Contents
Strategic Report
Letter from Our Chair and CEO
2023 Financial Performance
Company Overview
Business Segments
Business Review
Non-Financial & Sustainability Information Statement
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 U.K.
Dividend
Employee Engagement and Business Relationship
Energy and Carbon Reporting
Events since December 31, 2023
Future Developments
Change in Control
Political Donations
Financial Risk Management Objectives/Policies
Research and Development
Directors’ Responsibility Statements
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Contents
Directors’ Remuneration Report
Introduction and Compliance Statement
Letter from the Chair of the Compensation and Talent Committee
Annual Report on Remuneration: At a Glance – 2023 Highlights
Annual Report on Remuneration: Report for the Year Ended December 31, 2023
Elements of 2023 Executive Director Compensation
Statement of Directors’ Shareholding and Share Interests
Application of the Policy in 2024
Activities of the Compensation and Talent Committee in 2023
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
Cautionary Statement Regarding Forward-looking Statements
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
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Letter from Our Chair and CEO
Dear Shareholders,
We closed out a solid year having achieved notable contributions towards the transformation of our industry,
while delivering value to our clients. Our ability to improve project economics, primarily through the acceleration
of first production, strengthens our alliances and drives growth in direct awards to our Company. As a result, our
Subsea inbound orders in 2023 increased 45 percent versus the prior year and included a record level of
integrated Engineering, Procurement, Construction, and Installation (‘‘iEPCI™’’) projects.
I am particularly pleased with the quality of the inbound we received in the year, with iEPCI™, Subsea Services, and
direct awards exceeding 70 percent of total Subsea orders, reflecting the positive outcomes of our strong client
relationships and project selectivity. The number of clients adopting Subsea 2.0® is also increasing – now including
Equinor in Brazil, ExxonMobil in Guyana, and Chevron in Australia. Subsea 2.0® is a standardized
configure-to-order product offering with shorter lead times due to our focus on lean methodology in the design,
engineering, and manufacturing processes.
We are seeing similar qualitative improvements in Surface Technologies. This has resulted in improved financial
performance, higher cash generation, and greater consistency in delivering on our annual commitments.
We remain committed to returning more than 60 percent of annual free cash flow to our shareholders through at
least 2025. In support of our commitment, we initiated a quarterly dividend that represented $0.20 per share on
an annualized basis. We also increased our share repurchase authorization by $400 million, which grew our total
authorization to $800 million. In 2023, we returned nearly $250 million to shareholders through both share
repurchases and dividends.
We believe that our capital allocation policy aligns with shareholder interests, supported by changes to our
business and execution models, both of which are driving sustainable improvement in our financial performance.
The market continued to recognize the strength and differentiation of our offering, with our share price increasing
65 percent during the calendar year. While 2023 was a period of strong growth for our Company, we see further
strength ahead driven by the durability and resiliency of this cycle.
An evolving market
The demand for energy will continue to grow. However, we believe that the market’s evolution will differ from the
past, driven by three major trends. First, a shift in capital investment flows, which we believe will largely be
directed to the offshore and Middle East markets. Second, an increased role for new technologies for both
conventional and new energies to drive market expansion. And third, an expanded role for subsea services, driven
by the needs of growing and aging infrastructure.
This backdrop, combined with our unique capabilities, gives us the confidence to increase our expectations for
Subsea inbound to reach $30 billion over the three-year period ending 2025. The significant increase in our order
outlook will provide additional growth in backlog and further extend the execution of our project portfolio through
the end of the decade.
Continuing transformation
2024 began with a glimpse of the future with the announcement of our major iEPCI™ contract for Petrobras’s
Mero 3 HISEP® project. The significance of this project for the subsea industry cannot be overstated. It will be the
first to use subsea processing to capture carbon dioxide (‘‘CO2’’) rich dense gases directly from the well stream for
injection back into the reservoir.
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In addition to reducing greenhouse gas (‘‘GHG’’) emission intensity, HISEP® technologies will increase production
capacity by debottlenecking the gas processing plant that currently resides on the FPSO. By moving gas processing
to the seafloor, future FPSO and topside designs can be further simplified, driving significant improvement in
project economics.
This is the first iEPCI™ project for our New Energy team, which aims to leverage our traditional energy expertise to
drive change in the energy transition space. Mero 3 HISEP® perfectly illustrates this – allowing us to demonstrate
how technology innovation, project integration, and partner collaboration enable our meaningful participation in
the energy transition while remaining aligned with our strategic priorities.
Our ESG culture
Our three-year Environmental, Social, and Governance (‘‘ESG’’) Scorecard concluded on December 31, 2023, and we
establish our 2024-2026 goals in our new Scorecard in the ESG section of this report. We set challenging targets
for ourselves in the 2021-2023 Scorecard, including actions tied to our 50 by 30 initiative to reduce our GHG
emissions by 50 percent by 2030.
Under the Scorecard’s Environmental pillar, we reduced our GHG emissions by 21 percent over the three years and
exceeded our waste recycling and reuse target. In the Social and Governance metrics, we achieved or
outperformed our targets on fair representation, inclusion, volunteering and STEM initiatives, Serious Injuries and
Fatalities (‘‘SIF’’) prevention projects, human rights, and ethics and compliance training – far exceeding our targets
on some goals. Throughout the Company, our ESG activities go beyond those on our Scorecard.
Our efforts in ESG were also recognized by others. We won the National
Ocean Industries Association’s 2023 ESG Excellence Award, earning praise
for our ‘‘comprehensive and thoughtful commitment.’’ This spirit, rooted in
our Core Values and Foundational Beliefs, is reflected across TechnipFMC.
Our people want to make a difference, not just for our clients, but in the
communities where we live and work. It was also an honor to see
TechnipFMC again named among Forbes Magazine’s World’s Top
Companies for Women in 2023. Based on responses from women working
at thousands of companies, this recognition exemplifies the progress that
is driven by our ESG initiatives and programs.
Looking forward
We have entered an unprecedented time for the development of energy
resources, particularly offshore. The strong momentum that TechnipFMC
gathered in 2023 is continuing into 2024. These trends present us with
further opportunity to leverage the full capabilities of our integrated
solutions, differentiated technologies, and the industry’s most
comprehensive subsea service capabilities, ensuring that we fully
capitalize on the opportunities ahead. In an evolving marketplace – where
there is demand for both more energy and lower emissions – TechnipFMC
is well positioned for continuing success.
Douglas J. Pferdehirt
Chair and Chief Executive
Officer
March 15, 2024
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$11
billion
Inbound
orders
2023 Financial Performance
Total
Company
Subsea
Surface
Technologies
Inbound orders1 improved to $11 billion, driven largely by growth in
offshore activity
Cash flow from operations of $693.0 million increased year-over-year by
$340.9 million, and free cash flow2 of $467.8 million more than doubled
when compared to the prior year
Initiated quarterly cash dividend that represented $0.20 per share on an
annualized basis, and authorized additional share repurchase of up to
$400 million, which increased total authorization to $800 million
Established new commitment to return more than 60% of annual free
cash flow to shareholders through at least 2025
Received the National Ocean Industries Association’s ESG Excellence
Award, which recognized our commitment to Environmental, Social, and
Governance (‘‘ESG’’) actions, including efforts in fair representation and
inclusion and in energy transition technologies
Inbound orders increased 45% year-over-year to $9.7 billion, driven by
growth in both projects and services activity
Record year of integrated project awards for our Company, including
our largest iEPCI™ contract ever for Equinor’s Raia project (formerly
BM-C-33), following a successful iFEED™
Direct awards, iEPCI™ projects, and Subsea Services exceeded 70% of
total Subsea orders, reflecting the positive outcomes of our
differentiated offerings, strong client relationships, and project
selectivity
$9.7
billion
Inbound
orders
Increased adoption of Subsea 2.0® product platform, including three new
clients – Equinor, ExxonMobil, and Chevron
Subsea Services revenue grew to more than $1.5 billion for the year,
driven by a growing installed base and aging infrastructure
Inbound orders of $1.2 billion primarily supported by international
markets
Continued ramp-up in production at our Saudi Arabia facility, as well as
successful execution on our 10-year framework agreement with Abu
Dhabi National Oil Company
Increased client adoption of our digital e-Mission™ solution, the
industry’s only real-time monitoring and control system that reduces
methane flaring by up to 50% and maximizes oil production
$1.2
billion
Inbound
orders
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New Energy
Initiatives
Awarded multiple commercial contracts for surface wellheads and tree
systems for onshore CO2 injection in the Middle East, Netherlands, and
Australia
Delivered a hydrogen wellhead for Storengy’s Hydrogen Pilot Storage
for Large Ecosystem Replication
Completed and commissioned our Deep Purple Pilot™ project in Norway,
which is our solution for Long Duration Energy Storage (LDES) using
hydrogen as the energy carrier to help meet the growing demand for
power
(1) Reported financial results for the 12 months ended December 31, 2023 and inbound and backlog as of December 31, 2023 are included in our
Annual Report on Form 10-K (‘‘Form 10-K’’).
(2) Free cash flow is calculated as cash flow from operations less capital expenditures.
For additional details regarding the Company’s 2023 financial performance, please see the section
entitled ‘‘Business Review.’’
Company Overview
TechnipFMC plc (‘‘TechnipFMC,’’ the ‘‘Company,’’ ‘‘we,’’ ‘‘us,’’ or ‘‘our’’) is a leading technology provider to the
traditional and new energy industries, delivering fully integrated projects, products, and services. With our
proprietary technologies and comprehensive solutions, we are transforming our clients’ project economics, helping
them unlock new possibilities to develop energy resources while reducing carbon intensity and supporting their
energy transition ambitions.
Organized in two business segments — Subsea and Surface Technologies — we will continue driving change in the
energy industry with our pioneering integrated ecosystems, technology leadership, and digital innovation.
Each of our approximately 21,000 employees is driven by a commitment to our clients’ success and a culture of
execution excellence, purposeful innovation, and challenging industry conventions.
History
On January 17, 2017, FMC Technologies, Inc. and Technip S.A. combined through a merger of equals to create a
global subsea leader, TechnipFMC, that would drive change by redefining the development of the subsea
infrastructure used in the production of oil and natural gas through a new integrated commercial model. By
integrating the complementary work scopes of the subsea production system (‘‘SPS’’) with the subsea umbilicals,
risers, and flowlines (‘‘SURF’’) and installation vessels, we can more efficiently deliver an entire subsea
development utilizing our integrated engineering, procurement, construction, and installation model, which we
refer to as iEPCI™.
As the only subsea provider to integrate these work scopes, we successfully created a new market and helped
expand the deepwater opportunity set for our clients during a challenging market environment. iEPCI has since
grown to represent nearly one-third of the addressable subsea market, validating the benefits of our unique
business model aimed at improving project economics by lowering project costs and accelerating the delivery
schedule of hydrocarbon production. We have created a differentiated platform for further expansion and value
creation through our technology innovation, including our Subsea 2.0® (‘‘Subsea 2.0’’) configure-to-order product
suite, our vast network of customer partnerships, and our services business levered to serve our large and
expanding installed base.
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On February 16, 2021, we completed the separation of the Technip Energies business segment (the ‘‘Spin-off’’).
Technip Energies offered design, project management, and construction services spanning the entire downstream
value chain. The separation created two industry-leading, independent, publicly traded companies, TechnipFMC and
Technip Energies.
Following the separation of Technip Energies, the Company completed the voluntary delisting of our shares from
Euronext Paris in February 2022. A single listing on the New York Stock Exchange was more consistent with the
Company’s strategic refocus and the geographic location of our shareholder base, and allowed the Company to
better align with our most appropriate peer set.
Business Segments
Subsea
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 natural gas production and transportation.
iEPCI™
We are an industry leader in front-end engineering and design (‘‘FEED’’), SPS, SURF, and subsea robotics. We also
have the capability to install and service these products and systems using our fleet of highly specialized vessels.
We are able to drive even greater value to our clients by integrating the SPS and SURF through more efficient
design and installation of subsea field architecture. The resulting improvement in project economics has enabled
the successful market adoption of our integrated engineering, procurement, construction and installation model,
iEPCI, which now serves as the industry standard for integrated project execution.
iEPCI is our unique, fully integrated approach to designing, managing, and executing subsea projects. By combining
complementary skills with innovative technologies, we improve project economics by lowering costs and
accelerating time to first oil and natural gas for our clients. iEPCI projects are partnerships based on mutual trust
and sharing knowledge. Success is built on early engagement and a collaborative, cooperative approach, both
internally and with our clients.
Our integrated commercial model often begins with an integrated FEED study, or iFEED™ (‘‘iFEED’’), where we are
uniquely positioned to influence project concept and design through early client engagement, allowing for the
highest degree of integration. Using innovative solutions for subsea architecture, including standardized
configurable equipment, new technologies, digital services, and simplified installation, we can optimize field design
and layout.
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. 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.
Following project delivery, we continue to support our clients by offering aftermarket and life of field services,
which include production optimization, asset life extension, debottlenecking, and condition-based maintenance. Our
wide range of capabilities and solutions allows us to help clients increase oil and natural gas recovery and
equipment uptime while reducing overall cost. Our integrated life of field offering, iLOF™, is designed to unlock the
full potential of subsea infrastructures during operations by proactively addressing the challenges operators face
over the life of subsea fields.
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Subsea Segment Products and Services
Subsea Production Systems (SPS)
Our SPS are used in the offshore production of oil and natural gas. Systems are placed on the seafloor and are used
to control the flow of 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 products and integrated systems 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. We offer both electro-hydraulic and all-electric Subsea Production Systems, depending on the specific
needs of the customer or field. The design and manufacture of our subsea systems requires a high degree of
technical expertise and innovation. Some of our systems are designed to withstand exposure to the extreme
hydrostatic pressure of deepwater environments, as well as internal pressures of up to 20,000 pounds per square
inch (psi) and temperatures of up to 400º F. The development of our integrated subsea production systems
includes initial engineering design studies and field development planning, and considers all relevant aspects and
project requirements, including optimization of drilling programs and subsea architecture.
Subsea Processing Systems
Our subsea processing systems, which include subsea boosting, subsea gas compression, and subsea separation, are
designed to accelerate production, increase recovery, extend field life, lower greenhouse gas emissions, and lower
operators’ production costs for greenfield and brownfield applications.
Subsea Umbilicals, Risers, and Flowlines (SURF)
We are a leading provider of SURF infrastructure. We develop, engineer, manufacture, and install umbilicals,
flexible, hybrid-flexible and rigid pipelines, connections, and tie-ins for subsea systems.
We offer a comprehensive range of umbilical systems including steel tube umbilicals, thermoplastic hose
umbilicals, power and communication systems, and hybrid umbilicals.
We are the industry leader in the design and manufacture of flexible pipe that consists of the combination of
plastic and steel layers that can be easily adapted to the diverse requirements of subsea developments. We are
also the industry innovator in ‘‘hybrid-flexible’’ pipe, which utilizes unique and proprietary thermoplastic
composite materials to meet the needs of the most challenging production environments. Our rigid pipes are
designed to optimize flow assurance through innovative insulation coatings, electric trace heating, plastic liners,
and pipe-in-pipe systems.
Vessels
We have a fleet of 16 vessels, which typically perform the installation of our products and systems. We have sole
ownership of eight 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 includes the following offerings:
Drilling: exploration and production wellhead systems and services;
Installation: installation of subsea production and processing systems;
Intervention: rig and vessel-based well intervention services;
Plug and abandonment: rig- and vessel-based subsea equipment retrieval and plug and abandonment; and
ROV: remotely operated vehicle (‘‘ROV’’) support services.
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Asset Services includes the following offerings:
Maintenance: test, modification, refurbishment, and upgrade of subsea equipment and tooling;
Asset integrity: optimizing the performance of the subsea asset through product and field data, including
inspection, maintenance, and repair (‘‘IMR’’); and
Production management: enhanced well and field production, including real-time virtual metering and flow
assurance services.
Robotics
Our Schilling Robotics business is the leading designer and manufacturer of Subsea Remotely Operated Vehicles
(ROVs), ROV tooling systems, and robotic manipulator arms. We continue to revolutionize deepwater productivity
– enabling safe and more challenging subsea developments through our advanced and industry-leading robotic
technologies.
The Company manufactures GEMINI®, 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 task time from hours to minutes, ensuring predictable results every time. GEMINI® can easily access tools
for subsea intervention operations without returning to deck to reconfigure tooling – maximizing productivity and
significantly reducing operating time offshore.
Our robotic offerings also include the Athena™ manipulator system – the latest addition to the portfolio – which
leverages a subset of GEMINI® technologies and can be retrofitted to existing ROVs.
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 ecosystem connects applications using common data
models throughout a project’s lifecycle and can exchange data with suppliers, partners, and clients, providing
immediate access to information to improve the efficiency and quality of decisions and planning.
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. Petrobras accounted for more than 16 percent of our
2023 consolidated revenue. Our list of customers has expanded to more than 40 unique clients, which has allowed
us to further diversify our dependence away from any single customer.
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 are related to engineering, procurement, construction, and installation services.
Development of subsea fields, particularly in deepwater environments, involves substantial capital investments.
Operators have also sought 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 obligate our customers to purchase our systems and services, they have resulted in a growing
number of direct awards to the Company.
The commitment to our customers goes beyond project delivery, and we foster these alliances with transparency
and collaboration to better understand their needs and ensure customer success.
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Competition
We are the only fully integrated company that can provide the complete suite of SPS and SURF equipment with the
installation and life of field services, enabling us to develop a subsea field as a single company. We compete with
companies that supply various components and services of a subsea development. Our competitors include Baker
Hughes Company, Dril-Quip, Inc., McDermott International, Inc., NOV Inc., Oceaneering International, Inc., SLB, and
Subsea 7 S.A.
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.
Strategy
Our vision for Subsea is to focus on safely providing innovative technologies and integrated solutions that drive
change, improving economics, enhancing performance, and reducing emissions.
Our offering is enabled by our digital solutions and products that unlock new possibilities for growth in energy
resources. Through our established services and transformative offerings, including iEPCI and the Subsea 2.0®
Configure-to-Order (‘‘CTO’’) platform, we are making energy produced offshore more sustainable and competitive
with alternative sources.
As we look to the future, we remain focused on innovation, client relationships, and execution excellence. Our
success will be achieved in part by developing and empowering our people, becoming a data-centric organization,
advancing automation and robotics, and delivering all-electric fields.
The energy landscape is evolving rapidly, and we are confident that oil and natural gas will remain a significant
portion of the energy mix in the decades to come. By capitalizing on our subsea expertise, core competencies, and
integration capabilities, we will continue to improve the project economics of both oil and natural gas and new
energies, while reducing carbon emissions.
Product Development
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.
Our Subsea 2.0® configurable product platform consists of pre-engineered products designed to provide the
flexibility to accommodate client 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, which ensures quality, manufacturing, supply chain, and services are fully industrialized in order to deliver
the value offered with Subsea 2.0®.
By pivoting from bespoke Engineer-to-Order solutions, 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 to improve throughput and increase capacity of the existing manufacturing assets.
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.
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Our core Subsea 2.0® products include subsea trees, compact manifolds, flexible jumpers, distribution, controls,
flexible pipe, umbilicals, and integrated connectors. Additional components of the subsea infrastructure will be
made available on this configurable platform as we further industrialize our product offering.
We are also qualifying a new hybrid flexible pipe technology that utilizes thermoplastic composite technology and
is highly resistant to corrosive compounds. Hybrid flexible pipe brings many advantages to the market, including
the ability to withstand the most corrosive production environments, but also significant operational advantages
due to the lighter materials.
In the third quarter of 2022, we renewed the 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 transportation and storage. By collaborating 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.
Acquisitions and Disposals, Investments, and Partnerships
Acquisitions and Disposals
We did not have any material acquisitions in 2023.
In August 2023, the Company completed the sale of the Apache II pipelay vessel for net cash proceeds of
$54.4 million.
Investments
As part of our commitment to advancing the country’s emerging energy industry, in April 2022, we officially
opened our new service base in Georgetown, Guyana. More than 100 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 Base consists of a low bay, storage, and testing capabilities
for both drilling and completion activities.
Partnerships
Refer to the section entitled ‘‘Other Business Information Relevant to Our Business Segments’’ of this U.K. Annual
Report for information about our partnerships.
Surface Technologies
Our Surface Technologies segment designs, manufactures, and services fully
integrated products and systems used by companies involved in land and shallow
water exploration and production of crude oil and natural gas, as well as specialized
equipment supporting integrated carbon transportation and storage ("iCTS™"),
hydrogen storage, and geothermal production. Surface Technologies provides
integrated solutions for onshore applications in drilling, stimulation, production,
measurement, digital, and services globally.
iComplete™
Principal Products and Services
Drilling
We provide a full range of drilling and completion systems for both standard and custom-engineered applications.
The client base for drilling and completion offerings is energy production, transportation, and storage companies.
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Surface Wellheads and Production Trees
Our products are used to control and regulate the flow of 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. The production tree is composed of valves, actuators, and chokes, which can
be combined into various configurations, depending on client-specific requirements.
These systems 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 lifecycle. Our surface wellheads and production trees are used worldwide and include a full range of
system configurations from conventional wellheads, to high-pressure, high-temperature production tree systems
for extreme production applications.
We provide services for these systems, including service personnel and rental tooling, life of field maintenance, as
well as digital monitoring and remote operational control and automation.
Our products are also used for geothermal production and CO2 injection, and we have qualified designs to support
underground hydrogen storage solutions.
Stimulation and Pressure Pumping
We design and manufacture equipment used in well completion and stimulation activities. Our iComplete™ offering
is the first integrated pressure control system for the onshore unconventional stimulation market. Our extensive
knowledge of flexible pipe, manifold, and check valve technologies has been adapted to make this a very reliable
and predictable system. iComplete™ utilizes our digital offering CyberFrac™ to improve safety by reducing
manpower in high-risk areas (‘‘red zone’’), boost efficiency by automating operations, and reduce unplanned
stoppages by using predictive analytics. Our system can also manage continuous pumping and multi-well
operations and integrate data from adjacent wells. Together, this significantly reduces safety risks and the cost of
operations for our clients.
Fracturing Tree and Manifold Systems
During the completion of a shale well, the well undergoes hydraulic fracturing. During this phase, durable and
wear-resistant wellsite equipment is temporarily deployed.
Our equipment includes fracturing tree systems, fracturing valve greasing systems, hydraulic control units,
fracturing manifold systems, and rigid and flexible flowlines, and is designed to sustain the high pressure and the
highly erosive fracturing fluid that is pumped through the well in the formation. Exploration and production
operators typically rent this equipment directly from the Company during the hydraulic fracturing activities.
Fracturing equipment rental includes rig-up/rig-down field service personnel as well as oversight and operation of
the equipment during the multiple fracturing stages.
Flexible Pipe
We have been a leading supplier of flexible pipe 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. Our PumpFlex™, WellFlex™, and PadFlex™ products are 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
demonstrated excellent wear resistance and durability.
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 clients with reliable and durable pressure pumping equipment. Our total solutions
approach includes the InteServ tracking and management system, mobile inspection and repair, strategically
located service centers, and Chiksan® and Weco® spare parts.
10 TechnipFMC
U.K. Annual Report and Accounts
Strategic Report
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 natural gas products.
By leveraging digital solutions to optimize the performance of assets on the production site, it helps to reduce
flaring and CO2 emissions, predicting methane escape events by using machine learning, thereby helping to
prevent such events from ever happening.
Our iProduction™ system is the first automated integrated production platform for onshore unconventional
resources. This system can be deployed at new and existing client sites to upgrade technology, improve safety, and
reduce operating costs and carbon emissions.
Our digital systems leverage two of our core software products – our proprietary UCOS system for control and
automation of assets, and InsiteX for data visualization and analytics. These systems are deployed in standalone
applications, which address real client issues and can be integrated seamlessly to form an ecosystem or system
level Digital Twin. These technologies help clients 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 well pad, offshore platform module, or production facility. Our systems are based on standardized,
field-proven solutions and are designed for minimal maintenance during life of field operations.
Separation and Processing Systems
We provide 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 natural gas multiphase separation, in-line
separation, and solids removal, as well as fully assembled separation modules and packages designed and
fabricated for oil and natural 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 Solutions
We deliver accurate and reliable measurement solutions for the transportation, distribution, and storage of energy
products by truck, rail, vessel, aircraft, and pipeline. We are making measurements smarter with integrated flow
measurement and automation solutions. Our clients can also reduce complexity by working with one supplier that
can provide measurement and control systems, automation, and key data insights.
Our systems are an industry standard in mechanical custody metering.
Services
We offer our clients a comprehensive suite of service packages to ensure optimal performance and reliability of
our upstream and midstream equipment. These service packages include all phases of the asset’s life cycle from
early planning stages through testing and installation, commissioning, and operations, replacement and upgrade,
maintenance, storage, preservation, intervention, integrity, decommissioning, and abandonment.
U.K. Annual Report and Accounts
TechnipFMC 11
Strategic Report
Dependence on Key Customers
Surface Technologies’ customers include major integrated oil companies, national oil companies, independent
exploration and production companies, and oil and natural gas service companies. No single Surface Technologies
customer accounted for 10 percent or more of our 2023 consolidated revenue.
Competition
We are a market leader for many of our products and services. Some of the factors that distinguish TechnipFMC
from other companies in the sector include our technological innovation, integrated solutions, reliability, and
product quality. Surface Technologies competes with other companies that supply surface production equipment
and pressure control products, including Baker Hughes Company, Cactus, Inc., Forum Energy Technologies, Inc.,
Gardner Denver, Inc., SLB, Halliburton Co, and SPM Oil & Gas.
Strategy
We serve the onshore and shallow water markets from well to export pipeline, providing our clients with
reductions in cost, cycle time, and carbon intensity. We distinguish our offerings through three key strengths:
Core Technology: We are committed to applying technology within our core products to solve client problems,
leveraging the benefits of smarter designs.
Decarbonization: We are developing new ways for our clients to make the production of oil and natural gas less
carbon-intensive.
Digital and Automation: We are leveraging simple, pragmatic digital solutions to improve health and safety,
reduce carbon intensity, reduce operating cost, reduce non-productive time, and increase production.
Acquisitions and Disposals, Investments, and Partnerships
Acquisitions and Disposals
We did not have any material acquisitions in 2023.
In November 2023, TechnipFMC announced an agreement to sell the Company’s Measurement Solutions business
to One Equity Partners for $205 million in cash, subject to customary adjustments at the closing of the transaction.
As part of the Surface Technologies segment, the Measurement Solutions business encompasses terminal
management solutions and metering products and systems and includes engineering and manufacturing locations
in North America and Europe. Please see the section entitled ``Disposal of Measurement Solutions Business'' within
the Business Review section below for more information on the transaction and its recent completion.
Investments
In 2022, we started the manufacture of our first in-country orders in our new facility in Dhahran, Saudi Arabia. The
facility is part of our continued investment in the Middle East and positions us to respond to the expected increase
in activity in the area. The new facility extends our range of capabilities and offers greater in-country value-add,
supporting our full portfolio with high technology equipment in the drilling, completion, production, and pressure
control sectors.
We also committed to investing in new manufacturing space at our ICAD facility in Abu Dhabi in support of our
10-year framework agreement with ADNOC for the supply of surface wellheads, trees and associated services. We
are the first company to be API6A-qualified and in 2023, we became one of the first to secure a license to operate
as a 100 percent foreign-owned entity in Abu Dhabi.
To support our developments in the Middle East, we are investing 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.
12 TechnipFMC
U.K. Annual Report and Accounts
Strategic Report
Partnerships
Refer to the section entitled ‘‘Other Business Information Relevant to Our Business Segments’’ of this U.K. Annual
Report for information about our partnerships.
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.
This is the role of our New Energy business at TechnipFMC, where we will serve as system architect and integrator,
from technology development through project delivery and life of field services. We believe offshore will be the next
frontier of the energy transition, and our Company is ready to accelerate and grow our contribution.
We plan to be a key enabler of greenhouse gas removal, offshore floating renewables, and hydrogen solutions. To
excel in these three pillars, we will leverage our onshore and offshore expertise and demonstrated capabilities in
project integration. We will commercialize innovative solutions through our continued collaboration with energy
companies and technology providers.
We will also utilize a CTO manufacturing model to create superior value for our clients.
Our contributions to greenhouse gas removal begin with carbon transportation and storage (‘‘CTS’’). Leveraging our
existing equipment and integration expertise, we will safely transport and store CO2 using our integrated carbon
transportation and storage solution or iCTS™. CTO modules for CO2 distribution and injection will reduce
project-specific engineering while enabling custom storage system solutions to be built from
pre-engineered products. Integrated control systems will provide flexibility to manage a wide range of
functionalities, from surface and subsea injection equipment to downhole and seabed reservoir monitoring
systems. We are also developing advanced digital solutions for onshore and offshore storage projects that will
enable constant monitoring of CO2 at both the storage site and in the subsurface, a critical element of the CTS
value chain. We also see strong integration potential across offshore renewable markets, driven by continued
development of wind, wave, and tidal technologies. By leveraging our extensive experience in project integration
throughout the water column, from the ocean surface to the seafloor, we will bring scalability to offshore
renewable markets in our role as system architect.
When used as baseload generation, renewable power sources do increase variability to the system and require
additional energy storage capacity to ensure continuity of supply. We believe that creating large scale storage
solutions to overcome this challenge is fundamental to the expanded use of renewable power, and we have been
developing our Long Duration Energy Storage (‘‘LDES’’) hydrogen solution for offshore renewables to help meet the
growing demand for power.
We will approach integration opportunities in renewable markets with an execution model that builds on the
success of our iEPCI model in oil and natural gas. By acting as system architect and integrator in a complex and
rapidly changing environment, we can play a meaningful role in enabling offshore renewable solutions.
The Markets
Greenhouse
gas removal
Offshore
floating
renewables
Hydrogen
U.K. Annual Report and Accounts
TechnipFMC 13
Strategic Report
Greenhouse Gas Removal
We believe one of the safest and most efficient storage locations for greenhouse gases is in naturally occurring
reservoirs and saline aquifers.
Existing equipment developed by our Surface Technologies and Subsea businesses can be leveraged to achieve this
aim. Our efforts and achievements in this area include:
Development of our integrated carbon transportation and storage system, or iCTS™;
Development and manufacturing of new gas transportation technologies, including thermoplastic composite
pipe and hybrid flexible pipe;
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 offering; and
Awards for several commercial contracts for carbon injection wellheads to be used for permanent
sequestration in the Middle East, Australia, and the Netherlands.
Offshore Floating Renewables
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 11 gigawatts by 2030. Our efforts and achievements in this area
include:
Partnership with Magnora ASA, Magnora Offshore Wind, to develop floating offshore wind projects;
Partnership with Floating Power Plant, a renewable energy technology company, for an offshore green
hydrogen pilot in the Canary Islands, which will leverage our Deep Purple™ system to deliver stable, renewable,
and scalable energy offshore;
Strategic investment in Orbital Marine Power, owner of the world's most powerful floating tidal energy turbine,
which we believe to be the most mature tidal technology;
Development of best-in-class 66KV dynamic inter array cables (‘‘DIAC’’) which are a key component of our
engineered system used by floating renewables infrastructure to transmit electricity generated offshore to the
onshore power grid; and
Development of advanced integrated water column solutions, including the engineering of the
optimum-coupled DIAC and mooring and anchoring system.
Hydrogen Solutions
We believe hydrogen will become an important part of the global energy mix needed to reach Net Zero targets,
driven in part by regulatory frameworks. Hydrogen as an energy carrier will bring reliability, stability, and
efficiency to renewable sources. TechnipFMC’s extensive experience with oil and natural gas resources positions us
well to develop new solutions for this emerging offshore market. Our strategy is focused on two main areas: the
transportation and storage of green hydrogen produced offshore and in coastal areas, and LDES, where hydrogen
is used as a battery solution that can exceed the traditional efficiency limits of lithium-ion technologies. Our
efforts and achievements in this area include:
Deep Purple™, which is our sustainable energy solution that provides renewable and scalable energy
production offshore by integrating hydrogen production, compression, storage, and re-electrification via a fuel
cell. An at-scale pilot program began in Norway in January 2022 and was successfully completed in
October 2023;
The Hardanger Hydrogen Project, with several partners including Statkraft, where TechnipFMC will qualify its
subsea hydrogen storage pressure vessels and associated connection hardware, such as umbilicals and
connectors. We may also provide hydrogen subsea storage for the next commercial phases of the project; and
14 TechnipFMC
U.K. Annual Report and Accounts
Strategic Report
Hydrogen wellhead products and underground storage solutions as well as the integration of these systems
including participation in Storengy’s Hydrogen Pilot Storage for large Ecosystem Replication (‘‘HyPSTER’’)
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.
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 client 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 client needs.
Patents, Trademarks, and Other Intellectual Property
We own a number of patents, trademarks, and licenses that are cumulatively important to our businesses. As part
of our ongoing R&D focus, we seek patents when appropriate for new products, product improvements, and related
service innovations. Further, we license intellectual property rights to or from third parties. We also own numerous
trademarks and trade names worldwide.
We protect and promote our intellectual property portfolio and take actions we deem appropriate to enforce and
defend our intellectual property rights. We do not believe, however, that the loss of any one patent, trademark, or
license, or group of related patents, trademarks, or licenses would have a material adverse effect on our overall
business.
