The energy
architects
U.K. Annual Report and Accounts for
the year ended December 31, 2022
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 2023 annual general meeting
of shareholders to be held on April 28, 2023 (the “2023 Annual Meeting”).
Contents
Strategic Report
Letter from Our Chair and CEO
2022 Financial Performance
Company Overview
Business Segments
Business Review
Environmental, Social, and Governance
Environmental
Social
Employee Matters
Governance
Our Compliance Program
Supply Chain and Customer Matters
Health, Safety, and Security
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, 2022
Future Developments
Change in Control
Political Donations
Financial Risk Management Objectives/Policies and Hedging Arrangements
Research and Development
Directors’ Responsibility Statements
Directors’ Remuneration Report
iii TechnipFMC
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U.K. Annual Report and Accounts Introduction and Compliance Statement
Letter from the Chair of the Compensation and Talent Committee
Annual Report on Remuneration: At-a-Glance – 2022 Highlights
Annual Report on Remuneration: Report for the Year Ended December 31, 2022
Elements of 2022 Executive Director Compensation
Statement of Directors’ Shareholding and Share Interests
Application of the policy in 2023
Activities of the Compensation and Talent Committee in 2022
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
Cautionary statement regarding forward-looking statements
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iv TechnipFMC
U.K. Annual Report and Accounts Strategic Report
Letter from Our Chair and CEO
March 17, 2023
Dear Shareholders,
2022 was a year in which we reinforced our position as the energy architect; delivering the knowledge, skills, and
capabilities that help our clients address the essential need for energy security. We extended our leadership position
in traditional energy, while leveraging those competences to support the energy transition. Successful collaboration,
integration, and innovation are at the core of everything we do. Our capabilities and delivery models, and the strength of
the energy market, have positioned us well for growth.
The bold step of forming TechnipFMC in 2017 created a pure-play company that designs, manufactures, and executes
our clients’ projects using our integrated Engineering, Procurement, Construction, and Installation (“iEPCI™”) model
and provides standardized configure-to-order solutions such as Subsea 2.0™. We continue to transform our industry,
delivering client benefits in terms of lower costs and reduced time to first production, which drive repeat business and
direct awards. From initial concept to life-of-field services, our record of delivery in traditional energy lays the foundation
of our approach in offshore renewable energies.
We continued to strengthen our financial position in 2022, following the Spin-off of Technip Energies in 2021. We
completed the disposal of our remaining shares of Technip Energies in the second quarter of 2022. We utilized a portion
of the proceeds to further reduce our debt, providing us with the flexibility to begin shareholder distributions with the
authorization of a $400 million share repurchase program. This repurchase program underscores our confidence in
TechnipFMC’s long-term outlook. We believe our shares are undervalued, and as a result we bought $100 million of our
own stock in the second half of the year. We also reaffirmed our intent to initiate a quarterly dividend in the second half
of 2023.
Growing and delivering
Our market leadership with both our Subsea and Surface Technologies businesses is continuing to accelerate, driven by
the activity expansion in international markets.
We have a growing and diverse customer base in our Subsea business, and our Subsea Opportunity list – which highlights
larger projects that are available to the entire industry – continues to represent a record level for potential award over
the next two years. About 60% of our Subsea business came through direct or unannounced awards, with activity in all
major basins. We also saw an increase in front end engineering and design (“FEED”) contracts leading to awards.
In 2022, we saw increased activity in Brazil, Guyana, and the North Sea. In Brazil, we secured an EPCI contract for
Petrobras Búzios 6. In Guyana, we secured contracts for ExxonMobil’s Yellowtail and Gas to Energy projects, and we have
been developing in-country talent at our new service base since 2017. We also signed an integrated FEED (“iFEED™”)
contract for Equinor’s BM-C-33 development offshore Brazil, which will be the industry’s largest integrated project award
to date.
Activity was not limited to South America. In Norway, we secured our first iEPCI™ with Wintershall Dea for its Maria
revitalization project, and in the United Kingdom (“U.K.”), we won the EPCI contract for Shell’s Jackdaw development. We
also secured the subsea production system scope for TotalEnergies’s CLOV3 development, Angola – the first call-off on our
framework agreement with TotalEnergies, which will use our configure-to-order Subsea 2.0™ technology. In addition, we
1 TechnipFMC
U.K. Annual Report and Accounts renewed our five-year technology agreement with Halliburton to develop and commercialize new integrated subsea and
subsurface production solutions, and we announced our first iEPCI™ award from Aker BP for its Utsira High development.
We also experienced growth in Surface Technologies. In North America, we saw increased drilling and completions
activity. There was also a 25% increase in use of our iComplete™ integrated completions solution, which has been adopted
in every major basin.
Surface Technologies is well positioned to exploit continued growth in the Middle East. Our new facility in the Kingdom
of Saudi Arabia has begun operations and will be a key enabler in the supply of equipment to Aramco. We are also
executing work from our ten-year framework agreement with ADNOC at our expanded facility in Abu Dhabi.
Beyond these near-term opportunities, exploration activity is now occurring in new offshore frontiers such as Suriname
and Namibia and we expect significant investment to continue in onshore resources, where it will increasingly be led by
markets in the Middle East.
Energy Transition and ESG
In renewable energies, we maintain focus on our three pillars: greenhouse gas (“GHG”) removal, floating offshore
renewables, and hydrogen. These leverage the integration expertise within our Subsea and Surface Technologies business
units, and we are gaining traction with new alliance partners. We signed a technology agreement with Shell for the
development of carbon capture and storage (“CCS”), and we advanced our strategic alliance with Talos Energy to develop
and deliver CCS solutions. In the U.K., we were awarded options for floating offshore renewables projects. With Magnora
Offshore Wind, we secured the option to lease for the N3 area offshore the Western Isles for the development of a
500-megawatt wind farm which would power the equivalent of 600,000 homes. With Orbital Marine Power, we secured
two contracts to generate electricity using the world’s most powerful floating tidal turbines. Early in 2023, our Deep
Purple™ solution, which manages and utilizes hydrogen using offshore renewables, entered pilot testing in Norway.
Our actions and goals in Environmental, Social, and Governance (“ESG”) derive from our Foundational Beliefs. We act
responsibly, always considering our impact on the planet, people, and communities in which we operate. We monitor our
progress using our 2021-2023 ESG Scorecard, with clear metrics designed to drive performance and accountability.
Under the Environmental Pillar, we made progress on our 50 by 30 commitment – our pledge to reduce Scope 1 and Scope
2 GHG emissions by 50% by 2030. This pledge drove actions in 2022 such as making operational changes designed to reduce
emissions, and initiating global water management and global waste programs to enhance our efforts to decrease water
consumption, increase water reuse, and decrease our waste generation.
Under our Social pillar, I am proud that our people participated in more than 400 iVolunteer activities and nearly 50
science, technology, engineering, and mathematics (“STEM”) promotion events in 2022 as we strive to make a difference
in our communities and introduce the next generation of talent to the energy industry. We are committed to improving the
recruitment of female graduates and the proportion of underrepresented populations in senior management. In 2022, female
graduate recruitment in our global graduate program was at 43%. We made solid progress towards awareness and behaviors
around diversity, equity and inclusion, with 90% of our managers completing our comprehensive Inclusive Leadership
Training, on track towards 100% completion. We were also named in the World’s Top 400 Female-Friendly Companies by
Forbes magazine.
Under the Governance pillar, we exceeded our three-year target for Serious Injury and Fatality (“SIF”) prevention projects,
conducted annual ethics and compliance training for all managers, and are on track to exceed three-year targets for human
rights due diligence audits with high-risk suppliers. Our Pulse safety and Impact Quality programs were recognized as
industry leaders when they won a National Ocean Industries Association (“NOIA”) Safety at Seas Award for Culture of Safety
in 2022. We continue to look for areas of improvement in our safety performance. Sadly, last year, one of our colleagues
was fatally injured as a result of a “line of fire” accident that involved a third-party dropped object at a client’s well site.
We are committed to ensuring that our people return home safely every day.
2 TechnipFMC
U.K. Annual Report and Accounts Continuing to transform
The strategic transactions and investment we have made enable us to exploit the opportunities presented by the
evolving energy industry. Our integrated model and focus on simplification, standardization, and industrialization will set
us apart during this period of growth for the industry.
Our outlook for improved performance extends into the future. We expect $25 billion of Subsea inbound for our
company from 2023 through 2025, driven by the strength of the offshore market, industry adoption of iEPCI™, and the
increased contribution of Subsea 2.0™. When compared to 2022, our revised Subsea forecast for 2025 demonstrates a
650-basis point expansion in adjusted EBITDA margin to 18% and adjusted EBITDA of approximately $1.4 billion.
As the energy architect, we enable efficiencies and confidence in project delivery, building trust and lasting relationships.
This is best evidenced by a significant volume of direct awards and our leading market position. Our investments in
people, technology and innovative products and solutions will ensure our continued industry leadership – allowing us to
take full advantage of the growth that lies ahead.
Everything we have done as TechnipFMC has made us a leader in the energy industry’s evolution. We continue
to transform, building on the talents of the 20,000 women and men who make up TechnipFMC. Our focus on
industrialization and our steadfast commitment to never compromise on our Core Values and Foundational Beliefs will
drive us towards even stronger financial leadership within our industry
.
Douglas J. Pferdehirt
Chair and Chief Executive Officer
3 TechnipFMC
U.K. Annual Report and Accounts 2022 Financial Performance
Total Company
` Inbound orders1 improved to $8.1 billion, driven by increased customer
$8.1 billion
expenditures and shift in spending to offshore and the Middle East
` Reduced debt outstanding by $638 million, enabled by cash provided
by operating activities and proceeds from the divestiture of remaining
shares in Technip Energies
` Announced a new $400 million share buyback program in July and
repurchased $100 million of ordinary shares by year-end
` Inbound orders increased 36% year-over-year to $6.7 billion, including
contract awards composed of project and services orders from more
than 40 operators across all basins, illustrating growing diversity of our
customer base
` Received integrated FEED award by Equinor for the BM-C-33 project
offshore Brazil, and upon final investment decision would be the
industry’s largest integrated Engineering, Procurement, Construction
and Installation (“iEPCI™”) award to date
` Direct awards, iEPCI™ projects and Subsea Services represented
approximately 70% of total Subsea orders
Inbound orders
$6.7 billion
Inbound orders
` Inbound orders of $1.3 billion included an acceleration of orders in the
$1.3 billion
Middle East in the second half of the year
` Expanded our manufacturing capabilities in Saudi Arabia, where we
experienced an acceleration of orders from our Aramco backlog,
providing support for continued growth in international revenue in 2023
` Extended market reach of iComplete™, our integrated completions system
which minimizes complexity and eliminates intervention in the red zone,
driven in part by further adoption of WellFlex™ flexibles solutions
` Announced strategic agreements and partnerships for floating offshore
renewables, including two tidal energy contracts with partner Orbital Marine
Power in the U.K. and the Option to Lease Agreement for the ScotWind N3
area through our partnership, Magnora Offshore Wind
Inbound orders
Tidal Energy
Contracts
Subsea
Surface
Technologies
New Energy
Initiatives
` Progressed Deep Purple™, our solution for integrating renewable energy with
hydrogen to form a complete, zero-emission offshore energy system, with
the development of a land-based pilot which will prepare the system for
large-scale commercial use offshore
Announced
(1) Reported financial results for the 12 months ended December 31, 2022 and inbound and backlog as of December 31, 2022 are included in our
Annual Report on Form 10-K (“Form 10-K”).
For additional details regarding the Company’s 2022 financial performance, please see the section entitled “Directors’
Remuneration Report.”
4 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 Hadrian House, Wincomblee Road, Newcastle upon Tyne, NE6
3PL, 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 Houston, Texas, United States, and in 2022 we principally operated across two business segments:
Subsea and Surface Technologies.
We are uniquely positioned to deliver greater efficiency across project life cycles, 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.
Enhancing our performance and competitiveness is a key component of our 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,
including opportunities arising through the Energy Transition. We are managing our assets efficiently to ensure we are
well-prepared to drive and benefit from the opportunities in many of the markets we serve.
Each of our more than 20,000 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. 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, in May
2016 Technip and FMC Technologies announced 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 complementary 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™. For all of 2019, the value of 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
5 TechnipFMC
U.K. Annual Report and Accounts clients with whom 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.
On August 26, 2019, we announced our intention to separate into two diversified pure-play market leaders – TechnipFMC
and Technip Energies.
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% 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. Immediately following the completion of the Spin-off, we owned 49.9% of the
outstanding shares of Technip Energies. As of December 31, 2022, we have fully divested our remaining ownership stake
in Technip Energies.
On January 10, 2022, we announced that following a comprehensive review of the Company’s strategic objectives and
proceeded with the voluntary delisting of our shares from Euronext Paris. The delisting was completed on February 18, 2022.
Business Segments
Subsea
We are driving change in subsea energy production by safely providing innovative technologies and integrated 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 pipeline systems used in oil and gas
production and transportation.
We are an industry leader in FEED; subsea production systems (“SPS”); subsea flexible pipe, subsea umbilicals, risers,
and flowlines (“SURF”); and subsea robotics. We also have the capability to install these products and related subsea
infrastructure using 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™, which spans a project’s early phase design through life of field services.
Through iFEED™, we are uniquely positioned to influence project concept and design. Using innovative solutions for field
architecture, including standardized configurable equipment, new technologies, digital services, and simplified installation, we
can significantly reduce subsea development costs and accelerate time to first production.
6 TechnipFMC
U.K. Annual Report and Accounts iEPCI™ is our unique, fully integrated approach to designing,
managing, and executing subsea projects. By combining
complementary skills with innovative technologies, we boost
efficiency, lower costs, and accelerate time to first oil and gas
for our clients. As the first subsea provider to integrate SPS
with SURF and a fleet of installation vessels, we successfully
created a new market opportunity in 2016 through our
iEPCI™ offering. iEPCI™ projects are partnerships built on
knowledge sharing and mutual trust. Success is based on
early engagement and a collaborative, cooperative approach,
both internally and with our clients.
iEPCI™
Our first-mover advantage and ability to convert iFEED™ studies into iEPCI™ contracts, often as direct awards, 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 (“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 debottlenecking, 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.
Subsea segment products and services
Subsea Production Systems
Our SPS are used in the offshore production of crude oil and natural gas. 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 systems and products include subsea trees, chokes and flow modules, manifold pipeline systems, controls and
automation systems, well access systems, multiphase and wet-gas flow 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 400ºF. 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, lower greenhouse gas emissions, and/or lower
operators’ production costs for greenfield, subsea tieback and brownfield applications. To provide these products,
systems, and services, we utilize our engineering, project management, procurement, manufacturing, and assembly and
test capabilities.
7 TechnipFMC
U.K. Annual Report and Accounts Subsea umbilicals, risers, and flowlines
We are a leading provider of SURF infrastructure. We develop, engineer, manufacture, and install umbilicals, rigid
pipelines, and flexible pipes, connections, and tie-ins for subsea systems. Our rigid pipes are installed using our fleet of
differentiated rigid pipelay vessels and are designed to optimize flow assurance through innovative insulation coatings,
electric trace heating, plastic liners, and pipe-in-pipe systems.
Our vessels will typically perform the installation of our flexible pipes and umbilicals, but we also sell these products
directly to energy companies or to other vessel operators. We offer a comprehensive range of umbilical systems
including steel tube umbilicals, thermoplastic hose umbilicals, power and communication systems, and hybrid umbilicals.
We are also qualifying a new hybrid flexible pipe technology, which is highly resistant to corrosive compounds, and will
extend the operating envelope of flexible systems while reducing cost and weight.
Vessels
We have a fleet of 17 vessels. These are used for
the installation and servicing of our products. We have
sole ownership of nine vessels, ownership of six vessels
as part of joint ventures, and two vessels operated under
charter agreements.
Subsea Services
Subsea Services provides a portfolio of well and asset
services that drive value and efficiency throughout the
life of our clients’ subsea development cycle. Our vision
is to deliver customer service excellence every day, with
the purpose of maximizing the performance of our clients’
well and asset operations. Well Services include all service
offerings for the well:
Our Deep Arctic dive support vessel is
making a positive impact through an
upgrade to allow it to run as a battery hybrid
` ROV Services: remotely operated vehicle (“ROV”) drill support services, enabled by Schilling Robotics, TechnipFMC’s
underwater robotics group;
` Drilling Services: exploration and production wellhead systems and services; and
` Installation Services: Installation of trees and tubing hangers and completion of the well.
Asset Services include all service offerings for the asset:
` Maintenance Services: test, modification, refurbishment, and upgrade of subsea equipment and tooling;
` Asset Integrity Services: optimizing the performance of the subsea asset through product and field data, including
inspection, maintenance and repair (“IMR”); and
` Production Management Services: enhanced well and field production, including real-time virtual metering and flow
assurance services.
Intervention and Plug and Abandonment Services:
` Rig and vessel-based well intervention services and subsea plug and abandonment.
GEMINI® ROV System
To support our ROV Services offering, GEMINI® is a fully integrated, next generation ROV intervention system that
provides unprecedented subsea productivity for our clients. The integration of ROV, manipulators and tooling, advanced
automation, and computer vision technology enables a transition to highly automated subsea robotics, which reduces
8 TechnipFMC
U.K. Annual Report and Accounts task time from hours to minutes, ensuring predictable results every time. GEMINI® transforms ROV remote intervention,
enabling deepwater rigs to be more productive, reducing the cost and time to drill and complete wells, thereby reducing
the carbon footprint. GEMINI® is an integral part of TechnipFMC’s vision to deliver subsea energy by safely providing
innovative solutions that improve economics, enhance performance, and reduce emissions.
Subsea Studio™ Digital Platform
Through Subsea Studio™, we connect data, technology, and expertise to optimize the development, execution, and
operation of current and future subsea fields. Our open and connected ecosystem can exchange data efficiently with
suppliers, partners, and clients, providing immediate access to relevant information, and improving efficiency and quality
of decisions and planning. Subsea Studio™ establishes a data flow, or a “digital thread,” that connects applications using
common data models throughout a project’s life cycle. Each decision is data-driven and each piece of actionable data is
made readily available. We utilize this data to create value for our clients through efficiency gains, optimized productivity,
and increased reliability.
Our Subsea Studio™ portfolio of digital solutions will be commercialized over time, beginning with Subsea Studio™ FD,
which combines our subsea expertise and digital technologies to design, optimize, and select the best field development,
thereby increasing quality and reliability and accelerating time to first oil.
Research, Engineering, Manufacturing, and Supply Chain (“REMS”)
REMS is an organization formed in 2019 to support accelerated technology development and manufacturing innovation.
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 workflow management. 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
supports both our Subsea and Surface Technologies segments and New Energy business.
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. One Subsea customer accounted for 13% of our 2022 consolidated revenue.
Competition
We actively pursue alliances with companies engaged in the subsea development of oil and natural gas to promote our
integrated systems for subsea production. These alliances are typically related to the procurement of subsea production
equipment, although some of them are related to engineering, procurement, construction, and installation (“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.
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., SLB, and Subsea 7 S.A.
9 TechnipFMC
U.K. Annual Report and Accounts Seasonality
Seasonal weather conditions generally subdue 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 during such periods.
Market Environment
Our Subsea inbound orders in 2022 increased more than 35% versus the prior year, reflecting the continued offshore
market recovery and expansion. Innovative approaches to subsea projects, such as our iEPCI™ solution, have improved
project economics, and many offshore discoveries can be developed economically well below today’s crude oil prices.
We have also seen an increase in direct awards, which account for more than 60% of inbound in 2022 as a result of our
strong alliance partnerships. We believe deepwater development is likely 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 fulfill future orders.
Economic activity improved over the course of 2022. Increased global demand and production curtailments by the OPEC+
countries have resulted in improved oil prices, which in turn supports market supply growth. Addressing the essential
need for energy security is an increasing priority, which has grown in prominence as a result of the war in Ukraine.
Long-term demand for energy is forecast to rise, and we believe this outlook provides our customers with the confidence
to increase investments in new sources of oil and natural gas production. We see Brazil and Guyana as key growth areas,
in addition to the North Sea.
Strategy
We are driving change in subsea energy production by safely providing innovative technologies and integrated solutions
that improve economics, enhance performance, and reduce emissions.
The energy landscape is evolving rapidly, yet oil and gas will remain important to the energy mix in the decades to come.
Our vision for Subsea, which is focused on our integrated offering and enabled by our digital solutions and innovative
products, unlocks new possibilities for growth in both oil and gas and in new energy sources. By capitalizing on our
subsea expertise, core competencies, and integration capabilities, we will empower the production of oil and gas and new
energies, while reducing carbon emissions.
Through our established Subsea services and our transformative offerings including iEPCI™ and the Subsea 2.0™
Configure to Order (“CTO”) platform, we are making all types of energy produced offshore more sustainable, economical,
and competitive.
As we look to the future, we remain focused on our innovative technologies and solutions, client relationships, and
execution excellence. We will accomplish this by:
` Developing and empowering our people;
` Becoming a data-centric organization;
` Advancing automation and robotics; and
` Working toward all-electric fields.
We are industrializing our Subsea business with Subsea 2.0™ by using pre-engineered modular architectures to achieve
a fully flexible suite of product offerings, while making an evolutionary shift from unique project requirements to a CTO
execution model.
10 TechnipFMC
U.K. Annual Report and Accounts Our Subsea 2.0™ configurable product platform consists of pre-engineered products designed to provide the flexibility to
accommodate customer needs and functional requirements, combining field-proven and new technologies.
Our CTO execution model requires no product engineering work to deliver these configurable products to our clients, ensuring
quality, manufacturing, supply chain, and services are fully industrialized to deliver the value offered with Subsea 2.0™.
Our CTO Subsea 2.0™ program attributes include:
` Pre-engineered standard configurations;
` Pre-approved and qualified supply chain;
` Pre-defined quality, code, and surveillance requirements;
` Optimized manufacturing with dedicated capacity; and
` Pre-defined and developed services.
By pivoting from bespoke Engineer to Order (“ETO”) solutions unique to every project to pre-engineered CTO products,
we can leverage the efficiencies our execution model creates and bring value to our clients through reduced lead time,
an optimized execution model, and improved predictability and reliability for delivery. CTO also allows us to drive
manufacturing efficiency, improving throughput and increasing capacity of the existing manufacturing assets.
Acquisitions, Investments and Partnerships
Acquisitions
In 2022, we did not have any material acquisitions.
In 2018, we entered into a joint venture with Island Offshore Management AS (“Island Offshore”) called TIOS AS. In
August 2021, we acquired the remaining 49% interest in TIOS AS at a total price of $48.6 million. This will accelerate the
development of TechnipFMC’s integrated service model focused on maximizing value to our clients.
In 2018, we entered into a collaboration agreement with Magma Global Ltd. (“Magma Global”) to develop a new
generation of hybrid flexible pipe for use in the traditional and new energy industries. As part of the collaboration, we
purchased a minority ownership interest in Magma Global. In October 2021, we purchased the remaining ownership
interest in Magma Global for $64 million.
Investments
As part of our commitment to advancing Guyana’s emerging energy industry, we officially opened our new service base
in Georgetown, the country’s capital, in April 2022. More than 85 Guyanese women and men are at the heart of our
world-class Service Center, with this number projected to grow in response to the increased activity in the area over the
next several years. The Guyana Service Center consists of a low bay, storage, and testing capabilities for both drilling and
completion activities.
In the third quarter of 2022 we renewed our TechnipFMC and Halliburton technology alliance. This extends our
agreement signed in 2017 with a focus on the development of innovative technologies for use in All-Electric Wells, Subsea
Interventions, Subsea Fiber Optics and Carbon Capture and Storage. By teaming up on certain field domains, we are able
to develop disruptive technologies to improve productivity, reduce cost, and lower emissions of our clients. We believe the
alliance has a superior value proposition, leveraging TechnipFMC’s pioneering integrated ecosystems (such as iEPCI™) and
technology leadership with Halliburton’s subsurface, well completion, and production knowledge and service offering.
Partnerships
Refer to the Other Business Information Relevant to Our Business Segments section of this U.K. Annual Report for
information about our partnerships.
11 TechnipFMC
U.K. Annual Report and Accounts 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, as well as some specialized
equipment supporting carbon capture and storage (“CCS”), hydrogen storage, and geothermal. Our Surface Technologies
product families include drilling, stimulation, production, measurement, digital, and 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 energy production, transportation, and storage 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 into various configurations, depending on customer-specific requirements.
Surface wellheads and production trees are systems which are designed for onshore unconventional, onshore
conventional, and offshore platform applications, and are typically sold directly to exploration and production operators
during the drilling and completion phases of the well life cycle. Our surface wellhead and production tree systems are
used worldwide, and provide global coverage and a full range of system configurations from conventional wellheads,
Unihead® drill-through wellheads designed for faster installation and drill-time optimization, to high-pressure, high-
temperature (“HPHT”) systems for extreme production applications.
We also provide services associated with our surface wellhead and production tree portfolio, including service personnel
and rental tooling, life of field maintenance, repair, and refurbishment, as well as digital monitoring and remote
operational control and automation.
Our products are also used for geothermal production, CO2 injection for CCS projects, and we have recently qualified
designs to support underground hydrogen storage solutions.
Stimulation and Pressure Pumping
Our iComplete™ offering is the first integrated pressure control system for the onshore
conventional stimulation market. Extensive knowledge in flexible pipes, manifold, and
check valve technology has been adapted to make this a very reliable and predictable
system. This is combined with our digital offering CyberFrac™ to improve safety by
reducing manpower in the red zone, and boost efficiency in the field by automating
operations and reducing unplanned stoppages by providing predictive analytics. Our
system can also manage continuous pumping and multi-well operations, and ties in
data from adjacent wells to monitor potential breakthroughs. All of this significantly
reduces safety risk as well as the cost of operations for our customers.
12 TechnipFMC
iComplete™
U.K. Annual Report and Accounts Fracturing Tree and Manifold Systems
During the completion of a shale well, the well undergoes hydraulic fracturing. During this phase, durable and wear-
resistant well-site 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. Exploration and production operators typically 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.
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 our Coflexip® product is an industry standard
for drilling and stimulation operations offshore. We have adapted this product for use in high pressure, high volume
stimulation and our PumpFlex™ and WellFlex™ products are being incorporated into most shale operations and are an
integral part of our iComplete™ system. Our product is the only mechanical solution available today and has shown
excellent wear resistance and durability in this very onerous application. The Coflexip® product is also used for specialty
projects – refinery gas tanks, subsea production tie-in lines, tension leg platforms (“TLPs”) and has recently been adapted
for use in liquefied natural gas (“LNG”) offloading in response to the new demands in Europe.
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
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.
Production
Our upstream production offering includes well control, safety and integrity systems, multiphase meter modules, in-
line separation and processing systems, compact ball valves for manifolds, 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 E-Mission™ suite addresses ways to reduce carbon intensity in the production of oil and gas products. By leveraging
digital solutions to optimize the performance of assets on the production site, E-Mission™ helps to reduce flaring and CO2
emissions, predicting methane escape events by using artificial intelligence, thereby preventing such events ever happening.
Our iProduction™ system is the first automated integrated production platform for onshore unconventionals. Components
of this may be deployed at existing customer sites to upgrade their technology, improving safety and operating costs and
reducing carbon emissions. We continue to work toward improved solutions in this space to render old and new projects
better.
13 TechnipFMC
U.K. Annual Report and Accounts Our digital systems leverage two very specific core software products: UCOS for control and automation of assets, and
InsiteX for data visualization and analytics. These are deployed in small standalone applications which address real
customer issues and can be integrated seamlessly to form an ecosystem or system-level Digital Twin. These technologies
help customers improve health and safety, reduce carbon intensity, reduce operating expense, reduce unplanned
shutdowns, and increase productivity.
Well Control and Integrity Systems
We supply both hydraulic and electrical 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.
Separation and Processing Systems
TechnipFMC provides industry-leading technology for the separation of oil, gas, sand, and water. These solutions are
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 deliquidizers, 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.
Measurement
We are making measurement smarter with integrated flow measurement and automation solutions, from the wellhead
to the final point of sale. We deliver accurate and reliable measurement for the transportation, distribution, and storage
of energy products by truck, rail, vessel, aircraft, and pipeline. We have the right products and systems to help with any
application challenge. Our customers can reduce complexity by dealing with one supplier as we bring together reliable
and accurate measurement and control systems, automation, and key data insights.
Our systems are an industry standard in mechanical custody metering and we are focusing now on adapting technology
for the emerging harsh gas environment in metering CO2 and hydrogen, which will be critical to the Energy Transition.
Services
We offer our customers a comprehensive suite of service packages to ensure optimal performance and reliability of our
equipment, upstream and midstream. 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.
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 2022 consolidated revenue.
14 TechnipFMC
U.K. Annual Report and Accounts Competition
We are the only pure-play global supplier in the Surface Technologies market space and are a market leader for many of
our products and services. Some of the factors that distinguish us from other companies in the same sector include our
technological innovation, reliability, product quality, and our problem-solving capability. 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., SLB, Halliburton
Co, and SPM Oil & Gas.
Market Environment
2022 saw higher drilling and completion activity than in 2021. Activity in North America recovered close to pre-
pandemic levels. Outside of North America represented 54% of total segment revenue in 2022 and activity remained
resilient. We continued to benefit from our exposure and investment to local content in the Middle East, which remains a
strategic and growing market in the context of the current global energy outlook.
We are well positioned to benefit from ongoing opportunities in both North America and the Middle East, and in other
international onshore and shallow water markets.
Strategy
We serve the onshore, platform, and shallow water subsea markets from well to export pipeline, providing our customers
with breakthrough reductions in cost, lead time, and carbon intensity. We distinguish our offerings by three key strengths:
Core Technology. We are committed to applying technology within our core products to solve real customer problems,
leveraging the benefits of smarter designs.
Decarbonization. We see it as our duty as an industry leader to develop ways for our customers to make the production
of oil and gas less carbon intensive.
Digital and Automation. We are leveraging simple, pragmatic digital solutions to improve health and safety, reduce carbon,
reduce operating cost, reduce non-productive time, and increase production.
Acquisitions, Investments, and Partnerships
We did not have any acquisitions and did not enter into any partnership agreements during 2022 or 2021.
In December 2021 we officially inaugurated our new facility in Dhahran, Saudi Arabia, and in 2022 started the
manufacture of our first in-country orders. The facility 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 Technologies business. The new facility will
offer a broader range of capabilities and greater in-country value-add, supporting our full portfolio with high technology
equipment in the drilling, completion, production, and pressure control sectors.
In 2022 we also committed to investing in a new manufacturing space at our ICAD facility in Abu Dhabi, and in
September became the first company to be API6A qualified.
To support our developments in the Middle East, we are investing heavily in hiring, training, and developing personnel in the
region. These investments position us to respond to the increasing demand for local content and increasing opportunity in
the region. They strengthen our capabilities, providing a solid platform for us to grow in what is a strategic market for our
Surface Technologies business, recognized by our record inbound award from Saudi Aramco and our ten-year framework
agreement with ADNOC, from which we received the first $128 million commitment in the second half of 2022.
15 TechnipFMC
U.K. Annual Report and Accounts Other business information relevant to our business segments
Capitalizing on Energy Transition
Since our inception as an integrated company in 2017, TechnipFMC has been pursuing innovation to reduce emissions
within the conventional energy space. We have also been exploring ways to position ourselves in the Energy Transition
by delivering differentiated solutions and leveraging our core competencies and existing resources.
We believe offshore will be the next frontier of the Energy Transition and we are ready to accelerate and grow our
contribution. This is the role of New Energy at TechnipFMC. Our goal is to be a key enabler of the carbon transportation
and storage and offshore renewables industry. To get there, we will leverage our subsea and surface expertise, our
technology know-how, our collaborative and innovative mindset, and our demonstrated capabilities in project integration.
We will continue collaborating with energy companies and technology providers to bring to market innovative solutions
that are best suited to offshore applications, while leveraging our Company’s existing assets, technologies, and installation
expertise. Utilizing our expertise in integrated projects, we are able to serve as a system architect, from technology
development to project delivery and life of field services.
As a result of our evolution in the new energies arena, we are further refining our approach, which we define within
three main markets:
Greenhouse gas removal
Offshore fl oating renewables
Hydrogen
Project integration, associated with proprietary technology leadership, is perhaps TechnipFMC’s strongest point of
differentiation. We see strong integration potential across offshore renewable markets. For example, by combining
wind and hydrogen, we could maximize energy generation and efficiency, since the incremental capital expenditure
and operational expenditure needed is much lower than a standalone product for the same energy generation. We will
approach these new integration opportunities in renewable energies with a new execution model, which is integrated
Offshore Novel Energies (“iONE™”). iONE™ builds on the success of our iEPCI™ model in oil and gas, and leverages that
experience in the new energy space. By acting as system integrator in a complex and rapidly changing environment, we
can play a meaningful role in enabling offshore renewable solutions.
The markets
We believe one of the safest and most efficient storage locations for greenhouse gases is offshore, in naturally occurring
reservoirs and saline aquifers.
TechnipFMC is applying a configure-to-order model in its traditional and new energy businesses to create superior
value for its clients through robust project execution performance. This effort is eliminating product and process
development work from projects, producing execution stability and ensuring product cost, quality, and lead time targets
are consistently met.
Configurability and simplification are being applied to our integrated carbon transportation and storage solutions.
Standard configure-to-order modules for onshore carbon treatment and compression will minimize project-specific
engineering while enabling custom system solutions to be built from pre-engineered products. Standard all-electric
control systems for offshore carbon transportation and storage will also be configurable to meet project-specific needs.
These control systems will have the flexibility to manage a wide range of functionalities, from manifold/tree valve and
choke actuation to downhole and seabed reservoir monitoring systems.
16 TechnipFMC
321U.K. Annual Report and Accounts Existing equipment developed by our Surface Technologies and Subsea businesses can be leveraged to achieve this aim.
Our efforts in this area include:
` Development of our Integrated Carbon Transportation and Storage System (“iCTS™”);
` A strategic alliance with Talos Energy to accelerate carbon transportation and storage (“CTS”);
` The acquisition of Magma Global, manufacturer of the key gas transportation technologies thermoplastic composite
pipe and hybrid flexible pipe; and
` An agreement to commercialize PETRONAS’ unique natural gas processing membrane, which reduces emissions of CO2
and hydrogen sulfide by integrating the technology into our onshore and offshore production portfolio.
TechnipFMC aspires to lead the offshore floating renewables industry by leveraging our differentiated technologies,
product standardization, and system integration approach. This emerging market is predicted to grow from very limited
today to an installed base of 15 GW by 2030. Our efforts in this area include:
` A partnership with Magnora ASA, Magnora Offshore Wind, to develop floating offshore wind projects. The
partnership secured an Option Agreement for area N3 in the U.K.’s Western Isles from the Crown Estate Scotland in
the ScotWind leasing round in January 2022;
` A partnership with Floating Power Plant, a renewable energy technology company, for an offshore green hydrogen
pilot for the Canary Islands which will leverage Deep Purple™ (see below);
` A strategic investment in Orbital Marine Power, the world’s most powerful floating tidal energy turbine, which we
believe to be the most mature tidal technology. In July 2022, our collaboration with Orbital Marine Power was
awarded two Contracts for Difference to generate 7.2MW of predictable clean energy on Orkney as part of U.K.
Government renewable energy auction; and
` Development of best in class 66KV dynamic inter-array cables (“IAC”) – a key component of offshore floating
renewables infrastructure used to transmit electricity generated offshore to the grid. System engineering, cable
engineering, supply and installation will be provided by our existing manufacturing plant in the U.K. and our vessel fleet.
We believe hydrogen will become a crucial carrier for the storage and transportation of energy, as well as bringing
reliability, stability, and efficiency to renewable sources. Our strategy covers two areas: green hydrogen produced
offshore by the electrolysis of water using renewable energy, and off-grid energy systems delivering renewable, stable
power to traditional energy installations and remote islands. Our efforts in this area include:
` Deep Purple™ is our system to provide sustainable offshore renewable energy production by integrating wind energy
and hydrogen production and storage. A pilot production began in Norway in January 2023;
` The Hardanger Hydrogen Project, with several partners including Statkraft, where TechnipFMC will qualify its subsea
H2 storage and provide subsea storage for the next commercial phases of the project;
` Offering separate hydrogen solutions and the combination/system integration of those; infrastructure including
pipeline and storage (both subsea storage and underground storage) and hydrogen wellhead products; and
` Participation in Storengy’s HyPSTER (Hydrogen Pilot STorage for large Ecosystem Replication) pilot project in France,
where we have re-engineered and repurposed a Surface Technologies wellhead to facilitate the large-scale storage of
green hydrogen in underground salt caverns.
17 TechnipFMC
U.K. Annual Report and Accounts Sources and Availability of Raw Materials
Our business segments purchase carbon steel, stainless steel, aluminum, steel castings and forgings, polymers, micro-
processors, integrated circuits and various other materials 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, leveraging our CTO strategy.
Research and Development
We are engaged in research and development (“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 products to meet our customer needs.
more than
20,000
employees
Employees
As of December 31, 2022, we had more than 20,000 employees.
Segment and Geographic Financial Information
The majority of our consolidated revenue and segment operating profits is generated in markets outside of the United States
(“U.S.”). Each segment’s revenue is dependent upon worldwide oil and gas exploration and production 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.
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
Our U.K. Annual 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.
18 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, 2022 which were prepared in accordance with U.K.-adopted International Accounting
Standards in conformity with the requirements of the Companies Act 2006 (the “Companies Act”).
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 two segments: Subsea 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.
A summarized description of our products and services and annual financial data for each segment can be found in Note
3 to our consolidated financial statements.
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
and benefits from the current market fundamentals supporting the demand for new liquefied natural gas facilities.
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 such as 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 debt, are therefore, key performance indicators of cash flows.
19 TechnipFMC
U.K. Annual Report and Accounts In both of our segments, we serve customers from around the world. During 2022, approximately 80% 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.
The Spin-off
On February 16, 2021, we completed the separation of the Technip Energies business segment. The transaction was
structured as a Spin-off, which occurred by way of a Distribution to our shareholders of 50.1% 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 are traded under the ticker symbol “TE” on the
Euronext Paris stock exchange. As of December 31, 2022, we fully divested our remaining ownership interest in Technip
Energies.
For the year ended December 31, 2022, we recorded expenses from discontinued operations due to a change in estimate
of liabilities recognized in connection with the Spin-off.
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, 2022 to actual results of operations for the year ended December 31, 2021.
20 TechnipFMC
U.K. Annual Report and Accounts %
4.9%
4.2%
(4.1)%
(In millions, except percentages)
2022
2021
$
Year Ended
December 31,
Change
$6,725.7
$6,413.3
$312.4
Revenue
Costs and expenses
Cost of sales
Selling, general and administrative expense
620.3
647.0
5,776.0
5,542.5
233.5
(26.7)
Research and development expense
Impairment, restructuring and other expenses
Total costs and expenses
Other income (expense), net
Foreign exchange gain (loss), net
Income from associates
Income (loss) from investment in Technip Energies
Income before net interest expense and income taxes
67.0
1.1
79.0
66.7
(12.0)
(15.2)%
(65.6)
(98.4)%
6,464.4
6,335.2
129.2
2.0%
21.8
(68.8)
44.6
(27.7)
231.2
(0.4)
22.2
5,550.0%
6.8
0.6
8.5
(75.6)
(1,111.8)%
44.0
7,333.3%
(36.2)
(425.9)%
93.6
137.6
147.0%
Net interest expense
Loss on early extinguishment of debt
(160.6)
(188.1)
(29.8)
(61.9)
27.5
32.1
14.6%
51.9%
Income (loss) before income taxes
40.8
(156.4)
197.2
126.1%
Provision for income taxes
125.7
81.6
44.1
Net loss from continuing operations
(84.9)
(238.0)
153.1
54.0%
64.3%
Profit (loss) from discontinued operations
(26.4)
605.2
(631.6)
(104.4)%
Net profit (loss)
(111.3)
367.2
(478.5)
(130.3)%
(Profit) loss from continuing operations attributable to non-
controlling interests
Less: Profit from discontinued operations attributable to
non-controlling interests
Profit from discontinued operations attributable to
TechnipFMC plc
(25.4)
0.8
(26.2)
(3,275.0)%
—
—
(1.9)
1.9
100.0%
(1.9)
1.9
100.0%
Net income (loss) attributable to TechnipFMC plc
$(136.7)
$366.1
(502.8)
(137.3)%
21 TechnipFMC
U.K. Annual Report and Accounts Revenue
Revenue increased by $312.4 million in 2022 compared to 2021. Subsea revenue increased year-over-year, as a result
of higher project and services activity. Surface Technologies revenue increased, as a result of the increase in operator
activity in North America, driven by an increase in U.S. rig count year-over-year.
Gross Profit
Gross profit (revenue less cost of sales) as a percentage of sales increased to 14.1% in 2022 compared to 13.6% in 2021.
Subsea gross profit increased year over year due to improved margins in backlog and an increase in installation and
services activity. Surface Technologies gross profit increased year-over-year, mostly due to an increase in volume of
activities and increases in pricing in North America.
Selling, General and Administrative Expense
Selling, general, and administrative expenses decreased by $26.7 million year-over-year, driven by a decrease in costs
associated with our support functions.
Impairment, Restructuring and Other Expense
We incurred $1.1 million of restructuring, impairment and other expenses in 2022, compared to $66.7 million in 2021,
largely related to exiting our operations in Russia and Canada. Impairment, restructuring and other charges incurred in
2021 included $49.1 million of impairment charges relating to our operating lease right-of-use assets and property, plant
and equipment. See Note 22 to our consolidated financial statements for further details.
Other Income (Expense), Net
For the years ended December 31, 2022 and 2021, we recorded an income of $21.8 million and loss of $0.4 million
which reflects gains and losses associated with the remeasurement of net cash positions, gains and losses on sales of
property, plant and equipment and non-operating gains and losses.
Foreign Exchange Gain (Loss)
Foreign exchange decreased by $75.6 million year-over-year, due to exposure to certain currencies with limited
derivative hedging markets.
Income from Associates
For the years ended December 31, 2022 and 2021, we recorded an income of $44.6 million and $0.6 million,
respectively, from investments in associates. Income generated by our investments in associates during 2022 increased
year-over-year, driven by an increase in the operational activity of our investments. Income generated by our
investments in associates during 2021 was offset by a $36.7 million impairment of our Magma Global investment. See
Note 2 to our consolidated financial statements for further details.
Income (Loss) from Investment in Technip Energies
For the years ended December 31, 2022 and 2021, we recorded a $27.7 million loss and $8.5 million of income,
respectively, as a result of our investment in Technip Energies. The amounts recognized primarily represent fair value
revaluation gains (losses) of our investment. See Note 33 to our consolidated financial statements for further details.
22 TechnipFMC
U.K. Annual Report and Accounts Loss on Early Extinguishment of Debt
We recognized $29.8 million of loss on early extinguishment of debt during the year ended December 31, 2022, which
related to premium paid and write-off of debt issuance costs in connection with the repurchase of the 2021 Notes. We
recognized $61.9 million of loss on early extinguishment of debt for the year ended December 31, 2021, which related
to premium paid and write-off of debt issuance costs in connection with the repurchase of the 2021 Notes and the
repayment of our 3.45% Senior notes due 2022. See Note 19 to our consolidated financial statements for further details.
Net Interest Expense
Net interest expense decreased by $27.5 million in 2022 compared to 2021, largely due to the reduction in outstanding
debt.
Provision for Income Taxes
Our provision for income taxes for 2022 and 2021 reflected effective tax rates of 308.1% and (52.2)%, respectively. The
year-over-year increase in the effective tax rate was primarily due to the change in geographical profit mix year over year.
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 those of the United Kingdom.
Discontinued Operations
Income (loss) from discontinued operations, net of income taxes, was a loss of $26.4 million and income of $605.2 million
for the years ended December 31, 2022 and 2021, respectively. See Note 33 to our consolidated financial statements for
further details.
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.
23 TechnipFMC
U.K. Annual Report and Accounts Subsea
Year Ended
December 31,
Favorable/(Unfavorable)
(In millions, except %)
2022
2021
$
$5,461.2
$5,329.1
$132.1
$359.3
$147.2
$212.1
144.1%
%
2.5%
Revenue
Operating profit
Operating profit as a percentage of revenue
6.6%
2.8%
3.8pts
Subsea revenue increased by $132.1 million, due to higher project installation activity in Brazil and the United Kingdom,
which was partially offset by the negative impact of foreign exchange.
Subsea operating profit for the year ended December 31, 2022, increased versus the prior year, due to the improved
margins in backlog and an increased mix of installation and service activities.
Surface Technologies
(In millions, except %)
Revenue
Operating profit
Operating profit as a percentage of revenue
Year Ended
December 31,
Favorable/(Unfavorable)
2022
2021
$
$1,264.5
$1,084.2
$180.3
$43.1
3.4%
$37.9
3.5%
$5.2
%
16.6%
13.7%
(0.1) pts.
Surface Technologies revenue increased by $180.3 million, or 16.6% year-over-year, driven by an increase in North
America activity. Approximately 56% of total segment revenue was generated outside of North America for the year
ended December 31, 2022.
Surface Technologies operating profit increased versus the prior year, due to an increase in volume of activities and
increase in pricing in North America.
Corporate Items
(In millions, except %)
Corporate expense
Year Ended
December 31,
Favorable/(Unfavorable)
2022
2021
$
%
$(74.7)
$(106.8)
$32.1
30.1%
Corporate expenses decreased by $32.1 million or 30.1% year-over-year, driven by the decreased costs associated with
our support functions.
24 TechnipFMC
U.K. Annual Report and Accounts Inbound Orders and Order Backlog
Inbound orders represent the estimated sales value of confirmed customer orders received during the reporting period.
(In millions)
Subsea
Surface Technologies
Total inbound orders
Inbound Orders
Year Ended December 31,
2022
$6,738.3
1,340.8
$8,079.1
2021
$4,960.9
1,793.3
$6,754.2
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. See Note 5 to our consolidated financial
statements contained in this U.K. Annual Report for more information on order backlog.
(In millions)
Subsea
Surface Technologies
Total order backlog
Order Backlog
December 31,
2022
$8,131.5
1,221.5
$9,353.0
2021
$6,533.0
1,124.7
$7,657.7
Subsea – Order backlog for Subsea as of December 31, 2022, increased by $1.6 billion from December 31, 2021. Subsea
backlog of $8.1 billion as of December 31, 2022, was composed of various subsea projects, including Petrobras Búzios 6,
Mero I, Mero II and Marlim; Total Energies Mozambique LNG, Lapa NE and Clov 3; ExxonMobil Yellowtail and Payara; Shell
Jackdaw and Gumusut; Husky West White Rose; Equinor Halten East; Tullow Jubilee South East; Wintershall Maria and
Dvalin; and Harbour Talbot.
Surface Technologies – Order backlog for Surface Technologies as of December 31, 2022, increased by $96.8 million
compared to December 31, 2021.
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 – Net Debt 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 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, utilizing details of
classifications from our consolidated statements of financial position:
25 TechnipFMC
U.K. Annual Report and Accounts (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
December 31, 2022
December 31, 2021
$1,057.1
(418.8)
(999.3)
(872.5)
$1,327.4
(277.9)
(1,778.5)
(772.8)
$(1,233.5)
$(1,501.8)
Cash Flows from Continuing Operations
Cash flows for the periods ended December 31, 2022 and 2021, were as follows:
(In millions)
Cash provided by operating activities from continuing operations
Cash provided by investing activities from continuing operations
Cash required by financing activities from continuing operations
Net cash attributable to discontinued operations
Effect of exchange rate changes on cash and cash equivalents
Year Ended December 31,
2022
$443.7
157.5
(883.6)
—
12.1
2021
$727.4
0.1
(1,439.7)
(2,754.1)
(14.0)
Decrease in cash and cash equivalents
$(270.3)
$(3,480.3)
(Increase) decrease in working capital from continuing operations
Free cash flow from continuing operations
$(70.2)
$280.3
$468.3
$479.5
Operating cash flows from continuing operations – During 2022, we generated $443.7 million in operating cash flows
from continuing operations, as compared to $727.4 million in 2021, resulting in a $283.7 million decrease compared to
2021. The decrease in cash generated by operating activities from continuing operations in 2022 as compared to 2021
was primarily due to timing differences on project milestones, vendor payments for inventory, and timing of income tax
refund.
Investing cash flows from continuing operations – Investing activities from continuing operations provided $157.5 million
and $0.1 million in 2022 and 2021, respectively. The increase of $157.4 million in cash provided by investing activities
was primarily due to a $172.1 million increase in proceeds received from sales of our investment in Technip Energies and
a decrease in capital expenditures, partially offset by a decrease in proceeds from sales of assets during 2022.
Financing cash flows from continuing operations – Financing activities from continuing operations used $883.6 million
and $1,439.7 million in 2022 and 2021, respectively. The decrease of $556.1 million in cash used for financing activities
was due primarily to the decreased debt pay down and issuance activity of $683.7 million, partially offset by $100.2
million of share repurchases during 2022.
The change in working capital represents total changes in operating current assets and liabilities.
26 TechnipFMC
U.K. Annual Report and Accounts Free cash flow from continuing operations is defined as operating cash flows from continuing operations less capital
expenditures. The following table reconciles cash provided by operating activities from continuing operations, which is a
directly comparable financial measure determined in accordance with IFRS, to free cash flow (non-IFRS measure).
(In millions)
Cash provided by operating activities from continuing operations
Capital expenditures
Free cash flow from continuing operations
Year Ended December 31,
2022
$443.7
(163.4)
$280.3
2021
$727.4
(247.9)
$479.5
Debt and Liquidity
We are committed to maintaining a capital structure that provides sufficient cash resources to support future operating
and investment plans. During 2022, we reduced our total debt position as follows:
` We repaid $161.0 million of our 3.40% 2012 Private placement notes and
` We completed a tender offer and purchased for cash $430.2 million of the outstanding 2021 Notes. We paid a cash
premium of $21.5 million to the tendering note holders and wrote-off $8.3 million of debt issuance costs. Concurrent
with the tender offer, the Company obtained consents of holders with respect to the 2021 Notes to certain proposed
amendments (“Proposed Amendments”) to the indenture governing these notes. The Proposed Amendments, among
other things, eliminated substantially all of the restrictive covenants and certain event of default triggers in the
indenture.
