Italy S.P.A.
68, Viale Castello della Magliana
Ordinary shares
100
TPL - Tecnologie Progetti Lavori S.P.A.
In Liquidazione
MALAYSIA
00148 Rome
68, Viale Castello della Magliana
Ordinary shares
100
00148 Rome
304 TechnipFMC
197
U.K. Annual Report and Accounts
Company Name
Address
Share Class
The
Company
interest held
in %
Technip Geoproduction (M) Sdn. Bhd.
Suite 13.03, 13th Floor
Ordinary shares
31
2017 Jalan Tun Razak
Kuala Lumpur
50400
Asiaflex Products Sdn. Bhd.
Suite 13.03, 13th Floor
Ordinary shares
33
2017 Jalan Tun Razak
Kuala Lumpur
50400
Suite 13.03, 13th Floor
2017 Jalan Tun Razak
Kuala Lumpur
50400
Technip Far East Sdn Bhd
MEXICO
Ordinary shares
100
Technip de Mexico S.de R.L. de C.V.
Blvd, Manuel Avila Camacho
Ordinary shares
50
NETHERLANDS
36, Piso 10, Officina 1058
FMC Technologies Global B.V.
Zuidplein 126, Tower H, 15th Fl.
Ordinary shares
68.6
Technip Benelux B.V.
1077 XV Amsterdam
Afrikaweg 30
Zoetemeer, 2713 AW
Ordinary shares
100
Technip Energies B.V.
6-8 Allee de l'Arche - Faubourg
Ordinary shares
100
De l'Arche - ZAC Danton
Technip Oil & Gas B.V.
Afrikaweg 30
Ordinary shares
100
Technip Holding Benelux B.V.
Afrikaweg 30
Ordinary shares
100
Zoetemeer, 2713 AW
Zoetermeer 2713 AW
TechnipFMC International Holdings B.V. Zuidplein 126, WTC, Tower H, 15é
NEW-CALEDONIA - FRENCH OVERSEAS TERRITORY
Amsterdam 1077XV
Preferred shares
and Ordinary
shares
38.93
Technip Nouvelle-Caledonie
27 bis Avenue du Maréchal Foch - Galerie CENTER FOCH -
Centre-Ville
Ordinary shares
100
NORWAY
Inocean AS
Marine Offshore AS
Kanfa AS
PANAMA
B.P. 4460
98847 NOUMEA
Bryggeata 3
0250 Oslo
Vollsyeien 17A
1327 Lysaker
Philip Pedersens vei 7
1366 Lysaker
Ordinary shares
51
Ordinary shares
51
Ordinary shares
100
Technip Overseas S.A.
East 53rd Street
Ordinary shares
100
Marbella, Humboldt Tower 2nd Floor
Panama
PORTUGAL
TSKJ Servicos De Engenharia, Lda
Avenida Arriaga, numero trinta
Equity Interest
25
RUSSIAN FEDERATION
Technip Rus LLC
SAUDI ARABIA
Terceiro andar - H
Frequesia da Se, Concelho do Funchal
266 Litera O, Ligovsky Prospect
196084 St Petersburg
305 TechnipFMC
198
Ordinary shares
99.98
U.K. Annual Report and Accounts
Company Name
Address
Share Class
The
Company
interest held
in %
Technip Saudi Arabia Limited
Dhahran Center Building - 5th Floor, Suite $501
Ordinary shares
40
SERBIA
Petrolinvest, dd Sarajevo
SINGAPORE
31952 Al-Khobar
Tvornicka 3
71000 Sarajevo
Equity interest
33.01
Technip Energies Singapore Pte Ltd
149 Gul Circle
Ordinary shares
100
SPAIN
629605 Singapore
Technip Iberia, S.A.
Building n° 8 - Floor 4th Plaça de la Pau s/n
Ordinary shares
99.99
World Trade Center - Almeda Park - Cornellà de Llobregat
SWITZERLAND
Engineering Re AG
08940 Barcelone
Basteiplatz 7
8001 Zurich
UNITED KINGDOM
TechnipFMC Corporate Holdings
Limited
One St Paul’s Churchyard
London EC4M 8AP
Ordinary shares
100
Ordinary shares
88.12
Technip PMC Services Limited
One St Paul’s Churchyard
Ordinary shares
100
Technip E&C Limited
One St Paul’s Churchyard
Ordinary shares
100
London EC4M 8AP
VENEZUELA
London EC4M 8AP
Inversiones Dinsa, C.A.