Segment and Geographic Financial Information
The majority of our consolidated revenue and segment operating profit is generated in markets outside of the U.S.
Each segment’s revenue is dependent upon worldwide oil and natural 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.
Employees
As of December 31, 2023, we had more than 21,000 employees.
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.
more than
21,000
employees
U.K. Annual Report and Accounts
TechnipFMC 15
Business Review
Introduction
In this U.K. Annual Report, the Company is reporting in its consolidated financial statements, the financial position
of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of
the two years in the period ended December 31, 2023, 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 oil and natural gas demand, production volumes, and consequently, commodity
prices. We use 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.
Inbound orders increased 45% year-over-year to $9.7 billion, driven by growth in both projects and services
activity
Record year of integrated project awards for our Company, including our largest iEPCI™ contract ever for
Equinor’s Raia project (formerly BM-C-33), following a successful iFEED™
Direct awards, iEPCI™ projects, and Subsea Services exceeded 70% of total Subsea orders, reflecting the
positive outcomes of our differentiated offerings, strong client relationships, and project selectivity
Increased adoption of Subsea 2.0® product platform, including three new clients – Equinor, ExxonMobil and
Chevron
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
16 TechnipFMC
U.K. Annual Report and Accounts
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.
Inbound orders of $1.2 billion primarily supported by international markets
Continued ramp-up in production at our Saudi Arabia facility, as well as successful execution on our 10-year
framework agreement with Abu Dhabi National Oil Company
Experienced increased client adoption of our E-Mission™ solution, the industry’s only real-time monitoring and
control system that reduces methane flaring by up to 50% and maximizes oil production
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.
In both of our segments, we serve customers from around the world. During 2023, approximately 80% of our total
sales were recognized outside of the U.S. We evaluate international markets and pursue opportunities that fit our
technological capabilities and strategies.
Disposal of Measurement Solutions Business
In November 2023, the Company announced an agreement to sell the Company’s Measurement Solutions business
(the ‘‘MSB’’) to One Equity Partners (the ‘’Buyer’’) for $205 million in cash, subject to customary adjustments at the
closing of the transaction. As part of the Surface Technologies segment, the MSB encompasses terminal
management solutions and metering products and systems and includes engineering and manufacturing locations
in North America and Europe.
We have recorded $5.2 million in transaction costs associated with the sale. These transaction costs are included
within impairment, restructuring, and other expenses in our consolidated statement of income. The assets and
liabilities of MSB are classified as current assets and liabilities held for sale as presented in our consolidated
statement of financial position as of December 31, 2023. See Note 2 for details.
On March 11, 2024 we completed the sale of equity interests and assets of MSB to the Buyer.
U.K. Annual Report and Accounts
TechnipFMC 17
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, 2023 to actual results of operations for the year ended
December 31, 2022.
(In millions, except percentages)
2023
2022
$
%
Year Ended
December 31,
Change
$7,827.1
$6,725.7
$1,101.4
16.4%
Revenue
Costs and expenses
Cost of sales
Selling, general and administrative expense
684.5
620.3
Research and development expense
Impairment, restructuring and other expenses
69.0
20.0
67.0
1.1
64.2
2.0
18.9
6,483.2
5,776.0
707.2
Total costs and expenses
7,256.7
6,464.4
792.3
12.3%
(150.3)
(689.4)%
Other income (expense), net
Foreign exchange loss, net
Income from associates
Loss from investment in Technip Energies
Income before net interest expense and income taxes
(128.5)
(166.6)
34.4
—
309.7
21.8
(68.8)
44.6
(27.7)
231.2
Net interest expense
(147.2)
(160.6)
Loss on early extinguishment of debt
Income before income taxes
Provision for income taxes
Net income (loss) from continuing operations
Loss from discontinued operations
Net income (loss)
—
162.5
143.9
18.6
—
18.6
(29.8)
40.8
125.7
(84.9)
(26.4)
(111.3)
(97.8)
(10.2)
27.7
78.5
13.4
29.8
121.7
18.2
103.5
26.4
129.9
(Income) loss from continuing operations attributable to
non-controlling interests
4.3
(25.4)
29.7
Net income (loss) attributable to TechnipFMC plc
$
22.9
$ (136.7)
$ 159.6
12.2%
10.3%
3.0%
1,718.2%
(142.2)%
(22.9)%
100.0%
34.0%
8.3%
100.0%
298.3%
14.5%
121.9%
100.0%
116.7%
116.9%
116.8%
18 TechnipFMC
U.K. Annual Report and Accounts
Revenue
Revenue increased by $1,101.4 million in 2023 compared to 2022. Subsea revenue increased $973.6 million,
driven by a 24.5% higher backlog as of December 31, 2022, when compared to December 31, 2021, and included
increased revenue year-over-year from flexible pipe and subsea production equipment combined with higher
installation activities. Surface Technologies revenue increased $127.8 million year-over-year, as a result of
increased operator activity across the world, primarily from the Middle East.
Gross Profit
Gross profit (revenue less cost of sales) as a percentage of sales increased to $1,343.9 million in 2023 compared to
$949.7 million in 2022. Subsea gross profit increased year-over-year by $324.5 million, of which $123.4 million is
due to volume increase and $201.1 million is due to favorable activity mix. Surface Technologies gross profit
increased year-over-year, by $51.3 million, primarily of which $18.3 million was driven by North America’s
improved operational performance, $25.6 million due to higher activity in the Middle East and $7.6 million from
improved performance in the rest of the world.
Selling, General, and Administrative Expense
Selling, general, and administrative expenses increased by $64.2 million year-over-year, as a result of increased
activity in both segments.
Other Income (Expense), Net
Other income, and losses, includes 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. Other income expense,
net decreased by $150.3 million year-over-year, mainly due to $126.5 million non-recurring legal settlement
charges.
Foreign Exchange Gain (Loss)
Foreign exchange results decreased by $97.8 million year-over-year and was primarily a result of exposure to
certain currencies with limited derivative hedging markets, such as the Argentine peso and Angolan kwanza.
Additional losses resulted from balance sheet remeasurements and cost of carry.
Income from Associates
For the years ended December 31, 2023 and 2022, we recorded an income of $34.4 million and $44.6 million,
respectively, from investments in associates and joint ventures. Income generated by our equity method
investments during 2023 decreased year-over-year, driven by a decrease in operational activity of our joint
ventures. See Note 9 to the consolidated financial statements for further details.
Loss from Investment in Technip Energies
For the year ended December 31, 2022, we recorded a loss of $27.7 million as a result of our investment in
Technip Energies. The amounts recognized represented the fair value revaluation gains (losses) of our investment.
See Note 33 to our consolidated financial statements for further details.
U.K. Annual Report and Accounts
TechnipFMC 19
Loss on Early Extinguishment of Debt
We recognized $29.8 million of loss on early extinguishment of debt for the year ended December 31, 2022, which
related to a premium paid and a write-off of debt issuance costs in connection with the repurchase of the 2021
Notes. See Note 19 to our consolidated financial statements for further details.
Net Interest Expense
Net interest expense decreased by $13.4 million in 2023 compared to 2022, largely due to the reduction in
outstanding debt.
Provision for Income Taxes
Our provision for income taxes for 2023 and 2022 reflected effective tax rates of 88.6% and 308.1%, respectively.
The year-over-year decrease in the effective tax rate was largely 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 U.K.
Discontinued Operations
Loss from discontinued operations, net of income taxes, was $26.4 million for the year ended December 31, 2022.
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 details.
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 our subsidiaries in their functional
currencies are translated into U.S. dollars based upon the average exchange rate during the period. While the
U.S. dollar results reported reflect the actual economics of the period reported upon, the variances from prior
periods include the impact of translating earnings at different rates.
Subsea
(In millions, except %)
Revenue
Operating profit
Year Ended December 31,
Favorable/(Unfavorable)
2023
2022
$
$6,434.8
$5,461.2
$ 524.4
$ 359.3
$973.6
$165.1
%
17.8%
46.0%
1.5pts
Operating profit as a percentage of revenue
8.1%
6.6%
Subsea revenue increased $973.6 million during the year ended December 31, 2023, compared to the same period
in 2022, driven by an increase in backlog during 2022, related to higher energy demand and upstream spending,
further aided by our unique commercial offerings. $630.0 million of the increase in revenue came from Brazil,
$257.1 million from the U.S., and $229.9 million from Norway, due to increased supply of flexible pipe and subsea
20 TechnipFMC
U.K. Annual Report and Accounts
production equipment combined with higher installation activities across these geographies. The increase in
revenue in Brazil, the U.S., and Norway was offset by a net $143.4 million decrease from the rest of the world
primarily from lower activity as projects reached completion.
Subsea operating profit for the year ended December 31, 2023 increased by $165.1 million, $123.4 million from
volume, combined with $201.1 million in favorable activity mix, partially offset by a $98.5 million increase in
operating expense.
Surface Technologies
(In millions, except %)
Revenue
Operating profit
Year Ended December 31,
Favorable/(Unfavorable)
2023
2022
$
%
$1,392.3
$1,264.5
$
94.9
$
43.1
$127.8
$ 51.8
10.1%
120.2%
3.4 pts.
Operating profit as a percentage of revenue
6.8%
3.4%
Surface Technologies revenue increased by $127.8 million, during the year ended December 31, 2023, compared
to the same period in 2022, $76.0 million in the Middle East, $22.1 million in North America, $31.8 million in
Europe and Central Asia, and $20.3 million in the rest of the world. The increase in the Middle East resulted from
recent project awards in support of longer-term customer production targets in the region driving increased supply
of drilling and completions products. The increased revenue in North America was driven by improved commercial
conditions supporting higher drilling and completions activity. The increase in Europe, Central Asia, and the rest of
the world is the result of increased operator activity on projects in these geographies. Approximately 59% of total
segment revenue was generated outside of North America for the year ended December 31, 2023.
Surface Technologies operating profit increased $51.8 million; $21.3 million of the increase was due to improved
operational performance in North America, $27.4 million was the result of higher activity in the Middle East and
North Sea, and $7.6 million from improved operational performance in the rest of the world.
Corporate Items
(In millions, except %)
Corporate expense
Year Ended December 31,
Favorable/(Unfavorable)
2023
2022
$
%
$(143.0)
$(74.7)
$(68.3)
(91.4)%
Corporate expenses increased by $68.3 million year-over-year, mostly due to the non-recurring legal settlement
costs of $126.5 million incurred during 2023, which was offset by a decrease in various other corporate expenses.
See Note 21 for more details on legal settlement costs.
U.K. Annual Report and Accounts
TechnipFMC 21
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,
2023
2022
$ 9,749.0
$6,738.3
1,233.9
1,340.8
$10,982.9
$8,079.1
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,
2023
2022
$12,164.1
$8,131.5
1,066.9
1,221.5
$13,231.0
$9,353.0
Subsea - Order backlog for Subsea as of December 31, 2023, increased by $4.0 billion from December 31, 2022.
Subsea backlog of $12.2 billion as of December 31, 2023, was composed of various subsea projects, including
Petrobras Buzios 6, Mero I, Mero II, and Marlim; Total Energies Mozambique LNG, Lapa North East and Clov 3;
ExxonMobil Yellowtail and Uaru; AkerBP Utsira; Azule Energy Agogo; Shell Jackdaw and Dover; Husky West White
Rose; Equinor RAIA, Rosebank, and Irpa, Verdande; Tullow Jubilee South East; Wintershall Maria and Dvalin; and
Harbour Talbot.
Surface Technologies - Order backlog for Surface Technologies as of December 31, 2023 decreased by
$154.6 million, compared to December 31, 2022. Surface Technologies’ backlog of $1.1 billion as of December 31,
2023 was composed primarily of projects in the Middle East, namely Aramco and ADNOC. The remaining backlog
was composed of various projects in the rest of the world.
Liquidity and Capital Resources
Most of our cash is managed centrally and flows through bank accounts controlled and maintained by TechnipFMC
globally in various 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.
22 TechnipFMC
U.K. Annual Report and Accounts
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:
(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, 2023
December 31, 2022
$ 951.6
$ 1,057.1
(153.8)
(965.1)
(854.3)
(418.8)
(999.3)
(872.5)
$(1,021.6)
$(1,233.5)
Cash Flows from Continuing Operations
The consolidated statements of cash flows for the periods ended December 31, 2023 and 2022 were as follows:
(In millions)
Cash provided by operating activities from continuing operations
Cash (required) / provided by investing activities from continuing operations
Cash required by financing activities from continuing operations
Effect of exchange rate changes on cash and cash equivalents
Decrease in cash and cash equivalents
Decrease (increase) in working capital from continuing operations
Free cash flow from continuing operations
Year Ended December 31,
2023
$ 742.9
(72.0)
(760.1)
(16.3)
$(105.5)
$ 284.7
$ 524.1
2022
$ 443.7
157.5
(883.6)
12.1
$(270.3)
$ (70.2)
$ 280.3
Operating cash flows from continuing operations - During 2023 and 2022, we generated $742.9 million and
$443.7 million, respectively, in operating cash flows from continuing operations. The increase of $299.2 million in
cash generated by operating activities from continuing operations in 2023, as compared to 2022, was due to
timing differences on project milestones, payments to vendors for inventory, fluctuations in derivative assets and
liabilities, and timing of income tax payments.
Investing cash flows from continuing operations - We used $72.0 million of cash in investing activities from
continuing operations during 2023 as compared to $157.5 million cash generated in investing cash flows from
continuing operations during 2022. The decrease of $229.5 million in cash from investing activities was primarily
due to $288.5 million proceeds from sales of our investment in Technip Energies during 2022 and an increase in
capital expenditures of $55.4 million. This cash use was offset by an increase in proceeds from sales of assets of
$54.5 million during 2023 primarily related to the sale of the Apache II pipelay vessel and other investing
activities.
Financing cash flows from continuing operations - Financing activities from continuing operations used
$760.1 million and $883.6 million in 2023 and 2022, respectively. The decrease of $123.5 million in cash used for
financing activities was due primarily to the decreased debt pay-down and issuance activity of $228.1 million
during 2023, partially offset by $104.9 million of increase of share repurchases during 2023.
The change in working capital represents total changes in operating current assets and current liabilities.
U.K. Annual Report and Accounts
TechnipFMC 23
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,
2023
$ 742.9
(218.8)
$ 524.1
2022
$ 443.7
(163.4)
$ 280.3
Debt and Liquidity
We are committed to maintaining a capital structure that provides sufficient cash resources to support future
operating and investment plans. We maintain a level of liquidity sufficient to allow us to meet our cash needs in
both the short term and long term. During 2023, we reduced our total debt position primarily through the full
repayment of $270.2 million of our 3.15% 2013 Private Placement Notes.
Availability of borrowings under the Revolving Credit Facility (see definition below) is reduced by the outstanding
letters of credit issued against the facility. As of December 31, 2023, there were $54.2 million letters of credit
outstanding and availability of borrowings under the Revolving Credit Facility was $1,195.8 million.
As of December 31, 2023, TechnipFMC was in compliance with all debt covenants. See Note 19 to the consolidated
financial statements contained in this U.K. Annual Report for further details related to our outstanding debt
instruments.
Credit Ratings - As of December 31, 2023, our credit ratings with Standard and Poor’s (‘‘S&P’’) were BB+ for
long-term unsecured, guaranteed debt (2021 Notes) and for the long-term unsecured debt (the Private placement
notes). On March 7, 2024 both the issuer credit rating and the correspondent-rated notes were upgraded by S&P to
BBB-. Our credit ratings with Moody’s are Ba1 for our long-term unsecured, guaranteed debt. See Note 19 for
further details regarding our 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 financial instrument and the value of the net credit differential between
the counterparties to the derivative contract. Adjustments to our derivative financial 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
financial 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 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.
24 TechnipFMC
U.K. Annual Report and Accounts
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. We continue to maintain sufficient liquidity to support the needs of
the business through growth, cyclicality, and unforeseen events. We continue to maintain and drive sustainable
leverage to preserve access to capital throughout the cycle. Our capital expenditures can be adjusted and managed
to match market demand and activity levels. Projected capital expenditures do not include a contingent capital that
may be needed to respond to contract awards. In maintaining our commitment to sustainable leverage and
liquidity, we expect to be able to continue to generate cash flow available for investment in growth and
distribution to shareholders through the business cycle.
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. As of December 31, 2023 and 2022, 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, 2023, would have changed our revenue and
income before income taxes attributable to TechnipFMC by approximately $381.8 million and $21.4 million,
respectively.
When transactions are denominated in currencies other than our subsidiaries’ respective functional currencies, we
manage these exposures through the use of derivative financial 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 financial 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 derivative financial 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 financial instruments fair value will
not have an immediate impact on our results of operations since the gains and losses associated with these
derivative financial instruments are recorded in other comprehensive income. When the anticipated transactions
occur, these changes in value of derivative financial 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 consolidated statement of financial position, we
also hedge the foreign currency fluctuation of these assets and liabilities with derivative financial instruments
after netting our exposures worldwide. These derivative financial instruments do not qualify as cash flow hedges.
U.K. Annual Report and Accounts
TechnipFMC 25
Occasionally, we enter into contracts or other arrangements containing terms and conditions that qualify as
embedded derivative financial 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 financial 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 $115.3 million in
the net fair value of cash flow hedges reflected in our consolidated statement of financial position as of
December 31, 2023.
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 the consolidated statements of income. 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 of December 31, 2023, TechnipFMC’s floating rate debt amounted to $230.3 million compared to an aggregate
total debt of $1,118.9 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, 2023, a 1% (100 basis points) increase in interest rates would lower the fair value of the fixed
rate Senior notes and Private placements by $18.7 million before tax. A 1% (100 basis points) decrease in interest
rates would raise the fair value by $14.6 million before tax.
A 1% (100 basis points) increase in interest rates would generate an additional net income of $8.0 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, 2023 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
Total Equity from US GAAP to IFRS as of December 31, 2023 and 2022, together with a reconciliation of net
income (loss) attributable to TechnipFMC plc for the years ended December 31, 2023 and 2022, respectively.
These reconciliations set out all significant differences which are expected to result from the conversion from
US GAAP to IFRS.
26 TechnipFMC
U.K. Annual Report and Accounts
In the consolidated financial statements as of December 31, 2023 and for the years ended December 31, 2023 and
2022, the main differences between US GAAP and IFRS for TechnipFMC relate to the following:
(In millions; unaudited)
December 31,
2023
2022
Total TechnipFMC plc stockholders’ equity in accordance with US GAAP
$3,172.1
$3,276.7
Leases
Goodwill
Impairment of property, plant and equipment
Defined benefit plans
LIFO inventory adjustments
Hyperinflationary economies
Income tax
Other
(38.3)
142.2
(22.0)
(22.3)
20.7
(2.8)
(0.8)
(3.0)
(62.3)
142.2
(23.0)
(22.1)
15.8
11.5
—
(10.8)
Total equity in accordance with IFRS
$3,245.8
$3,328.0
(In millions; unaudited)
Year Ended
Net income (loss) attributable to TechnipFMC plc in accordance with US GAAP
Leases
Impairment of property, plant and equipment
Defined benefit plans
LIFO inventory adjustments
Hyperinflationary economies
Income tax
Other
2023
$ 56.2
(9.6)
—
(12.7)
4.3
(13.9)
10.1
(11.5)
2022
$(107.2)
(8.6)
(1.0)
(12.2)
5.6
(7.8)
—
(5.5)
Net income (loss) attributable to TechnipFMC plc in accordance with IFRS
$ 22.9
$(136.7)
Leases
Under the US GAAP leasing accounting guidance, at lease commencement, a lessee classifies a lease as a finance
lease or an operating lease. Under the IFRS accounting guidance, 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 the
majority of its leases as operating leases under US GAAP, which 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.
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 non-US Surface businesses resulted in a higher goodwill
impairment charge under US GAAP.
U.K. Annual Report and Accounts
TechnipFMC 27
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.
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 on the consolidated statement of other comprehensive
income (‘‘OCI’’) and subsequently amortized to net income through a corridor approach as elected by TechnipFMC.
Under IFRS, actuarial gains and losses are recognized immediately on the consolidated statement OCI for long-term
benefit plans. Gains and losses are not subsequently recognized in the consolidated statement of 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 on the consolidated
statement OCI and subsequently recognized on the consolidated statement of 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 the consolidated statement of income 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 on the consolidated statements of income as a component of defined benefit cost, based on
the discount rate used to determine the obligation.
US GAAP does not limit the amount of the net defined benefit asset that can be recognized on the balance sheet,
whereas, under IFRS, all defined benefit plans in a surplus position could be affected by the asset ceiling. A
reduction in the net defined benefit asset as a result of the asset ceiling may be more likely to occur when surplus
assets may not fully revert to the employer upon plan wind-up or termination, due to plan provisions, local laws
(including tax laws), or the constructive obligation of the employer to share the surplus with other parties,
including plan participants.
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.
Hyperinflationary economies
Under US GAAP in hyperinflationary economies local functional currency financial statements are remeasured as if
the functional currency was the reporting currency (U.S. dollar in the case of a US parent), with resulting exchange
differences recognized in income.
28 TechnipFMC
U.K. Annual Report and Accounts
Under IFRS in hyperinflationary economies, the standard requires that the functional currency be maintained.
However, local functional currency financial statements (current and prior period) need to be restated in terms of
the measuring unit current (i.e., general price index) at the balance sheet date with the resultant monetary gains
(losses) recognized in the statement of income. Once the financial statements are adjusted by applying a general
price index, the financial statements are translated to the presentation currency at the current rate. See Note 30.2
for details.
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 income taxes, excluding charges
and credits (‘‘Adjusted Net Income (Loss)’’); 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.
U.K. Annual Report and Accounts
TechnipFMC 29
The following is a reconciliation of the most comparable financial measures under US GAAP to the non-GAAP
financial measures:
(In millions)
December 31, 2023
December 31, 2022
Net income (loss) attributable to TechnipFMC plc
$ 56.2
$ (61.9)
Year Ended
Charges and (credits):
Restructuring, impairment and other charges
Non-recurring legal settlement charges
Loss from investment in Technip Energies
Tax on charges and (credits)
Adjusted net income (loss) attributable to TechnipFMC plc
Weighted diluted average shares outstanding
Reported earnings (loss) per share - diluted
Adjusted earnings (loss) per share - diluted
20.0
126.5
—
(1.3)
$201.4
452.3
$ 0.12
$ 0.45
Year Ended
22.0
—
27.7
(0.4)
$ (12.6)
449.5
$ (0.14)
$ (0.03)
(In millions)
December 31, 2023
December 31, 2022
Net income (loss) attributable to TechnipFMC plc
Income (loss) attributable to non-controlling interests
Provision for income tax
Net interest expense
Depreciation and amortization
Restructuring, impairment and other charges
Non-recurring legal settlement charges
Loss from investment in Technip Energies
Adjusted EBITDA
Foreign exchange, net
Adjusted EBITDA, excluding foreign exchange, net
$ 56.2
(4.3)
154.7
88.7
377.8
20.0
126.5
—
$819.6
119.0
$938.6
$ (61.9)
25.4
105.4
150.7
377.2
22.0
—
27.7
$646.5
23.9
$670.4
Free cash flow is defined as operating cash flows less capital expenditures. The following table reconciles cash
provided by operating activities, which is the most directly comparable financial measure determined in
accordance with US GAAP, to free cash flow (non-GAAP measure).
(In millions)
December 31, 2023
December 31, 2022
Cash provided by operating activities from continuing operations
Capital expenditures
Free cash flow from continuing operations
$ 693.0
(225.2)
$ 467.8
$ 352.1
(157.9)
$ 194.2
Year Ended
30 TechnipFMC
U.K. Annual Report and Accounts
Non-Financial & Sustainability
Information Statement
The Company submits the following climate-related financial disclosures as required under the Companies
(Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 and to comply with sections 414CA and
414CB of the Companies Act 2006. These disclosures are located within the section entitled ‘‘Environmental, Social,
and Governance’’ below. These disclosures include:
a)
b)
c)
d)
e)
f)
g)
h)
a description of our governance arrangements in relation to assessing and managing climate-related risks
and opportunities (see the sections entitled ‘‘Governance of Environmental, Social, and Governance Matters’’
and ‘‘Environmental and QHSES Governance’’);
a description of how we identify, assesses, and manages climate-related risks and opportunities (see the
sections entitled ‘‘Enterprise Risk Management Process’’ and ‘‘Environmental Risk Management’’);
a description of how processes for identifying, assessing, and managing climate-related risks are integrated
into our overall risk management process (see the section entitled ‘‘Enterprise Risk Management Process’’);
a description of (i) the principal climate-related risks and opportunities arising in connection with our
operations, and (ii) the time periods by reference to which those risks and opportunities are assessed (see
the 2021-2023 and 2024-2026 ESG scorecards (‘‘Scorecards’’) and the section entitled ‘‘Climate-Related
Scenario Resiliency’’);
a description of the actual and potential impacts of the principal climate-related risks and opportunities on
our business model and strategy (see the section entitled ‘‘Climate-Related Scenario Resiliency’’);
an analysis of the resilience of our business model and strategy, taking into consideration different
climate-related scenarios (see the section entitled ‘‘Climate-Related Scenario Resiliency’’);
a description of the targets used by the Company to manage climate-related risks and to realize
climate-related opportunities and of performance against those targets (see the 2021-2023 and 2024-2026
Scorecards and the section entitled ‘‘Environmental’’); and
a description of the key performance indicators used to assess progress against targets used to manage
climate-related risks and realize climate-related opportunities and of the calculations on which those key
performance indicators are based (see the section entitled ‘‘Environmental’’).
U.K. Annual Report and Accounts
TechnipFMC 31
Environmental, Social,
and Governance
Our Environmental, Social, and Governance decisions are founded on the principles that guide our Company,
including our Core Values and Foundational Beliefs. The actions we take in furtherance of our ESG objectives
support our intention to act as responsible corporate citizens and drive our ambitions to be more sustainable as
we deliver on our strategic goals consistent with our long-term value creation. Beginning in 2017, we have
realized these ambitions through measures that seek to hold us accountable.
In 2020, we established the Scorecard measured over 2021–2023, with clear, verifiable metrics designed to drive
long-term behavior. This Scorecard measured our progress toward specific, measurable ESG goals relevant to our
business in relation to the planet, people, and communities in which we operate.
We will maintain the same Scorecard approach for the period 2024–2026, as we believe this approach drives
meaningful change and holds us accountable for delivering on our commitments. We have adopted new,
measurable ESG goals that account for the progress we achieved in our 2021–2023 Scorecard and various
stakeholder interests.
A snapshot of our ESG achievements reflected in the 2021–2023 Scorecard and ESG ambitions reflected in the
2024–2026 Scorecard are set forth below.
While the Scorecard measures specific achievements in ESG initiatives, our activities are neither limited to those
that are measured on our Scorecard, nor to actions and monitoring required by law.
32 TechnipFMC
U.K. Annual Report and Accounts
Recent ESG Recognition
NOIA ESG Excellence Award
TechnipFMC was recognized as the winner of the 2023 National Offshore Industries Association ESG
Excellence Award. The award recognizes the Company’s commitment to ESG actions, including efforts in fair
representation and inclusion and in energy transition technologies.
Human Rights Program Awarded 2023 Chair and CEO Prize
At the Company's internal 2023 Driving Change Awards, our human rights program received the Chair and
CEO Prize, which is awarded to an initiative for overall exceptional achievement and impact to our business.
The program achieved tangible impacts such as:
• Immediate return of migrant workers' passports and identity documents so that they have freedom to leave
work as they choose;
• Repayment to workers of backpay;
• Implementation of grievance mechanisms and improvement in human rights policies and procedures; and
• Training of suppliers and engagement on TechnipFMC expectations.
For more information on our human rights program, please see the section entitled ‘‘Our Compliance Program’’
below.
Results of our 2021–2023 Scorecard
Year 3 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
Target: 33%
Actual: 28%
92%
Target: 45%
Actual: 46%
102%
Nationality/race
Target: 23%
Actual: 28%
Female graduate
recruitment1
Gender
Target: 26%
Actual: 26%
100%
122%
SIF Prevention Projects
Target: 400
Actual: 1098
Water consumption1
Awareness and culture1
Human rights due diligence1
Target: 10%
Actual: 5%
50%
Inclusive leadership training
Target: 100%
Actual: 100%
100%
Audits on high-risk
suppliers1
Target: 100%
Actual: 100%
Recycled and reused waste2
Community1
Ethics and compliance2
Target: 53%
Actual: 71%
134%
Volunteering initiatives
STEM initiatives
Target: 800
Actual: 1287
161%
Target: 150
Actual: 165
110%
Annual training for all
managerial levels
Target: 100%
Actual: 100%
(1) Metric shows against target and is cumulative
(2) Metric shows against target and is annual
275%
100%
100%
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TechnipFMC 33
The 2024–2026 Scorecard
Our ESG Scorecard commitments 2024-2026
New Energy
Fair representation
Leadership in HSE
• Introduce three new fully qualified products
across the New Energy technology portfolio
by end of 2026.
•
Attract a diverse workforce whereby at least
50 percent of roles filled have a minimum of
one diverse candidate in the candidate pool
in 2024, 60 percent of roles in 2025,
and 70 percent of roles in 2026.
• Roll-out of waves I, II and III of Safe Choice
(our behavioural based training program)
plan, including training and coaching,
by end of 2026.
Our carbon footprint
Community
• Increase the usage of our renewable energy
to 60 percent from the baseline (2023) by
end of 2026.
• Target to reduce our Scope 1 and Scope 2
GHG emissions by 50 percent by 2030.
•
•
At least 80 percent of countries in which
we operate participate in STEM education and
engagement activities annually.
120,000 hours of volunteering by end of 2026.
Ethical business behavior
• Initiate on-site human rights audit of at
least 50 percent of suppliers identified for
assessments each year.
• 100 percent completion of annual advanced
integrity curriculum training of managerial
personnel.
4 We show progress in two ways: (1) Annual as a percentage of the corresponding year and
(2) Cumulative as a percentage of the 2026 commitment.
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, climate risk, 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 stakeholders and public disclosures with respect to ESG matters.
34 TechnipFMC
U.K. Annual Report and Accounts
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 as detailed in each committee’s charter.
Board of Directors ESG Oversight
Compensation and
Talent Committee
Global strategy and initiatives
related to fair representation
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)
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
Cybersecurity risk management
ESG
Committee
Policies, programs, and strategies
related to environmental
stewardship, responsible
investment, corporate citizenship,
climate change 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 Oversight
TechnipFMC’s Executive Leadership Team (‘‘ELT’’) sets the overall direction and approach toward our ESG efforts.
The ESG Steering Committee, which meets bimonthly, is composed of members of the ELT who are directly
responsible for various aspects of the ESG program. The ESG Steering Committee is responsible for the specific
Company initiatives toward corporate responsibility, sustainability, climate-related risks and opportunities and
actions aimed to further such initiatives. The ESG Steering Committee sets 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.
In addition to the ESG Steering Committee, TechnipFMC has internal organizations responsible for executing and
overseeing the day-to-day aspects of our environmental strategy. These organizations include the Environmental
Operating Committee and the Environmental Network.
U.K. Annual Report and Accounts
TechnipFMC 35
The Environmental Operating Committee is composed of members from our business segments and functions who
meet to:
Clarify workstream objectives;
Determine goals, KPIs and milestones;
Establish organization and processes related to the environmental aspects of our ESG strategy;
Elevate risks and 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, including the implementation of
plans to further progress towards goals.
The Environmental Network serves as a conduit between the Environmental Operating Committee, the global
environmental team, and health, safety, and environmental (‘‘HSE’’) specialists and professionals throughout the
Company. The Environmental Network’s responsibilities include creating environmental programs, supporting the
enhancement of environmental performance, sharing best practices and lessons learned, and developing global
environmental initiatives involving local working groups, regions, and projects in an effort to reduce the
Company’s environmental footprint.
Enterprise Risk Management Process
TechnipFMC’s enterprise risk management (‘‘ERM’’) process is designed to identify, evaluate, respond to, control,
and monitor risk. This ERM process is applicable to activities of TechnipFMC in all business functions and is applied
at the global business unit, global function, and enterprise-wide levels.
Under the global ERM process, risk is considered as an effect of uncertainty on objectives and is defined by
situations or circumstances that have both a likelihood of occurring and a potentially negative (threat) or positive
(opportunity) consequence. This process includes climate-related risks and opportunities but is not limited to such
risks and opportunities and does not treat climate-related risks and opportunities differently than any other
identified risk and opportunity. Instead, climate-related risks and opportunities are assessed across the
sub-processes identified below.
Under this process, global business unit and function leadership identify, manage, and monitor risks, with the top
risks being reviewed with the ELT and Board of Directors annually and more frequently, if needed, for enterprise
level consideration and mitigation.
This general process is applied globally across TechnipFMC and includes annual enterprise risk reporting and
reviews, as well as closing of response actions and acceptance of residual risks.
This enterprise risk management process consists of the following six sub-processes:
Strategy;
Integration;
Risk Assessment;
Risk Treatment (mitigation);
Monitoring and Review; and
Recording and Reporting.