Availability of borrowings under the Revolving Credit Facility is reduced by the outstanding letters of credit issued
against the facility. As of December 31, 2022, there were $45.4 million letters of credit outstanding and availability of
borrowings under the Revolving Credit Facility was $954.6 million.
As of December 31, 2022, we were in compliance with all debt covenants. See Note 19 to the consolidated financial
statements contained in this U.K. Annual Report, for further information related to our outstanding debt instruments.
Credit Ratings – Our credit ratings with Standard and Poor’s (“S&P”) are BB+ for our long-term unsecured, guaranteed
debt (2021 Notes) and BB for our long-term unsecured debt (the Private placement notes). Our credit ratings with
Moody’s are Ba1 for our long-term unsecured, guaranteed 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
27 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 access capital markets throughout
the cycle. We believe our liquidity continues to exceed the level required to meet our requirements and plans for cash for
the next 12 months. 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 2023 are estimated to be
approximately $250 million. Projected capital expenditures do not include any contingent capital that may be needed to
respond to contract awards.
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 for speculative purposes. At
December 31, 2022 and 2021, 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, 2022, would have changed our revenue and income before income taxes
attributable to TechnipFMC by approximately $318.6 million and $2.1 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
28 TechnipFMC
U.K. Annual Report and Accounts 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 $61.9 million in the net fair
value of cash flow hedges reflected in our consolidated balance sheet as of December 31, 2022.
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.
As is 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, including bearing greater risk of paying
some, if not all, of any cost overruns. 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. Rising interest rates could cause actual expenses
incurred in executing these fixed-price contracts to vary substantially from those originally anticipated.
TechnipFMC’s floating rate debt amounted to $264.2 million compared to an aggregate total debt of $1,418.1 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, 2022, a 1% (100 basis points) increase in interest rates would lower the fair value of the fixed rate
Senior notes and Private placements by $26.3 million before tax. A 1% (100 basis points) decrease in interest rates would
raise the fair value by $20.5 million before tax.
A 1% (100 basis points) increase in interest rates would generate an additional profit of $6.4 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.
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, 2022 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, 2022 and 2021, respectively, together with a reconciliation of
Total Equity from US GAAP to IFRS as of December 31, 2022 and December 31, 2021. 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, 2022 and for the two years then ended, the main differences
between US GAAP and IFRS for TechnipFMC relate to the following:
29 TechnipFMC
U.K. Annual Report and Accounts (In millions)
December 31,
2022
2021
Total TechnipFMC plc stockholders’ equity in accordance with US GAAP
$3,276.7
$3,418.4
Leases
Goodwill
Impairment of property, plant and equipment
Defined benefit plans
LIFO inventory adjustments
Other
(62.3)
142.2
(23.0)
(22.1)
15.8
0.7
(54.7)
142.2
(24.0)
(3.7)
10.9
(2.5)
Total equity in accordance with IFRS
$3,328.0
$3,486.6
(In millions)
Year Ended
2022
Net income (loss) attributable to TechnipFMC plc in accordance with US GAAP
$(107.2)
Leases
Discontinued operations
Impairment of property, plant and equipment
Defined benefit plans
LIFO inventory adjustments
Other
(8.6)
—
(1.0)
(12.2)
5.6
(13.3)
2021
$13.3
(9.5)
392.1
(1.0)
(31.9)
(0.7)
3.8
Net income (loss) attributable to TechnipFMC plc in accordance with IFRS
$(136.7)
$366.1
Leases
Under the US GAAP leasing accounting guidance effective from January 1, 2019, at lease commencement, a lessee
classifies a lease as a finance lease or an operating lease. Under the IFRS accounting guidance, lessees do not classify
leases and 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.
Goodwill
Both US GAAP and IFRS require initial measurement of assets acquired, liabilities assumed and non-controlling interests
in a business combination, subject to certain exceptions, at fair value. There are certain differences between fair value
measurements under US GAAP and related measurement concepts in IFRS. Technip and FMC Technologies merged on
January 16, 2017. On the merger date, the recognized goodwill under IFRS was higher when compared to the value of
goodwill under US GAAP as of January 16, 2017.
30 TechnipFMC
U.K. Annual Report and Accounts 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 yielded different results in
2017 that resulted in a positive impact to IFRS earnings in subsequent years.
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.
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.
Discontinued operations
In the comparative period presented in these financial statements, the Spin-off of Technip Energies and related income
from discontinued operations is accounted for differently under IFRS vs. US GAAP. Under IFRS, income from discontinued
operations includes gain on Spin-off of Technip Energies, loss from discontinued operations (from January 1, 2021
through the Spin-off date) and losses on subsequent sales of Technip Energies shares during the period when Technip
Energies was an equity method investment. See Note 33 for further details. Under US GAAP, loss from discontinued
operations represented loss from Technip Energies from January 1, 2021 through the Spin-off date.
31 TechnipFMC
U.K. Annual Report and Accounts Other
TechnipFMC recorded other various insignificant differences including differences from deferred taxes.
Non-GAAP measures
In addition to financial results determined in accordance with US GAAP, we provide non-GAAP financial measures (as
defined in Item 10 of Regulation S-K of the Securities Exchange Act of 1934, as amended) below.
Net income, excluding charges and credits, as well as measures derived from it (including diluted earnings (loss) per share,
excluding charges and credits; Income before net interest expense and taxes, excluding charges and credits (“Adjusted
Operating profit”); Depreciation and amortization, excluding charges and credits; Earnings before net interest expense,
income taxes, depreciation and amortization, excluding charges and credits (“Adjusted EBITDA”); and net debt) are non-
GAAP financial measures.
Management believes that the exclusion of charges and credits from these financial measures enables investors and
management to more effectively evaluate TechnipFMC’s operations and consolidated results of operations period-over-
period, and to identify operating trends that could otherwise be masked or misleading to both investors and management
by the excluded items. These measures are also used by management as performance measures in determining certain
incentive compensation. The foregoing non-GAAP financial measures should be considered in addition to, not as a
substitute for or superior to, other measures of financial performance prepared in accordance with US GAAP.
The following is a reconciliation of the most comparable financial measures under US GAAP to the non-GAAP financial
measures.
Year Ended
December 31, 2022
Income before
Net interest
net interest
expense and
expense and
Earnings
before net
interest
expense,
income taxes,
depreciation
loss on early
income taxes
Depreciation
and
Income
Loss from
attributable to
continuing
non-controlling
operations
interests from
attributable to
continuing
Provision for
extinguishment
(Operating
and
amortization
TechnipFMC plc
operations
income taxes
of debt
profit)
amortization
(EBITDA)
$(61.9)
$25.4
$105.4
$150.7
$219.6
$377.2
$596.8
4.7
16.9
27.7
—
—
—
—
—
—
0.4
—
—
—
—
—
—
4.7
17.3
27.7
—
—
—
—
—
4.7
17.3
27.7
23.9
$(12.6)
$25.4
$105.8
$150.7
$269.3
$377.2
$670.4
(In millions)
TechnipFMC plc, as
reported
Charges and (credits):
Impairment and
other charges
Restructuring and
other charges
Loss from
investment in
Technip Energies
Foreign exchange
loss
Adjusted financial
measures
32 TechnipFMC
U.K. Annual Report and Accounts Free cash flow from continuing operations is defined as operating cash flows from continuing operations less capital
expenditures. The following table reconciles cash provided by operating activities from continuing operations, which is
the most directly comparable financial measure determined in accordance with US GAAP, to free cash flow (non-GAAP
measure).
(In millions)
Cash provided by operating activities from continuing operations
Capital expenditures
Free cash flow from continuing operations
Year Ended
December 31, 2022
$352.1
(157.9)
$194.2
33 TechnipFMC
U.K. Annual Report and Accounts Environmental, Social,
and Governance
Our decisions regarding corporate responsibility, governance, and sustainability are founded on the principles that guide
our Company. Our Core Values and Foundational Beliefs provide the framework for all of our decision making. The three
pillars of ESG – Environmental, Social, and Governance – support us in being responsible corporate citizens and drive our
ambitions to be more sustainable.
We have been realizing these ambitions through measures that seek to hold us accountable. From 2018 to 2020, we
utilized a three-year sustainability roadmap that sought to guide our efforts and focus our attention on these priorities.
The roadmap focused on three aspirational objectives – supporting our communities, promoting gender diversity and
equality, and respecting the environment. The 2018-2020 roadmap set performance goals designed to align with our
Code of Business Conduct, and aspects of both the UN Global Compact and the UN’s Sustainable Development Goals.
We developed groups of experts in our business to implement our strategy, share knowledge and best practices and
initiate global and local efforts, and these groups led us to advancements in our Company in this area with a number of
accomplishments.
Building on this approach, in 2020, we established a scorecard with an extensive set of ESG goals measured over 2021-
2023 (the “Scorecard”), with clear, verifiable metrics designed to drive behavior over the long term. Our unique Scorecard
depicts our progress toward specific, measurable ESG goals relevant to our business in relation to the planet, people, and
communities in which we operate. The Scorecard contains data-driven metrics under each pillar of “E,” “S,” and “G” and
spans a variety of types of initiatives, including efforts to reduce greenhouse gas emissions, advance social governance
initiatives such as gender diversity and giving back to our communities, support safety and integrity, and advancing
human rights practices.
We believe this approach drives change and holds us accountable for delivering on our commitments. It is punctuated by
a direct link to our executive compensation program. In 2021, we introduced a feature of our program that ties 25% of
our executives’ annual cash incentive to our Scorecard performance. We believe that this allows us to drive leadership
behavior with meaningful metrics and further supports our ESG mission. For more information on how ESG metrics are
tied to our executive compensation program, please see the section entitled “Directors’ Remuneration Report” below.
A snapshot of our 2022 progress toward our ESG goals in our 2021-2023 Scorecard is set out below.
While the Scorecard measures specific achievements in ESG, our activities are not limited to those that are measured
on our Scorecard, or to actions and monitoring required by law. Our achievements and activities in ESG, including the
achievements reflected in the ESG Scorecard and the activities that are not depicted in the Scorecard, are presented over
the following pages.
34 TechnipFMC
U.K. Annual Report and Accounts Year 2 results against 2021-2023 targets
Fair representation
Underrepresented populations
in senior management2
Leadership in HSE1
Reduce our clients’ carbon footprint (kt CO2 eq.)1
Order intake linked to lower carbon intensity
Female graduate
recruitment1
Gender
Target: 26%
Actual: 21%
Target: 33%
Actual: 18%
18%
Target: 45%
Actual: 43%
43%
Nationality/race*
Target: 23%
Actual: 25%
Water consumption1
Target: 10%
Actual: 6%
6%
Awareness and culture1
Inclusive leadership training
Target: 100%
Actual: 90%
21%
25%
90%
SIF Prevention Projects
Target: 400
Actual: 650
100%
Human rights due diligence1
Audits on high-risk
suppliers1
Target: 100%
Actual: 75%
75%
100%
Recycled and reused waste2
Community1
Ethics and compliance2
Target: 53%
Actual: 61%
61%
Volunteering initiatives
STEM initiatives
Target: 800
Actual: 574
72%
Target:150
Actual: 119
79%
Annual training for all
managerial levels
Target: 100%
Actual: 100%
(1) Metric shows against target and is cumulative
* race refers to US minorities
(2) Metric shows against target and is annual
1 Metric shows against target and is cumulative
2 Metric shows against target and is annual
Detailed explanation of our progress is set out in the respective Environmental, Social, and Governance sections below.
In our ESG approach, we are informed by several important global frameworks described below.
35 TechnipFMC
U.K. Annual Report and Accounts UN Global Compact Alignment
United Nations
Sustainable
Development
Goals
TechnipFMC supports the Ten Principles of the United Nations (“UN”) Global Compact. We integrate the UN Global
Compact’s ten principles in the areas of Human Rights, Labor, Environment, and Anti-Corruption into our business
strategy, culture, and daily operations.
The UN Global Compact is also a call for action to achieve its 17 Sustainable Development Goals (“SDGs”). These societal
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. At TechnipFMC, our targets are designed to
align with the 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.
TechnipFMC is taking greater environmental responsibility, positioning ourselves as leaders, and playing our part in
the journey to a net zero-carbon society by disclosing clear, comparable, and consistent information, including in our
Scorecard, about the risks and opportunities presented by climate change. We continue to proactively optimize our
processes, particularly around risk management and measuring strategy resilience in line with our Company Core Values
and Foundational Beliefs and regulatory requirements.
Governance of Environmental, Social, and Governance Matters
Board Oversight
All Board members participate in oversight of ESG matters. Oversight is concentrated in the Environmental, Social, and
Governance Committee (“ESG Committee”), which, as set forth in its charter, has principal responsibility of overseeing
ESG matters. These areas of oversight include:
` Environmental stewardship, responsible investment, corporate citizenship, human rights, and ESG risk management;
` Reviewing and monitoring the development and implementation of targets, standards, metrics, or methodologies to
track the Company’s ESG performance; and
` Reviewing the Company’s engagement with shareholders and public disclosures with respect to ESG matters.
In addition to oversight by the ESG Committee, the Audit and Compensation and Talent Committees also oversee certain
ESG matters that align with their areas of oversight.
36 TechnipFMC
U.K. Annual Report and Accounts Board of Directors ESG Oversight
Audit
Committee
` Certain Health, Safety and
Environmental (“HSE”) matters
` Along with the ESG Committee,
systems and controls for
the prevention of bribery
and receive reports on non-
compliance
ESG
Committee
` Policies, programs, and strategies
Compensation and
Talent Committee
` Review global strategy and
initiatives related to diversity,
equity, and inclusion efforts and
to contributions to the world
around us
` Executive compensation
structure which includes ESG
performance as a performance
measure in our Annual Incentive
Plan (as detailed in the “Directors’
Remuneration Report” section)
related to environmental
stewardship, responsible
investment, corporate citizenship,
human rights, and ESG risk
management
` Development and
implementation of targets,
standards, metrics, and
methodologies related to ESG
` Public disclosures with respect to
ESG matters
` Policies that support integrity
in everything we do, including
respect for humanity
Management-Level Oversight
TechnipFMC’s Executive Leadership Team sets the overall direction and approach toward our ESG efforts. The ESG
Steering Committee, composed of members of the executive leadership team directly responsible for various aspects of
the ESG program, is responsible for the specific Company’s initiatives toward corporate responsibility and sustainability
and actions to further those initiatives. The ESG Steering Committee is responsible for setting the direction and long-term
strategy to achieve our ESG-related plans, the development and implementation of targets, standards, and metrics, or
methodologies to achieve our ESG goals and publication of our external communication on ESG topics. The ESG Steering
Committee regularly receives updates and provides guidance to subject-matter experts in each of the ESG pillars that
coordinate activity across the Company that underpins our ESG strategy.
For more information on other internal ESG-related groups, please see the Environmental Governance section below.
37 TechnipFMC
U.K. Annual Report and Accounts Environmental
This Environmental section details our efforts to mitigate the impact we have on our planet. The Scorecard, which is
published annually and tied to bonus schemes throughout the Company to encourage positive behaviors, and our 50
by 30 goal, cover three distinct areas of our environmental efforts: Scope 1 and Scope 2 GHG emissions, lower carbon
intensity offerings to clients, waste and water management.
Since establishing our Scorecard commitments, our environmental measurement and reporting methods have evolved,
improved, and have led to meaningful change in our Company. For instance, in 2021, where regulatory requirements to
comprehensively monitor water/waste did not exist, some workplaces did not have the capabilities to adequately report their
water and waste consumption, but since then, sites have implemented measuring capabilities that allowed them to report
their efforts and to identify opportunities to rationalize resource usage. We have seen tangible, measurable progress toward
achieving our goals. We believe the Scorecard is a unique approach, which has been successful in holding us accountable.
In addition to our Scorecard commitments, we have set other indicators that measure our environmental footprint and
potential risks. As we progress into the third year of the Scorecard, our measuring and reporting methods will continue to
evolve as we learn more about our behaviors and identify improvement opportunities.
50 by 30
We aim to reduce our Scope 1
and Scope 2 GHG emissions by
50% by 2030
Year 2 result against 2030 Target
Reduce our carbon footprint by 50% by 2030 (kt CO2 eq.)2
Our 50 by 30 target – to reduce our Scope 1 and
Scope 2 GHG emissions by 50% by 2030 – was
announced in November 2020. It covers CO2
equivalent (“CO2e”) emissions from fuel combustion
and refrigerants usage as well as emissions from
the purchase of electricity, heat, cooling, and steam
by the Company for its own use. TechnipFMC
calculates Scope 1 and Scope 2 GHG emissions in
alignment with the GHG Protocol Corporate
Accounting and Reporting Standard. Activity data
from fuel purchased, refrigerants, and energy consumption is collected and reported on a periodic basis and published
emission factors are used to calculate the Scope 1 and Scope 2 GHG emissions.
2017 Re- Baseline: 312
Target: 156
Actual: 289
2017 Baseline: 677
Target: 338
Actual: 289
Metric shows against target and is annual
We continue our journey to achieve these targets, taking into account the evolving market, and the availability of
renewable sources for fuel and purchased energy which play an important role in meeting the new targets.
Our efforts to reduce GHG emissions focus on three areas: purchased energy and fuel from renewable sources, increased
energy efficiency, and consideration of technologies that support the company’s decarbonization journey.
38 TechnipFMC
1 Metric shows against target and is cumulative
2 Metric shows against target and is annual
2
U.K. Annual Report and Accounts Our business units, functions, and workplaces all work to identify opportunities to reduce our consumption of fuel and
energy and increase our efficiency in consuming resources, and to focus on reduction opportunities.
Our recent activity reflects a decrease in intensity of carbon usage.
The table below describes the annual quantity of Scope 1 and Scope 2 GHG emissions resulting from activities for which
the Company has operational control over, reported in tonnes of CO2e, reflecting an adjusted 2017 base year and our
operational scope after the Spin-off. The Scope 2 GHG emissions reflect the average emissions intensity of the grids that
supply the energy to our workplaces and considering the renewable energy ratio for the grid.
Scope 1 and Scope 2 GHG emissions from workplaces of the Company in the U.K. represent 1.1% from the Scope 1 and 2
GHG emissions for the total Company.
GHG Emissions
(in Tonnes CO2e
equivalent)
GHG Emissions
by Scope
TOTAL GHG
Emissions
2020*
2021*
2022
Scope 1
Scope 2
Scope 1
Scope 2
Scope 1
Scope 2
291,856
46,153
236,347
40,825
250,067
39,360
338,009
277,172
289,427
* Results reflect adjusted 2017 baseline, which has been adjusted to reflect our operational scope after the Spin-Off.
Our total company GHG emissions (Scope 1 and 2) in 2022 increased by approximately 4% as compared to 2021. Our
increase in fuel consumption (Scope 1 GHG emissions) in 2022 led to this increase. The decrease in our Scope 2 emissions
reflects increased use of renewable energy. In addition, our GHG emissions intensity decreased in 2022 as noted below.
We continue to refine our reporting methodologies and remain committed to focusing on further reducing our emissions.
Given the emissions stemming from our vessels, which comprise over 75% of our total Scope 1 emissions, our OneFleet
team continues implementing measures to increase energy efficiencies aboard our vessels and to evaluate the use
of biofuels in the fleet, considering the associated logistics and viability. In 2021, OneFleet reduced the GHG Scope 1
emissions when operating a vessel that underwent a hybridization process. The hybridization process of this vessel made
possible the reduction of the number of engines running in operational mode and, thus, reduced fuel consumption. The
fleet has also made adjustments to its operating parameters to enhance fuel conservation, consistent with operational
and commercial requirements.
GHG Emissions Intensity
Our 50 by 30 target takes into account the absolute value of Scope 1 and Scope 2 GHG emissions. Due to the nature of
our business, it is important to assess our emissions based on our activity to understand our emissions when project
activity increases. Currently, the GHG emissions intensity factor is calculated by dividing the total Scope 1 and Scope 2
GHG emissions by the hours worked. Hours worked has been acknowledged as being the most representative indicator
of the Company’s overall activity and is frequently used in HSE standards in the industry. In 2022, the GHG intensity
decreased by 5% as compared to 2021.
GHG Emissions Intensity
(kg CO2e/workhours)
2020
5.90
2021
5.61
2022
5.35
39 TechnipFMC
U.K. Annual Report and Accounts Energy Consumption
Our total energy consumed for the year ended December 31, 2022 was approximately 1.1 million MWh. Total energy
consumption is the total of (i) the annual energy consumed from activities for which the Company is responsible for
(including the combustion of fuel) plus (ii) the annual quantity of energy consumed resulting from the purchase of
electricity, heat, steam, or cooling by the Company for its own use (“purchased energy”).
From the total energy consumption, approximately 160,000 MWh comes from purchased energy. There was an absolute
increase of 22% of the purchased energy consumed in 2022 compared to the purchased energy consumed in 2021 due
to increased activity. 52% of our 2022 purchased energy came from renewable sources. This percentage of renewable
energy accounts for the portion of renewable energy our workplaces received from the grid. When considering total
energy consumption, which includes energy from fuel consumption, the renewable energy for 2022 was 7% of the
Company’s total energy consumption.
Energy consumed by the Company in the U.K. represents 2% of the total energy consumed by the Company. The
total amount of purchased electricity, heat, steam, or cooling consumed by the Company in the U.K. is 8% of the total
purchased energy consumed by the Company.
Our Scorecard Commitments
Our clients’ carbon footprint
18%
Target: 33%
Actual: 18%
Metric shows against target and is cumulative
We offer lower-carbon solutions to the energy industry that aim to help reduce our clients’ carbon footprint. In Subsea,
our Subsea 2.0™ products and all-electric offering as well as iEPCI™ result in lower carbon footprints. In Surface,
E-Mission™, electrification, and methane guiding principles have helped to reduce emissions.
In the Scorecard, we set a target to reduce our clients’ carbon footprint by achieving 33% of our orders linked to lower
carbon intensity offerings (“CI Orders”) by 2023. This metric reflects the cumulative average percentage of CI Orders for
the Scorecard period of 2021-2022. As of the end of 2022, our average percentage of CI Orders was 18%.
Water management
6%
Target: 10%
Actual: 6%
Metric shows against target and is cumulative
At TechnipFMC, we prioritize water conservation at the Company’s workplaces. We have internal, risk-based requirements
for water management to promote water reuse and wastewater treatment.
Our methodology to collect and calculate environmental key performance indicators has been enhanced since we started
40 TechnipFMC
U.K. Annual Report and Accounts our company in 2017. We have developed methodologies for data collection, increased the number of sites reporting
while building these efforts into normal operational processes, and generally increased awareness of the need to
promote sensible use of resources. Due to the nature of our business, our activity fluctuates with the projects that are
executed at our workplaces. As such, we have developed methodologies to normalize consumption to reflect additional
data collection efforts. We have also considered the average for water consumption since the beginning of the three-year
plan that started in 2021 to report this metric for the current year. The reduction in water consumption is reported using
this average. For 2021-2022, the average reduction in water consumption was 6%.
Waste management
61%
Target: 53%
Actual: 61%
Metric shows against target and is annual
Increasing material reuse and promoting recycling is a key part of our environmental management system and operating
strategy. We strive for circularity in our business and operations by reducing material use at source, minimizing waste
generation, and increasing waste recycling and reuse.
As of the end of 2022, waste generation increased by 8% in comparison with 2021. The increase in waste generation was
primarily due to waste from construction at some of our workplaces, which does not occur regularly. We were able to
send some of this waste stream to recycling, contributing to an increase in our waste generated to waste recycled/reused
ratio. This also contributed to an increase in the recycling rate in 2022, which was 61%, in contrast with 46% in 2021.
The Scorecard metric has prompted behavioral changes in this area as well. For example, we have become aware that
there are some workplaces located in regions where the region’s infrastructure does not support waste recycling or
reuse and, thus, this increases the treatment of waste through landfills or other waste treatment methods. This impacts
the performance of waste recycling and reuse metric. We continue to explore opportunities for resource conservation in
these areas.
In 2022, the Company initiated a Global Water Management program and a Global Waste Management program to
continue enhancing performance in these areas by implementing an assessment at each workplace and a decision-
making hierarchy for water consumption and reuse as well as waste minimization, which will include the identification of
recycling and reuse opportunities.
41 TechnipFMC
U.K. Annual Report and Accounts Beyond the Scorecard
Our efforts under the Environmental pillar go beyond those detailed in the Scorecard, as we demonstrate in the following pages.
.
Since 2011, our Dunfermline site
in the UK has generated its
own power from a wind turbine
In Brazil, seven of our eight sites
operate with 100% electricity from
hydro and renewables
In Singapore, we’re generating
electricity and reducing CO2
emissions with 6,000 solar cells
Renewable Resources
We are already using certain 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
began with changing to lower energy light bulbs and currently seven of TechnipFMC’s eight operating facilities in Brazil
operate with electricity that is 100% from the country’s vast hydro-based resources and other renewable sources. As
more resources become available, we will look to employ hybrid battery and biofuel solutions as transportation fuel, with
the potential for conversion of our offshore fleet.
We continue to outline options to utilize renewable resources and offset our use of nonrenewable sources.
Air Emissions
As part of our environmental management approach, in addition to GHG emissions, we monitor other air emissions on a
monthly basis at those workplaces that have compliance obligations for the reporting of such emissions. These include
but are not limited to sulfur oxides (“SOx”), nitrogen oxides (“NOx”), and volatile organic compounds (“VOC”). We monitor
air emissions from our workplaces in line with our commitment to manage and reduce the impact of our operations on
local air quality.
Environmental Governance
In addition to the ESG Steering Committee, TechnipFMC has internal organizations responsible for executing and
overseeing the environmental aspects of our “E” strategy. The structure consists of an Environmental Operating
Committee and an Environmental Network.
The Environmental Operating Committee is composed of members from our business units and functions who meet to
clarify workstream objectives, determine goals, KPIs and milestones; decide on organization and processes related to the
environment as part of our ESG strategy; define mitigations and elevate risks and concerns as well as opportunities to
the ESG Steering Committee; review and agree on standards, scopes, and products; align their functions to the strategy;
and facilitate communications within their functions on environmental matters within ESG, including the implementation
of plans to achieve goals and ensure targets are met.
The Environmental Network coordinates a network of HSE specialists and professionals from other functions from all regions
and business units. The Environmental Network’s responsibilities include the setting of environmental programs, supporting
the enhancement of environmental performance, sharing of best practices and lessons learned, and developing global
environmental initiatives involving local working groups, regions and projects to reduce our environmental footprint.
As part of the environmental governance framework, environmental data is collected on a periodic basis through our
Quality, Health, Safety, Environment, and Security (“QHSES”) reporting system from each workplace where TechnipFMC
has operational control for both, whether owned or leased workplaces. This data reflects the environmental performance
of entities involved (e.g., offices, manufacturing, yards and spoolbases, and fleet operations). A monthly report is
distributed to our business units and functions leadership to inform the current conditions and identify opportunities
42 TechnipFMC
U.K. Annual Report and Accounts for improvement in managing our environmental footprint in the areas of GHG emissions, energy consumption, waste
generation, water consumption, and environmental incidents. These monthly reports are discussed at the Environmental
Network meetings, where specialists and professionals discuss ways to improve reporting metrics, identify opportunities
for improvement, and promote data quality and completeness.
Management Systems and Standards
All workplaces and projects within the Company are managed by dedicated QHSES managers and directors, with a team
of QHSES professionals responsible for the application of the environmental rules in their respective areas to enable
our environmental requirements to be 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. Our Code of Conduct is discussed further in the
section entitled “Our Compliance Program.”
A key element of the Company’s environmental program is our Global Environmental Management Standard, applicable
to all our workplaces. The standard details the minimum requirements for identifying any potential environmental
risk of our activities, products, and services, and opportunities to manage the related impacts by identifying and
implementing appropriate controls, improving as a consequence our environmental performance. This process allows us
to identify, monitor, and mitigate environmental risks at every business level. The standard is in line with the ISO 14001
requirements and in compliance with applicable environmental regulations.
To continue the development of our standards around GHG Management, we developed a standard in 2022 to
account for GHG emissions in projects and products. This standard promotes a responsible and consistent approach
to GHG emissions accountability for these two important aspects of our business. Different functions, including Global
Environmental, Global Sourcing and Procurement, Subsea Projects, Surface Product Management and Digitalization,
are working together to determine the path forward to meet the requirements of the GHG emissions management for
projects and products standard to facilitate alignment in the process.
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. As such, 46
workplaces had an active ISO 14001 certification during 2022, including 21 workplaces that were re-certified. The
management system used to certify these entities is the same used across the organization.
46 workplaces
ISO 14001 certifi ed
Environmental Events
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 recorded and assigned an “actual” and “potential” impact rating. We
formally investigate any potential or actual event then implement corrective actions to prevent recurrence. 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. The Company did not have any significant
incidents with an adverse impact on the environment in 2022.
In order to manage our environmental incidents effectively, we also monitor our total environmental incident rate
(“TEIR”) (by reference to 200,000 worked hours) and our total relevant incidents rate (“REIR”) (by reference to 200,000
43 TechnipFMC
U.K. Annual Report and Accounts worked hours). The total REIR captures all significant environmental incidents within our responsibility. This indicator
enables us to understand the effectiveness of our incident management system. 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:
a. involve a discharge/release above regulatory or client limits;
b. reach warning levels provided by regulatory agencies;
c. may cause public concern;
d. impact work; and
e. require external support for containment or clean-up.
The REIR for 2022 is 0.02 versus 0.01 in 2021.
44 TechnipFMC
U.K. Annual Report and Accounts Social
The second pillar of our ESG strategy is Social. Its roots are also in Sustainability, one of our Foundational Beliefs, with
particular reference to our impact on people and the communities where we operate. Our Social actions are also closely
linked to two of our other Foundational Beliefs, Integrity and Respect. Our actions seek to empower our people to be the
difference, while helping TechnipFMC exhibit the power of inclusion by exercising the value of diversity.
There are three Social commitments on our ESG Scorecard which drive intentional actions in support of our diversity,
equity, and inclusion journey – Awareness & Culture, Fair Representation, and Community.
Our Social actions and commitments are not limited to those covered by the Scorecard. The Scorecard goals and our
ongoing progress are detailed below.
Our Scorecard Commitments
Commitment to
improving the
recruitment of
female graduates
Fair representation
43%
of all graduates hired globally
in 2021-2022 were women
43%
Female graduate
recruitment1
Target: 45%
Actual: 43%
21%
Underrepresented populations
in senior management (Gender)2
Target: 26%
Actual: 21%
25%
Underrepresented populations in senior
management (Nationality/race)2
Target: 23%
Actual: 25%
(1) Metric shows against target and is cumulative
(2) Metric shows against target and is annual
TechnipFMC is committed to improving the recruitment of female graduates and the proportion of underrepresented
populations in senior management. As of the end of 2022, we recruited 43% female participants to our graduate program.
Our target is to recruit 45% female graduates by 2023.
Under our 2021-2023 Scorecard, we also aim to increase underrepresented populations in senior management: our
target is to increase the percentage of females in senior management to 26% by the end of 2023. As of the end of 2022,
female representation in senior management is at 21%. We further aim to increase the percentage of underrepresented
nationalities (nationalities outside North American and European countries) and U.S. minorities in senior management
to 23%, and as of 2022 we have exceeded our target, with 25%. The protection of personal information varies widely
from country to country thereby making it difficult to track certain characteristics. Instead, we link to nationality and U.S.
45 TechnipFMC
U.K. Annual Report and Accounts minorities, encouraging the development of local talent around the globe. Given the evolving nature of this population,
we will continue to keep leadership succession high on the agenda to maintain or further improve fair representation.
A goal to always include female representation in the succession plans for our leadership roles and resulting efforts to
identify internal talent early has translated into an increase in depth and representation of females and underrepresented
nationalities and U.S. minorities. We have maintained 38% representation of females in our Executive Leadership Team and
this year TechnipFMC was named for the first time as one of the World’s Top 400 Female-Friendly Companies by Forbes.
Awareness and Culture
90%
Inclusive leadership
training
Target: 100%
Actual: 90%
Metric shows against target and is cumulative
In February 2021, our Inclusive Leadership Learning journey began for all managers. The launch of this curriculum
focused on the development of inclusive behaviors, the importance of allyship, and unconscious biases. This initiative was
recognized by employees by winning the Company’s internal 2021 Driving Change Awards in the Employee Development
and Engagement category.
As part of the Scorecard, our goal is for 100% completion of this curriculum by managers by 2023. In 2022, we exceeded
our interim expectations with 90% of managers completing the curriculum, against our 2023 target of 100%.
Community
72%
Volunteering
initiatives
Target: 800%
Actual: 574%
79%
STEM initiatives
Target: 150%
Actual: 119%
Metric shows against target and is cumulative
TechnipFMC is focused on making a long-term, positive impact in the communities where we live and work. We
encourage our employees to actively engage in “doing something good’’ through active engagement in health, education,
and local employment. Initiatives include our global volunteering program, which encourages employees to perform
four hours of volunteering each year at the Company’s expense, and promoting science, technology, engineering and
mathematics (“STEM”) careers.
We are working toward participating in 800 volunteering initiatives and 150 STEM initiatives by 2023. As at the end
of 2022, we exceeded our targets with 559 volunteering and 118 STEM initiatives, being 70% and 79%, respectively,
of our three-year target. The launch of the iVolunteer platform in May 2022 provided a global solution and introduced
employees to face-to-face and virtual volunteering opportunities, including opportunities to volunteer a number of hours
on paid time. Our employees’ dedication and generosity are examples of corporate social responsibility at TechnipFMC.
46 TechnipFMC
U.K. Annual Report and Accounts Beyond the Scorecard
There are many initiatives that we do not measure in the Scorecard, such as supporting a school in Ghana, creating awareness
through international UN calendar events, and more formal initiatives such as the launch of supplier diversity and continued
growth of our employee networks and resource groups (“ENRGs”). We explore those areas over the following pages.
Community Highlights
School sports field open for play
The Twin City Special School in Sekondi-Takoradi, Ghana, unveiled
their brand-new sports field and playground, courtesy of team
TechnipFMC. It is the only public dedicated school in the area to
have its own sports field. The Ghana Education Service awarded us a
citation to mark its appreciation for the team’s impactful project.
International Calendar Events
In 2022, Corporate Communications and Inclusion & Diversity
departments highlighted the following international events to create
awareness and support our continued commitment to inclusion:
International Women’s Day, PRIDE Month, International Women in
Engineering Day, Mental Health Awareness Month, and International
Day of Persons with Disabilities.
Supplier Diversity at TechnipFMC
In 2022, TechnipFMC established a supplier diversity business
case and roadmap which resulted in the creation of the Supplier
Diversity policy and launch in the United States. Collaborating with
the National Minority Supplier Development Council (NMSDC) and
the Petrochemicals and Energy Industry Group (PEIG) within NMSDC
establishes a basis to create awareness and facilitate alignment with
the Supplier Diversity policy in this journey.
Employee Networks and Resource Groups
The following ENRGs continued to use their grass root efforts to
strengthen engagement, retention, and social responsibility: VALOR
(Veterans & Advocates Leading Organizational Responsibilities - U.S.;
XYZ (generations) - U.S.; BOLD (Black Organization for Leadership
& Development) - U.S.; STRIVE (Supporting TechnipFMC Reach Its
Vision of Equity) - Australia; Parents Network - U.S.; IDEA (Inclusion,
Development & Equality for All) - U.K.; EmPower Women’s Network -
U.S.; and SAFE (Suporte, Acessibilidade, Fala & Equidade) - Brazil.
47 TechnipFMC
U.K. Annual Report and Accounts Employee Matters
Our people are at heart of everything we do, and they drive our culture of strong execution, purposeful innovation, and
challenging industry conventions. We are committed to the development of 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, equitable, and inclusive workforce.
Workforce Overview
Our workforce consists of the following:
Permanent employees
Temporary employees
(fixed-term)2
Employees on payroll
Contracted workforce
Total Workforce
December 31,
20191
December 31,
20201
December 31,
2021
December 31,
2022
21,522
1,637
23,159
2,560
25,719
19,078
1,054
20,132
635
20,767
19,103
1,507
20,610
1,392
22,002
20,301
1,671
21,972
1,374
23,346
(1) 2019 and 2020 figures have been recalculated to exclude Technip Energies.
(2) Temporary employees include interns and apprentices.
48 TechnipFMC
U.K. Annual Report and Accounts From 2020 through 2022, TechnipFMC had the following number of executive officers and employees:
Male Employees
Female
Employees
Total
% of Female
Employees
2020
2021
2022
2020
2021
2022
2020
2021
2022
2020
2021
2022
Directors
(non-executive
10
directors)
Executive
officers
(including
Douglas J.
Pferdehirt)
5
4
5
4
5
3
3
4
3
4
14
3
8
8
8
8
28%
50%
50%
8
38%
38%
38%
Senior managers
92
57
55
19
14
13
111
71
68
19%
20%
19%
Employees on
payroll (overall)
26,948 16,084 16,943
8,135
3,979
4,242 37,083 20,063 21,185
23%
20%
20%
Figures for 2020 and 2021 include Technip Energies.
Figures for 2022 include Germany.
Unique worldwide footprint
Headquarters
Operational headquarters
Newcastle
upon Tyne
Houston
North America
Canada
Mexico
United States
South America
Argentina
Brazil
Colombia
Guyana
Europe
France
Germany
Italy
Netherlands
Norway
Poland
Portugal
United Kingdom
Africa
Algeria
Angola
Cameroon
Congo-Brazzaville
Egypt
Equatorial Guinea
Gabon
Ghana
Mozambique
Nigeria
Tunisia
Asia, Australasia
and Middle East
Australia
Azerbaijan
China
India
Indonesia
Iraq
Kazakhstan
Malaysia
Russia
Saudi Arabia
Singapore
United Arab Emirates
Vietnam
49 TechnipFMC
U.K. Annual Report and Accounts Attracting Talent
In 2022, we revisited our Employee Value Proposition (“EVP”) with active involvement of leaders, new employees and a
cross-section of experienced employees to ensure it resonates with everyone and aligns with Company ambitions.
We encouraged and included more people from our business to share their inspiring experiences and stories that truly
reflect the diversity and plurality we have in the company. People from different cultures, generations, genders, races,
disabilities, and sexual preferences are represented by what they all have in common: inspiring experiences lived at
TechnipFMC. We continue to explore how best we can share these experiences with external candidates as well as
internally through different channels. Significant effort was put into improving candidate experiences when accessing our
website’s new career page, as well as on our internal EVP-dedicated web page.
Our global recruitment system is being optimized to provide a more dynamic, modern, and attractive experience with
relevant content. Our onboarding program will be further simplified, with better global alignment and more efficient
communication to make the experience of new employees and line managers more streamlined and connected.
Key performance indicators linked to talent acquisition are now available and accessible to key stakeholders through our
internal tracking platform. 2022 saw a reduction in recruiting lead times, even in a year of increased hiring volume.
Developing and Keeping Talent
In 2022, we continued to mature ‘Talking Talents’ (launched in 2020), a process where leaders meet to talk about their
employees and identify key talents. This then becomes the basis for developing employees into our three main career
pathways, Leadership, Project Management, and Technology. We continued to see an improvement in our Leadership
Succession Planning, both in terms of depth and in representation of underrepresented nationalities and gender. In 2022,
82% of our succession plans up to three levels below CEO had at least one female successor compared to 79% in 2021.
In 2022, we also launched the Check-In process, where managers and employees meet at least quarterly to discuss goals,
share feedback and have in-depth discussion about the employee’s development. This replaced the annual Performance
Appraisal process and has been a success since its implementation, as evidenced by employee perception surveys and
positive feedback from employees and managers. The Check-In process is designed to build trust, improve engagement
and performance at work. It gets employees to stay future focused, own their careers and gets leaders to focus on the
development of people on their team.
Leadership You, introduced in 2021, is our internal leadership development initiative which provides development
opportunities not only for our leaders, but for all of our employees. It is driven by a global, enterprise-wide learning and
knowledge management ecosystem. We have also made other development tools available for all employees. Examples
include Individual Development Plan, Continuous Multi Source Feedback, Employee Development Guide, Check-in
Conversations Workshops, and Inclusive Leadership Training.
Employee attrition in 2022 was marginally higher than in 2021 at 8.89% reflective of trends across the industry and
beyond. However, key talent attrition was lower at 7.65% as a result of dedicated efforts on providing learning and
development opportunities and key talent moves identified in succession plans. Our internal hiring rate that refers to the
number of jobs posted that were filled internally improved from 14% in 2021 to 19% in 2022. We continue to focus on
internal talent mobility in 2023.
As we see a potential up-cycle in our industry, sharpening our focus on talent attraction and retention by enabling our
people to grow, develop, and share knowledge will be imperative. The importance of being able to offer learning and
knowledge-sharing opportunities in a digital and global environment has been key to our success. Building on our solid
foundations, we delivered impactful courses, initiatives, and solutions across all of our business segments, in addition to
being particularly focused on leadership, technology, and project management.
50 TechnipFMC
U.K. Annual Report and Accounts Technical Expertise Program
The global Technical Expertise Program (“TEP”) recognizes and rewards employees who have demonstrated technical
mastery in their discipline, as well as:
a. technical impact, whether it is operational performance, product development, or project management;
b. people development, by inspiring others, enabling the full potential of people and teams, mentoring, sharing
knowledge and expertise, and attracting other technical talent;
c. business impact, by developing business with existing or new customers, new solutions in existing markets, or new
markets altogether; and
d. industry leadership: through internal and external professional visibility as a thought leader, both individually and as
a representative of the Company’s technical leadership.
The Technical Expertise Program currently has about 592 members, and in 2022 we added various resources to support
these experts and enable other employees to connect with them, including:
a. A Find the Expert search tool which has filters to select experts by level, scientific expertise, discipline, sub-discipline,
location and organization, as well as a free text search;
b. A public (internal) calendar for program events;
c. Home pages for each of the seven major disciplines where their members are displayed along with content from their
TEP Talks; and
d. An open community of practice for members (and aspiring members) of the program where employees can reach out
to them.
We took a more intentional approach to supporting and leveraging our Technology Fellows, who are the highest tier
in the Company’s Technical Expertise Program, in 2022, facilitating conventions for them in which they collaborate
on business and technical problems and prioritize opportunities to add value for the company, the members of the
Technical Expertise Program, and the technical community in general. A new Fellows Blog was created for them to share
their knowledge in an informal format. They identified and are sponsoring a major new global initiative on intellectual
property called “Think IP.”
As champions of “Think IP,” they will share their knowledge broadly across the Company’s learning ecosystem, using
knowledge management platforms such as The Bridge to connect with employees. The Bridge has 44 chartered global
knowledge-sharing networks. The related knowledge repository, The Well, has more than 5,100 pages (up from 4,000
in 2021), which received in excess of 824,000 visits in 2022 (up from 650,000 in 2021). The Well is connected with the
Company’s competency management platform and provides direct access to competency-based content. Employees
in all regions access these and other knowledge management social learning tools such as an Experts Explain webinar
series and Illuminate podcasts to increase their knowledge about business and technical topics, and to share their own
knowledge.
Learning and Training
Engagement in our iLearn learning platform continues to see significant growth and use, as we continue to embrace our
digital transformation and more engaging content. In 2022, there were almost 28,000 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 roles. In 2022, almost 418,000 training hours (doubled from 2020)
and 374,000 course completions (up 2x from 2020) were completed with 90% of completions being done online, which
resulted in 20.5 training hours per employee (up from 5.85 hours per employee in 2020). The top areas of learning in
2022 were Health, Safety, Environment, and Security, Quality, Our Company, Human Resources, and Engineering.
51 TechnipFMC
U.K. Annual Report and Accounts Employee Networks and Resource Groups (“ENRGs”)
TechnipFMC’s ENRGs aim to engage and reinforce our commitment to creating an environment where all employees can
achieve their full potential. We continue to promote ENRGs globally by improving participation and sponsorship. ENRGs
contribute in three ways:
` Encouraging meaningful employee engagement and development of future leaders;
` Acting as a resource for attraction and retention of talent; and
` Sharing new ideas and perspectives for a changing workforce.
Equal Opportunity and Fair Representation
Three of our Foundational Beliefs – integrity, respect, and sustainability – are tangibly embedded in our commitment to
diversity, equity, inclusion and fair representation. 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 identity or gender reassignment, marital
status, or disability.
There are three Social commitments on our ESG Scorecard which drive intentional actions in support of our inclusion and
diversity journey – Awareness & Culture, Fair Representation, and Community.
TechnipFMC is committed to improving the recruitment of female graduates and the proportion of underrepresented
populations in senior management. In 2021 and 2022, we recruited 43% female participants to our graduate program.
We also aim to increase underrepresented populations in senior management: our target is to increase the percentage
of females in senior management to 26% by the end of 2023. As of the end of 2022, female representation in senior
management is at 21%. We further aim to increase the percentage of underrepresented nationalities (nationalities outside
North American and European countries) and U.S. minorities in senior management to 20% by the end of 2023, and as
of 2022 we have exceeded our target, with 25%. We have maintained 38% representation of females in our Executive
Leadership Team and this year TechnipFMC was named for the first time, one of the World’s Top 400 Female-Friendly
Companies by Forbes.
In February 2021, our Inclusive Leadership Learning journey began for all managers. The launch of this curriculum
focused on the development of inclusive behaviors, the importance of allyship, and unconscious biases. This initiative was
recognized by employees by winning the Company’s internal 2021 Driving Change Awards in the Employee Development
and Engagement category. 90% of our managers have completed this curriculum.
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, promotion opportunities, and a safe work environment based on
the requested, reasonable needs to disabled employees to the fullest extent possible.
In December 2022, we celebrated International Day of Persons with Disabilities. We had various initiatives to promote
inclusion and respect featuring our colleagues throughout the globe, including:
` Inspiring stories featuring perspectives from leadership, people with disabilities, and careers of disabled children;
` Creating awareness of invisible disabilities in a podcast; and
` Webcast with Paralympian Andy Barrow sharing his story after suffering a life-changing spinal cord injury while
playing rugby.
Other global days marked by TechnipFMC in 2022 include International Women’s Day, PRIDE month, and International
Women in Engineering Day, among others.
52 TechnipFMC
U.K. Annual Report and Accounts Giving back to the community
TechnipFMC is focused on making a long-term, positive impact in the communities where we live and work. We
encourage our employees to actively engage in ‘doing something good’’ through active engagement in health, education,
and local employment. Initiatives include our global volunteering program, which encourages employees to perform
four hours of volunteering each year at the Company’s expense, and promoting science, technology, engineering, and
mathematics (“STEM”) careers.
We are working toward participating in 800 volunteering initiatives and 150 STEM initiatives during the 2021-2023
period. As at the end of 2022, we exceeded our targets with 559 volunteering and 118 STEM initiatives, being 70% and
79%, respectively, of our three-year target. Whether it is building a new soccer field for school children, opening their
homes to those displaced by conflict, or walking in an event to raise charitable donations, the efforts of our employees
have helped us exceed our targets.
Employee Engagement and Well-being
In 2022, we continued to implement actions identified through the global employee engagement survey conducted in
2021. Through a combination of global as well as local actions and communications, we kept employees involved and
engaged. The key actions we took in 2022 are captured below;
1. Greater connection to senior leadership
a. The ELT Connect series was successfully established with ten sessions having taken place since October 2021. This
series continues to be offered to all employees every other month.
b. ELT members are participating in and seeking out employee feedback via town halls and other GBU/function
meetings as well as increased Yammer participation.
c. Most local leaders have begun hosting quarterly town hall meetings.
2. Increase in well-being and recognition
a. A safe return to premises has taken place at all locations. Workplace Options, a well-being program, was established
and is available for most of our employees.
b. ELT and leadership are working to recognize employees’ efforts through quarterly meetings and recognition
programs as well as through regular check-ins and use of the continuous feedback platform.
c. Managers were asked to make development of employees a top priority and encourage teams to establish
development goals. Crucial learning opportunities through iLearn including Leadership You and the Inclusive
Leadership program are available.
3. Provide awareness on business prospects and clear direction on long-term strategy
a. TechnipFMC continues to strengthen and demonstrate our leadership in the Energy Transition as the New Energy
organization builds and seeks out opportunities to expand our portfolio in greenhouse gas removal, floating
offshore renewables and hydrogen.
b. New business and progress are communicated using internal channels – PoP, Yammer, webcasts, and podcasts.
c. Quarterly updates regarding our business earnings and long-term strategy are sent out via email, PoP, and
podcasts, and Managers’ packs sent out on a quarterly basis include a shareable document detailing an overview
of company performance. In addition, dedicated external and internal websites pertaining to analysts have been
developed.
Our next global engagement survey is scheduled for middle of 2023.
53 TechnipFMC
U.K. Annual Report and Accounts We launched a program called “Your Wellbeing Program” from Workplace Options in 2021, which provides all our
employees and family members with access to mental health resources, counselling and health coaching. As committed
by our Chair and CEO in 2020, we annually mark the month of October as mental health awareness month with several
activities to promote awareness. The 2022 activities included Take 5 Moments, webinars, employees podcasts, a virtual
yoga event, and a Global Wellbeing Questionnaire, which allows people to learn more about their physical, emotional,
and practical well-being. A new Global Wellbeing & Mental Health Yammer page was created for employees to stimulate
discussions around the topic. Employees around the world are able to share their own stories to better assist and educate
us as we continue to push the message that “it’s okay not to be okay.”
Internal Communication
We have a robust internal communications strategy and support communication channels that ensure that we
communicate with our employees in a timely and effective manner. The effectiveness of internal communication is
continually monitored and adjusted based on a focus group feedback program that reaches multiple levels across the
Company. New digital tools help us gauge the effectiveness of our digital communication platforms. 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.
Labor Relations and Collective Agreements
We seek to maintain constructive relationships and regular dialogue and consultation 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’s European Works Council (“EWC”) meets at least twice a year with management and all of our
eligible European entities joined the EWC by the end of 2019.
54 TechnipFMC
U.K. Annual Report and Accounts Governance
The third pillar of our ESG strategy is Governance, which is touched by all of our Foundational Beliefs: Safety, Quality,
Sustainability, Integrity and Respect.
Each of the commitments covered in our ESG Scorecard is tied closely to making a positive impact on our people and the
communities where we operate – leadership in HSES, human rights due diligence, and ethics and compliance training – but also
links to the aspirations of our other Foundational Beliefs, because how we do business is as important as why we do business.