Avenida Principal de La Urbina, calle 1 con calle 2
Ordinary shares
100
Centro Empresarial INECOM, piso 1, oficina 1-1 La Urbina,
Minicipio Sucre
1070 Caracas
Technip Bolivar, C.A. en liquidation
523 Zona Industrial Matanzas, Planta De Bauxilum
Ordinary shares
99.94
Puerto Ordaz Ciudad Bolivar
NOTE 4 – LEASES
In 2020, the Company novated its sole lease to another entity within the TechnipFMC's subsidiaries. The Company
has no leases as of December 31, 2020.
(In millions except for discount rate)
Right-of-use asset
Lease Liability
Current lease liabilities
Non-current lease liabilities
Weighted average discount rate
$
$
December 31,
2020
2019
—
—
—
—
$
$
42.6
45.4
35.5
9.9
— %
3.9 %
The following summarizes various amounts recognized by the Company as of and for the years ended
December 31, 2020 and 2019:
•
Depreciation of ROU asset in consolidated statement of income of $0.0 million and $35.6 million,
respectively.
306 TechnipFMC
199
U.K. Annual Report and Accounts
•
•
Interest expense on lease liability of $0.0 million and $2.0 million, respectively.
Payments for the principal portion of lease liability of $0.0 million and $34.2 million and interest portion of
$0.0 million and $1.8 million for total payments of $0.0 million and $36.0 million, respectively.
NOTE 5 - LOAN RECEIVABLES
(In millions)
Loan receivables - current
Loan receivables - non-current
Total
December 31,
2020
2019
$
$
1,035.2 $
156.8
1,192.0 $
—
1,551.9
1,551.9
The Company’s loan receivables from related parties are unsecured and are stated net of impairment allowance of
$4.7 million and $4.7 million as of December 31, 2020 and 2019, respectively.
Loan receivables from related parties primarily consist of loans to Technip Offshore International SAS (“TOI”),
Technip UK Ltd (“Technip UK”) and Asiaflex. The terms and interest rates for significant loans are detailed below:
(i)
(ii)
Loans to TOI consist of two loans in the amount of $1,103.5 million and $114.0 million respectively with 5
year terms and interest rates of 4.16% and 2.10% respectively.
Loan to Technip UK is in the amount of $147.8 million with a 5 year term and interest rate of LIBOR GBP 6
months +0.5 basis point.
(iii)
Loan to Asiaflex is in the amount of $70.0 million with a 10 year term and interest rate of LIBOR 3M +1.1%.
NOTE 6 - DEFERRED INCOME TAX
The tax rate utilized to compute deferred taxes depends on the location of the underlying transaction. The
transactions carried out by the U.K. head office are tax effected using the U.K. tax rate. The transactions carried out
by the French permanent establishment are tax effected using the French tax rate.
The earnings of the U.K. head office are subject to the U.K. statutory rate of 19.0%. The profits or losses of the
French permanent establishment are not taxable in the U.K. as the election under section 18A CTA 2009 has been
validly made.
The net deferred tax assets and liabilities amounts to $5.8 million and $0.6 million as of December 31, 2020 and
2019, respectively. The deferred tax balance comprises:
(In millions)
Deferred tax relating to pensions
Deferred tax relating to financial instruments
Short term temporary differences
Tax loss carry forward
Total
The movement in the deferred tax asset is shown below:
(In millions)
As of January 1
Movement relating to pensions
Credit to income statement
As of December 31
307 TechnipFMC
200
December 31,
2020
2019
0.2 $
—
—
5.6
5.8 $
December 31,
2020
2019
0.6 $
0.2
5.0
5.8 $
0.4
(1.9)
0.9
1.2
0.6
22.2
0.4
(22.0)
0.6
$
$
$
$
U.K. Annual Report and Accounts
NOTE 7 - TRADE AND OTHER RECEIVABLES
(In millions)
Trade receivables - related parties
Prepaid expenses
Advances paid to suppliers
Trade and other receivables
December 31,
2020
2019
$
$
188.4 $
16.5
0.1
205.0 $
182.7
11.9
0.4
195.0
The Company’s trade receivables from related parties are stated net of loss allowance of $0.0 million and $6.3
million as of December 31, 2020 and 2019, respectively.