36 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, and waste and water management. Additionally, this section includes
TCFD-aligned disclosures on climate change-related risks and opportunities in accordance with the requirements of
the amended Companies Act.
Our environmental measurement and reporting methods have evolved since establishing our 2021–2023
Scorecard commitments. For instance, in 2021, some workplaces did not have the capabilities to adequately report
their water consumption and waste generation. Since then, several sites have implemented measuring capabilities
that allow 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 begin working towards the goals set out in the 2024–2026 Scorecard, our measuring and
reporting methods will continue to evolve as we learn more about our behaviors and identify improvement
opportunities.
Environmental Risk Management
TechnipFMC recognizes that the environment can impact the company in the short-, medium- and long-term. Those
risks may manifest as physical risks, such as an increase in the severity of extreme weather events or longer-term
shifts in climate patterns, or as transition risks, such as policy, legal, technology, and market changes arising from
the transition to a lower-carbon economy.
TechnipFMC’s assessment and management process for climate-related risks and opportunities starts with the
Board of Directors, as further detailed above on page 36, and includes the ESG Steering Committee (see page 35),
our enterprise risk management process outlined below on page 36, and the Quality, Health, Safety, Environment,
and Security (‘‘QHSES’’) systems and standards set out below.
These risks and opportunities are considered at various cadences, as appropriate for the respective process. But
ultimately, these risks and opportunities are identified, assessed, and managed, at some level, on an ongoing basis.
Environmental and QHSES Governance
As part of the environmental governance framework, environmental data is collected on a periodic basis through
our 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 the leadership of our
business units and functions to inform the current conditions and identify opportunities 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 Environmental Network
meetings, where specialists and professionals discuss ways to improve reporting metrics, identify opportunities for
improvement, and promote data quality and completeness.
U.K. Annual Report and Accounts
TechnipFMC 37
Management Systems and Standards
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 requirements 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 potential
environmental risks of our activities, products, and services and opportunities to manage the related impacts by
identifying and implementing appropriate controls, consequently improving 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 governance of GHG management, we developed a process in 2022 to account
for GHG emissions in projects and products in accordance with the GHG Protocol (as defined below). 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 standard management.
We continue to commit resources and expertise to eliminate hazards, reduce risks, and prevent environmental
pollution related to our activities through design, process improvement, and technologies. As such, 38 workplaces
had an active ISO 14001 certification during 2023, as compared to 48 certifications in 2022. This decrease is due
to the recent consolidation of several, pre-existing ISO certifications. The Company uses the same management
system to certify these entities throughout the organization.
Climate-Related Scenario Resiliency
In 2023, the Company conducted a qualitative climate scenario analysis focused on its Subsea business in the
U.K. (the ‘‘Scenario Analysis’’), which feeds into the assessment of the resilience of Company’s business model and
strategy in the light of risk arising under certain climate change scenario projections. TechnipFMC relied on the
services of a reputable third party for completion of the Scenario Analysis.
As the Scenario Analysis is the first such analysis of this type that the Company has conducted, we focused
initially on our Subsea business in the U.K., which we deem the most relevant geography and business line for
purposes of the Scenario Analysis. TechnipFMC anticipates that it will develop the sophistication of its climate risk
scenario analysis capabilities over time, ultimately building to a quantitative scenario analysis of TechnipFMC.
The Scenario Analysis considered short-term impacts of less than three years, medium-term impacts between three
and five years, and long-term impacts between six and 20 years against a status quo scenario of 4⁰ C warming,
moderate climate action of 2.5⁰ C warming, and aggressive climate action of 1.5⁰ C warming. Our time horizons
were chosen based on industry leading practices, TCFD recommendations, and collaboration with TechnipFMC
stakeholders.
The Scenario Analysis was based on Intergovernmental Panel on Climate Change (the ‘‘IPCC’’) scenarios SSP1-2.6,
SSP2-4.5, and SSP5-8.5 and International Energy Agency (the ‘‘IEA’’) scenarios Net Zero Emissions by 2050 (NZE2050),
Sustainable Development Scenario (‘‘SDS2’’), Announced Pledges Scenario (‘‘APS’’), and Stated Policies Scenario (‘‘STEPS’’).
The IPCC scenarios were relied upon more when considering physical risk-related analysis, as we consider the IPCC
scenarios more suited to physical risks, and the IEA scenarios were relied upon more when considering transition
risk-related analysis, as we consider the IEA scenarios more suited to transition risks. We mapped the IPCC and IEA
scenarios to the three climate impact scenarios based on the forecasted change in mean global temperature, and using
38 TechnipFMC
U.K. Annual Report and Accounts
that mapping, we leveraged the forecasted impacts under each scenario in the respective reports to identify the
potential likelihood and impact of each principal. Our scenario selection was informed by industry leading practices,
TCFD and U.K. CFD recommendations, and guidance from the IPCC and the IEA.
To assess the Company’s principal climate-related risks and opportunities, we conducted a climate-focused risk
survey, employee interviews, and a climate risk lab. These inputs identified the following principal climate-related
risks for TechnipFMC:
Enhanced climate and emissions reporting obligations;
Regulations limiting current business activities (e.g., limits on future oil and gas extraction activities);
Increased pricing of GHG emissions;
Decreased access to capital; and
Sector stigmatization.
These efforts also identified the following principal climate-related opportunities for the Company:
Growing demand for lower-emission products and services; and
Increased revenue through access to new and emerging markets, including new energy and resilience.
While some actual impacts to the Company may have been influenced at least in part by climate-related risks, such
climate-related matters have not had a material impact on our operations historically. The potential impacts of the
Company’s principal climate-related risks and opportunities are as follows:
RISKS & OPPORTUNITIES
TIME HORIZON
POTENTIAL IMPACTS & OTHER CONSIDERATIONS
Enhanced Climate &
Emissions Reporting
High impact risk in the medium
term with aggressive climate
action (1.5º C warming).
Regulations Limiting
Current Business Activities
High impact risk in the long term
with moderate climate action
(2.5º C warming). High impact
risk in the short term with
aggressive climate action (1.5º C
warming).
Increased Pricing of GHG
Emissions
High impact risk in the long term
with moderate climate action
(2.5º C warming). High impact
risk in the short term with
aggressive climate action (1.5º C
warming).
Transition risk leading to increased costs to
obtain and maintain the capabilities required to
comply with evolving reporting obligations (e.g.,
talent, data, systems, technology). TechnipFMC’s
choices in relation to the selected technologies,
systems, and platforms, as well as the
organizational choices relating to climate and
sustainability disclosures may result in synergies
and reduce the cost of compliance.
Transition risk leading to reduced revenue due to
reduced demand in response to legislation banning
new oil and gas exploration and extraction.
Stranding/early retirement of assets supporting oil
and gas extraction; the likelihood of stranded assets
asset early retirement can, however, be reduced
based on the feasibility of and cost associated with
the conversion of manufacturing facilities from
supporting the Subsea business to supporting the
new energy business.
Transition risk leading to increased costs associated
with current business activities either to reduce or
offset emissions associated with operations. The
rate of advancement for carbon capture and
storage technology, as well as ongoing activities to
reduce the emissions from TechnipFMC’s Subsea
offering, can reduce the impact of increasing GHG
emissions prices.
U.K. Annual Report and Accounts
TechnipFMC 39
RISKS & OPPORTUNITIES
TIME HORIZON
POTENTIAL IMPACTS & OTHER CONSIDERATIONS
Decreased Access to Capital High impact risk in the long
term with moderate climate
action (2.5º C warming). High
impact risk in the medium term
with aggressive climate action
(1.5º C warming).
Sector Stigmatization
High impact risk in the long
term with moderate (2.5º C
warming) or aggressive (1.5º C
warming) climate action.
Transition risk leading to reduced revenue due to
delay or disruption of planned activities, such as
the inability to start new projects or slowing
down ongoing projects. Strategic decisions
related to TechnipFMC’s investment in and
growth of the New Energies business could lessen
the impact of financial institutions and
institutional investors divesting from fossil fuels,
and potentially expand TechnipFMC’s access to
capital.
Transition risk leading to increased costs of
workforce attraction and retention. Strategic
decisions related to TechnipFMC’s investment in
and growth of the new energy business could
reduce the costs associated with workforce
retention and attraction and potentially attract
those seeking jobs involving new technology,
sustainability, and energy transition.
Growing Demand for
Lower-Emission Products &
Services
Medium impact opportunity in
the long term in a status quo
scenario (4º C warming) or with
moderate climate action (2.5º C
warming). Medium impact
opportunity in the short term
with aggressive climate action
(1.5⁰ C warming).
Transition opportunity leading to increased
revenue driven by growing demand for
lower-emission products and services.
TechnipFMC’s investment in efficiency and
emissions reduction, as well as the pace of
technological advancement, may increase the
potential benefit to the Company.
Increased revenue through
access to new and
emerging markets
High impact opportunity in the
long term with aggressive
climate action (1.5º C warming).
Transition opportunity leading to new revenue
streams from new markets (e.g., tidal energy,
hydrogen) and improved reputation if the
Company effectively (co-)invests in those areas.
Strategic decisions related to TechnipFMC’s
investment in and growth of the New Energy
business may increase the potential benefit to
TechnipFMC.
40 TechnipFMC
U.K. Annual Report and Accounts
The range of climate impact scenarios and time horizons underlying the Scenario Analysis account for a variety of
possible circumstances and allow TechnipFMC to make informed decisions regarding climate-related risks and
opportunities. Recognizing the limits inherent in such an exercise, we are encouraged that our operational
initiatives and decisions, our carbon capture and storage technology and emissions reductions, and the growth of
our New Energies business are illustrative of the strategic resilience of the Company under the variety of such
possible circumstances over the foreseeable future.
We aim to reduce our Scope 1
and Scope 2 GHG emissions by 50% by 2030
Our 50 by 30 target — to reduce our global Scope 1
and Scope 2 GHG emissions by 50% by 2030 – was
announced in November 2020 and, along with our
lower carbon intensity products target from our
Scorecard, is our primary target for managing
climate-related risks. 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.
Reduce our carbon footprint by 50% by 2030 (kt CO2 eq.)
2017 Baseline: 677
2017 Re- Baseline: 312
Target: 338
Actual: 266
Target: 156
Actual: 266
Metric shows against target and is annual
TechnipFMC calculates Scope 1 and Scope 2 GHG emissions in alignment with the GHG Protocol Corporate
Accounting and Reporting Standard (the ‘‘GHG Protocol’’). More specifically, we measure and report data on
emissions produced by: fuels purchased; refrigerants used in the manufacturing, servicing, and disposal of
refrigeration and air-conditioning equipment; and purchased energy consumption. This activity data is multiplied
by appropriate emission factors commonly used in the industry, including those sources from the U.S.
Environmental Protection Agency, the U.K. Department for Environment, Food & Rural Affairs (Defra), and the
International Energy Agency, to calculate the Scope 1 and Scope 2 GHG emissions.
We continue our journey to achieve these targets, considering 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.
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.
The table below describes the annual quantity of Scope 1 and Scope 2 GHG emissions resulting from those activities
within the operational control of the Company, reported in tonnes of CO2e, reflecting an adjusted 2017 base year and
our operational scope after the Spin-off (as defined in the section entitled ‘‘Company Overview’’ above).
For 2023, the Company’s Scope 2 GHG emissions were calculated using the GHG Protocol’s market- and
location-based methods. With the market-based method, we quantify those emissions by applying emission factors
provided by the instrument chosen to purchase energy. The location-based method uses the average emissions
intensity of the grid that supply energy to the respective workplace(s) to calculate Scope 2 emissions. At the
Company, the market-based method is used where an instrument certifies that Company has procured an amount
of renewable energy exclusively available to it. The renewable energy attributes are only applied to those
workplaces consuming the purchased energy under these instruments.
U.K. Annual Report and Accounts
TechnipFMC 41
Scope 1 and Scope 2 GHG emissions from workplaces of the Company in the U.K. represent 0.9 percent from the
Scope 1 and 2 GHG emissions for the total Company. The total of the Scope 1 and 2 GHG emissions for 2023 were
calculated using the Scope 2 GHG emissions by the market-based method.
GHG Emissions
(in Tonnes CO2e equivalent)
GHG Emissions by Scope
TOTAL GHG Emissions
2021*
2022
2023
Scope 1
238,114
Scope 21
40,865
Scope 1
247,473
Scope 21
35,355
Scope 1
235,263
Scope 22
31,166
278,979
282,828
266,429
*
Results reflect adjusted 2017 baseline, which has been adjusted to reflect our operational scope after the Spin-Off.
1 Scope 2 emissions calculated with the market-based method.
2 Reflects the Company’s Scope 2 emissions calculated with the market-based method. In 2023, the Company’s Scope 2 emissions calculated with
the location-based method were 42,147 tonnes CO2e equivalent.
The Company’s Scope 1 and 2 GHG emissions in 2023 decreased by 6 percent as compared to 2022, with a
15 percent reduction against our adjusted baseline year. Given the emissions stemming from our vessels, which
comprise more than 77 percent of our total Scope 1 and 2 GHG emissions, our OneFleet team continues to
implement measures to increase energy efficiencies aboard our vessels and to evaluate the use of biofuels in the
fleet, considering the associated logistics and viability. The energy efficiency initiatives implemented in our fleet
as part of each vessel’s Ship Energy Efficiency Management Plan (SEEMP), which uses digitized operational data to
improve energy and operational efficiency, contributed to our decrease in GHG emissions in 2023. Through our
engagement and collaboration with stakeholders, our vessels transit at speeds that optimize fuel efficiency, thus,
reducing fuel consumption and lowering emissions.
GHG Emissions Intensity
Our 50 by 30 target considers 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 environmental performance
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
2023, the GHG intensity decreased by 14 percent as compared to 2022.
GHG Emissions Intensity
(kg CO2e/workhours)
2021
5.61
2022
5.19
2023
4.48
Energy Consumption
Our total energy consumed for 2023 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 (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, 169,286 MWh came from purchased energy in 2023. In 2023, TechnipFMC
saw an absolute increase of 6 percent of purchased energy consumed as compared to 2022. Of that purchased
energy, 35 percent came from renewable energy sources that the Company procured through instruments such as
renewable energy certificates, power purchase agreements, and similar options. We continue monitoring the
renewable energy composition of the purchased electricity from the grids that provide energy to our workplaces.
Energy consumed by the Company in the U.K. represents 2 percent 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
7 percent of the total purchased energy consumed by the Company.
42 TechnipFMC
U.K. Annual Report and Accounts
Our Scorecard Commitments
Our clients’ carbon footprint
Target: 33%
Actual: 28%
92%
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 the 2021–2023 Scorecard, we set a target to reduce our clients’ carbon footprint by achieving 33 percent 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 2021–2023 Scorecard period. As of the end of 2023, our average percentage of
CI Orders was 28 percent.
Water management
Metric shows against target and is cumulative
Target: 10%
Actual: 5%
50%
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 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. The average reduction in water consumption for 2021–2023 as
compared to the 2020 baseline was 5 percent.
Waste management
Metric shows against target and is annual
Target: 53%
Actual: 71%
134%
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 2023, waste generation increased by 11 percent in comparison with 2022. This 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 2023, which
was 71 percent, in contrast with 61 percent in 2022.
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 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.
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TechnipFMC 43
Beyond the Scorecard
Our efforts under the Environmental pillar go beyond those detailed in the Scorecard, as we demonstrate in the
following pages.
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. Our workplaces in Singapore,
Trafalgar, Tananger, and Hyderabad are powered in part from solar panels at their locations. Our facilities in Brazil
began with changing to lower energy light bulbs and now currently six of TechnipFMC’s eight operating facilities in
Brazil operate with electricity that is 100 percent from the country’s vast hydro-based resources and other renewable
sources. During 2023, we acquired renewable energy credits for some of our workplaces by procuring purchased
energy from renewable sources through our energy providers. We also evaluate opportunities to use biofuel solutions
as transportation fuel for 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
monthly at 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 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 2023.
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 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 helps
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 2023 is 0.08 versus 0.02 in 2022.
44 TechnipFMC
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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 actions in support of our fair representation
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
Fair representation
Female graduate recruitment1
Underrepresented populations in senior management2
Target: 45%
Actual: 46%
102%
Gender
Target: 26%
Actual: 26%
100%
122%
Nationality/race
Target: 23%
Actual: 28%
(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 2023, we recruited 46 percent female
participants to our graduate program, which exceeded our 45 percent target for 2023.
Under our 2021-2023 Scorecard, we aimed to increase underrepresented populations in senior management: our
target was to increase the percentage of females in senior management to 26 percent by the end of 2023. As of
December 31, 2023, female representation in senior management was 26 percent. We also aimed to increase the
percentage of underrepresented nationalities (nationalities outside North American and European countries) and
U.S. minorities in senior management to 23 percent, and as of the end of 2023, we exceeded our target with
28 percent. The protection of personal information varies widely from country to country thereby making it
difficult to track certain characteristics. Instead, we linked to nationality and U.S. minorities to encourage the
development of local talent around the globe.
Our consideration of diversity in the succession plans for our leadership roles and resulting efforts to identify
internal talent early have translated into an increase in depth and representation of females and underrepresented
nationalities and U.S. minorities. We have maintained 38 percent representation of females in our Executive
Leadership Team.
Awareness and Culture
Metric shows against target and is cumulative
Inclusive leadership training
Target: 100%
Actual: 100%
100%
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 2021–2023 Scorecard, we set a goal of 100 percent completion of this curriculum by managers by 2023.
In 2023, we met our expectations with 100 percent of managers completing the curriculum.
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TechnipFMC 45
Community
Metric shows against target and is cumulative
Volunteering initiatives
STEM initiatives
Target: 800
Actual: 1287
161%
Target: 150
Actual: 165
110%
TechnipFMC is focused on making a long-term, positive impact in the communities where we live and work. We
encourage our employees to ‘‘do 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.
In 2021–2023, we worked toward participating in 800 volunteering initiatives and 150 STEM initiatives by the
end of 2023, and we exceeded our targets with 1,287 volunteering and 165 STEM initiatives of our three-year
target. Our employees’ dedication and generosity are examples of corporate social responsibility at TechnipFMC.
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’’), which are open to all of
our employees. We explore those areas over the following pages.
Community Highlights
Family Day
Embracing a vibrant company culture, our global Family Day
events stand as a testament to our commitment to unity and
innovation. With a spotlight on STEM, we create engaging
experiences that inspire curiosity across generations. These
events exemplify our dedication to fostering a collaborative and
inclusive environment, where families witness firsthand our
passion for STEM and Power of Purple as well as getting a
glimpse of an employee’s workday. From interactive activities to
exciting demonstrations, our Family Day celebrations reinforce
the values that drive our company forward, showcasing a
dynamic blend of camaraderie and a dedication to shaping the
future.
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Global Giving
In a testament to our commitment to global giving, our company
proudly champions the 36-year United Way of Greater Houston
campaign, donating $1.35 million. This enduring partnership
symbolizes our dedication to making a positive impact on
communities. Additionally, we celebrated a record-breaking year
for our American Heart Association campaign, donating
$454,327, reflecting the collective generosity and compassion of
our employees. These milestones underscore our belief in
corporate social responsibility, fostering a culture of philanthropy
that transcends borders and transforms lives. Together, we strive
for a brighter and healthier future for all.
BOLD STEM Day
In 2023, more than 400 Greater Houston area students attended
the 6th TechnipFMC STEM Day event at our Gremp Campus and
participated in interactive science, technology, engineering, and
mathematics activities that promoted learning, discovery, and
interest in new fields.
Sponsored by BOLD (Black Organization for Leadership and
Development), the event was a collaboration between internal
and external STEM partners who created more than 25 stations
focused on introducing K-12 students to new ideas and career
paths.
Employee Networks and Resource Groups
The following ENRGs continued to use their grassroot 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. Three new
ENRGs – OPEM (Orgulho de Poder ser Eu Mesmo – Proud to be
Myself) – Brazil; iPODER! (Provide Opportunities, Development,
Engagement & Representation for Hispanic/Latino) – U.S.; A4A
(Accessibility for All) – U.K. Also EmPower has chapters in Africa,
Brazil, France, and the Middle East.
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TechnipFMC 47
Employee Matters
Our people are at the 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 our employees are entitled to fair treatment and respect, wherever they work: in the office,
offshore, 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 discriminating, intimidating, or hostile.
Furthermore, we are committed to hiring and employee development decisions that are fair, objective, and not
based on protected characteristics. Our policy is for employment decisions to be 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)1
Employees on payroll
Contracted workforce
Total workforce
December 31, 2021
December 31, 2022
December 31, 2023
19,103
1,507
20,610
1,392
22,002
20,301
1,671
21,972
1,374
23,346
21,469
1,293
22,762
2,265
25,027
(1) Temporary employees include interns and apprentices.
From 2021 through 2023, TechnipFMC had the following number of executive officers and employees:
Male
Employees
Female
Employees
Total
% of Female
Employees
2021
2022
2023
2021
2022
2023
2021
2022
2023
2021
2022
2023
4
4
4
4
4
4
8
8
8
50%
50%
50%
5
57
5
55
5
51
3
14
3
13
3
17
8
71
8
68
8
38%
38%
38%
68
20%
19%
25%
16,084
16,943
17,692
3,979
4,242
5,070
20,063
21,185
22,762
20%
20%
22%
Directors
(non-executive
directors)
Executive officers
(including Douglas
J. Pferdehirt)
Senior managers
Employees on
payroll (overall)
Figures for 2021 include Technip Energies.
Attracting Talent
Our Employee Value Proposition (‘‘EVP’’) is part of the way we attract, engage, and retain our people. It is an aspect of
our employer brand that communicates the attributes and qualities that make our organization a great place to work,
and helps us attract people who will contribute to, and thrive within TechnipFMC. In 2023, we redefined our EVP in a
way that reflects the company we are today. We sought extensive input and feedback from a cross-section of our
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employees, senior leadership team, and new recruits, and announced “The energy to transform” as our new EVP. Built
on two pillars – relentless innovation and caring for the future – it is underpinned by our global collaborative culture. It
links to our overall brand positioning, which is driving change in the energy industry, and it describes both what the
company does and what it offers employees and potential employees.
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. In 2023, we achieved a reduction in recruiting lead times, even in a year of
increased hiring volume.
Developing and Keeping Talent
People development is a key focus at TechnipFMC, including providing learning, career development and
knowledge sharing opportunities enabling our people to perform at their fullest potential, and develop capabilities
for simplification, standardization, and industrialization.
We focus on talent development through a process called ‘‘Talking Talents.’’ This program forms the basis for
developing employees into our three main career pathways: Leadership, Project Management, and Technology.
Input from the Talking Talents process is also used for succession planning. As in previous years, in 2023, our
leaders spent a considerable amount of time planning for succession, resulting in an increase in depth of
succession, utilization of talents and cross-pollination between business units and functions. Representation of
underrepresented nationalities and gender also increased, as represented by the percentage of succession plans
that included the specified populations.
We believe that regular dialogue between managers and employees is key to driving performance and building
trust and engagement. Our Check-In process is embedded in our culture, where managers and employees meet at
least quarterly to discuss goals, share feedback, and have in-depth discussion about the employee’s development,
including creating individual development plans. This process focuses leaders on the development of people on
their team and enables employees to own their career path and focus on the future. In 2022 and 2023, we
conducted Check-in Conversation workshops across our business attended by a majority of our managers. Our
tools for developing employees also include a continuous feedback platform that enables feedback to be provided
from peers, leaders, and reporting employees.
Developing effective leaders at all levels of the organization is also a top priority at TechnipFMC. Leadership You is
our internal leadership development model which focuses on four areas: engaging people, thinking strategically,
driving results, and embracing change. This program is available to all employees, self-directed, customizable, and
driven by a global, enterprise-wide learning and knowledge management ecosystem.
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TechnipFMC 49
Learning and Training
With the forecasted growth in our business, sharpening our focus on 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, 24/7, 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.
Our iLearn learning platform continues to be the main hub for delivering our formal learning initiatives such as
eLearning courses, videos, instructor led training, and resource materials. We continue to embrace our digital
transformation and strive to deliver engaging content. In 2023, there were more than 32,000 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 2023, almost 432,000 training
hours and 324,323 course completions were completed with 84 percent of completions being done online, which
resulted in 18 training hours per employee. We also saw a substantial increase in the amount of training hours
related to our technical and engineering training where 164,271 hours were completed. This was the result of a
significant focus and strategy to better engage with our technical employees and provide additional learning
opportunities.
We leverage our internal knowledge sharing tools, The Bridge and The Well, to collaborate across the Company. The
Bridge has 49 chartered global knowledge-sharing networks, up from 44 networks in 2022. The related knowledge
repository, The Well, has more than 5,450 pages (up from 5,100 in 2022), which received more than 1.3 million
visits in 2023 (up from 824,000 in 2022). 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.
Technical Expertise Program
The global Technical Expertise Program (‘‘TEP’’) recognizes employees (‘‘Technical Experts’’) who have
demonstrated technical mastery in their discipline, as well as technical impact, people development, business
impact and industry leadership. The TEP currently has about 859 members, and in 2023, we added new
sub-disciplines to capture under-represented technical communities and activities.
Our Technology Fellows are the highest tier of the TEP and personify its mission of advancing the Company’s
technical leadership by advising, innovating, enhancing operations, sharing knowledge, and inspiring others –
within the company and across the industry. Each Fellow is a pillar in their field of expertise, setting standards
across the industry, cultivating the next generation of experts, and ensuring that TechnipFMC retains its market
leadership and competitive advantage.
In 2023, our Fellows sponsored a significant global initiative on intellectual property called ‘‘Think IP.’’ Through this
program, they will share their knowledge broadly across the Company’s learning ecosystem and drive initiatives to
protect our competitive advantage and respect our Company’s intellectual property and the intellectual property of
other companies.
Equal Opportunity and Fair Representation
Three of our Foundational Beliefs – integrity, respect, and sustainability – are tangibly embedded in our
commitment to equal opportunity and fair representation. While we recognize the importance of equal opportunity
and fair representation to our long-term value and performance, we also recognize the importance of pursuing
these aims in legally compliant manners. It is our policy that employment decisions, including those related to
recruitment, selection, evaluation, compensation, and development, among others, not be influenced by unlawful
or unfair discrimination on the basis of race, religion, gender, age, ethnic origin, nationality, sexual orientation,
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gender identity or gender reassignment, marital status, disability, or any other legally protected characteristic. Our
equal opportunity and fair representation efforts are part of our legal compliance considerations, and we are
committed to only rewarding legal methods of promoting these efforts.
In 2023, TechnipFMC was named one of the World's Top Companies for Women by Forbes, for the second year in a
row.
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 2023, we celebrated International Day of Persons with Disabilities. In recent years, we have had
various initiatives to promote inclusion and respect featuring our colleagues throughout the globe, including:
Inspiring stories featuring perspectives from leadership and people with disabilities;
Creating awareness of disabilities through web-based learning experiences; and
Webcast with a diversity and inclusion expert, that shared a personal testimonial on disability in the
workplace.
Other global days marked by TechnipFMC in 2023 include International Women’s Day, International Day of
Persons with Disabilities, and World Mental Health Day, among others.
Employee Networks and Resource Groups
TechnipFMC’s ENRGs aim to engage and reinforce our commitment to creating an environment where all
employees can achieve their full potential. Our ENRGs are open to all of our employees and include BOLD (Black
Organization for Leadership and Development), EmPower Women’s Network, Parents Network, ¡PODER! Latin
Network, OPEM (Proud to be Myself), Military Veterans and Friends Network, XYZ Network for professional
development, and STRIVE and IDEA Networks for diversity and inclusion. 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.
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 STEM careers.
Employee Engagement and Well-being
In 2023, we conducted a global employee engagement survey. 73 percent of employees participated in the survey,
and there was an improvement in overall engagement score as compared to the previous survey in 2021. This was
the result of global actions and communications including a focus on senior leadership engagement through regular
webcasts, site visits and quarterly meetings, roll out of a global wellbeing program ‘‘Workplace Options,’’ and
regular communication to employees on business prospects and long-term strategy. In addition, engagement
survey information was also made available by managers, location and business units, and leaders had access to
review results, identify improvement opportunities and put action plans in place.
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As committed by our Chair and CEO, we annually mark the month of October as mental health awareness month
with several activities to promote awareness. Our 2023 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 Viva Engage 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.” Our global well-being program from Workplace Options provides all our employees with access to mental
health resources, counseling and health coaching.
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
monitored and adjusted based on various forms of feedback from multiple levels across the Company. Digital tools
help us gauge the effectiveness of our digital communication platforms — from email to intranet to internal social
media. 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’’) includes all our eligible European
entities and meets at least twice a year with management.
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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, upholding human rights, and ethics and compliance
training – but also links to the aspirations of our Foundational Beliefs, because how we do business is as important
as why we do business.
Our Scorecard Commitments
Leadership in HSE
Metric shows against target and is cumulative
SIF Prevention Projects
Target: 400
Actual: 1098
275%
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 2023, 650 SIFP projects were raised from which 323 were implemented and closed.
During the 2021–2023 Scorecard period, 1098 SIFP projects were raised and completed against the target of
400 SIFPs. The goal was exceeded by 175 percent.
Our further actions in HSE are discussed in greater detail in the section entitled ‘‘Health, Safety, and Security’’
below.
Human rights due diligence
Metric shows against target and is cumulative
Audits on high-risk suppliers1
Target: 100%
Actual: 100%
100%
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 percent of human rights audits on 100 suppliers in countries where
there are high risks of human rights abuses. In 2021, we laid the groundwork for all of the audits (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 percent of the
selected desk audits and more than 60 percent of the selected on-site audits of our most significant high-risk
suppliers. In 2023, we completed the remaining on-site audits to achieve our objective of completing audits of
100 percent of our highest risk suppliers. In addition to the foregoing, starting in 2022 we annually reviewed and
updated our list of selected suppliers to assess based on factors such as high-risk countries of operations, high-risk
scope of work, and spend.
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TechnipFMC 53
The Company’s assessment and audit process has consisted of the following three levels:
(1)
In our Level 1 Due Diligence phase, we issued our Self-Assessment Questionnaire (‘‘SAQ’’), which was
developed based on industry best practices, to the selected suppliers. and conducted additional due diligence
research via web search and the Company’s due diligence subscription services.
(2)
In our Level 2 Desktop Audits, we followed-up on supplier SAQ responses to further assess potential risk and
to determine whether on-site audits were warranted.
(3) For our Level 3 ‘‘On-Site’’ Audits, we dispatched a third-party auditor to the supplier’s operational site to
conduct a thorough review of the supplier’s facilities, documentation, and policies and to interview the
supplier’s workers. The on-site audits resulted in an audit report that measured the supplier’s performance
against the auditor’s human rights audit standard.
Ethics and compliance
Metric shows against target and is annual
Annual training for all managerial levels
Target: 100%
Actual: 100%
100%
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. This commitment targets 100 percent 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 course.
For 2023, we met our expectations, with 100 percent of managers taking the required ethics and integrity course.
Beyond the Scorecard
Our efforts under the Governance pillar go beyond those detailed in the Scorecard, as we demonstrate in the
following pages.
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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 anti-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 was appointed as our Executive Vice President and Chief Legal Officer in 2023,
and reports dually to the Chair and CEO and 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 violations 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 regarding retaliation against
employees for reporting in good faith any suspected violations of our policies or Code of Business Conduct.
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.
Anti-Corruption and Anti-Bribery Compliance Controls
The Company is committed to conducting business around the world 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
U.K. Annual Report and Accounts
TechnipFMC 55
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).
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 anti-corruption related operational standards that translate our general principles into concrete
operating procedures.
Our Anti-Bribery and Corruption Standard is 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 anti-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 employ a Business Partner Standard that establishes the due diligence
requirements and procedures for third-party government intermediaries and joint ventures/consortia partners and
enables us to assess and manage the bribery and corruption risks of third-party arrangements while conducting
business globally.
We have a Gifts, Hospitality, and Travel Standard 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 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 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.
Our Anti-Bribery and Corruption Standard; Business Partner Standard; Gifts, Hospitality, and Travel Standard; and
Social Donations, Sponsorships, and Charitable Contributions Standard each apply to all of our directors, officers,
employees, and contracted personnel.
Code of Business Conduct
Our Code of Business Conduct is built on our Foundational
Beliefs and gives our directors, officers, employees, and
contracted personnel 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, contracted personnel, officers, directors, and
external parties to anonymously report violations of our Code of
Business Conduct or other policies and complaints regarding
accounting and auditing practices. Reports of possible violations
of financial or accounting policies are reported to our Audit
Committee.
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U.K. Annual Report and Accounts
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.
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 compliance or legal department, the employee’s human resources representative, or an independent third party
via our dedicated reporting helpline and website.
We treat all reports of suspected violations of our Code of Business Conduct seriously 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 New York Stock Exchange (‘‘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 fundamentally guides how we 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 express a strong commitment for respecting human rights, and we do not tolerate any form of
modern slavery or the use of prohibited child, forced, indentured, or involuntary labor, regardless of where we
conduct business.
Our Code of Business Conduct reflects our commitment to acting ethically and lawfully and recognizing human
rights on a global basis. It is our policy that our Code of Business Conduct be shared and discussed with our clients,
suppliers, and business partners to better explain our rules of conduct and reinforce our culture of accountability.