Our Governance actions and commitments are not limited to those covered by the Scorecard. Our progress toward our
Scorecard commitments is detailed below.
Our Scorecard Commitments
Leadership in HSE
100%
SIF Prevention
Projects
Target: 400
Actual: 650
Metric shows against target and is cumulative
At TechnipFMC, we are committed to upholding a strong safety culture by rolling out Serious Incidents and Fatalities
Prevention (“SIFP”) programs, which are a cornerstone of our prevention mindset. SIFP is a proactive high-impact
risk prevention program which aims to shift the organization’s focus from reactive to proactive risk reduction by
incorporating field experience into enhanced safety practices. The objectives are to prevent serious injuries, to
proactively reduce our overall risk profile by putting mitigation strategies in place, and to bring visibility to critical issues
requiring the support of leadership. Our SIFP program gained widespread momentum since its launch in 2018. In 2022,
592 SIFP projects were raised from which 360 were implemented and closed.
Our further actions in HSE are discussed in greater detail in the section entitled “Health, Safety, and Environment” below.
Human rights due diligence
75%
Audits on high-
risk suppliers
Target: 100%
Actual: 75%
Metric shows against target and is cumulative
We are raising the bar on workers’ welfare through human rights audits of our suppliers in high-risk countries and those
suppliers engaged in high-risk activities with respect to worker welfare. Under our ESG objectives, we have undertaken
a commitment to complete 100% of human rights audits scheduled each year on our 100 most significant suppliers
in countries where there are high risks of human rights abuses. In 2021, we laid the groundwork for all of the audits
55 TechnipFMC
U.K. Annual Report and Accounts (developing questionnaires, selecting suppliers, creating an audit toolbox, etc.) and completed the first phase of the audits.
By the end of 2022, we met our objectives for the second year of our Scorecard by completing 100% of the selected
desk audits and more than 60% of the selected on-site audits of our most significant high-risk suppliers.
The audits consist of three levels:
(1) In our Level 1 Due Diligence phase, we issued our Self-Assessment Questionnaire (“SAQ”) that was developed based
on industry standard best practices, and received a 100% response rate from the 100 selected suppliers. Based on
these questionnaire responses, and with the use of due diligence tools, we completed a due diligence review of all
100 suppliers, and met our 2021 goal of completing the first round of Level 2 “Desk Audits” for selected suppliers.
(2) In our Level 2 Phase, in 2022, we conducted the remaining 57 Desk Audits of selected suppliers. This process
involved follow-up inquiries with the selected suppliers to assess risk levels and activities, in order to determine
whether on-site audits were warranted for such companies.
(3) For our Level 3 “On-Site” Audits, in 2022, we met our objective to complete 14 of our 24 selected audits.
Our goal for 2023 is to complete the remaining ten on-site audits (at a minimum), along with any additional desk audits
as needed. In addition, an annual review is conducted each year (starting in 2022) to update the selected supplier list as
needed.
Ethics and compliance
100%
Annual training for
all managerial levels
Target: 100%
Actual: 100%
Metric shows against target and is annual
Our Code of Business Conduct helps us recognize and address the ethical dimensions of our everyday decisions. It
provides practical guidance about what is expected of all of us. Board oversight of our ESG strategy and executive
remuneration further ensures fairness. This commitment targets 100% completion of our Ethics and Compliance
e-learning by all managers every year. We systematically roll out the program and are measuring completion rates of the
courses.
For 2022, we met our expectations, with 100% of managers taking required ethics and integrity courses.
Beyond the Scorecard
Our efforts under the Governance pillar go beyond those detailed in the Scorecard, as we demonstrate in the following
pages.
56 TechnipFMC
U.K. Annual Report and Accounts Our Compliance Program
How TechnipFMC conducts its business around 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 integrity
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. 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:
` 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.
` 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.
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 the 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’ ESG Committee. Our Chief Compliance Officer regularly reports compliance matters to management
and formally reports to the ESG 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 helpline. TechnipFMC has a zero-tolerance policy on retaliation against employees for reporting
suspected violations of our policies or Code of Business Conduct.
57 TechnipFMC
U.K. Annual Report and Accounts Anti-Corruption and Anti-Bribery Compliance Controls
The Company is committed to conducting business around 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.
We conduct due diligence of potential business partners before entering into a relationship to better enable us to identify
partners that share our commitment to ethical business practices and partners whose other relationships do not create
the appearance of a potential conflict of interest. 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.
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 relating to making 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 so that our contributions are not misused for improper purposes, such as to disguise illegal payments to
government officials.
58 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 helpline 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.
Our Code of Business Conduct and its related standards are applicable to all directors, 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 enable us to preserve the interests of our stakeholders in
accordance with our Core Values and Foundational Beliefs.
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.
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 on
our website at www.technipfmc.com. The information on our website is not a part of this U.K. Annual Report and is not
incorporated into any of our filing made with the SEC. 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.
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
59 TechnipFMC
U.K. Annual Report and Accounts 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,
2021 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 statement addressing 2022 shall be published later this year on our website.
The Company endeavors to ensure compliance with human rights regulations and principles 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
The Company remains a member of the United Nations Global Compact.
The Company also adopted a Human Rights Standard setting forth recognized human rights principles so that our
operations are executed in compliance with the same and so that 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 580,000 employees and
operating in over 100 countries. We continue working on our human rights strategy to embed respect for human
rights in our operations and business relationships and to 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 promote 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 toward 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.
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:
a. Our suppliers, customers, and business partners are aware of our commitment to creating a diverse and tolerant
workforce.
b. 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.
60 TechnipFMC
U.K. Annual Report and Accounts c. Our business partners and suppliers do not engage in inappropriate labor practices, including child or indentured labor.
d. 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.
e. We exercise appropriate due diligence on subcontractors, suppliers, and other vendors to prevent money laundering.
f. 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.
We aspire to develop business relationships with like-minded clients, subcontractors, suppliers, and business partners who
are guided by a similar set of principles of business conduct. 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.
Health, Safety, and Security
Health and safety are integral parts of our business, based on our genuine care and concern for the people and
environment. Safety is one of our five 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.
In 2022, we won the National Ocean Industries Association’s Culture of Safety Award. The award honors overall
organizational immersion in and commitment to safety, which has resulted in remarkable, measurable, and sustained
safety performance over a prolonged period of time.
61 TechnipFMC
U.K. Annual Report and Accounts We have adopted the International Association of Oil & Gas Producers (“IOGP”) life-saving rules, which are fully
aligned with our Global HSE management system. We are working with our industry to prevent serious incidents
in the workplace. To anchor the IOGP life-saving rules in day-to-day activity, a series of e-learning modules was
released, providing an opportunity for all our employees, partners, and subcontractors to improve general awareness,
understanding, and compliance.
Our programs aim to de-risk our operations with a particular focus on dropped object, energy release, and uncontrolled
moves, which are the most common causes of work-related incidents at the Company.
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.
Making an impact on Mental Health
We are making mental health and well-being a global priority – that’s why we recognize the whole of October as Mental
Health Awareness Month, with a wide range of activities.
Our Global Employee Assistance Program (“EAP”) helps employees navigate daily life, whether managing remote work,
coping with major life events, or even dealing with a global pandemic. The EAP gives employees and their family
members direct access to professional coaches for in-the-moment counseling or referrals to community experts and
extended care providers.
Safety Performance
Whilst we had no work-related fatalities in prior years, sadly, we experienced a tragic accident at a client surface well site
in 2022. One of our colleagues was fatally injured as a result of a “line of fire” accident that involved a dropped object.
Not every day is a “safe day” yet and the safety of our employees, partners, and contractors remains at the forefront of
our HSE journey.
In 2022, 53.5 million hours were worked at the Company’s facilities and project sites worldwide.
Safety Performance
Total Recordable Incident Rate (TRIR)1
Lost Time Injury Frequency (LTIF)1
Leadership and Management Walkthrough
Frequency1
2020
0.29
0.09
18.72
2021
0.26
0.11
21.86
2022
0.31
0.06
26.15
Fatal Accident Frequency1
0
0
0.0037
(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, 2022.
In 2022, we continued our emphasis on effective controls, human performance, and leadership engagement for higher-
risk work activities. Active leadership engagement is a key contributor to a powerful safety culture. Our leaders reinforce
our culture through training, participation, and site visits. We will continue to stay focused and strive toward zero serious
injuries or fatalities for today and the future.
Strong Health and Safety Culture
Our Pulse program is designed to drive the development of 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
62 TechnipFMC
U.K. Annual Report and Accounts Pulse formula for success: Inspire, Interact, Intervene. Each element of the formula integrates the principles of human
performance: lead by example, actively listen to others and promote safety conversations, collaborate with colleagues,
and welcome and praise all interventions you receive or observe. In 2022, 114 sessions were delivered and more than
1,800 TechnipFMC employees attended a Pulse session, ranging from senior managers and managers/supervisors to site
workers and including partners and subcontractors.
Prevention mindset
Risk management is 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 2022, we have taken important actions to further reduce our risk profile and to prevent serious injuries, described below.
` 592 SIFP projects were raised from which 360 were implemented and closed in 2022.
` The key risk conditions remain unchanged with the top three being: dropped objects, energy release, and uncontrolled
moves. The root causes analysis from serious incidents we faced in 2022 revealed one common contributing factor:
the presence of personnel in the line of fire. In 2023, we will focus and prioritize SIFP projects that contribute to
removing or reducing exposure of personnel in the line of fire and we will strive to process and close out these SIFP
projects in a timely manner.
` Stop Work Authority (“SWA”) is a cornerstone of our Foundational Belief in Safety. Our Global HSE policy states:
“Every person has the right to stop the work if they consider conditions are unsafe, in any way.” In 2022, we drove a
fresh energy to SWA. Supporting materials were developed to help leaders actively promote SWA by demonstrating
their support for both givers and receivers of SWA interventions. By removing the barriers to psychological safety,
we are creating a culture where SWA is expected, accepted, welcomed, celebrated, and rewarded. Changes were made
to our QHSE digital management system so that we can more easily identify and celebrate SWA.
Making the Safe Choice: Human Performance in HSE
Even with the most advanced technology, equipment and processes, we recognize that people are central to everything
we do at TechnipFMC. The “human in the loop” might be responsible for the design, handling, installation, operation,
or obsolescence of our products or services. For this reason, the quality of our risk perception and decision making is
essential in ensuring the safety of our people, partners and the environment.
In response to trends both in our organization and the industry more broadly, we launched the Safe Choice program in
January 2023 to equip and empower our people with the motivation and mindset for safe decision making at all levels
in an organization. Safe Choice provides new personal knowledge on decision making, cognitive biases, fast and slow
thinking, and present motivation linked directly to an organization’s current safety tools and systems.
Safe Choice is a proven intervention across many industries which enhances existing policies, strategies, processes, and
procedures by focusing on human factor/human performance in driving HSE performance.
We began rolling out the Safe Choice program to our frontline personnel – defined as all TechnipFMC personnel whose
primary job sites are on client locations. These include Technical Service Personnel (“TSPs”). Field Service Technicians
(“FSTs”), and all construction workers on TechnipFMC-owned vessels. This is Wave 1 of the Safe Choice implementation.
Wave 2, planned for Q4 2023, will expand the roll out to all personnel at our spool and service bases, as well as those
working in our manufacturing facilities and workshops. Managers and leaders at all levels are fully committed to
deploying Safe Choice successfully and to ensuring the safety and protection of our people, assets and the environment.
63 TechnipFMC
U.K. Annual Report and Accounts Security
Security within TechnipFMC is considered a fundamental service, that is governed at a corporate and regional level. Our
Global Security Team operates a 24/7 Global Security Operations Center. In addition, we appoint Security Correspondents
who have security responsibilities in addition to their primary function of acting as an extension of the Global Security
Team. They are responsible for implementing the Global Security Program and maintaining security at a local or project
level. The Global Security Program comprises programs for Asset (vessels and sites), Project, Personal, and Travel
security. Global Security is also the custodian of the Incident and Crisis Management program, that has 36 identified
Incident management teams, three business unit crisis management teams, and a corporate crisis management team.
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, 2022. 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. 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. 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 the Remuneration Report).
` Interests of employees: In 2022, each of our more than 20,000 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 are 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 (further details are set out in the paragraphs entitled “Social”
and “Employee 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, sub-contractors, 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, sub-contractors, and local communities where we have operations (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: The Environment is the first pillar of our ESG
strategy. 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 the Social pillar of our ESG strategy. Since the formation of TechnipFMC, we have adopted
64 TechnipFMC
U.K. Annual Report and Accounts company-wide, consecutive three-year ESG road maps which include our 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 section entitled “Environmental, Social, and Governance” of this Strategic Report).
` 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 several 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 2022/2023 Off-Season Shareholder Outreach Campaign
involved our active outreach to shareholders representing approximately 55% 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. We 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).
Principal Risks and Uncertainties
Important risk factors 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 and the
demand for and price of crude oil and natural gas.
` Competition 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 and intellectual
property related thereto.
` Cumulative loss of several major contracts, customers, or alliances may have an adverse effect on us, and the credit
and commercial terms of certain contracts may subject us to further risks.
65 TechnipFMC
U.K. Annual Report and Accounts ` The COVID-19 pandemic, and any resurgence thereof, and 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.
` The Depository Trust Company (“DTC”) may cease to act as a depository and clearing agency for our shares.
` Our existing and future debt may limit cash flows available to our operations and to service our outstanding debt, and
the terms thereof may restrict our ability to access the capital markets.
` Our acquisition and divestiture activities involve substantial risks.
` Increasing scrutiny and expectations regarding ESG matters could result in additional costs or risks or otherwise
adversely affect our business.
` Uncertainties with respect to the energy transition may adversely affect our business.
Risks Related to Our Operations
` We may lose money on fixed-price contracts.
` 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 or breach of our IT infrastructure or that of our subcontractors, suppliers, or joint venture partners, including
as a result of cyberattacks, could adversely impact our business and results of operations.
` Pirates endanger our maritime employees and assets.
` New capital asset construction projects for vessels and manufacturing facilities are subject to risks, including delays
and cost overruns.
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 existing and future laws and regulations, 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 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; and 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 U.K. for tax purposes, but 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 U.K. and other countries.
66 TechnipFMC
U.K. Annual Report and Accounts 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.
` We may be unable to obtain sufficient bonding capacity for certain contracts, and the need for performance and
surety bonds could reduce availability under our credit facility.
` Our revenues and earnings could be adversely affected by high levels of inflation resulting in increased supply costs
and impacts on pricing and demand.
` Our operating results, sales, profits, cash flows, liquidity, financial position, wage expenses, employee retention and
capital expenditures could be adversely affected by rising interest rates, which have increased the cost of borrowing
and increased volatility in the capital markets.
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;
` costs of exploring for, producing, and delivering oil and natural gas;
` political and economic uncertainty, socio-political unrest and geopolitical conflicts, including the continued conflict
between Russia and Ukraine, which has resulted in substantial reduction of natural gas imports from Russia to Europe
and significant volatility in the costs of both wholesale gas and power;
` 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 ten 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;
67 TechnipFMC
U.K. Annual Report and Accounts ` 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 regulations, enforcement, and 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.
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 to control the value chain, which may affect
demand for our products and services because of price concessions from 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 pricing, 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 and suppliers.
The COVID-19 pandemic, and any resurgence thereof, have had, and may continue to have, an adverse impact on our
financial condition, results of operations, and cash flows.
The COVID-19 pandemic, and any resurgence thereof, have had, and may continue to have an adverse impact on the
economies and financial markets of many countries and our financial condition, operating results, and cash flows. These
effects may be compounded by actions taken by governments and businesses, and may include adverse revenue and net
income effects; disruptions to our operations; potential project delays or cancellations; downward revisions to customer
budgets; impacts from illness, school closures, and other community response measures, which may lead to disruptions
and decreased productivity of our employees, subcontractors, partners, and vendors; temporary closures of our facilities
or the facilities of our customers and suppliers, and other risk factors discussed in this Risk Factors section, including risks
related to the demand for oil and gas. The pandemic has led to global supply chain challenges, which could adversely
impact our ability to acquire certain equipment and materials, impact our ability complete projects and cause delays in
completing projects, and materially and negatively impact our business results, operations, revenue, growth and overall
financial condition. Additionally, shift from the pandemic-led contraction to economic growth has resulted in and may
continue to cause high inflation and logistical bottlenecks.
68 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.
We continually attempt to develop new technologies for use in our business. However, there is no guarantee of future
demand for those technologies because customers may be reluctant or unwilling to adopt our new technologies. In
addition, we may also have difficulty negotiating satisfactory terms that would provide acceptable returns on our
investment in the research and development of new technologies.
Development of new technology is critical to maintaining our competitiveness. However, we cannot assure that we will
be able to successfully develop technology that our customers demand. Demand for our products and services may
decline if we cannot keep pace with technological advances. Technology that is unavailable to us or that does not work
as we expect, could adversely affect us. New technologies, services or standards could render some of our products and
services obsolete, which could reduce our competitiveness and have a material adverse impact on our business, financial
condition, cash flows and results of operation.
Additionally, we are exploring opportunities in greenhouse gas removal, offshore floating renewables (wind, wave
and tidal energy), and hydrogen. Many technologies involved in those projects are novel and will need to be further
developed before we can determine whether a renewable energy project is technologically feasible.
Our success also depends 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, and the credit and
commercial terms of certain contracts may subject us to further risks.
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.
Additionally, certain of our customers may require us to provide extended payment terms or other forms of financial
support as a condition of obtaining commercial contracts. We have long-term contracts involving significant amounts
to be paid by our customers toward the later stage of a project. Pursuant to these contracts, we may deliver products
and services representing an important portion of the contract price before receiving any significant payment from the
customer. Such arrangements could restrict the use of our cash and other resources for other projects and opportunities
and our business could also be adversely affected if the financial condition of our customers erodes.
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
69 TechnipFMC
U.K. Annual Report and Accounts we conduct business, including economically and politically volatile areas or conflict or rumor of conflict 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;
` volatility in economic conditions including tightening of credit markets, inflation, rising interest rates, and currency
exchange rate fluctuations and devaluations;
` civil unrest, labor issues, political instability, disease outbreaks, terrorist attacks, cyberterrorism, military activity, and
wars, including the continued conflict between Russia and Ukraine;
` increasing attention to global climate change resulting in pressure from shareholders, financial institutions and/or
financial markets;
` 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 U.S. 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 (including as a result of the U.K.’s withdrawal from the
European Union), and investment decisions resulting from domestic and foreign laws, and regulations;
` 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 may cease to act as the depository and clearing agency for our shares.
Our shares were issued into the facilities of the DTC with respect to shares listed on the NYSE. DTC is a widely used
mechanism that allows for rapid electronic transfers of securities between the participants in their respective systems, which
include many large banks and brokerage firms. DTC has general discretion to cease to act as the depository and clearing
agency for our shares. If DTC determines 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, and trading in our
shares would be disrupted. Any such disruption could have a material adverse effect on the trading price of 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.
We have substantial existing debt. As of December 31, 2022, our total debt was $1.4 billion. We also have the capacity
under our debt agreements to incur substantial additional debt.
70 TechnipFMC
U.K. Annual Report and Accounts Our level of debt could have important consequences. For example, it could:
` require us to dedicate a substantial portion of our cash flows from operations to the payment of debt service,
reducing the availability of our cash flows 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 on our other debt.
Our loans denominated in United States dollars (“USD”), at our option, under our Revolving Credit Facility bear interest
at an adjusted rate linked to the London Interbank Offered Rate (“LIBOR”) and our euro-denominated loans under
the Revolving Credit Facility bear interest at an adjusted rate linked to the Euro Interbank Offered Rate (“EURIBOR”).
LIBOR, EURIBOR 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 U.K.’s Financial Conduct Authority (the “FCA”), which regulates LIBOR, has
announced that the publication of LIBOR on the current basis would cease and no longer be representative immediately
after December 31, 2021 (in the case of all sterling, euro, Swiss franc and Japanese yen settings, and one-week and
two-month USD settings) and immediately after June 30, 2023 (in the case of all remaining USD settings). Despite this
deferral in regard to USD, the FCA has confirmed that use of USD LIBOR will not be permitted in most new contracts
after December 31, 2021 and while the FCA is requiring the LIBOR administrator to publish one-, three- and six-month
sterling and Japanese yen LIBOR rates for a limited time following December 31, 2021 using a synthetic methodology,
such synthetic LIBOR rates are also only permitted for legacy use. If the methods of calculating LIBOR change from their
current form while we continue to rely on LIBOR, or if we adopt alternative benchmarks for our current or future debt,
interest rates on our 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, (as amended) that governs our
$1.0 billion three-year senior secured multi-currency 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.
71 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.
Increasing scrutiny and expectations regarding ESG matters could result in additional costs or risks or otherwise
adversely affect our business.
There has been increasing attention from stakeholders, investors, customers, and regulators on renewable energy and
ESG practices and disclosures, including practices and disclosures related to greenhouse gases and climate change, and
diversity and inclusion initiatives and governance standards. If we are unable to meet the ESG standards, investment
and/or lending criteria, or current and future regulatory requirements set by these investors, regulators, customers,
or other stakeholders, we may lose investment and our ability to raise capital and our reputation may be negatively
affected. In addition, negative attitudes toward or perceptions of fossil fuel products and their relationship to the
environment and climate change may reduce the demand for production of oil and gas in areas of the world where our
customers operate or otherwise limit our customers’ access to capital or ability to conduct operations, including via new
regulation, and reduce future demand for our products and services. Any of these trends may, in turn, adversely affect
our financial condition, results of operations and cash flows.
While we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among
others) or commitments to improve the ESG profile of our company and/or products, such initiatives or achievements
of such commitments may be costly and may not have the desired effect. For example, expectations around company’s
management of ESG matters continues to evolve rapidly, in many instances due to factors that are out of our control. In
addition, we may commit to certain initiatives or goals and we may not ultimately be able to achieve such commitments
or goals, either on the timeframes or costs initially anticipated or at all, due to factors that are within or outside of our
control. Moreover, actions or statements that we may take based on based on expectations, assumptions, or third-party
information that we currently believe to be reasonable may subsequently be determined to be erroneous or be subject to
misinterpretation. Even if this is not the case, our current actions may subsequently be determined to be insufficient by
various stakeholders, and we may be subject to investor or regulator engagement on our ESG initiatives and disclosures,
even if such initiatives are currently voluntary. The increasing attention and pressure from the shareholders, financial
institutions and/or financial markets could also increase the likelihood of governmental investigations and private litigation.
Additionally, certain market participants, including major institutional investors and capital providers, use third-party
benchmarks and scores to assess companies’ ESG profiles in making investment or voting decisions. Unfavorable ESG
ratings could lead to increased negative investor sentiment toward us or our industry, which could negatively impact
our share price as well as our access to and cost of capital. To the extent ESG matters negatively impact our reputation,
72 TechnipFMC
U.K. Annual Report and Accounts it may also impede our ability to compete as effectively to attract and retain employees or customers, which may
adversely impact our operations. We also expect there to be increasing ESG-related regulations, disclosure-related
and otherwise, which could magnify any of the risks identified in this risk factor. For more information, see our risk
factor titled “Compliance with environmental and climate change-related laws and regulations may adversely affect our
business and results of operations.” Our customers and suppliers may be subject to similar risks, which may also result in
augmented or additional risks.
We are exploring investments in Energy Transition, and uncertainties with respect to these markets may adversely
affect our business.
Uncertainties with respect to the energy transition may adversely affect our business. As a result of our evolution in the
renewable energies arena, we are exploring opportunities in greenhouse gas removal, offshore floating renewables, and
hydrogen. While we have subsea and surface expertise, as well as capabilities in project integration, we are exploring
opportunities that are new to us, and therefore involve uncertainties and risks.
The market for renewable energy is also intensively competitive and rapidly evolving. If the demand for renewable
energy fails to grow sufficiently, if new geopolitical, legislative or regulatory initiatives emerge and governments around
the world reduce subsidies and economic incentives on renewable energy projects, or if market opportunities manifest
themselves in areas that we do not focus on, our New Energy business may not succeed.
Limited operating experience or limited brand recognition in new energy markets may also limit our goals and targets on
business expansion.
Risks Related to Our Operations
We may lose money on fixed-price contracts.
As is 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, including bearing greater risk of paying
some, if not all, of any cost overruns. 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, material, and components necessary for
contract fulfillment or labor shortages in the markets where the contracts are performed;
` increasing costs from inflation, rising interest rates as well as supply chain disruptions;
` 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), which may become more frequent or severe as a result of climate change; 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.
73 TechnipFMC
U.K. Annual Report and Accounts 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 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 or breach of our IT infrastructure or that of our subcontractors, suppliers, or joint venture partners, including
as a result of cyberattacks, could adversely impact our business and results of operations.
The efficient operation of our business is dependent on the security and integrity of our IT systems, physical assets, and data
that we process and maintain. 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 and evolving threats. We
have been and are continuously subject to cyberattacks, including phishing, malware, ransomware and other security incidents.
No such attack has had a material adverse effect on our business, however, this may not be the case with future attacks.
Our systems and physical assets may be vulnerable to damages from such attacks, as well as from natural disasters, failures
or security vulnerabilities in hardware or software, power fluctuations, unauthorized access to data and systems, theft, loss
or destruction of data (including confidential customer, employee or contractor 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. Hybrid working arrangements also present increased
cybersecurity risks due to the prevalence of social engineering and other attacks in relation to non-corporate and home
workers. If a cyberattack, 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, across a broad array of services and functions
(e.g., human resources, finance, data transmission, communications, risk compliance, among others). The security and privacy
measures implemented by such third parties, as well as the measures implemented by any entities we acquire or with whom
74 TechnipFMC
U.K. Annual Report and Accounts we do business, may not be sufficient to identify or prevent cyberattacks, and any such attacks may have a material adverse
effect on our business. While our agreements with third parties, such as vendors, typically contain provisions that seek to
eliminate or limit our exposure to liability for damages from a cyberattack, we cannot ensure such provisions will withstand
legal challenges or cover all or any such damages.
Threats to our IT systems and to those of our subcontractors, suppliers and joint venture partners arise from numerous
sources, not all of which are within our or their control, including fraud or malice on the part of insiders or third parties,
accidental technological failure, electrical or telecommunication outages, failures of computer servers or other damage to
our property or assets, outbreaks of hostilities, terrorist acts, and social engineering (e.g., phishing). The frequency and
magnitude of cyberattacks and other security incidents is expected to increase in the future and attackers are becoming
more sophisticated. We, as well as other critical business partners, may be unable to anticipate, detect or prevent future
attacks, particularly because the methodologies utilized by attackers change frequently or are not recognized until launched,
and attackers are increasingly using techniques and tools designed to circumvent controls, to avoid detection, and to remove
or obfuscate forensic evidence. The failure of our or others’ security controls and measures to prevent, detect, contain or
remediate cyberattacks or other significant security incidents 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, litigation or regulatory investigations, actions and fines included for a
breach of data protection laws, reputational harm, increased overhead costs including due to compliance requirements,
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 attacks,
disruptions or other security incidents in the future. Our insurance coverage may not cover all of the costs and liabilities we
incur as the result of these events, and if our business continuity and/or disaster recovery plans do not effectively and timely
resolve issues resulting from a cyberattack, 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.
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;
` inflation, including rising costs of 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.
75 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 oil, gas or well fluids, or other sources of energy, 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 expands 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 n° 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 operate, in the future, 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 increase 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 policies and procedures 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,
76 TechnipFMC
U.K. Annual Report and Accounts 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.
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 ESG (including sustainability) matters have been, and are being, implemented in
the United Kingdom 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 U.K., the U.S., and more globally. For example, in the United States, the
SEC has proposed climate-related disclosure requirements addressing governance, strategy, risk management, emissions
metrics, and financial impacts, among other things, which could require us to incur additional costs for monitoring and
compliance.
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 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 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
77 TechnipFMC
U.K. Annual Report and Accounts Wales, we may only make a distribution if the amount of our net assets is not less than the aggregate of our called-up
share capital and non-distributable reserves, 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 such 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 flows 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 product liability and claims and 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 2016/679, or GDPR,
in the European Economic Area, or EEA, and the U.K. equivalent (“U.K. GDPR”). The GDPR, U.K. GDPR and implementing
legislation in the EEA and U.K. 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.
78 TechnipFMC
U.K. Annual Report and Accounts In addition, we are subject to the GDPR and U.K. GDPR’s rules on transferring personal data outside of the EEA and U.K.
(including to the U.S.), and recent legal developments in Europe have created complexity and uncertainty regarding such
transfers. On July 16, 2020, the Court of Justice of the European Union (“CJEU”) invalidated the EU-US Privacy Shield
Framework (“Privacy Shield”) under which personal data could be transferred from the EEA (and the U.K.) to US entities
who had self-certified under the Privacy Shield scheme, and the decision cast uncertainly on when transfers could be
made under the standard contractual clauses; compliance with such may require us to change processes by which we
transfer data outside of the EEA and U.K., including to the U.S. We currently rely on the standard contractual clauses to
transfer personal data outside the EEA and U.K. The European Commission has published revised standard contractual
clauses for data transfers from the EEA: the revised clauses have been mandatory for relevant, new transfers since
September 27, 2021 and for relevant, existing transfers, since December 27, 2022. The U.K.’s Information Commissioner’s
Office has published new data transfer standard contracts for transfers from the U.K. under the U.K. GDPR. This new
documentation has been mandatory for relevant, new data transfers since September 21, 2022; existing standard
contractual clauses arrangements must be migrated to the new documentation by March 21, 2024. We will be required
to implement the latest U.K. data transfer documentation for data transfers subject to the U.K. GDPR within the relevant
time frames. As the enforcement landscape further develops, and supervisory authorities issue further guidance on
personal data export mechanisms, including circumstances where the standard contractual clauses cannot be used, and/
or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines,
and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we
operate, it could affect the manner in which we provide our services, the geographical location or segregation of our
relevant systems and operations, and could adversely affect our financial results.
We are also subject to evolving EU and U.K. privacy laws on cookies and e-marketing. Recent European court and
regulator decisions are driving increased attention to cookies and tracking technologies, regulators are also increasingly
focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that
implement the ePrivacy Directive are highly likely to be replaced by an EU regulation known as the ePrivacy Regulation
which will significantly increase fines for non-compliance. If regulators start to enforce the strict approach in recent
guidance, this could lead to substantial costs, and require significant systems changes.
Failure to comply with the requirements of GDPR, U.K. GDPR and the local laws implementing or supplementing the GDPR
could result in fines (for example, non-compliance with the GDPR or U.K. GDPR, specifically, may result in administrative
fines or monetary penalties, by each regime, up to the greater of €20,000,000/ £17,000,000 or up to 4% of the total
worldwide annual turnover of the preceding financial year). In addition, we may also face regulatory investigations and
enforcement action, reputational damage, and civil claims including representative actions and other class action type
litigation, potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of
internal resources, and reputational harm.
We are likely to be required to expend significant capital and other resources to ensure ongoing compliance with the
GDPR, U.K. 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 U.K., 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 U.S. 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
79 TechnipFMC
U.K. Annual Report and Accounts (“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 the U.S. Treasury, through guidance, 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
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 U.K., the U.S., 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 U.S., 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 U.S. 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 an extended focus on issues related to the
taxation of multinational corporations. For instance, in October 2021, the OECD released additional proposals under
Base Erosion and Profit Shifting that provide for a global minimum tax of 15%, and to date approximately 140 countries
have tentatively signed a framework agreeing in principle to this initiative. The implementation of this global minimum
tax, however, is contingent upon the independent actions of participating countries and is subject to further negotiation
80 TechnipFMC
U.K. Annual Report and Accounts among OECD member states. 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. Moreover, the U.S. government, and other jurisdictions in which we do business,
may enact significant changes to the taxation of business entities including, among others, the imposition of minimum
taxes or surtaxes on certain types of income. The likelihood of these changes being enacted or implemented is unclear.
Further changes, including with retroactive effect, in the tax laws of the U.S. (such as the recent United States Inflation
Reduction Act which, among other changes, introduced a 15% corporate minimum tax on certain U.S. corporations and
a 1% excise tax on certain stock redemptions by U.S. corporations, which the U.S. Treasury indicated may also apply to
certain stock redemptions by a foreign corporation funded by certain U.S. affiliates), the U.K., the European Union, or
other countries in which we and our affiliates do business could adversely affect us.
We may not qualify for benefits under tax treaties entered into between the U.K. and other countries.
We operate in a manner such that we believe we are eligible for benefits under tax treaties between the U.K. 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 U.S. 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 U.K. 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 U.K. 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 U.K. 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 U.K. and (ii) there is a tiebreaker
provision in that tax treaty which allocates exclusive residence to that other jurisdiction.
In this regard, we had a permanent establishment in France to satisfy certain French tax requirements imposed by the
French Tax Code with respect to the Merger. The assets and liabilities pertaining to this permanent establishment were
contributed on December 27, 2022 to one of our French subsidiaries with retroactive effect as of January 1, 2022, in
accordance with a tax ruling issued by the French tax authorities, as a result of which this permanent establishment
has been deregistered before the close of the 2022 fiscal year. Although it is intended that we will be treated as
having our exclusive place of tax residence in the U.K., the French tax authorities may claim, for the period prior to
the reorganization, that we were a tax resident of France if we were to have failed to maintain our “place of effective
management” in the U.K. over that period as a result of the activities of such permanent establishment. 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 U.K. 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
81 TechnipFMC
U.K. Annual Report and Accounts in the U.K. 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.
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 operation and expansion, as well as 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 tropical storms in the Gulf of Mexico or Indo-Pacific or extreme winter
conditions in Canada, 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. In addition, acute or chronic physical impacts of climate change, such as sea level
rise, coastal storm surge, inland flooding from intense rainfall and hurricane-strength winds may damage our facilities or
the facilities of key third parties. 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, as well as changes to temperature and precipitation patterns, 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 significant portions of our revenue and
expenses are 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, our ability to hedge certain currencies in which we conduct operations, specifically currencies in countries such
as Angola and Nigeria, may be limited; therefore, we may be subject 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.
82 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 20 for further information.
We may be unable to obtain sufficient bonding capacity for certain contracts, and the need for performance and surety
bonds could reduce availability under our credit facility.
In line with industry practice, we are often required to post standby letters of credit to customers or enter into surety
bond arrangements in favor of customers. Those letters of credit and surety bond arrangements generally protect
customers against our failure to perform our obligations under the applicable contracts. If we are unable to renew or
obtain a sufficient level of bonding capacity in the future, we may be precluded from bidding for certain contracts or
contracting with certain customers. Additionally, even if we are able to successfully renew or obtain performance or
payment bonds, we may be required to post letters of credit in connection with the bonds. The letters of credit would
reduce availability under our credit facility. Furthermore, under standard terms in the surety market, sureties issue bonds
on a project-by-project basis and can decline to issue bonds at any time or require the posting of additional collateral as
a condition to issuing or renewing any bonds. If we were to experience an interruption or reduction in the availability of
bonding capacity as a result of these or any other reasons, we may be unable to compete for or work on projects that
require bonding.
On behalf of the Board
Douglas J. Pferdehirt
Chair and CEO
March 17, 2023
83 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, 2022.
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, 2022, and at the date of this
Directors’ Report, were as follows:
Executive Director
Chair and CEO
Douglas J. Pferdehirt
Non-Executive Directors
Claire S. Farley
Eleazar de Carvalho Filho
Robert G. Gwin (effective February 1, 2023)
Peter Mellbye (not standing for re-election at 2023 annual general meeting of shareholders)
John O’Leary
Margareth Øvrum
Kay G. Priestly
John Yearwood
Sophie Zurquiyah
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.
84 TechnipFMC
U.K. Annual Report and Accounts Share Capital and Articles of Association
of the Company
As at the close of business on March 6, 2023, 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
441,308,014
Nominal value
$441,308,014
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.
Pursuant to a shareholder resolution passed at the Company’s 2022 annual general meeting of shareholders on April 29,
2022 (“2022 AGM”), the Directors have the authority to allot and issue such number of ordinary shares as represents
one third of the Company’s issued share capital, being an aggregate nominal amount equal to $150,722,858, for general
purposes plus an additional number of ordinary shares as represents a further one third of the Company’s issued share
capital, being an aggregate nominal amount equal to $150,722,858, in connection with a rights issue, in each case on a
preemptive basis. The Directors are further authorized by a shareholder resolution passed at the 2022 AGM to allot and
issue such number of the aforementioned ordinary shares as represents 5% of the Company’s issued share capital, being
an aggregate nominal value equal to $22,608,428, for general purposes plus an additional number of the aforementioned
ordinary shares as represents a further 5% of the Company’s issued share capital, being an aggregate nominal amount
equal to $22,608,428, in connection with an acquisition or specified capital investment, in certain circumstances, as
if the preemption rights set out in section 561(1) of the U.K. Companies Act 2006 did not apply. Each authorization
relating to the allotment of shares expires at the earlier of (a) the conclusion of the Company’s annual general meeting
of shareholders in 2023 (“2023 AGM”) or (b) at the close of business on July 29, 2023. New authorities are being
recommended by the Board of Directors for approval by shareholders at our 2023 AGM. Specific powers relating to
the ability of the Company to repurchase ordinary shares are included in the Articles of Association provided such
repurchase is in accordance with the repurchase contracts and counterparties approved by shareholders at the 2021
Annual General 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 related
to our 2023 AGM, as required by the U.S. Securities and Exchange Commission (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.
85 TechnipFMC
U.K. Annual Report and Accounts Share Repurchases
A share repurchase program authorization was granted by shareholders at the 2021 Annual General Meeting of
Shareholders (“Annual General Meeting”) on May 20, 2021 with a five-year validity period from that date. These
authorities will expire on May 21, 2026.
Historic 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 canceled 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. The Company purchased 10,065,498 ordinary shares
during the financial year ending December 31, 2022.
The Company established an 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 6, 2023, being the latest practicable date prior to the publication of this
Directors’ Report, the EBT held 6,019 ordinary shares of the Company.
Significant Shareholdings
As at the close of business on March 6, 2023, 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
Shares
Percent of Class1
T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, MD 21202
FMR, LLC
245 Summer Street
Boston, MA 02210
T. Rowe Price Mid-Cap Value Fund, Inc.
100 E. Pratt Street
Baltimore, MD 21202
58,933,4472
13.4%
42,290,7583
25,656,7264
9.6%
5.8%
(1) The calculation of percentage of ownership of each listed beneficial owner is based on 441,308,014 Ordinary Shares outstanding on March 6,
2023.
(2) Based solely on a Schedule 13G/A filed with the SEC on February 14, 2023, T. Rowe Price Associates, Inc. has sole voting power over 21,945,617
Ordinary Shares and sole dispositive power over 58,933,447, Ordinary Shares.
(3) Based solely on a Schedule 13G filed by FMR LLC and Abigail P. Johnson, a Director and the Chairman and the Chief Executive Officer of FMR LLC,
with the SEC on February 9, 2023. FMR LLC has sole voting power with respect to 42,290,585 shares and sole dispositive power with respect to
42,290,758 shares. Ms. Johnson has sole dispositive power with respect to 42,290,758 shares.
(4) Based solely on a Schedule 13G/A filed with the SEC on February 14, 2023, T. Rowe Price Mid-Cap Value Fund, Inc. has sole voting power over
25,656,726 Ordinary Shares.
86 TechnipFMC
U.K. Annual Report and Accounts 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 deeds of indemnity 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.
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 Hadrian House, Wincomblee Road, Newcastle upon Tyne, NE6 3PL, United Kingdom.
Dividend
There were no dividends paid or declared during the year ended December 31, 2022.
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 Matters” of the Strategic Report. Advancing
gender diversity is a strategic objective for the Company. More information can be found in the section entitled “Social”
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 “Environmental” 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 in the section entitled “Environmental” 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
“Environmental” of the Strategic Report.
87 TechnipFMC
U.K. Annual Report and Accounts Events since December 31, 2022
No other significant events since December 31, 2022 are reported.
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 Chair, 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, 2022. In addition, the Company has not made any contributions to a non-U.K. political party during the
year ended December 31, 2022.
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.
88 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 U.K. Annual Report and Accounts for the year ended December 31, 2022
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 U.K.-adopted international accounting standards and
company financial statements in accordance with U.K. Generally Accepted Accounting Practice (U.K. 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 U.K.-adopted international accounting standards have been followed for the group financial statements
and U.K. 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 U.K.
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:
` the group financial statements, which have been prepared in accordance with U.K.-adopted international accounting
standards, give a true and fair view of the assets, liabilities, financial position and profit of the group;
` the company financial statements, which have been prepared in accordance with United Kingdom Accounting
89 TechnipFMC
U.K. Annual Report and Accounts Standards, comprising FRS 101, give a true and fair view of the assets, liabilities, and financial position of the
Company; and
` the 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 each director is aware, there is no relevant audit information of which the Company’s and the group’s auditor
is unaware; and
` 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
Chair and CEO
March 17, 2023
90 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, 2022. This report is divided into three sections:
i. The letter from the Chair of the Compensation and Talent Committee;
ii. The Annual Report on Remuneration for 2022 including an upfront “At-a-Glance” section to highlight the key aspects
of remuneration policy; and
iii. The Directors’ Remuneration Policy approved by shareholders at the 2021 Annual General Meeting on May 20, 2021
(for reference only).
Pursuant to English law, the Directors’ Remuneration Report forms part of the statutory annual report of the Company
for the year ended December 31, 2022, and has been prepared by the Compensation and Talent 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 2023 Annual General Meeting on April 28,
2023, the Directors’ Remuneration Report will be subject to a non-binding advisory shareholder vote.
91 TechnipFMC
U.K. Annual Report and Accounts Letter from the Chair of the
Compensation and Talent 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, 2022 to December 31, 2022.
Our compensation program is designed to directly link our Chair and CEO’s pay to his performance and the achievements
of TechnipFMC’s overall performance and business strategies to create and preserve value for our shareholders.
Unlocking Shareholder Value
In 2021, the Board of Directors and Executive Officers led the successful Spin-off of Technip Energies and the emergence
of TechnipFMC as a leading technology provider to the traditional and new energy industries, delivering fully integrated
projects, products, and services.
Since then, we have continued our transformation and taken meaningful actions that led to shareholder value creation.
Concluded the sale of our
remaining 49.9% ownership
stake in Technip Energies,
generating total proceeds
of $1.2 billion since the
completion of the Spin-off.
Delisted from the Euronext
Paris in February 2022,
reducing complexity and costs
while aligning revised business
profile with more appropriate
company peer set.
Strategic actions that
led to shareholder
value creation
Announced our intent
to initiate a dividend
beginning in the second
half of 2023.
In July 2022, we initiated a
$400 million share buyback
program, repurchasing
$100 million in 2022.
Reduced net debt by
$1.5 billion to $309.5 million
since March 31, 2021,
achieving our target of
$500 million.
92 TechnipFMC
U.K. Annual Report and Accounts We Significantly Outperformed our Peers in 2022
Driven by the value creation from these and other strategic actions, we significantly outperformed our peer group in
2022 as evidenced by the performance of our stock, our relative total shareholder return (“TSR”) and relative degree of
alignment for 2022.
Our stock increased x1.06 times in 2022 and We Significantly
Performed Over our Peers and Major Indexes
130%
110%
90%
70%
50%
30%
10%
-10%
-30%
PSU Peers
Dec-21
Jan-22 Mar-22 Mar-22
Apr-22 May-22
Jun-22
Jul-22
Aug-22
Sep-22
Oct-22
Nov-22
Dec-22
FTI
PSU Peer Average
OSX
S&P 500
We Delivered Incremental Value Creation Over our Peers
106%
We delivered ~$1.4 billion
of incremental value creation
to shareholders in 2022
relative to PSU peers
55%
1-Year
TechnipFMC
Average Relative TSR Peer
For a list of PSU peers,
refer to Long-Term Equity
Incentives section below
CEO Pay Is Aligned with Relative Performance for 2022
RDA (2022 Measurement)
100%
SUBC
NBR
FTI
SLB
RIG
HAL
50%
NOV
OII
CHX
k
n
a
R
e
c
n
a
m
r
o
f
r
e
P
R
S
T
e
v
i
t
a
e
R
l
CLB
0%
0%
50%
Relative Pay Rank
BKR
100%
iq_closeprice_adj iq_closeprice_adj
3
6
TSR Peers
Stock Prices
Measurement Date
2022 Performance
Period
% Rank
12/31/2021
12/30/2022
BKR
SUBC
SLB
HAL
OII
NOV
CLB
RIG
CHX
NBR
FTI
$23.30
$5.85
$29.37
$22.46
$11.31
$13.42
$22.26
$2.76
$19.95
$81.09
$5.92
$29.35
$10.60
$53.21
$39.18
$17.49
$20.89
$20.26
$4.56
$28.91
$154.87
$12.19
TSR
26%
81%
81%
74%
55%
56%
-9%
65%
45%
91%
106%
Pay
$14,790
$1,428
$17,015
$23,144
$6,516
$11,145
$4,912
$13,555
$5,343
$10,089
$13,387
TSR
10%
80%
70%
60%
30%
40%
0%
50%
20%
90%
100%
Pay
80%
0%
90%
100%
30%
50%
10%
70%
20%
40%
60%
93 TechnipFMC
U.K. Annual Report and Accounts
Shareholder Engagement and Response to 2021 Remuneration Report Vote
At our 2022 Annual General Meeting, 56.2% of votes cast approved our 2021 Remuneration Report with 43.8% votes cast
voting against the report (percentages subject to rounding). This vote outcome prompted us to engage with shareholders
and proxy advisory firms to connect and specifically understand the reasons behind the voting results.
Our shareholder engagement plan was actioned in three ways:
` Undertook a shareholder perception study. During August and September 2022, we engaged a highly regarded
strategic communications firm to carry out a perception study with shareholders to gain anonymous insight and
feedback on topics such as our business strategy, capital allocation, management performance and corporate
governance topics, including our executive compensation programs.
` Held face-to-face meetings with shareholders. During December 2022, our Chair and CEO and SVP, Investor Relations
and Corporate Development traveled to meet in person with institutional shareholders representing 35% of our
Ordinary Shares outstanding. These meetings followed our perception study and allowed for a more robust discussion
of several topics raised by our shareholders.
` Annual shareholder engagement sessions. In addition to direct engagement with portfolio management teams, we
held shareholder engagement sessions, as part of our regular annual practice, but also to get feedback and address
concerns following the low Remuneration Report vote for our 2021 compensation program. We heard directly
from them on various elements of our corporate governance, including executive compensation and our goals and
achievements in addressing environmental and social issues/topics. In these sessions we offered the participation of
our Lead Independent Director and Chair of Compensation and Talent Committee as requested by shareholders.
What We Heard From Shareholders
During 2021-2022 engagement, our shareholders recommended changes to our long-term incentive (“LTI”) plan that
further aligned our compensation practices with their interests. These changes included: (1) the reintroduction of return
on invested capital (“ROIC”) as a performance measure in our LTI plan; and (2) increased rigor of the relative TSR payout
scale in our LTI plan. These changes were made in our plan for the 2022 plan year, and our shareholders favorably
acknowledged these changes in our 2022-2023 engagement.
Additionally, shareholders indicated concerns on the removal of performance conditions in outstanding 2019 and 2020
performance share unit awards. The Spin-off in 2021 resulted in the emergence of TechnipFMC as a leading technology
provider to the traditional and new energy industries with a compelling and distinct investment profile. Following the
Spin-off, the performance conditions were removed to pay out at target on the vesting date, since it was no longer
possible to measure 2019-2021 and 2020-2022 performance against the set goals. We heard from our shareholders
that they did not support this action, even with the rationale we provided. We accept this feedback and do not intend to
remove performance conditions for our performance-based awards in the future.
What We Did Based on Shareholder Feedback
Outlined below is a summary of our shareholder engagement, shareholder feedback, and the actions we took to address
them:
94 TechnipFMC
U.K. Annual Report and Accounts Shareholder engagement team
Chair and CEO • SVP, Investor Relations and Corporate Development • EVP, Chief Legal Officer and Secretary
• EVP, People and Culture • Other members of senior leadership, as applicable.
We contacted
What we heard from
shareholders
What we did
Shareholders
representing 55%
of our outstanding
shares.
55%
Add return-based component to
Performance Share Unit (“PSU”) awards
Increase rigor of relative TSR
We reintroduced return on invested
capital (“ROIC”) as a measure weighted at
50% of the total PSU award
We revised the relative TSR component
of PSUs to pay at target when achieving
a 50th percentile position versus
our Relative TSR Peer Group. Payout
continues to be capped at 100% in the
case of negative absolute TSR.
We met with
Shareholders
representing 49%
of our outstanding
shares.
49%
We discussed
` Company overview.
` Actions taken in 2022 to increase
shareholder value.
` Executive compensation
philosophy, results of say-on-
pay, and actions taken to date to
address shareholder feedback.
` Requested additional feedback
on Executive Compensation.
` Corporate governance and Board
leadership.
` ESG governance and ESG
objectives aligned to our short-
term incentive program.
Expanded disclosure on short-term
We expanded disclosures on progress
incentive payouts aligned to ESG
toward our ESG Scorecard objectives
Scorecard objectives
that link to the 2022 payout of the ESG
component of our annual short-term
incentive.
Continue to have a strong link between
90% of the Chair and CEO’s compensation
compensation and performance
and 79% of compensation for other NEOs
was at-risk and based on performance.
70% of our long-term incentive is
performance based, which is higher
weighting than market prevalence and
our compensation peers.
Maintain performance conditions for LTI
We do not intend to remove or change
awards
performance conditions for future LTI
awards. The removal of performance
conditions for the 2019 and 2020
performance awards was a one-time
event related to a significant structural
change that unlocked shareholder
value and made it difficult to measure
performance under outstanding awards
(i.e., the Spin-off of Technip Energies).
Shareholder engagement and the outcome of our annual say-on-pay vote will continue to inform our future
compensation decisions
95 TechnipFMC
U.K. Annual Report and Accounts Remuneration Arrangements in 2022
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 2023
The current Directors’ Remuneration Policy was approved by shareholders at the 2021 Annual General Meeting and will
remain in place for a period of up to three years.
The Committee has reviewed 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.