NOTE 8 - INCOME TAX RECEIVABLE / INCOME TAX PAYABLE
The Company is a tax resident of both the United Kingdom (the “U.K.”) and France.
The Company maintains a permanent establishment in France which carries out the activities that were previously
carried out by Technip. For tax purposes, this permanent establishment is the head of the French tax consolidated
group. As such, the Company’s French branch is liable for tax at the French statutory rate of 31.0% on French
consolidated income.
In turn, the Company’s French branch receives from the French affiliates members of the French tax consolidated
group the income tax that these affiliates would have paid on a standalone basis if they had not been a member of
the French tax consolidated group.
The current income tax credit booked by the Company’s French branch is the difference between the income tax
due on the consolidated income to the French tax authorities and the income tax received from the affiliates
members of the French tax consolidated group.
NOTE 9 - STOCKHOLDERS’ EQUITY
9.1 Changes in the Company’s ordinary shares
On November 27, 2019, TechnipFMC redeemed 50,000 redeemable shares of £1 each and cancelled one deferred
ordinary share of £1 in the capital of TechnipFMC. As of December 31, 2020, the Company’s share capital was
449,466,233. As of December 31, 2019, TechnipFMC’s share capital was 447,064,767 ordinary shares. The
movements in share capital were as follows:
(In millions of shares)
December 31, 2018
Stock awards
Treasury stock cancellations
December 31, 2019
Stock awards
Treasury stock cancellations
December 31, 2020
Ordinary Shares
450.5
0.6
(4.0)
447.1
2.4
—
449.5
As an English public limited company, we are required under U.K. law to have available “distributable reserves” to
conduct share repurchases or pay dividends to shareholders. Distributable reserves are a statutory requirement and
are not linked to a IFRS reported amount (e.g. retained earnings, net income and other reserves). The declaration
and payment of dividends require the authorization of our Board of Directors, provided that such dividends on
issued share capital may be paid only out of our “distributable reserves” on our statutory balance sheet. Therefore,
we are not permitted to pay dividends out of share capital, which includes share premium
The Company's articles of association permit by ordinary resolution of the shareholders to declare dividends,
provided that the directors have made a recommendation as to its amount. The dividend shall not exceed the
amount recommended by the directors. The directors may also decide to pay interim dividends if it appears to them
308 TechnipFMC
201
U.K. Annual Report and Accounts
that the profits available for distribution justify the payment. When recommending or declaring payment of a
dividend, the directors are required under English law to comply with their duties, including considering its future
financial requirements.
The additional information required in relation to shareholder’s equity is given in Note 17 to TechnipFMC
consolidated financial statements.
9.2 Dividends
Dividends declared and paid during the year ended December 31, 2020 and 2019 were $59.2 million and $232.8
million, respectively. We made a dividend payment of $0.13 per share in April 2020, which fulfills our annual
dividend under our revised dividend policy announced on April 21, 2020.
The additional information required in relation to dividends is given in Note 17 to TechnipFMC consolidated financial
statements.
9.3 Share-based compensation
See Note 18 of TechnipFMC consolidated financial statements for details of share-based payment schemes. Details
of the directors’ remuneration is provided in the Directors’ Remuneration Report in the Company’s Annual Report.