We aim to develop business relationships with like-minded subcontractors, suppliers, and business partners who
are guided by a similar set of principles of business conduct, and we 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, 2022 in accordance with section 54 of the U.K. Modern Slavery Act 2015. This document is available
on our website at www.technipfmc.com. Our statement addressing 2023 shall be published on our website later
this year.
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; and
The International Labour Organization’s Fundamental Conventions.
The Company remains a member of the United Nations Global Compact.
The Company also maintains 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 companies that are working together to promote the rights and
U.K. Annual Report and Accounts
TechnipFMC 57
welfare of workers. 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 maintain an internal Human Rights Working Group and internal Human Rights Leaders Network, which bring
together our support functions and operations to foster and promote a better working environment for our
employees and our suppliers. These groups also continuously strive for the standardization of our processes across
the Company and among our peers. These efforts have resulted, for example, in the TechnipFMC Suppliers and
Subcontractors Integrity Expectations, which require our suppliers’ adherence to international human rights
standards in the execution of their operations. We also continue to assess how our company-wide assessment, due
diligence, and monitoring processes could be standardized and reinforced in this area.
Speak Up
Our core values and foundational beliefs are essential to how we conduct business. The Company has worked
diligently to provide an environment where our employees feel safe to speak up without fear of retaliation if they
see behavior that is not in line with our Code of Business Conduct. The Company takes every allegation seriously
and does not tolerate retaliation in any form against anyone raising a concern in good faith. Every reported
concern or issue is treated seriously, fairly, and promptly. Employees are encouraged to raise integrity concerns
through the multiple reporting channels available, which include their manager, Compliance, People & Culture, or
through the Integrity Helpline. The Company’s Integrity Helpline is an accessible and confidential way for
employees, contractors, customers, vendors, and other stakeholders to seek assistance and report potential
violations of ethics matters.
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 and other policies and procedures require 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.
c. Our business partners and suppliers do not engage in inappropriate labor practices, including child, forced,
indentured, or involuntary 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, compliance with
trade compliance laws, adherence to international human rights standards, and avoidance of conflicts of
interest.
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.
58 TechnipFMC
U.K. Annual Report and Accounts
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.
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TechnipFMC 59
Health, Safety, and Security
Health and safety are integral parts of our business, based on our genuine care and concern for 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.
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
In 2023, 59.4 million hours were worked at the Company’s facilities and project sites worldwide.
Safety Performance1
Total Recordable Incident Rate (TRIR)
Lost Time Injury Frequency (LTIF)
Leadership and Management Walkthrough Frequency
Fatal Accident Frequency
2021
0.26
0.11
21.86
0
2022
0.31
0.06
26.15
0.0037
2023
0.30
0.07
30.86
0
(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, 2023.
In 2023, 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.
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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 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 2023, 71 sessions were delivered
and more than 1,300 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.
Our SIFP program is a cornerstone of our prevention mindset. SIFP is a proactive high impact risk prevention
program which aims to shift the organization focus from reactive to proactive risk reduction. The objectives are to
prevent serious injuries, proactively reduce our overall risk profile by putting mitigation strategies in place, and
bring visibility to critical issues requiring the support of leadership.
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 2023, we continued important actions to further reduce our risk profile and to prevent serious injuries,
described below.
650 new SIFP projects were raised, 323 of which were implemented and closed in 2023.
The key risk conditions remain unchanged with the top three being: dropped objects, energy release, and
uncontrolled moves. In 2023, we have focused and prioritized SIFP projects that contribute to removing or
reducing exposure of personnel in the line of fire and we will continue 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.’’ By
removing the barriers to psychological safety, we are creating a culture where SWA is expected, accepted,
welcomed, celebrated, and rewarded. Our QHSE digital management system is designed to report SWA so that
we can more easily celebrate and recognize SWA.
Making the Safe Choice: Human Performance in HSE
TechnipFMC recognizes that even with access to the most advanced technology, equipment, and processes, our
people play a crucial role in every aspect of its operations. From design to handling, installing, operating, and the
obsolescence of our products or services, the human factor is essential. To ensure the safety of our people,
partners, and environment, it is vital to maintain the quality of our risk perception and decision-making.
To address industry trends and improve our organization’s safety culture, we launched the Safe Choice program in
January 2023. This program aims to equip and empower our people with the motivation and mindset for safe
decision-making at all organizational levels. Safe Choice provides new personal knowledge on decision-making,
cognitive biases, fast and slow thinking, and present motivation linked directly to our current safety tools and
systems.
Safe Choice is a proven intervention that underpins existing policies, strategies, processes, tools, and procedures
by focusing on human factors and performance to drive HSE performance.
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TechnipFMC 61
We started rolling out the first phase of the Safe Choice program to our frontline personnel, including Technical
Service Personnel (‘‘TSPs”), Field Service Technicians (‘‘FSTs’’), and all construction workers on TechnipFMC-owned
vessels. These personnel groups work in highly hazardous worksites and in the case of TSPs and FSTs on client
locations. We are committed to deploying the Safe Choice program successfully and to the safety of our people,
assets, and the environment.
In the second phase of the program, which launched in late 2023, we began expanding the program to apply to all
personnel at our spool and service bases, as well as those working in our manufacturing facilities and workshops.
We are confident that our Company leaders at all levels throughout the Company will fully support the Safe Choice
program and promote its success.
We have made significant progress in the implementation of the Safe Choice program in 2023 and plan to continue
expanding its reach in 2024.
Security
Security within TechnipFMC is considered a fundamental service, which 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, which includes 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, 2023. 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 volatility of economic conditions. 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 ‘‘Remuneration and
Shareholder Engagement’’ of the Directors’ Remuneration Report).
Interests of employees: In 2023, each of our more than 21,000 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).
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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 ‘‘Governance’’ 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 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 2023–2024 Off-Season Shareholder Outreach
Campaign involved our active outreach to shareholders representing approximately 56 percent 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 paragraphs entitled ‘‘Shareholder Engagement’’ of the Directors’
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.
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TechnipFMC 63
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 natural gas industry activity and expenditure levels
and the demand for and price of 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.
Disruptions in the political, regulatory, economic, and social conditions or public health crises in 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 restrictive covenants thereof may restrict our ability to take certain corporate actions.
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 cyber-attacks, could adversely impact our business and results of operations.
Pirates and maritime conflicts 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, including laws and
regulations related to environment, climate change and greenhouse gas emissions, privacy, data protection,
and data security, violations of which could have a material adverse effect on our financial condition, results of
operations, or cash flows.
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U.K. Annual Report and Accounts
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.
We are subject to compliance risk with tax laws of numerous jurisdictions, and challenges to our interpretation
of, or future changes to, tax laws could adversely affect us.
General Risk Factors
Our businesses are dependent on the continuing services of our key managers and employees.
Seasonal, weather, and other climatic 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.
Risks Related to Our Business and Industry
Demand for our products and services depends on oil and natural gas industry activity and expenditure levels,
which are directly affected by trends in the demand for and price of oil and natural gas.
We are substantially dependent on conditions in the oil and natural 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
natural 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 10 other oil producing
countries, including Russia, Mexico and Kazakhstan (‘‘OPEC+’’) to set and maintain production level for oil;
oil refining and transportation capacity and shifts in end-customer preferences toward fuel efficiency and the
use of natural gas;
technological advances affecting energy consumption;
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development, exploitation, relative price, and availability of alternative sources of energy and our customers’
shift of capital to the development of these sources;
volatility in, and access to, capital and credit markets, which may affect our customers’ activity levels, and
spending for our products and services;
decrease in investors’ interest in hydrocarbon producers because of environmental and sustainability
initiatives; and
natural disasters.
The oil and natural 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 natural 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, including building artificial intelligence (‘‘AI’’) capabilities into our products and services 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.
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, including AI and machine learning.
However, there is no guarantee of future demand for those technologies because the market for the new
technologies may not develop or 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. For example, the AI algorithms that we use may be flawed or
may be based on datasets that are biased or insufficient, and our AI features may not achieve sufficient levels of
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accuracy or may not function as designed or have unintended consequences. 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. There is also uncertainty
around the validity and enforceability of intellectual property rights related to our use, development, and
deployment of AI. 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 to 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 or public health crises in the countries in
which we conduct business could adversely affect our business or results of operations.
We operate in various countries across the world. Instability and unforeseen changes in any of the markets in
which we conduct business, including economically and politically volatile areas 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, cyber terrorism, military
activity, and wars, including the continued conflict between Russia and Ukraine and Hamas and Israel;
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public health crisis such as the COVID-19 pandemic;
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 Depository Trust Company (‘‘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 flows 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, 2023, our total debt was $1.1 billion. We also have the
capacity under our debt agreements to incur substantial additional debt.
Our level of debt could have important consequences. For example, it could:
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.
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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.
Under our Revolving Credit Facility (see definition below), U.S. dollar-denominated loans bear interest, at the
Company’s option, at a base rate or an adjusted rate linked to the Secured Overnight Financing Rate (‘‘SOFR’’) and
Euro-denominated loans bear interest on an adjusted rate linked to the Euro interbank offered rate (‘‘EURIBOR’’).
SOFR has limited history, and the future performance of SOFR cannot be predicted based on historical
performance. SOFR, 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 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 $1.25 billion senior secured multi-currency revolving credit facility (as amended, 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.
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 impairment 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
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TechnipFMC 69
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, 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. Expectations regarding such practices and
disclosures may result in increased costs (including but not limited to increased costs related to compliance,
stakeholder engagement, contracting and insurance), changes in demand for certain product or service offerings,
changes in the availability or cost of capital, enhanced compliance or disclosure obligations, or other impacts. In
addition, negative attitudes toward or perceptions of fossil fuel products and their relationship to the environment
and climate change may reduce the demand or authorization for production of oil and natural 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 or respond to
stakeholder concerns, 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 any failure, or perceived failure, to comply with or advance certain ESG
initiatives (including the timeline and manner in which we complete such initiatives) may result in various adverse
impacts, including reputational damage or, 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 towards 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, 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.’’ Simultaneously,
there are efforts by some stakeholders to reduce companies’ efforts on certain ESG-related matters. Both
advocates and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including
media campaigns and litigation, to advance their perspectives. To the extent we are subject to such activism, it
may require us to incur costs or otherwise adversely impact our business. This and other stakeholder expectations
will likely lead to increased costs as well as scrutiny that could heighten all of the risks identified in this risk
factor. Our customers and suppliers may be subject to similar risks, which may also result in augmented or
additional risks.
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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 alternative and renewable energy is also intensively competitive and rapidly evolving. If the
demand for alternative and renewable energy sources 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.
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
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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 or other event such as a major cyberattack, 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 cyber-attacks, could adversely impact our business and results of operations.
The efficient and successful operation of our business is dependent on the security and integrity of our physical
assets and computing hardware, software, technology infrastructure, online sites and networks (collectively,
‘‘IT Systems’’), and data about customers, employees and others, including personal information and proprietary
business data (collectively, ‘‘Confidential Information’’) that we process and maintain. Accordingly, we rely upon
the capacity, reliability, and security of our IT Systems and our ability to expand and update such systems in
response to changing needs and evolving threats.
We face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity, and availability of
our IT Systems and Confidential Information. We are continuously subject to cyber-attacks, including phishing,
malware, ransomware, and other security incidents, and expect attacks and other incidents in the future. No attack
or incident has had a material adverse effect on our business; however, this may not be the case with future
attacks. There can be no assurance that our cybersecurity risk management program and processes, including our
policies, controls or procedures, will be fully implemented, complied with or effective in protecting our IT Systems
and Confidential Information. Accordingly, our IT Systems, Confidential Information, and physical assets are
vulnerable to compromise and damage 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. 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 cyber-attack, power
outage, connectivity issue, or other event occurred that impacted our employees’ ability to work remotely, it may
be difficult or, in certain cases, impossible, for us to continue our business for a substantial period of time.
We rely on third parties to provide IT Systems, for example, to support the operation of our IT hardware, software
infrastructure, and cloud services, and in certain instances, we 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). Third parties are also involved in helping us collect, process and
maintain aspects of our Confidential Information. The security and privacy measures implemented by third parties
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on whom we rely for internal and external operations may not be sufficient to identify or prevent cyber-attacks,
and any such attacks may have a material adverse effect on our business. While our agreements with third parties,
such as vendors, typically contain provisions that seek to eliminate or limit our exposure to liability for damages
from a cyber-attack, we cannot ensure such provisions will withstand legal challenges or cover all or any such
damages. We have acquired and continue to acquire companies with cybersecurity vulnerabilities and/or
unsophisticated security measures, which exposes us to significant cybersecurity, operational, and financial risks.
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 but not limited to fraud or malice on
the part of insiders or third parties, accidental technological failure or unknown vulnerabilities in hardware or
software, 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 (such as AI) 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 cyber-attack, we may suffer material adverse effects on our business.
Pirates and maritime conflicts endanger our maritime employees and assets.
We face material piracy and maritime conflict risks in the Gulf of Guinea, the Somali Basin, the Gulf of Aden, and
the Red Sea, 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. We may face
additional risks to the extent other maritime disputes or conflicts emerge, such as the conflict around the Houthis’
attacks in the Red Sea following the Israel/Hamas war. 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.
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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.
Risks Related to Legal Proceedings, Tax and Regulatory Matters
The industries in which we operate or have operated expose us to potential liabilities, including as a result of 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 expand in the future, or we introduce new features
in our products and services, such as AI, that subject us to new and evolving laws and regulations, 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 nº 2016-1691 dated December 9, 2016 relating to Transparency, Anti-corruption and Modernization of the
Business Practice, the Brazilian law nº 12,846/13, or the Brazilian Anti-Bribery Act (also known as the Brazilian
Clean Company Act), and economic and trade sanctions, including those administered by the United Nations, the
European Union, the Office of Foreign Assets Control of the U.S. Department of the Treasury (‘‘U.S. Treasury’’), and
the U.S. Department of State. The FCPA prohibits corruptly providing anything of value to foreign officials for the
purposes of obtaining or retaining business or securing any improper business advantage. We may deal with both
governments and state-owned business enterprises, the employees of which are considered foreign officials for
purposes of the FCPA. The provisions of the Bribery Act extend beyond bribery of foreign public officials and are
more onerous than the FCPA in a number of other respects, including jurisdiction, non-exemption of facilitation
payments, and penalties. Economic and trade sanctions restrict our transactions or dealings with certain sanctioned
countries, territories, and designated persons.
As a result of doing business in countries throughout the world, including through partners and agents, we are
exposed to a risk of violating anti-corruption laws and sanctions regulations. Some of the international locations in
which we currently operate or may 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.
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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, 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 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 European Union in particular, in relation to financial market participants. Such regulatory requirements are
being implemented on a phased basis. We expect regulatory requirements related to, and investor focus on, ESG
(including sustainability) matters to continue to expand in the EU, the U.S., Brazil, and more globally. For example,
in the U.S., various policymakers, including the SEC and the State of California, have adopted (or are considering
adopting) 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
‘‘greenhouse gases’’ (‘‘GHGs’’). These efforts have included cap-and-trade programs, carbon taxes, GHG reporting
and tracking programs and regulations that directly limit GHG emissions from certain sources. Such existing or
future laws, regulations, and proposals concerning the release of GHGs or that concern climate change (including
laws, regulations, and proposals that seek to mitigate the effects of climate change) may adversely impact demand
for the equipment, systems and services we design, market and sell. For example, oil and natural gas exploration
and production may decline as a result of such laws, regulations, and proposals, and as a consequence, demand for
our equipment, systems and services may also decline. In addition, such laws, regulations, and proposals may also
result in more onerous obligations with respect to our operations, including the facilities where we manufacture
our equipment and systems. Such decline in demand for our equipment, systems and services and such onerous
obligations in respect of our operations may adversely affect our financial condition, results of operations, or cash
flows.
As an English public limited company, we must meet certain additional financial requirements before we may
declare dividends or repurchase shares and certain capital structure decisions may require stockholder approval
which may limit our flexibility to manage our capital structure. We may not be able to pay dividends or
repurchase 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
U.K. Annual Report and Accounts
TechnipFMC 75
written off in a reduction or reorganization of capital duly made. In addition, as a public limited company
incorporated in England and Wales, we may only make a distribution if the amount of our net assets is not less
than the aggregate of our called-up 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 personal injury 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,
including through our use of AI, 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, the UK General Data Protection Regulation and Data Protection Act
2018 (collectively, the ‘‘U.K. GDPR’’), certain U.S. state regulations, and the Lei Geral de Proteção de Dados (‘‘LGPD’’
in Brazil). The GDPR, U.K. GDPR and implementing legislation in the EEA impose several stringent requirements for
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controllers and processors of personal data which have increased our obligations, including, for example, by
requiring more robust disclosures to individuals, notifications, in some cases, of data breaches to regulators and
data subjects, and a record of processing and other policies and procedures to be maintained to adhere to the
accountability principle.
In addition, we are subject to the GDPR and UK GDPR’s rules on transferring personal data outside of the EEA and
UK (including to the United States). Case law from the Court of Justice of the European Union (‘‘CJEU’’) states that
reliance on the standard contractual clauses—a standard form of contract approved by the European Commission
as an adequate personal data transfer mechanism—alone may not necessarily be sufficient in all circumstances and
that transfers must be assessed on a case-by-case basis. On October 7, 2022, President Biden signed an Executive
Order on ‘Enhancing Safeguards for United States Intelligence Activities’ which introduced new redress
mechanisms and binding safeguards to address the concerns raised by the CJEU in relation to data transfers from
the EEA to the United States and which formed the basis of the new EU-US Data Privacy Framework (‘‘DPF’’), as
released on December 13, 2022. The European Commission adopted its Adequacy Decision in relation to the DPF
on July 10, 2023, rendering the DPF effective as an EU GDPR transfer mechanism to U.S. entities self-certified
under the DPF. On October 12, 2023, the U.K. Extension to the DPF came into effect (as approved by the
U.K. Government), as a U.K. GDPR data transfer mechanism to U.S. entities self-certified under the U.K. Extension to
the DPF. We currently rely on the standard contractual clauses to transfer personal data outside the EEA and the
U.K. Addendum to the EU standard contractual clauses and the U.K. International Data Transfer Agreement to
transfer personal data outside the EEA and the U.K. with respect to both intragroup and third-party transfers. 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. We expect the existing legal
complexity and uncertainty regarding international personal data transfers to continue. In particular, we expect the
DPF Adequacy Decision to be challenged and international transfers to the United States and to other jurisdictions
more generally to continue to be subject to enhanced scrutiny by regulators. 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, we may have to stop using
certain tools and vendors and make other operational changes, we have had to and will have to implement revised
standard contractual clauses for existing customer arrangements within required time frames, 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, tracking technologies, 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 to opt-in consent for all but essential use cases,
as seen in recent guidance and decisions, this could lead to substantial costs, require significant systems changes.
Violations of such laws could result in regulatory investigations, fines, orders to cease/change our use of such
technologies, as well as civil claims including class actions, and reputational damage.
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 percent of the total worldwide annual turnover of the preceding financial year). Since we are subject to the
supervision of relevant data protection authorities under both the EU GDPR and the U.K. GDPR, we could be fined
under each of those regimes independently in respect of the same breach. In addition, we may also face regulatory
investigations and enforcement action, reputational damage, orders to cease/change our data processing activities,
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TechnipFMC 77
enforcement notices, assessment notices (for a compulsory audit), and/or 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 United Kingdom, the U.S. Internal Revenue Service (the ‘‘IRS’’) may assert that we
should be treated as a U.S. ‘‘domestic’’ corporation (and, therefore, a U.S. tax resident) for U.S. federal income tax
purposes pursuant to Section 7874 of the U.S. Internal Revenue Code of 1986, as amended (the ‘‘Code’’). For U.S. federal
income tax purposes, a corporation (i) is generally considered a ‘‘domestic’’ corporation (or U.S. tax resident) if it is
organized in the United States or of any state or political subdivision therein, and (ii) is generally considered a ‘‘foreign’’
corporation (or non-U.S. tax resident) if it is not considered a domestic corporation. Because we are a U.K. incorporated
entity, we would be considered a foreign corporation (and, therefore, a non-U.S. tax resident) under these rules.
Section 7874 of the Code (‘‘Section 7874’’) provides an exception under which a foreign incorporated entity may, in
certain circumstances, be treated as a domestic corporation for U.S. federal income tax purposes.
We do not believe this exception applies. However, the Section 7874 rules are complex and subject to detailed
regulations, the application of which is uncertain in various respects. It is possible that the IRS will not agree with
our position. Should the IRS successfully challenge our position, it is also possible that an excise tax under
Section 4985 of the Code (the ‘‘Section 4985 Excise Tax’’) may be assessed against certain ‘‘disqualified
individuals’’ (including former officers and directors of FMC Technologies, Inc.) on certain stock-based
compensation held thereby. We may, if we determine that it is appropriate, provide disqualified individuals with a
payment with respect to the Section 4985 Excise Tax, so that, on a net after-tax basis, they would be in the same
position as if no such Section 4985 Excise Tax had been applied.
In addition, there can be no assurance that there will not be a change in law or interpretation, including with retroactive
effect, which 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.
We are subject to the tax laws of numerous jurisdictions; challenges to the interpretation of, or future changes to,
such laws could adversely affect us.
We and our subsidiaries are subject to tax laws and regulations in the United Kingdom, the United States, France,
and numerous other jurisdictions in which we and our subsidiaries operate. These laws and regulations are
inherently complex, and we are, and will continue to be, obligated to make judgments and interpretations about
the application of these laws and regulations to our operations and businesses. The interpretation and application
of these laws and regulations could be challenged by the relevant governmental authorities, which could result in
administrative or judicial procedures, actions, or sanctions, which could be material.
On December 22, 2017, the Tax Cuts and Jobs Act was signed into law in the United States, which made extensive
changes to the U.S. taxation of multinational companies, and is subject to continuing regulatory and possible
legislative changes. 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
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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 percent, so-called ‘‘pillar two,’’ 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 among OECD member states. In this respect, the Council of the European Union
unanimously adopted the directive implementing ‘‘pillar two’’ on December 22, 2021 and that the European Union
member States had to transpose this Directive into their national laws by December 31, 2023 for the rules to
become applicable for fiscal years starting on or after December 31, 2023 (with the exception of the ‘‘under taxed
payment rule,’’ which is to be applicable for fiscal years starting on or after December 31, 2024). In July 2023, as
part of the Finance (No. 2) Act 2023, legislation was enacted in the United Kingdom which introduced a Pillar
Two Income Inclusion Rule applicable to periods after December 31, 2023. We continue to assess and monitor
legislative changes.
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 United States
(such as the recent United States Inflation Reduction Act which, among other changes, introduced a 15 percent
corporate minimum tax on certain United States corporations and a one percent excise tax on certain stock
redemptions by United States corporations, which the U.S. Treasury indicated may also apply to certain stock
redemptions by a foreign corporation funded by certain United States affiliates), the United Kingdom, 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 United Kingdom and other countries.
We operate in a manner such that we believe we are eligible for benefits under tax treaties between the United
Kingdom and other countries. However, our ability to qualify for such benefits will depend on whether we are
treated as a UK tax resident, the requirements contained in each treaty and applicable domestic laws, on the facts
and circumstances surrounding our operations and management, and on the relevant interpretation of the tax
authorities and courts. For example, because of Brexit, we may lose some or all of the benefits of tax treaties
between the United States and the remaining members of the European Union, and face higher tax liabilities, which
may be significant. Another example is the Multilateral Convention to Implement Tax Treaty Related Measures to
Prevent Base Erosion and Profit Shifting (the ‘‘MLI’’), which entered into force for participating jurisdictions on
July 1, 2018. The MLI recommends that countries adopt a ‘‘limitation-on-benefit’’ (‘‘LOB’’) rule and/or a ‘‘principal
purpose test’’ (‘‘PPT’’) rule with regards to their tax treaties. The application of the LOB rule or the PPT rule could
deny us treaty benefits (such as a reduced rate of withholding tax) that were previously available and as such
there remains uncertainty as to whether and, if so, to what extent such treaty benefits will continue to be
available. The position is likely to remain uncertain for a number of years.
The failure by us or our subsidiaries to qualify for benefits under tax treaties entered into between the United Kingdom
and other countries could result in adverse tax consequences to us (including an increased tax burden and increased
filing obligations) and could result in certain tax consequences of owning and disposing of our shares.
We intend to be treated exclusively as a resident of the United Kingdom for tax purposes, but French or other tax
authorities may seek to treat us as a tax resident of another jurisdiction.
We are incorporated in the United Kingdom. English law currently provides that we will be regarded as a
U.K. resident for tax purposes from incorporation and shall remain so unless (i) we are concurrently a resident in
another jurisdiction (applying the tax residence rules of that jurisdiction) that has a double tax treaty with the
United Kingdom and (ii) there is a tiebreaker provision in that tax treaty which allocates exclusive residence to
that other jurisdiction.
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TechnipFMC 79
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 United Kingdom, 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 United Kingdom 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 United Kingdom. There is no assurance that these authorities would reach an agreement that we
will remain exclusively a U.K. tax resident; an adverse determination could materially and adversely affect our
business, financial condition, results of operations, or cash flows. A failure to maintain exclusive tax residency in
the United Kingdom could result in adverse tax consequences to us and our subsidiaries and could result in certain
adverse changes in the tax consequences of owning and disposing of our shares.
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 recruit,
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, weather, and other climatic 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, or result in operational
interruptions. 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 longer-term climatic changes, such as shifting 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, Nigeria, and Argentina, 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.
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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.
In addition, applicable law and/or the terms of the relevant defined benefit pension plan may require us to make
cash contributions or provide financial support upon the occurrence of certain events. We cannot predict whether,
or to what extent, changing market or economic conditions, regulatory changes or other factors will further
increase our pension expense or funding obligations. For further information regarding our pension liabilities, see
Note 22 for further information.
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 15, 2024
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TechnipFMC 81
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, 2023.
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, 2023, 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
Peter Mellbye (did not stand 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
pursuing, understanding, and implementing 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 and
interests. 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.
82 TechnipFMC
U.K. Annual Report and Accounts
Directors’ Report
Share Capital and Articles of Association
of the Company
As at the close of business on March 4, 2024, 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
437,135,619
Nominal value
$437,135,619
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 2023 Annual General Meeting of Shareholders on
April 28, 2023 (“2023 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
$147,102,671, 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 $147,102,671, 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 2023 AGM to allot and issue such number of the aforementioned ordinary shares as
represents 5 percent of the Company’s issued share capital, being an aggregate nominal value equal to
$44,130,801, for general purposes plus an additional number of the aforementioned ordinary shares as represents
a further 5 percent of the Company’s issued share capital, being an aggregate nominal amount equal to
$44,130,801, 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 2024 (“2024 AGM’’) or (b) at the close of business on July 28, 2024. New authorities
are being recommended by the Board of Directors for approval by shareholders at our 2024 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 of Shareholders (“2021 AGM”).
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 2024 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 > Investors overview >
AGM materials.’’
The process of amending the Articles of Association is subject to the procedure outlined in the Companies Act.
U.K. Annual Report and Accounts
TechnipFMC 83
Directors’ Report
Share Repurchases
A share repurchase program authorization was granted by shareholders at the 2021 AGM 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
12,289,216 ordinary shares during the financial year ending December 31, 2023.
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 4, 2024, 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 4, 2024, 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 percent
or more of the Company’s ordinary shares were as follows:
Name and Address of Beneficial Owner
Shares
Percent of Class1
The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355
T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, MD 21202
T. Rowe Price Investment Management, Inc.
100 E. Pratt Street
Baltimore, MD 21202
FMR LLC
245 Summer Street
Boston, Massachusetts 02210
BlackRock, Inc.
50 Hudson Yards
New York, NY 10001
39,914,9802
37,348,9943
36,353,7774
34,119,4245
23,478,6416
9.13%
8.54%
8.32%
7.81%
5.37%
(1) The calculation of percentage of ownership of each listed beneficial owner is based on 437,135,619 Ordinary Shares outstanding on March 4,
2024.
(2) Based solely on a Schedule 13G filed with the SEC on February 13, 2024, The Vanguard Group has shared voting power over 158,951 Ordinary
Shares, sole dispositive power over 39,344,861 Ordinary Shares, and shared dispositive power over 570,119 Ordinary Shares. The Vanguard
Group reports that various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale
of, Ordinary Shares, and no one person’s interest in the Company is more than 5% of the total outstanding Ordinary Shares.
(3) Based solely on a Schedule 13G/A filed with the SEC on February 14, 2024, T. Rowe Price Associates, Inc. has sole voting power over
12,415,564 Ordinary Shares and sole dispositive power over 37,335,426 Ordinary Shares. T. Rowe Price Associates, Inc. reports that various
persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, Ordinary Shares, and no
one person’s interest in the Company is more than 5% of the total outstanding Ordinary Shares.
(4) Based solely on a Schedule 13G filed with the SEC on February 14, 2024, T. Rowe Price Investment Management, Inc. has sole voting power
over 14,918,224 Ordinary Shares and sole dispositive power over 36,353,777 Ordinary Shares. T. Rowe Price Investment Management, Inc.
reports that various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of,
Ordinary Shares, and no one person’s interest in the Company is more than 5% of the total outstanding Ordinary Shares.
(5) Based solely on a Schedule 13G/A 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 8, 2024, FMR LLC has sole voting power over 33,959,738 Ordinary Shares and sole dispositive power over
84 TechnipFMC
U.K. Annual Report and Accounts
Directors’ Report
34,119,424 Ordinary Shares. Ms. Johnson has sole dispositive power over 34,119,424 Ordinary Shares. FMR LLC and Ms. Johnson report that
various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, Ordinary
Shares, and no one person’s interest in the Company is more than 5% of the total outstanding Ordinary Shares.
(6) Based solely on a Schedule 13G filed with the SEC on February 2, 2024, BlackRock, Inc. has sole voting power over 20,434,947 Ordinary Shares
and sole dispositive power over 23,478,641 Ordinary Shares. BlackRock, Inc. reports that various persons have the right to receive or the power
to direct the receipt of dividends from, or the proceeds from, the sale of, Ordinary Shares, and no one person’s interest in the Company is more
than 5% of the total outstanding Ordinary Shares.
U.K. Annual Report and Accounts
TechnipFMC 85
Directors’ Report
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 U.K.
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
On July 26, 2023, the Company announced the initiation of a quarterly cash dividend. On July 25, 2023 and
October 24, 2023, the Board authorized and declared a quarterly cash dividend of $0.05 per share. The cash
dividends paid during the years ended December 31, 2023; 2022; and 2021 were $43.5 million, nil, and nil,
respectively.
On February 20, 2024, the Company announced that its Board has authorized and declared a quarterly cash
dividend of $0.05 per share, payable on April 3, 2024 to shareholders of record as of the close of business on the
NYSE on March 19, 2024. The ex-dividend date is March 18, 2024.
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.
Energy and Carbon Reporting
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.
86 TechnipFMC
U.K. Annual Report and Accounts
Directors’ Report
Events since December 31, 2023
On February 20, 2024, the Company announced that its Board has authorized and declared a quarterly cash
dividend of $0.05 per share. Please see the section entitled ‘‘Dividend’’ above for more detail on the recently
announced dividend.
On February 28, 2024, FMC Technologies Pension Plan Limited (the trustee of the Company's U.K. pension plan)
and Just Retirement Limited (the insurer) entered into a buy-in policy with a first payment start date on
April 24, 2024.
On March 7, 2024, both the Company's issuer credit rating and the correspondent rated Notes were upgraded by
S&P to BBB-.
On March 11, 2024, the Company completed the sale of equity interests and assets of MSB to One Equity Partners.
No other significant events since December 31, 2023 are reported.
Future Developments
Expected future developments of the Company and our subsidiaries are set out in the section entitled ‘‘Business
Segments’’ of the Strategic Report section of this U.K. Annual 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 section of this
U.K. Annual Report.
Political Donations
The Company has not made any political donations or incurred any political expenditure during the year ended
December 31, 2023. In addition, the Company has not made any contributions to a non-U.K. political party during
the year ended December 31, 2023.
Financial Risk Management Objectives/Policies
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 plans for assessing, monitoring, and
managing 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
U.K. Annual Report and Accounts
TechnipFMC 87
Directors’ Report
place to identify, mitigate, manage, and control financial and business risks and that the Company has adequate
insurance coverage to reasonably 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.
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,
2023 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; and
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.
88 TechnipFMC
U.K. Annual Report and Accounts
Directors’ Report
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 U.K. Accounting 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 15, 2024
U.K. Annual Report and Accounts
TechnipFMC 89
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, 2023. 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 2023, including an upfront ‘‘At a Glance’’ section to highlight the key
aspects of remuneration policy; and
iii. The Directors’ Remuneration Policy.
Pursuant to English law, the Directors’ Remuneration Report forms part of the statutory annual report of the
Company for the year ended December 31, 2023, 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 2024 AGM on April 26, 2024,
the Directors’ Remuneration Report will be subject to a non-binding advisory shareholder vote. In addition, the
Remuneration Policy, which was last approved by shareholders in 2021, will be submitted for shareholder
approval for a binding vote at the upcoming Annual General Meeting of Shareholders (‘‘Annual General Meeting’’).