We look forward to hearing your views on our director compensation arrangements, and your continued support at the
2023 Annual General Meeting.
Yours sincerely,
John O’Leary
Director and Compensation and Talent Committee Chair
March 17, 2023
96 TechnipFMC
U.K. Annual Report and Accounts Annual Report on Remuneration:
At-a-Glance – 2022 Highlights
2022 Performance Impact on Compensation
The table below outlines the elements of our compensation program that are directly tied to Company performance.
2022 Target
Definition
Why it matters
BPI Measure
% Weighting
Adjusted EBITDA
as a Percentage
of Revenue %
10.1%
25%
Weighting
Adjusted earnings
before interest, taxes,
depreciation, and
amortization, calculated as
a percentage of revenue
Reflects our performance in
leveraging cost efficiencies, and
driving profitability improvement,
which help create a sustainable
business
Free Cash Flow
25%
Weighting
$175 million
Cash provided by
operating activities, less
capital expenditures
Measures our ability to generate
cash as an indicator of the
financial health and liquidity of
the Company
ESG
Performance
25%
Weighting
Year 2
progress
toward
three-
year ESG
objectives
Performance relative
to the TechnipFMC ESG
Scorecard
Directly links our compensation
program to our ESG commitments
and objectives, including our
2021-2023 ESG Scorecard
Please refer to the Business Review section of this U.K. Annual Report for a reconciliation to the most directly comparable GAAP measures.
Our pay-for-performance program aims to motivate our Chair 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 Chair and CEO compensation was directly impacted by our
performance.
97 TechnipFMC
U.K. Annual Report and Accounts 2022 Performance Impact on Annual Cash Incentive
The annual cash incentive comprises 13% of 2022 total target at-risk compensation for our Chair and CEO. Our Chair and
CEO achieved a payout of 125% of target for the annual cash incentive, based on the following:
` The total payout for the business performance indicators (which make up 75% of the annual cash incentive plan) was
108% based on the following:
` Performance for Adjusted EBITDA as a Percentage of Revenue was calculated to be 94%.
` Performance on Free Cash Flow Conversion measures was calculated to be 111%.
` 2022 performance towards our 2021-2023 ESG objectives was confirmed at 120%.
` The payout for the individual annual performance indicator (which makes up 25% of the annual incentive plan) was 174%
Overview of our Compensation Practices
Our compensation practices are designed to align with shareholder interests and incorporate strong governance practices
that support the guiding principles of our executive director compensation program, which include the following:
` Attract talented individuals by providing market competitive levels of compensation
` Align to our pay-for-performance philosophy
` Link the interests of our Chair and CEO with the interests of the Company and shareholders
` Align our Chair and CEO’s interests with our long-term financial and strategic objectives
` Maintain flexibility to better respond to the cyclical energy industry
` Encourage prudent risk-taking by our Chair and CEO
98 TechnipFMC
U.K. Annual Report and Accounts What We Do:
What We Don’t Do
` Pay for performance by aligning performance
measures with our strategy and shareholder
interests
` Majority of Chair and CEO compensation
is performance-based, “at-risk” long-term
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 non-executive director
options
share ownership requirements
` 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
` No hedging and pledging of Company securities
99 TechnipFMC
U.K. Annual Report and Accounts Annual Report on Remuneration:
Report for the Year Ended December 31, 2022
The Compensation and Talent Committee presents the Annual Report on Remuneration and the statement of the Chair
of the Compensation and Talent Committee, which will be submitted to shareholders as an advisory vote at the 2023
Annual General 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.
Chair and CEO
As intended by our pay-for-performance program, and as outlined in the sections below, our 2022 compensation for our
Chair and CEO was directly impacted by our performance against key financial, operational, and individual metrics.
Base
Salary
10%
Below is an illustration of the Chair and CEO’s remuneration.
Chair and CEO
Base
Salary
10%
RSU
23%
Annual
Incentive
13%
PSU
54%
90% At-risk
RSU
23%
Annual
Incentive
13%
All Other NEOs
PSU
54%
90% At-risk
RSU
17%
Base
Salary
21%
Fixed
At-risk1
Cash
Equity
Annual
Incentive
22%
PSU
40%
10%
90%
23%
77%
Fixed
At-risk1
Cash
Equity
Short-Term Performance
Long-Term Performance
13%
77%
79% At-risk
Short-Term Performance
Long-Term Performance
21%
79%
43%
57%
22%
57%
All Other NEOs
RSU
17%
Base
Salary
21%
Annual
Incentive
22%
PSU
40%
79% At-risk
Fixed
At-risk1
Cash
Equity
Short-Term Performance
Long-Term Performance
21%
79%
43%
57%
22%
57%
(1) RSUs are included in variable pay because their delivered value is based on share price at vesting.
Fixed
At-risk1
10%
90%
Cash
Equity
Short-Term Performance
Long-Term Performance
23%
77%
13%
77%
100 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 Chair and CEO for the periods ended December 31,
2022 and 2021.
A proportion of the annual incentive and long-term incentive awards (the variable and at-risk element), 77% is subject to
share price appreciation. During 2022, 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
Chair and CEO: Douglas J. Pferdehirt
2022 $1,236,000 $60,811
$4,987,404
$—
$209,382
$1,506,193
$4,987,404
$6,493,597
2021 $1,236,000 $68,077
$7,738,789
$10,744,161 $305,339
$1,609,416
$18,482,950
$20,092,366
(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 of peer group, based on responsibility, experience, individual performance, and contributions to the business.
Salary for our Chair and CEO is unchanged since March 1, 2018 with the exception of a 30% temporary pay reduction in 2020.
(2) The taxable benefits for 2022 for the Chair and CEO include all: (i) personal use of Company automobile of $23,097.23 (ii) financial planning
services of $19,360 (iii) U.K. tax preparation fees of $1,239.43, (iv) company paid life insurance fees of $578.45, (v) club dues of $5,378.19, (vi)
spousal travel of $9,613, and (vii) taxable travel expenses of $1,544.
The taxable benefits for 2021 for the Chair and CEO include all: (i) personal use of Company automobile of $19,057 (ii) financial planning services
of $18,000 (iii) U.K. tax preparation fees of $1,657, (iv) company paid life insurance fees of $578, (v) club dues of $5,344, and (vi) security
services of $23,441.
(3) The amount disclosed in the Annual Incentive Awards column for 2022 for the Chair and CEO represents the sum of annual cash incentive bonus
and time-based (non-performance based) RSUs awarded in 2022. In 2022, the Chair and CEO’s annual cash incentive was $2,077,407, calculated
using a target bonus of 135% of salary, a BPI rating of 108%, and an API rating of 174%. The time-based (non-performance based) RSUs awarded
in 2022 were valued at $2,909,997.32 comprising 30% of the Chair and CEO’s long-term equity incentive target value of $9,700,000, consisting of
369,289 shares vesting on March 8, 2025.
The amount disclosed in the Annual Incentive Awards column for 2021 for our Chair and CEO represents the sum of annual cash incentive and
time-based (non-performance based) RSUs awarded in 2021. In 2021, our Chair and CEO’s annual cash incentive was $2,694,789, calculated
using a target bonus of 135% of salary, a BPI rating of 162%, and an API rating of 160%. The time-based (non-performance based) RSUs awarded
in 2021 were valued at $2,910,000, comprising 30% of the Chair and CEO’s long-term equity incentive target value of $9,700,000 consisting of
364,661 shares and vesting on March 1, 2024. The Chair and CEO received a one-time long-term equity grant of $2,134,000 in four-year cliff
vesting RSUs, consisting of 267,419 shares vesting on April 1, 2025
(4) The amount disclosed in the Long-term Incentive Awards column for 2021 for our Chair and CEO represents the value of performance-based
RSUs that were converted to time based RSUs as a result of the Spin-off as measurement of performance against the set goals was not possible
following the Spin-off. The value was calculated using the target value (100% i.e., 1,284,707 shares) and the stock price at the time of the
conversion ($8.09).
Dividend equivalents of $350,881 attributable to the vested shares have been included in the table above for 2021.
There were no performance-based RSUs with a concluding performance period in 2022.
(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.
Executive Director Remuneration Received in Respect of 2022 (Audited Information)
One of the Compensation and Talent Committee’s primary goals in establishing our executive director compensation
philosophy and designing our compensation program is to ensure that compensation incentivizes an executive director 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 and Talent 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.
101 TechnipFMC
U.K. Annual Report and Accounts
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 and Talent Committee reviews base salary for the Chair and CEO on an annual basis, and determines
and approves any changes, with input from the Compensation and Talent Committee’s independent compensation
consultant.
Pension Related Benefits
Retirement benefits for 2022 have been calculated in line with the U.K. reporting regulations. The Chair and CEO does not
have entitlement to a Defined Benefit pension plan. Details of the aggregate benefits accrued in the U.S. Qualified Savings
Plan (401k) and the U.S. Non-Qualified Savings Plan by the Chair and CEO are shown below.
The value of the benefits under the schemes is calculated based on the Company’s contributions which are based on a
percentage of employee salary. Retirement contributions for the Chair and CEO relate to our U.S. Qualified Savings Plan
(401k) and U.S. Non-Qualified Savings Plan, which are both defined compensation (“DC”) schemes.
Values relating to
DC Schemes4
DC Scheme Balance
at Year End1
$’000
Company Contributions Over Year2
$’000
Normal Retirement
Age3
Chair and CEO
5,493
209
N/A
(1) Accrued balance at 2022 year end in the U.S. Qualified Savings Plan (401k) and the U.S. Non-Qualified Savings Plan (which is a defined
contribution scheme)
(2) Company contributions in 2022 to the U.S. Qualified Savings Plan (401k) 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 six months post-termination, therefore retirement age does not apply.
(4) Chair and CEO is not entitled to a Defined Benefit Scheme
Benefits
The Company also provides limited perquisites to the Chair and CEO, facilitating the performance of their roles and
to ensure a competitive total compensation package. The perquisites we provide to our Chair and CEO may include
financial planning and personal tax assistance, personal use of Company automobiles, dining club memberships and
country club memberships, car allowances, 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 director, and we do
not gross up for the taxes due on such imputed income. Additional allowances or benefits may be granted to our Chair
and CEO, if considered appropriate and reasonable.
Reflecting the safety concerns associated with their roles, the Company provides a security program for our Chair and
CEO. The Compensation and Talent Committee believes this is in the best interests of shareholders as the personal safety
and security of our executive director 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 external consultant. We do not
consider the security measures provided to our Chair and CEO to be a personal benefit, but rather reasonable and
necessary expenses for the benefit of the Company.
102 TechnipFMC
U.K. Annual Report and Accounts Elements of 2022 Executive Director Compensation
Our executive director compensation program comprises of short-term and long-term components that link our Chair
and CEO’s pay to his performance and advancement of TechnipFMC annual and long-term performance and business
strategies. In addition, the program also aligns the executive director’s interests with those of shareholders and
encourages retention of a high-performing executive director.
The table below summarizes these elements, along with their purpose and key characteristics. However, a more detailed
explanation is available in further sections.
103 TechnipFMC
U.K. Annual Report and Accounts 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 Chair and CEO’s role
` Set with reference to market median of compensation peer group,
based on responsibility, experience, and performance
` 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%)
` 2022 business performance targets were adjusted EBITDA as a
Percentage of Revenue (25%), Free Cash Flow from Operations
(25%), ESG Scorecard measures (25%) and individual performance
measures (25%)
` Actual payout can range from 0% to 200% of target
Performance
Share Units
(PSUs)
To drive and reward the
achievement of long-term
results and align interests
of the Chair and CEO with
shareholders’ interests
` Payout linked to the achievement of TechnipFMC relative TSR (50%)
and ROIC (50%) for the 2022 to 2024 performance period
` Realized value based on payout based on performance and post-
grant share price appreciation
` Actual payout can range from 0% to 200% of target
Restricted
Stock Units
(RSUs)
Health and
Welfare
Benefits,
Retirement
Benefits, and
Perquisites
Further align the Chair
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
To facilitate the
performance of the role
and ensure a market
competitive total
compensation package
104 TechnipFMC
` Realized value based in part on post-grant share price appreciation
` 50% of after-tax RSUs must be retained for at least one year
following vesting
` Three-year ratable vesting with 1/3 vesting each year
` 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 U.S.
Qualified Savings Plan (401k) 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
` Limited participation in other programs dependent on geography
and tenure (non-U.S.-based executive director)
U.K. Annual Report and Accounts Compensation Peer Group
We compete with energy industry companies, as well as with other industries and professions, for executive director
talent. In making decisions about target compensation levels, the Compensation and Talent Committee reviews data from
peer group proxy statements as well as general industry and industry-specific market surveys.
In looking for potential peer companies, the Compensation and Talent Committee evaluated companies with reasonably
similar business characteristics, which included:
` Applicable Industry Focus – Prioritize public companies with energy or engineering and construction elements that
trade on major U.S. stock exchanges
` Relevant Size Range – Revenue between 1/3 to 3x TechnipFMC’s projected 2022 revenue, market capitalization, and
assets
` Comparable Quantitative Characteristics – Projected EBITDA margins less than 25%, non-US revenue greater than
33% of total revenue, and total employees between 1/3 to 3x TechnipFMC’s projected number of employees
` Comparable Business Characteristics – Similar margin profile, sales per full-time employee, and asset intensity
` Comparable Qualitative Characteristics – Prioritized companies that are logistically and technically complex, mature
stage businesses, and business-to-business focused
Following this evaluation, the Committee determined that the following companies continue to constitute the peer group
for benchmarking executive director compensation decisions for 2022 and 2023.
Compensation Peer Group Constituents
AECOM
APA Corporation
Baker Hughes
ChampionX Corp.
Chart Industries, Inc.
Jacobs Engineering Group Inc.
KBR, Inc.
National Oilwell Varco, Inc.
Oceaneering International
Quanta Services, Inc.
Devon Energy Corporation
SLB
Dover Corporation
Fluor Corporation
Halliburton Company
Transocean Ltd.
Valmont Industries
Weatherford International plc
Base Salary
We provide our Chair 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 Chair 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 and Talent Committee reviews base salary for the Chair and CEO on an annual basis. For the CEO,
the Compensation and Talent Committee determines and approves any changes, with input from the Compensation and
Talent Committee’s independent compensation consultant.
105 TechnipFMC
U.K. Annual Report and Accounts Chair and CEO
Base Salary
(2021)
Base Salary
(2022)
Change %
Douglas J. Pferdehirt
$1,236,000
$1,236,000
0%
Annual Cash Incentive (Audited Information)
2022 Annual Cash Incentive Target
We provide our Chair and CEO with an annual cash incentive to drive and reward the achievement of short-term
Company strategic goals and individual contributions. Our Chair and CEO has an annual cash incentive target, set as a
percentage of base salary and can earn 0% to 200% of their annual cash incentive target, depending on Company and
individual performance.
The Compensation and Talent Committee reviews and approves target annual cash incentive percentages for our Chair
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 achievement of short-term financial, ESG goals for the Company, as well as individual
goals. The annual cash incentive also ensures that we provide market-competitive levels of total compensation.
The following were the 2021 and 2022 annual cash incentive targets for our Chair and CEO:
Chair and CEO
Douglas J. Pferdehirt
2021
135%
2022
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
director’s 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 BPI components are intended to drive the achievement of key financials and ESG objectives. Each component is
assessed independently from the other components and has a maximum possible payout of 200% of target. Furthermore,
if performance with respect to any BPI fails to meet the threshold level the payout is 0%
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 life cycle 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.
106 TechnipFMC
U.K. Annual Report and Accounts In setting performance goals, the Compensation and Talent 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
` 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.
2022 Measures and Results
The 2022 BPI measures for the annual cash incentive are outlined below:
2022 Target1
Definition
Why it matters
BPI Measure
% Weighting
Adjusted EBITDA
as a Percentage
of Revenue %
10.1%
25%
Weighting
Adjusted earnings
before interest, taxes,
depreciation, and
amortization, calculated as
a percentage of revenue
Reflects our performance in
leveraging cost efficiencies, and
driving profitability improvement,
which help create a sustainable
business
Free Cash Flow
25%
Weighting
$175 million
Cash provided by
operating activities, less
capital expenditures
Measures our ability to generate
cash as an indicator of the
financial health and liquidity of
the Company
ESG
Performance
25%
Weighting
Year 2
progress
toward
three-
year ESG
objectives
107 TechnipFMC
Performance relative
to the TechnipFMC ESG
Scorecard
Directly links our compensation
program to our ESG commitments
and objectives, including our
2021-2023 ESG Scorecard
U.K. Annual Report and Accounts The 2022 results versus target for Adjusted EBITDA1 as a Percentage of Revenue and Free Cash Flow are outlined below.
2022 BPI
Measure
Adjusted EBITDA
as a Percentage
of Revenue %
25% Weighting
Free Cash Flow
25% Weighting
2022 Goals1
2022 Performance2
Threshold
Target
Maximum
Performance
Performance
Performance
Performance %
Payout %
8.6%
10.1%
11.6%
10.0%
94%
$0 million
$175 million
$350 million
$194 million
111%
(1) Financial targets and actual performance based on Adjusted EBITDA exclude non-recurring charges and credits, such as impairments,
restructuring costs, integration costs, foreign exchange impact, as well as other items identified in TechnipFMC’s Form 10-Q and Form 10-K filings.
Free cash flow is defined as cash provided by operating activities less capital expenditures. For the calculation of adjusted EBITDA, please refer to
the Business Review Section of this U.K. Annual Report for a reconciliation to the most directly comparable GAAP measures. For the calculation of
free cash flow, please refer to the Business Review section of the consolidated financial statements of this U.K. Annual Report for a reconciliation
to the most directly comparable GAAP measures.
(2) 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.
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.
2022 Results for the 2021-2023 ESG Scorecard
To align our executives’ incentives with our ESG commitments, we link our Scorecard performance to our executive
compensation program. This complements the extensive efforts that inform our approach to ESG matters to drive
behaviors and create outcomes that make a positive impact on the planet, people, and communities in which we operate.
Determination of Payout for 2022
The Compensation and Talent Committee took a comprehensive approach to reflect on the progress made in 2022
towards the achievement of the 2021-2023 ESG Scorecard objectives and focused on overall results, behaviors and
measurable actions that showed advancement in areas of ESG that are important to the Company, in assessing the
determination of the payout related to this component:
` In making its assessment, the Committee also received input from the ESG Committee and the Audit Committee. Both
the ESG and Audit Committees have responsibility for assessment of specified objectives on the Scorecard, and the
ESG Committee has responsibility for the certification of the Scorecard results.
` The Committee recognized that, as of Year 2, the majority of objectives were either in line or above target, with a few
requiring accelerated efforts in 2023 to achieve Year 3 targets.
` The Committee recognized the considerable efforts made by the Company to advance ESG initiatives and move
forward towards inherent and sustainable behavior in all the ESG pillars.
` Furthermore, the Committee recognized the significant progress to raise awareness of how individual employee
actions contribute to the achievement of goals and the embedment of these efforts into the Company’s culture as
demonstrated by the progress above expectations made in Scorecard targets such as community volunteering, STEM
volunteering, completion of inclusive leadership curriculum and SIFP programs among others.
108 TechnipFMC
U.K. Annual Report and Accounts Based upon this comprehensive and holistic assessment, the Compensation and Talent Committee recommended a
payout of 120% for the 2021-2023 ESG Scorecard component of the 2022 Annual Cash Incentive. A summary of Year 2
(2021 and 2022 combined) results against 2021-2023 targets is provided below.
Reduce our clients’ carbon footprint (kt CO2 eq.)1
Order intake linked to lower carbon intensity
Year 2 results against 2021-2023 targets
Fair representation
Underrepresented populations
in senior management2
Leadership in HSE1
Female graduate
recruitment1
Gender
Target: 26%
Actual: 21%
21%
SIF Prevention Projects
Target: 400
Actual: 650
100%
Target: 33%
Actual: 18%
18%
Target: 45%
Actual: 43%
43%
Nationality/race*
Target: 23%
25%
Actual: 25%
Water consumption1
Awareness and culture1
Human rights due diligence1
Target: 10%
Actual: 6%
6%
Inclusive leadership training
Target: 100%
Actual: 90%
90%
Audits on high-risk
suppliers1
Target: 100%
Actual: 75%
Recycled and reused waste2
Community1
Ethics and compliance2
Target: 53%
Actual: 61%
61%
Volunteering initiatives
STEM initiatives
Target: 800
Actual: 574
72%
Target:150
Actual: 119
79%
Annual training for all
managerial levels
Target: 100%
Actual: 100%
75%
100%
(1) Metric shows against target and is cumulative
* race refers to US minorities
(2) Metric shows against target and is annual
1 Metric shows against target and is cumulative
2 Metric shows against target and is annual
For further information on the results of the second year of our 2021-2023 Scorecard, please see the section entitled
“Environmental, Social, and Governance.”
API Component – 25% of Annual Cash Incentive
Each February, the individual performance goals are established for the Chair 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 our Chair and CEO failed to achieve any of his
objectives, the API multiple would likely be 0%, absent any mitigating factors. If the Chair 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 and Talent Committee, and
any factors that may have prevented achievement of certain objectives.
For 2022, the Chair and CEO received an API rating of 174%.
In determining the 2022 API rating for our Chair and CEO, the Compensation and Talent Committee took into account
a comprehensive view of his 2022 performance and contributions, including exceeding expectations on many of his
2022 key annual objectives as well as the significant growth in shareholder value created during 2022 as a result of key
strategic actions taken since the Spin-off.
The objectives established and their achievements against those goals as well as the assessment as determined by the
Committee were as follows:
109 TechnipFMC
U.K. Annual Report and Accounts Douglas J. Pferdehirt
Chair and CEO
Objective
Achievements
Assessment
Strategy and Growth:
` Advance technology
` Achieve ESG Scorecard objectives
` Address key business challenges
` Advanced qualification of key technology and
multi-year supply agreement with customer.
Above expectations
` Addressed supply chain challenges by
leveraging CEO-level relationships resulting in
the avoidance of material project disruptions,
and mitigation of inflationary pressures.
` Drove company-wide ESG Scorecard
objectives resulting in solid progress towards
achievement of three-year objectives.
See “2022 results for the 2021-2023 ESG
Scorecard” section.
` Delivered on company financial strategy post
Spin-off, including selling down remaining
shareholding in Technip Energies, reducing
debt structure and authorizing a $400 million
share repurchase program.
Execute on Key Business Deliverables:
` Delivered above target inbound, revenue and
Above expectations
` Deliver key financial commitments
` Strengthen market position and grow
our business
` Secure key alliances and contracts
EBITDA for Subsea business.
` Grew Surface business in North America and
in the Middle East. Passed key audit in Saudi
Arabia manufacturing facility and increased
number of E-Mission™ installations in North
America.
` Secured key licenses for offshore floating wind
and tidal energy to continue to drive growth in
the New Energy business.
Personal / Board Development
` Participate in Boards and
Committees that align with our
business and diversity objectives
` Recruited and nominated new non-executive
director to TechnipFMC’s Board of Directors.
Met expectations
` Nominated to American Petroleum Industry
(API) Executive Committee.
` Recruit Board talent to promote
` Assumed global responsibility with Advancing
interest of shareholders and success
of TechnipFMC
Women Executives (AWE).
Continued overleaf >
110 TechnipFMC
U.K. Annual Report and Accounts
Douglas J. Pferdehirt
Chair and CEO
Objective
Achievements
Assessment
Organizational Readiness
` Continued succession planning actions to
Above expectations
` Ensure succession planning in place /
incorporate diversity
` Execute organizational effectiveness
to better support our customers and
grow our business
increase diversity of key leadership within the
organization.
` Simplified Surface organization to improve
efficiency, manage cost and meet customer
needs.
` Centralized engineering function, implemented
OneEngineering organization, increasing
efficiency, and reducing cost and lead times
for customers.
Promote Foundational Beliefs
` Completed regulatory obligations in Brazil and
Below expectations
` Integrity – Complete regulatory
U.S.
obligations in Brazil and U.S.
` Actively contributed to advancement in gender
` Sustainability – Achieve metrics;
equity, community engagement and
environment
` QHSE – Fully implement and expand
Pulse (HSES) and Impact Quality
(Quality) transformation programs
and racial diversity through AWE and CEO
Action for Racial Equity Advisory Boards.
` Actively led TechnipFMC as a top contributor
to both United Way and American Heart
Association.
` Promoted human rights through active
industry leadership.
` Appointed leader of Industrialization and
Quality function to lead the simplification,
standardization, and industrialization of the
organization.
` On track to exceed 2023 SIFP (Serious Injury
and Fatality Prevention) target.
` One fatality in 2022, did not achieve zero
fatality target.
Overall Rating for Mr. Pferdehirt
174%
111 TechnipFMC
U.K. Annual Report and Accounts
Determination of 2022 Annual Cash Incentive Payout for the Chair and CEO
The Chair and CEO’s 2022 annual cash incentive payout was calculated to be $2,077,407 based on the following table:
Chair and CEO
Target Bonus
(% of Salary)
BPI Rating
(75%
Weight)
API Rating
(25%
Weight)
Overall
Weighted
Rating
Actual
Bonus (% of
salary)
Actual
Bonus ($)
Douglas J. Pferdehirt
135%
108%
174%
125%
168%
$2,077,407
Long-Term Equity Incentives (Audited Information)
Long-term equity incentive awards, granted in the form of TechnipFMC equity, represent the largest component of
the Chair and CEO’s annual target compensation opportunity, grounded in our compensation philosophy of paying for
performance and aligning our Chair and CEO’s 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.
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.
Long-Term Equity Mix
RSUs
30%
ROIC
50%
Relative TSR
50%
PSUs
70%
Awards vests based on relative
TSR and ROIC performance
measured over three years.
The Compensation and Talent Committee reviews and approves equity awards for our Chair 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 2022, the Compensation and Talent Committee set the target value of equity awards for our Chair and CEO reference
to market median total compensation data.
Chair and CEO
2021 Long-Term Incentive Target Award
2022 Long-Term Incentive Target Award
Douglas J. Pferdehirt
9,700,000
9,700,000
112 TechnipFMC
U.K. Annual Report and Accounts 2022 Performance Stock Unit Awards (70% of Equity Award) –
Conditional Share Awards – (Audited Information)
The Compensation and Talent Committee sets the performance targets associated with PSU awards prior to the beginning
of each three-year performance period. For awards in 2022, PSU awards comprised 70% of the total long-term equity
award and payout will be based on relative TSR performance and ROIC for the three-year period of 2022-2024.
We believe that these are meaningful measures of our long-term performance and motivate our Executive Directors 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.
PSU Measure
Weighting
Definition
Why It Matters
Relative TSR
50% of PSU
award
ROIC
50% of PSU
award
Relative TSR: Cumulative
three-year increase in
volume-weighted average
price and dividends
relative to peers
Assesses our overall performance in the
eyes of our shareholders and the broader
stock market, relative to companies
with which we compete for customers
and investors that are subject to similar
macroeconomic factors
Three-year average net
operating profit after tax
divided by a three-year
average invested capital.
Assesses our profitability and how
effectively we use capital over the three-
year period to generate income.
The relative TSR performance for our 2022 PSU awards will be measured against a group of ten companies (collectively,
“Relative TSR Peer Group,” and each a “TSR Peer”) that the Compensation and Talent 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 macroeconomic
factors.
2022 Relative TSR Peer Group
Baker Hughes
Nabors Industries Ltd.*
Transocean Ltd.*
Champion X Corp.*
National Oilwell Varco, Inc.
Oceaneering International, Inc.
Core Laboratories N.V.*
SLB
Halliburton Company
Subsea 7 S.A.
*New peers for 2022
In comparison to our prior Relative TSR Peer Group, the following companies were removed due to no longer being
comparable peers due to divestitures, business profile, or not having a comparable market cap: The Weir Group PLC, Aker
Solutions ASA, Oil States Intl., Inc., Forum Technologies, Inc
The vesting date for the 2022 PSU awards is March 8, 2025, with a performance period of January 1, 2022 through
December 31, 2024.
113 TechnipFMC
U.K. Annual Report and Accounts The Compensation and Talent Committee approved the following targets in relation to the 2022 PSU awards:
Relative TSR
The Relative TSR payout scale for the 2022-2024 PSU award is outlined below:
Performance Achievement
Relative TSR Performance
Below Threshold
Threshold
Target
Below 25th percentile
25th percentile
50th 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.
ROIC
The 2022-2024 ROIC target was calculated based on a three-year average net operating profit after tax divided by a
three-year average invested capital. This will measure our profitability and how effectively the Company uses capital
over the three year performance period to generate financial returns. ROIC targets align with the Company’s long-term
plan at the time it was approved.
The results for the ROIC three-year period of 2022-2024 will be disclosed at the end of the performance period.
PSU Grant Detail
2021 PSU Grant
2022 PSU Grant2
Number of PSUs/ conditional share awards awarded
948,120
861,675
Share Price on Grant Date
$7.98
$7.88
Fair Value on the date of award1
$7,565,998
$6,789,999
Fair Value of award as a % salary
612%
549%
Face Value on the date of award at maximum performance1
$15,131,995
$13,579,998
Face Value of award at maximum performance as a % salary
1224%
1099%
(1) Calculated using the grant price, equal to the closing price on the New York Stock Exchange on the date of grant, April 1, 2021.
(2) Calculated using the grant price, equal to the closing price on the New York Stock Exchange on the date of grant, March 8, 2022.
2022 Time-Based RSU Awards (30% of Equity Award) –
Conditional Share Awards (Audited Information)
Time-based RSU awards further align our Chair 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.
114 TechnipFMC
U.K. Annual Report and Accounts RSUs are subject to three-year cliff vesting terms, with no phased vesting, meaning our Chair and CEO must remain
employed through the vesting date of March 1, 2024, with exceptions only for retirement, death, and disability. Once
vested, our Chair and CEO receives ownership and the voting rights of the underlying Ordinary Shares.
The number of RSUs granted to our Chair and CEO was determined by dividing the target value set for our Chair 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 Chair and
CEO to retain the shares and increase share price, further aligning our Chair and CEO’s interests with our shareholders.
RSU Grant Detail
Number of RSUs/ conditional share awards
Share Price on Grant Date
2021 RSU Grant1
2022 RSU Grant2
632,079
$7.98
369,289
$7.88
Face Value on the date of award1
$5,043,990
$2,909,997
Award as a % salary
408%
235%
(1) Calculated using the grant price, equal to the closing price on the New York Stock Exchange on the date of grant, April 1, 2021. Includes RSUs for
both 2021 annual grant and additional one-time grant.
(2) Calculated using the grant price, equal to the closing price on the New York Stock Exchange on the date of grant, March 8, 2022.
Statement of Directors’ Shareholding
and Share Interests
Share Ownership and Retention Requirements (Audited Information)
The Compensation and Talent Committee oversees the Company’s directors’ share ownership and retention policy to
ensure a continuing alignment of director and shareholder interests.
None of the Directors exercised stock options in 2022.
Share Ownership Requirement
Our Chair 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 Chair and CEO met his pro-rated share ownership requirement as of December 31, 2022.
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.
115 TechnipFMC
U.K. Annual Report and Accounts 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 2022.
The table below sets forth the beneficial interests in the share capital of the Company held by our Chair and CEO and his
connected persons for the period ending December 31, 2022:
Name
Share
Number
Outright
Vested but
and
Ownership
of Shares
(including
Unexercised
Unexercised
RSUs
Subject to
Number
of Shares
Owned
Unvested
Weighted
Average
Exercise
Price of
Vested
Weighted
Average
Period to
Requirements
Required to
Connected
(% of salary)
Hold1
Persons)
Stock
Options
Stock
RSUs
Performance
Options
Time Based
Conditions
Options
Vest of RSUs
Chair and
CEO
600%
608,368
890,547
970,547
0 2,332,011 1,809,795
$20.38
14.87
(1) Number of Shares Required to Hold is based on the share price as at December 31, 2022 of $12.19. An executive director has 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.
116 TechnipFMC
U.K. Annual Report and Accounts TSR Performance Graphs and Table for the Chair and CEO
The figure below indicates the Company’s TSR performance 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.
TechnipFMC Five-year Performance vs. OSX Index
$120
$100
$80
$60
$40
$20
$0
Jan 18
Jul 18
Jan 19
Jul 19
Jan 20
Jul 20
Jan 21
Jul 21
Jan 22
Jul 22
Jan 23
TechnipFMC
OSX Index
Summary of Chair
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
2018
2019
2020
2021
2022
$5,437,504
$7,861,135
$6,282,074
$20,092,366
$6,493,597
65%
87%
50%
81%
62%
0%
25%
12.5%
50%
0%
(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”. Data shown is the data for Douglas Pferdehirt.
117 TechnipFMC
U.K. Annual Report and Accounts Percentage Change in Remuneration of the Chair and CEO, non-executive directors
and employees
The following table shows the percentage change in base salary, annual cash incentive, and benefits for our Chair and
CEO, non-executive directors, and for the average of all employees of the Company in the U.S. was as follows. The
Company considers that the remuneration of employees in the U.S. is an appropriate comparator against that of the Chair
and CEO, rather than of the whole Company, on the basis that the Chair and CEO’s remuneration tracks market practice
and the regulatory environment in the U.S. and U.K./Europe. TechnipFMC plc has a limited number of employees, and
comparison versus this group would not provide meaningful information.
2021 to 2022
2020 to 2021
2019 to 2020
Salary1
Bonus
Benefits2
Salary
Bonus
Benefits
Salary
Bonus
Benefits
0%
-23%
-28%
30%
62%
26%
-20%
-43%
-9%
1.5%
39.0%
7.7%
125%
129%
2.7%
20.5%
-11.1%
-11.5%
Douglas J.
Pferdehirt
Average US
Employee
Non-Executive Directors
Salary
Bonus
Benefits
Salary
Bonus
Benefits
Salary
Bonus
Benefits
Eleazar de
Carvalho Filho
Claire S. Farley
Peter Mellbye
John O’Leary
Margaret Øvrum
Kay G. Priestly
John Yearwood
Sophie Zurquiyah
Pascal Colombani
Marie-Ange Debon
Didier Houssin
Joseph Rinaldi
James M. Ringler
Arnaud Caudoux
0%
0%
0%
0%
0%
0%
0%
0%
-
-
-
-
-
-
N/A
-100%
30%
N/A
-87.7%
-20%
N/A
230%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-
-
-
-
-
-
0%
100.0%
-100%
589.0%
-83%
-100%
-65%
-
-
-
-
-
-
30%
30%
30%
30%
30%
30%
-
-
-
-
-
-
-
N/A
N/A
N/A
N/A
N/A
N/A
-
-
-
-
-
-
-
0%
-89%
-88%
0%
-31%
-85%
-
-
-
-
-
-
-
-20%
-20%
-20%
N/A
-20%
-20%
-
-2%
-17%
-22%
-20%
-16%
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
281%
230%
N/A
230%
N/A
-
230%
230%
230%
36%
69%
N/A
(1) For Non-Executive Directors, amount provided is annual cash retainer and meeting fees.
(2) Non-Executive Directors are not eligible for any taxable benefits other than U.K. tax preparation assistance – the cost of U.K. tax preparation
increased from an average cost of $804 for 2021 to an average cost of $1864 in 2022. In 2021, Mr. de Carvalho Filho had a taxable benefit total
of $445.84 while in 2022 he had $0. In 2021, Ms. Farley had a taxable benefit total of $0 while in 2022 she had $0. In 2021, Mr. Mellbye had a
taxable benefit total of $0 while in 2022 he had $493.37. In 2021, Mr. O’Leary had a taxable benefit total of $445.84 while in 2022 he had $0.
In 2021, Ms. Øvrum had a taxable benefit total of $875.47 while in 2022 she had $6,034.70. In 2021, Ms. Priestly had a taxable benefit total of
$2,522.66 while in 2022 she had $433.20. In 2021, Mr. Yearwood had a taxable benefit total of $283.81 while in 2022 he had $0. In 2021, Ms.
Zurquiyah had a taxable benefit total of $1,410.49 while in 2022 she had $493.37. Values were converted to USD using the 12/31/2022 exchange
rate.
118 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 Chair
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 benefits, 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)
P50
(Median)
P75
(Upper
Quartile)
2022
2021
2020
2019
Financial
year
C
C
C
C
CEO
118:1
335:1
113:1
133:1
98:1
271:1
89:1
115:1
71:1
200:1
64:1
80:1
26:1
24:1
21:1
24:1
22:1
19:1
16:1
22:1
17:1
16:1
12:1
15:1
U.K. Employees
P25
P50
P75
Base
Salary
Total
Remuneration
Base
Salary
Total
Remuneration
Base
Salary
Total
Remuneration
Base
Salary
Total
Remuneration
2022
$1,236,000
$6,493,597
$46,891
$55,095
$56,712
$66,304
$72,777
$91,836
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, 2022. 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 1,963 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 the three quartile employees,
and the methodology applied is the same as 2019. The current median ratio is representative of the Company’s pay
progression policies at the Company. The 2021 median ratio was an anomaly due to the one-time conversion of 2019
and 2020 outstanding equity awards that was done because of the Spin-off of Technip Energies.
Relative Importance of Spend on Pay
The table below sets out data for 2021 and 2022.
Relative spend information
2021
2022
% Change
Remuneration for All Global Employees
$1,344,223,620
$1,396,560,000
Distributions to Shareholders
-
-
3.75%
—%
119 TechnipFMC
U.K. Annual Report and Accounts Remuneration of Non-Executive Directors (Audited Information)
The following table presents the fees paid to the Company’s current and former non-executive directors for the year
ended 31 December 2022, pursuant to our Directors’ Remuneration Policy, which was approved at our 2018 annual
general meeting of shareholders. Our current Chair and CEO, Mr. Pferdehirt, is not included in the table below as he was
an employee during 2022 and did not receive any additional compensation for his service as a director.
Board of Director Members
Non-Executive Director
2022 ($000s)
2021 ($000s)
Base fees1
Additional
fees1
Stock
Awards2
Taxable
benefits3
Total
Base fees1
Additional
fees1
Stock
Awards2
Taxable
benefits3
Total
Eleazar de Carvalho Filho
100
10.0
175
0.0
285.0
100
8
175
0.4
283.4
Claire S. Farley
100
60.0
175
0.0
335.0
100
Peter Mellbye
100
17.5
175
0.5
293.0
100
John O’Leary
100
25.0
175
0.0
300.0
100
54
18
17
175
0.0
329.0
175
175
0.4
293.4
0.4
292.4
Margaret Øvrum
100
10.0
175
6.0
291.0
100
8
248
0.9
356.9
Kay G. Priestly
100
30.0
175
0.4
305.4
100
John Yearwood
100
20.0
175
0.0
295.0
100
28
15
175
2.5
305.5
175
0.3
290.3
Sophie Zurquiyah
100
10.0
175
0.5
285.5
75
5
175
1.4
256.4
(1) 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.
(2) Restricted stock unit grants were valued at $7.98 and $7.88 on April 1, 2021 and March 8, 2022 respectively, the closing price on the NYSE of the
Company’s Ordinary Shares on such date. 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 one to ten years from the grant date or (b) upon their separation from Board
service. The restricted stock units are forfeited if a director ceases service on the Board prior to the vesting date of the restricted stock units,
except in the event of death or disability. Unvested restricted stock units 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.
(3) Includes assistance for annual individual U.K. tax return provided by Deloitte. Total amount is based on utilization by the respective director in a
given tax year.
120 TechnipFMC
U.K. Annual Report and Accounts 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 2022, the number of our Ordinary Shares owned by each of our non-executive directors.
Non-Executive Director
Share
ownership
requirements
Number
of shares
required to
hold
Number of
shares owned
outright1
Interest in
shares
Total number
of shares held
Eleazar de Carvalho Filho
500,000
41,017
94,601
22,208
116,809
Claire S. Farley
500,000
41,017
124,905
22,208
147,113
Peter Mellbye
500,000
41,017
81,389
22,208
103,597
John O’Leary
500,000
41,017
83,996
22,208
106,204
Margaret Øvrum
500,000
16,407
31,067
22,208
53,275
Kay G. Priestly
500,000
41,017
79,557
22,208
101,765
John Yearwood
500,000
24,610
63,939
22,208
86,147
Sophie Zurquiyah
500,000
8,203
21,929
22,208
44,137
(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 2022, the number of Ordinary Shares subject to RSUs credited to each non-executive
director as part of the annual equity grant was 22,208. 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 one to ten 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.
All of our Directors met their pro-rated share ownership requirements as of December 31, 2022.
121 TechnipFMC
U.K. Annual Report and Accounts Application of the policy in 2023
Compensation for directors is recommended annually by the Compensation and Talent Committee with the assistance of
Fredrick W. Cook & Co., Inc. (“FW Cook”) and approved by the Board.
The Directors’ Remuneration will be implemented with effect from the 2023 Annual General Meeting (April 28, 2023) as
follows:
Salary and Benefits
Chair and CEO Base salary for 2023 is $1,328,720.
Benefits and Pension
No changes are being made.
Annual Bonus
The bonus opportunity and operation for 2023 will be in line with the Directors’ Remuneration Policy. The measures and
weightings for the year will be as follows:
BPI
Adjusted EBITDA as a Percentage of Revenue
Free Cash Flow Conversion
ESG Performance
API
Total
75%
25%
25%
25%
25%
100%
The 2023 BPI targets and min/max thresholds are commercially sensitive and will be disclosed in our 2023 U.K. Annual
Report.
122 TechnipFMC
U.K. Annual Report and Accounts 2023 Long-Term Equity Incentive Plan
Our annual 2023 Long-Term Equity grant (excluding any exceptional, one-time grants) is expected to be based on the
measures outlined in the table below.
Long-Term
Equity
Weighting
Vesting
Performance
Measure
Performance
Stock Units
70% of total long-
term equity
Three-year cliff
vesting
Relative TSR (50% of
PSU award)
ROIC (50% of PSU
award)
Performance is
measured over a
three-year period and
subject to three-year
cliff vesting
Restricted
Stock Units
30% of total long-
term equity
Three Year Ratable
vesting with 1/3
vesting each year.
N/A
Why It Matters
TSR assesses our
overall performance
in the eyes of our
shareholders and
the broader stock
market, relative to
companies with
which we compete
for customers and
investors that are
subject to similar
macroeconomic
factors
ROIC measures our
profitability as well
as our effective
utilization of capital
Further align our Chair
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
We believe that both ROIC and relative TSR closely align with value creation and is a meaningful measure of our long-
term performance and motivates our executives to generate returns and 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.
The relative TSR performance for our 2023 PSU awards will be measured against a Relative TSR Peer Group that the
Compensation and Talent Committee believes best reflects the companies that we compete with for both investments
and customers. For 2023 we intend to retain the same Relative TSR Peer Group as 2022. 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 2023 relative TSR peer group is outlined below:
123 TechnipFMC
U.K. Annual Report and Accounts 2023 Relative TSR Peer Group
Baker Hughes
Nabors Industries Ltd.
Transocean Ltd.
Champion X Corp.
National Oilwell Varco, Inc.
Oceaneering International, Inc.
Core Laboratories N.V.
SLB
Halliburton Company
Subsea 7 S.A.
Relative TSR Performance
The Relative TSR payout scale for the 2023-2025 PSU award is outlined below:
Performance Achievement
Relative TSR Performance
Below Threshold
Threshold
Target
Below 25th percentile
25th percentile
50th 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.
Return On Invested Capital
The 2023-2025 ROIC target was calculated based on a three-year average net operating profit after tax divided by a
three-year average invested capital. This will measure our profitability and how effectively the Company uses capital
over the three year performance period to generate financial returns. ROIC targets align with the Company’s long-term
plan at the time it was approved.
The results for the ROIC three-year period of 2023-2025 will be disclosed at the end of the performance period.
Non-Executive Director fees
For the year ending December 31, 2022, 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.
124 TechnipFMC
U.K. Annual Report and Accounts Compensation Element
Compensation 2022
Compensation 2023
% increase
Annual Retainer
$100,000 paid in cash.
$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 one to ten
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 31 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 one to ten
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 31 of the year prior to
grant.
Annual Chair Fee
$20,000 for Audit Committee
$20,000 for Audit Committee
$15,000 for Compensation and
Talent Committee
$15,000 for Compensation and
Talent Committee
$10,000 for Environmental, Social,
and Governance Committee
$10,000 for Environmental, Social,
and Governance Committee
$50,000
$50,000
Annual Lead
Independent Director
Fee
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%
Our Chair 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.
125 TechnipFMC
U.K. Annual Report and Accounts Activities of the Compensation
and Talent Committee in 2022
Our Compensation and Talent Committee comprising independent non-executive directors oversees our executive
director compensation program and determines the compensation for our Chair and CEO on behalf of the Board. The
Compensation and Talent 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, Chair and
CEO, and other officers, as applicable; and
` All awards of equity securities or equity derivatives to an executive director of the Company, in addition to other
officers, 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 and Talent 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 and Talent Committee’s charter may be viewed on our website at www.technipfmc.com under the
heading “About us > ESG.”
Under its charter, the Compensation and Talent 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 Chair and CEO does not discuss compensation matters with the
Compensation and Talent Committee’s consultant, except as needed to respond to questions from the consultant.
In late 2020, the Compensation and Talent Committee conducted a competitive search of leading compensation consulting
firms, including in-depth interviews with management and members of the Compensation and Talent Committee. As
an outcome of this search, the Committee engaged FW Cook as its executive compensation consultant effective March
2021. During 2022, FW Cook provided advice to the Compensation and Talent Committee on the prevalence and design
of executive compensation programs. In addition, FW Cook advised the Committee on 2022 director and executive
compensation matters, updates on executive compensation trends and applicable legislative and governance activity, and
on the Compensation Peer Group used to establish the market value of executive jobs and inform pay practices.
The Committee assesses FW Cook’s independence and objectivity by considering seven factors:
1. The provision of other services to TechnipFMC by FW Cook;
2. The amount of fees paid to FW Cook, as a percentage of FW Cook’s total revenue;
3. FW Cook’s policies and procedures that are designed to prevent conflicts of interest;
4. Any business or personal relationship of FW Cook (or the spouse of the compensation advisor) with the members of
our Board, the Compensation and Talent Committee, or our executive officers;
5. Any stock of TechnipFMC owned by FW Cook (or the compensation advisor’s immediate family members);
6. Any business or personal relationship of the compensation advisor (or the spouse of the compensation advisor) or
FW Cook (including any employee of FW Cook) with any individual who served as an executive officer of TechnipFMC
since December 31, 2022.
7. Other factors deemed relevant to the independence of FW Cook from TechnipFMC any Committee member of
TechnipFMC or any member of TechnipFMC’s management.
126 TechnipFMC
U.K. Annual Report and Accounts The Compensation and Organization Development Committee has considered and assessed all relevant factors, including
those required by the SEC, that could give rise to a potential conflict of interest and determined that FW Cook’s work
performed during 2022 did not raise any conflicts of interest.
FW Cook was paid approximately $226,412 in time and expense fees related to executive compensation services
provided in 2022. FW Cook provides no services to TechnipFMC or its management other than the services provided to
the Committee in its capacity as the Committee’s independent advisor on executive and Board of Directors compensation
matters. In accordance with its annual practice and pursuant to the SEC rules and NYSE listing standards, the Committee
annually reviews and considers the independence of FW Cook.
Compensation and Talent Committee Members
All members of the Compensation and Talent Committee are independent. The Compensation and Talent Committee met
four times in 2022 and all members attended each meeting. From January 1, 2022 to December 31, 2022, the members
of the Compensation and Talent Committee of the Board were Claire S. Farley, John O’Leary, and John Yearwood.
The Compensation and Talent Committee’s Activities during the
Year Ended December 31, 2022
Each year, the Compensation and Talent Committee approves an annual calendar which sets out the key activities in
accordance with its charter. The key activities of the committee in 2022 were as follows:
Q1
Q2–Q3
Q4
` Approve compensation decisions
and equity awards for directors
and officers
` Approve Company performance
achievements for prior year in
relation to annual short-term and
long-term incentive plans
` Review executive director
` Review internal governance
share ownership guidelines and
compliance
` Discuss shareholder engagement
outcomes and review annual
meeting vote results
` Determination of the
policies (e.g., claw-back, insider
trading policy, anti-hedging,
pledging) and compliance
` Approve equity programs, annual
equity budget for non-executives,
and impact on shareholder dilution
` Review and discuss executive
Compensation Peer Group
` Review of peer compensation
compensation strategy, structure,
and programs
` Approve annual compensation
disclosures in Company Proxy
statement and U.K. Annual Report
127 TechnipFMC
practices and executive
leadership compensation versus
Compensation Peer Group
` Provide feedback on potential
framework for annual and long-
term incentive plans for the
upcoming fiscal year
` Review the Company’s strategy
related to succession planning for
senior leadership roles
U.K. Annual Report and Accounts Statement of Voting at Annual Shareholders’ Meeting
At our 2022 Annual General Meeting, 56.2% of votes cast approved our 2021 Remuneration Report with 43.8% voting
against the report (percentages subject to rounding), and 150,290 votes (less than 0.1%) abstaining. At our 2021 Annual
General Meeting, our Remuneration Policy was approved by 69.8% of shareholders, with 30.2% of votes cast against
the policy and 425,039 votes abstaining. The Compensation and Talent Committee has carefully considered the results
of these votes as it completed its annual review of our compensation program, and has taken actions to respond to
the concerns of shareholders: we have included return on invested capital (“ROIC”), increased the rigor of the Relative
TSR payout scale in our 2022 Long-Term Incentive Plan, and confirmed that we do not intend to remove or change
performance conditions for future awards. 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 and
Talent Committee Chair.
We have continued our shareholder engagement program of soliciting feedback on our director compensation program
structure and decisions, and our Compensation and Talent Committee considers shareholder feedback as it evaluates and
reviews the compensation program each year.
On behalf of the Board
John O’Leary
Director and Compensation and Talent Committee Chair
March 17, 2023
128 TechnipFMC
U.K. Annual Report and Accounts Remuneration Policy
The Directors’ Remuneration Policy was approved at the 2021 Annual General Meeting on May 20, 2021 and took
effect from that date. There are no proposed changes to the policy, and therefore, no requirement for a shareholder
vote at the 2023 Annual General Meeting. The policy will continue to apply until the annual general meeting of
shareholders in 2024, or until an earlier vote is held.
The Directors’ Remuneration Policy (also referenced as the “Remuneration Policy”) is set out in this section for
reference only. The Remuneration Policy as approved in 2021 is set forth in our 2020 U.K. Annual Report and
Accounts, which is available on our website at www.technipfmc.com under “Investors > AGM materials.”