NOTE 10 - DEBT (SHORT-TERM AND LONG-TERM)
Debt consisted of the following:
(In millions)
Synthetic bonds due 2021
3.45% Senior Notes due 2022
3.40% Notes due 2022
3.15% Notes due 2023
3.15% Notes due 2023
4.50% Notes due 2025
4.00% Notes due 2027
4.00% Notes due 2032
3.75% Notes due 2033
Total Long-term debt
5.00% Notes due 2020
Synthetic bonds due 2021
UK Commercial paper
Other
December 31, 2020
December 31, 2019
Carrying
Amount
Fair Value
Carrying
Amount
Fair Value
$
— $
— $
491.6 $
459.9
184.0
159.5
153.3
241.0
92.0
122.7
122.7
459.2
180.6
156.8
150.5
241.0
96.4
127.8
123.8
1,535.1
1,536.1
—
543.6
817.3
26.1
—
513.1
817.3
26.1
459.9
168.4
145.4
140.2
—
84.2
108.6
109.2
1,707.5
224.4
—
—
20.2
244.6
513.1
459.2
180.6
156.8
150.5
—
96.4
127.8
123.8
1,808.2
230.0
—
—
20.2
250.2
Total short-term debt and current portion of long-term debt
1,387.0
1,356.5
Total debt
$
2,922.1 $
2,892.6 $
1,952.1 $
2,058.4
For details of long and short term debt included in the table above, see Note 19 of TechnipFMC consolidated
financial statements.
NOTE 11 – DERIVATIVE FINANCIAL INSTRUMENTS
For purposes of mitigating the effect of changes in exchange rates, we hold derivative financial instruments to
hedge the risks of certain identifiable and anticipated transactions and recorded assets and liabilities in our
statement of financial position. The types of risks hedged are those relating to the variability of future earnings and
cash flows caused by movements in foreign currency exchange rates. Our policy is to hold derivatives only for the
purpose of hedging risks associated with anticipated foreign currency purchases and sales created in the normal
course of business and not for trading purposes where the objective is solely or partially to generate profit. There
are no derivatives designated for hedge accounting.
309 TechnipFMC
202
U.K. Annual Report and Accounts
The derivative instrument we hold is designated in USD. The instrument is related to commercial paper borrowings
that were repaid during the first quarter of 2021.
The analysis of derivative financial instruments by category is as follows:
(In millions)
Current assets
Derivative financial instruments
Total
Non-current liabilities
Derivative financial instruments
Total
(In millions)
Current assets
Derivative financial instruments
Total
Non-current liabilities
Derivative financial instruments
Total
NOTE 12 - LOAN PAYABLES - RELATED PARTIES
Loan payables - related parties consists of the following:
(In millions)
Borrowings from TechnipFMC Holdings ltd (UK)
Borrowings from TechnipFMC International (UK) ltd
Borrowings from TechnipFMC Finance ULC
Borrowing from TechnipFMC (Europe) Ltd
Borrowings from TechnipFMC International Holdings BV
Borrowing from Technip Holding Benelux BV
Borrowing from Cofri SAS
Loan payables - related parties
December 31, 2020
At Fair Value
through Profit
or Loss
Carrying
Amount
At Fair Value
through OCI
69.9 $
69.9 $
1.1 $
1.1 $
69.9 $
69.9 $
1.1 $
1.1 $
—
—
—
—
December 31, 2019
At Fair Value
through Profit
or Loss
Carrying
Amount
At Fair Value
through OCI
4.3 $
4.3 $
4.3 $
4.3 $
4.3 $
4.3 $
4.3 $
4.3 $
—
—
—
—
$
$
$
$
$
$
$
$
December 31,
2020
2019
$
2,735.0 $
2,189.1
—
374.2
26.9
267.3
109.2
2,657.6
2,131.0
446.7
364.2
—
—
—
$
5,701.7 $
5,599.5
Loan payables to related parties are unsecured and consist of borrowings from TechnipFMC Holdings Ltd (UK)
(“Holdings Ltd”), TechnipFMC International (UK) Ltd (“International Ltd”), TechnipFMC Finance ULC (“Finance
ULC”), and TechnipFMC (Europe) Ltd (“Europe Ltd”). The terms and interest rates for significant loans are detailed
below.
(i)
(ii)
Loans from Holdings Ltd primarily consist of three loans in the amount of $1,008.1 million, $838.5 million
and $545.8 million respectively with 5 year terms and interest rates of 4.83%, 4.68% and 2.69%
respectively.