90 TechnipFMC
U.K. Annual Report and Accounts
Directors’ Remuneration Report
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, 2023 to December 31, 2023.
Our compensation programs are 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.
Actions that Created Shareholder Value in 2023
We are committed to creating long-term and sustainable shareholder value through strategic actions that benefit
both the Company and our shareholders.
Below is a summary of key actions taken during 2023 intended to create growth and value for shareholders:
Initiated a quarterly cash dividend, representing $0.20 per share on an annualized basis;
Authorized additional share repurchase of up to $400 million, increasing total authorization to $800 million;
Established new commitment to return more than 60% of annual free cash flow1 to shareholders through at
least 2025;
Announced strategic actions that create greater focus on core products, market-leading technologies and
integrated solutions, including sales of the Measurement Solutions business and Apache II pipelay vessel for
total proceeds of approximately $260 million; and
Gained inclusion into the Russell U.S. Index, helping drive increased investor awareness, higher trading
volume, and expanded ownership.
(1) Free cash flow is calculated as cash provided by operating activities less capital expenditures.
U.K. Annual Report and Accounts
TechnipFMC 91
Directors’ Remuneration Report
We Outperformed Our Peers and Major Indexes in 2023
Our total shareholder return (‘‘TSR’’) in 2023 meaningfully outperformed our peer groups and the PHLX Oil Service
Sector (‘‘OSX’’) index due to the Company’s strong execution and key strategic initiatives outlined below.
TechnipFMC
Average Compensation Peer
Average Relative TSR Peer
OSX Index
$190
$180
$170
$160
$150
$140
$130
$120
$110
$100
$90
$80
Dec. 31,
2022
Mar. 31,
2023
June 30,
2023
Sept. 30,
2023
Dec. 31,
2023
The graph above compares the cumulative TSR on our Ordinary Shares for the period from December 31, 2022 to December 31, 2023 with our
relative TSR Peer Group, our Compensation Peer Group, and the OSX index. The comparison assumes $100 was invested, including reinvestment of
dividends, if any, in our Ordinary Shares, relative TSR Peer Group, Compensation Peer Group, and the OSX index on December 31, 2022. Please see
the sections entitled ‘‘Compensation Peer Group’’ and ‘‘2023 Performance Stock Unit Awards’’ for lists of the peer companies included in our
Compensation Peer Group (defined below) and TSR Peer Group (defined below), respectively. The results shown in the graph above are not
necessarily indicative of future performance.
CEO Pay Is Aligned with Relative Performance of TechnipFMC
Realizable Degree of Alignment, or RDA, is a measure used to assess whether CEO realizable pay is aligned with TSR
relative to a peer group. The graph below shows that our CEO percentile rank among our Compensation Peer Group
(as defined in the section entitled ‘‘Compensation Peer Group’’ below) is aligned to our performance for the period
between our 2021 Spin-Off through the end of 2023.
100%
50%
k
n
a
R
e
c
n
a
m
r
o
f
r
e
P
e
v
i
t
a
l
e
R
RDA (2021 Spin-Off to 2023)
WFRD
PWR
DVN
FTI
FLR
APA
KBR
OII
CHX
ACM
RIG
NOV
SLB
HAL
BKR
DOV
J
VMI
GTLS
0%
0%
50%
100%
Relative Pay Rank
92 TechnipFMC
U.K. Annual Report and Accounts
Directors’ Remuneration Report
Our 2023 Pay Programs Emphasize Pay-for-Performance
Our executive compensation incentive mix is intended to create a balance between achieving both short-term and
long-term interests of the business through compensation that links the interests of our Chair and CEO with
shareholders through significant at-risk compensation.
Total Target Compensation
Chair and CEO
10%
Base Salary
RSU 1
23%
Long-Term
Performance
PSU
55%
Cash
22%
Equity
78%
12%
Annual Incentive
Short-Term Performance
90%
At-risk*
1 RSUs are included in at-risk pay because their delivered value is based on share price at vesting.
Annual and Long-Term Incentive Performance
Measures
As intended by our pay-for-performance program, our 2023 executive compensation is directly tied to key
financial, operational, ESG, and individual measures.
RSU
30%
PSU
70%
2023
Long-Term
Equity Mix
ROIC
50%
Relative TSR
50%
Adj. EBITDA as
a Percentage
of Revenue
25%
Annual
Individual
Performance
Indicators
25%
2023
Annual Incentive
Plan Performance
Measures
ESG
Performance
25%
Free Cash
Flow from
Operations
25%
Total target compensation comprises salary, an annual cash incentive, and long-term equity incentives.
Total target compensation is benchmarked relative to relevant peer groups by our independent compensation
consultant, Fredrick W. Cook & Co., Inc. (‘‘FW Cook’’).
The Compensation and Talent Committee references the median of the peer group and considers other factors
such as experience, tenure, role criticality, and performance of the incumbent executive director, when making
compensation decisions.
The 2023 annual cash incentive was based on Adjusted EBITDA as a percentage of revenue (25%), free cash
flow from operations (25%), ESG Scorecard measures (25%), and individual performance in areas of strategic
significance (25%).
U.K. Annual Report and Accounts
TechnipFMC 93
Directors’ Remuneration Report
○
○
○
Payouts for the financial portion are based on quantifiable performance. There is no payout if
Company performance is below a minimum level of performance due to our emphasis on paying for
performance. Payouts increase with increasing levels of performance, and there is a cap on payout at
maximum performance. Performance targets and goals are predetermined, communicated in advance,
and disclosed publicly.
The ESG Scorecard includes specific, measurable, and challenging goals to reduce our environmental
impact, to support the communities where we live and operate, to improve and respect fair
representation and inclusion in our Company, to reinforce our health and safety culture, and to
reaffirm our commitments to respecting human rights and corporate governance.
Payout for the individual performance indicators is based on rigorous, individual goal setting and
year-end evaluation of performance.
Performance stock units (‘‘PSUs’’) comprise the majority of the 2023 long-term equity incentive grant (70%)
with payout contingent on relative TSR performance and return on invested capital (‘‘ROIC’’), measured over the
three-year (2023-2025) performance period.
○
○
The relative TSR performance measure comprises 50% of the PSU award and is based on equity
returns — both share price performance and dividend distributions – relative to an external peer
group. There is no payout if Company performance is below a minimum level of performance, and
there is a cap on payout at maximum performance. In addition, in the case of negative absolute TSR
performance, payouts are capped at target, even if our TSR performance relative to our Relative TSR
Peer Group (as defined below) is above target.
ROIC comprises 50% of the PSU award and is calculated based on a three-year average net operating
profit after tax, divided by a three-year average invested capital. This measure assesses our
profitability and how effectively the Company uses capital over the three-year performance period
to generate income.
○
Performance targets and goals are predetermined, communicated in advance, and disclosed publicly.
PSUs vest on the third year after the grant date following the end of the 2023-2025 performance period. The
remainder (30%) of the 2023 long-term equity incentive grant is delivered in the form of Restricted Stock Units
(“RSUs”) and one-third of the shares vest each year over a three-year period. The delivered value of RSUs to
executive directors is based on share price performance.
Remuneration and Shareholder Engagement
The Compensation and Talent Committee values our shareholders’ feedback on our
executive compensation program as expressed through our regular shareholder
engagement actions and the annual ‘‘say-on-pay’’ vote and 2022 Directors’
Remuneration Report. At our 2023 Annual General Meeting of Shareholders, we
received 96.5 percent support for our ‘‘say-on-pay’’ proposal and 96.6 percent support
for our 2022 U.K. remuneration proposal.
As part of our regular annual shareholder engagement, we contacted shareholders
representing 56% of our outstanding shares and met with shareholders representing
29% of our outstanding shares. A team comprising senior leadership in Investor Relations,
Legal, and People & Culture discussed and obtained feedback from shareholders on an
important range of topics, including our executive compensation program, measures
connected to short and long-term incentives, and how we recognize performance through
pay. Additionally, as requested by one of our major shareholders, one meeting was
attended by the Chair of the Compensation and Talent Committee. Shareholder feedback
reflected strong support for our current executive compensation program and
compensation philosophy.
96.6%
of 2023 Annual
General Meeting
Votes Supported Our
2022 U.K.
Remuneration Report
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Remuneration Arrangements in 2023
Details of Mr. Pferdehirt’s remuneration are provided in our Annual Report on Remuneration and summarized in
the section below. The Compensation and Talent Committee reviewed and approved Mr. Pferdehirt’s remuneration
and all payments were in line with our shareholder-approved Remuneration Policy.
Proposed Remuneration Arrangements in 2024
The current Remuneration Policy was approved by shareholders at the 2021 Annual General Meeting for a period
of up to three years. As a result, and in line with U.K. requirements, we are submitting our Remuneration Policy for
shareholder approval at the 2024 Annual General Meeting.
The Compensation and Talent Committee has taken this opportunity to review the continued appropriateness of
the Remuneration Policy to ensure it continues to provide operational flexibility and is aligned with
North American and U.K. market practices and regulatory environment.
We look forward to hearing your views on our director compensation arrangements, and your continued support at
the 2024 Annual General Meeting.
Yours sincerely,
John O’Leary
Director and Compensation and Talent Committee Chair
March 15, 2024
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Directors’ Remuneration Report
Annual Report on Remuneration:
At a Glance – 2023 Highlights
2023 Performance Impact on Compensation
The table below outlines the elements of our compensation program that are directly tied to Company performance.
BPI Measure
% Weighting
Definition
Why it
matters
Adjusted EBITDA as a Percentage of Revenue %
25%
Weighting
Free Cash Flow
25%
Weighting
ESG Performance
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
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
Performance relative
to the TechnipFMC ESG
Scorecard
Directly links our compensation
program to our ESG commitments
and objectives, as set forth in 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 Company performance.
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2023 Performance Impact on Annual Cash Incentive
The annual cash incentive comprises 12% of 2023 total target at-risk compensation for our Chair and CEO. Our
Chair and CEO achieved a payout of 164.75% 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 153% based on the following:
Performance for adjusted EBITDA as a percentage of revenue was calculated to be 120%;
Performance on free cash flow conversion measures was calculated to be 200%; and
Performance towards our 2021-2023 ESG objectives was confirmed at 140%.
The payout for the individual annual performance indicator (which makes up 25% of the annual incentive plan)
was 200%.
Overview of our Compensation Practices
Our executive compensation practices are designed to drive performance, align with shareholder interests, and
support strong governance practices that align with the best standards in executive compensation. These practices
are annually reviewed through shareholder engagement, recommendations from our independent compensation
consultant, and executive compensation best practices.
What We Do:
What We Don’t Do:
Pay for performance by aligning performance
measures with our strategy and shareholder
interests
Ensure the majority of NEO compensation is
performance-based, ‘‘at-risk’’ compensation
Maintain a clawback policy in the event of
erroneously awarded incentive based
compensation resulting from a financial
restatement, malfeasance, or fraud
Require robust share ownership by executives
and directors
Single-trigger vesting upon a change in control
Guaranteed bonuses
Uncapped incentives
Tax gross-ups on any severance payments
Engage an independent, external compensation
consultant
Excessive perquisites, benefits, or pension
payments
Benchmark compensation against relevant
industry peer groups
Discounting, reloading, or repricing of stock
options
Cap performance share unit (‘‘PSU’’) payout at
target when relative total shareholder return
(‘‘TSR’’) exceeds peers’ TSR, but absolute TSR is
negative
Hedging and pledging of Company securities
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Directors’ Remuneration Report
Annual Report on Remuneration:
Report for the Year Ended December 31, 2023
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 2024 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.
As intended by our pay-for-performance program, and as outlined in the sections below, our 2023 compensation
for our Chair and CEO was directly impacted by our performance against key financial, operational, and
individual metrics.
Below is an illustration of the Chair and CEO’s remuneration.
Chair and CEO
RSU1
23%
Long-Term
Performance
PSU
55%
Cash
22%
Equity
78%
10%
Base Salary
12%
Annual Incentive
Short-Term
Performance
90%
At-risk*
1 RSUs are included in variable pay because their delivered value is based on share price at vesting.
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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, 2023 and 2022.
A proportion of the annual incentive and long-term incentive awards (the variable and at-risk element), 97% is
subject to share price appreciation. During 2023, 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
2023
2022
$1,328,700
$70,361 $6,084,272 $43,006,723 $271,773
$1,670,834 $49,090,996 $50,761,830
$1,236,000
$60,811 $4,987,404
— $209,382
$1,506,193 $ 4,987,404 $ 6,493,597
(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.
(2) The taxable benefits for 2023 for the Chair and CEO include all: (i) personal use of Company automobile of $14,310.34 (ii) financial planning
services of $15,000 (iii) U.K. tax preparation fees of $4,439.39, (iv) company paid life and disability insurance fees of $701.52, (v) security of
$26,071.20, and (vi) spousal travel of $9,841.46.
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) security of $5,378.19,
(vi) spousal travel of $9,613, and (vii) taxable travel expenses of $1,544.
(3) The amount disclosed in the Annual Incentive Awards column for 2023 for the Chair and CEO represents the sum of annual cash incentive bonus
and time-based (non-performance based) RSUs awarded in 2023. In 2023, the Chair and CEO's annual cash incentive was $2,955,195, calculated
using a target bonus of 135% of salary, a BPI rating of 153%, and an API rating of 200%. The time-based (non-performance based) RSUs awarded
in 2023 were valued at $3,129,077.46 comprising 30% of the Chair and CEO's long-term equity incentive target value of $10,430,295,
consisting of 223,346 shares vesting on a graded schedule with 73,704 vesting on February 21, 2024, 73,704 vesting on February 21, 2025
and 75,938 vesting on February 21, 2026.
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.
(4) The 2023 compensation reflects the impact of significant TechnipFMC share price appreciation over the 2021-2023 performance period,
as well as a PSU payout of 200% of target for relative TSR performance above the 75th percentile compared to the peer group. On April 1, 2021,
Mr. Pferdehirt was granted 948,120 target PSUs with a fair market value of $7,565,997 based on a share price of $7.98 (‘‘2021 PSUs’’). On
March 1, 2024, the 2021 PSUs were paid out at 200% of target, as outlined in the section entitled ‘‘Payout under the 2021 PSU Awards Based on
Relative TSR,’’ resulting in the vesting of 1,896,240 shares with a fair market value of $43,006,723 based on a share price of $22.58, plus
dividends of $0.10 per share. The total fair market value increase of the 2021 PSUs from the time of grant to March 1, 2024, as a result of the
200% of target payout, share price appreciation, and dividend payments, was $35,440,726. Mr. Pferdehirt did not receive any
performance-based RSUs with a performance period ending 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 2023
(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.
Base salary
Base salary is set with reference to a competitive range around the size-adjusted market median peer group data,
reflecting factors such as individual performance, experience, and business conditions within the parameters of
our Directors’ Remuneration Policy.
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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 2023 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
Chair and CEO
DC Scheme Balance
at Year End1
$’000
7,043
Company Contributions Over Year2
$’000
Normal Retirement
Age3
272
N/A
(1) Accrued balance as of December 31, 2023 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 2023 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 his 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, 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.
Elements of 2023 Executive Director
Compensation
Our executive director compensation program comprises 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.
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The table below summarizes these elements, along with their purpose and key characteristics. However, a more
detailed explanation is available in further sections.
Element
Purpose
Key Characteristics
Base Salary
To provide market
competitive compensation for
the role
Annual Cash
Incentive
To drive and reward the
achievement of short-term
Company strategic goals and
individual contributions
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
Restricted
Stock Units
(RSUs)
Health and
Welfare
Benefits,
Retirement
Benefits, and
Perquisites
Further align the Chair and
CEOs’ interests with the
interests of our shareholders
by incentivizing to increase
share value, while reinforcing
the retention impact of our
compensation program
To facilitate the performance
of the role and ensure a
market competitive total
compensation package
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
At-risk cash compensation
Target value based on role, set with reference to market median
peer group
Paid based on achievement of business performance targets (75%)
and achievement of individual performance targets (25%)
2023 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
Payout linked to the achievement of TechnipFMC relative TSR (50%)
and ROIC (50%) for the 2023 to 2025 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
Realized value based in part on post-grant share price appreciation
Three-year ratable vesting schedule
The same health and welfare benefits offered to other employees of
the Company in the respective countries
Retirement savings offered through participation in our U.S. Qualified
Savings Plan (401(k)) and non-qualified defined contribution plans,
similar to plans offered to other U.S. employees
Limited perquisites including financial planning, tax assistance, use
of company cars, club memberships, executive physicals, and
security services where necessary
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Compensation Peer Group
We compete with energy industry companies, as well as with other industries and professions, for executive-level
talent. In making decisions about target compensation levels, the Compensation and Talent Committee reviews
data from peer group proxy statements and market survey data.
In determining peer groups, the Compensation and Talent Committee evaluates companies with reasonably similar
business characteristics, which includes the factors outlined below:
Applicable Industry Focus – Prioritize public companies with energy or engineering and construction elements
that trade on major U.S. stock exchanges;
Relevant Size Range – Companies within a reasonable range of TechnipFMC for revenue, market capitalization,
and assets; and
Business Characteristics – Companies with similar margin profiles, international focus, asset intensity, and sales
per full-time employee; prioritized companies that are logistically and technically complex, mature stage
businesses, and business-to-business focused.
In 2022, the Compensation and Talent Committee conducted its annual review of the compensation peer group and
determined that the following companies (‘‘Compensation Peer Group’’) continue to constitute the peer group for
benchmarking executive compensation decisions for 2023:
2023 Compensation Peer Group
AECOM
APA Corporation
Baker Hughes Company
ChampionX Corp.
Chart Industries, Inc.
Devon Energy Corporation
Dover Corporation
Fluor Corporation
Halliburton Company
Jacobs Engineering Solutions Inc.
KBR, Inc.
National Oilwell Varco, Inc.
Oceaneering International, Inc.
Quanta Services, Inc.
SLB
Transocean Ltd.
Valmont Industries, Inc.
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.
Chair and CEO
Douglas J. Pferdehirt
Base Salary
(2022)
$1,236,000
Base Salary
(2023)
$1,328,700
Change %
7.5%
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Annual Cash Incentive (Audited Information)
2023 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 2022 and 2023 annual cash incentive targets for our Chair and CEO:
Chair and CEO
Douglas J. Pferdehirt
2022
135%
2023
135%
Increase
0%
Annual Cash Incentive Performance Indicators
75% of the annual cash incentive is based on business performance indicators (‘‘BPI’’), and 25% of the plan is based
on individual annual performance indicators (‘‘API’’).
75% BPI
Assessment of overall Company performance
based on business performance indicators
+
25% API
Assessment of individual performance based
on qualitative factors reflected in the executive
directors’ annual performance objectives
The payout under both the BPI and API components may range from 0% to 200% of target depending on performance.
BPI Component – 75% of Annual Cash Incentive
The 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 component 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.
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;
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Anticipated changes in customer activity; and
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 and challenging without incentivizing inappropriate risk taking.
2023 Measures and Results
The 2023 results versus target for adjusted EBITDA as a percentage of revenue and free cash flow are
outlined below.
2023 BPI Measure
Adjusted EBITDA
as a Percentage
of Revenue %
25% Weighting
Free Cash Flow
25% Weighting
Threshold
Performance
2023 Goals1
Target
Performance
2023 Performance2
Maximum
Performance
Performance %
Payout %
10.2%
11.7%
13.2%
12.0%
120%
$150 million
$300 million
$450 million
$468 million
200%
(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 Quarterly Reports on
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 at or below threshold performance is 0%, payout at target performance is 100%, and payout at or above maximum performance is 200%.
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.
Results of the 2021-2023 ESG Scorecard
To align our executives’ incentives with our ESG commitments, we link executive compensation to our ESG
Scorecard performance. 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 2023
The ESG Committee is responsible for determining and assessing the Company’s ESG Scorecard objectives,
certifying results, and recommending a performance rating to the Compensation and Talent Committee, who
reviews this information to determine the ESG Scorecard payout.
In recommending a rating, the ESG Committee performed a comprehensive review of the Company’s 2021-2023
ESG Scorecard objectives and considered the following:
Environmental pillar: We reduced our GHG emissions and exceeded our waste recycling and reuse objectives;
Social pillar: We achieved or significantly outperformed our targets on fair representation, inclusion,
volunteering, and STEM initiatives;
Governance pillar: We exceeded our SIFP projects, human rights, and met our human rights due diligence and
ethics and compliance objectives;
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In aggregate, we met or exceeded ten of the twelve individual objectives connected to our 2021-2023 ESG
Scorecard;
Our commitment over the past three years to meaningfully advance ESG initiatives and cultivate inherent and
sustainable behavior in all of our ESG pillars; and
Our significant progress in raising awareness of how individual employee actions contribute to the achievement
of our ESG objectives and embedding ESG awareness into our culture, as demonstrated by our achievements in
our ESG Scorecard.
Based on this assessment, the ESG Committee determined that, in the aggregate, the Company exceeded its
2021-2023 ESG Scorecard objectives and recommended a payout reflective of an above expectations rating.
Aligned with this rating, the Compensation and Talent Committee approved a payout of 140% out of a maximum
200%. A summary of the 2021-2023 ESG Scorecard component of the 2023 annual incentive is provided below.
Year 3 results against 2021-2023 targets
Reduce our clients’ carbon footprint (kt CO2 eq.)1
Order intake linked to lower carbon intensity
Fair representation
Underrepresented populations
in senior management2
Leadership in HSE1
Female graduate
recruitment1
Gender
Target: 26%
Actual: 26%
100%
122%
SIF Prevention Projects
Target: 400
Actual: 1098
Target: 33%
Actual: 28%
92%
Target: 45%
Actual: 46%
102%
Nationality/race
Target: 23%
Actual: 28%
Water consumption1
Awareness and culture1
Human rights due diligence1
Target: 10%
Actual: 5%
50%
Inclusive leadership training
Target: 100%
Actual: 100%
100%
Audits on high-risk
suppliers1
Target: 100%
Actual: 100%
Recycled and reused waste2
Community1
Ethics and compliance2
Target: 53%
Actual: 71%
134%
Volunteering initiatives
STEM initiatives
Target: 800
Actual: 1287
161%
Target: 150
Actual: 165
110%
Annual training for all
managerial levels
Target: 100%
Actual: 100%
275%
100%
100%
(1) Metric shows against target and is cumulative
(2) Metric shows against target and is annual
For more detail on how each metric is measured and our progress in 2023, please see the section entitled
‘‘Environmental, Social, and Governance.’’
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API Component – 25% of Annual Cash Incentive
The API objectives for the Chair and CEO are established at the start of the year. Similar to our BPI performance
objectives, API objectives are set at ‘‘stretch’’ levels (i.e., objectives that are difficult and challenging but should be
achievable with superior execution) using a rigorous evaluation process.
Each February, the Compensation and Talent Committee reviews and approves the Chair and CEO’s API objectives
for the new fiscal year, and evaluates the API objectives set for the prior fiscal year to determine the payout for
the API component of his annual cash incentive.
If the 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 2023, the Chair and CEO received an API rating of 200%.
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The objectives established and their achievements against those goals as well as the assessment as determined by
the Compensation and Talent Committee were as follows:
Douglas J. Pferdehirt
Chair and CEO
Objective
ABOVE EXPECTATIONS
Shareholder Returns:
Achievements
200%
Overall
Rating
Deliver superior returns
2023 TSR outperformed our peers and the OSX index
Achieve debt reduction
Reduced the Company’s gross and net debt position and achieved debt leverage targets
Expand shareholder distributions
Expanded Company shareholder distributions adding a dividend as well as increasing the total
value of the share repurchase program
ABOVE EXPECTATIONS
Strategy and Growth:
Advance strategic financial objectives
Advance technology partnerships, and
strategic alliances
Achieve ESG Scorecard objectives
ABOVE EXPECTATIONS
Execute on Key Business Deliverables:
Both business segments outperformed 2023 financial targets, resulting in the Company
exceeding targets for total Company adjusted EBITDA margin, free cash flow, revenue, backlog,
and ROIC
Continued to advance key technology partnerships and strategic alliances
Advanced the Company’s Industrialization and Transformation activities, including
implementing 14 Transformative Industrialization programs
Drove the successful achievement of our three-year ESG Scorecard objectives. See the section
entitled ‘‘Environmental, Social and Governance’’ above
Deliver profitable growth for Subsea
and Surface businesses
Delivered above-target inbound, revenue, and EBITDA for both the Subsea and Surface
businesses
Continue to evolve New Energy
business
Delivered record iEPCI™ awards for our Subsea business
Signed in-country corporate procurement agreements with key strategic customers for our
Surface business
Secured key contracts for our New Energy business and remains on track to achieve more than
$1 billion in inbound by 2025
ABOVE EXPECTATIONS
Organizational Readiness:
Ensure succession planning in place and
incorporate fair representation
Continued succession planning and talent development actions to increase breadth and depth of
succession plans, and increased diversity in succession plans and talent acquisition
Increased representation of females and underrepresented minorities in senior leadership of
the Company
ABOVE EXPECTATIONS
Promote Foundational Beliefs:
Integrity – Engage/advance industry
progress in Human Rights
Sustainability – Achieve metrics on fair
representation and community
QHSE (Quality, Health, Safety and
Environmental) – Reduce SIFR (Serious
Injury and Fatality Rate) and exceed
SIFP (Serious Injury and Fatality
Prevention) target
Promoted human rights through active industry leadership, including in cross industry forums
Actively contributed to advancement in gender and racial diversity through the Association of
Women in Energy (AWE) and CEO Action for Racial Equity Advisory Boards
Exceeded 2021−2023 ESG Scorecard goals for fair representation, inclusive leadership training,
and community/STEM volunteering
Actively led TechnipFMC as a top contributor to both United Way and American Heart
Association
Exceeded SIFR and SIFP targets
U.K. Annual Report and Accounts
TechnipFMC 107
Directors’ Remuneration Report
Determination of 2023 Annual Cash Incentive Payout for the Chair and CEO
The Chair and CEO’s 2023 annual cash incentive payout was calculated to be $2,955,195 based on the following
table:
Chair and CEO
Target Bonus
(% of Salary)
BPI Rating
(75%
Weight)
API Rating
(25%
Weight)
Overall
Weighted
Rating
Actual
Bonus (% of
salary)
Actual
Bonus ($)
Douglas J. Pferdehirt
135%
153%
200%
164.8%
222.4%
$2,955,195
Long-Term Equity Incentives (Audited Information)
Annual long-term 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 one-third
each year, over three
years
RSU
30%
PSU
70%
Long-Term
ROIC
50%
Relative TSR
50%
Awards 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.
Payout under the 2021 PSU Awards Based on Relative TSR
In February 2024, the Compensation and Talent Committee approved the performance results for the PSUs granted
to executive directors in February 2021. The PSUs were subject to a performance period beginning February 16,
2021 (the date of the Spin-off) through December 31, 2023, and performance was based on relative TSR
performance against an industry peer group of companies that the Committee believed reflected the companies we
compete with for both shareholder investments and customers.
Relative TSR for the applicable performance period is based on the difference between the volume weighted
average share price (‘‘VWAP’’) for the first month performance period (February 16 to February 26, 2021) and the
VWAP for the last 30 days of the measurement period (December 1 to December 31, 2023), plus any dividends
paid during that period, which are assumed to be reinvested into the stock. The difference in VWAP from the
two periods is divided by the beginning VWAP value to determine total shareholder return.
The performance condition requires the Company to perform at or above the 25th percentile for a threshold
payout of 50% and 75th percentile or greater for a payout of 200% of target. The payout is interpolated on a
straight-line basis between those points. If our absolute TSR is negative for the performance period, the payout in
respect of the TSR element is capped at target, regardless of our relative performance.
108 TechnipFMC
U.K. Annual Report and Accounts
Directors’ Remuneration Report
Over the 2021-2023 performance period, the Company’s TSR ranked in the 94th percentile relative to its TSR peer
group, which resulted in a payout of 200% of target PSUs as illustrated in the table below.
Performance period
TechnipFMC
relative TSR position
TechnipFMC
percentile rank
February 16, 2021 to December 31, 2023
138.3%
94th
payout
200%
2023 Long-Term Equity Incentive (Audited Information)
For 2023, the Compensation and Talent Committee set the target value of equity awards for our Chair and CEO
with reference to market median peer group total compensation data. The table below sets forth the Long-Term
Incentive target value for the Chair and CEO for 2022 and 2023. The target value is based on the Chair and CEO’s
base salary at the time of the award multiplied by his target long-term incentive percentage of 785%.
Chair and CEO
2022 Long-Term Incentive Target Award
2023 Long-Term Incentive Target Award
Douglas J. Pferdehirt
$9,700,000
$10,430,295
2023 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 2023, 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 2023-2025.
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
ROIC
50%
of PSU award
50%
of PSU award
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 shareholder
investments and customers
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
U.K. Annual Report and Accounts
TechnipFMC 109
Directors’ Remuneration Report
The relative TSR performance for our 2023 PSU awards will be measured against a group of companies
(collectively, the ‘‘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 shareholder investments and customers, have
comparable median market capitalization and revenue to TechnipFMC, and are exposed to similar markets in terms
of industry and global scope.
2023 Relative TSR Peer Group
Baker Hughes Company
Nabors Industries Ltd.
Transocean Ltd.
ChampionX Corp.
National Oilwell Varco, Inc.
Oceaneering International, Inc.
Core Laboratories N.V.
SLB
Halliburton Company
Subsea 7 S.A.
The vesting date for the 2023 PSU awards is February 21, 2026, with a performance period of January 1, 2023
through December 31, 2025.
The Compensation and Talent Committee approved the following targets for the 2023 PSU awards:
Relative TSR
The Relative TSR payout scale for the 2023-2025 PSU award is outlined below.
Performance Achievement
Below Threshold
Threshold
Target
Maximum or above
Relative TSR Performance
Below 25th percentile
25th percentile
50th percentile
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 (ROIC)
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 2022-2024 will be disclosed at the end of the performance period.
PSU Grant Detail
Number of PSUs/ conditional share awards awarded
Share Price on Grant Date
Fair Value on the date of award1
Fair Value of award as a % of salary
2022 PSU Grant1
2023 PSU Grant2
861,675
$
7.88
$ 6,789,999
521,142
$
14.01
$ 7,301,199
549%
549%
Face Value on the date of award at maximum performance1
$13,579,998
$14,602,399
Face Value of award at maximum performance as a % of salary
1099%
1099%
(1) Calculated using the grant price, equal to the closing price on the New York Stock Exchange on the date of grant, March 8, 2022.
(2) Calculated using the grant price, equal to the closing price on the New York Stock Exchange on the date of grant, February 17, 2023.
110 TechnipFMC
U.K. Annual Report and Accounts
Directors’ Remuneration Report
2023 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.
For 2023, the Compensation and Talent Committee modified the vesting schedule of our RSU awards from a
three-year cliff to a three-year ratable schedule, with RSUs vesting in three equal installments over three years on
the anniversary of the grant date.
The Compensation and Talent Committee’s decision to use a combination of graded vesting for RSUs and
three-year cliff vesting for PSUs ensures a balanced and effective retention strategy for our equity awards. In
addition, this modification aligns with market practices of our Compensation Peer Group, as reported by FW Cook.
The number of RSUs granted to executive directors was determined by dividing the target value set for each executive
officer by the closing price of the Company’s Ordinary Shares on the NYSE on the date prior to the grant date.
RSU Grant Detail
Number of RSUs/ conditional share awards
Share Price on Grant Date
Face Value on the date of award1
Award as a % of salary
2022 RSU Grant1
2023 RSU Grant2
369,289
$
7.88
$2,909,997
235%
223,346
$
14.01
$3,129,077
235%
(1) Calculated using the grant price, equal to the closing price on the New York Stock Exchange on the date of grant, March 8, 2022.
(2) Calculated using the grant price, equal to the closing price on the New York Stock Exchange on the date of grant, February 17, 2023.
Clawback Policy
In 2023, we adopted an updated compensation recovery clawback policy that enables us to recoup and/or cancel
previously awarded compensation in defined situations. The updated policy supersedes our prior clawback policy.
Covered Employees
Covered
Compensation
Triggering Events
Executive officers, including executive directors, subject to the reporting
requirements of Section 16 of the Exchange Act
Cash and equity that is granted, earned, or vested based on the attainment of
financial reporting measures
Restatement of the Company’s quarterly or annual financial statements resulting
in erroneously awarded compensation
Illegal acts, including fraud, material theft of Company assets, bribery, and
corruption; gross negligence; and willful misconduct
Compensation and Talent
Committee Authority
Administer, interpret, and construe the policy
Cancel previously granted compensation in part or in whole, whether vested or
deferred
Clawback previously earned or erroneously awarded compensation by requiring
the executive officer to repay the Company any gain realized or payment
received
Reduce or offset future incentive compensation
U.K. Annual Report and Accounts
TechnipFMC 111
Directors’ Remuneration Report
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 2023.
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 full share ownership requirement as of December 31, 2023.
Share Retention Requirements
An executive director is required to retain 50% of the net shares acquired after the vesting of time-based
restricted stock units and performance-based restricted stock units until the required ownership level is achieved.
The purpose of this additional requirement is to impose a holding period during which an executive director must
retain ownership of a significant portion of vested equity compensation.