Decision Making Process for Remuneration
Our Compensation and Talent 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 and Talent Committee is responsible for, among other things, reviewing, evaluating, and approving
the agreements, plans, policies, and programs of the Company to compensate its Chair and CEO and its independent
directors. The Compensation and Talent 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 2021, the Compensation and Talent Committee retained FW Cook as its principal compensation consultant to provide
information and advice to the Compensation and Talent 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 Chair and CEO, the Compensation and Talent Committee
compares each element and combined total of the Chair and CEO’s compensation to data for relevant roles within the
Compensation Peer Group. In setting target compensation, the Compensation and Talent Committee also considers market
median data, as well as other factors including the experience, tenure, role criticality, and performance of the Chair and
CEO. The Compensation and Talent Committee, in partnership with its independent compensation consultant, determines
and approves any changes to compensation for the Chair and CEO, who is not present during these discussions. In
addition, any changes to the Chair 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.
129 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
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.
Operation
Normally reviewed annually or following a change in responsibilities with
changes usually taking effect from March 1.
The Compensation and Talent 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 and Talent 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.
Maximum payment
Performance assessment
Overall performance of the executive director is considered by the
Compensation and Talent Committee when setting salaries annually.
Provisions to recover sums paid
or the withholding of payments
Not applicable.
130 TechnipFMC
U.K. Annual Report and Accounts Pension and Other Retirement 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 Chair and CEO currently participates
in the Company’s U.S. Qualified Savings Plan (401k) 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 2022 financial year, the employer contributions to the U.S.
Qualified Savings Plan (401k) and non-qualified pension plan for the Chair and
CEO was $209,382.
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.
131 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 and Talent 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 and Talent 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 and Talent 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 2022 is currently set at 270% of base
salary for the Chair 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 and Talent 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 and Talent Committee by reference to the annual operating
plan and renewed throughout the year by the Compensation and Talent
Committee and the Environmental, Social, and Governance Committee.
` The Compensation and Talent 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.
132 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 2022, long-term award grants comprise:
` Performance Stock Units (“PSUs”): an award of shares subject to
performance conditions assessed over a period of three years; and
` Restricted Stock Units (“RSUs”): an award of shares that vest three 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 and Talent Committee at its discretion. A minimum of
50% will be performance based. However, it is the current intention of the
Compensation and Talent Committee for the weighting for the Chair and CEO
based on the fair value at the grant date to be, for 2022:
` 70% Performance Stock Units; and
` 30% Restricted Stock Units.
The Compensation and Talent 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 Chair and Chief Executive Officer will be $18 million per annum.
` PSUs pay out at 25% of target for achievement of threshold performance.
` The Compensation and Talent 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 below >
133 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 and Talent
Committee annually at its discretion prior to grant and will be set out in the
annual report on remuneration.
` The Compensation and Talent 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
134 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 and Talent 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 and Talent 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 and Talent 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 and Talent 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.
135 TechnipFMC
U.K. Annual Report and Accounts 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.
Non-Qualified Deferred Compensation
Our U.S.-based executives, including our Chair 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 (401k). 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 (401k). 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 (401k) 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
(401k). 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 and Talent Committee’s approach to recruitment remuneration is to pay no more than is necessary
to attract appropriate candidates to the role.
` The Compensation and Talent Committee will seek to structure pay for any new director in line with the remuneration
policy. The Compensation and Talent 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 and Talent
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 and Talent Committee at its
discretion.
` The Compensation and Talent 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.
136 TechnipFMC
U.K. Annual Report and Accounts Service Agreements
Our Chair and CEO and non-executive directors have not entered into service agreements. Our Chair 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
Provision (not definitive) *
Remuneration
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 are 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.
137 TechnipFMC
U.K. Annual Report and Accounts Illustrations of Application of Directors’
Remuneration Policy
The chart below illustrates the potential value of total remuneration that could be received by the Chair and CEO under
the 2021 Policy. The chart illustrates 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).
Performance
Fixed pay
Annual variable pay
Long-term variable pay
Threshold
performance /
Minimum pay-out
On-target /
“expected”
performance
Chair and CEO Base pay for
2022: $1,236,000
n/a
n/a
Chair and CEO taxable
benefits as per the single
figure of remuneration:
$60,811
Chair and CEO retirement
benefits as per the single
figure of remuneration:
$209,382
Chair and CEO face value of
restricted stock awards at
grant: $2,909,997
Fixed Pay (see above)
On-target bonus (100% of
target).
Performance Stock Units
at 100% of target.
For 2022: 135% of salary for
the Chair and CEO.
For 2022: face value
of $6,789,999 for the
Chair and CEO.
Maximum
performance
Fixed Pay (see above)
Maximum bonus (200% of
target).
Performance Stock Units
at 200% of target.
For 2022: 270% of salary for
the Chair and CEO.
For 2022: face value
of $13,579,998 for the
Chair and CEO.
138 TechnipFMC
U.K. Annual Report and Accounts Policy on Payment for Loss of Office
The Compensation and Talent 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 and Talent Committee will generally take into
account the circumstance of the loss of office and performance of the director.
The Compensation and Talent 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 Chair
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 Chair 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 FW Cook. 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 and Talent Committee and the
Compensation and Talent Committee retains the right to accelerate vesting for any outstanding share awards.
139 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 Chair 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 Chair 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 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 Chair 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 Chair 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 Chair 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
140 TechnipFMC
U.K. Annual Report and Accounts 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.
Future Policy Table for Non-Executive Directors
Directors Fees
Purpose and link to strategy
Operation and maximum
payment
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.
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 2022:
Compensation Element
Compensation
Annual Retainer
$100,000 paid in cash
Annual Equity Grant
$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 and Talent 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 five years)
The Compensation and Talent 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.
141 TechnipFMC
U.K. Annual Report and Accounts Directors Fees
Performance assessment
None, although overall performance of the non-executive directors is
considered by the Compensation and Talent 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 one to ten 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 31 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 subject to
annual re-election since 2019. No compensation payable if required to stand down.
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 and Talent Committee believes are necessary to reflect
the different levels of responsibility and market practices.
142 TechnipFMC
U.K. Annual Report and Accounts Statement of consideration of employment
conditions elsewhere in the Company
The Compensation and Talent Committee generally considers pay and employment conditions elsewhere in the Company
when considering the Chair and CEO’s remuneration. While the Compensation and Talent 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 and Talent 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 Chair 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 and Talent 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 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 and Talent Committee Chair, held meetings with proxy advisory firms and shareholders
representing approximately 18% of our Ordinary Shares outstanding.
At our 2022 Annual General Meeting, 56.2% of votes cast approved our 2021 Remuneration Report with 43.8% votes cast
voting against the report (percentages subject to rounding). This vote outcome prompted us to engage with shareholders
and proxy advisory firms to connect and specifically understand the reasons behind the voting results. For more
information on our 2022-2023 shareholder engagement, please see the “Letter from the Chair of the Compensation and
Talent Committee” above.
143 TechnipFMC
U.K. Annual Report and Accounts Changes in the Remuneration Policy
In seeking a renewal of the 2018 remuneration policy, the Compensation 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 Chair 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
did 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 Chair and CEO will be 60% performance based.
144 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 2022 and of the group’s loss and
the group’s cash flows for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted international accounting
standards as applied in accordance with the provisions 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, including 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: Consolidated and Company Statements of Financial Position as at 31 December 2022; Consolidated Statements
of Income, Consolidated Statements of Other Comprehensive Income, Consolidated Statements of Cash Flows,
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.
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 entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements.
Our audit approach
Overview
Audit scope
• We conducted full scope audits on 3 components and specified procedures, the audit of specified balances or the audit
of classes of transactions on a further 27 components. The scope of work at each component was determined by its
contribution to the group’s overall financial position and its risk profile.
145 TechnipFMC
U.K. Annual Report and Accounts • We engaged our network firms in Brazil, France, Norway, Singapore, UK and the US to perform the audit procedures as
they related to those components in their respective locations.
• The components where audit work was performed provided coverage of 57% of revenue at the transactional level.
Key audit matters
• Revenue recognition (group)
• Carrying value of investments in subsidiaries (parent)
Materiality
• Overall group materiality: USD 38m (2021: USD 40m) based on 0.6% of Revenue.
• Overall company materiality: USD 36m (2021: USD 37m) based on 1% of total assets subject to a capped allocation of
group materiality.
• Performance materiality: USD 28.5m (2021: USD 30m) (group) and USD 27m (2021: USD 28m) (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.
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.
Accounting for the separation of, and retained investment in, Technip Energies N.V., which was a key audit matter last
year, is no longer included because of the conclusion of the transaction during the prior year. Otherwise, the key audit
matters below are consistent with last year.
Key audit matter
Revenue recognition (group)
Revenue from products and services recognised over
time accounted for approximately 63% of group’s total
revenue for the year.
Contract revenue is recognised over the term of the
contract with reference to the percentage stage of
completion at each reporting date based on the cost-to-
cost method. 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 values greater than USD 75m) with
low margins (below 2%) and a percentage of
completion of less than 90%, where we determined that
there was a greater risk of manipulation, particularly in
relation to costs to complete. The risk identified is in
respect of the accuracy assertion.
Please refer to Note 1.5 Use of critical accounting
estimates, judgements and assumptions, Note 3
How our audit addressed the key audit matter
In auditing the group’s fixed price construction contracts, we
performed the following procedures:
- We tested key internal financial controls, including the
review and approval of life of project forecast costs and
revenues and project margin calculations;
- For a sample of contracts, we obtained the percentage of
completion calculations, agreed key contractual terms back
to signed contracts including the contract price, tested the
mathematical accuracy of the cost to complete calculations
and re-performed the calculation of revenue, profit
recognised in the year, and the contract assets and liabilities
based on the cost-to-cost percentage of completion method;
- 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
146 TechnipFMC
U.K. Annual Report and Accounts Segment information and Note 5 Revenue in the group
financial statements.
revenue and costs, and the existence of any claims or
litigation. For a sample of variation orders, we obtained the
signed contract amendments;
- For costs incurred to date, we tested a sample to
appropriate supporting documentation. To test the forecasted
costs to complete, we obtained the breakdown of forecasted
costs and tested elements of the forecasts by obtaining
executed purchase orders and agreements, comparing
estimated costs to other similar projects and challenging and
corroborating management’s judgements and assumptions to
appropriate supporting documentation. This included testing
vessel rates to underlying cost information and assessing the
appropriateness of vessel days by comparing to operational
shipping schedules and a sample of comparable completed
projects;
- We assessed the competency and objectivity of the project
engineers and performed comparative analysis tests to
assess the accuracy of forecasts in previous reporting
periods against actual expenditure; and
- 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.
Based on our procedures, we did not identify any material
issues.
In auditing the carrying value of investments in subsidiaries
we performed the following procedures:
- We considered external and internal sources of information
which could be indicative of impairment triggers including:
- Considered oil price movements, a key driver of the
performance of the sector and therefore the group;
- Compared the market capitalisation of the group at
31 December 2022 and post year end against the
carrying value of the investments;
- Considered recent analyst reports on the group; and
- Compared current year backlog and order intake to
prior years.
- We performed a look back test by comparing the 2022
actual performance against the 2021 budgeted performance;
- We also checked the consistency of Long Range Plan
information used in management’s trigger assessment to
other information obtained during our audit;
- We considered and challenged the impact of the group
reorganisation during 2022 and whether there was any
Carrying value of investments in subsidiaries (parent)
The total carrying value of investments presented within
the Company financial statements as at 31 December
2022 is USD 4,084.8m. In line with IAS 36,
management performed an exercise to evaluate the
existence of impairment triggers for each material
investment balance at the Company level.
We focused on this area given the significance of the
balance, the management judgements involved in
determining impairment triggers.
Please refer to Note 2.4 Use of critical accounting
estimates, judgments and assumptions and Note 3
Investments in subsidiaries in the Company financial
statements.
147 TechnipFMC
U.K. Annual Report and Accounts indication of an impairment trigger in either of the two
remaining material investment balances;
- We assessed management’s consideration of impairment
reversal; and
- We reviewed the disclosures provided in the financial
statements to ensure compliance with IAS 36.
As a result of our procedures, we concurred with
management’s assessment that no impairment triggers
existed in relation to the carrying value of investments in
subsidiaries at the year end and that no impairment reversal
was necessary. Based on our procedures, management's
disclosures are appropriate.
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.
The group financial statements are a consolidation of a large number of components which make up the group’s operating
businesses within the two business unit segments: Subsea 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 from other PwC network firms operating under our instruction.
The group’s components vary significantly in size and we identified three 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 maintained oversight over the work performed by the component
teams across the audit. We maintained regular communication and conducted formal interim and year-end conference calls
with all full and specified procedure component teams. We also visited the US and Norway component teams during the
year. Of the 30 components in scope, we considered three to be financially significant to the group: EWHG (USA), Technip
Brasil Engenharia Ltda (Brazil) and GKOS FTI Kongsberg (Norway). 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 57% of revenue at the transactional level.
As part of our planning procedures, utilising our knowledge of the group gained in previous audits, we reviewed
management’s climate change strategy, assessment of the risk and governance with regards to the potential impacts of
climate change. We formed our own view in concluding that climate risk is not considered to result in a significant audit risk
in the context of the group and Company audits for the current year.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the process management adopted to assess the
extent of the potential impact of climate risk on the Group’s financial statements and support the disclosures made within
the Strategic Report.
In addition to enquiries with management, we also read the governance processes in place to assess climate risk.
We challenged the completeness of management’s climate risk assessment by comparison with board minutes and
reading the Company's website and communications for details of climate related impacts, including whether the time
horizons management have used take account of all relevant aspects of climate change such as transition risks and
physical risks.
148 TechnipFMC
U.K. Annual Report and Accounts The key areas of the financial statements where management evaluated that climate risk has a potential impact are: the
going concern of the Company, the forecasted future cash flows generated by non-current assets and associated with
goodwill, the realisability of pensions assets, and the carrying value of the non-current assets.
We considered the following areas to potentially be impacted by climate risk and consequently we focused our audit work
in these areas: going concern and the carrying value of the fixed assets.
To respond to the audit risks identified in these areas we tailored our audit approach to address these, in particular, we
challenged management on how the impact of climate commitments made by the Group would impact the impairment
analyses; and challenged whether the impact of climate risk in the Directors’ assessments and disclosures of going
concern were consistent with management’s climate impact assessment.
Our procedures did not identify any material impact in the context of our audit of the financial statements as a whole, or our
key audit matters for the year ended.
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
USD 38m (2021: USD 40m).
0.6% of Revenue
We considered the following benchmarks for 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, as revenue is a key measure used by shareholders in
assessing the performance of the group.
Financial statements -
company
USD 36m (2021: USD 37m).
1% of total assets subject to
a capped allocation of group
materiality
If the materiality cap was not
applied, 1% of total assets
would result in an overall
materiality of USD 85.8m.
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 USD 325k and USD 37m. 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% (2021: 75%) of overall materiality, amounting to USD
28.5m (2021: USD 30m) for the group financial statements and USD 27m (2021: USD 28m) 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 at the upper end of our normal range
was appropriate.
149 TechnipFMC
U.K. Annual Report and Accounts We agreed with those charged with governance that we would report to them misstatements identified during our audit above
USD 3.8m (group audit) (2021: USD 4m) and USD 1.8m (company audit) (2021: USD 1.9m) 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 they are consistent with our existing knowledge and understanding of the business;
• Agreeing the forecasted cashflow position per management's going concern workings to approved forecasts;
• Reviewing the group's severe but plausible downside scenario, evaluating the assumptions used, and verifying that the
group is able to maintain liquidity within the going concern period under this scenario;
• Obtaining and understanding the terms and conditions of the group's financing facilities including financial covenants and
opening liquidity position, as well as the group's ability to access cash balances in international locations;
• Testing the model for mathematical accuracy; and
• Assessing the adequacy of the disclosure provided in Note 1.2 of the Group financial statements and Note 2.1 of the
Company 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.
150 TechnipFMC
U.K. Annual Report and Accounts 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 2022 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 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, 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 anti-bribery and corruption legislation, 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 financial statements such as Companies Act 2006 and relevant tax legislation. 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 unusual journal entry combinations and assumptions and judgements
made by management in their significant accounting estimates, in particular in relation to the accounting for contracts which
recognise revenue under the over-time recognition method. 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;
151 TechnipFMC
U.K. Annual Report and Accounts • Challenging assumptions and judgements made by management in their significant accounting estimates, in particular
in relation to the accounting for contracts which recognise revenue under the over-time recognition method;
•
Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations; and
• Understanding and assessing management's ongoing processes for investigating and concluding on any whistleblowing
allegations and understanding the status of investigations conducted by regulatory authorities.
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.
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.
Bruce Collins (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Aberdeen
17 March 2023
152 TechnipFMC
U.K. Annual Report and Accounts CONSOLIDATED FINANCIAL STATEMENTS
TECHNIPFMC PLC
FOR THE YEAR ENDED DECEMBER 31, 2022
Company No. 09909709
153 TechnipFMC
U.K. Annual Report and Accounts 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
Total costs and expenses
Other income (expense), net
Foreign exchange gain (loss), net
Income from associates
Income (loss) from investment in Technip Energies
Income before net interest expense and income taxes
Financial income
Financial expense
Loss on early extinguishment of debt
Income (loss) before income taxes
Provision for income taxes
Net loss from continuing operations
Profit (loss) from discontinued operations
Net profit (loss)
(Profit) loss from continuing operations attributable to non-controlling interests
Less: Profit from discontinued operations attributable to non-controlling interests
Profit from discontinued operations attributable to TechnipFMC plc
Net income (loss) attributable to TechnipFMC plc
Earnings (loss) per share from continuing operations attributable to TechnipFMC plc
8
Basic and diluted
Earnings (loss) per share from discontinued operations attributable to TechnipFMC
plc
Basic and diluted
Total earnings (loss) per share attributable to TechnipFMC plc
Basic and diluted
Weighted average shares outstanding
Basic and diluted
The accompanying notes are an integral part of the consolidated financial statements.
154 TechnipFMC
Year Ended December 31,
2022
2021
Note
5
6
22
6
9
33
6
6
7
33
$
3,634.5 $
2,868.4
222.8
6,725.7
3,011.7
2,594.3
170.0
620.3
67.0
1.1
3,442.9
2,808.4
162.0
6,413.3
3,052.8
2,360.3
129.4
647.0
79.0
66.7
6,464.4
6,335.2
21.8
(68.8)
44.6
(27.7)
231.2
19.3
(179.9)
(29.8)
40.8
125.7
(84.9)
(26.4)
(111.3)
(25.4)
—
—
(136.7)
(0.4)
6.8
0.6
8.5
93.6
19.0
(207.1)
(61.9)
(156.4)
81.6
(238.0)
605.2
367.2
0.8
(1.9)
(1.9)
366.1
$
$
$
(0.25) $
(0.53)
(0.06) $
1.34
(0.30) $
0.81
449.5
450.5
U.K. Annual Report and Accounts CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME
(In millions)
Net income (loss) attributable to TechnipFMC plc
(Profit) loss from continuing operations attributable to non-controlling interests
Less: Profit from discontinued operations attributable to non-controlling interests
Net profit (loss) attributable to TechnipFMC plc, including non-controlling interest
Exchange differences on translating entities operating in foreign currency
Cash flow hedging
Income tax effect
Other comprehensive income (loss) to be reclassified to statement of income in
subsequent years, net of tax
Actuarial gains on defined benefit plans
Income tax effect
Other comprehensive income not being reclassified to statement of income in
subsequent years, net of tax
Reclassification of other comprehensive income to income statement upon spin-off of
Technip Energies (Note 33)
Other comprehensive income, net of tax
Comprehensive income (loss), net of tax
Comprehensive (income) loss attributable to non-controlling interest
Year Ended December 31,
2022
2021
$
(136.7) $
(25.4)
—
(111.3)
(26.6)
8.2
(8.0)
(26.4)
45.5
(7.6)
37.9
—
11.5
(99.8)
(21.3)
366.1
0.8
(1.9)
367.2
32.7
(63.5)
9.5
(21.3)
151.3
(19.6)
131.7
166.9
277.3
644.5
0.5
645.0
Comprehensive income (loss) attributable to TechnipFMC plc
$
(121.1) $
Comprehensive income (loss) attributable to:
(In millions)
TechnipFMC plc
Continuing operations
Discontinued operations
Comprehensive income (loss) attributable to TechnipFMC plc
Non-controlling interest
Continuing operations
Discontinued operations
Comprehensive (income) loss attributable to non-controlling interest
Comprehensive income (loss), net of tax
Year Ended December 31,
2022
2021
(94.7) $
(26.4)
(121.1) $
(125.2)
770.2
645.0
(21.3) $
—
(21.3)
(1.9)
2.4
0.5
(99.8) $
644.5
$
$
$
$
The accompanying notes are an integral part of the consolidated financial statements.
155 TechnipFMC
U.K. Annual Report and Accounts CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In millions, except par value data)
Assets
Investments in associates
Property, plant and equipment, net
Right-of-use assets
Goodwill
Intangible assets, net
Deferred tax assets
Derivative financial instruments
Defined benefit asset, less current portion
Other assets
Total non-current assets
Cash and cash equivalents
Trade receivables, net of loss allowance of $31.5 in 2022 and $29.0 in 2021
Contract assets
Inventories
Derivative financial instruments
Income taxes receivable
Advances paid to suppliers
Asset held for sale
Other current assets
Investment in Technip Energies
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 tax liabilities
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 including warranty provisions of $74.2 and $86.2 for 2022 and 2021
Total current liabilities
Total liabilities
Total equity and liabilities
Note
December 31,
2022
2021
9
10
4
11
11
7
27
20
12
13
14
5
15
27
7
16
33
$
325.0 $
2,399.1
733.2
140.9
716.0
46.1
7.2
48.9
126.2
4,542.6
1,057.1
968.5
984.1
1,053.1
282.7
150.5
80.8
18.5
450.9
—
5,046.2
$
9,588.8 $
17
$
442.2 $
17
17
19
4
7
20
27
21
23
19
4
24
5
27
7
21
23
3,643.0
(793.7)
3,291.5
36.5
3,328.0
999.3
685.8
96.3
110.1
3.6
6.1
77.9
1,979.1
418.8
186.7
1,282.0
1,155.6
175.6
346.6
120.5
210.1
385.8
4,281.7
6,260.8
292.4
2,636.6
649.1
140.9
813.7
43.1
10.5
57.8
131.4
4,775.5
1,327.4
1,013.7
967.7
1,046.8
110.3
106.1
79.4
4.9
422.4
317.3
5,396.0
10,171.5
450.7
3,859.8
(839.6)
3,470.9
15.7
3,486.6
1,778.5
646.6
91.9
165.3
15.6
17.3
82.3
2,797.5
277.9
126.2
1,293.6
988.9
194.1
161.0
137.8
277.5
430.4
3,887.4
6,684.9
$
9,588.8 $
10,171.5
The accompanying notes are an integral part of the consolidated financial statements.
156 TechnipFMC
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
March 17, 2023
157 TechnipFMC
U.K. Annual Report and Accounts
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Cash provided by operating activities
Net income (loss)
Less: Net (income) loss from discontinued operations
Adjustments to reconcile net profit (loss) to cash provided by operating activities
Depreciation
Amortization
Impairments
Employee benefit plan and share-based compensation costs
Deferred income tax benefit, net
(Income) loss from investment in Technip Energies
Unrealized loss on derivative instruments and foreign exchange
Income from equity affiliates, net of dividends received
Loss on early extinguishment of debt
Payments for debt issuance cost(1)
Financial income classified as investing cash flows(2)
Other(1)
Changes in operating assets and liabilities, net of effects of acquisitions
Trade receivables, net and contract assets
Inventories, net
Accounts payable, trade
Contract liabilities
Income taxes payable, net
Other assets and liabilities, net
Cash provided by operating activities from continuing operations
Cash provided by operating activities from discontinued operations
Cash provided by operating activities
Cash provided (required) by investing activities
Capital expenditures(3)
Payment to acquire debt securities
Proceeds from sale of debt securities
Acquisitions, net of cash acquired
Proceeds from sale of assets
Proceeds from sale of investment in Technip Energies (FVTPL)
Proceeds from repayment of advances to joint venture
Financial income(2)
Other
Cash provided (required) by investing activities from continuing operations
Cash required by investing activities from discontinued operations
Cash provided (required) by investing activities
Cash required by financing activities
Proceeds from issuance of short-term debt
Repayments of short-term debt
Cash settlement for derivative hedging debt
Proceeds from issuance of commercial paper
Repayments of commercial paper
Proceeds from issuance of long-term debt
Repayments of long-term debt(1)
Share repurchases
Payments for the principal portion of lease liabilities
Acquisition of non-controlling interest
Other
Cash required by financing activities from continuing operations
Cash required by financing activities from discontinued operations
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
158 TechnipFMC
Year Ended December 31,
Note
2022
2021
$
(111.3) $
26.4
4, 10
11
10, 11, 22
19
19
19
19
19
19
17
4
2
13
13
$
439.8
92.0
4.7
56.6
(8.9)
27.7
87.9
(31.9)
29.8
—
(19.3)
(47.6)
(61.2)
(33.5)
50.6
187.7
(55.6)
(190.2)
443.7
—
443.7
(163.4)
—
9.7
(18.5)
30.2
288.5
12.5
19.3
(20.8)
157.5
—
157.5
16.8
(217.2)
(80.5)
—
—
60.9
(430.2)
(100.2)
(128.3)
—
(4.9)
(883.6)
—
(883.6)
12.1
(270.3)
1,327.4
1,057.1 $
367.2
(605.2)
442.4
94.1
49.1
148.4
(123.9)
(8.5)
23.7
(0.6)
61.9
(60.4)
(19.0)
(30.3)
(74.6)
195.8
89.2
9.6
233.9
(65.4)
727.4
83.6
811.0
(247.9)
(29.1)
27.4
(15.3)
104.6
116.4
25.0
19.0
—
0.1
(2,758.6)
(2,758.5)
—
(62.0)
—
1,348.8
(2,323.1)
1,215.6
(1,432.7)
—
(135.3)
(48.6)
(2.4)
(1,439.7)
(79.1)
(1,518.8)
(14.0)
(3,480.3)
4,807.7
1,327.4
U.K. Annual Report and Accounts
(1) The December 31, 2021 balances for debt issuance cost of $60.4 million and cash premium paid of $29.5 million have been
reclassified from financing activities to operating activities, consistent with the classification of interest payments.
(2) The December 31, 2021 balance of financial income of $19.0 million has been reclassified from operating activities to investing
activities.
(3) The December 31, 2021 acquisition of assets of $51.2 million has been aggregated with capital expenditures.
The following items are included within operating activities:
(In millions)
Supplemental disclosures of cash flow information attributable to continuing operations
Cash paid for interest on debt
Cash paid for interest on lease
Cash paid for income taxes (net of refunds received)
Year Ended December 31,
2022
2021
$
$
$
110.6 $
42.7 $
189.2 $
104.8
41.2
25.1
The following table provides non-cash investing and financing activities:
(In millions)
Dividend Distribution of shares in Technip Energies N.V. due to Spin-off
Year Ended December 31,
2022
2021
—
1,383.5
The accompanying notes are an integral part of the consolidated financial statements.
159 TechnipFMC
U.K. Annual Report and Accounts CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In millions)
Retained
Earnings, Net
Income and
Other
Reserves
Accumulated
Other
Comprehensive
Income (Loss)
Ordinary
Shares
Non-
controlling
Interest
Total
Shareholders’
Equity
Balance as of December 31, 2020
$
449.5 $
4,847.8 $
(1,154.1) $
103.8 $
4,247.0
Net income
Other comprehensive income
Issuance of ordinary shares (Note 17)
Share-based compensation (Note 18)
Acquisition of non-controlling interest
Accrued distributions to non-controlling interest
Spin-off of Technip Energies
Other
—
—
1.2
—
—
—
—
—
366.1
—
—
26.8
43.8
—
(1,420.6)
(4.1)
—
110.3
—
—
—
—
204.2
—
1.1
(1.6)
—
—
(43.8)
(15.0)
(21.8)
(7.0)
367.2
108.7
1.2
26.8
—
(15.0)
(1,238.2)
(11.1)
Balance as of December 31, 2021
$
450.7 $
3,859.8 $
(839.6) $
15.7 $
3,486.6
Net income (loss)
Other comprehensive income (loss)
Issuance of ordinary shares (Note 17)
Share-based compensation (Note 18)
Shares repurchased and cancelled
Other (a)
—
—
1.6
—
(10.1)
—
(136.7)
—
(1.5)
40.5
(90.1)
(29.0)
—
11.5
—
—
—
25.4
(4.1)
—
—
—
34.4
(0.5)
(111.3)
7.4
0.1
40.5
(100.2)
4.9
Balance as of December 31, 2022
$
442.2 $
3,643.0 $
(793.7) $
36.5 $
3,328.0
(a) Other in Accumulated Other Comprehensive Income (Loss) and Retained Earnings, Net Income, and
Other Reserves includes a $34.4 million adjustment due to discontinuance of cash flow hedge accounting.
Refer to Note 27.
The accompanying notes are an integral part of the consolidated financial statements.
160 TechnipFMC
U.K. Annual Report and Accounts 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 and Surface Technologies.
We have manufacturing operations worldwide, strategically located to facilitate delivery of our products,
systems and services to our customers.
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”), trading under the “FTI” symbol. The address of the
registered office is Hadrian House, Wincomblee Road, Newcastle upon Tyne, England, NE63PL. On
February 18, 2022, following a comprehensive review of the strategic objectives, we voluntarily delisted
TechnipFMC’s shares from Euronext Paris.
1.1. Basis of preparation
The consolidated financial statements of TechnipFMC (the "consolidated financial statements") were
prepared in accordance with U.K.-adopted International Accounting Standards in conformity with the
requirements of the Companies Act 2006 (the "Companies Act").
The consolidated financial statements are expressed in millions of U.S. dollars and all values are rounded
to the nearest hundred 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.
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.
We are committed to a strong balance sheet and ample liquidity that will enable us to access capital
markets throughout the cycle. We believe our liquidity continues to exceed the level required to achieve
this goal.
During the preparation of these financial statements, we reviewed our expected requirements through
December 31, 2024 and are confident that we will be able to maintain sufficient liquidity, adequate
financial resources and financial flexibility in order to fund the requirements of our business. As at
December 31, 2022, the Company was in a net current asset position of $764.5 million, with available
undrawn facilities of $1.0 billion. Our Revolving Credit Facility will expire as of February 15, 2024. We
are currently in the process of amending and extending this agreement for another 5 years. We have not
placed reliance on this facility in our going concern assessment or plausible downside scenarios. Based
on current market conditions and our future expectations, our capital expenditures are estimated to be
approximately $250.0 million and $300.0 million for 2023 and 2024, respectively. We have excluded
any projected contingent capital amounts that may be needed to respond to contract awards, as these
can be amended as required. We do however believe there to be sufficient financing available within the
business to meet these needs. Given that we have a strong and committed balance sheet and ample
liquidity, we are also in a position to access additional capital markets.
As part of our assessment of going concern we have modelled our projected cash flows under severe but
plausible downside scenarios, including applying a reduction to the 2023 forecasted margins compared
with 2022 actuals, similar to the reductions experienced during the COVID pandemic in 2020, and
assuming no growth in 2024 from the reduced 2023 forecast. Under all the scenarios which we have
161 TechnipFMC
U.K. Annual Report and Accounts modelled, after taking mitigating actions as required, our forecasts did not indicate a liquidity deficit
within the going concern period of review, on any of the future dates through to December 31, 2024.
We also continue to actively monitor the current economic environment, including inflation and rising
interest rates and the market volatility caused by the current geopolitical situation in Ukraine. While the
current economic conditions continue to create uncertainty, we are confident of our access to sufficient
liquidity in the projected period under severe but plausible downside scenarios.
The majority 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 liquidity needs
of our global operations in those jurisdictions. We expect to meet the continuing funding requirements of
our global operations with cash generated by such operations.
Following the above going concern assessment, we concluded 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, we continue to adopt the going concern basis in preparing the consolidated financial statements.
1.3. Changes in accounting policies and disclosures
a. Standards, amendments and interpretations effective in 2022
The Company has applied the amendments to IFRS 3, IAS 16, and IAS 37 for the first time in its
consolidated financial statements for the year ended December 31, 2022. These amendments did not
have any impact on the Company's accounting policies and did not require retrospective adjustments.
The decision made by the IFRS IC in April 2021 on the treatment of cloud computing has no material
impact.
There are no other new or amended standards or interpretations adopted during the year that have a
significant impact on the consolidated financial statements.
b. Standards, amendments and interpretations to existing standards that are issued, not yet effective
and have not been early adopted as of December 31, 2022
Certain new accounting standards and interpretations have been published that are not mandatory for
December 31, 2022 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. There are no other standards,
amendments or interpretations in issue but not yet adopted that are expected to have a material impact
on the consolidated financial statements
Amendments to IAS 1 "Presentation of financial statements" on disclosure of material accounting policy
information
The IASB has amended IAS 1 to require entities to disclose their material rather than their significant
accounting policies. The amendments define what is ‘material accounting policy information’ and explain
how to identify when accounting policy information is material. They further clarify that immaterial
accounting policy information does not need to be disclosed. If it is disclosed, it should not obscure
material accounting information. The new amendments are effective on or after January 1, 2023 but can
be adopted early. We do not expect that the adoption of the amendment will have a significant impact on
the consolidated financial statements.
Amendments to IFRS 17 "Insurance Contracts"
IFRS 17 provides a new general model for accounting for contracts where the issuer accepts significant
insurance risk from another party and agrees to compensate that party if a future uncertain event
adversely affects them, this includes financial guarantees and warranties. The new amendments are
effective on or after January 1, 2023. We do not expect that the adoption of the amendment will have a
significant impact.
Definition of Accounting Estimates – Amendments to IAS 8
The amendments clarify how companies should distinguish changes in accounting policies from changes
in accounting estimates. That distinction is important because changes in accounting estimates are
applied prospectively only to future transactions and other future events, but changes in accounting
policies are generally also applied retrospectively to past transactions and other past events. The new
amendments will be effective for annual periods beginning on or after January 1, 2023 subject to
162 TechnipFMC
U.K. Annual Report and Accounts
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.
Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction
The IASB issued targeted amendments to International Accounting Standard (IAS) 12, Income Taxes, the
IFRS Standard on income taxes, to specify how companies should account for deferred tax on
transactions such as leases and decommissioning obligations.
IAS 12 establishes requirements on how a company accounts for income tax, including deferred tax,
which represents tax payable or recoverable in the future. In certain circumstances, companies are
exempt from recognizing deferred tax when they recognize assets or liabilities for the first time.
The amendments clarify that the exemption does not apply, and that companies are required to
recognize deferred tax on such transactions. We have evaluated the impact of these amendments and do
not expect that the adoption of these amendments will have a significant impact on our consolidated
financial statements.
The amendments are effective for annual reporting periods beginning on or after January 1, 2023, with
early application permitted.
Amendments to IAS 1 "Presentation of financial statements" on classification of liabilities as current or non-
current
These narrow-scope amendments to IAS 1 aim to improve the information provided when a right to defer
settlement of a liability is subject to compliance with covenants within twelve months after the reporting
period. The new amendments are effective on or after January 1, 2024 and override previous
amendments. 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 the
classification of current or non-current liabilities in our consolidated financial statements.
1.4. Summary of significant accounting policies
a) Consolidation principles and joint arrangements
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.
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.
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%.
Using the equity method, the investment in an associate or a joint venture is initially recognized at cost.
The carrying amount is then adjusted to reflect changes in TechnipFMC’s share of net assets of the
associate or joint venture since the date of acquisition. Any goodwill relating to the associate or joint
venture is included in the carrying amount of the investment; no separate test for impairment is
performed thereon.
163 TechnipFMC
U.K. Annual Report and Accounts
TechnipFMC recognizes its share of the results of operations of the associate or joint venture in profit or
loss. Any change in OCI of those entities are reflected in TechnipFMC’s OCI. Changes recorded directly in
the equity of the associate or joint venture, when applicable, are recognized in TechnipFMC’s statement
of changes in equity to the extent of its share therein. Unrealized gains and losses resulting from
transactions between TechnipFMC and its associate or joint venture are eliminated to the extent of the
interest in the associate or joint venture.
The financial statements of the associate or joint venture are prepared for the same reporting period as
the group. When necessary, adjustments are made to bring the accounting policies in line with those of
the group.
After the equity method has been applied, TechnipFMC assesses whether there are any indicators, and if
that is the case is it necessary to recognize any impairment loss on its investment in its associate or joint
venture. Upon objective evidence that the investment in the associate or joint venture is impaired,
TechnipFMC calculates the amount of impairment as the difference between the recoverable amount of
the associate or joint venture and their carrying value. Any impairment loss is recognized as a loss from
equity affiliates or, if applicable, as net loss from discontinued operations in the consolidated income
statement.
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, 2022 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.
All intercompany balances and transactions, as well as internal income and expenses, are fully
eliminated.
If TechnipFMC loses control of a subsidiary, the related assets (including goodwill), liabilities, non-
controlling interest and other components of equity are derecognized, with any gains or losses
recognized in profit or loss. Retained investment is recognized at fair value, with revaluation gain also
recognized in profit or loss.
Upon loss of significant influence over an associate or joint control over a joint venture, TechnipFMC
remeasures any retained investment to its fair value. Differences between the carrying amount of the
associate or joint venture at the date of loss of significant influence or joint control and the fair value of
the retained investment, as well as proceeds from disposal is recognized in profit or loss as income from
equity affiliates or, if applicable, as net profit from discontinued operations.
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 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
164 TechnipFMC
U.K. Annual Report and Accounts
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. Additionally, we may agree on variations or on claims with
a customer that may increase or decrease contract revenue in a period subsequent to which the contract
was initially signed. We record such variation orders only when they are legally enforceable.
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. We
recognize revenue over time on contracts where the customer simultaneously receives and consumes the
benefit, our performance creates an asset that the customer controls as the asset is created, or where our
performance does not create an asset with an alternative use, and we have an enforceable right to
payment plus a reasonable profit for performance completed to date. Revenue from products and
services transferred to customers over time accounted for approximately 63% of our revenue for the
year ended December 31, 2022. 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
165 TechnipFMC
U.K. Annual Report and Accounts 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.
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 the profit and loss statement, with no impact on goodwill.
e) 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. We now operate under two reportable segments: Subsea and Surface
Technologies.
TechnipFMC’s reportable segments are:
•
•
Subsea - designs and manufactures 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; 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.
166 TechnipFMC
U.K. Annual Report and Accounts In the comparative financial statement information, TechnipFMC completed the separation of Technip
Energies segment (which designed and built onshore facilities related to the production, treatment and
transportation of oil and gas; and designed, manufactured and installed fixed and floating platforms for
the production and processing of oil and gas reserves for companies in the oil and gas industry) on
February 16, 2021 via a spin-off transaction (see Note 33).
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 of 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 mostly on the basis of the following
countries:
•
•
•
•
•
•
United States;
Brazil;
Norway;
United Kingdom;
Guyana; 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.
f)
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.
Shares repurchased pursuant to our shares repurchase program are immediately cancelled and therefore
excluded from the calculation of the average number of shares outstanding.
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.
g) 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.
167 TechnipFMC
U.K. Annual Report and Accounts
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.
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 CGU is judgmental in nature
and involves the use of estimates and assumptions. TechnipFMC estimates the value in use 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 value in use 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.
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.
The GCGU valuation was determined by utilizing the income approach.
See Note 11 for further details.
h) 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.
168 TechnipFMC
U.K. Annual Report and Accounts 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 and 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, the following:
•
•
•
•
•
•
A significant decrease in the market value of property, plant and equipment;
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.
An assessment is made at each reporting date as to whether there is any indication that previously
recognized impairment losses may no longer exist or may have decreased. If such an indication exists,
the recoverable amount is estimated. A previously recognized impairment loss is reversed only if there
has been a change in the estimates used to determine the asset's recoverable amount since the last
impairment loss was recognized. If that is the case, the carrying amount of the asset is increased to the
lower of its recoverable amount and the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognized for the asset in prior years. Impairment reversals
are recognized in profit or loss.
169 TechnipFMC
U.K. Annual Report and Accounts
i)
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 or, the
useful life of the asset, whichever is shorter. 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. Right-of-use assets are assessed for impairment in line with the
accounting policy for impairment of property, plant and equipment.
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. Renewal options are only
included when it is considered reasonably certain that an option to extend a lease will be exercised.
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.
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. Leases of low-value assets are
not recorded on the statement of financial position and the lease expense is recognized on a straight-line
basis.
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
170 TechnipFMC
U.K. Annual Report and Accounts remaining economic life. Income from operating leases is recognized on a straight-line basis over the
term of the relevant lease. 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.
j)
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.
k)
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.
171 TechnipFMC
U.K. Annual Report and Accounts
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, increased operating costs as a result of
inflation, 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.
During the review for impairment, we considered whether climate change indicated the carrying amount
of non-financial assets may not be recoverable. In relation to vessels, we have conducted an evaluation
on the efforts needed to reduce Scope 1 emissions from fuel consumption and identified initiatives such
as the upgrade of vessels and use of alternative fuel, in alignment with commercial and regulatory
analysis. For all other property, plant and equipment, given the expected continued investment globally
in the oil and gas sector over the near to medium term, the relatively short period over which these
assets are depreciated and the adaptability of services that can be provided, we do not consider climate
change to be a specific indicator of impairment. The impact of changes to fuel sources has been assessed
and we do not consider this be an indicator of impairment. See Note 10 for further details.
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.
Non-financial assets other than goodwill with an accumulated impairment loss are reviewed for possible
reversal of the impairment at the end of each reporting period. If there is such indication, TechnipFMC
estimates the asset’s or CGU’s recoverable amount as described above. A previously recognized
impairment is reversed only if there has been a change in the assumptions used to determine the asset’s
recoverable amount since the last impairment loss was recognized. The reversal is recognized in the
statement of profit or loss and is limited to the extent that the revised carrying amount of the asset or
CGU does not exceed the carrying amount (net of depreciation) that would be applicable without
impairment loss recognized in prior years.
l)
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).
172 TechnipFMC
U.K. Annual Report and Accounts
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.
m) 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 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.
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).
173 TechnipFMC
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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 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. 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, an ECL is applied
over the remaining life of the exposure (lifetime ECL).
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.
Impairment of trade receivables and contract assets
For trade receivables and contract assets TechnipFMC applies the IFRS 9 simplified approach to
measuring expected credit losses which uses a lifetime expected loss allowance. 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.
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.
174 TechnipFMC
U.K. Annual Report and Accounts 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 significantly 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.
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.
n) 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.
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.
175 TechnipFMC
U.K. Annual Report and Accounts 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.
o) 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.
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
Hedges of a net investment in a foreign operation (TechnipFMC currently has no financial
instruments designated for such hedging relationship)
In prior years, TechnipFMC had a policy of applying cash as a natural hedge instrument. We reviewed the
applicability of IFRS 9 and discontinued this policy in the current year. The impact of the change in policy
is not material to the activities of the group and has been presented in the Consolidated Statements of
Changes to Stockholders’ Equity.
When implementing hedging transactions, each of TechnipFMC’s subsidiaries enters into forward
exchange contracts with banks or with TechnipFMC Cash B.V., 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
176 TechnipFMC
U.K. Annual Report and Accounts 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:
•
•
•
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.
p)
Inventories
Inventories are recognized at the lower of cost and net realizable value with cost being principally
determined on a weighted-average cost basis.
177 TechnipFMC
U.K. Annual Report and Accounts
Write-down of inventories are recorded when the net realizable value of inventories is lower than their
net book value.
q) 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.
r) 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.
s) 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. 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. 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.
t) 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.
u) 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.
178 TechnipFMC
U.K. Annual Report and Accounts 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 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. Defined benefit assets can only be recognized to the extent that there are benefits in the
form of refunds from the plan or reductions in future contributions to the plan. The fair value of an
overfunded plan can be recognized as a defined benefit asset only to the extent that the surplus
represents an increase in the present value of the economic benefits.
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 the 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.
v)
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 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 the extent we believe recovery is not probable, no deferred tax asset is recognized.
We believe this assessment is 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. 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.
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.
Provision for income tax expense (benefit) for the period is the tax payable on the current period's
taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in
deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted
at the end of the reporting period in the countries where TechnipFMC and our subsidiaries and associates
operate and generate taxable income. We periodically evaluate positions taken in tax returns with
179 TechnipFMC
U.K. Annual Report and Accounts
respect to situations in which applicable tax regulation is subject to interpretation. Provisions are
established where appropriate on the basis of amounts expected to be paid to the tax authorities.
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 may engage the services of a professional firm, together
with the expertise and historic experience of the in-house tax team when the provision is particularly
judgmental or complex. 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. We have determined our tax position by applying the expected
value approach in accordance with the principles of IFRIC 23.
See Note 7 for further details.
w) 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.
x) 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.
y) 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)
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, which was executed in 2021, refer to Note 33
for further details.
180 TechnipFMC
U.K. Annual Report and Accounts
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 revenue recognition and pension accounting,
are described below.
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 Subsea segment. 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.
Due to the nature of the work required to be performed on many of the 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 highly probable. The estimated amounts are
included in the transaction price to the extent it is highly 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, which include labor rates
and hours and materials and supplies. 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 impact
vessel time and expense and affect the accuracy of cost estimates, and ultimately, the future
profitability.
Our operating
impacted by
loss for the year ended December 31, 2022 was positively
approximately $104.9 million, as a result of changes in contract estimates related to projects that were in
progress as of December 31, 2021.
181 TechnipFMC
U.K. Annual Report and Accounts
During the year ended December 31, 2022, we recognized changes in our estimates that had an impact
on our margin in the amounts of $104.6 million and $0.3 million in our Subsea and Surface Technologies
segments, respectively. The changes in contract estimates are attributed to better performance
throughout our execution of our projects.
Our operating loss for the year ended December 31, 2021 was negatively impacted by approximately
$68.4 million, as a result of changes in contract estimates related to projects that were in progress as of
December 31, 2020. During the year ended December 31, 2021, we recognized changes in our estimates
that had an impact on our margin in the amounts of $(72.5) million and $4.1 million in Subsea and
Surface Technologies segments, respectively. The changes in contract estimates are attributed to worse
than expected performance throughout our execution of our projects. We cannot provide a meaningful
sensitivity analysis for the above estimates.
See Note 1 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 expenses 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.
c) Other Estimates
Economic and inflationary environment
Management estimates are required to determine whether, and by how much our results could be
impacted by factors such as macroeconomic volatility. A portion of our benefit obligations are linked to
inflation and higher inflation will lead to higher liabilities. See Note 20 for additional discussion of the
impact of inflation on our net defined benefit obligations. We continue to implement risk management
strategies to hedge temporary economic impacts driven by inflation and supply chain events. Failure to
react appropriately to economic conditions, e.g. inflationary pressures, foreign exchange volatility and
supply chain disruptions, may impact our financial performance. There are no material impacts to our
operations that have not been given appropriate consideration.
182 TechnipFMC
U.K. Annual Report and Accounts
Climate change considerations
The impact of climate change assessment and the stated reduction in our carbon footprint, Scope 1 & 2,
by 50% by 2030, has been considered as part of the assessment of estimates and judgements in
preparing the consolidated financial statements. The climate change scenario analyses undertaken this
year did not identify any material financial impact.
During the preparation of these financial statements the potential impact of climate change was assessed,
to the extent information is available, on:
–
–
–
–
the going concern of the Company over the next two years;
the forecasted future cash flows generated by non-current assets and associated with goodwill
(see Note 11);
the realizability of pensions assets; and
the carrying value of the fixed assets.
NOTE 2. BUSINESS COMBINATIONS AND OTHER TRANSACTIONS
2.1 Business combinations and transactions with non-controlling interests
Year ended December 31, 2021 - Significant business combinations and other changes
Magma Global Ltd.
In 2018, we entered into a collaboration agreement with Magma Global Ltd. (“Magma Global”) to develop
a new generation of hybrid flexible pipe for use in the traditional and new energy industries. As part of
the collaboration, we purchased a minority ownership interest in Magma Global.
In October 2021, we entered into a transaction to purchase the remaining ownership interest in Magma
Global for $64.0 million. The cash consideration is being paid to the shareholders of Magma Global in
three annual installments. The first payment of $23.9 million was paid on October 12, 2021 and the
second payment of $18.5 million was paid on October 12, 2022. Magma technology enables the
manufacture of Thermoplastic Composite Pipe (TCP) using Polyether Ether Ketone (PEEK) polymer, which
is highly resistant to corrosive compounds, such as CO2.
With the step acquisition of the remaining outstanding shares of Magma Global and our resulting control
of the company, we recorded a $36.7 million impairment during the third quarter of 2021 to adjust our
investments in associates to its estimated fair market value. The impairment charge is included in
income/loss from investments in associates line in our consolidated statement of income.
As a result of the purchase price allocation of the remaining interest, we recognized $50.2 million of
intangible assets consisting primarily of in-process research and development and trademarks, which are
being amortized on a straight-line basis over 15 years. The fair value of the identifiable intangible assets
has been estimated using an income approach.
The assets and liabilities recognized as a result of the acquisition were as follows (in millions):
(In millions)
Cash
Accounts receivable
Other current assets
PP&E
Intangibles
Accounts payable
Net assets acquired
TIOS
$
$
8.6
3.0
2.8
18.1
50.2
(8.3)
74.4
In accordance with the Share Purchase Agreement between Technip-Coflexip UK Holdings Limited (“TUK”)
and Island Offshore Management AS (“Island Offshore”) that was executed on March 12, 2018, whereby
TUK initially purchased 51% of the shares of TIOS AS (“TIOS”), a joint venture between TUK and Island
Offshore, TUK acquired the remaining 49% interest in TIOS at a total price of $48.6 million during the
third quarter of 2021.
183 TechnipFMC
U.K. Annual Report and Accounts
2.2 Subsidiaries, joint venture undertakings and associates
TechnipFMC’s subsidiaries, joint venture undertakings and associates as of December 31, 2022 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.