Loan from International Ltd is in the amount of $2,048.2 million with a 5 year term and interest rate of
2.69%.
(iii)
The loan from Finance ULC was repaid in 2020.
310 TechnipFMC
203
U.K. Annual Report and Accounts
(iv)
Loan from Europe Ltd is in the amount of $350.0 million with a 5 year term and interest rate of 2.69%.
(v)
A new loan from Technip Holding Benelux BV was executed in 2020 in the amount of $267.3 million with a 5
year term and interest rate of 3.22%.
NOTE 13 - TRADE AND OTHER PAYABLES
Trade and other payables consists of the following:
(In millions)
December 31,
2020
2019
Overdraft with Technip Eurocash (Related party Cash Pooling)
$
1,675.2 $
2,176.6
Borrowings from TechnipFMC Holdings ltd (UK)
Trade payables - related parties
Other current liabilities
Trade and other payables
NOTE 14 - SUBSEQUENT EVENTS
36.7
93.1
112.6
—
131.5
19.1
$
1,917.6 $
2,327.2
On February 16, 2021, we completed the Spin-off. In connection with the Spin-off, on January 7, 2021, Bpifrance
Participations SA (“BPI”), which has been one of our substantial shareholders since 2009, entered into a share
purchase agreement with us (the “Share Purchase Agreement”) pursuant to which BPI agreed to purchase a portion
of our retained stake in Technip Energies N.V. (the “BPI Investment”) for $200.0 million (the “Purchase Price”). On
February 25, 2021, BPI paid $200.0 million in connection with the Share Purchase Agreement. The Purchase Price
was subject to adjustment, and BPI’s ownership stake was determined based upon a thirty day volume-weighted
average price of Technip Energies N.V.’s shares (with BPI’s ownership collared between an 11.82 percentage floor
and a 17.25 percentage cap), less a six percent discount. The BPI Investment was subject to customary conditions
and regulatory approval. On March 31, 2021 pursuant to the Share Purchase Agreement BPI exercised its right and
purchased from TechnipFMC 7.5 million shares in Technip Energies N.V. for $100.0 million. On April 8, 2021 we
refunded $100.0 million to BPI as a result of their revised level of investment. We intend to significantly reduce our
shareholding in Technip Energies N.V. over the 18 months following the Spin-off.
Pursuant to the Separation and Distribution Agreement, signed between TechnipFMC and Technip Energies in
connection with the Spin-off, we and Technip Energies each agreed to cross-indemnities principally designed to
allocate financial responsibility for the obligations and liabilities of our business to us and those of Technip Energies’
business to it.
In connection with the Spin-off, we executed a series of refinancing transactions, in order to provide a capital
structure with sufficient cash resources to support future operating and investment plans.
On February 16, 2021, we entered into a new senior secured revolving credit facility (the “Revolving Credit Facility”)
that provides for aggregate revolving capacity of up to $1.0 billion. Availability of borrowings under the Revolving
Credit Facility is reduced by any outstanding letters of credit issued against the facility.
On January 29, 2021, we issued $1.0 billion of 6.5% senior notes due 2026 (the “2021 Notes”). The interest on the
2021 Notes is paid semi-annually on February 1 and August 1 of each year, beginning on August 1, 2021. The 2021
Notes are senior unsecured obligations and are guaranteed on a senior unsecured basis by substantially all of our
wholly-owned U.S. subsidiaries and non-U.S. subsidiaries in Brazil, the Netherlands, Norway, Singapore and the
United Kingdom.
The proceeds from the debt issuance described above along with the available cash on hand were used to fund the
repayment of all $522.8 million of the outstanding Synthetic Convertible Bonds that matured in January 2021 and
the repayment of all $500.0 million aggregate principal amount of outstanding 3.45% Senior Notes due 2022.
In addition, we terminated the $2.5 billion senior unsecured revolving credit facility we entered into on January 17,
2017 and terminated the €500.0 million Euro Facility and CCFF Program we entered into on May 19, 2020. In
connection with the termination of these credit facilities, we repaid most of the outstanding commercial paper
borrowings, which were $1,525.2 million as of December 31, 2020.
311 TechnipFMC
204