We believe that the combination of the share ownership and share retention requirements more closely aligns the
interests of an executive director with the long-term interest of our shareholders. We regularly evaluate and
monitor compliance with our share ownership and retention policy, and the Board will review compliance on at
least an annual basis. All executive directors met their pro rata ownership and retention requirements under the
Company’s policy in 2023.
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, 2023:
Share
Ownership
Requirements
(% of salary)
Number
of Shares
Required to
Hold1
Number
of Shares
Owned
Outright
(including
Connected
Persons)
Vested but
Unexercised
Stock
Options
Unvested
and
Unexercised
Stock
Options
RSUs
Subject to
Performance
Conditions1
RSUs
Time Based
Weighted
Average
Exercise
Price of
Vested
Options
Weighted
Average
Period to
Vest of RSUs
600%
395,839 1,697,581
970,547
0 1,224,714
2,330,937
$20.38
11.57
Name
Chair and
CEO
(1) Number of Shares Required to Hold is based on the share price as of December 29, 2023 of $20.14. 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. No stock options were exercised in 2023.
(2) Represents target. Maximum possible payout is 200% of target, or 4,661,874 RSUs.
112 TechnipFMC
U.K. Annual Report and Accounts
Directors’ Remuneration Report
TSR Performance Graphs and Table for the Chair and CEO
The figure below indicates the Company’s TSR performance against the OSX index from January 1, 2019 through
December 31, 2023. 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
$160
$140
$120
$100
$80
$60
$40
$20
$0
Jan 19
Jul 19 Jan 20 Jul 20
Jan 21
Jul 21
Jan 22
Jul 22
Jan 23
Jul 23
Dec 23
TechnipFMC
OSX Index
Summary of Chair and CEO Pay1
2018
2019
2020
2021
2022
2023
Total Single Figure of Remuneration
$5,437,504
$7,861,135
$6,282,074 $20,092,366
$6,493,597 $50,761,830
Annual Cash Incentive Award Paid as a
% of Maximum
Long-Term Incentive Award Paid as a %
of Maximum
65%
0%
87%
25%
50%
12.5%
81%
50%
62%
82%
0%
100%
(1) For more details on the calculation of the Total Single Figure of Remuneration, please see the section entitled ‘‘Executive Director's Single Figure
Table.’’ Data shown is the data for Douglas Pferdehirt.
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. 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.
U.K. Annual Report and Accounts
TechnipFMC 113
Directors’ Remuneration Report
2022 to 2023
2021 to 2022
2020 to 2021
2019 to 2020
Salary1
Bonus
Benefits2
Salary1
Bonus
Benefits2
Salary
Bonus
Benefits
Salary
Bonus
Benefits
Douglas J. Pferdehirt
Average U.S. Employee
7.5%
6.3%
42%
49%
27%
47%
0%
-23%
-28%
30%
62%
26%
-30%
-43%
-9%
1.5%
39.0%
7.7%
125%
129%
2.7%
20.5% -11.1%
-11.5%
Non-Executive Directors
2022 to 2023
2021 to 2022
2020 to 2021
2019 to 2020
Salary
Bonus
Benefits
Salary
Bonus
Benefits
Salary
Bonus
Benefits
Salary
Bonus
Benefits
Eleazar de Carvalho Filho
Claire S. Farley
Robert Gwin
Peter Mellbye
John O'Leary
Margareth Øvrum
Kay G. Priestly
John Yearwood
Sophie Zurquiyah
Pascal Colombani
Marie-Ange Debon
Didier Houssin
Joseph Rinaldi
James M. Ringler
Arnaud Caudoux
7%
-2%
—
-4%
4%
0%
4%
0%
0%
—
—
—
—
—
—
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
—
—
—
—
—
—
100%
0%
—
351%
100%
-63%
414%
100%
403%
—
—
—
—
—
—
0%
0%
—
0%
0%
0%
0%
0%
0%
—
—
—
—
—
—
N/A
N/A
—
N/A
N/A
N/A
N/A
N/A
N/A
—
—
—
—
—
—
-100%
0%
—
100.0%
-100%
589.0%
-83%
-100%
-65%
—
—
—
—
—
—
30%
30%
—
30%
30%
30%
30%
30%
—
—
—
—
—
—
—
N/A
N/A
—
N/A
N/A
N/A
N/A
N/A
—
—
—
—
—
—
—
-87.7%
-20%
0%
—
-20%
—
-89%
-20%
-88%
-20%
0%
N/A
-31%
-20%
-85%
-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
230%
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. Mr. O’Leary and Ms. Priestly had their salary increase due to
the increase in their respective chair fees. Mr. O’Leary as the Chair of the Compensation and Talent Committee had his annual chair fee increased from
$15,000 to $20,000. Ms. Priestly as the Chair of the Audit committee had an increase from $20,000 to $25,000. Mr. Mellbye as the chair of the ESG
committee also had his chair fee increased from $10,000 to $15,000 but also left the board after the second quarter resulting in a decrease.
Mr. de Carvalho Filho was appointed to the chair of the ESG committee after the second quarter resulting in an increase in salary.
(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 2023, the average cost went to $2263.19.
In 2021, Mr. de Carvalho Filho had a taxable benefit total of $445.84 while in 2022 he had $0, in 2023 he incurred a cost of $2,225.79. In 2021,
Ms. Farley had a taxable benefit total of $0 while in 2022 she had $0, in 2023 she remained at $0. In 2021, Mr. Mellbye had a taxable benefit total of
$0 while in 2022 he had $493.37, in 2023 he incurred a cost of $2,225.79. In 2021, Mr. O'Leary had a taxable benefit total of $445.84 while in 2022
he had $0, in 2023 he incurred a cost of $2,225.79. In 2021, Ms. Øvrum had a taxable benefit total of $875.47 while in 2022 she had $6,034.70, in
2023 she incurred a cost of $2,225.79. In 2021, Ms. Priestly had a taxable benefit total of $2,522.66 while in 2022 she had $433.20, in 2023 she
incurred a cost of $2,225.79. In 2021, Mr. Yearwood had a taxable benefit total of $283.81 while in 2022 he had $0, in 2023 he incurred a cost of
$2,225.79. In 2021, Ms. Zurquiyah had a taxable benefit total of $1,410.49 while in 2022 she had $493.37, in 2023 she incurred a cost of $2,480.17.
Values were converted to USD using the 12/29/2023 exchange rate.
Payments to Past Directors (Audited Information)
The Company made no payments to past directors for the period under review.
Payments for Loss of Office (Audited Information)
The Company made no payments to past directors for the period under review.
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.
114 TechnipFMC
U.K. Annual Report and Accounts
Directors’ Remuneration Report
Financial
year
Option
P25
(Lower Quartile)
P50
(Median)
P75
(Upper Quartile)
P25
(Lower Quartile)
P50
(Median)
P75
(Upper Quartile)
Total Remuneration
Base Salary Only
2023
2022
2021
2020
2019
Financial
year
2023
C
C
C
C
C
872:1
118:1
335:1
113:1
133:1
696:1
98:1
271:1
89:1
115:1
491:1
71:1
200:1
64:1
80:1
27:1
26:1
24:1
21:1
24:1
21:1
22:1
19:1
16:1
22:1
16:1
17:1
16:1
12:1
15:1
CEO
P25
P50
P75
Base
Salary
Total
Remuneration
Base
Salary
Total
Remuneration
Base
Salary
Total
Remuneration
Base
Salary
Total
Remuneration
$1,328,700
$50,761,830
$49,451
$58,185
$62,070
$72,909
$85,216
$103,403
U.K. Employees
The Company has decided to use Option C to select the P25, P50 and P75 employees. This option was chosen since
this provided the most reliable and accurate data to be used for pay ratio reporting, based on our system
capabilities. The data used was as of December 31, 2023. We used a database that includes base salary, benefits,
pensions, and incentive plans and selected the employees by comparing them on a full-time equivalent basis
among 2,000 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 since 2019.
The 2023 ratio reflects the share value appreciation of equity awards granted on April 1, 2021, at a share price of
$7.98 compared to a share price of $22.58 as of March 1, 2024, the vesting date of such awards, and a
performance payout of 200% of target for the 2021 PSUs. For more information, see the section entitled ‘‘Executive
Director’s Single Figure Table (Audited Information).’’
Relative Importance of Spend on Pay
The table below sets out data for 2022 and 2023.
Relative spend information
2022
2023
% Change
Remuneration for All Global Employees
$1,396,560,000
$1,492,127,000
Distributions to Shareholders
—
$
43,545,217
6.8%
100%
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 2023, pursuant to our current Directors’ Remuneration Policy, which was approved at
our 2018 Annual General Meeting. Our current Chair and CEO, Mr. Pferdehirt, is not included in the table below as
he was an employee during 2023 and did not receive any additional compensation for his service as a director.
U.K. Annual Report and Accounts
TechnipFMC 115
Directors’ Remuneration Report
Board of Director Members
Non-Executive Director
Base fees
Additional
fees1
Stock
Awards2
Taxable
benefits3
Total Base fees1
Additional
fees1
Stock
Awards2
Taxable
benefits3
Total
2023 ($000s)
2022 ($000s)
Eleazar de Carvalho
Filho
Claire S. Farley
Robert Gwin4
Peter Mellbye5
John O'Leary
Margareth Øvrum
Kay G. Priestly
John Yearwood
Sophie Zurquiyah
100
100
100
50
100
100
100
100
100
17.5
57.5
175
175
2.2 294.7
0 332.5
7.5
189.5
0 297.0
12.5
30
10
35
20
10
0
175
175
175
175
175
2.2
64.7
2.2 307.2
2.2 287.2
2.2 312.2
2.2 297.2
2.5 287.5
100
100
—
100
100
100
100
100
100
10.0
60.0
—
17.5
25.0
10.0
30.0
20.0
10.0
175
175
—
175
175
175
175
175
175
0.0 285.0
0.0 335.0
—
—
0.5 293.0
0.0 300.0
6.0 291.0
0.4 305.4
0.0 295.0
0.5 285.5
(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 $7.88 and $14.01 on March 8, 2022 and February 17, 2023 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.
(4) Mr. Gwin joined the Board of Directors on February 1, 2023. In addition to the annual equity grant of $175,000, he received a prorata award for
his service prior to the February 20, 2023 Board of Directors meeting.
(5) Mr. Mellbye retired from the board on April 28, 2023.
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 December 31, 2023, the number of our Ordinary Shares owned by each of our
non-executive directors.
116 TechnipFMC
U.K. Annual Report and Accounts
Directors’ Remuneration Report
Non-Executive Director
Eleazar de Carvalho Filho
Claire S. Farley
Robert Gwin2
John O'Leary
Margareth Øvrum
Kay G. Priestly
John Yearwood
Sophie Zurquiyah
Share
ownership
requirements
$500,000
$500,000
$500,000
$500,000
$500,000
$500,000
$500,000
$500,000
Number
of shares
required
to hold
24,826
24,826
4,965
24,826
14,896
24,826
19,861
9,930
Number of
shares owned
outright1
Interest in
shares
Total number
of shares held
94,601
147,113
—
106,204
53,275
101,765
86,147
44,137
12,491
12,491
13,531
12,491
12,491
12,491
12,491
12,491
107,092
159,604
13,531
118,695
65,766
114,256
98,638
56,628
(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 2023, 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.
(2) Mr. Gwin joined the Board of Directors on February 1, 2023. In addition to the annual equity grant of $175,000, he received a prorata award for
his service prior to the February 20, 2023 Board of Directors meeting.
(3) Mr. Mellbye retired from the board on April 28, 2023. As such, he was not subject to share ownership requirements as of December 31, 2023.
All of our Directors met their applicable share ownership requirements as of December 31, 2023.
U.K. Annual Report and Accounts
TechnipFMC 117
Directors’ Remuneration Report
Application of the Policy in 2024
Compensation for directors is recommended annually by the Compensation and Talent Committee with the
assistance of FW Cook and approved by the Board.
The Directors’ Remuneration will be implemented with effect from the 2024 Annual General Meeting
(April 26, 2024) as follows:
Salary and Benefits
Chair and CEO Base salary for 2024 is $1,328,720.
Benefits and Pension
No changes are being made.
Annual Bonus
The bonus opportunity and operation for executive directors in 2024 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
2024-2026 ESG Scorecard Performance
API
Total
75%
25%
25%
25%
25%
100%
The 2024 Adjusted EBITDA as a Percentage of Revenue and Free Cash Flow Conversation targets are commercially
sensitive but align with our 2024 fiscal year plan. The targets will be disclosed in our 2024 U.K. Annual Report.
Please see the section entitled ‘‘The 2024-2026 Scorecard’’ section for the Company’s 2024-2026 Scorecard
objectives.
118 TechnipFMC
U.K. Annual Report and Accounts
2024 Long-Term Equity Incentive Plan
Our annual 2024 long-term equity grant will be based on the measures outlined in the table below.
Directors’ Remuneration Report
Long-Term
Equity
Performance
Stock Units
Weighting
Vesting
Three-year cliff
vesting
70%
of total long-
term equity
Performance
Measure
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
Three-year ratable
vesting with
one-third vesting
each year
N/A
30%
of total long-
term equity
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
value while
reinforcing the
retention impact of
our compensation
program
We believe that both ROIC and relative TSR closely align with value creation, are meaningful measures of our
long-term performance, and motivate 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.
U.K. Annual Report and Accounts
TechnipFMC 119
Directors’ Remuneration Report
The relative TSR performance for our 2024 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 2024, we intend to retain the same Relative TSR Peer Group as 2023. 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 2024 relative TSR peer group is outlined below:
2024 Relative TSR Peer Group
Baker Hughes Company
Nabors Industries Ltd.
Transocean Ltd.
ChampionX 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 2024-2026 PSU award is outlined below:
Performance Achievement
Below Threshold
Threshold
Target
Relative TSR Performance
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 2024-2026 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. The 2024-2026 ROIC target is
commercially sensitive and will be disclosed at the end of the performance period, but it aligns with the
Company’s long-term plan at the time it was approved.
The results for the ROIC three-year period of 2024−2026 will be disclosed at the end of the performance period.
120 TechnipFMC
U.K. Annual Report and Accounts
Directors’ Remuneration Report
Non-Executive Director fees
For the year ending December 31, 2023, 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.
Compensation Element
Compensation 2023
Compensation 2024
% increase
Annual Retainer
$100,000 paid in cash.
$105,000 paid in cash.
Annual Equity Grant
$175,000 in RSUs, vesting after one
year of service.
$185,000 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
$25,000 for Audit Committee
$25,000 for Audit Committee
$20,000 for Compensation and
Talent Committee
$20,000 for Compensation and
Talent Committee
$15,000 for Environmental, Social,
and Governance Committee
$15,000 for Environmental, Social,
and Governance Committee
Annual Lead Independent
Director Fee
$50,000
$50,000
Meeting Fee
$2,500 per committee meeting
Not applicable
Annual Committee Member
Fee
Not applicable
$10,000 per committee
Stock Ownership
Requirement
Five times annual retainer
Five times annual retainer
5.0%
5.7%
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.
U.K. Annual Report and Accounts
TechnipFMC 121
Directors’ Remuneration Report
Activities of the Compensation and Talent
Committee in 2023
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 compensation 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. Based on the outcomes of this competitive search, the Compensation and Talent Committee appointed
FW Cook as its independent compensation consultant in 2021. FW Cook provides the Compensation and Talent
Committee independent advice in evaluating our director and executive compensation program, as well as insight
into legislative and governance activity, market prevalence, and setting the Compensation Peer Group used to
inform executive compensation decisions.
The Compensation and Talent Committee annually assesses FW Cook’s independence and objectivity by
considering seven factors:
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 director compensation;
FW Cook’s fees and expenses for consulting services to the Committee were less than 1% of FW Cook’s total
revenue in 2023;
FW Cook’s policies and procedures are designed to prevent conflicts of interest;
No member of the FW Cook consulting team (or the consulting team’s immediate family members) owns
TechnipFMC stock;
No member of the FW Cook consulting team (or their spouse) serving TechnipFMC’s Committee has any
business or personal relationship with any executive officer of TechnipFMC, nor does any other employee of
FW Cook have such a relationship; and
Other factors deemed relevant that might impair the independence of FW Cook from TechnipFMC, any
Committee member of TechnipFMC, or any member of TechnipFMC’s management.
122 TechnipFMC
U.K. Annual Report and Accounts
Directors’ Remuneration Report
FW Cook was paid approximately $102,000 in time and expenses related to executive compensation services
provided in 2023. In accordance with its annual practice and pursuant to the SEC rules and NYSE listing standards,
the Compensation and Talent Committee reviewed and considered the independence of FW Cook during 2023 and
determined that FW Cook’s work performed during 2023 did not raise any conflicts of interest.
Compensation and Talent Committee Members
All members of the Compensation and Talent Committee are independent. The Compensation and Talent Committee
met four times in 2023 and all members attended each meeting. From January 1, 2023 to December 31, 2023, 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, 2023
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 2023 were as follows:
Q1
Q2-Q3
Q4
Approve compensation decisions
and equity awards for directors
and officers
Review executive officer share
ownership guidelines and
compliance
Approve Company performance
achievements for prior year in
relation to annual short-term
and long-term incentive plans
Discuss shareholders’ and proxy
advisory feedback and review
annual general meeting vote
results
Determine the Compensation
Peer Group
Review and discuss executive
compensation strategy, structure,
and programs
Approve annual compensation
disclosures in Company Proxy
Statement and U.K. Annual
Report and Accounts
Review internal governance
policies (e.g., clawback and
insider trading policy) and
compliance
Approve annual equity budget
for non-executives, and review
impact on shareholder dilution
Review peer compensation
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
TechnipFMC 123
Directors’ Remuneration Report
Statement of Voting at Annual Shareholders’
Meeting
At our 2023 Annual General Meeting, 96.6% of votes cast approved our 2023 Directors’ Remuneration Report with
3.4% voting against the report (percentages subject to rounding), and 2,433,722 votes 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 director compensation program, and is pleased with the support from shareholders stemming
from our extensive shareholder engagement and changes made to the director compensation program as a result.
An integral component in the evaluation and review of our compensation program are our shareholder
engagement initiatives, explained in further detail in the letter from our Compensation and Talent Committee Chair.
On behalf of the Board
John O’Leary
Director and Compensation and Talent Committee Chair
March 15, 2024
124 TechnipFMC
U.K. Annual Report and Accounts
Remuneration Policy
This section of the report sets out the remuneration policy for the executive and non-executive directors which
shareholders are asked to approve at the 2024 Annual General Meeting of Shareholders on April 26, 2024.
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 independent 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 considers
relevant market data and factors relating to the Company 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 executive director is present in the discussion of their own remuneration and
independent advice is provided by our independent compensation consultants.
U.K. Annual Report and Accounts
TechnipFMC 125
Remuneration Policy
Future Policy Table for Executive Directors
The table and accompanying notes below describe each component of the Company’s executive directors’
remuneration package.
Base Salary
Purpose and link to strategy
Operation
Maximum payment
Performance assessment
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
Reviewed annually or following a change in responsibilities, with changes usually
taking effect at the start of the fiscal year (January 1) although it may be reviewed
at other times if considered appropriate.
The Compensation and Talent Committee considers the following parameters when
setting and reviewing base salary levels:
economic conditions and governance trends;
the individual’s performance, skills, and responsibilities;
base salaries of comparable positions within peer companies of similar size and
industry; 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 market median level of peer companies. Salary
adjustments may also reflect wider market conditions in the geography in which
the executive director is based.
While there is no current intent to materially increase salary levels, we understand
that the U.K. regulations with which this policy complies envisage a monetary cap
on each component. For this purpose, no executive director’s salary will exceed
$2,000,000.
The Compensation and Talent Committee annually sets salaries by considering
factors such as base pay versus market, peer company compensation for similar
positions, and the individual performance of an executive director, along with the
overall performance of the Company.
Provisions to recover sums paid or
the withholding of payments
Not applicable
126 TechnipFMC
U.K. Annual Report and Accounts
Remuneration Policy
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, which
may vary based on the location. The Chair and CEO currently participates in the
Company’s U.S. Qualified Savings Plan (401(k)) 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 section entitled ‘‘Annual Report on Remuneration.’’
The annual company contributions to the U.S. Qualified Savings Plan (401(k)) and
U.S. Non-Qualified Savings Plan are capped based on a percentage of eligible
earnings, typically comprising base and annual cash incentive earnings for the plan
year. The current employer contribution cap of 7% may be subject to periodic
review, but executive directors will not have the level increased unless the revised
level is applied to most eligible participants.
Performance assessment
None
Provisions to recover sums paid or
the withholding of payments
Not applicable
Annual Performance Bonus
Purpose and link to strategy
Incentivizes achievement of the Company’s annual financial and strategic
objectives as well as individual contributions to the Company’s performance
U.K. Annual Report and Accounts
TechnipFMC 127
Remuneration Policy
Annual Performance Bonus
Operation
Performance measures and stretch targets are set annually in advance by the
Compensation and Talent Committee by reference to the annual operating plan and
may relate to success measures as it considers appropriate. Below is a summary of
performance measures linked to the annual bonus in 2024.
EBITDA as a percentage of revenue (25% weight) and free cash flow from
operations (25% weight) are key financial objectives that measure the Company’s
ability to drive profitability, manage cost, generate cash, and create a sustainable
business.
Performance relative to the Company’s ESG Scorecards (25% weight) drives
behaviors and creates outcomes that make a positive impact on the planet, people,
and communities in which the Company operates.
Individual performance objectives (25% weight) comprise personal stretch goals
that are built around various strategic business objectives.
The award is usually paid out in cash after the end of the financial year when the
Compensation and Talent Committee reviews the results and approves the payouts
for each performance component.
The Compensation and Talent Committee annually reviews the performance
measures connected to the annual performance bonus which may include financial,
non-financial, corporate, divisional, strategic, operational, and/ or personal
measures. The weighting of each measure is based on both shareholder input and
the business priorities for the 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 within the overall caps. 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 applicable caps and provide applicable
disclosures on the rationale for issuing such bonus.
128 TechnipFMC
U.K. Annual Report and Accounts
Annual Performance Bonus
Maximum payment
Performance assessment
Remuneration Policy
For below threshold performance, the bonus normally pays out at 0% of target
value although this can be varied by the Committee.
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 maximum annual bonus for the Chair and CEO for 2024 is set at 270% of
base salary (or 200% of the target value of 135% of base salary).
As the U.K. regulations require a cap, the Committee has set a cap of 400% of
base salary, noting that there is no intent to increase the actual maximum payout
from the current 270% level.
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 measures and suitable stretch 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
ESG Committee.
The Compensation and Talent Committee has discretion to vary the measures and
weighting of these measures over the life of this Remuneration Policy.
Further details are set out on page 128 in the Operation section of this Annual
Performance Bonus table.
Provisions to recover sums paid or
the withholding of payments
Clawback provisions apply as described on page 111 of the Directors’
Remuneration Report. The precise terms of such provisions may be amended from
time to time having regard to market norms in the U.S.
U.K. Annual Report and Accounts
TechnipFMC 129
Remuneration Policy
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 2022 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 2024, long-term award grants consist of:
Performance Stock Units: an award of shares subject to performance conditions
assessed over a period of three years; and
Restricted Stock Units: an award of shares that vest one-third each year, over three
years from the grant date.
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 and any and all elements of the
Incentive Plan may be utilized to the extent permitted under the plan. A minimum of
50% will be performance based. However, it is the current intention of the
Compensation and Talent Committee that the 2024 weighting for the Chair and CEO be
as follows (based on the fair value at the grant date):
70% PSUs; and
30% RSUs.
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 $20 million per annum.
PSUs pay out at 25% of target for achievement of threshold performance, and at 0%
for below threshold performance. For stretch performance, PSU awards may vest at up
to 200% of the target value.
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 a fair value as of the grant date of $20 million.
130 TechnipFMC
U.K. Annual Report and Accounts
Remuneration Policy
Long-term Incentive Schemes
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, earnings per share);
a measure of the Company’s performance on environmental, social, and
governance metrics;
a measure of efficiency (for example, operating margin, operating cash
conversion, and ROIC); and
a measure of the Company’s relative performance in relation to its peers (for
example, relative TSR).
For 2024, the performance measures for PSUs are ROIC (50% weight) and relative
Total Shareholder Return (50% weight).
The Compensation and Talent Committee has discretion to amend the performance
metrics and weightings 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.
Measures and targets will be determined by the Compensation and Talent Committee
annually at its discretion prior to grant and will be disclosed in the applicable annual
report on remuneration.
Provisions to recover sums paid or
the withholding of payments
Clawback provisions apply as described on page 111 of the 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
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Remuneration Policy
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, which 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.
No material changes to benefits or perquisites are currently in contemplation and,
in particular, there is no current intent to increase the current value provided.
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 our strategic and financial business plan over the short and long-term, shareholder
feedback and general market practices.
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.
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Remuneration Policy
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 (401(k)). 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
(401(k)). 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 matches 5% of the employee’s contributions to the U.S. Non-Qualified
Savings Plan. Participants are 100% vested in their contributions and the employer matching 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. These levels
have been fixed for some time, but the Company may review and increase these percentages from time to time
provided that any increase will not extend to an executive director unless also applied to a majority of eligible
employees. Similar to the U.S. Qualified Savings (401(k)) 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 (401(k)). 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 although some flexibility may be applied with respect to buyout
awards as described below. 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 rigorous 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.
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TechnipFMC 133
Remuneration Policy
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 below.
If an executive director were to be subsequently appointed under a service agreement during the term of the
Remuneration Policy, or, indeed, if the Committee subsequently decides that it is appropriate to enter into such an
agreement with a current executive director, 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.
Share Ownership and Retention Requirements
While the U.K. regulations do not require the Company to set out its practice regarding share ownership
requirements, The Compensation and Talent Committee considers this to be part of the overall compensation
arrangements and the current approach is summarized below. This is not technically part of the policy and may be
modified from time to time.
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Remuneration Policy
Share Ownership Requirements
Chair and CEO: 6x base salary
Qualifying Share Interests
• Ordinary shares owned outright
•
PSU awards where the performance period is final and
approved
• Unvested RSUs
Time for Achievement
Five years from the effective date of appointment
Pro rata requirement of 20% per year applies within the first
five years
Consequences for Non-achievement
At the discretion of the Board of Directors
Retention Requirement
50% of the net shares acquired after the vesting of
time-based RSUs and PSUs until the required ownership
level is achieved
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TechnipFMC 135
Remuneration Policy
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 proposed 2024 Remuneration 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).
Chair and Chief Executive Officer
($’000)
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$-
+
50% Share Price Appreciation
Long-term variable pay
Annual Variable Pay
Fixed
$30,322
8,355 (28%)
$13,384
9,919 (74%)
1,794 (13%)
1,671 (12%)
On-target
$4,800
3,129 (65%)
1,671 (35%)
Minimum
$21,967
16,709 (76%)
16,709 (55%)
3,587 (16%)
1,671 (8%)
Maximum
3,587 (12%)
1,671 (6%)
50% Share Price Appreciation on Maximum
The table below sets out the elements and approach to calculation for the chart above.
Performance
Fixed pay
Annual variable pay
Long-term variable pay
Threshold
performance /
Minimum pay-out
Chair and CEO Base pay for
2024: $1,328,700
N/A
N/A
Chair and CEO taxable
benefits as per the single
figure of remuneration:
$70,361
Chair and CEO retirement
benefits as per the single
figure of remuneration:
$271,773
Chair and CEO face value of
restricted stock awards at
grant: $3,129,077
136 TechnipFMC
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Remuneration Policy
Performance
Fixed pay
Annual variable pay
Long-term variable pay
On-target /
‘‘expected’’
performance
Fixed Pay (see above)
On-target bonus (100% of
target)
Performance Stock Units at
100% of target
For 2024: 135% of salary for
the Chair and CEO
For 2024: face value of
$7,301,207 for the Chair
and CEO
Maximum
performance
Fixed Pay (see above)
Maximum bonus (200% of
target)
Performance Stock Units at
200% of target
For 2024: 270% of salary for
the Chair and CEO
For 2024: face value of
$14,602,413 for the Chair
and CEO
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.
The above sets out the current position although the Committee reserves the right to amend these provisions
within the life of the Remuneration Policy, having suitable regard to market practice in the U.S., should it consider
it appropriate to do so.
U.K. Annual Report and Accounts
TechnipFMC 137
Remuneration Policy
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 the greater of (a) the executive’s base salary as in effect on the effective date of the agreement or
(b) the executive’s base salary on the effective date of termination;
a pro-rated payment equal to the amount of his annual target bonus for the year that 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: (x) 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; (y) a voluntary termination by the Chair and CEO for ‘‘good reason’’ within 24 months of the change in
control; or (z) 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 that 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.
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Remuneration Policy
It is intended that any new executive director would be retained on similar loss of office terms to the current executive
directors. Non-executive directors are not entitled to any compensation on termination and have a one-month notice
period. However, all share awards will automatically be accelerated on a change of control of the Company.
The above sets out the current position although the Committee reserves the right to amend these provisions
within the life of the policy, having suitable regard to market practice in the U.S., should it consider it appropriate
to do so.
Future Policy Table for Non-Executive Directors
Director’s 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
$600,000 annually in cash and grant date fair value of equity to each person. 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 core compensation elements for non-executive
directors. These elements of compensation are reviewed annually by the
Compensation and Talent Committee’s independent compensation consultant and are
subject to change, should it be considered appropriate, to ensure alignment with
competitive market practices, but in no way should the total exceed the
$600,000 maximum.
Where any discretion is exercised, the basis of this exercise should be disclosed in
the next annual remuneration report.
Compensation Element
Purpose
Annual Retainer
Cash compensation for the non-executive director’s time and service on the Board.
Annual Equity Grant
Equity compensation to create alignment with shareholder interests and assist in complying
with stock ownership requirements.
Delivered as RSUs, awards vest after one year of service and are settled in Ordinary Shares
on a date elected by the non-executive director that is either (a) after a period of one 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.
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TechnipFMC 139
Remuneration Policy
Compensation Element
Purpose
Annual Chair Fees
Cash compensation provided to the Chair of each committee of the Board of Directors to
recognize the additional responsibilities and time required for leading their specific
committee.
Annual Lead Independent
Director Fee
Committee Membership
Fee
Other compensation
Director’s Fees
Performance assessment
Cash compensation for the additional responsibilities and time required to fulfill the position.
A fixed cash fee payable to each non-executive director for participating on a committee.
Reimbursement of travel and other related expenses incurred in connection with attending
Board and committee meetings.
Assistance with annual individual U.K. tax returns.
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 as of December 31, 2023.
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.
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Remuneration Policy
Other Provisions
The directors’ appointment letters currently 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 retire.
These provisions may be amended during the life of the Remuneration Policy having regard to market practice
in the U.S.
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
practices across the Company. However, there are some differences in the structure of the Remuneration Policy for
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.
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 entitled ‘‘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 2023 Annual General Meeting, 96.6% of votes cast by shareholders approved our 2022 Directors’
Remuneration Report with 3.4% votes cast against the report (percentages subject to rounding). The high
shareholder support demonstrates the alignment of our Directors’ Remuneration Report to shareholder interests.
For more information on our 2023−2024 shareholder engagement, please see the ‘‘Letter from the Chair of the
Compensation and Talent Committee’’ above.
Changes in the Remuneration Policy
In seeking approval of the proposed Remuneration Policy, the Compensation Committee reviewed the current
policy, considered the views of shareholders, and considered evolving governance and market practices. The policy
U.K. Annual Report and Accounts
TechnipFMC 141
Remuneration 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.
The key changes to this 2024 Remuneration Policy compared to the 2021 Remuneration policy are summarized
below:
Adjusted in the target maximum grant date fair value of annual long-term equity award granted to the Chair
and CEO from $18 million per annum to $20 million per annum, to provide flexibility for the future to adjust
compensation mix and the proportion of equity-based compensation during a period of volatility in the energy
industry sector. However, this change did not impact the 2024 long-term equity grant, which will remain below
$18 million.
Adjusted the maximum threshold for annual non-executive director remuneration of combined cash and grant
date fair value of equity from $500,000 to $600,000. However, this change does not impact 2024
non-executive director remuneration, which remains below $500,000.
Adjusted maximum threshold for annual bonus payments to 400% of annual base salary.
Adjusted maximum threshold for annual base salary to $2,000,000.
Expanded information on performance measures linked to the annual bonus payment and compensation
elements for non-executive directors.
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Cautionary Statement
Regarding Forward-Looking
Statements
This U.K. Annual Report contains ‘‘forward-looking statements’’ as defined in Section 27A of the U.S. Securities Act
of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. 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 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
U.K. Annual Report and Accounts
TechnipFMC 143
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.
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 2023 and of the group’s profit
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 2023; Consolidated Statements
of Income, Consolidated Statements of Other Comprehensive Income, Consolidated Statements of Cash Flows,
Consolidated Statements of Changes in Stockholders' Equity, and Company Statements 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 22 components. The scope of work at each component was determined by its
contribution to the group's overall financial position and its risk profile.
TechnipFMC 145 • We engaged our network firms in Brazil, Portugal, Norway, 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 68% of revenue at the transactional level.
Key audit matters
• Revenue recognition (group)
• Carrying value of investments in subsidiaries (parent)
Materiality
• Overall group materiality: USD 43m (2022: USD 38m) based on 0.6% of revenue.