NOTE 3. SEGMENT INFORMATION
3.1 Information by business segment
Segment revenue and segment operating profit (loss)
(In millions)
Segment revenue
Subsea
Surface Technologies
Total revenue
Segment operating profit
Subsea
Surface Technologies
Total segment operating profit
Corporate items
Other corporate expenses (a)
Interest income
Interest expense
Loss on early extinguishment of debt
Income (loss) from investment in Technip Energies
Foreign exchange gains (losses)
Total corporate items
Profit (loss) before income taxes (b)
$
$
$
Year Ended December 31,
2022
2021
5,461.2 $
1,264.5
6,725.7 $
5,329.1
1,084.2
6,413.3
359.3 $
43.1
402.4
(74.7)
19.3
(179.9)
(29.8)
(27.7)
(68.8)
(361.6)
147.2
37.9
185.1
(106.8)
19.0
(207.1)
(61.9)
8.5
6.8
(341.5)
(156.4)
$
40.8 $
(a) Corporate expense includes corporate staff expenses, stock-based compensation expenses and other
employee benefits.
(b) Includes amounts attributable to non-controlling interests.
For the year ended December 31, 2022, the largest Subsea segment client Petrobras accounted for more
than 10 percent of our 2022 consolidated revenue.
Segment assets
(In millions)
Segment assets:
Subsea
Surface Technologies
Total segment assets
Corporate (a)
Total assets
Year Ended December 31,
2022
2021
$
6,419.7 $
1,500.5
7,920.2
1,668.6
6,526.0
1,583.1
8,109.1
2,062.4
$
9,588.8 $
10,171.5
(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.
184 TechnipFMC
U.K. Annual Report and Accounts
Other business segment information:
Capital Expenditures
Depreciation and
Amortization
Research and
Development Expense
Year Ended December 31,
(In millions)
Subsea
Surface Technologies
Corporate
Total
2022
2021
2022
2021
2022
2021
120.2
37.4
5.8
149.4
41.8
5.5
459.1
68.1
4.6
441.8
80.0
14.7
62.2
4.8
—
$
163.4 $
196.7 $
531.8 $
536.5 $
67.0 $
73.2
5.8
—
79.0
3.2 Information by geography
Sales by geography were identified based on the location where TechnipFMC’s products and services
were delivered.
(In millions)
Revenue
United States
Brazil
Norway
United Kingdom
Guyana
Australia
Mozambique
Angola
Malaysia
Ghana
Singapore
India
United Arab Emirates
Israel
Canada
Indonesia
Saudi Arabia
Egypt
All other countries
Total revenue
Property, plant and equipment, net by geography is as follows:
(In millions)
United Kingdom
United States
Netherlands
Brazil
Norway
All other countries
Year Ended December 31,
2022
2021
$
1,348.4 $
1,137.2
1,047.3
907.6
710.3
369.1
295.4
284.4
247.9
228.5
184.7
126.5
121.4
117.8
117.3
88.0
42.6
39.4
29.3
419.8
$
6,725.7 $
767.8
979.9
542.5
314.7
419.8
472.0
406.3
206.9
73.4
216.3
109.8
49.4
26.8
33.0
224.9
24.1
33.8
374.7
6,413.3
December 31,
2022
2021
$
741.6 $
405.8
371.9
306.4
225.3
348.1
882.9
433.7
398.6
265.5
271.9
384.0
Total property, plant and equipment, net
$
2,399.1 $
2,636.6
185 TechnipFMC
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
Variable lease costs
Short-term lease costs
Sublease income
Year Ended December 31,
2022
2021
$
153.8 $
138.0
42.9
21.0
14.0
3.6
40.9
29.8
5.2
2.4
The above expenses relating to short term and variable payments not included in lease liabilities.
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 and Office furniture
Total
Depreciation
Year Ended December 31,
Net Book Value
December 31,
2022
2021
2022
2021
$
92.5 $
91.3 $
608.5 $
52.1
7.8
1.4
43.1
2.6
1.0
88.8
27.2
8.7
590.6
49.4
8.2
1.4
$
153.8 $
138.0 $
733.2 $
649.6
Additions to the right-of-use assets during the year ended December 31, 2022 and 2021 were $128.2
million and $167.3 million, respectively.
The statement of financial position shows the following amounts relating to lease liabilities:
(In millions)
Current lease liabilities
Non-current lease liabilities
Total lease liabilities
December 31,
2022
2021
$
$
186.7 $
685.8
872.5 $
126.2
646.6
772.8
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
Year Ended December 31,
2022
2021
$
128.3 $
42.7
135.3
41.2
186 TechnipFMC
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
Total lease liabilities (1)
December 31,
2022
2021
$
188.6 $
151.7
121.7
98.2
85.2
640.4
1,285.8
413.3
$
872.5 $
150.2
108.3
102.3
83.1
74.7
675.9
1,194.5
421.7
772.8
(1) Includes the current portion of $186.7 million and $126.2 million for lease liabilities as of December 31, 2022 and 2021,
respectively.
We have a lease agreement for our Gremp Campus Properties in Houston, Texas, which 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 the initial term. At inception of the new lease
agreement, TechnipFMC did not consider any renewal period as probable of being exercised.
Lessor arrangements
The total lease revenue from lessor arrangements was $222.8 million and $162.0 million for the year
ended December 31, 2022 and 2021, respectively.
The following table is a summary with the maturity analysis of 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
Between 4 and 5 years
Thereafter
December 31,
2022
2021
$
23.8 $
3.0
3.0
3.0
3.0
0.8
18.3
1.0
—
—
—
—
Total undiscounted cash flows
$
36.6 $
19.3
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.
187 TechnipFMC
U.K. Annual Report and Accounts
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.
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.
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
and we have an enforceable right to payment plus a reasonable profit for performance completed to
date.
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.
188 TechnipFMC
U.K. Annual Report and Accounts
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 years ended
December 31, 2022 and 2021:
(In millions)
Europe and Central Asia
Latin America
Africa
North America
Asia Pacific
Middle East
Total revenue
Reportable Segments
Year Ended December 31,
2022
2021
Subsea
Surface
Technologies
Subsea
Surface
Technologies
$
1,550.1 $
166.7 $
1,404.4 $
191.5
1,460.1
865.6
780.6
687.5
117.3
137.4
37.6
552.0
97.2
273.6
1,157.7
1,057.3
753.6
927.4
28.7
96.5
44.0
372.7
104.2
275.3
$
5,461.2 $
1,264.5 $
5,329.1 $
1,084.2
The following table represents revenue by contract type for each reportable segment for the years ended
December 31, 2022 and 2021:
(In millions)
Services
Products
Lease
Total revenue
5.3 Contract balances
Year Ended December 31,
2022
2021
Subsea
Surface
Technologies
Subsea
Surface
Technologies
$
3,410.4 $
224.1 $
3,282.0 $
1,993.8
57.0
874.6
165.8
2,002.5
44.6
160.9
805.9
117.4
$
5,461.2 $
1,264.5 $
5,329.1 $
1,084.2
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 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, 2022
and 2021, respectively:
(In millions)
Contract assets
Contract (liabilities)
Net contract (liabilities)
189 TechnipFMC
December 31,
2022
2021
$ change
% change
$
$
984.1 $
967.7 $
(1,155.6)
(988.9)
(171.5) $
(21.2) $
16.4
(166.7)
(150.3)
2 %
17 %
709 %
U.K. Annual Report and Accounts
The increase in our contract assets from December 31, 2021 to December 31, 2022 was primarily due to
the timing of project milestones. The increase in our contract liabilities was driven from an overall
portfolio and client mix enabling an acceleration of cash payments in advance.
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, 2022 that were included in
the contract liabilities balance as of December 31, 2021 was $607.4 million. Revenue recognized for
the year ended December 31, 2021 that were included in the contract liabilities balance as
of December 31, 2020 was $305.3 million.
In addition, net revenue recognized for the year ended December 31, 2022 and 2021 from our
performance obligations satisfied in previous periods has favorable impacts of $160.8 million and $25.9
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, 2022, the aggregate amount of the transaction price allocated to order backlog was
$9,353.0 million. TechnipFMC expects to recognize revenue on approximately 47.6% of the order backlog
through 2023 and 52.4% thereafter.
The following table details the consolidated order backlog for each business segment and represents the
estimated timing of recognition as of December 31,
2022:
(In millions; unaudited)
Subsea
Surface Technologies
Total remaining unsatisfied performance obligations
2023
2024
Thereafter
$
$
3,919.0 $
2,900.6 $
1,311.9
537.4
126.8
557.3
4,456.4 $
3,027.4 $
1,869.2
The following table details the consolidated order backlog for each business segment as of December 31,
2021:
(In millions)
Subsea
Surface Technologies
Total remaining unsatisfied performance obligations
2022
2023
Thereafter
$
$
3,372.8 $
2,227.5 $
376.8
95.2
932.7
652.7
3,749.6 $
2,322.7 $
1,585.4
NOTE 6. OTHER INCOME AND EXPENSE ITEMS, FINANCIAL INCOME AND EXPENSES
6.1 Other income (expense), net
Other income (expense) is as following:
(In millions)
Net gain (loss) from disposal of property, plant and equipment
Other
Total other income (expense), net
Year Ended December 31,
2022
2021
$
$
6.4 $
15.4
21.8 $
(1.3)
0.9
(0.4)
190 TechnipFMC
U.K. Annual Report and Accounts
6.2 Expenses by nature
An analysis of operating expenses by nature is as following:
(In millions)
Wages and salaries
Social security costs
Other pension costs
Right-of-use lease amortization
Depreciation and amortization
Impairment
Purchases, external charges and other expenses
Total costs and other expenses
6.3 Financial income
Financial income consists of the following:
(In millions)
Interest income from treasury management
Other
Total financial income
6.4 Financial expenses
Financial expenses consist of the following:
(In millions)
Interest expense on debt
Interest expense on leases
Other
Total financial expenses
Net financial expenses
NOTE 7. INCOME TAX
7.1 Income tax expense
Year Ended December 31,
2022
2021
$
1,394.1 $
1,344.2
339.3
14.6
153.8
378.0
4.7
4,179.9
$
6,464.4 $
311.2
16.1
138.0
398.5
49.1
4,078.1
6,335.2
Year Ended December 31,
2022
2021
19.0 $
0.3
19.3 $
14.6
4.4
19.0
Year Ended December 31,
2022
2021
(136.6) $
(42.1)
(1.2)
(179.9) $
(160.6) $
(157.0)
(40.9)
(9.2)
(207.1)
(188.1)
$
$
$
$
$
The income tax expense recognized in the statements of income is $125.7 million and $81.6 million in
2022 and 2021 respectively, explained as follows:
(In millions)
Current income tax (expense)
Deferred income tax credit (expense)
Income tax expense 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 credit (expense) as recognized in the consolidated statements of other
comprehensive income
Year Ended December 31,
2022
2021
(134.6) $
8.9
(125.7) $
(141.2)
59.6
(81.6)
Year Ended December 31,
2022
2021
(4.4) $
(15.5)
5.7
(10.1)
(19.9) $
(4.4)
$
$
$
$
191 TechnipFMC
U.K. Annual Report and Accounts
7.2 Income tax reconciliation
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 from continuing operations
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 tax contingencies
Deferred tax assets not recognized
Other
Effective income tax expense
Tax rate
Year Ended December 31,
2022
2021
$
(84.9)
$
(125.7)
40.8
(7.8)
(83.0)
(5.1)
(31.1)
1.3
(125.7)
308.1 %
(238.0)
(81.6)
(156.4)
29.7
(64.2)
(7.6)
(40.4)
0.9
(81.6)
(52.2) %
(81.6)
Income tax (expense) as recognized in the consolidated statements of income
$
(125.7)
$
7.3 Deferred income tax
Significant components of deferred tax assets and liabilities are as follows:
(In millions)
Lease liability
Accrued expenses
Other tax credits
Net tax losses
Non-deductible interest
Inventories
Margin recognition on construction contracts
Contingencies and other
Contract liabilities
Foreign exchange
Tax on foreign subsidiaries’ undistributed earnings not indefinitely
reinvested
Provisions for pensions and other long-term employee benefits
Property, plant and equipment, goodwill and other assets
Lease right of use asset
December
31, 2021
Recognized
in Statement
of Income
Recognized
in Statement
of OCI
December
31, 2022
$
174.9 $
31.7 $
21.7 $
0.3
20.7
—
3.6
0.1
6.5
(2.9)
(6.4)
1.5
18.1
(6.8)
4.4
(0.6)
(0.1)
(6.9)
—
9.2
—
(13.4)
(26.9)
(69.9)
(170.5)
8.1
3.9
(34.9)
14.2 $
— $
— $
—
—
—
—
—
—
—
(8.0)
—
(7.6)
—
—
(15.6) $
206.6
23.2
18.4
13.9
4.4
3.0
—
(0.4)
(2.9)
(5.2)
(13.4)
(26.4)
(66.0)
(205.4)
(50.2)
Deferred income tax assets (liabilities), net
$
(48.8) $
192 TechnipFMC
U.K. Annual Report and Accounts
(In millions)
Leasing
Accrued expenses
Net tax losses
Contingencies and other
Inventories
Other tax credits
Margin recognition on construction contracts
Non-deductible interest
Tax on foreign subsidiaries’ undistributed earnings not
indefinitely reinvested
Revenue in excess of billings on contracts accounted for
under the percentage of completion method
Foreign exchange
Provisions for pensions and other long-term employee
benefits
Property, plant and equipment, goodwill and other
assets
Leasing
December
31, 2020
Spin-off of
Technip
Energies
Recognized
in
Statement
of Income
Recognized
in
Statement
of OCI
December
31, 2021
$
245.9 $
— $
(71.0) $
— $
174.9
54.9 $
120.3
33.7
3.6
0.4
78.5
11.8
(4.2)
(44.2)
(22.3)
(28.5)
(8.8)
(35.6)
—
—
—
—
—
(50.3)
(39.8)
(4.7) $
(90.8)
8.4
—
(0.1)
(78.4)
(11.8)
4.2
91.6
46.2
—
—
—
—
—
—
—
—
—
9.5
21.7
20.7
6.5
3.6
0.3
0.1
—
—
(2.9)
(6.4)
12.1
(38.4)
19.0
(19.6)
(26.9)
Deferred income tax assets (liabilities), net
$
100.5 $
(198.8) $
59.6 $
(10.1) $
(155.1)
(234.9)
2.6
—
82.6
64.4
—
—
(69.9)
(170.5)
(48.8)
As of December 31, 2022, the net deferred tax liability of $50.2 million is broken down into a deferred
tax asset of $46.1 million and a deferred tax liability of $96.3 million as recorded in the statement of
financial position.
As of December 31, 2021, the net deferred tax asset of $48.8 million is broken down into a deferred tax
asset of $43.1 million and a deferred tax liability of $91.9 million as recorded in the statement of
financial position.
7.4 Tax loss carry-forwards and tax credits
As of December 31, 2022 and 2021, deferred tax assets excluded U.S. foreign tax credit carryforwards of
$136.5 million and $136.5 million, which, if not utilized, will begin to expire in 2023. Realization of these
potential deferred tax assets not recognized 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 potential deferred tax assets not recognized. 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 $0.3 million in 2022 and $19.5 million in 2021,
respectively.
As of December 31, 2022, we had $487.5 million of tax-effected net operating loss carryforwards with
approximately $21.5 million estimated to be utilized against an uncertain tax position and $473.6 million
are potential deferred tax assets not recognized. The ultimate realization of these net operating loss
carryforwards depends on our ability to generate sufficient taxable income in the appropriate taxing
jurisdiction. Our tax-effected net operating losses will expire as follows:
(In millions)
2023 – 2026
2027 – 2031
2032 – 2042
Non-Expiring
193 TechnipFMC
Net Operating
Loss
$
$
61.1
58.7
74.4
293.3
487.5
U.K. Annual Report and Accounts
For the years ended December 31, 2022 and 2021, the uncertain tax position balances in the financial
statements amount to $64.7 million and $69.0 million, respectively, for which $36.3 million and $32.7
million, respectively, relate to income taxes payable and $28.3 million and $36.3 million, respectively
relate to deferred incomes taxes. It is reasonably possible that within twelve months, $8.9 million of
assets for unrecognized tax benefits will be settled.
NOTE 8. EARNINGS PER SHARE
A calculation of the basic and diluted earnings (loss) is as follows:
(In millions, except per share data)
Net loss from continuing operations attributable to TechnipFMC plc
Profit (loss) from discontinued operations
Net income (loss) attributable to TechnipFMC plc
Weighted average number of shares outstanding
Total shares and dilutive securities
Basic and diluted earnings (loss) per share attributable to TechnipFMC plc:
Loss per share from continuing operations attributable to TechnipFMC plc
Basic and diluted
Earnings (loss) per share from discontinued operations attributable to TechnipFMC plc
Basic and diluted
Total earnings (loss) per share attributable to TechnipFMC plc
Basic and diluted
Year Ended December 31,
2022
2021
(110.3) $
(237.2)
(26.4)
(136.7) $
449.5
449.5
603.3
366.1
450.5
450.5
(0.25) $
(0.53)
(0.06) $
1.34
(0.30) $
0.81
$
$
$
$
$
Shares repurchased pursuant to our shares repurchase program are immediately cancelled and therefore
excluded from the calculation of the average number of shares outstanding.
Diluted earnings (loss) per share amounts are calculated by dividing the net profit/(loss) 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 2022, the average annual share price
amounted to $8.43 and the closing price to $12.19. In 2021, the average annual share price amounted to
$7.66 and the closing price to $5.92.
For the years ended December 31, 2022 and 2021, we incurred net losses from continuing operations;
therefore, the impact of any incremental shares from our share-based compensation awards would be
anti-dilutive. For the year ended December 31, 2022 and 2021, 8.9 million shares and 4.1 million shares
were anti-dilutive due to net loss position.
194 TechnipFMC
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
Total
Year Ended December 31,
2022
2021
1.5
—
1.5
1.7
0.1
1.8
NOTE 9. INVESTMENTS IN ASSOCIATES
Our investments in associates were as follows as of December 31, 2022 and 2021:
(In millions, except %)
Dofcon Brasil AS
Serimax Holdings SAS
Other
Investments in associates
December 31, 2022
December 31, 2021
Percentage
Owned
Carrying
Value
Percentage
Owned
Carrying
Value
50 % $
20 %
—
312.8
8.6
3.6
$
325.0
50 % $
20 %
—
$
276.9
15.0
0.5
292.4
Our income from investments in associates for the years ended December 31, 2022 and 2021 was $44.6
million and $0.6 million, respectively and included within our Subsea segment.
We assess investments for impairment whenever events or changes in circumstances indicate that the
carrying value of an investment may not be recoverable. During 2022, we did not record any
impairments of our equity method investments. During 2021, we recorded a $36.7 million impairment, in
connection with the step acquisition of the remaining outstanding shares of Magma Global and our
resulting control of the company. See Note 2 for further details.
Our major investments in associates 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 Brasil AS is a holding company, which owns and
controls TechDof Brasil AS and Dofcon Navegacao Ltda, collectively referred to as “Dofcon.” Dofcon
provides Pipe-Laying Support Vessels (PLSVs) for work in oil and gas fields offshore Brazil. Dofcon is
considered a joint venture under IFRS 11, and as such, we have accounted for our 50% investment using
the equity method of accounting with results reported in our Subsea segment.
Dofcon has debt related to loans on its vessels. TechnipFMC and DOF ASA, the parent of DOF Subsea,
provide guarantees for the debt and our share of the guarantees was $441.0 million as of December 31,
2022. DOF ASA is in the process of restructuring its debt (unrelated and outside of the joint venture)
which triggered cross default provisions in certain credit facilities within the joint venture associated
with the guarantees provided by the Company and DOF Subsea. The lenders have made no claims under
the guarantees and the acceleration clauses within the debt instruments are not currently enforceable as
the Company obtained waivers or consents from the lenders. Dofcon continues to service the credit
facilities as per the terms of the agreements. As a result, TechnipFMC has not recognized a liability
related to its guarantees.
Serimax Holdings SAS (“Serimax”) - is an affiliated company in the form of a joint venture between
TechnipFMC 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.
Other includes Magnora Offshore Wind AS -During the first quarter of 2022, we entered into Magnora
Offshore Wind AS, a partnership with Magnora ASA, in order to develop floating offshore wind projects.
As of December 31, 2022, the investment balance was $3.4 million and represented approximately 20%
ownership.
195 TechnipFMC
U.K. Annual Report and Accounts
Reconciliation of carrying amount in TechnipFMC’s investment in associates is as follows:
(In millions)
Carrying amount of investments at January 1
Disposal as part of Spin-off of Technip Energies
Acquisitions
Divestiture (1)
Share of income of associates
Distributed dividends
Other comprehensive income
Net foreign exchange differences and other
Carrying Amount of Investment as of December 31(2)
2022
2021
$
292.4 $
—
3.0
—
44.6
(12.9)
0.5
(2.6)
354.3
(48.8)
—
(15.1)
0.6
(0.5)
—
1.9
$
325.0 $
292.4
(1) In October 2021, we acquired the remaining 75% interest in Magma Global Limited.
(2) The comparatives within the table excludes the investment in Technip Energies which was accounted for as an equity affiliate from
February 16, 2021 through September 3, 2021. During 2022, we fully divested our ownership in Technip Energies.
The tables below provide summarized financial information for Dofcon that is material to TechnipFMC.
The information disclosed reflects the amounts presented in the financial statements of Dofcon and is not
TechnipFMC’s share of those amounts.
(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 (excluding trade payables)
Total non-current liabilities
Financial current liabilities (excluding trade payables)
Other current liabilities
Total current liabilities
Total equity and liabilities
(In millions)
Data at 100%
Revenue
Depreciation and amortization
Interest income
Interest expense
Income tax benefit
Profit for the period
Other comprehensive income (loss)
Total comprehensive income
196 TechnipFMC
$
$
$
Dofcon
December 31,
2022
2021
67.8 $
95.0
162.8
1,515.1
1,677.9 $
625.6 $
—
—
923.7
128.6
1,052.3
99.3
102.4
201.7
1,648.6
1,850.3
553.8
917.8
917.8
246.2
132.5
378.7
$
1,677.9 $
1,850.3
Dofcon
December 31,
2022
2021
$
308.4 $
(89.8)
12.8
(51.6)
(33.5)
99.4
(1.7)
$
97.7 $
281.4
(89.5)
7.4
(41.8)
(21.0)
78.0
6.0
84.0
U.K. Annual Report and Accounts
(In millions)
Data at 100%
Carrying amount of investment as at January 1
Profit for the period
Other comprehensive income (loss)
Distributed dividends
Carrying amount of investment as of December 31
TechnipFMC’s share in %
TechnipFMC’s share in investment
Carrying amount
Dofcon
2022
2021
553.8
$
99.4
(1.7)
(25.9)
625.6
$
50.0 %
312.8
312.8
$
$
469.8
78.0
6.0
—
553.8
50.0 %
276.9
276.9
$
$
$
$
In addition to the interest in Dofcon 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,
2022
2021
$
$
$
$
105.0 $
80.2
185.2 $
59.8 $
20.6
104.8
185.2 $
86.6
72.7
159.3
75.3
5.7
78.3
159.3
Summarized statement of total comprehensive income (at 100%) are presented below:
Year Ended December 31,
2022
2021
$
122.1 $
(10.3)
(4.4)
(0.9)
(26.3) $
(5.6)
(31.9) $
$
$
137.7
(11.3)
(1.2)
(1.0)
(11.6)
(6.6)
(18.2)
(In millions)
Data at 100%
Revenue
Depreciation and amortization
Interest expense
Income tax benefit
Loss for the period
Other comprehensive loss
Total comprehensive loss
197 TechnipFMC
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)
Net book value as of
December 31, 2020
Costs
Accumulated depreciation
Accumulated impairment
Net book value as of
December 31, 2021
Costs
Accumulated depreciation
Accumulated impairment
Net book value as of
December 31, 2022
Land
Buildings
Vessels
Machinery
and
Equipment
Assets under
construction
Other
Total
$
81.7 $
367.3 $ 1,203.7 $
902.8 $
145.6 $
144.1 $ 2,845.2
88.5
(7.6)
(8.1)
624.1
(149.0)
(103.6)
2,535.5
(795.2)
(580.7)
2,283.6
(1,036.9)
(429.3)
110.3
328.1
5,970.1
—
(1.8)
(206.4)
(2,195.1)
(14.9)
(1,138.4)
$
$
72.8 $
371.5 $ 1,159.6 $
817.4 $
108.5 $
106.8 $ 2,636.6
77.2 $
593.6 $ 2,386.1 $
2,244.1 $
116.7 $
335.2 $ 5,752.9
(7.7)
(8.2)
(150.1)
(103.0)
(802.1)
(555.4)
(1,071.1)
(423.3)
—
(2.3)
(216.5)
(2,247.5)
(14.1)
(1,106.3)
$
61.3 $
340.5 $ 1,028.6 $
749.7 $
114.4 $
104.6 $ 2,399.1
Property, plant and equipment is reviewed for impairment whenever events or changes in circumstances
indicate the carrying amounts may not be recoverable.
2022
We did not record any material impairments of property, plant and equipment in 2022.
2021
The $24.4 million of property, plant and equipment impairments recorded in 2021 consisted of
$22.8 million of property, plant and equipment impairments recorded in our Subsea segment and
$1.6 million of property, plant and equipment impairments recorded in our Surface Technologies
segment.
A reconciliation of the carrying amount of property, plant and equipment is as following:
(In millions)
Land
Buildings
Vessels
Machinery
and
Equipment
Assets
under
construction
Other
Total
Net book value as of December
31, 2020
Additions
Acquisitions through business
combinations
Spin-off of Technip Energies
Disposals
Depreciation expense for the year
Impairment
Net foreign exchange differences
Other
Net book value as of December
31, 2021
Additions
Disposals
Depreciation expense for the year
Impairment
Net foreign exchange differences
Other
Net book value as of December
31, 2022
$
81.7 $
367.3 $ 1,203.7 $
902.8 $
145.6 $ 144.1 $ 2,845.2
0.2
75.9
33.0
91.3
38.1
6.0
244.5
—
(7.6)
—
(0.6)
—
(1.0)
0.1
7.8
(37.7)
(1.5)
(19.8)
(12.6)
(6.8)
(1.1)
—
—
(45.4)
(98.2)
—
(11.9)
78.4
9.6
(20.1)
(13.4)
(154.8)
(11.7)
(18.4)
32.1
—
—
0.6
—
—
(1.8)
(74.0)
—
(40.2)
(2.7)
(19.7)
(0.1)
(6.3)
25.7
17.4
(105.6)
(62.4)
(293.1)
(24.4)
(46.2)
61.2
$
72.8 $
371.5 $ 1,159.6 $
817.4 $
108.5 $ 106.8 $ 2,636.6
0.2
(4.4)
(0.5)
—
(0.4)
(6.4)
8.3
(3.8)
(19.5)
—
(8.1)
(7.9)
34.0
(2.6)
(94.7)
—
(80.1)
12.4
95.8
(6.5)
(151.8)
(1.7)
(26.0)
22.5
19.3
—
—
—
1.1
(14.5)
10.3
(0.2)
(17.6)
—
3.2
2.1
167.9
(17.5)
(284.1)
(1.7)
(110.3)
8.2
$
61.3 $
340.5 $ 1,028.6 $
749.7 $
114.4 $ 104.6 $ 2,399.1
198 TechnipFMC
U.K. Annual Report and Accounts
NOTE 11. GOODWILL AND INTANGIBLE ASSETS, NET
11.1 Intangible assets, net
The components of intangible assets were as follows:
(In millions)
Net book value as of December 31, 2020 $
Costs
Acquired
Technology
Customer
Relationships
Trade
names
Licenses,
Patents and
Trademarks
Software
Other
Total
141.1 $
171.0 $ 509.0 $
51.8 $ 66.7 $ 41.5 $ 981.1
240.0
285.4
632.7
68.9
108.2
71.6
1,406.8
Accumulated amortization
(123.9)
(142.9)
(157.6)
(65.8)
(84.8)
(10.7)
(585.7)
Accumulated impairment
Net book value as of December 31, 2021 $
Costs
—
—
—
—
—
(7.4)
(7.4)
116.1 $
142.5 $ 475.1 $
3.1 $ 23.4 $ 53.5 $ 813.7
240.0
285.4
632.1
68.9
109.7
71.6
1,407.7
Accumulated amortization
(146.9)
(171.6)
(189.5)
(67.7)
(91.8)
(16.8)
(684.3)
Accumulated impairment
Net book value as of December 31, 2022 $
—
—
—
—
—
(7.4)
(7.4)
93.1 $
113.8 $ 442.6 $
1.2 $ 17.9 $ 47.4 $ 716.0
A reconciliation of the carrying amount of intangible assets is as follows:
(In millions)
Acquired
Technology
Customer
Relationships
Trade names
Licenses,
Patents and
Trademarks
Software
Other
Total
Net book value as of December 31, 2020 $
Additions
Spin-off of Technip Energies
Acquisitions
Amortization charge for the year
Net foreign exchange differences
Other
Net book value as of December 31, 2021 $
Additions
Amortization charge for the year
Net foreign exchange differences
Other
Net book value as of December 31, 2022 $
141.1 $
171.0 $
509.0 $
51.8 $ 66.7 $ 41.5 $ 981.1
—
—
—
—
—
—
—
—
—
(25.0)
(28.5)
(31.9)
—
2.0
1.2
3.2
(51.0)
(22.6)
(54.5)
(128.1)
4.5
0.6
—
45.7
50.2
(9.2)
(0.1)
(94.1)
—
—
—
—
—
(0.3)
(0.1) —
(2.0)
(2.5)
(13.4) 19.7
(0.4)
1.8
116.1 $
142.5 $
475.1 $
3.1 $ 23.4 $ 53.5 $ 813.7
—
—
—
—
1.5
—
1.5
(23.0)
(28.7)
(32.0)
(1.3)
(7.0) —
(92.0)
—
—
—
—
(0.5)
(0.6)
0.1
(4.7)
—
—
(0.1)
(1.4)
(5.7)
(1.5)
93.1 $
113.8 $
442.6 $
1.2 $ 17.9 $ 47.4 $ 716.0
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 other than goodwill with indefinite useful life.
11.2 Goodwill
A reconciliation of carrying amounts of goodwill by reporting segment are as follows:
December 31, 2020
Spin-off of Technip Energies
Net foreign exchange differences (2)
December 31, 2021
December 31, 2022
Technip Energies
$
2,512.5 $
(2,512.5)
—
—
— $
$
Surface
Technologies (1)
Total
142.2 $
—
(1.3)
140.9
140.9 $
2,654.7
(2,512.5)
(1.3)
140.9
140.9
(1) Surface Technologies includes Surface West and Surface East operating segments. While the CODM receives separate reports for
each of the Surface region, the Surface West and Surface East operating segments have been aggregated into one reportable segment
Surface Technologies as they have similar characteristics. The entire goodwill balance relates to our Surface East operating segment.
(2) Goodwill is partially denominated in Euro.
199 TechnipFMC
U.K. Annual Report and Accounts
Goodwill was tested for impairment utilizing the methodology in accordance with the accounting policy
in Note 1. The valuation of GCGUs for the purpose of the goodwill impairment test was primarily
determined by estimating value in use. 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.
Value in use impairment testing on GCGUs reflects management's best estimate of any expected
applicable costs to manage greenhouse gas emissions, manage natural resources and increase usage of
renewable energy sources. This requires management's best estimate of how future changes to relevant
policies and/or legislation, use of renewable resources are likely to affect the future cash flows of the
applicable GCGUs. Future potential costs are included in the value in use calculations to the extent
management has sufficient information to make such an estimate.
We did not record any impairment of goodwill as of December 31, 2022 in our Surface East operating
segment. The recoverable amount over carrying amount for our Surface East operating segment was
approximately 70% of its carrying amount as of October 31, 2022. No reasonably possible change in any
of the estimates would cause the Surface East carrying amount to exceed its recoverable amount.
Assumptions
The following table presents the key assumptions used by management in determining the recoverable
amount of our relevant operating segments for the years ended December 31, 2022 and 2021 as:
Year of cash flows before terminal value
Risk-adjusted post-tax discount rate
NOTE 12. OTHER NON-CURRENT ASSETS
Other non-current assets consisted of the following:
(In millions)
Non-current financial assets at amortized cost, gross
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
Year Ended December 31,
2022
4
14.1%
2021
4
10.4%
December 31,
2022
2021
$
104.2 $
0.3
104.5
1.9
19.8
$
126.2 $
104.9
(1.2)
103.7
2.7
25.0
131.4
200 TechnipFMC
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
British pound sterling
Norwegian krone
Australian dollar
Malaysian ringgit
Other
Total cash and cash equivalents by currency
Fixed term deposits
Other
Total cash equivalents by nature
December 31,
2022
2021
$
$
$
$
$
$
1,021.3 $
35.8
1,057.1 $
480.3 $
42.4
89.0
59.2
6.3
—
379.9
1,057.1 $
21.7 $
14.1
35.8 $
1,299.0
28.4
1,327.4
619.7
118.2
105.2
90.6
71.1
28.8
293.8
1,327.4
4.5
23.9
28.4
A substantial portion of cash and securities are recorded or invested in either Euro or U.S. dollars 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, all potential
uncollectible receivables as of December 31, 2022 and 2021 were determined as follows for both trade
receivables and contract assets:
December 31,
2022
2021
Trade
Receivables
Contract
Assets
Trade
Receivables
Contract
Assets
1,000.0 $
980.6 $
1,042.7 $
(29.0) $
1.9 $
(108.9) $
965.8
(1.0)
—
(5.4)
3.2
11.3
(11.6)
(31.5) $
968.5 $
—
—
—
—
1.6
68.7
(7.3)
6.8
6.7
5.0
3.5 $
(29.0) $
—
0.6
—
0.7
1.6
1.9
984.1 $
1,013.7 $
967.7
$
$
$
$
(In millions)
Gross amount
Opening loss allowance
Spin-off of Technip Energies
(Increase) decrease in loss allowance
Used allowance reversals
Unused allowance reversals
Effects of foreign exchange and other
Closing loss allowance
Total, net
201 TechnipFMC
U.K. Annual Report and Accounts
See Note 30 for further information on impairment losses of trade receivables and contract assets 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,
2022
2021
$
$
317.4 $
152.0
583.7
250.1
178.7
618.0
1,053.1 $
1,046.8
All amounts in the table above are reported net of obsolescence reserves of $108.2 million and $116.6
million as of December 31, 2022 and 2021, respectively. Inventories recognized as expense during the
years ended December 31, 2022 and 2021, respectively, amounted to $2,594.3 million and $2,360.3
million.
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
Tax receivables and other receivables
Prepaid expenses
Held to maturity investments
Pension asset
Other
Other current assets, total
Total other current assets, net
December 31,
2022
2021
$
12.4 $
12.4
185.6
138.9
61.9
15.7
12.3
24.1
438.5
$
450.9 $
21.9
21.9
222.4
77.0
50.7
9.3
—
41.1
400.5
422.4
NOTE 17. STOCKHOLDERS’ EQUITY
17.1 Changes in TechnipFMC’s ordinary shares and treasury shares
As of December 31, 2022 and 2021, TechnipFMC’s share capital was 442,208,014 ordinary shares and
450,700,480 ordinary shares, respectively.
The movements in share capital were as follows:
(Number of shares in millions)
December 31, 2020
Stock awards
December 31, 2021
Stock awards
Shares repurchased and cancelled
December 31, 2022
202 TechnipFMC
Ordinary
Shares Issued
449.5
1.2
450.7
1.6
(10.1)
442.2
U.K. Annual Report and Accounts
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.
See Note 33 for additional information regarding the Distribution of Technip Energies that occurred
during 2021.
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 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 shares. We have also met all our financial covenants set forth by our
loans and borrowings.
In July 2022, the Board of Directors authorized the repurchase of up to $400.0 million of our
outstanding ordinary shares under our share repurchase program. Pursuant to this share repurchase
program, we repurchased $100.2 million of ordinary shares during the year ended December 31, 2022.
Based upon the remaining repurchase authority of $299.8 million and the closing stock price as of
December 31, 2022, approximately 24.6 million ordinary shares could be subject to repurchase. All
shares repurchased were immediately cancelled.
As of December 31, 2022, 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
(in thousands)
Weighted Average
Exercise Price of
Outstanding
Options, Warrants
and Rights (in $)
Number of Securities
Remaining Available for
Future Issuance under Equity
Compensation Plans
(in thousands)
Equity compensation plans approved by
security holders
1,441.2 $
20.31
—
We had no unregistered sales of equity securities during the years ended December 31, 2022 and 2021.
203 TechnipFMC
U.K. Annual Report and Accounts
17.4 Accumulated other comprehensive income (loss)
Accumulated other comprehensive income (loss) are as follows:
Gains (Losses)
on Defined
Benefit Pension
Plans
Foreign
Currency
Translation
Accumulated
Other
Comprehensive
Income (Loss) –
TechnipFMC plc
Accumulated
Other
Comprehensive
Income (Loss) –
Non-Controlling
Interests
Total
Accumulated
Other
Comprehensive
Income (Loss)
— $
(156.7) $
(997.4) $
(1,154.1) $
(5.0) $
(1,159.1)
Cash Flow
Hedges (1)
$
(In millions)
December 31, 2020
Net gain/(loss) before
reclassification to profit
or loss, net of tax
Reclassification to profit
or loss, net of tax
Reclassification to profit
or loss due to Spin-off
of Technip Energies,
net of tax
Other comprehensive
(loss)/income, net of tax
Spin-off of Technip
Energies
Net gain/(loss) before
reclassification to profit
or loss, net of tax
Reclassification to profit
or loss, net of tax
96.4
14.1
166.9
277.4
37.2
(844.5)
81.2
(35.3)
(798.6)
(68.1)
131.7
32.7
14.1
—
—
(14.5)
—
181.4
(68.5)
131.7
214.1
—
37.2
—
96.3
14.1
166.9
277.3
37.2
0.1
—
—
0.1
—
December 31, 2021
$
(68.5) $
12.2 $
(783.3) $
(839.6) $
(4.9) $
69.9
37.9
(26.6)
81.2
December 31, 2022
$
(33.9) $
50.1 $
(809.9) $
(35.3)
—
—
(35.3)
(793.7) $
—
—
(4.9) $
(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 $36.5 million and $15.7 million as of December 31, 2022 and
2021, respectively, did not represent a material component of TechnipFMC’s consolidated financial
statements in the years ended December 31, 2022, and 2021.
As a result of the spin-off of Technip Energies transaction, non-controlling interest of $21.8 million has
been derecognized as of February 16, 2021, within the comparative period presented.
NOTE 18. SHARE-BASED COMPENSATION
Incentive compensation and award plan
Under the Amended and Restated TechnipFMC plc Incentive Award Plan (the “2017 Plan”), we were able
to grant certain incentives and awards to our officers, employees, non-employee directors and
consultants of the Company and its subsidiaries. Awards included share options, share appreciation
rights, performance stock units, restricted stock units, restricted shares or other awards authorized under
the 2017 Plan. On April 28, 2022, we adopted the TechnipFMC plc 2022 Incentive Award Plan (the
“Plan”), which replaces the 2017 Plan. Under the Plan, 8.9 million ordinary shares were authorized for
awards, and the remaining available shares from the 2017 Plan were added to the authorized amount
under the Plan.
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.
204 TechnipFMC
U.K. Annual Report and Accounts
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. All
restricted share units awarded prior to 2020 will be settled when a non-executive director ceases
services on the Board of Directors. Beginning with the 2020 equity award, non-executive directors now
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 December 31 of the
year prior to grant. Restricted share units are settled when a director ceases services to the Board of
Directors. As of December 31, 2022, outstanding awards to active and retired non-employee directors
included 177.7 thousand of share units.
The measurement of share-based compensation expense on restricted share awards is based on the
market price and fair value at the grant date and the number of shares awarded. 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. We use the Black-Scholes options pricing model to measure the fair value
of stock options granted on or after January 1, 2017.
The share-based compensation expense for each award is recognized ratably over the applicable service
period or the period beginning at the start of the service period and ending when an employee becomes
eligible for retirement (currently age 62 under the Plan), after taking into account estimated forfeitures.
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,
2022
2021
$
40.5 $
8.8
26.8
7.2
As of December 31, 2022 and 2021, 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 of U.S. dollars)
$
Weighted-average recognition period (in years)
Restricted share units
A summary of the non-vested restricted share units' activity is as follows:
December 31,
2022
2021
52.6 $
1.26
51.6
1.42
(Shares in thousands)
Non-vested as of January 1
Granted
Vested
Cancelled/forfeited
Adjustment due to Spin-off
Non-vested as of December 31
2022
2021
Weighted-
Average
Grant Date Fair
Value
Shares
Weighted-
Average
Grant Date Fair
Value
Shares
9,589.5 $
2,874.1 $
(2,193.8) $
(548.1) $
— —
9,721.7 $
11.35
7.89
16.57
7.99
—
7.81
6,121.9 $
2,893.0 $
(667.1) $
(882.6) $
2,124.3 $
9,589.5 $
18.43
7.97
37.57
13.75
12.37
11.35
The total grant date fair value of restricted stock share units vested during the years ended
December 31, 2022 and 2021 was $36.4 million and $25.1 million, respectively.
205 TechnipFMC
U.K. Annual Report and Accounts
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”).
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,
2022
2021
$
11.34
$
11.50
65.9 %
1.8 %
3.0
62.7 %
0.4 %
2.9
(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 2022, 2021 and 2020.
A summary of the non-vested performance share units' activity is as follows:
(Shares in thousands)
Balance as of December 31, 2020
Granted
Exercised
Cancelled/forfeited
Adjustment due to Spin-off
Balance as of December 31, 2021
Granted
Cancelled/forfeited
Balance as of December 31, 2022
Weighted
Average Grant
Date Fair Value
Shares
4,840.7 $
2,426.2 $
(111.3) $
(1,723.2) $
(3,122.8) $
2,309.6 $
2,427.0 $
(223.6) $
4,513.0 $
17.55
11.50
30.42
16.03
12.37
13.26
11.10
11.46
11.29
The total grant date fair value of performance shares vested during years ended December 31, 2022 and
2021 was nil and $3.4 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.
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.
We did not grant any share option awards during the years ended December 31, 2022 and 2021.
206 TechnipFMC
U.K. Annual Report and Accounts
The following is a summary of share option transactions during year ended December 31, 2022:
(Shares in thousands)
Balance as of December 31, 2021
Cancelled
Balance as of December 31, 2022
Exercisable as of December 31, 2022
Weighted
average
exercise price
Weighted
average
remaining life
Shares
1,576.1 $
(134.9) $
1,441.2 $
1,441.2 $
20.17
20.84
20.31
20.31
6.3
—
5.3
5.3
The aggregate intrinsic value of stock options outstanding and stock options exercisable as of
December 31, 2022 was nil and nil, respectively.
Cash received from the share option exercises was nil during each of the years ended December 31,
2022 and 2021. The total intrinsic value of share options exercised during each of the years ended
December 31, 2022 and 2021 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).
The following summarizes significant ranges of outstanding and exercisable share options as
of December 31, 2022:
Exercise Price Range
$16.00-$19.00
$20.00-$24.00
$25.00-$26.00
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 $)
578.0
678.7
184.5
1,441.2
6.2
4.6
4.7
5.3
$
$
$
$
16.46
22.22
25.31
20.31
578.0 $
678.7 $
184.5 $
1,441.2 $
16.46
22.22
25.31
20.31
The following summarizes significant ranges of outstanding and exercisable options as of December 31,
2021:
Exercise Price Range
$16.00-$19.00
$20.00-$24.00
$25.00-$26.00
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 $)
636.7
721.2
218.2
1,576.1
7.2
5.6
5.6
6.3
$
$
$
$
16.46
22.28
25.32
20.17
— $
721.2 $
218.2 $
939.4 $
—
22.28
25.32
23.00
207 TechnipFMC
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)
December 31,
2022
2021
Carrying
amount
Fair Value
Carrying
amount
Fair Value
3.40% 2012 Private placement due 2022
$
— $
— $
169.9 $
171.9
3.15% 2013 Private placement due 2023
3.15% 2013 Private placement due 2023
Bank borrowings
Other
Total short-term debt and current portion of
long-term
Debt consisted of the following:
138.6
133.4
127.5
19.3
136.6
131.6
127.5
19.3
—
—
72.6
35.4
—
—
72.6
35.4
$
418.8 $
415.0 $
277.9 $
279.9
(In millions)
December 31, 2022
December 31, 2021
Carrying
amount
Fair Value
Carrying
amount
Fair Value
3.15% 2013 Private placement due 2023
$
— $
3.15% 2013 Private placement due 2023
5.75% 2020 Private placement due 2025
6.50% Senior notes due 2026
4.00% 2012 Private placement due 2027
4.00% 2012 Private placement due 2032
3.75% 2013 Private placement due 2033
Bank borrowings and other
Total long-term debt
Bank borrowings and other
3.40% 2012 Private placement due 2022
3.15% 2013 Private placement due 2023
3.15% 2013 Private placement due 2023
Total short-term debt and current portion of long-
term
—
211.6
199.7
80.0
104.1
104.4
299.5
999.3
146.8
—
138.6
133.4
418.8
—
—
217.4
199.8
76.7
81.2
73.0
299.5
947.6
146.8
—
136.6
131.6
415.0
$
147.0 $
141.5
223.7
619.8
84.9
110.2
110.6
340.8
1,778.5
108.0
169.9
—
—
277.9
Total debt
$
1,418.1 $
1,362.6
$
2,056.4 $
153.6
147.5
247.1
678.2
90.9
111.9
105.0
340.8
1,875.0
108.0
171.9
—
—
279.9
2,154.9
Credit Facilities and Debt Commitments
Revolving Credit Facility - On February 16, 2021, we entered into a credit agreement, which provides for
a $1.0 billion three-year senior secured multi-currency Revolving Credit Facility including a
$450.0 million letter of credit sub-facility. We incurred $34.8 million of debt issuance costs in connection
with the Revolving Credit Facility. These debt issuance costs are deferred and are included in other
assets in our consolidated balance sheets. The deferred debt issuance costs are amortized to interest
expense over the term of the Revolving Credit Facility.
Availability of borrowings under the Revolving Credit Facility is reduced by the outstanding letters of
credit issued against the facility. As of December 31, 2022, there were $45.4 million letters of credit
outstanding and availability of borrowings under the Revolving Credit Facility was $954.6 million.
208 TechnipFMC
U.K. Annual Report and Accounts
Borrowings denominated in United States dollars (“USD”), at our option, under our Revolving Credit
Facility bear interest at an adjusted rate linked to the London Interbank Offered Rate (“LIBOR”) and our
euro-denominated loans under the Revolving Credit Facility bear interest at an adjusted rate linked to
the Euro Interbank Offered Rate (“EURIBOR”). The United Kingdom’s Financial Conduct Authority (the
“FCA”), which regulates LIBOR, has announced that the publication of LIBOR on the current basis would
cease and no longer be representative immediately after December 31, 2021 (in the case of all sterling,
euro, Swiss franc and Japanese yen settings, and one-week and two-month USD settings) and
immediately after June 30, 2023 (in the case of all remaining USD settings). Despite this deferral in
regard to USD, the FCA has confirmed that use of USD LIBOR will not be permitted in most new contracts
after December 31, 2021 and while the FCA is requiring the LIBOR administrator to publish one-, three-
and six-month sterling and Japanese yen LIBOR rates for a limited time following December 31, 2021
using a synthetic methodology, such synthetic LIBOR rates are also only permitted for legacy use. The
agreements governing our Credit Facilities include customary provisions to provide for replacement of
LIBOR with an alternative benchmark rate when LIBOR ceases to be available. The International Swaps
and Derivatives Association has developed provisions for SOFR-based fall-back rates to apply upon
permanent cessation of LIBOR and has published a protocol to enable market participants to include the
new provisions in existing swap agreements.
We are currently assessing our options to amend our facility agreement and transition to a new
benchmark rate.
The applicable margin for borrowings under the Revolving Credit Facility ranges from 2.50% to 3.50% for
Eurocurrency loans and 1.50% to 2.50% for base rate loans, depending on a total leverage ratio. The
Revolving Credit Facility is subject to customary representations and warranties, covenants, events of
default, mandatory repayment provisions and financial covenants.
2021 Notes - On January 29, 2021, we issued $1.0 billion of 6.50% Senior notes due 2026. 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. We incurred $25.7 million of debt issuance
costs in connection with issuance of the 2021 Notes. These debt issuance costs are deferred and are
included in long-term debt in our consolidated balance sheets. The deferred debt issuance costs are
amortized to interest expense over the term of the 2021 Notes, which approximates the effective
interest method.
During 2022, we completed a tender offer and purchased for cash $430.2 million of the outstanding
2021 Notes. We paid a cash premium of $21.5 million to the tendering note holders and wrote off
$8.3 million of debt issuance costs. Concurrent with the tender offer, the Company obtained consents of
holders with respect to the 2021 Notes to certain proposed amendments (“Proposed Amendments”) to
the indenture governing these notes. The Proposed Amendments, among other things, eliminated
substantially all of the restrictive covenants and certain event of default triggers in the indenture.
During 2021, we completed two tender offers and purchased for cash $366.9 million of the outstanding
2021 Notes. We paid a cash premium of $29.5 million to the note holders who tendered and wrote off
$8.9 million of bond issuance costs.
As of December 31, 2022, we were in compliance with all debt covenants.
Private placement Notes
2020 Issuance:
During 2020, we completed the Private placement of €200 million aggregate principal amount of the
2020 Private placement Notes. The 2020 Private placement Notes bear interest of 5.75% 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.
209 TechnipFMC
U.K. Annual Report and Accounts
2013 Issuances:
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 on June 14, 2013. Interest on the Tranche
B 2027 Notes is payable annually in arrears on June 15 of each year, beginning on June 15, 2013.
During 2022, we repaid $161.0 million of our 3.40% 2012 Private placement notes.
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 at the
request of 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.
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 in 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.
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.
Prior to June 2021, we leased operating facilities in San Antonio, Brighton and Odessa which we
subsequently purchased from the lessors. In June 2021, we entered into three agreements with Bank of
America, N.A. to refinance the purchase of previously leased office and industrial properties in San
Antonio, Brighton and Odessa, each expiring in January 2023, with an extension option for additional
five years that we expect to exercise. As a result, the remaining obligations under the existing
arrangement of $28.7 million were derecognized and we recorded a financial liability of $51.2 million
and we have pledged our interest in the properties as collateral.