• Overall company materiality: USD 40.85m (2022: USD 36m) based on 1% of total assets subject to a capped allocation
of group materiality.
• Performance materiality: USD 32.25m (2022: USD 28.5m) (group) and USD 30.6m (2022: USD 27m) (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.
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 64% 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. Please refer to Note 1.5 Use of critical
accounting estimates, judgements and assumptions,
Note 3 Segment information and Note 5 Revenue in
the group financial statements.
How our audit addressed the key audit matter
In auditing the group's revenue from products and services
recognised over time, 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 revenue and costs, and the existence of
146 TechnipFMC 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 as well as 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 obtained and read management's assessment which
concluded that there were no impairment triggers;
- We considered external and internal sources of
information which could be indicative of impairment
triggers including:
-
-
-
-
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 2023 and post year end against the
carrying value of the investments;
Recent market commentary on the group; and
Current year backlog and order intake compared to
prior years.
- We performed a lookback test by comparing the 2023
actual performance against the 2023 budgeted
performance;
- We assessed management's consideration of impairment
reversals; and
Carrying value of investments in subsidiaries (parent)
The total carrying value of investments presented
within the Company financial statements as at 31
December 2023 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, and
management judgements involved in determining
impairment triggers. Please refer to Note 2.4 Use of
critical accounting estimates, judgements and
assumptions and Note 3 Investments in subsidiaries in
the Company financial statements.
TechnipFMC 147 - 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 operat ing
businesses within 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 scope and specified procedure component teams. We also visited the US, Norway and Brazil component teams
during the year. Of the 25 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 specified procedure
component audits gave appropriate coverage of all material balances at a group level. On a consolidated bases, these
provided coverage of 68% 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 and 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 enquires 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 transitional risks and
physical risks.
The key areas of the financial statements where management evaluated that climate risk has a potential impact are the
forecasted future cash flows generated by non-current assets and those associated with goodwill.
We considered the following areas to potentially be impacted by climate risk and consequently we focused our audit work
on the carrying value of non-current assets and goodwill.
148 TechnipFMC
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 related disclosures.
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 31 December 2023.
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 43m (2022: USD 38m).
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 40.85m (2022: USD
36m).
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 56.8m.
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 USD 9m and USD 36m. 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% (2022: 75%) of overall materiality, amounting to USD
32.25m (2022: USD 28.5m) for the group financial statements and USD 30.6m (2022: USD 27m) 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.
We agreed with those charged with governance that we would report to them misstatements identified during our audit above
USD 4.3m (group audit) (2022: USD 3.8m) and USD 2m (company audit) (2022: USD 1.8m) 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 cash flow 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;
TechnipFMC 149 • Agreeing the forecasted cash flow position per management's going concern working 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 s o,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in
the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial
statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based
on these responsibilities.
With respect to the Strategic report and Directors' Report, we also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions
and matters as described below.
Strategic report and Directors' Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and
Directors' Report for the year ended 31 December 2023 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.
150 TechnipFMC
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 the 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 account 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;
• 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;
Indentifying and testing journal entries, in particular any journal entries posted with unusual account combinations
impacting revenue; and
• Understanding and assessing management's ongoing processes for investigation and concluding on any whistleblowing
allegations and understanding the status of investigations conducted by regulatory authorities.
TechnipFMC 151 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
15 March 2024
152 TechnipFMC CONSOLIDATED FINANCIAL STATEMENTS
TECHNIPFMC PLC
FOR THE YEAR ENDED DECEMBER 31, 2023
Company No. 09909709
TechnipFMC 153 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 loss, net
Income from associates
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 before income taxes
Provision for income taxes
Net income (loss) from continuing operations
Loss from discontinued operations
Net income (loss)
(Income) loss from continuing operations attributable to non-controlling interests
Net income (loss) attributable to TechnipFMC plc
Earnings (loss) per share from continuing operations attributable to TechnipFMC plc
8
Basic and diluted
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
Diluted
The accompanying notes are an integral part of the consolidated financial statements.
6
22
6
6
9
33
6
6
7
33
Year Ended December 31,
2023
2022
Note
5
$
4,283.4 $
3,266.4
277.3
7,827.1
3,383.5
2,915.6
184.1
684.5
69.0
20.0
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
7,256.7
6,464.4
(128.5)
(166.6)
34.4
—
309.7
47.2
(194.4)
—
162.5
143.9
18.6
—
18.6
4.3
22.9 $
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)
0.05 $
(0.25)
— $
(0.06)
0.05 $
(0.30)
438.6
452.4
449.5
449.5
154 TechnipFMC CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME
(In millions)
Year Ended December 31,
2023
2022
Net income (loss) attributable to TechnipFMC plc
$
22.9 $
(Income) loss from continuing operations attributable to non-controlling interests
Net income (loss) attributable to TechnipFMC plc, including non-controlling interest
Exchange differences on translating entities operating in foreign currency (1)
Cash flow hedging
Income tax effect
Other comprehensive income (loss) to be reclassified to statement of income in
subsequent years, net of tax (1)
Actuarial gains (losses) on defined benefit plans
Income tax effect
Other comprehensive income (loss) not being reclassified to statement of income in
subsequent years, net of tax
Other comprehensive income, net of tax (1)
Comprehensive income (loss), net of tax (1)
Comprehensive (income) loss attributable to non-controlling interest
Comprehensive income (loss) attributable to TechnipFMC plc (1)
4.3
18.6
111.2
40.9
(2.9)
149.2
(32.2)
3.7
(28.5)
120.7
139.3
0.5
$
139.8 $
(1) A correction was posted to amend a small mathematical difference noted in the 2022 comparative figures.
(136.7)
(25.4)
(111.3)
(30.7)
8.2
(8.0)
(30.5)
45.5
(7.6)
37.9
7.4
(103.9)
(21.3)
(125.2)
Comprehensive income (loss) attributable to:
(In millions)
Continuing operations (1)
Discontinued operations
Comprehensive income (loss) attributable to TechnipFMC plc (1)
Non-controlling interest
Continuing operations
Comprehensive (income) loss attributable to non-controlling interest
Comprehensive income (loss), net of tax (1)
Year Ended December 31,
2023
2022
$
$
$
$
139.8 $
—
139.8 $
0.5 $
0.5
139.3 $
(98.8)
(26.4)
(125.2)
(21.3)
(21.3)
(103.9)
(1) A correction was posted to amend a small mathematical difference noted in the 2022 comparative figures.
The accompanying notes are an integral part of the consolidated financial statements.
TechnipFMC 155 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In millions, except par value data)
Assets
Non-current 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
Current assets
Cash and cash equivalents
Trade receivables, net
Contract assets, net(1)
Inventories, net
Derivative financial instruments
Income taxes receivable
Advances paid to suppliers
Other current assets
Assets classified as held for sale
Total current assets(1)
Total assets(1)
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
Non-current liabilities
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
Current liabilities
Short-term debt and current portion of long-term debt
Lease liabilities
Accounts payable, trade
Contract liabilities(1)
Accrued payroll
Derivative financial instruments
Income taxes payable
Current provisions(1)
Other current liabilities including warranty provisions of $45.0 and $74.2 for 2023 and 2022
Liabilities classified as held for sale
Total current liabilities(1)
Total liabilities(1)
Total equity and liabilities
Note
December 31,
2023
2022
9
10
4
11
11
7
27
20
12
13
14
5, 14
15
27
7
16
2
17
17
17
19
4
7
20
27
21
23
19
4
24
5
27
7
21
23
2
$
274.4 $
2,308.0
740.0
140.9
601.6
148.5
30.4
44.1
286.1
4,574.0
951.6
1,138.1
1,036.0
1,106.7
183.4
187.4
89.5
425.4
5,118.1
155.1
5,273.2
9,847.2 $
432.9 $
3,454.3
(676.8)
3,210.4
35.4
3,245.8
965.1
705.3
133.0
138.7
24.8
5.2
79.7
2,051.8
153.8
149.0
1,355.1
1,470.4
187.8
179.9
182.9
265.7
540.7
4,485.3
64.3
4,549.6
6,601.4
9,847.2 $
$
$
$
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
1,047.2
1,053.1
282.7
150.5
80.8
450.9
5,090.8
18.5
5,109.3
9,651.9
442.2
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
1,142.7
175.6
346.6
120.5
286.1
385.8
4,344.8
—
4,344.8
6,323.9
9,651.9
(1) The December 31, 2022 balances for contract loss provisions of $63.1 million and $12.9 million have been reclassified from
contract assets and contract liabilities to current provisions, respectively. As the effect from reclassification is discussed in Note 21 and
there is no further impact, an additional statement of financial position has not been presented.
The accompanying notes are an integral part of the consolidated financial statements.
156 TechnipFMC 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 15, 2024
TechnipFMC 157
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 income (loss) to cash provided by operating activities
Depreciation
Amortization
Impairments
Employee benefit plan and share-based compensation costs
Deferred income tax benefit, net
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
Payments related to taxes withheld on share-based compensation
Financial income classified as investing cash flows
Other
Changes in operating assets and liabilities, net of effects of acquisitions
Trade receivables, net and contract assets, net
Inventories, net
Accounts payable, trade
Contract liabilities
Income taxes payable, net
Other assets and liabilities, net
Cash provided by operating activities
Cash provided (required) by investing activities
Capital expenditures
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
Other
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 long-term debt
Repayments of long-term debt
Share repurchases
Payments for the principal portion of lease liabilities
Dividends paid
Other
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
Year Ended December 31,
Note
2023
2022
$
18.6 $
—
447.3
89.7
1.7
46.7
(41.9)
—
29.6
(34.2)
—
(16.7)
(17.2)
(47.2)
62.9
(252.8)
(84.2)
59.2
306.4
40.6
134.4
742.9
(218.8)
14.9
—
84.7
—
—
47.2
—
(72.0)
5.0
(346.6)
(30.0)
—
—
(205.1)
(141.0)
(43.5)
1.1
(760.1)
(16.3)
(105.5)
(111.3)
26.4
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
(163.4)
9.7
(18.5)
30.2
288.5
12.5
19.3
(20.8)
157.5
16.8
(217.2)
(80.5)
60.9
(430.2)
(100.2)
(128.3)
—
(4.9)
(883.6)
12.1
(270.3)
1,057.1
$
951.6 $
1,327.4
1,057.1
4, 10
11
10, 11, 22
19
19
19
19
17
4
17
13
13
158 TechnipFMC
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)
The following table provides non-cash investing and financing activities:
(In millions)
Right-of-use assets obtained in exchange for lease obligations
Dividend receivable in exchange for loan receivable
Year Ended December 31,
2023
2022
96.7 $
52.6 $
150.7 $
110.6
42.7
189.2
Year Ended December 31,
2023
2022
115.9 $
85.0 $
283.2
—
$
$
$
$
$
The accompanying notes are an integral part of the consolidated financial statements.
TechnipFMC 159
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, 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 (Note 17)
Other (a)
Balance as of December 31, 2022
Net income (loss)
Other comprehensive income
Issuance of ordinary shares, net of shares
withheld for tax (Note 17)
Share-based compensation (Note 18)
$
$
—
—
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
442.2 $
3,643.0 $
(793.7) $
36.5 $
3,328.0
— $
22.9 $
— $
(4.3) $
—
116.9
—
3.0
—
(20.1)
45.8
3.8
—
—
—
—
(0.6)
18.6
120.7
(17.1)
45.8
(205.1)
(43.5)
(1.6)
—
—
—
—
—
Shares repurchased and cancelled (Note 17)
(12.3)
(192.8)
Dividends declared and paid (Note 17)
Other
—
—
(43.5)
(1.0)
Balance as of December 31, 2023
$
432.9 $
3,454.3 $
(676.8) $
35.4 $
3,245.8
(a) Other in Accumulated Other Comprehensive Income (Loss) and Retained Earnings, Net Income, and Other Reserves for the year
ended December 31, 2022 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
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"
or "U.K.") 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, United Kingdom. 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") as applicable to companies reporting
under those standards.
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 International Accounting Standards ("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 operating cycle. We believe our liquidity continues to exceed the level required
to achieve this goal.
During the preparation of these consolidated financial statements, we reviewed our expected
requirements through December 31, 2025 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 of December 31, 2023, the Company was in a net current asset position of $723.6 million,
with available undrawn facilities of $1.25 billion. On April 24, 2023, we amended and extended to April
24, 2028 our Credit Agreement for 5 years from the date of the amendment. 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 $275.0 million for 2024 and 3.0 to 3.5% of total revenue for 2025. 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 2024 forecasted margins compared
with 2023 actuals, similar to the reductions experienced during the COVID pandemic in 2020, and
assuming no growth in 2025 from the reduced 2024 forecast. Under all the scenarios which we have
TechnipFMC 161 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, 2025.
We also continue to actively monitor the current economic environment, including inflation, interest rates
and the market volatility caused by the current geopolitical situation in Ukraine and Israel, including the
impact on economic activity. 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.
Most of our cash is managed centrally and flows through bank accounts controlled and maintained by
TechnipFMC globally in various jurisdictions to best meet the liquidity needs of our global operations. We
expect to meet the continuing funding requirements of our global operations with cash generated by
such operations.
Following the above going concern assessment, we concluded that there are no material uncertainties
that cast significant 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 2023
The Company has applied the following new standard and amendments to International Financial
Reporting Standards ("IFRS") and International Accounting Standards ("IAS") for the first time in its
consolidated financial statements for the year ended December 31, 2023.
•
•
•
•
IFRS 17, “Insurance Contracts”
Amendments to IAS 8, "Accounting policies, Changes in Accounting Estimates and Errors:
Definition of Accounting Estimates"
Amendments to IAS 12, "Taxation", relating to Deferred tax related to assets and liabilities arising
from a single transaction
Amendments to IAS 1 and IFRS Practice Statement 2, "Disclosure of Accounting Policies"
These amendments did not have any impact on the Company's accounting policies and did not require
retrospective adjustments.
Amendment to IAS 12 “International Tax Reform"
On May 23, 2023, the IASB issued the Amendment to IAS 12 “International Tax Reform - Pillar Two Model
Rules”, which introduces a mandatory temporary exception to the requirements of IAS 12 for the
recognition and specific disclosure of deferred tax assets and liabilities arising from the OECD “Pillar Two
Model Rules”. The amendments provide a temporary exception from the requirement to recognize and
disclose deferred taxes arising from enacted or substantively enacted tax law that implements the Pillar
Two model rules published by the OECD, including tax law that implements qualified domestic minimum
top-up tax (‘QDMTT’) described in those rules. The amendments to IAS 12 make it clear that entities
subject to Pillar Two rules must ignore the deferred tax implications of enacted or substantively enacted
Pillar Two legislation in their IFRS financial statements. However, for annual reporting periods beginning
on or after January 1, 2023, these entities will need to provide some additional disclosures about current
taxes in their annual financial reports. The Company applied the exception to recognizing and disclosing
information about deferred tax assets and liabilities related to Pillar Two income taxes, as provided in
the amendments to IAS 12 issued in May 2023. See additional disclosures in Note 7.
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, 2023
Certain new accounting standards and interpretations have been published that are not mandatory for
December 31, 2023 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,
162 TechnipFMC
amendments or interpretations in issue but not yet adopted that are expected to have a material impact
on the consolidated financial statements.
Amendment to IAS 12 “International Tax Reform - Pillar Two Model Rules”
The Company is within the scope of the OECD “Pillar Two Model Rules”. Pillar Two legislation was enacted
in U.K. on July 19, 2023, the jurisdiction in which the Company is incorporated, and will come into effect
from January 1, 2024. Since the Pillar Two legislation was not effective at the reporting date, the
Company has no related current tax exposure. The group applies the exception to recognizing and
disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes, as
provided in the amendments to IAS 12 issued in May 2023. The Company has performed an assessment
of the potential exposure to Pillar Two income taxes. The Company does not expect a material exposure
to Pillar Two income taxes.
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.
Amendment to IAS 7 and IFRS 7 “Supplier Finance Arrangements”
On May 25, 2023, the IASB issued the Amendment to IAS 7 and IFRS 7 “Supplier Finance Arrangements”,
which requires entities to provide additional information on supplier finance contracts allowing the users
of the financial statements to assess how these supplier contracts affect liabilities and cash flows and to
understand the effect on the exposure to liquidity risks. The amendments will be effective on or after
January 1, 2024. 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
Company's consolidated financial statements.
Amendments to IFRS 16 "Leases" Lease Liability in a Sale and Leaseback
In September 2022, the IASB finalized narrow-scope amendments to the requirements for sale and
leaseback transactions in IFRS 16 Leases which explain how an entity accounts for a sale and leaseback
after the date of the transaction. The amendments specify that, in measuring the lease liability
subsequent to the sale and leaseback, the seller-lessee determines ‘lease payments’ and ‘revised lease
payments’ in a way that does not result in the seller-lessee recognizing any amount of the gain or loss
that relates to the right of use that it retains. This could particularly impact sale and leaseback
transactions where the lease payments include variable payments that do not depend on an index or a
rate. The amendments will be effective on or after January 1, 2024. 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 Company's consolidated financial statements.
Amendments to IAS 21 - Lack of Exchangeability
An entity is impacted by the amendments when it has a transaction or an operation in a foreign currency
that is not exchangeable into another currency at a measurement date for a specified purpose. A
currency is exchangeable when there is an ability to obtain the other currency (with a normal
administrative delay), and the transaction would take place through a market or exchange mechanism
that creates enforceable rights and obligations. Assessing exchangeability between two currencies
requires an analysis of different factors; such as the time frame for the exchange, the ability to obtain
the other currency, markets or exchange mechanisms, the purpose of obtaining the other currency, and
the ability to obtain only limited amounts of the other currency. When a currency is not exchangeable
into another currency, the spot exchange rate needs to be estimated. The amendments to IAS 21 do not
provide detailed requirements on how to estimate the spot exchange rate. Instead, they set out a
framework under which an entity can determine the spot exchange rate at the measurement date. The
amendments will be effective on or after January 1, 2025. We are currently evaluating the impact of this
amendment on our consolidated financial statements and do not expect that the adoption of the
amendments will have a significant impact on the Company's consolidated financial statements.
TechnipFMC 163
1.4. Summary of significant accounting policies
a) Consolidation principles and joint arrangements
In accordance with IFRS 10 “Consolidated Financial Statements”, 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.
TechnipFMC recognizes its share of the results of operations of the associate or joint venture in net
income. Any change in Other Comprehensive Income ("OCI") of those entities are reflected in the
statement of OCI. Changes recorded directly in the equity of the associate or joint venture, when
applicable, are recognized in the 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
associates or, if applicable, as net loss from discontinued operations in the consolidated statement of
income.
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, 2023 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
164 TechnipFMC
recognized in net income. Retained investment is recognized at fair value, with revaluation gain also
recognized in net income.
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 net income as income from
associates or, if applicable, as net income 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
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
TechnipFMC 165
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 63.7% of our revenue for the
year ended December 31, 2023. Typically, revenue is recognized over time using an input measure (e.g.,
costs incurred to date relative to total estimated costs at completion) to measure progress.
Cost-to-cost method - For long-term contracts, because of control transferring over time, revenue is
recognized based on the extent of progress towards completion of the performance obligation. The cost-
to-cost measure of progress for contracts is generally used because it best depicts the transfer of control
to the customer which occurs as costs on the contracts incur. Under the cost-to-cost measure of progress,
the extent of progress towards completion is measured based on the ratio of costs incurred to date to the
total estimated costs at completion of the performance obligation. Revenues, including estimated fees or
profits, are recorded proportionally as costs are incurred. Any expected losses on contracts in progress
are charged to earnings, in total, in the period the losses are identified.
Right to invoice practical expedient - The right-to-invoice practical expedient can be applied to a
performance obligation satisfied over time if we have a right to invoice the customer for an amount that
corresponds directly with the value transferred to the customer for our performance completed to date.
When this practical expedient is used, we do not estimate variable consideration at the inception of the
contract to determine the transaction price or for disclosure purposes. We have contracts which have
payment terms dictated by daily or hourly rates where some contracts may have mixed pricing terms
which include a fixed fee portion. For contracts in which we charge the customer a fixed rate based on
the time or materials spent during the project that correspond to the value transferred to the customer,
we recognize revenue in the amount to which we have the right to invoice.
Contract modifications - Contracts are often modified to account for changes in contract specifications
and requirements. We consider contract modifications to exist when the modification either creates new,
or changes the existing, enforceable rights and obligations. Most of our contract modifications are for
goods or services that are not distinct from the existing contract due to the significant integration service
provided in the context of the contract and are accounted for as if they were part of that existing
contract. The effect of a contract modification on the transaction price and our measure of progress for
the performance obligation to which it relates is recognized as an adjustment to revenue (either as an
increase in or a reduction of revenue) on a cumulative catch-up basis.
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.
166 TechnipFMC
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 statement of income, 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 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 oil and natural gas; and
Surface Technologies - designs and manufactures systems and provides services used by oil and gas
companies involved in land and shallow water exploration and production of oil and natural gas;
designs, manufactures and supplies technologically advanced high-pressure valves and fittings for
oilfield service companies; and also provides flowback and well testing services for exploration
companies in the oil and gas industry.
Total revenue by segment includes intersegment sales, which are made at prices approximating those
that the selling entity is able to obtain in an arm's length transaction. Segment operating profit (loss) is
defined as total segment revenue less segment operating expenses. Income (loss) from associates is
included in calculation of segment operating profit (loss). The following items have been excluded in
calculating the segment operating profit (loss): non-recurring legal settlement charge, 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 mostly reported on the basis of Brazil, United
States, Norway, United Kingdom, Guyana, Angola, Ghana, Australia, United Arab Emirates, Mozambique,
Saudi Arabia, Canada, Malaysia and Indonesia.
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 income/ (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.
TechnipFMC 167
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 market 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 the consolidated
statement of income as a bargain purchase. Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s
previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any
gains or losses arising from such remeasurement are recognized in the consolidated statement of income.
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/ triggering events
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 carrying value, including goodwill. If the carrying 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 recoverable amount of its
GCGUs using a discounted future cash flow model. The majority of the estimates and assumptions used in
a discounted future cash flow model involve unobservable inputs reflecting management’s own
assumptions about the assumptions market participants would use in estimating the fair value less cost
to sell 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 GCGU valuation was determined by utilizing the income approach. 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.
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.
168 TechnipFMC
Property, plant and equipment is initially recognized at cost or at their fair value in case of business
combinations.
Depreciation is calculated 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. We most commonly applied the following useful lives:
•
•
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, we review the useful lives of our 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 expenses 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 expenses.
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 indicators/ triggering 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 carrying
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.
TechnipFMC 169
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 revised recoverable amount is estimated. A previously recognized impairment loss is reversed only if
there has been a change in the assumptions or 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 net income.
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.
In determining the lease term, TechnipFMC considers all facts and circumstances that create an economic
incentive to exercise an extension option, or not exercise a termination option. Extension options (or
periods after termination options) are only included in the lease term if the lease is reasonably certain to
be extended (or not terminated). In making this assessment, TechnipFMC considers all relevant economic
factors such as contract-based factors, asset-based factors, entity-based factors, and market-based
factors, which include (but are not limited to) the below:
•
•
•
•
If contractual terms and conditions for the optional periods are attractive compared with current
market rates. For example, the lease payment during the renewal period for an office building is the
same rate as the base rate, which is lower than the market rate for a similar office building;
If leasehold improvements are expected to have significant economic value for the lessee when the
option to renew or terminate the lease or to purchase the underlying asset becomes exercisable. For
example, TechnipFMC, as a lessee, makes modifications to a production building it is leasing. Because
these modifications were costly, it would be more economically beneficial for TechnipFMC to renew
the building lease than to uninstall the modifications and start a new lease in a different building;
If the lessee would incur substantial additional costs relating to the termination of the lease and/or
the signing of a new lease, such as negotiation costs, relocation costs, costs of identifying another
underlying asset suitable for operations, or costs associated with returning the underlying asset in a
specified condition or to a specified location; and
If the underlying asset is important to the lessee’s operations. For example, if the underlying asset is
a specialized asset and the location of the underlying asset is important.
170 TechnipFMC
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 or a market interest rate), 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 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 net income 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 subleases certain of its leased real estate and vessels to third parties. These subleases are
classified as operating leases.
Lessor arrangements
TechnipFMC leases real estate including land, buildings and warehouses, machinery/equipment, and
vessels from a lessor perspective. TechnipFMC determines if an arrangement is a lease at inception by
assessing whether an identified asset exists and if the customer has the right to control the use of the
identified asset. TechnipFMC uses the implicit rate for its lessor arrangements. TechnipFMC estimates the
amount it expects to derive from the underlying asset following the end of the lease term based on
remaining economic life. 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”, development
costs are capitalized if all of the following criteria are met:
•
•
•
the projects are clearly identified;
the ability to reliably measure expenditures incurred by each project during its development;
the ability to demonstrate the technical and industrial feasibility of the project;
• maintain the financial and technical resources available to achieve the project;
•
•
the ability to demonstrate the intention to complete, to use or to commercialize products resulting
from the project; and
the ability 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.
TechnipFMC 171 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 indicators/ triggering 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 internal or external indicators/ triggering 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.
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 for vessels has
been assessed and we do not consider this to be an indicator of impairment. See Note 10 for further
details.
172 TechnipFMC
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 or estimates used to
determine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is
recognized in net income 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 statement
of financial position date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
The fair value of an asset or a liability is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming that market participants act in their economic best
interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.
TechnipFMC uses valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximizing the use of relevant observable inputs and
minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial
statements are categorized within the fair value hierarchy, described as follows, based on the lowest
level input that is significant to the fair value measurement as a whole:
•
•
•
Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in
active markets;
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or
liability either directly or indirectly; and
Level 3: Unobservable inputs (e.g., a reporting entity’s own data).
For assets and liabilities that are recognized in the consolidated financial statements at fair value on a
recurring basis, TechnipFMC determines whether transfers have occurred between levels in the hierarchy
by re-assessing categorization (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period.
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”). 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.
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.
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.
TechnipFMC 173
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 FVOCI, 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 FVOCI.
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 net income 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 FVTPL
Financial assets at FVTPL 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 FVTPL (in order to eliminate, or significantly
reduce, an accounting mismatch), or
Financial assets required to be measured at fair value (i.e., assets with cash flows that are not solely
payments of principal and interest, irrespective of the business model).
Derivatives, including separated embedded derivatives, are also classified as held for trading except for
those designated as effective hedging instruments. Financial assets at FVTPL are carried in the statement
of financial position at fair value with net changes in fair value recognized in the statement of income.
This category includes derivative instruments, listed and non-quoted equity investments which
TechnipFMC had not irrevocably elected to classify at FVOCI, 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 income 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 FVTPL.
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.
174 TechnipFMC
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
estimates 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 "Financial Instruments",
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 ECL which uses a lifetime expected loss allowance. TechnipFMC’s trade receivables and
contracts assets constitute a homogeneous portfolio, therefore, to measure the ECL, 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.
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.
TechnipFMC 175
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 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 FVTPL (i.e., instruments held for trading including derivatives not designated as
hedging instruments and also instruments designated upon initial recognition as of FVTPL),
financial debt at amortized cost,
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 FVTPL
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 income.
TechnipFMC has not elected to designate any financial liability as of FVTPL.
Financial debts (current and non-current)
Current and non-current financial debts include bond loans, commercial paper programs and other
borrowings. After initial recognition, the debt instrument 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 measurement and redemption
amount 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 instruments
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. Derivative instruments 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
176 TechnipFMC
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 2022 we reviewed the applicability of IFRS 9 and discontinued the policy applying cash as a natural
hedge instrument. The impact of the change in policy is not material to the activities of the Company and
has been presented in the statements of changes to stockholders’ equity as of December 31, 2022.
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
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 income 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.
TechnipFMC 177
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 OCI, and the ineffective portion of the gain or loss on the hedging instrument is
recorded in the statement of income. The amounts accumulated in 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 in net income as a reclassification adjustment in the same period or periods
during which the hedged cash flows affect net income. 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 the
consolidated statement of income 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 statement of income. 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
statement of income; and
the changes in fair value of derivative financial instruments that do not qualify as hedging in
accounting standards are directly recorded in the statement of income.
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 statement of income 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.
Write-down of inventories are recorded when the net realizable value of inventories is lower than their
carrying 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 fair market
value at year-end. Any change in fair value is recorded in the statement of income.
178 TechnipFMC
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 income 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.
Contract loss provisions
Contract loss provisions are recorded for contract losses that arise because estimated cost for the
contract exceeds estimated contract revenue. The losses expected to complete a contract are recognized
in the entire amount in the year in which they are considered probable and are recorded within project
costs.
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 statement 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.
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”. 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
TechnipFMC 179
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 fair value of 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 net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is included in employee benefit expense in the
consolidated statement of income.
The actuarial gains and losses resulting from adjustments related to experience and changes in actuarial
assumptions are recorded in OCI.
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
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.
180 TechnipFMC
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 International Financial Reporting Interpretations
Committee ("IFRIC") 23 "Uncertainty over Income Tax Treatment".
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
TechnipFMC presents current and non-current assets and current and non-current liabilities as separate
classifications in its statement of financial position. Current assets include assets (such as inventories,
trade receivables and contract assets) that are sold, consumed or realized as part of the normal operating
cycle even where they are not expected to be realized within 12 months after the reporting period. Some
current liabilities, such as trade payables, contract liabilities and some accruals for employee and other
operating costs, are part of the working capital used in the Company’s normal operating cycle. Such
operating items are classified as current liabilities even if they are due to be settled more than 12
months after the reporting period.
z) Hyperinflationary accounting
TechnipFMC applies provisions of IAS 29, Hyper inflationary economies ("IAS 29") to the financial
statements of our subsidiaries whose functional currency is the currency of a hyper-inflationary
economy. Non-monetary assets, liabilities and equity items are restated in terms of the measuring unit
current at the statement of financial position date with the resultant monetary gain (losses) recognized in
Other income and expenses. The prior year comparatives, for both monetary and non-monetary items,
are restated in terms of the measuring unit current at the end of the latest reporting period.
In 2018 we started to apply inflationary accounting to the financial statements of our subsidiaries in
Argentina. See Note 30.2 for details.
aa) Reclassifications
Certain prior-year amounts have been reclassified to conform to the current year's presentation. Refer to
Note 21 for reclassifications recorded as of December 31, 2022 and 2021.
TechnipFMC 181
1.5. Use of critical accounting estimates, assumptions and judgements
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) 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 accounting for
pension and other post-retirement benefit plans 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.
182 TechnipFMC
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 gross profit for the year ended December 31, 2023 was negatively impacted on a net basis by
approximately $92.3 million, as a result of aggregate changes in contract estimates related to projects
that were in progress as of December 31, 2022 with $91.0 million and $1.3 million in our Subsea and
Surface Technologies segments, respectively. Certain projects that were significantly impacted negatively
by changes to estimated project costs during this period totaled $106.1 million. These were offset
partially by projects with material positive
impacts from favorable negotiations of variable
considerations of $39.1 million. The remaining other changes resulted in a net negative impact of $25.3
million.
Our gross profit for the year ended December 31, 2022 was positively impacted by approximately
$104.9 million, as a result of changes in contract estimates related to projects that were in progress as of
December 31, 2021, with $104.6 million and $0.3 million in our Subsea and Surface Technologies
segments, respectively. Certain projects that were significantly impacted negatively by changes to
estimated project costs during this period totaled $192.7 million. These were offset partially by projects
with material positive impacts from favorable negotiations of variable considerations of $171.7 million.
The remaining other changes resulted in a net positive impact of $125.5 million.
See Note 5 for further details.
Accounting for pension and other post-retirement benefit plans
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 statement of
financial position and to the amount of pension expense in our 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 in 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
TechnipFMC 183
estimates used are appropriate, differences in actual experience or changes in plan participant
assumptions may materially affect the financial position or results of operations.
See Note 20 for further details.
b) Judgments
In the process of applying TechnipFMC’s accounting policies, management has made the following
judgements, which have the most significant effect on the amounts recognized in the consolidated
financial statements:
Accounting for defined benefit pension surpluses
Defined benefit pension surpluses are only recognized to the extent they are recoverable. The
determination of whether TechnipFMC have unconditional right to a refund of surplus may require
judgement. The majority of benefit payments are from trustee-administered funds. Plan assets held in
trusts are governed by local regulations and practice in each country, as is the nature of the relationship
between TechnipFMC and the trustees (or equivalent) and their composition. Trustees might have
discretionary power but not an obligation to wind-up the plan and use surplus to augment benefits or
repay surplus funds (if any) to the employer after receiving advice from the plan’s actuary.
Management applies IFRIC Interpretation 14, IAS 19 - The Limits on a Defined Benefit Asset, Minimum
Funding Requirements and their Interaction (“IFRIC 14") in exercising its judgement whether TechnipFMC,
as the ultimate beneficiary, will have an unconditional right to defined benefit pension surpluses in the
event of the wind-up or gradual settlement scenarios. A defined benefit pension surplus is recognized
when the trustees would owe a fiduciary duty to the employer (TechnipFMC) as a potential recipient of
surplus under a wind-up scenario, and if the employer is the ultimate beneficiary under the plan rules
after defined benefit obligations are settled in full.