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.
210 TechnipFMC
U.K. Annual Report and Accounts
19.2 Secured financial debts excluding finance leases
Secured debts are as follows:
(In millions)
Current facilities and other
Guarantee
$
December 31,
2022
Without
Guarantee
Total
Guarantee
2021
Without
Guarantee
— $
122.3 $
122.3 $
— $
76.5 $
Short-term portion of long-term debt
22.7
273.8
296.5
26.4
175.0
Total
76.5
201.4
Total short-term debt and current
portion of long-term
Total long-term debt, less current portion
and finance leases
22.7
396.1
418.8
26.4
251.5
277.9
338.0
661.3
999.3
851.6
926.9
1,778.5
Total debt excluding finance leases
$
360.7 $ 1,057.4 $ 1,418.1 $
878.0 $ 1,178.4 $ 2,056.4
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, 98.6% of our total pension plan
assets represent the U.S. qualified plan (401k) and the U.K. 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.
We expect to contribute approximately $11.7 million to our international pension plans, representing
primarily the 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 2023. All of the
contributions are expected to be in the form of cash.
211 TechnipFMC
U.K. Annual Report and Accounts
The following table summarizes expected benefit payments from our various pension and post-
retirement benefit plans through 2030 as of December 31, 2022. Actual benefit payments may differ
from expected benefit payments.
(In millions)
2023
2024
2025
2026
2027-2031
Total
$
$
20.2 Remeasurement Effects Recognized in Other Comprehensive Income (OCI)
(In millions)
December 31,
2022
2021
Actuarial (gain) loss due to experience on defined benefit obligation
$
13.9 $
Actuarial (gain) due to demographic assumption changes in defined benefit obligation
Actuarial (gain) loss due to financial assumption changes in defined benefit obligation
Return on plan assets (greater) lower than discount rate
Change in irrecoverable surplus other than interest
1.1
(384.9)
319.6
1.1
Expected
benefit
payments
53.8
53.7
56.0
55.9
380.1
599.5
22.8
(1.3)
(61.8)
(89.9)
4.9
Actuarial (income) loss recognized in other comprehensive income
$
(49.2) $
(125.3)
20.3 Defined benefit asset (liability) recognized in the consolidated statements of financial position
As of December 31, 2022, the net defined benefit liability of $105.9 million is comprised of a defined
benefit asset of $61.1 million and defined benefit liability of $167.1 million as recognized in the
statement of financial position. As of December 31, 2021, there was a gross defined benefit liability of
$160.9 million recognized in the statement of financial position.
212 TechnipFMC
U.K. Annual Report and Accounts
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, 2020
Acquisitions / disposals
Expense as recorded in the statement of income
Total current service cost
Net financial costs
Actuarial losses of the year
Administrative costs and taxes
Actuarial loss recognized in other comprehensive income
Actuarial gain on (defined benefit obligation) / gain on plan (assets)
- Experience
- Financial assumptions
- Demographic assumptions
Actuarial gain (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, 2021
Defined
Benefit
Obligation
Fair Value of
Plan Assets
Net Defined
Benefit
Obligation
$
1,706.5 $
1,220.5 $
(311.0)
(152.0)
41.3
9.3
28.1
(0.5)
4.4
(40.3)
(40.3)
22.8
(61.8)
(1.3)
—
—
(86.9)
—
0.9
(19.6)
(68.2)
(12.0)
—
(4.1)
21.0
—
21.0
—
—
85.0
85.0
—
—
—
89.9
(4.9)
(33.0)
34.3
0.9
—
(68.2)
(8.9)
—
—
486.0
(159.0)
20.3
9.3
7.1
(0.5)
4.4
(125.3)
(125.3)
22.8
(61.8)
(1.3)
(89.9)
4.9
(53.9)
(34.3)
—
(19.6)
—
(3.1)
—
(4.1)
$
1,293.5 $
1,132.6 $
160.9
213 TechnipFMC
U.K. Annual Report and Accounts
(In millions)
December 31, 2021
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 gain on defined benefit obligation / loss on plan assets
- Experience
- Financial assumptions
- Demographic assumptions
Actuarial gain (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, 2022
Defined Benefit
Obligation
Fair Value of
Plan Assets
$
1,293.5 $
1,132.6 $
Net Defined
Benefit Obligation
160.9
38.2
4.0
30.3
(0.1)
4.0
(369.9)
(369.9)
13.9
(384.9)
1.1
—
—
(64.3)
—
—
(10.7)
(53.6)
(55.4)
—
25.8
—
25.8
—
—
(320.7)
(320.7)
—
—
—
(319.6)
(1.1)
(41.7)
11.9
—
—
(53.6)
(59.8)
—
12.4
4.0
4.5
(0.1)
4.0
(49.2)
(49.2)
13.9
(384.9)
1.1
319.6
1.1
(22.6)
(11.9)
—
(10.7)
—
4.4
—
$
842.1 $
736.2 $
105.9
In 2022 and 2021, the discounted defined benefit obligation included $787.0 million and $1,214.3
million for funded plans and $54.6 million and $79.0 million for unfunded plan assets, respectively.
The following table shows a breakdown of the defined benefit obligation and plan assets by country for
the years ending December 31, 2022 and 2021.
(In millions)
December 31, 2021
Defined Benefit Obligation
Fair Value of Plan Assets
Net Defined Benefit (Asset) Obligation
December 31, 2022
Defined Benefit Obligation
Fair Value of Plan Assets
Net Defined Benefit (Asset) Obligation
United Kingdom United States
Other
Total
539.5
611.0
(71.5)
293.0
353.7
(60.7)
690.3
517.4
172.9
500.6
377.3
123.3
63.7
4.2
59.5
48.0
4.7
43.3
1,293.5
1,132.6
160.9
841.6
735.7
105.9
214 TechnipFMC
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, 2022
Bonds
Shares
Real Estate
Cash
Other
Total
— %
63 %
8 %
— %
13 %
83 %
— %
11 %
— %
— %
13 %
10 %
100 %
— %
— %
100 %
100 %
101 %
December 31, 2021
Bonds
Shares
Real Estate
Cash
Other
Total
— %
5 %
— %
— %
77 %
92 %
— %
11 %
— %
— %
7 %
8 %
100 %
— %
— %
100 %
100 %
100 %
December 31, 2022
Future Salary
Increase
(above Inflation
Rate)
Discount Rate
3.7% to 3.8%
2.2% to 3.5%
4.9 %
5.4 %
N/A
4.0 %
Healthcare Cost
Increase Rate
Inflation
Rate
NA
NA
NA
2.2% to 2.3%
2.9% to 3.4%
NA
December 31, 2021
Future Salary
Increase
(above Inflation
Rate)
2.0% to 3.2%
N/A
4.0 %
Discount Rate
1.0% to 1.2%
1.9 %
2.9 %
Healthcare Cost
Increase Rate
NA
NA
NA
Inflation
Rate
1.9% to 2.10%
2.9% to 3.6%
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:
December 31, 2022
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
24
22
21
28
24
22
26
23
21
30
26
23
(in years)
Eurozone
United Kingdom
United States
215 TechnipFMC
U.K. Annual Report and Accounts
December 31, 2021
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
24
22
20
28
24
22
27
23
21
31
25
23
(in years)
Eurozone
United Kingdom
United States
The sensitivity analysis is based on a change in an assumption while holding all other assumptions
constant.
The discount rates as of December 31, 2022 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, 2022
remain unchanged compared to 2021. A 25% decrease in the discount rate would increase the defined
benefit obligation by approximately 3.1%. A 25% increase in the discount rate would decrease the
defined benefit obligation by approximately (3.2)%. A one year decrease in the life expectancy would
decrease the defined benefit obligation by approximately (2.8)%. A one year increase in the life
expectancy would increase the defined benefit obligation by approximately 2.8%. A 25% increase in
inflation rates would increase the defined benefit obligation by 0.6%. A 25% decrease in inflation rates
would decrease the defined benefit obligation by (0.6)%.
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, 2022 and 2021, our liability for the Non-Qualified Plan was $20.2 million and $30.0
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, 2022 and 2021, we had investments for the Non-Qualified Plan
totaling $18.5 million and $24.1 million at fair market value, respectively.
We recognized expense of $19.8 million and $21.5 million for matching contributions to these plans in
2022 and 2021, respectively. Additionally, we recognized expense of $8.7 million and $9.0 million for
non-elective contributions in 2022 and 2021, respectively.
216 TechnipFMC
U.K. Annual Report and Accounts
NOTE 21. PROVISIONS (CURRENT AND NON-CURRENT)
Movements in each class of provision as of December 31, 2021 are as follows:
—
—
12.1
—
5.2
33.4
18.5
103.2
20.3
—
102.1
277.5
294.8
1.7
4.4
6.1
13.5
18.1
98.5
8.4
71.6
210.1
216.2
(In millions)
Tax
Litigation
Restructuring obligations
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 (2)
Total current provisions
6.5
27.1
9.4
9.0
52.2
110.9
20.2
168.4
55.7
0.3
87.7
443.2
—
2.1
—
1.9
4.0
14.0
0.4
13.4
28.5
—
113.6
169.9
As of
December
31, 2020
$
Increase
Used
Reversals
Unused
Reversals
Foreign
exchange
differences
Spin-off of
Technip
Energies
As of
December
31, 2021
0.2 $
— $
— $
— $
—
(2.3)
—
—
(2.3)
—
—
—
—
—
— $
—
Other
(0.2) $ — $
(6.5) —
(0.5)
(10.2)
(4.1)
—
—
(9.4) —
(5.7) —
(0.5)
(32.0)
(4.1)
17.3
(3.6)
(26.2)
—
(9.8)
(1.2)
(7.8)
(35.5)
(17.7)
—
(67.7)
(116.6)
—
(17.6)
(70.5)
(1.0)
(0.2)
(2.1)
(1.1)
—
(2.4)
(6.8)
(51.6)
(9.1)
(0.7) —
(60.3)
(12.0)
1.4
2.4
(0.3) —
(11.0)
(0.5)
(135.9)
(5.8)
Total provisions
$
495.4 $ 173.9 $
(118.9) $
(70.5) $
(7.3) $
(167.9) $
(9.9) $
Movements in each class of provision as of December 31, 2022 are as follows:
As of
December 31,
2021
Used
Reversals
Unused
Reversals
Foreign
Exchange
Adjustments
As of
December 31,
2022
Other
(In millions)
Restructuring obligations
Other non-current provisions
Total non-current provisions
Contingencies related to
contracts
Tax
Litigation (1)
Restructuring obligations
Other current provisions (2)
Total current provisions
Increase
1.2
1.2
2.4
20.5
2.9
9.5
2.6
90.3
12.1
5.2
17.3
33.4
18.5
103.2
20.3
102.1
277.5
125.8
(4.0)
(3.6)
(7.6)
(7.0)
(0.1)
(7.1)
(0.2)
(0.4)
0.1
(0.1)
1.6
1.2
(10.6)
(17.8)
(5.0)
(7.0)
(0.1)
(9.8)
(14.2)
(105.2)
(139.9)
(1.5)
(6.6)
(1.5)
(18.2)
(45.6)
(1.7)
2.2
0.7
2.1
—
—
0.5
0.5
(1.7)
(6.0)
Total provisions
$
294.8 $ 128.2 $
(147.5) $
(52.7) $
(1.8) $
(4.8) $
(1) Litigation - Includes provision of $70.0 million for the years ended December 31, 2022 and 2021, respectively, regarding the
investigation by the French authorities (Parquet National Financier) related to 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.
(2) Other current provisions - The majority of this balance is related to our annual bonus plan of $70.8 million and $85.7 million as of
December 31, 2022 and 2021, respectively.
The accounting policy principles utilized to evaluate the amounts and types of provisions for liabilities
and charges are described in Note 1. We have contingent liabilities and provision of the following nature:
217 TechnipFMC
U.K. Annual Report and Accounts
Contingent liabilities associated with legal and tax matters - We are involved in various pending or
potential legal and tax actions or disputes in the ordinary course of our business. These actions and
disputes can involve our agents, suppliers, clients, and venture partners, and can include claims related to
payment of fees, service quality, and ownership arrangements, including certain put or call options. We
are unable to predict the ultimate outcome of these actions because of their inherent uncertainty.
However, we believe 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.
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 also raised with the DOJ certain other projects performed by
Technip S.A. subsidiaries in Brazil between 2002 and 2013. The DOJ 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 were not required to have
a monitor and, instead, provided 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 also provided the DOJ reports on our anti-corruption program during the
term of the DPA.
In Brazil, on June 25, 2019, 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 made, as part of those agreements, certain enhancements to the compliance programs in
Brazil during the two-year self-reporting period, which aligned 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.
On December 8, 2022, the Company received notice of the official release from all obligations and
charges by CGU, having successfully completed all of the self-reporting requirements in the leniency
agreements and the case was closed. On December 27, 2022, the DOJ filed a Motion to Dismiss the
charges against TechnipFMC related to conspiracy to violate the FCPA, noting to the Court that the
Company had fully met and completed all of its obligations under the DPA. The Dismissal Order was
signed by the Court on January 4, 2023, thereby closing the case. All obligations to regulatory authorities
related to the enforcement matters in the United States and Brazil have been completed and the
Company has been unconditionally released by both jurisdictions.
To date, the investigation by the 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. Additionally, the PNF informed us that it is
reviewing other historical projects in Angola. We are not aware of any evidence that would support a
finding of liability with respect to these projects, or whether the PNF would seek to impose any
additional penalty. As we continue our discussions with PNF towards a potential resolution of all of these
matters, the amount of a settlement could exceed this provision.
218 TechnipFMC
U.K. Annual Report and Accounts
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 anti-corruption laws and
regulations that it may seek to impose in appropriate circumstances including, but not limited to, fines,
penalties, confiscations 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.
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, 2022 and 2021, and that the ultimate resolution of such matters will not materially affect
our consolidated financial position, results of operations, or cash flows.
We believe the ultimate resolution of our known contingencies will not materially adversely affect our
consolidated financial position, results of operations, or cash flows.
NOTE 22. IMPAIRMENT, RESTRUCTURING AND OTHER EXPENSES
Impairment, restructuring and other expenses were as follows:
(In millions)
Subsea
Surface Technologies
Corporate and other
Total restructuring, impairment, and other expense
2022
Year Ended December 31,
2022
2021
$
$
(13.0) $
10.4
3.7
1.1 $
53.5
7.6
5.6
66.7
During 2022, we released a previously recorded provision of $14.1 million related to demobilization
costs of a facility that is now being used for a new project. In addition, during the year ended
December 31, 2022, we recorded $1.1 million of impairment charges for property, plant and equipment
and right-of-use lease assets, related to exiting our operations in Russia and Canada.
2021
During the year ended December 31, 2021, subsequent to the Spin-off, certain real estate rationalization
actions were taken, and as a result, we recorded $49.1 million of impairment charges relating to our
right-of-use assets and property, plant and equipment and $17.6 million of restructuring and other
charges for severance and other employee related costs.
NOTE 23. OTHER LIABILITIES (CURRENT AND NON-CURRENT)
Other current liabilities are as follows:
(In millions)
Other taxes payable
Warranty obligations (Note 25)
Social security liability
Other(1)
Total other current liabilities
219 TechnipFMC
December 31,
2022
2021
$
65.3 $
74.2
70.9
175.4
$
385.8 $
71.0
86.2
70.4
202.8
430.4
U.K. Annual Report and Accounts
(1) Includes miscellaneous other employee, medical and costs of operations.
Other non-current liabilities are as follows:
(In millions)
Obligations on non-qualified employee retirement plans
Subsidies
Other
Total other non-current liabilities
NOTE 24. ACCOUNTS PAYABLE, TRADE
December 31,
2022
2021
$
$
20.2 $
0.3
57.4
77.9 $
30.0
0.4
51.9
82.3
Trade payables amounted to $1,282.0 million as of December 31, 2022 as compared to $1,293.6 million
as of December 31, 2021. 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, 2022 and 2021. A reconciliation of warranty obligations for the
years ended December 31, 2022 and 2021 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,
2022
2021
$
$
86.2 $
18.2
(19.0)
(11.2)
74.2 $
109.6
54.0
(56.5)
(20.9)
86.2
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 would have a material adverse effect on our consolidated financial position, results
of operations, or cash flows. In addition, refer to Note 21 for further discussion of our contingent
liabilities.
Guarantees made by our consolidated subsidiaries consisted of the following:
(In millions)
Financial guarantees (1)
Performance guarantees (2)
Maximum potential undiscounted payments
December 31,
2022
2021
$
$
170.2 $
1,458.2
1,628.4 $
177.4
1,069.0
1,246.4
(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 non-financial obligating agreement. Events that trigger payment are performance-related,
such as failure to ship a product or provide a service.
220 TechnipFMC
U.K. Annual Report and Accounts
Note 27. FINANCIAL INSTRUMENTS
27.1 Financial assets and liabilities by category
Financial assets and financial liabilities are as follows:
(In millions)
Trade receivables, net
Other financial assets
Derivative financial instruments
Cash and cash equivalents
Total financial assets
Long-term debt, less current portion
Non-current lease liabilities
Short-term debt and current portion of long-term debt
Accounts payable, trade
Derivative financial instruments
Current lease liabilities
Total financial liabilities
(In millions)
Trade receivables, net
Other financial assets
Derivative financial instruments
Cash and cash equivalents
Total financial assets
Long-term debt, less current portion
Non-current lease liabilities
Short-term debt and current portion of long-term debt
Accounts payable, trade
Derivative financial instruments
Current lease liabilities
Total financial liabilities
December 31, 2022
Analysis by Category of Financial Instruments
Carrying
Amount
At Fair Value
through Profit
or Loss
Assets/
Liabilities at
Amortized cost
Designated as
cash flow
hedges
$
968.5 $
— $
138.6
289.9
1,057.1
21.7
27.9
1,057.1
968.5 $
116.9
—
—
$
2,454.1 $
1,106.7 $
1,085.4 $
999.3
685.8
418.8
1,282.0
350.2
186.7
—
—
—
—
14.1
—
999.3
685.8
418.8
1,282.0
—
186.7
$
3,922.8 $
14.1 $
3,572.6 $
—
—
262.0
—
262.0
—
—
—
—
336.1
—
336.1
December 31, 2021
Analysis by Category of Financial Instruments
Carrying
Amount
At Fair Value
through Profit
or Loss
Assets/
Liabilities at
Amortized cost
Designated as
cash flow
hedges
$
1,013.7 $
— $
1,013.7 $
153.3
120.8
1,327.4
27.7
3.9
1,327.4
125.6
—
—
$
2,615.2 $
1,359.0 $
1,139.3 $
1,778.5
646.6
277.9
1,293.6
176.6
126.2
—
—
—
—
21.5
—
1,778.5
646.6
277.9
1,293.6
126.2
$
4,299.4 $
21.5 $
4,122.8 $
—
—
116.9
—
116.9
—
—
—
—
155.1
—
155.1
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.
221 TechnipFMC
U.K. Annual Report and Accounts
(In millions)
Investments:
Traded securities(1)
Money market and stable value funds
Derivative financial instruments:
Foreign exchange contracts
Financial assets
Derivative financial instruments:
Foreign exchange contracts
Financial liabilities
(In millions)
Investments:
Nonqualified plan:
Investment in Technip Energies
Traded securities(1)
Money market and stable value funds
Derivative financial instruments:
Foreign exchange contracts
Assets
Derivative financial instruments:
Foreign exchange contracts
Liabilities
December 31, 2022
Level 1
Level 2
Level 3
Total
19.8
—
—
1.9
—
289.9
—
—
—
19.8 $
291.8 $
— $
—
350.2
— $
350.2 $
—
— $
19.8
1.9
289.9
311.6
350.2
350.2
$
$
December 31, 2021
Level 1
Level 2
Level 3
Total
$
317.3 $
— $
— $
25.0
—
—
2.7
—
120.8
—
—
—
342.3 $
123.5 $
— $
—
176.5
— $
176.5 $
—
— $
$
$
317.3
25.0
2.7
120.8
465.8
176.5
176.5
(1) Includes equity securities, fixed income and other investments measured at fair value.
During the financial years 2022 and 2021, there were no transfers 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.
Fair value of debt—The fair values (based on Level 2 inputs) of our debt, carried at amortized cost, are
presented in Note 19 Debt.
222 TechnipFMC
U.K. Annual Report and Accounts
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
speculative purposes.
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 is 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 2022 and 2021 in local currency (LC):
223 TechnipFMC
U.K. Annual Report and Accounts
(In millions except for rates)
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
Euro
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
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
Kuwaiti dinar
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
U.S. dollar (total)
224 TechnipFMC
December 31, 2022
Maturity
1-12 months
12-24 months
Beyond 24
months
Total
243.1
1.5
165.2
(802.9)
5.2
(153.9)
(270.0)
0.8
(324.8)
40.6
1.4
29.9
1,070.8
0.9
1,142.9
1,074.0
82.8
13.0
1,312,559.9
15,592.0
84.1
(346.7)
4.4
(78.7)
70.0
19.6
3.6
2,665.6
9.9
270.4
165.9
1.3
123.8
(4.0)
0.3
(13.2)
35.5
1.5
24.1
18.9
5.2
3.6
39.3
0.8
47.3
(0.3)
1.4
(0.2)
46.8
0.9
49.9
—
82.8
—
—
—
1.5
—
—
5.2
—
(1.9)
0.8
(2.3)
—
1.4
—
1.6
0.9
1.7
—
82.8
—
278.6
1.5
189.3
(784.0)
5.2
(150.3)
(232.6)
0.8
(279.8)
40.3
1.4
29.7
1,119.2
0.9
1,194.5
1,074.0
82.8
13.0
—
1,312,559.9
15,592.0
15,592.0
—
(18.3)
4.4
(4.1)
—
19.6
—
947.5
9.9
96.2
8.6
1.3
6.4
(0.1)
0.3
(0.3)
—
—
4.4
—
—
19.6
—
2.1
9.9
0.2
—
1.3
—
—
0.3
—
0.4
15,592.0
84.1
(365.0)
4.4
(82.8)
70.0
19.6
3.6
3,615.2
9.9
366.8
174.5
1.3
130.2
(4.1)
0.3
(13.5)
(1,557.7)
(1,333.3)
(224.8)
U.K. Annual Report and Accounts
(In millions except for rates)
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
Euro
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
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
Swedish Krona
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
New Israeli Shekel
Notional amount (LC)
225 TechnipFMC
December 31, 2021
Maturity
1-12 months
12-24 months
Beyond 24
months
Total
135.4
1.4
98.1
1,631.3
5.6
292.3
(296.3)
0.7
(399.5)
16.5
1.3
13.0
717.0
0.9
812.1
264,581.4
74.3
3,560.9
(309,356.9)
29.9
1.4
21.7
(331.6)
5.6
(59.4)
99.7
0.7
134.5
2.7
1.3
2.1
61.5
0.9
69.7
—
74.3
—
—
14,278.0
14,278.0
(21.7)
—
(536.3)
4.2
(128.7)
(116.7)
20.4
(5.7)
(72.0)
4.2
(17.2)
—
20.4
—
(189.7)
1,173.4
8.4
(21.5)
123.1
1.3
91.2
—
6.6
—
2.1
8.4
133.1
2.3
1.3
1.7
(7.0)
6.6
(1.1)
—
17.1
1.4
12.4
—
5.6
—
(0.7)
0.7
(1.0)
—
1.3
—
(3.2)
0.9
(3.6)
(263,700.0)
74.3
(3,549.0)
182.4
1.4
132.2
1,299.7
5.6
232.9
(197.3)
0.7
(266.0)
19.2
1.3
15.1
775.3
0.9
878.2
881.4
74.3
11.9
263,700.0
14,278.0
18.5
(45,656.9)
14,278.0
(3.2)
(19.1)
4.2
(4.6)
—
20.4
—
(15.7)
8.4
(1.8)
—
—
—
—
6.6
—
—
(627.4)
4.2
(150.5)
(116.7)
20.4
(5.7)
968.0
8.4
109.8
125.4
1.3
92.9
(7.0)
6.6
(1.1)
2.1
U.K. Annual Report and Accounts
Average forward rate (LC/USD)
USD equivalent
Russian Ruble
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 (total)
3.1
0.7
925.0
74.3
12.5
(3.3)
0.3
(10.9)
(9.9)
6.7
(1.6)
3.1
—
—
74.3
—
—
0.3
—
—
0.1
3.1
—
—
74.3
—
—
0.3
—
—
—
3.1
0.7
925.0
74.3
12.5
(3.3)
0.3
(10.9)
(9.9)
(1.5)
(817.2)
(300.9)
(1.8)
(1,119.9)
226 TechnipFMC
U.K. Annual Report and Accounts
Foreign exchange rate instruments embedded in purchase and sale contracts—In general embedded
derivative instruments 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 2022 and 2021 our portfolio of these instruments included the following material net positions:
December 31, 2022
1-12 months
12-24 months
Beyond 24
months
Total
97.3
5.2
18.7
(1.9)
0.9
(2.0)
(24.6)
9.9
(2.5)
(12.5)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
December 31, 2021
1-12 months
12-24 months
Beyond 24
months
Total
52.0
5.6
9.3
(7.3)
0.9
(8.3)
7.9
8.8
0.9
(1.6)
0.5
5.6
0.1
—
0.9
—
(1.8)
8.8
(0.2)
0.4
—
—
—
—
—
—
—
—
—
—
97.3
—
18.7
(1.9)
—
(2.0)
(24.6)
—
(2.5)
(12.5)
52.5
5.60
9.4
(7.3)
1.8
(8.3)
6.1
17.6
0.7
(1.2)
(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 (total)
(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 (total)
227 TechnipFMC
U.K. Annual Report and Accounts
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.
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, 2022
December 31, 2021
Assets
Liabilities
Assets
Liabilities
Current - Derivative financial instruments
$
254.8 $
332.5 $
106.4 $
Long-term - Derivative financial instruments
Total derivatives designated as hedging instruments
Derivatives not designated as hedging instruments
Foreign exchange contracts
Current - Derivative financial instruments
Total derivatives not designated as hedging
instruments
7.2
262.0
27.9
27.9
3.6
336.1
14.1
14.1
10.5
116.9
3.9
3.9
Total derivatives
Cash flow hedges
$
289.9 $
350.2 $
120.8 $
139.5
15.6
155.1
21.5
21.5
176.6
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 a gain (loss) of $(1.0) million and $3.8 million for 2022 and 2021, 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 $33.9 million and $68.5 million as of 2022 and 2021, respectively. In prior years,
TechnipFMC had a policy of applying cash as a natural hedge instrument. We reviewed the applicability
of IFRS 9 and discontinued this policy in the current year. The impact of the change in policy is not
material to the activities of the group and has been presented in the Consolidated Statements of Changes
to Stockholders’ Equity. We expect to transfer approximately $9.4 million earnings 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.
228 TechnipFMC
U.K. Annual Report and Accounts
The following represents the effect of cash flow hedge accounting on the consolidated statements of
income for the 2022 and 2021:
(In millions)
Year Ended December 31, 2022
Year Ended December 31, 2021
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)
Ineffective amounts
—
—
—
(1.0)
(1.8)
(3.3)
—
$
(7.4) $ (14.5) $
(0.3) $
(13.1) $
(29.7) $ 10.7 $
0.2 $
32.9
3.8
Total cash flow
hedge gain (loss)
recognized in income
Gain (loss) recognized
in income on
derivatives not
designated as hedging
instruments
(7.4)
(14.5)
(0.3)
(14.1)
(31.5)
7.4
0.2
36.7
(0.3)
(0.7)
—
78.1
1.3
0.3
—
(13.3)
Total
$
(7.7) $ (15.2) $
(0.3) $
64.0 $
(30.2) $
7.7 $
0.2 $
23.4
Impact of hedging on equity
A reconciliation of cash flow hedge reserves in OCI attributable to TechnipFMC plc are as follows:
(In millions)
Balance at beginning of period
Spin-off of Technip Energies
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,
2022
2021
$
(68.5) $
—
77.9
(35.3)
(8.0)
(33.9) $
$
—
(14.5)
(77.6)
14.1
9.5
(68.5)
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 2022 and 2021 we had no
collateralized derivative contracts.
229 TechnipFMC
U.K. Annual Report and Accounts
The following tables present both gross information and net information of recognized derivative
instruments:
(In millions)
Gross
Amount
Recognized
December 31, 2022
Gross
Amounts Not
Offset
Permitted
Under Master
Netting
Agreements
Net Amount
Gross
Amount
Recognized
December 31, 2021
Gross
Amounts Not
Offset
Permitted
Under Master
Netting
Agreements
Net Amount
Derivative assets
Derivative liabilities
$
$
289.9 $
350.2 $
(142.5) $
(142.5) $
147.4 $
207.7 $
120.8 $
176.6 $
(78.6) $
(78.6) $
42.2
97.9
NOTE 28. PAYROLL STAFF
As of December 31, 2022, TechnipFMC had approximately 20,000 full-time employees.
The average monthly number of employees (including executive directors) employed by TechnipFMC
during the years ended December 31, 2022 and 2021 are as follows:
By function:
Production / Services
Selling and distribution
General and administrative
Total
2022
2021
14,866
1,858
3,979
20,703
14,184
1,823
3,839
19,846
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.
Accounts receivables consisted of receivables due from following related parties:
(In millions)
Dofcon
Others
Total trade receivables
December 31,
2022
2021
$
$
16.6 $
1.3
17.9 $
27.2
2.5
29.7
230 TechnipFMC
U.K. Annual Report and Accounts
As of December 31, 2022 and 2021, we did not have any material accounts payable outstanding with
our related parties.
Dofcon is our equity method investment. As of December 31, 2021, we had a note receivable of $12.6
million with Dofcon which was included in other assets in our consolidated balance sheet. During 2022,
this note was repaid.
Revenue consisted of amount from following related parties:
(In millions)
Dofcon
Others
Total revenue
Expenses consisted of amount to following related parties:
(In millions)
Dofcon
Jumbo Shipping
Serimax Holdings SAS
Magma Global Limited
Others
Total expenses
Year Ended December 31,
2022
2021
$
$
21.3 $
7.8
29.1 $
25.7
14.0
39.7
Year Ended December 31,
2022
2021
$
14.4 $
11.5
—
—
20.3
$
46.2 $
26.7
—
7.6
8.8
22.3
65.4
In October 2020, we added a new member to our Board of Directors who was an executive of Equinor
ASA up through January 2021. Serimax Holdings SAS is an equity method affiliate. A member of our
Board of Directors serves on the Board of Directors for Jumbo Shipping. Magma Global Limited was an
equity method affiliate through September 30, 2021. In October 2021, we purchased the remaining
ownership interest in Magma Global, see Note 2 for further details.
29.2 Executive compensation
The below table sets forth the single figure of remuneration for the years ended December 31, 2022 and
2021 for each of TechnipFMC’s executive directors; the Chief Executive Officer and the Executive Chair.
In May 2019, our Chief Executive Officer assumed the role of Executive Chair when the former Executive
Chair retired.
(In millions)
Salary
Taxable benefits
Annual incentive
Long-term incentive awards
Pension-related benefits
Total remuneration
Chief Executive Officer
2022
2021
1.2 $
0.1
5.0
—
0.2
6.5 $
1.2
0.1
7.7
10.7
0.3
20.0
$
$
Total remuneration for non-executive directors was $2.4 million and $2.4 million for the years ended
December 31, 2022 and 2021.
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.
231 TechnipFMC
U.K. Annual Report and Accounts
Net debt
Net debt 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 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, 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
December 31,
2022
2021
$
1,057.1 $
418.8
999.3
872.5
1,327.4
277.9
1,778.5
772.8
$
(1,233.5) $
(1,501.8)
Reconciliation of liabilities from financing activities is as follows:
(In millions)
Long-term debt, less current portion
12/31/2021
$ 1,778.5 $
Opening
balance at
Non-cash changes
Exchange
Closing
Cash
flows
rate
Bond
effects
amortization
Other
changes (1)
balance at
12/31/2022
(390.8) $
(57.0) $
33.0 $
(364.4) $
999.3
Short-term debt and current portion of
long-term debt
Liabilities from leases
277.9
772.8
(200.4)
(128.3)
(10.0)
—
—
—
351.3
228.0
418.8
872.5
Liabilities from financing activities
$ 2,829.2 $
(719.5) $
(67.0) $
33.0 $
214.9 $
2,290.6
(1) This relates to reclassification from non-current to current debt. Liabilities from finance leases relates to the addition of new leases.
Opening
Spin-off of
balance at
Technip
12/31/2020
Energies
Exchange
Closing
Cash
flows
rate
Bond
effects
amortization
Other
changes (1)
balance at
12/31/2021
Non-cash changes
$ 1,792.5 $
(482.2) $
11.5
$
(70.6) $
61.1 $
466.2 $
1,778.5
2,161.6
1,154.9
(11.5)
(1,388.8)
(23.3)
(299.7)
(135.3)
—
1.0
—
(461.1)
52.9
277.9
772.8
$ 5,109.0 $
(793.4) $ (1,512.6) $
(93.9) $
62.1 $
58.0 $
2,829.2
(In millions)
Long-term debt, less
current portion
Short-term debt and
current portion of long-
term debt
Liabilities from leases
Liabilities from
financing activities
(1) This relates to reclassification from non-current to current debt. Liabilities from finance leases relates to the addition of new leases.
Cash flows
Operating cash flows from continuing operations - During 2022, we generated $443.7 million in operating
cash flows from continuing operations, as compared to $727.4 million in 2021, resulting in a $283.7
million decrease compared to 2021. The decrease in cash generated by operating activities from
continuing operations in 2022 as compared to 2021 was primarily due to timing differences on project
milestones, vendor payments for inventory, and timing of income tax refund.
232 TechnipFMC
U.K. Annual Report and Accounts
Investing cash flows from continuing operations - Investing activities from continuing operations provided
$157.5 million and $0.1 million in 2022 and 2021, respectively. The increase of $157.4 million in cash
provided by investing activities was primarily due to a $172.1 million increase in proceeds received
from sales of our investment in Technip Energies and a decrease in capital expenditures, partially offset
by a decrease in proceeds from sales of assets during 2022.
Financing cash flows from continuing operations - Financing activities from continuing operations used
$883.6 million and $1,439.7 million in 2022 and 2021, respectively. The decrease of $556.1 million in
cash used for financing activities was due primarily to the decreased debt pay down and issuance
activity of $683.7 million, partially offset by $100.2 million of share repurchases during 2022.
Debt and Liquidity
Total borrowings as of December 31, 2022 and 2021 were $1,418.1 million and $2,056.4 million,
respectively. See Note 19 for further details.
Availability of borrowings under the Revolving Credit Facility is reduced by the outstanding letters of
credit issued against the facility. As of December 31, 2022, there were $45.4 million letters of credit
outstanding, and our availability of borrowings under the Revolving Credit Facility was $954.6 million.
During 2022, We repaid $161.0 million of our 3.40% 2012 Private placement notes and we completed a
tender offer and purchased for cash $430.2 million of the outstanding 2021 Notes. We paid a cash
premium of $21.5 million to the tendering note holders and wrote-off $8.3 million of debt issuance costs.
Concurrent with the tender offer, the Company obtained consents of holders with respect to the 2021
Notes to certain proposed amendments (“Proposed Amendments”) to the indenture governing these
notes. The Proposed Amendments, among other things, eliminated substantially all of the restrictive
covenants and certain event of default triggers in the indenture.
As of December 31, 2022, we were in compliance with all restrictive covenants under our credit
facilities. See Note 19 for further details.
Credit Ratings - Our credit ratings with Standard and Poor’s (“S&P”) are BB+ for our long-term unsecured,
guaranteed debt (2021 Notes) and BB for our long-term unsecured debt (the Private placement notes).
Our credit ratings with Moody’s are Ba1 for our long-term unsecured, guaranteed debt.
The contractual, undiscounted repayment schedule of financial liabilities are as follows:
(In millions)
Debt
Interest on debt
Accounts payable, trade
Derivative financial
instruments
Finance lease liabilities
Total financial liabilities as
of December 31, 2022
(In millions)
Debt
Interest on debt
Accounts payable, trade
Derivative financial
instruments
Finance lease liabilities
Total financial liabilities as
of December 31, 2021
2023
2024
2025
2026
2027
2028 and
beyond
Total
$
418.8 $
117.8 $
268.3 $
256.6 $
103.8 $
252.8 $ 1,418.1
74.0
1,282.0
346.6
188.6
57.0
—
3.6
151.7
40.0
—
—
121.7
17.6
—
—
98.2
11.4
—
—
85.2
43.0
—
—
640.4
243.0
1,282.0
350.2
1,285.8
$ 2,310.0 $
330.1 $
430.0 $
372.4 $
200.4 $
936.2 $ 4,579.1
2022
2023
2024
2025
2026
2027 and
beyond
Total
$
277.9 $
396.4 $
56.9 $
281.1 $
661.8 $
382.3 $ 2,056.4
102.7
1,293.6
161.0
150.2
89.5
—
15.3
108.3
77.6
—
0.3
102.3
67.1
—
—
83.1
19.0
—
—
74.7
59.0
—
—
675.9
414.9
1,293.6
176.6
1,194.5
$ 1,985.4 $
609.5 $
237.1 $
431.3 $
755.5 $ 1,117.2 $ 5,136.0
233 TechnipFMC
U.K. Annual Report and Accounts
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 in the average exchange rates of all foreign currencies as of December 31, 2022, would
have decreased our revenue and profit before income taxes attributable to TechnipFMC by
approximately $318.6 million and $2.1 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
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 $61.9 million in the net fair value of cash flow hedges reflected in our consolidated statement of
financial position as of December 31, 2022.
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
December 31,
2022
December 31,
2021
$
$
1,153.9 $
264.2
1,418.1 $
1,864.6
191.8
2,056.4
Sensitivity analysis as of December 31, 2022
TechnipFMC’s floating rate debt amounted to $264.2 million compared to an aggregate total debt of
$1,418.1 million. To ensure liquidity, cash is invested on a short-term basis. Financial products are
subject to fluctuations in currency interest rates.
234 TechnipFMC
U.K. Annual Report and Accounts
As of December 31, 2022, the net short-term cash position of TechnipFMC (cash and cash equivalents,
less short-term financial debts) amounted to $451.6 million.
As of December 31, 2022, a 1% (100 basis points) increase in interest rates would lower the fair value of
the fixed rate Senior notes and Private placements by $26.3 million before tax. A 1% (100 basis points)
decrease in interest rates would raise the fair value by $20.5 million before tax.
A 1% (100 basis points) increase in interest rates would generate an additional profit of $6.4 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.
Sensitivity analysis as of December 31, 2021
TechnipFMC’s floating rate debt amounted to $191.8 million compared to an aggregate total debt of
$2,056.4 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, 2021, the net short-term cash position of TechnipFMC (cash and cash equivalents,
less short-term financial debts) amounted to $923.3 million.
As of December 31, 2021, a 1% (100 basis points) increase in interest rates would lower the fair value of
the fixed rate synthetic bonds, convertible bonds and Private placements by $33.5 million before tax. A
1% (100 basis points) decrease in interest rates would raise the fair value by $47.3 million before tax.
A 1% (100 basis points) increase in interest rates would generate an additional profit of $10.5 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 have been grouped based on shared credit risk characteristics. 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 historical losses experienced over a period of 12 months before
December 31, 2022 or December 31, 2021, respectively. These historical loss trends, where applicable,
are adjusted for current conditions and expectations about the future. When considering the impact of
climate change, rising rates and inflation, we have not identified factors that would indicate that our
historical approach to expected credit loss needs to be revised or that additional disclosure is required.
235 TechnipFMC
U.K. Annual Report and Accounts
Credit risk exposure on our trade receivables and contract assets using a provision matrix are set out as
follows:
(In millions)
Carrying amount - Gross
Expected credit loss rate
(In millions)
Carrying amount - Gross
Expected credit loss rate
December 31, 2022
Days past due
Current
Less than 3
months
3 to 12
months Over 1 year
$
518.4 $
150.7 $
109.8 $
221.1 $
Total Trade
Receivables
1,000.0
Contract
Assets
980.6
$
0.12 %
0.12 %
December 31, 2021
Days past due
Current
Less than 3
months
3 to 12
months
Over 1 year
$
532.9 $
122.4 $
182.0 $
205.4 $
Total Trade
Receivables
1,042.7
Contract
Assets
965.8
$
0.11 %
0.11 %
2022
2021
9.8 $
2.9
12.7 $
0.1
0.1 $
9.6
2.6
12.2
0.1
0.1
NOTE 31. AUDITORS’ REMUNERATION
Fees payable to TechnipFMC’s auditors and its associates are as follows:
(In millions)
Fees payable to TechnipFMC plc’s auditors for the audit of its annual financial statements
including 404B internal control
$
Fees payable to TechnipFMC plc’s auditors and its associates for the audit of its subsidiaries
Total fees payable for audit services
Legal and tax related services
Total fees payable for other services
$
$
236 TechnipFMC
U.K. Annual Report and Accounts
NOTE 32. SUBSIDIARIES, JOINT VENTURE UNDERTAKINGS AND EQUITY AFFILIATES
TechnipFMC’s subsidiaries, joint venture undertakings and equity affiliates as of December 31, 2022 are
listed below:
32.1 Directly owned subsidiaries
Company Name
FRANCE
Compagnie Française De Réalisations
Industrielles, Cofri SAS
Address
Share Class
Group
interest
held in %
1BIS Place de la Défense Tour Trinity 92400 Courbevoie
Ordinary shares 100
Seal Engineering SAS
19, Avenue Feuchères 30000 Nîmes
TechnipFMC Subsea France SAS
1BIS Place de la Défense Tour Trinity 92400 Courbevoie
Ordinary shares 100
Ordinary shares 77.79
1
Technip Offshore International SAS
1BIS Place de la Défense Tour Trinity 92400 Courbevoie
Ordinary shares 100
INDONESIA
PT Technip Indonesia
UNITED KINGDOM
TechnipFMC Finance Limited
TechnipFMC Group Holdings Limited
VENEZUELA
Technip Bolivar, C.A. in liquidation
Metropolitan Tower, 15th Floor, JL. R. A.
Kartini Kav.
Hadrian House, Wincomblee Road,
Newcastle Upon Tyne, NE6 3PL
Hadrian House, Wincomblee Road,
Newcastle Upon Tyne, NE6 3PL
Equity interest
9
Ordinary
shares
Ordinary
shares
100
100
523 Zona Industrial Matanzas, Planta De Bauxilum
Puerto Ordaz Ciudad Bolivar
Ordinary shares 99.88
1
(1) Subsidiary is fully and indirectly 100% owned by TechnipFMC, plc.
32.2 Indirectly owned subsidiaries
Address
Share Class
09 Rue Naama Sebti ex Paul Langevin, El Mouradia, 16
035 Alger, Algérie
Ordinary
Shares
Group
interest
held in %
99.98
Company Name
ALGERIA
FMC Technologies Algeria SARL
ARGENTINA
FMC Technologies Argentina S.R.L.
c/o Allende & Brea
Maipú 1300, 10th Floor
Buenos Aires C1006ACT
AUSTRALIA
FMC Technologies Australia Limited
66 Sparks Road - Henderson WA 6166
Technip Oceania Pty Ltd
1120 Hay St, West Perth WA 6005
BAHAMAS
AMC Angola Offshore Ltd
BRAZIL
FMC Technologies do Brasil Ltda
c/o Trident Corporate Services Limited
Provident House
East Hill Street, Nassau
Equity interest
100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Rodovia Presidente Dutra, n° 2660, PavunaRodovia
Presidente Dutra, no 2660, Pavuna, cidade e Estado do Rio
de Janerio, 21535-900
Equity interest
100
GLBL Brasil Oleodutos E Serviços
Ltda.
Rua Dom Marcos Barbosa, no 2, Sala 602 (parte), Cidade
Nova, Rio de Janerio, 20211-178
Equity interest
100
Technip Brasil - Engenharia,
Instalações e Apoio Marítimo Ltda.
Avenida Marquês de Sapucaí nº 200, 16º e 17º andares,
Rio de Janeiro/RJ, CEP 20.210-912.
Equity interest
100
237 TechnipFMC
U.K. Annual Report and Accounts
Cybernetix Produtos e Serviços do
Brasil Ltda (In liquidation)
Rua Paulo Emílio Barbosa, nº 2 sala 402 20211-178,
Cidade Nova Rio de Janeiro
Equity interest
69.59
CAMEROON
FMC Technologies Cameroon SARL
CANADA
TechnipFMC Canada Limited
Zone Portuaire/Place de l’Udeac,
P.B. 12804, Bonanjo, Douala
c/o McInnes Cooper
5th Floor, 10 Fort William Place
P.O. Box 5939, St John's, NL A1C 5X4
Newfoundland and Labrador
CHINA
FMC Technologies (Shanghai) Co.,
Ltd
Room 190
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
Equity interest
100
Ordinary shares 100
Equity interest
100
Equity interest
100
EGYPT
FMC Technologies Egypt LLC
2nd floor, building No. 80 located at Road 250 Maadi El
Sarayat, Maadi
Ordinary shares 100
EQUATORIAL GUINEA
TechnipFMC Equatorial Guinea SARL Carretera de Aeropuerto, KM 5, APDO 925, Malabo
Ordinary shares 65
FRANCE
Angoflex SAS
Flexi France SAS
FMC Technologies Overseas, SAS
FMC Technologies SAS
GABON
FMC Technologies Gabon S.A.R.L.
GERMANY
F.A. Sening GmbH
Smith Meter GmbH
GHANA
FMC Technologies (Ghana) Limited
1BIS Place de la Défense Tour Trinity 92400 Courbevoie
Ordinary shares 100
Rue Jean Huré
76580 Le Trait
Bâtiment C, Rue Nelson Mandela, Zone ECOParc, 89100
Sens
Bâtiment C, Rue Nelson Mandela, Zone ECOParc, 89100
Sens
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Boite Postale (B.P) 277 Port Genti
Equity interest
90
Regentstraße 1
25474 Ellerbek
Regentstraße 1
25474 Ellerbek
Commercial Port Gate 2 Takoradi
P.O. Box CT 42, Cantonments, Accra
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
GNPC-TechnipFMC Engineering
Services Limited
6th Floor, One Airport Square, Airport City, Accra PMB CT
305 Cantonments, Accr
Ordinary shares 70
GUYANA
TechnipFMC Guyana INC.
HONG KONG
FMC Technologies Energy (Hong
Kong) Limited
FMC Technologies Energy Holdings
(Shanghai) Ltd.
INDIA
c/o Cameron & Shepherd
2 Avenue of the Republic,
Georgetown
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
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
238 TechnipFMC
U.K. Annual Report and Accounts
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
Ordinary shares 100
Jalan Cakung Cilincing Raya KM 2.5
Semper, Jakarta 14130
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 80.39
Ordinary shares 95
English Village Compound House 161 - Gulan Street - Erbil
31019 Iraq
Ordinary shares 100
Al Mansour - District 609 - Alley 23, Building 70 - Office 15,
Baghdad
Equity interest
100
Burleigh Manor, Peel Road
Douglas IM1 5EP
ITALY
FMC Technologies S.r.l. a socio unico Via Thomas Alva Edison n.110 ed. A
20099 Sesto San Giovanni (MI),
Ordinary shares 100
Equity interest
100
26 New Street, St. Helier, Jersey, JE2 3RA
Ordinary shares 100
43/5 building, industrial area 3, birlik h.e., Kyzyktobe r.d.,
Munaily district | Aktau, Mangystau | 130006
Equity interest
100
INDONESIA
PT FMC Santana Petroleum
Equipment Indonesia
PT FMC Technologies Subsea
Indonesia
IRAQ
F.M.C Petroleum Services Ltd.
Advanced Oil Services LLC
ISLE OF MAN
Subtec Asia Ltd
JERSEY
CSO Oil & Gas Technology (West
Africa) Ltd
KAZAKHSTAN
FMC Technologies Kazakhstan LLP
LUXEMBOURG
FMC Technologies Global Rental
Tools S.a r.l
FMC Technologies Tool Holdings
S.ar.l
MALAYSIA
Asiaflex Products Sdn. Bhd.
Flexiasia Sdn Bhd
FMC Petroleum Equipment
(Malaysia) Sdn. Bhd.
FMC Technologies Global Supply
Sdn. Bhd.
Asiaflex Products Sdn Bhd
8-10 avenue de la Gare
1610 Luxembourg
8-10 avenue de la Gare
1610 Luxembourg
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, Menara Tan
&Tan, 207 Jalan Tun Razak
Kuala Lumpar, Malaysia
Ordinary shares 100
Ordinary shares 100
Ordinary shares 52.43
Ordinary shares 28.89
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
MAURITIUS
Coflexip Stena Offshore (Mauritius)
Ltd.
GIL Mauritius Holdings Ltd
Global Construction Mauritius
Services Ltd (In Liquidation)
MEXICO
33, Edith Cavell Street
11324 Port Louis
33, Edith Cavell Street
11324 Port Louis
33, Edith Cavell Street
11324 Port Louis
239 TechnipFMC
U.K. Annual Report and Accounts
FMC Technologies de México S.A. de
R.L de C.V.
FMC Technologies Servicios
Corporativos, 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
FMC Technologies de Mexico, S.A. de C.V.
Laurel Lote 41, Manzana 19, Col. Bruno Pagliai
Veracruz, Veracruz
C.P. 91697
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.
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
MOZAMBIQUE
Technip Mozambique Lda
MYANMAR
Technip Myanmar Co. Ltd
NETHERLANDS
FMC Separation Systems B.V.
FMC Technologies B.V.
Edifico Topazio Av, Vladimir, Lenine
8th Floor Mozambique
No. 18 G/F, Ground Floor
Tha Pyay Nyo Street ,Shin Saw Pu Quarter
Sanchaung Township
11201
Delta 101, 6825MN, Amsterdam
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
FMC Technologies Brazil Finance
B.V.
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
FMC Technologies Global B.V.
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.
TechnipFMC PLSV BV
TechnipFMC PLSV CV
Technip Offshore Contracting B.V.
Technip Offshore N.V.
Technip Ships (Netherlands) B.V.
TechnipFMC Cash 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
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
Ordinary shares 100
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 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
240 TechnipFMC
U.K. Annual Report and Accounts
Ordinary shares
Preferred
shares
100
100
Ordinary shares 100
Ordinary shares 99.99
Ordinary shares 66.91
Ordinary shares 99
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
TechnipFMC International Holdings
B.V.
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
TechnipFMC Pipelaying BV
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
NIGERIA
Global Pipelines Plus Nigeria Ltd.
Neptune Maritime Nigeria Ltd.
7 Town Planning way, Ilupeju, Lagos
Neptune Base, Rumuolumeni
PMB 017 (Trans Amadi), Rivers State
Port Harcourt
22A Gerrard Road
Ikoyi Lagos
22A, Gerrard Road,
Ikoyi, Lagos.
Kirkegårdsveien 45
3616 Kongsberg
Kirkegårdsveien 45
3616 Kongsberg
Philip Pedersens vei 7
1366 Lysaker
Philip Pedersens vei 7
1366 Lysaker
Philip Pedersens vei 7
1366 Lysaker
Lagerveien 23, 4033, Stavanger
Lagerveien 23, 4022, Stavanger
Lagerveien 23, 4022, Stavanger
TechnipFMC Nigeria Limited
Technip Offshore (Nigeria) Ltd
NORWAY
Deep Purple AS
FMC Kongsberg Subsea AS
Technip Chartering Norge AS
Technip Norge AS
Technip-Coflexip Norge AS
TIOS AS
TIOS Crewing AS
Agat Technology AS
POLAND
FMC Technologies Sp.z.o.o.
PORTUGAL
Angoltech, SGPS, LDA.
Lusotechnip Engenharia, Sociedade
Unipessoal Lda.
SAUDI ARABIA
FMC Technologies Saudi Arabia
Limited
SINGAPORE
FMC Technologies Global Services
Pte. Ltd.
FMC Technologies Singapore Pte.
Ltd.
Technip Singapore Pte. Ltd.
SOUTH AFRICA
FMC Technologies (Pty.) Ltd.
Al. Jana Pawła II 43B Krakow 31-864 Poland
Ordinary shares 100
Centro Empresarial Torres de Lisboa, Rua Tomás da
Fonseca, Torre E, Piso 9
Centro Empresarial Torres de Lisboa, Rua Tomás da
Fonseca, Torre E, Piso 9
1600-209 Lisboa
PO Box 3076
2nd Industrial City
Dammam 34326, Eastern Province
149 Gul Circle
629605 Singapore
149 Gul Circle
629605 Singapore
149 Gul Circle
629605 Singapore
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Koper Street Brackenfell 7560, Cape Town
Ordinary shares 100
SPAIN
Global Industries Offshore Spain, S.L. Arturo Soria 263B
28003 Madrid
SWITZERLAND
FMC Kongsberg International GmbH Bahnofstrasse 10
FMC Technologies GmbH
THAILAND
241 TechnipFMC
6300 Zurich
Bahnofstrasse 10
6300 Zurich
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
U.K. Annual Report and Accounts
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
TUNISIA
FMC Technologies Service SARL
UNITED ARAB EMIRATES
Technip Middle East FZCO
Rue Lac Tanganyika, Immeuble Junior, Bureaux 2-3, Les
Berges du Lac, 1053, La Marsa,Tunis
Ordinary shares 100
Office LB15310, P.O. Box 17864
Jebel Ali Free Zone Dubai
Ordinary shares 100
TechnipFMC Gulf FZE
Office LB15325, Jebel Ali Free Zone Dubai
Ordinary shares 100
UNITED KINGDOM
AABB Limited
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Control Systems International (UK)
Limited
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
100
100
48,880 Ordinary
(equity) of 1p
each
4,937,630
Ordinary
deferred of 10p
each
Ordinary shares 100
Crosby Services International Ltd.
Enterprise Drive, Westhill, Aberdeenshire, AB32 6TQ
Ordinary shares 100
Forsys Subsea Limited (In
Liquidation)
FMC Kongsberg Services Limited
FMC/KOS West Africa Limited
FMC Technologies Limited
FMC Technologies Pension Plan Ltd
Magma Global 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
Birchin Court, 20 Birchin Lane, London, EC3V 9DU, U.K.
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
O Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Technip Offshore Manning Services
Ltd
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Technip Services Limited
Technip Ships One Ltd
Technip UK Limited
Technip-Coflexip UK Holdings Ltd
TechnipFMC DSV3 Limited
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
242 TechnipFMC
Share A
Share B
100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary
shares
100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 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
TechnipFMC (Europe) Limited
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
TechnipFMC Corporate Holdings
Limited
Hadrian House, Wincomblee Road,
Newcastle Upon Tyne, NE6 2PL
TechnipFMC Finance ULC
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
TechnipFMC International Finance
Limited
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
TechnipFMC International UK Limited Hadrian House, Wincomblee Road,
Ordinary shares 100
TechnipFMC Umbilicals Ltd
Newcastle upon Tyne, NE6 3PL, U.K.
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
TechnipFMC Island Offshore UK
Limited
Pavilion 2, Aspect 32, Arnhall Business Park,
Westhill, Aberdeenshire, Scotland, AB32 6FE
Ordinary shares 100
Ordinary shares 100
West Africa Subsea Services Limited Hadrian House, Wincomblee Road,
Ordinary shares 100
UNITED STATES
Control Systems International, Inc.
FMC Subsea Service, Inc.
FMC Technologies Energy LLC
FMC Technologies, Inc.
FMC Technologies Measurement
Solutions, Inc.
FMC Technologies Overseas Ltd.
Newcastle upon Tyne, NE6 3PL, U.K.
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
Ordinary shares 100
Ordinary shares 100
Membership
interest
100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
FMC Technologies Separation
Systems, Inc.
c/o CT Corporation System 1999 Bryan Street, Suite 900
Dallas, Texas 75201
Ordinary shares 100
FMC Technologies Surface Integrated
Services, Inc.
FMX, LLC
Schilling Robotics, LLC
Subtec Middle East Ltd
TechnipFMC Umbilicals, Inc.
TechnipFMC USA, Inc
TechnipFMC US Holdings Inc.
c/o The Corporation Company
7700 E Arapahoe Road, Suite 220
Centennial, Colorado 80112-1268
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 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
243 TechnipFMC
Ordinary shares 100
Membership
interest
Membership
interest
100
100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
U.K. Annual Report and Accounts
TechnipFMC US LLC 1
TechnipFMC US LLC 2
The Red Adair Company, L.L.C.
VENEZUELA
FMC Wellhead de Venezuela, S.A.
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
Technip Bolivar, C.A. en liquidation
523 Zona Industrial Matanzas, Planta De Bauxilum Puerto
Ordaz Ciudad Bolivar
VIETNAM
FMC Technologies (Vietnam) Co.,
Ltd.
No. 29, Le Duan Street
Ben Nghe Ward, Distric 1
Ho Chi Minh City
(1) Subsidiary fully and indirectly owned by TechnipFMC, plc.
32.3 Joint ventures
Company Name
ANGOLA
Angoflex Industrial Limitada
Address
Rua 1 de Dezembro nº 15, Província de Benguela Lobito
Technip Angola-Engenharia, Limitada
(In Liquidation)
Rua Rei Katyavala, N.°43-45,
Edificio Avenca Plaza, 5°. Andar
5364 Luanda
Membership
Interest
Membership
Interest
Membership
interest
100
100
100
Ordinary shares 100
Ordinary shares 99.881
Equity interest
100
Share Class
Ordinary
Shares
Ordinary
Shares
Group
interest
held in %
70
60
49
Rua Major Marcelino Dias, Edifício ICON 2014, 8º andar
Luanda - Angola
Ordinary
Shares
Avenida Marquês de Sapucaí nº 200, 16º e 17º andares, Rio
de Janeiro/RJ, CEP 20.210-912.
Ordinary shares 0.1
Floor, One Airport Square,
th
6
00233, Accra
Thormohlens Gate 53 C
5006 Bergen
Karenslyst Allé 2, 9
Floor, Oslo, 0278
th
Killingøy
5515 Haugesund
P O Box No 31685
31952 Al Khoba
Ordinary
shares
49
Ordinary shares 50
Ordinary
shares
No capital
25
50
Ordinary shares 50
TechnipFMC Angola, Limitada
BRAZIL
DOFCON NAVEGAÇÃO LDA
GHANA
TechnipFMC (Ghana) Limited
NORWAY
Dofcon Brasil AS
Magnora Offshore Wind AS
Technip-DeepOcean PRS JV DA
SAUDI ARABIA
Global Al Rushaid Offshore Ltd
244 TechnipFMC
U.K. Annual Report and Accounts
32.4 Associated undertakings
Company Name
BOSNIA AND HERZEGOVINA
Petrolinvest, D.D. Sarajevo
FINLAND
Creowave Oy
FRANCE
Serimax Holdings SAS
INDONESIA
PT Technip Indonesia
Address
Tvornicka 3
71000 Sarajevo
Yrttipellontie 10 H
90230 Oulu
346 rue de la Belle Etoile
95700 Roissy en France
Metropolitan Tower, 15th Floor, JL. R. A.
Kartini Kav.
14 (T.B Simatupang), Cilandak
Jakarta Selatan 12430
MALAYSIA
FMC Wellhead Equipment Sdn. Bhd.
Technip Marine (M) Sdn Bhd
Suite 13.03, 13th Floor
207 Jalan Tun Razak
50400 Kuala Lumpur
Suite 13.03, 13th Floor
207 Jalan Tun Razak
50400 Kuala Lumpur
NORWAY
Kongsberg Technology Training Centre
AS
Kirkegårdsveien 45
3616 KONGSBERG
Share Class
Group
interest
held in %
Ordinary shares 33
Ordinary shares 24.9
Ordinary shares 20
Ordinary shares 9
Ordinary shares 14.21
Ordinary shares 28.89
Ordinary shares 33.33
32.5 Statutory audit exemption
TechnipFMC has agreed to provide guarantees over the liabilities of a number of its subsidiaries under
Section 479C of Companies Act 2006. The following entities are therefore exempt from statutory audit
requirements of the Act by virtue of Section 479A thereof:
Company Name
Technip Offshore Manning Services Limited
Spoolbase UK Limited
West Africa Subsea Services Limited
Subsea Offshore Services Limited
Subsea I & C Limited
Subsea Maritime Services Limited
Schilling Robotics Limited
FMC/KOS West Africa Limited
TechnipFMC (Europe) Limited
TechnipFMC DSV3 Limited
TechnipFMC International Finance Limited
TechnipFMC International UK Limited
TechnipFMC Corporate Holdings Limited
TechnipFMC Group Holdings Limited
TechnipFMC Finance Limited
245 TechnipFMC
Company number
4055455
5315706
10345570
9681629
9460007
9919636
4848086
621727
11437449
11489082
11112457
11112462
12346753
14501041
14501545
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NOTE 33. DISCONTINUED OPERATIONS
The Spin-off
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% 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., Eastern Standard 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, TechnipFMC and Technip Energies entered into a separation and
distribution agreement, as well as various other agreements, including among others a tax matters
agreement, an employee matters agreement and a transition services agreement and certain agreements
relating to intellectual property. These agreements provide for the allocation between TechnipFMC and
Technip Energies of assets, employees, taxes, liabilities and obligations attributable to periods prior to, at
and after the Spin-off.
Discontinued Operations
The Spin-off represented a strategic shift that will have a major impact on our operations and
consolidated financial statements. Accordingly, historical results of Technip Energies prior to the
Distribution on February 16, 2021 have been presented as discontinued operations in our consolidated
statements of income and consolidated statements of cash flows for the year ended December 31, 2022
and 2021. Our consolidated statements of income and consolidated statements of cash flows and notes
to the consolidated financial statements have been updated to reflect continuing operations only.
On initial recognition at the Spin-off date, we recorded the retained interest in Technip Energies at fair
value of $1,377.9 million, being the market share price of the investment as of the Spin-off date. The
remeasurement difference of $507.9 million, representing an excess of TechnipFMC’s share of the net
fair value of Technip Energies' identifiable assets and liabilities over the carrying value of the retained
share Technip Energies net assets, is included within the line net profit from discontinued operations in
the consolidated statement of income.
The following table summarizes the components of income from discontinued operations, net of tax:
(In millions)
Revenues
Costs and expenses (a)
Other income and interest expense, net
Loss from discontinued operations before income taxes
Provision for income taxes
Loss from discontinued operations after income taxes
Gain on loss of control at Spin-off (i)
$
Loss on sale of shares of Technip Energies and remeasurements (ii)
Profit (loss) from discontinued operations, net of income taxes
Income from discontinued operations attributable to non-controlling interests
Profit (loss) from discontinued operations attributable to TechnipFMC plc
$
Year Ended December 31,
2022
2021
— $
(26.4)
—
(26.4)
18.9
(45.3)
—
—
(45.3)
—
(45.3) $
906.0
(932.0)
(18.6)
(44.6)
56.0
(100.6)
872.8
(167.0)
605.2
(1.9)
603.3
(a) Includes $53.3 million related to separation costs for the years ended December 31, 2021.
For the year ended December 31, 2022, we recorded $(26.4) million in expense from discontinued
operations due to a change in estimate of liabilities recognized in connection with the Spin-off. Also, for
the year ended December 31, 2022, we recorded $18.9 million in income tax (benefit) expense from
discontinued operations related to a change in estimate in our French tax group.
246 TechnipFMC
U.K. Annual Report and Accounts
The following table summarizes the details of amounts realized upon the Spin-off transaction:
(i) (In millions)
Amount of distribution payable to shareholders (fair value of 50.1% shares of Technip Energies)
Fair value of retained 49.9% shareholding
Less carrying amount of net assets of Technip Energies at spin-off date
Gain on spin off before reclassification of OCI
Reclassification of other comprehensive income to profit or loss (a)
Reclassification of non-controlling interest’s share in other comprehensive income to profit or loss
Total gain on loss of control at Spin off
Income taxes
Total gain on loss of control on Spin-off, net of income taxes
$
$
$
$
$
February 16, 2021
1,383.5
1,377.9
(1,743.5)
1,017.9
(166.9)
21.8
872.8
—
872.8
(a) Includes $14.5 million gain and $181.4 million loss related to hedging instruments and currency
translation adjustments, refer to consolidated statement of other comprehensive income for further
details.
In addition to the amounts in the table above, a net accumulated loss of $37.2 million on the
remeasurement of pension liabilities has been transferred from accumulated other comprehensive
income to retained earnings upon the completion of the Spin-off.
The following table summarizes the details of Technip Energies share sales after spin-off date during
2021:
(ii) (In millions)
Proceeds from sale of shares, net of transaction costs
Carrying amount of 32.8% shares sold
Loss on sales of Technip Energies shares
Impairment of retained financial investment upon loss of significant influence
Income taxes
Loss on subsequent sales of Technip Energies shares included in discontinued operations
Proceeds from sale of additional shares, net of transaction costs
Carrying amount of 4.9% shares sold
Loss on sale of additional shares
Fair value measurement of financial investment in Technip Energies
Loss on financial investment in Technip Energies
Year ended
December 31, 2021
$
$
$
$
$
784.5
(904.8)
(120.3)
(46.8)
—
(167.1)
116.3
(124.0)
(7.7)
16.2
8.5
247 TechnipFMC
U.K. Annual Report and Accounts
The following table summarizes the details of Technip Energies share sales during 2022:
(In millions)
Proceeds from sale of additional shares, net of transaction costs
Carrying amount of 12% shares sold
Fair value measurement of financial investment in Technip Energies
Loss on financial investment in Technip Energies
Year ended
December 31, 2022
$
$
288.5
(301.6)
(14.6)
(27.7)
The carrying amounts of assets and liabilities of Technip Energies as of the spin-off date were as follows:
(in millions)
Assets
Cash and cash equivalents
Other current assets
Property, plant and equipment, net of accumulated depreciation
Goodwill
Other non-current assets
Total assets
Liabilities
Current liabilities
Long-term debt, less current portion
Operating lease liabilities
Other non-current liabilities
Total liabilities
February 16, 2021
$
3,538.6
2,225.7
105.6
2,512.5
656.7
9,039.1
6,213.2
482.2
248.2
352.0
7,295.6
Net assets distributed to Technip Energies
$
1,743.5
Investment in Technip Energies
Immediately following the completion of the Spin-off, we owned 49.9% of the outstanding shares of
Technip Energies. At the Spin-off date the 49.9% retained interest was classified as an equity affiliate on
the basis that TechnipFMC retained significant influence over Technip Energies through its retained stake
and representation in Technip Energies Board.
IFRS 5 states that an asset is considered as held for sale provided two conditions are met: it must be
available for immediate sale in its present condition and its sale must be highly probable. At the Spin-off
date, when it became highly probable that the value of the investment in Technip Energies would be
recovered through sale rather than continuing ownership, the investment in Technip Energies was
classified as held for sale. As of the Spin-off date we committed to conduct an orderly sale of our
remaining stake in Technip Energies over time and use the proceeds (net of broker fees and discounts)
from future sales to further reduce our net leverage. We did not intend to remain a long-term
shareholder of Technip Energies and planned to exit our ownership stake in a timely and orderly manner
within a year.
Following the held for sale classification the remaining interest in Technip Energies equity affiliate was
measured at the lower of its carrying amount and fair value less costs to sell. The fair value of the
investment was determined using the market share price of Technip Energies shares. This is a Level 1
measurement as per the fair value hierarchy.
248 TechnipFMC
U.K. Annual Report and Accounts
Sale of Technip Energies shares
During the year ended December 31, 2021, we sold 37.7% of carrying amount of our investment in
Technip Energies and recognized a net loss of $158.5 million, from which $167.1 million is reported
within the line net profit from discontinued operations attributable to TechnipFMC plc and $8.5 million is
in gain from investment in Technip Energies in the consolidated income statement.
As of December 31, 2021, we determined that TechnipFMC ceased to have a significant influence due to
(i) the decrease in stake in Technip Energies to 12.2%, and (ii) due to decrease in representation on
Technip Energies Board leading to one of nine seats. The investment in Technip Energies became a
subject to accounting for equity instruments under IFRS 9 and therefore was recorded at fair value as of
December 31, 2021 with changes in fair value $16.2 million reported in gain from investment in Technip
Energies in the consolidated income statement. This is a Level 1 measurement as per the fair value
hierarchy.
During 2022, we fully divested our remaining ownership in Technip Energies and recognized $27.7
million loss related to the changes in fair value.
NOTE 34. SUBSEQUENT EVENTS
There have been no material subsequent events after the reporting period, up to and including the date
that the financial statements were authorized for issue, that would have required disclosure or
adjustment of the Consolidated financial statements.
249 TechnipFMC
U.K. Annual Report and Accounts
COMPANY FINANCIAL STATEMENTS
TECHNIPFMC PLC
FOR THE YEAR ENDED DECEMBER 31, 2022
Company No. 09909709
250 TechnipFMC
U.K. Annual Report and Accounts
COMPANY STATEMENT OF FINANCIAL POSITION
(In millions)
Assets
Investments in subsidiaries
Intangible assets, net
Loan receivables – related parties
Total non-current assets
Cash and cash equivalents
Trade and other receivables, net
Loan receivables - related parties
Income taxes receivable
Investment in Technip Energies
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
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Short-term debt
Trade and other payables
Loan payables – related parties
Total current liabilities
Total liabilities
Total equity and liabilities
At January 1
Profit (loss) for the year
Other changes in retained earnings
Retained earnings
December 31,
2022
December 31,
2021
Note
3
4
6
4
12
$
4,084.8 $
10,052.4
—
—
1.4
476.4
4,084.8
10,530.2
3.7
24.5
4,441.3
8.8
—
20.0
4,498.3
10.1
48.3
184.2
95.5
317.3
26.0
681.4
$
8,583.1 $
11,211.6
8
9
5
8
10
9
7
$
442.2 $
2,222.3
2,664.5
699.6
3,406.2
—
—
450.7
2,551.9
3,002.6
1,437.6
5,963.1
1.8
0.1
4,105.8
7,402.6
290.4
753.5
768.9
1,812.8
5,918.6
203.9
602.5
—
806.4
8,209.0
$
$
8,583.1 $
11,211.6
2,551.9 $
(280.0)
(49.6)
1,618.8
2,393.3
(1,460.2)
$
2,222.3 $
2,551.9
The accompanying notes are an integral part of the consolidated financial statements. The financial
statements were approved by the Board of Directors and signed on its behalf by
Douglas J. Pferdehirt
Director and Chief Executive Officer
March 17, 2023
251 TechnipFMC
U.K. Annual Report and Accounts
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
(In millions)
Ordinary
Shares
Retained Earnings, Net Profit
(Loss) and Other reserves
Total Shareholders’
Equity
Balance as of December 31, 2020
$
449.5 $
1,618.8 $
Net profit
Other comprehensive loss
Issuance of ordinary shares (Note 7)
Share-based compensation (Note 7)
Spin-off of Technip Energies (Note 12)
—
—
1.2
—
—
Balance as of December 31, 2021
$
450.7 $
Net loss
Shares repurchased and cancelled (Note 7)
Issuance of ordinary shares (Note 7)
Share-based compensation (Note 7)
—
(10.1)
1.6
—
2,393.3
(103.0)
—
26.8
(1,384.0)
2,551.9 $
(280.0)
(90.1)
—
40.5
Balance as of December 31, 2022
$
442.2 $
2,222.3 $
The accompanying notes are an integral part of the consolidated financial statements.
2,068.3
2,393.3
(103.0)
1.2
26.8
(1,384.0)
3,002.6
(280.0)
(100.2)
1.6
40.5
2,664.5
252 TechnipFMC
U.K. Annual Report and Accounts
NOTES TO THE COMPANY FINANCIAL STATEMENTS
NOTE 1 - GENERAL CORPORATE INFORMATION
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 Hadrian House, Wincomblee
Road, Newcastle upon Tyne, NE6 3PL, 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 Houston, Texas,
United States, and in 2022 we principally operated across two business segments: Subsea and Surface
Technologies.
TechnipFMC is listed on the New York Stock Exchange and its ordinary shares trade under the symbol
“FTI." On February 18, 2022, following a comprehensive review of the strategic objectives, we
voluntarily delisted TechnipFMC’s shares from Euronext Paris.
NOTE 2 - ACCOUNTING PRINCIPLES
2.1 Basis of preparation
The financial statements for the year ended December 31, 2022 have been prepared in accordance with
United Kingdom Accounting Standards – in particular Financial Reporting Standard 101 “Reduced
Disclosure Framework” (“FRS 101”) – and with the Companies Act 2006.
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 disclosure exemptions adopted by the Company are as follows:
•
•
•
•
•
•
•
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, 2022 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 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 judgment 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. Therefore, the financial statements have been prepared on a going concern basis.
Details of going concern assessment are provided in Note 1 of TechnipFMC consolidated financial
statements.
253 TechnipFMC
U.K. Annual Report and Accounts
2.2 Changes in accounting policies and disclosures
a)
Standards, amendments and interpretations effective in 2022
The Company has applied the amendments to IFRS 3 and IAS 37 for the first time in its consolidated
financial statements for the year ended December 31, 2022. These amendments did not have any impact
on the Company's accounting policies and did not require retrospective adjustments. There are no other
new or amended standards or interpretations adopted, or on issued but not yet adopted, that have, or
are expected to have, a material impact on the financial statements.
b) Standards, amendments and interpretations to existing standards that are issued, not yet effective
and have not been early adopted as of December 31, 2022
Amendments to IAS 1 "Presentation of financial statements" on disclosure of material accounting policy
information
The IASB has amended IAS 1 to require entities to disclose their material rather than their significant
accounting policies. The amendments define what is ‘material accounting policy information’ and explain
how to identify when accounting policy information is material. They further clarify that immaterial
accounting policy information does not need to be disclosed. If it is disclosed, it should not obscure
material accounting information. The new amendments are effective on or after January 1, 2023 but can
be adopted early. We are currently evaluating the impact of this amendment on our consolidated
financial statements and do not expect that the adoption of the amendment to have a significant impact
on the consolidated financial statements.
Amendments to IAS 1 "Presentation of financial statements" on classification of liabilities as current or non-
current
These narrow-scope amendments to IAS 1, aims to improve the information provided when a right to
defer settlement of a liability is subject to compliance with covenants within twelve months after the
reporting period. The new amendments are effective on or after January 1, 2024 and override previous
amendments. We are currently evaluating the impact of this amendment on our consolidated financial
statements and do not expect that the adoption of the amendment to have a significant impact on the
classification of current or non-current liabilities in our consolidated financial statements.
Definition of Accounting Estimates – Amendments to IAS 8
The amendments clarify how companies should distinguish changes in accounting policies from changes
in accounting estimates. That distinction is important because changes in accounting estimates are
applied prospectively only to future transactions and other future events, but changes in accounting
policies are generally also applied retrospectively to past transactions and other past events. 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.
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.
Where non-cash assets are contributed to an investment with no substantive change to the risk, timing or
amount of cash flows
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 cost of disposal 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.
254 TechnipFMC
U.K. Annual Report and Accounts
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.
Dividends received are recorded as income unless the dividend clearly represents a recovery of part of
the cost of the investment. 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 expected credit loss. We apply IFRS 9 guidance for
intercompany loans in separate financial statements to measure the expected credit loss. The majority of
our receivables are related to loans that are payable on demand and we have assessed the expected
manner of recovery to determine the exposure at risk of default and measured the expected credit loss
at a probability-weighted amount.
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 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. 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. 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.
d)
Long term debt
Financial liabilities are recognized initially at fair value and, in the case of loans, borrowings and
payables, net of directly attributable transaction costs. 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.
A financial liability is derecognized when the obligation under the liability is discharged, 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.
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
255 TechnipFMC
U.K. Annual Report and Accounts
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
In the comparative financial statement, the income statement of the Company’s branch is translated into
USD at the average exchange rate prevailing during the year. Statement of financial position is 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)
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.
g)
Share capital and dividend distribution
Ordinary shares and redeemable shares are classified as 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.
h)
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.
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.
i)
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 sell/or distribute will
be withdrawn. Management must be committed to the sale/or distribution expected within one year from
the date of the classification.
j)
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”).
TechnipFMC currently has no financial assets at fair value through OCI.
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).
256 TechnipFMC
U.K. Annual Report and Accounts
Financial assets at fair value through profit or loss are carried in the statement of financial position at
fair value with net changes in fair value recognized in the statement of profit or loss.
k)
Related parties
The Company is a qualifying entity for the purposes of FRS 101 and took 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.
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 and was estimated to be $2.4 million as of December
31, 2022. The Company uses judgment 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 customers' 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.
Judgements
During the year ended December 31, 2022, the Company received a distribution of $4.3 billion from
TechnipFMC Corporate Holdings Limited pursuant to a reorganization of the Company's net investment in
its subsidiaries. The substance of this distribution has been considered to be a return of capital, reducing
the carrying amount of the investment in TechnipFMC Corporate Holdings Limited, rather than income.
During the year ended December 31, 2022, the Company contributed assets and liabilities of the
Company's French Branch to Technip Offshore International SAS ("TOI"). The contribution transaction
resulted in TOI acquiring the assets and liabilities of the French Branch. TOI recognized the transferred
assets and liabilities at historical carrying values as through the transfer had occurred as of January 1,
2022, in line with what management considers to be the legal form of the transaction. The Company
derecognized assets and liabilities of French Branch at their respective historical carrying values and no
gain or loss was recorded as a result of the distribution in line with the Company's accounting policy. See
Note 11 for further details.
Additionally, areas of judgment that have the most significant effect on the amounts recognized in the
consolidated financial statements relate to the separation transaction, which was executed during 2021.
See Note 12 for further details.
There have been no other critical judgments made in applying the Company’s accounting policies.
257 TechnipFMC
U.K. Annual Report and Accounts
NOTE 3 - INVESTMENTS IN SUBSIDIARIES
The movement in investments account balances are described below:
(In millions)
Net book value at January 1,
Return of capital from subsidiaries (1)
Sale of subsidiaries for intercompany debt (2)
Contribution of French Branch investment to TOI (3)
Addition of investment in TOI in exchange for French Branch Business (3)
Spin-off of Technip Energies (Note 12)
Additions due to the spin-off of Technip Energies (4)
Net foreign exchange differences
2022
2021
$
10,052.4 $
11,110.2
(4,300.0)
(1,834.0)
(444.7)
611.1
—
—
—
—
—
—
—
(1,709.0)
818.3
(167.1)
Net book value as of December 31,
$
4,084.8 $
10,052.4
(1) During 2022, the Company received a distribution from TechnipFMC Corporate Holdings Limited which was in
substance a return of capital and was recognized as a reduction in the carrying amount of that investment.
(2) During 2022, The Company sold TechnipFMC International Holdings BV to TechnipFMC Group Holdings Limited in
exchange for the novation of intercompany liabilities to Technip FMC Group Holdings Limited.
(3) During 2022, the Company contributed assets and liabilities of the French Branch to TOI, in consideration of the
issuance of the ordinary shares of TOI.
(4) In connection with the Spin-off, the Company executed a series of transactions to restructure and realign the
ownership of its group entities. 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.
During the year the Company has transferred a number of wholly-owned subsidiary undertakings to
other wholly-owned subsidiaries for the issue of shares. These transactions have not substantially
changed the risk, timing or amount of cash flows available to the Company and accordingly they have
been recorded at cost with no change to the total carrying amount of investments or any gain or loss.
During the year ended December 31, 2022, we performed an impairment assessment of the Company's
investments and no impairment triggers were identified.
The Company’s direct subsidiaries as of December 31, 2022 are listed below. The effective interest
reflects holdings of ordinary shares. Details of other related undertakings are provided in Note 32 of
TechnipFMC consolidated financial statements.
Company Name
FRANCE
Technip Offshore International SAS 1bis Place de la Défense Tour Trinity 92400 Courbevoie Ordinary shares 100
Share Class
Address
Effective interest
held in %
INDONESIA
PT Technip Indonesia
UNITED KINGDOM
TechnipFMC Group Holdings
Limited
TechnipFMC Finance Limited
VENEZUELA
Technip Bolivar, C.A.
Metropolitan Tower, 15th Floor, JL. R. A.
Kartini Kav.
Equity interest
9
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Hadrian House, Wincomblee Road,
Newcastle Upon Tyne, NE6 3PL
Ordinary shares 100
Ordinary shares 100
523 Zona Industrial Matanzas, Planta De Bauxilum
Puerto Ordaz Ciudad Bolivar
Ordinary shares 99.88
258 TechnipFMC
U.K. Annual Report and Accounts
NOTE 4 - LOAN RECEIVABLES - RELATED PARTIES
(In millions)
Loan receivables - current
Loan receivables -non current
Total
December 31,
2022
2021
$
$
4,441.3 $
—
4,441.3 $
184.2
476.4
660.6
The Company’s loan receivables from related parties are unsecured and we determined that there was no
material expected credit loss as of December 31, 2022 and 2021.
As of December 31, 2022, loan receivables from related parties primarily consisted of a loan to
TechnipFMC Corporate Holdings Ltd (U.K.) (“Corporate Holdings Ltd”). The loan to Corporate Holdings Ltd
is in the amount of $4,300 million and interest rate of 6.05% is repayable on demand with no repayment
date.
As of December 31, 2021, loan receivables from related parties primarily consist of loans to TOI, Technip
UK Ltd (“Technip UK”) and FMC Technologies, Inc. ("FMCTI"). The terms and interest rates for significant
loans are detailed below:
•
•
•
Loans to TOI consisted of two loans in the amount of $31.9 million and $115.0 million
respectively with 5 year terms and interest rates of 4.16% and 2.10% respectively.
Loan to Technip UK was in the amount of $91.0 million with a 5 year term and interest rate of
LIBOR GBP 6 months +0.5 basis point through May 16, 2022. Due to the termination of GBP
LIBOR on December 31, 2021, the interest rate changed to SONIA 6 month+0.5 basis points.
Loan to FMCTI was in the amount of $233.0 million with a 9 month term and interest rate of
4.25%.
NOTE 5 - 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. Prior to
2022, the transactions carried out by the French permanent establishment were tax effected using the
French statutory tax rate of 27.5%. Effective January 1, 2022, the business assets and liabilities of the
French permanent establishment were contributed to a first-tier French subsidiary of the U.K. head office
and therefore no transactions were tax effected using the French statutory rate in 2022.
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 were not taxable in the U.K. as the election under section 18A
CTA 2009 had been validly made.
The net deferred tax liabilities amounts to $0 and $1.8 million as of December 31, 2022 and 2021,
respectively. The deferred tax balance comprises:
(In millions)
Deferred tax relating to pensions
Total
December 31,
2022
2021
$
$
— $
— $
(1.8)
(1.8)
259 TechnipFMC
U.K. Annual Report and Accounts
The movement in the deferred tax asset is shown below:
(In millions)
As of January 1
French Branch deferred tax contributed
Movement relating to pensions
Credit to income statement
As of December 31
NOTE 6 - TRADE AND OTHER RECEIVABLES
(In millions)
Trade receivables - related parties
Prepaid expenses
Advances paid to suppliers
Trade and other receivables
December 31,
2022
2021
(1.8) $
1.8
—
—
— $
December 31,
2022
2021
16.2 $
8.3
—
24.5 $
5.8
—
(1.8)
(5.8)
(1.8)
27.1
10.7
10.5
48.3
$
$
$
$
The Company’s trade receivables from related parties are stated net of loss allowance of $0 and
$6.4 million as of December 31, 2022 and 2021, respectively. There was no material expected credit loss
for trade and other receivables as of December 31, 2022
NOTE 7 - STOCKHOLDERS’ EQUITY
7.1 Changes in the Company’s ordinary shares
As of December 31, 2022, TechnipFMC’s share capital was 442,208,014 ordinary shares. As of December
31, 2021, TechnipFMC's share capital was 450,700,480 ordinary shares. The movements in share capital
were as follows:
(In millions of shares)
December 31, 2020
Stock awards
December 31, 2021
Stock awards
Shares repurchased and retired
December 31, 2022
Ordinary Shares
449.5
1.2
450.7
1.6
(10.1)
442.2
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 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.
260 TechnipFMC
U.K. Annual Report and Accounts
7.2 Dividends
No dividends were declared and paid during the years ended December 31, 2022 or 2021. See Note 12
for additional information regarding the Distribution of Technip Energies.
7.3 Capital Management
In July 2022, the Board of Directors authorized the repurchase of up to $400.0 million of our
outstanding ordinary shares under our share repurchase program. Pursuant to this share repurchase
program, we repurchased $100.2 million of ordinary shares during the year ended December 31, 2022.
Based upon the remaining repurchase authority of $299.8 million and the closing stock price as of
December 31, 2022, approximately 24.6 million ordinary shares could be subject to repurchase. All
shares repurchased were immediately cancelled.
7.4 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 8 - DEBT (SHORT-TERM AND LONG-TERM)
Debt consisted of the following:
(In millions)
5.75% Notes due 2025
3.15% Notes due 2023
3.15% Notes due 2023
Senior notes due 2026
4.00% Notes due 2027
4.00% Notes due 2032
3.75% Notes due 2033
Total Long-term debt
3.15% Notes due 2023
3.15% Notes due 2023
3.40% Notes due 2022
Other
Total short-term debt and current portion of long-term debt
Total debt
December 31,
2022
2021
$
211.6 $
—
—
199.7
80.0
104.1
104.4
699.8
138.6
133.4
—
18.4
290.4
223.7
147.0
141.5
619.8
84.9
110.2
110.5
1,437.6
—
—
169.9
34.0
203.9
$
990.2 $
1,641.5
Our loans denominated in United States dollars (“USD”), at our option, under our Revolving Credit Facility
bear interest at an adjusted rate linked to the London Interbank Offered Rate (“LIBOR”) and our euro-
denominated loans under the Revolving Credit Facility bear interest at an adjusted rate linked to the
Euro Interbank Offered Rate (“EURIBOR”). The United Kingdom’s Financial Conduct Authority (the “FCA”),
which regulates LIBOR, has announced that the publication of LIBOR on the current basis would cease
and no longer be representative immediately after December 31, 2021 (in the case of all sterling, euro,
Swiss franc and Japanese yen settings, and one-week and two-month USD settings) and immediately
after June 30, 2023 (in the case of all remaining USD settings). Despite this deferral in regard to USD, the
FCA has confirmed that use of USD LIBOR will not be permitted in most new contracts after December
31, 2021 and while the FCA is requiring the LIBOR administrator to publish one-, three- and six-month
sterling and Japanese yen LIBOR rates for a limited time following December 31, 2021 using a synthetic
methodology, such synthetic LIBOR rates are also only permitted for legacy use. The agreements
governing our Credit Facilities include customary provisions to provide for replacement of LIBOR with an
alternative benchmark rate when LIBOR ceases to be available. The International Swaps and Derivatives
Association has developed provisions for SOFR-based fall-back rates to apply upon permanent cessation
of LIBOR and has published a protocol to enable market participants to include the new provisions in
existing swap agreements.
We are currently assessing the impact as a result of the transition from LIBOR.
261 TechnipFMC
U.K. Annual Report and Accounts
For details of long and short term debt included in the table above, see Note 19 of TechnipFMC
consolidated financial statements.
NOTE 9 - LOAN PAYABLES - RELATED PARTIES
Loan payables (including accrued interest) - related parties consists of the following:
(In millions)
December 31,
2022
2021
Borrowings from TechnipFMC Corporate Holdings Ltd (UK)
$
3,011.7 $
Borrowings from TechnipFMC (Europe) Ltd
Loans payables - current portion
Borrowings from TechnipFMC Corporate Holdings Ltd (UK)
Borrowings from TechnipFMC International (UK) Ltd
Borrowings from TechnipFMC (Europe) Ltd
Borrowing from TechnipFMC International Holdings BV
Borrowing from Technip Coflexip UK Holdings Ltd
Borrowings from Technip Holding Benelux BV
Borrowings from Cofri SAS
Loan payables - non current portion
Loan payables - related parties
394.5
3,406.2
—
418.3
—
28.7
37.1
284.8
—
768.9
$
4,175.1 $
—
—
—
2,889.1
2,248.0
384.2
27.8
35.9
276.0
102.1
5,963.1
5,963.1
Loan payables to related parties are unsecured and consist of borrowings from Technip FMC Corporate
Holdings Ltd (UK), TechnipFMC International (UK) Ltd (“International Ltd”) and TechnipFMC (Europe) Ltd
(“Europe Ltd”). The terms and interest rates for significant loans are detailed below.
•
•
•
•
Loans from TechnipFMC Holdings Ltd were novated to Corporate Holdings Ltd on March 31,
2021, and primarily consist of three loans in the amount of $1,247.3 million, $1.007.1 million
and $718.3 million at December 31, 2022 and $1,189.6 million, $962.0 million and $699.5
million at December 31, 2021 respectively with 5 year term and interest rates of 4.83%, 4.68%
and 2.69% respectively. The remaining loan from International Ltd is an amount of $34 million
with an interest rate of 3.32%.
As of December 31, 2021, loan from International Ltd was in the amount of $2,048.2 million
with a 5 year term and interest rate of 2.69%. During 2022, the loan was extinguished. As of
December 31, 2022, loan from International Ltd is in the amount of $417.5 million with a three
year term and interest rate of 6.19%.
Loan from Europe Ltd is in the amount of $350 million with a 5 year term and interest rate of
2.69%.
Loan from Technip Holding Benelux BV is in the amount of $267 million with a 5 year term and
interest rate of 3.22%.
NOTE 10 - TRADE AND OTHER PAYABLES
Trade and other payables consists of the following:
(In millions)
Overdraft with cash pool
Trade payables - related parties
Other current liabilities
Trade and other payables
December 31,
2022
2021
$
$
732.5 $
18.4
2.6
753.5 $
531.5
5.0
66.0
602.5
262 TechnipFMC
U.K. Annual Report and Accounts
NOTE 11 - FRENCH BRANCH CONTRIBUTION
During the year ended December 31, 2022, the Company contributed assets and liabilities of the
Company's French Branch to TOI. The contribution transaction resulted in TOI acquiring the assets and
liabilities of the French Branch. TOI recognized the transferred assets and liabilities at historical carrying
values as through the transfer had occurred as of January 1, 2022, in line with what management
considers to be the legal form of the transaction. The Company derecognized assets and liabilities of
French Branch at their respective historical carrying values and no gain or loss was recorded as a result
of the distribution.
The carrying amounts of assets and liabilities as of the date of the transfer were:
(In millions)
Assets
Cash and cash equivalents
Trade receivables
Other current assets
Investments in subsidiaries
Loan receivables - related parties
Total assets
Liabilities
Accounts payable
Other current liabilities
Other non-current liabilities
Total liabilities
Net assets contributed to TOI
NOTE 12. SPIN-OFF
The Spin-off
December 31, 2022
$
$
0.6
7.2
21.0
445.7
271.8
746.3
2.8
30.1
102.3
135.2
611.1
On February 16, 2021, we completed the separation of Technip Energies. 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% 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., Eastern Standard 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.
See Note 33 of TechnipFMC consolidated financial statements for further details.
On initial recognition at the Spin-off date, we recorded the retained interest in Technip Energies at fair
value of $1,377.9 million, being the market share price of the investment as of the Spin-off date. The
gain on distribution of $2,736.4 million represents an excess of the fair value of the retained shares in
Technip Energies N.V. over the carrying value of the investment in subsidiaries and other adjustments
relating to the intercompany balances between Technip Energies and the Company, in accordance with
the Separation and Distribution Agreement.
Investment in Technip Energies
Immediately following the completion of the Spin-off, we owned 49.9% of the outstanding shares of
Technip Energies. At the Spin-off date the 49.9% retained interest was classified as an equity affiliate on
the basis that TechnipFMC retained significant influence over Technip Energies through its retained stake
and representation in Technip Energies Board.
263 TechnipFMC
U.K. Annual Report and Accounts
IFRS 5 states that an asset is considered as held for sale provided two conditions are met: it must be
available for immediate sale in its present condition and its sale must be highly probable. At the Spin-off
date, when it became highly probable that the value of the investment in Technip Energies would be
recovered through sale rather than continuing ownership, the investment in Technip Energies was
classified as held for sale. As of the Spin-off date we committed to conduct an orderly sale of our
remaining stake in Technip Energies over time and use the proceeds (net of broker fees and discounts)
from future sales to further reduce our net leverage. We did not intend to remain a long-term
shareholder of Technip Energies and planned to exit our ownership stake in a timely and orderly manner
within a year.
Following the held for sale classification the remaining interest in Technip Energies equity affiliate was
measured at the lower of its carrying amount and fair value less costs to sell. The fair value of the
investment was determined using the market share price of Technip Energies shares. This is a Level 1
measurement as per the fair value hierarchy.
As of December 31, 2021, we determined that TechnipFMC ceased to have a significant influence due to
(i) the decrease in stake in Technip Energies to 12.2%, and (ii) due to decrease in representation on
Technip Energies Board leading to one of nine seats. The investment in Technip Energies became a
subject to accounting for equity instruments under IFRS 9 and was therefore recorded at fair value as of
December 31, 2022 with changes in fair value ($16.1 million) reported in gain from investment in
Technip Energies in the income statement. This is a Level 1 measurement as per the fair value hierarchy.
During 2022, we fully divested our remaining ownership interest in Technip Energies and recognized a
$27.7 million loss related to the changes in fair value.
The following table summarizes the details of amounts realized upon the Spin-off transaction:
(In millions)
Amount of distribution payable to shareholders (fair value of 50.1% shares of Technip Energies)
February 16, 2021
1,383.5
$
Fair value of retained 49.9% shareholding
Less carrying amount of investments in Technip Energies at spin-off date
Debt and cash adjustment in accordance with separation and distribution agreement
Total gain on loss of control at Spin off
Income taxes
Total gain on loss of control on Spin-off, net of income taxes
$
1,377.9
(1,709.0)
1,684.0
2,736.4
—
2,736.4
The following table summarizes the details of Technip Energies share sales after Spin-off date during
2021:
(In millions)
Proceeds from sale of shares, net of transaction costs
Carrying amount of 32.8% shares sold
Loss on sales of Technip Energies shares
Impairment of retained financial investment upon loss of significant influence
Income taxes
Loss on subsequent sales of Technip Energies shares
Proceeds from sale of additional shares, net of transaction costs
Carrying amount of 4.9% shares sold
Loss on sale of additional shares
Fair value measurement of financial investment in Technip Energies
Gain on financial investment in Technip Energies
Year ended
December 31, 2021
$
784.5
(904.8)
(120.3)
(46.8)
—
(167.1)
116.3
(124.0)
(7.7)
16.2
8.5
264 TechnipFMC
U.K. Annual Report and Accounts
The following table summarizes the details of Technip Energies share sales during 2022:
(In millions)
Proceeds from sale of additional shares, net of transaction costs
Carrying amount of 12% shares sold
Fair value measurement of financial investment in Technip Energies
Loss on financial investment in Technip Energies
The following table summarizes the total gain in respect of Technip Energies:
(In millions)
Total gain on loss of control on Spin-off, net of income taxes
Loss on subsequent sales of Technip Energies shares included
Gain on financial investment in Technip Energies
Total gain in respect of Technip Energies
The following table summarizes the details of Technip Energies investment:
(In millions)
Net book value of investment in Technip Energies subsidiaries at spin date
Spin via distribution leading to income statement gain
Classification as HFS equity associate
Movement for sale of shares/impairment
Classification at FVTPL on loss of significant influence
Fair value/disposal movements
Closing balance
NOTE 13 - SUBSEQUENT EVENTS
Year ended
December 31, 2022
$
$
$
$
$
$
288.5
(301.6)
(14.6)
(27.7)
2,736.4
(167.1)
8.5
2,577.8
1,709.0
(1,709.0)
1,378.0
(951.0)
427.0
(109.7)
317.3
There have been no material subsequent events after the reporting period, up to and including the date
that the financial statements were authorized for issue, that would have required disclosure or
adjustment of the Company financial statements.
265 TechnipFMC
U.K. Annual Report and Accounts
Cautionary statement
regarding forward-looking
statements
The U.K. Annual Report contains “forward-looking statements” as defined in Section 27A of the United States Securities
Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended (the
“Exchange Act”). All statements other than statements of historical or current facts, including statements regarding
our environmental and other ESG plans and goals, made in this document are forward-looking. We use words such as
“believe,” “expect,” “anticipate,” “plan,” “intend,” “commit,” “foresee,” “should,” “would,” “could,” “may,” “estimate,” “outlook”
and similar expressions, including the negative thereof. The absence of these words, however, does not mean that the
statements are not forward-looking. All of our forward-looking statements involve risks and uncertainties (some of
which are significant or beyond our control) and assumptions that could cause actual results to differ materially from
our historical experience and our present expectations or projections. These forward-looking statements are based on
our current expectations, beliefs and assumptions concerning future developments and business conditions and their
potential effect on us. While management believes these forward-looking statements are reasonable as and when made,
there can be no assurance that future developments affecting us will be those that we anticipate. Known material factors
that could cause actual results to differ materially from those contemplated in the forward-looking statements include
unpredictable trends in the demand for and price of crude oil and natural gas; competition and unanticipated changes
relating to competitive factors in our industry, including ongoing industry consolidation; the COVID-19 pandemic and
any resurgence thereof; our inability to develop, implement and protect new technologies and services and intellectual
property related thereto, including new technologies and services for our New Energy business; the cumulative loss of
major contracts, customers or alliances and unfavorable credit and commercial terms of certain contracts; disruptions
in the political, regulatory, economic and social conditions of the countries in which we conduct business; the refusal of
DTC to act as depository agency for our shares; the impact of our existing and future indebtedness and the restrictions
on our operations by terms of the agreements governing our existing indebtedness; the risks caused by our acquisition
and divestiture activities; additional costs or risks from increasing scrutiny and expectations regarding ESG matters;
uncertainties related to our investments in New Energy business; the risks caused by fixed-price contracts; our failure
to timely deliver our backlog; our reliance on subcontractors, suppliers and our joint venture partners; a failure or
breach of our IT infrastructure or that of our subcontractors, suppliers or joint venture partners, including as a result
of cyberattacks; risks of pirates endangering our maritime employees and assets; any delays and cost overruns of new
capital asset construction projects for vessels and manufacturing facilities; potential liabilities inherent in the industries
in which we operate or have operated; our failure to comply with existing and future laws and regulations, including
those related to environmental protection, climate change, health and safety, labor and employment, import/export
controls, currency exchange, bribery and corruption, taxation, privacy, data protection and data security; the additional
restrictions on dividend payouts or share repurchases as an English public limited company; uninsured claims and
litigation against us; tax laws, treaties and regulations and any unfavorable findings by relevant tax authorities; potential
departure of our key managers and employees; adverse seasonal and weather conditions and unfavorable currency
exchange rates; and risk in connection with our defined benefit pension plan commitments, as well as the risk factors
discussed in our filings with the SEC, including our annual reports on Form 10-K and quarterly reports on Form 10-Q.
In addition, historical, current, and forward-looking ESG-related statements may be based on standards for measuring
progress that are still developing, and internal controls and processes that continue to evolve. Forward-looking and
266 TechnipFMC
U.K. Annual Report and Accounts other statements in the Annual Report may also address our corporate responsibility and sustainability progress, plans,
and goals, and the inclusion of such statements is not an indication that these contents are necessarily material for the
purposes of complying with or reporting pursuant to the U.S. federal securities laws and regulations, even if we use
the word “material” or “materiality” in this document. With respect to ESG information that pertains to our third-party
vendors, suppliers and partners, we often rely on such third-parties’ data and do not independently verify or audit,
or commit to independently verifying or auditing, their information. Such information may also change over time as
methodologies and data availability and quality continue to evolve. These factors, as well as any inaccuracies in third-
party information we use, including in estimates or assumptions, may cause results to differ materially and adversely
from statements, estimates, and beliefs made by us or third-parties. We caution you not to place undue reliance on any
forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or
revise any of our forward-looking statements after the date they are made, whether as a result of new information,
future events or otherwise, except to the extent required by law. Additionally, we may provide information that is not
necessarily material for SEC reporting purposes but that is informed by various ESG standards and frameworks (including
standards for the measurement of underlying data), internal controls, and assumptions or third-party information that are
still evolving and subject to change. Our disclosures based on any standards may change due to revisions in framework
requirements, availability of information, changes in our business or applicable governmental policies, or other factors,
some of which may be beyond our control.
267 TechnipFMC
U.K. Annual Report and Accounts