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
and Note 30 for discussion on foreign exchange risks and impact from devaluation of Argentine peso and
Angolan kwanza. 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.
Climate change considerations
In 2023, the Company conducted a qualitative climate scenario analysis focused on its Subsea business in
the United Kingdom (the “Scenario Analysis”), which feeds into the assessment of the resilience of
Company’s business model and strategy in the light of risk arising under certain climate change scenario
projections. We focused initially on our Subsea business in the United Kingdom, which we deem the most
relevant business for purposes of the Scenario Analysis due to its significant exposure to risks arising
from climate action and enhanced GHG emissions regulation. While some actual impacts of the Company’s
may have been influenced at least in part by climate-related risks, such climate-related matters have not
had a material impact on our operations historically. The climate change Scenario Analysis undertaken
this year did not identify any material financial impact.
The potential impacts of the Company’s principal climate-related risks relate to transition risks arising
from the transition phase aimed at reducing emissions and thus mitigating the effects of climate change
and include the following identified potential impacts:
•
•
reduced revenue due to reduced demand in response to legislation banning new oil & gas
exploration and extraction;
reduced revenue due to delay or disruption of planned activities, such as the inability to start
new projects or slowing down ongoing projects;
184 TechnipFMC
•
•
•
•
stranding/early retirement of assets supporting oil & gas extraction;
increased costs associated with current business activities either to reduce or offset emissions
associated with the Company's operations;
increased costs of workforce attraction and retention;
increased costs to obtain and maintain the capabilities required to comply with evolving
reporting obligations (e.g., talent, data, systems, technology).
For details refer to discussion in section "Climate-Related Scenario Resiliency" included within
"Environmental, Social, and Governance" Report.
Significant accounting estimates and judgements in preparing the consolidated financial statements could
be impacted by actions taken to limit the effects of climate change. Climate risks may in fact affect the
recoverable amount of the Company's property, plant and equipment, intangible assets and the goodwill
and other financial and non-financial assets. During the preparation of these consolidated 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 (see discussion in section "Going
concern" in Note 1);
recoverable amount of property, plant and equipment, intangible assets and goodwill in the
medium to long term. (See Note 11);
realizability of pensions assets (See Note 20);
recoverable amount of investments in the Company's affiliates and joint ventures (See Note 9);
recoverability of deferred tax assets (See Note 7); and
creditworthiness of the Company's customers (See discussion on Credit risk in Note 30).
In addition, new laws or regulations introduced in response to climate change may give rise to new
obligations that did not previously exist. Management monitors the relevant regulations in order to
assess whether such obligations require the recognition of specific provisions or otherwise the disclosure
of related contingent liabilities. As of December 31, 2023 the Company did not identify any material
obligations arising from climate action.
TechnipFMC 185
NOTE 2. DISPOSAL OF MEASUREMENT SOLUTIONS BUSINESS
In November 2023, TechnipFMC announced an agreement to sell the Company’s Measurement Solutions
business (the “MSB”) to One Equity Partners (the "Buyer") for $205 million in cash, subject to customary
adjustments at the closing of the transaction. As part of the Surface Technologies segment, the MSB
encompasses terminal management solutions and metering products and systems and includes
engineering and manufacturing locations in North America and Europe.
We have recorded $5.2 million in transaction costs associated with the sale during 2023. These
transaction costs are included within impairment, restructuring and other expenses in our consolidated
statement of income. The assets and liabilities of MSB are classified as current assets and liabilities held
for sale as presented in our consolidated statement of financial position as of December 31, 2023.
(In millions)
Assets
Trade receivables, net of allowances
Contract assets
Inventories, net
Other current assets
Total current assets
Property, plant and equipment, net of accumulated depreciation
Intangible assets, net of accumulated amortization
Measurement Solutions business classified as assets held for sale
Liabilities
Accounts payable, trade
Contract liabilities
Other current liabilities
Total current liabilities
Accrued pension and other post-retirement benefits, less current portion
Other liabilities
Measurement Solutions business classified as liabilities held for sale
December 31, 2023
$
$
$
$
25.1
12.7
52.0
3.3
93.1
31.0
28.8
152.9
19.8
11.6
10.9
42.3
15.1
6.9
64.3
On March 11, 2024 we completed the sale of equity interests and assets of MSB to the Buyer.
Other assets and liabilities classified as held for sale
Included within assets classified as held for sale are other various assets totaling $2.2 million and
$18.5 million as of December 31, 2023 and 2022, respectively.
186 TechnipFMC
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
Loss from investment in Technip Energies
Foreign exchange losses
Total corporate items
Income before income taxes (b)
Year Ended December 31,
2023
2022
6,434.8 $
1,392.3
7,827.1 $
5,461.2
1,264.5
6,725.7
524.4 $
94.9
619.3 $
(143.0) $
47.2
(194.4)
—
—
(166.6)
(456.8)
162.5 $
359.3
43.1
402.4
(74.7)
19.3
(179.9)
(29.8)
(27.7)
(68.8)
(361.6)
40.8
$
$
$
$
$
$
(a) Corporate expense includes a non-recurring legal settlement charge for the year ended December 31, 2023, corporate staff
expenses, stock-based compensation expenses and other employee benefits.
(b) Includes amounts attributable to non-controlling interests.
Segment assets
(In millions)
Segment assets:
Subsea
Surface Technologies
Total segment assets
Corporate (a)
Total assets (b)
Year Ended December 31,
2023
2022
$
6,290.7 $
1,719.1
8,009.8
1,837.4
$
9,847.2 $
6,482.8
1,500.5
7,983.3
1,668.6
9,651.9
(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.
(b) The December 31, 2022 balances for contract loss provisions of $63.1 million have been reclassified from contract assets to current
provisions. See Note 21.
Other business segment information:
Capital Expenditures
Depreciation and
Amortization
Research and
Development Expense
Year Ended December 31,
(In millions)
Subsea
Surface Technologies
Corporate
Total
2023
2022
2023
2022
2023
2022
$
193.0 $
120.2 $
447.2 $
459.1 $
65.0 $
23.4
2.4
37.4
5.8
86.4
3.4
68.1
4.6
4.0
—
$
218.8 $
163.4 $
537.0 $
531.8 $
69.0 $
62.2
4.8
—
67.0
TechnipFMC 187
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
Brazil
United States
Norway
United Kingdom
Guyana
Angola
Ghana
Australia
United Arab Emirates
Mozambique
Saudi Arabia(1)
Canada
Malaysia
Indonesia
All other countries(1)
Total revenue
Year Ended December 31,
2023
2022
$
1,687.6 $
1,569.5
1,134.1
867.2
500.4
400.8
265.6
174.6
161.4
153.6
148.9
70.9
69.2
50.0
573.3
1,047.3
1,348.4
907.6
710.3
369.1
247.9
184.7
295.4
117.8
284.4
98.8
88.0
228.5
42.6
754.9
$
7,827.1 $
6,725.7
(1) The year ended December 31, 2022 sales amount for All other countries included $59.4 million of revenue delivered to Saudi
Arabia and accordingly, have been reclassified for the year ended December 31, 2022 to conform with presentation.
Property, plant and equipment, net by geography is as follows:
(In millions)
United Kingdom
Netherlands
Brazil
United States
Norway
All other countries
December 31,
2023
2022
$
714.7 $
380.7
352.3
318.9
227.1
314.3
741.6
371.9
306.4
405.8
225.3
348.1
Total property, plant and equipment, net
$
2,308.0 $
2,399.1
NOTE 4. LEASES
Lessee arrangements
The following table shows the summary of amounts relating to leases recognized in the consolidated
statements 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,
2023
2022
$
158.4 $
153.8
49.9
51.0
45.7
5.7
42.9
21.0
14.0
3.6
188 TechnipFMC
The above expenses relating to short term and variable payments are not included in lease liabilities.
The following table shows the carrying values 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,
2023
2022
2023
2022
$
85.1 $
92.5 $
602.3 $
57.5
10.5
5.3
52.1
7.8
1.4
66.5
53.7
17.5
$
158.4 $
153.8 $
740.0 $
608.5
88.8
27.2
8.7
733.2
Additions to the right-of-use assets during the year ended December 31, 2023 and 2022 were $115.9
million and $128.3 million, respectively.
The consolidated statements of financial position show the following amounts relating to lease liabilities:
(In millions)
Current lease liabilities
Non-current lease liabilities
Total lease liabilities
December 31,
2023
2022
$
$
149.0 $
705.3
854.3 $
186.7
685.8
872.5
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
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)
Year Ended December 31,
2023
2022
$
141.0 $
52.6
128.3
42.7
December 31,
2023
2022
$
196.4 $
149.5
116.6
100.5
84.9
584.2
1,232.1
377.8
$
854.3 $
188.6
151.7
121.7
98.2
85.2
640.4
1,285.8
413.3
872.5
(1) Includes the current portion of $149.0 million and $186.7 million for lease liabilities as of December 31, 2023 and 2022,
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 $277.3 million and $222.8 million for the year
ended December 31, 2023 and 2022, respectively.
TechnipFMC 189
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,
2023
2022
$
3.0 $
23.8
3.0
3.0
3.0
0.8
—
3.0
3.0
3.0
3.0
0.8
Total undiscounted cash flows
$
12.8 $
36.6
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 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 designs and manufactures products and systems, performs engineering,
procurement and project management and provides services used by oil and natural gas companies
involved in offshore exploration and production of oil and natural gas.
Systems and services may be sold separately, or as integrated systems and services offered within one
contract. Many of the systems and products TechnipFMC supplies for subsea applications are 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.
Revenue for engineering, procurement, construction and installation projects is principally generated
from long-term contracts with customers. We have determined these contracts generally have one
performance obligation as the delivered product is built to customer and/or field specifications. We
generally recognize revenue over time for such contracts as the customized products do not have an
alternative use for TechnipFMC and we have an enforceable right to payment plus a reasonable profit for
performance completed to date.
Our Subsea segment also performs an array of subsea services including (i) installation services, (ii) asset
management services (iii) product optimization, (iv) inspection, maintenance and repair services, and (v)
well access and intervention services, where revenue is generally earned through the execution of either
installation-type or maintenance-type contracts. For either contract-type, management has determined
that the performance of the service generally represents one single performance obligation. We have
determined that revenue from these contracts is recognized over time as the customer simultaneously
receives and consumes the benefit of the services.
Surface Technologies - Our Surface Technologies segment designs, manufactures and supplies
technologically advanced wellhead systems and pressure control products used in well completion and
stimulation activities for oilfield service companies. We also provide installation, flowback and other
services for exploration and production 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.
190 TechnipFMC
For contracts with a customized product or equipment performance obligation, the revenue is recognized
over time, as customized products do not have 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.
Commitments
TechnipFMC has commitments with customers and/or other beneficiaries (financial and insurance
institutions) relating to the fulfillment of performance obligations entered into by itself and/or by its
subsidiaries, associates and joint ventures in the event of non-performance and payment of any damages
arising from non-performance. Refer to Note 26 for details.
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, 2023 and 2022:
(In millions)
Latin America
Europe and Central Asia
North America
Africa
Asia Pacific
Middle East
Total revenue
Reportable Segments
Year Ended December 31,
2023
2022
Subsea
Surface
Technologies
Subsea
Surface
Technologies
$
2,182.9 $
125.8 $
1,460.1 $
1,927.4
1,064.2
920.8
331.3
8.2
198.5
574.1
49.1
95.2
349.6
1,550.1
780.6
865.6
687.5
117.3
137.4
166.7
552.0
37.6
97.2
273.6
$
6,434.8 $
1,392.3 $
5,461.2 $
1,264.5
The following table represents revenue by contract type for each reportable segment for the years ended
December 31, 2023 and 2022:
(In millions)
Services
Products
Lease
Total revenue
5.3 Contract balances
Year Ended December 31,
2023
2022
Subsea
Surface
Technologies
Subsea
Surface
Technologies
$
4,072.7 $
210.7 $
3,410.4 $
2,264.1
98.0
1,002.3
179.3
1,993.8
57.0
224.1
874.6
165.8
$
6,434.8 $
1,392.3 $
5,461.2 $
1,264.5
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
statements 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
TechnipFMC 191
value. Costs and estimated earnings in excess of billings on uncompleted contracts are generally
classified as current.
Contract Liabilities - We sometimes 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, 2023
and 2022, respectively:
(In millions)
Contract assets (1)
Contract (liabilities) (1)
Net contract (liabilities)
December 31,
2023
2022
$ change
% change
$
$
1,036.0 $
1,047.2 $
(1,470.4)
(1,142.7)
(434.4) $
(95.5) $
(11.2)
(327.7)
(338.9)
(1) %
29 %
355 %
(1) The December 31, 2022 balances for contract loss provisions of $63.1 million and $12.9 million have been reclassified from
contract assets and contract liabilities to current provisions, respectively. See Note 21.
The decrease in our contract assets from December 31, 2022 to December 31, 2023 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 client cash payments in advance.
In order to determine revenue recognized in the period from contract liabilities, we first allocate revenue
to the individual contract liability balance outstanding at the beginning of the period until the revenue
exceeds that balance. Any subsequent revenue we recognize increases our contract asset balance.
Revenue recognized for the years ended December 31, 2023 and 2022 that were included in the contract
liabilities balance as of December 31, 2022 and 2021 was $647.1 million and $607.4 million,
respectively.
In addition, net revenue recognized for the years ended December 31, 2023 and 2022 from our
performance obligations satisfied or partially satisfied in previous periods had a favorable impact of
$7.2 million and $160.8 million, respectively. Certain projects were materially impacted favorably for the
years ended December 31, 2023 and 2022 by negotiations of variable consideration of $39.1 million and
$110.6 million, respectively and were offset by individually immaterial net negative impact of
$31.9 million and net positive impact of $50.2 million, respectively.
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, 2023, the aggregate amount of the transaction price allocated to order backlog was
$13,231.0 million. TechnipFMC expects to recognize revenue on approximately 40.0% of the order
backlog through 2024 and 60.0% thereafter.
The following table details the consolidated order backlog for each business segment and represents the
estimated timing of recognition as of December 31, 2023:
(In millions)
Subsea
Surface Technologies
Total remaining unsatisfied performance obligations
2024
2025
Thereafter
$
$
4,812.0 $
3,411.0 $
3,941.1
483.8
133.0
450.1
5,295.8 $
3,544.0 $
4,391.2
192 TechnipFMC
The following table details the consolidated order backlog for each business segment as of December 31,
2022:
(In millions)
Subsea
Surface Technologies
Total remaining unsatisfied performance obligations
2023
2024
Thereafter
$
$
3,919.0 $
2,900.6 $
537.4
126.8
4,456.4 $
3,027.4 $
1,311.9
557.3
1,869.2
NOTE 6. EXPENSES BY NATURE, OTHER INCOME AND EXPENSE ITEMS, FINANCIAL INCOME AND
EXPENSES
6.1 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
6.2 Other income (expense), net
Other income (expense) is as following:
(In millions)
Net gain from disposal of property, plant and equipment
Legal settlement charges (1)
Other
Total other income (expense), net
(1) See Note 23 for further details
6.3 Financial income
Financial income consists of the following:
(In millions)
Interest income from treasury management
Financial income related to long-term employee benefit plans
Other
Financial income
Year Ended December 31,
2023
2022
$
1,492.1 $
1,394.1
396.9
11.5
158.4
378.6
1.7
4,817.5
$
7,256.7 $
339.3
14.6
153.8
378.0
4.7
4,179.9
6,464.4
Year Ended December 31,
2023
2022
13.3 $
(126.5)
(15.3)
(128.5) $
6.4
—
15.4
21.8
Year Ended December 31,
2023
2022
44.8 $
1.5
0.9
47.2 $
19.0
—
0.3
19.3
$
$
$
$
TechnipFMC 193
6.4 Financial expenses
Financial expenses consist of the following:
(In millions)
Interest expense on debt
Interest expense on leases
Other
Financial expenses
Financial expenses, net
6.5 Foreign exchange gain (loss)
Year Ended December 31,
2023
2022
$
(126.6) $
(49.9)
(17.9)
(194.4)
$
(147.2) $
(136.6)
(42.1)
(1.2)
(179.9)
(160.6)
Foreign exchange loss increased $97.8 million year-over-year comprised of losses of $166.6 million and
$68.8 million in 2023 and 2022, respectively. This increase is primarily driven by the devaluation of
Argentine peso and Angolan kwanza currencies that have limited derivative hedging markets, in addition
to statement of financial position remeasurement impacts.
NOTE 7. INCOME TAX
7.1 Income tax expense
The income tax expense recognized in the consolidated statements of income is $143.9 million and
$125.7 million in 2023 and 2022 respectively, explained as follows:
(In millions)
Current income tax expense
Deferred income tax credit
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 expense as recognized in the consolidated statements of other
comprehensive income
7.2 Income tax reconciliation
Year Ended December 31,
2023
2022
(185.7) $
41.8
(143.9) $
(134.6)
8.9
(125.7)
Year Ended December 31,
2023
2022
(19.9) $
0.8
(4.4)
(15.5)
(19.1) $
(19.9)
$
$
$
$
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)
Year Ended December 31,
2023
2022
Net income (loss) from continuing operations
$
18.6
$
Income tax expense
Income before income taxes
At TechnipFMC plc statutory income tax rate of 25.0%
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
Income tax expense as recognized in the consolidated statements of income
(143.9)
162.5
(40.6)
(155.1)
0.2
50.4
1.2
(143.9)
88.6 %
$
(143.9)
$
(84.9)
(125.7)
40.8
(7.8)
(83.0)
(5.1)
(31.1)
1.3
(125.7)
308.1 %
(125.7)
In 2023 our income tax expense as recognized in the consolidated statements of income had $155.1
million expense related to differences between TechnipFMC plc and foreign income tax rates. This
194 TechnipFMC
amount includes $77.6 million expense associated with undistributed earnings of foreign subsidiaries
that are not considered permanently reinvested.
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, 2022
Recognized
in Statement
of Income
Recognized
in Statement
of OCI
December
31, 2023
$
206.6 $
10.5 $
— $
217.1
23.2
18.4
13.9
4.4
3.0
—
(0.4)
(2.9)
(5.2)
(13.4)
(26.4)
(66.0)
(205.4)
8.0
(3.4)
156.7
9.0
4.3
(3.1)
55.9
(36.3)
(41.2)
(46.6)
(1.3)
(31.1)
(16.5)
—
—
—
—
—
—
—
—
(2.9)
—
3.7
—
—
31.2
15.0
170.6
13.4
7.3
(3.1)
55.5
(39.2)
(49.3)
(60.0)
(24.0)
(97.1)
(221.9)
Deferred income tax assets (liabilities), net
$
(50.2) $
64.9 $
0.8 $
15.5
(In millions)
Lease liability
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
Contract liabilities
Foreign exchange
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 $
— $
206.6
21.7
20.7
6.5
3.6
0.3
0.1
—
—
(2.9)
(6.4)
(26.9)
(69.9)
(170.5)
1.5
(6.8)
(6.9)
(0.6)
18.1
(0.1)
4.4
(13.4)
—
9.2
8.1
3.9
(34.9)
14.2 $
—
—
—
—
—
—
—
—
—
(8.0)
(7.6)
—
—
(15.6) $
23.2
13.9
(0.4)
3.0
18.4
—
4.4
(13.4)
(2.9)
(5.2)
(26.4)
(66.0)
(205.4)
(50.2)
Deferred income tax assets (liabilities), net
$
(48.8) $
As of December 31, 2023, the net deferred tax asset of $15.5 million is broken down into a deferred tax
asset of $148.5 million and a deferred tax liability of $133.0 million as recorded in the consolidated
statement of financial position. This position reflects a net increase in deferred tax assets from the prior
year net deferred tax liability position which is primarily related to the recognition of net tax losses in
Norway and Brazil jurisdictions, which were previously unrecognized. These changes are due to
improved forecast with material sources of future taxable income and significant improvement on the
Company’s profitability profile during the 2023 year thus informing the expected realizability of the net
tax losses.
TechnipFMC 195
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 consolidated
statement of financial position.
7.4 Tax loss carry-forwards and tax credits
As of December 31, 2023 and 2022, no deferred tax assets have been recognized in respect of U.S.
foreign tax credit carryforwards of $120.4 million and $136.5 million, which, if not utilized, will begin to
expire in 2024. 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 $0.8 million
in 2023 and $0.3 million in 2022, respectively.
As of December 31, 2023, we had $484.8 million of tax-effected net operating loss carryforwards with
approximately $22.2 million estimated to be utilized against an uncertain tax position and $314.3 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)
2024 – 2027
2028 – 2032
2033 – 2043
Non-Expiring
Net Operating
Loss
$
$
27.1
116.8
36.8
304.1
484.8
For the years ended December 31, 2023 and 2022, the uncertain tax position balances in the
consolidated statements of financial position amount to $68.8 million and $64.7 million, respectively, for
which $46.6 million and $36.3 million, respectively, relate to income taxes payable and $22.2 million
and $28.3 million, respectively relate to deferred incomes taxes. It is reasonably possible that within
twelve months, $6.9 million of assets for unrecognized tax benefits will be settled.
196 TechnipFMC
NOTE 8. EARNINGS PER SHARE
A calculation of the basic and diluted earnings (loss) is as follows:
(In millions, except per share data)
Net income (loss) from continuing operations attributable to TechnipFMC plc
Loss from discontinued operations attributable to TechnipFMC plc
Net income (loss) attributable to TechnipFMC plc
Weighted average number of shares outstanding
Dilutive effect of restricted stock units
Dilutive effect of performance shares
Total shares and dilutive securities
Basic and diluted earnings (loss) per share attributable to TechnipFMC plc:
Earnings (loss) per share from continuing operations attributable to TechnipFMC plc
Basic and diluted
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,
2023
2022
22.9 $
—
22.9 $
438.6
5.8
8.0
452.4
(110.3)
(26.4)
(136.7)
449.5
—
—
449.5
0.05 $
(0.25)
— $
(0.06)
0.05 $
(0.30)
$
$
$
$
$
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 income/(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 2023, the average annual share price
amounted to $16.78 and the closing price to $20.14. In 2022, the average annual share price amounted
to $8.43 and the closing price to $12.19.
For the years ended December 31, 2022, 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 years ended December 31, 2022, 8.9 million shares were anti-dilutive due to net loss position.
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:
(In millions of shares)
Share option awards
Total
Year Ended December 31,
2023
2022
0.8
0.8
1.5
1.5
TechnipFMC 197
NOTE 9. INVESTMENTS IN ASSOCIATES
Our investments in associates and joint ventures were as follows as of December 31, 2023 and 2022:
(In millions, except %)
Dofcon Brasil AS
Serimax Holdings SAS
Other
Investments in associates
December 31, 2023
December 31, 2022
Percentage
Owned
Carrying
Value
Percentage
Owned
Carrying
Value
50 % $
20 %
—
261.9
8.9
3.6
50 % $
20 %
—
312.8
8.6
3.6
$
274.4
$
325.0
Our income from investments in associates for the years ended December 31, 2023 and 2022 was $34.4
million and $44.6 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 2023 and 2022, we did not record any
impairments of our equity method investments.
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 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.
In June 2023, Dofcon Brasil AS declared a dividend of $170.0 million to its JV partners. The dividend
receivable was recorded within other current assets on our consolidated statement of financial position
until December 2023 when the Dofcon JV partners agreed and signed the agreement to convert their
outstanding dividend receivable into a long-term loan receivable from Dofcon. As a result of this
conversion, we converted our 50% share of this dividend receivable into a long-term loan receivable that
has a due date of June 26, 2028 and is included in other assets on our consolidated statement of
financial position as of December 31, 2023.
Dofcon Navegacao Ltda and Techdof Brasil AS have debts related to loans on its vessels. TechnipFMC and
DOF Subsea provide guarantees for the debts and our share of the guarantees were $380.9 million and
$441.0 million as of December 31, 2023 and 2022, respectively. During March 2023, DOF ASA
completed the process of restructuring, unrelated and outside of the joint venture, and DOF Services AS
is the new holding company of DOF Group. As a result of the restructure within DOF Group, the cross
default provisions ceased to exist and therefore waivers and consents are no longer required.
Accordingly, TechnipFMC has not recognized a liability related to its guarantees.
TechDof Brasil AS owns and operates the Skandi Buzios vessel. During June 2023, a fire occurred
onboard the vessel alongside Porto do Açu in Brazil. Repairs on the vessel have started during the fourth
quarter of 2023 and are progressing according to plan. The vessel is scheduled to be back in operation
during the second half of 2024. During our annual impairment review we assessed the carrying value of
the vessel was lower than the fair market value determined by broker valuations, and thus no
impairment has been recorded after consideration of the incident.
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 acquired non-controlling
interest in Magnora Offshore Wind AS, a partnership with Magnora ASA, in order to develop floating
offshore wind projects. As of December 31, 2023 and 2022, the investment balance was $3.0 million and
$3.4 million, respectively, which represented approximately 20% ownership.
198 TechnipFMC
Reconciliation of carrying value in TechnipFMC’s investment in associates and joint ventures is as
follows:
(In millions)
Carrying value of investments as of January 1
Acquisitions
Share of income of associates
Distributed dividends
Other comprehensive income
Net foreign exchange differences and other
2023
2022
$
325.0 $
—
34.4
(85.2)
—
0.2
Carrying value of investments as of December 31
$
274.4 $
292.4
3.0
44.6
(12.9)
0.5
(2.6)
325.0
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)(1)
Other non-current liabilities(1)
Total non-current liabilities (1)
Financial current liabilities (excluding trade payables)(1)
Other current liabilities(1)
Total current liabilities(1)
Total equity and liabilities
$
$
$
Dofcon
December 31,
2023
2022
146.9 $
100.9
247.8
1,357.0
1,604.8 $
523.9 $
894.6
43.2
937.8
109.6
33.5
143.1
67.8
95.0
162.8
1,515.1
1,677.9
625.6
652.2
100.3
752.5
271.5
28.3
299.8
$
1,604.8 $
1,677.9
(1) Certain balances as of December 31, 2022 were reclassified between current and non-current.
(In millions)
Data at 100%
Revenue
Depreciation and amortization
Interest income
Interest expense
Income tax benefit
Net income for the period
Other comprehensive income (loss)
Total comprehensive income
Dofcon
December 31,
2023
2022
$
336.0 $
(91.9)
18.5
(47.9)
(46.4)
68.3 $
1.1
69.4 $
$
$
308.4
(89.8)
12.8
(51.6)
(33.5)
99.4
(1.7)
97.7
TechnipFMC 199
(In millions)
Data at 100%
Carrying value of investment as of January 1
Net income for the period
Other comprehensive income (loss)
Distributed dividends
Carrying value of investment as of December 31
TechnipFMC’s share in %
TechnipFMC’s share in investment
Carrying value of TechnipFMC's investment
Dofcon
2023
2022
$
$
$
$
625.6
$
68.3
1.1
(171.1)
523.9
$
50.0 %
261.9
261.9
$
$
553.8
99.4
(1.7)
(25.9)
625.6
50.0 %
312.8
312.8
In addition to the interest in Dofcon disclosed above, TechnipFMC also has interests in a number of
individually immaterial associates and joint ventures 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,
2023
2022
$
$
$
$
106.4 $
70.8
177.2 $
60.1 $
24.1
93.0
177.2 $
Summarized statement of total comprehensive income (at 100%) are presented below:
(In millions)
Data at 100%
Revenue
Depreciation and amortization
Interest expense
Income tax benefit
Loss for the period
Other comprehensive loss
Total comprehensive loss
Year Ended December 31,
2023
2022
$
$
$
128 $
(8.1)
(6.3)
(1.5)
(0.3) $
(3.5)
(3.8) $
105.0
80.2
185.2
59.8
20.6
104.8
185.2
122.1
(10.3)
(4.4)
(0.9)
(26.3)
(5.6)
(31.9)
200 TechnipFMC
NOTE 10. PROPERTY, PLANT AND EQUIPMENT
The following tables include the carrying value of property, plant and equipment, including costs,
accumulated depreciation and impairment losses by classes of assets:
(In millions)
Net book value as of
December 31, 2021
Costs
Accumulated depreciation
Accumulated impairment
Net book value as of
December 31, 2022
Costs
Accumulated depreciation
Accumulated impairment
Net book value as of
December 31, 2023
Land
Buildings
Vessels
Machinery
and
Equipment
Assets under
construction
Other
Total
$
72.8 $
371.5 $ 1,159.6 $
817.4 $
108.5 $
106.8 $ 2,636.6
77.2
(7.7)
(8.2)
593.6
(150.1)
(103.0)
2,386.1
(802.1)
(555.4)
2,244.1
(1,071.1)
(423.3)
116.7
335.2
5,752.9
—
(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
78.9
(7.9)
(8.0)
604.2
(174.2)
(106.0)
2,362.3
(815.9)
(566.4)
2,346.2
(1,248.8)
(419.1)
157.9
362.4
5,911.9
—
(1.1)
(242.0)
(2,488.8)
(14.5)
(1,115.1)
$
63.0 $
324.0 $
980.0 $
678.3 $
156.8 $
105.9 $ 2,308.0
Property, plant and equipment is reviewed for impairment whenever events or changes in circumstances
indicate the carrying values may not be recoverable. We did not record any material impairments of
property, plant and equipment in 2023 and 2022.
A reconciliation of the carrying value 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, 2021
Additions
Disposals
Depreciation expense for the year
Impairment
Net foreign exchange differences
Other
Net book value as of December
31, 2022
Additions
MSB classified as held for sale
Disposals
Depreciation expense for the year
Impairment
Net foreign exchange differences
Other
Net book value as of December
31, 2023
$
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
—
—
(5.4)
(0.4)
—
0.8
6.7
5.3
—
(14.2)
(19.0)
(2.5)
5.6
8.3
51.2
—
(43.9)
(97.0)
—
31.9
9.2
93.2
(29.4)
(15.8)
(154.3)
0.9
13.4
20.6
67.2
(1.6)
3.2
(1.6)
—
5.5
(30.3)
11.6
—
(0.8)
(16.4)
—
6.2
0.7
228.5
(31.0)
(76.9)
(288.7)
(1.6)
63.4
15.2
$
63.0 $
324.0 $
980.0 $
678.3 $
156.8 $ 105.9 $ 2,308.0
TechnipFMC 201
NOTE 11. GOODWILL AND INTANGIBLE ASSETS, NET
11.1 Intangible assets, net
The following tables include the carrying value of intangible assets, including costs, accumulated
amortization and impairment losses by classes of assets:
(In millions)
Acquired
Technology
Customer
Relationships
Trade
names
Licenses,
Patents and
Trademarks
Software
Other
Total
Net book value as of December 31, 2021 $
116.1 $
142.5 $ 475.1 $
3.1 $ 23.4 $ 53.5 $ 813.7
Costs
Accumulated amortization
Accumulated impairment
240.0
285.4
632.1
68.9
109.7
71.6
1,407.7
(146.9)
(171.6)
(189.5)
(67.7)
(91.8)
(16.8)
(684.3)
—
—
—
—
—
(7.4)
(7.4)
Net book value as of December 31, 2022 $
93.1 $
113.8 $ 442.6 $
1.2 $ 17.9 $ 47.4 $ 716.0
Costs
Accumulated amortization
Accumulated impairment
230.0
285.4
597.4
68.9
110.9
48.9
1,341.5
(163.2)
(200.0)
(210.3)
(68.9)
(96.0)
5.9
(732.5)
—
—
—
—
—
(7.4)
(7.4)
Net book value as of December 31, 2023 $
66.8 $
85.4 $ 387.1 $
— $ 14.9 $ 47.4 $ 601.6
A reconciliation of the carrying value of intangible assets is as follows:
(In millions)
Net book value as of December 31, 2021 $
Additions
Amortization charge for the year
Net foreign exchange differences
Other
Acquired
Technology
Customer
Relationships
Trade names
Licenses,
Patents and
Trademarks
Software
Other
Total
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)
Net book value as of December 31, 2022 $
93.1 $
113.8 $
442.6 $
1.2 $ 17.9 $ 47.4 $ 716.0
Additions
MSB classified as held for sale
Amortization charge for the year
Net foreign exchange differences
—
(3.3)
(23.0)
—
—
—
(28.4)
—
—
(23.9)
(31.9)
0.3
—
—
1.2
—
1.2
(0.1)
(1.5)
(28.8)
(1.2)
(4.0)
(1.2)
(89.7)
—
(0.1)
2.7
2.9
Net book value as of December 31, 2023 $
66.8 $
85.4 $
387.1 $
— $ 14.9 $ 47.4 $ 601.6
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 values of goodwill by reporting segment are as follows:
December 31, 2021
December 31, 2022
December 31, 2023
Surface
Technologies
Total
$
$
140.9 $
140.9
140.9 $
140.9
140.9
140.9
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.
202 TechnipFMC
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, 2023 and 2022 in our non-US Surface
Technologies businesses. The recoverable amount over carrying value for our non-US Surface
Technologies businesses was approximately 50% of its carrying value as of October 31, 2023. No
reasonably possible change in any of the estimates would cause the non-US Surface Technologies
businesses carrying value to exceed its recoverable amount.
The following table presents the discount rates used by management in determining the recoverable
amount of our Surface Technologies segments for the years ended December 31, 2023 and 2022 as:
Risk-adjusted post-tax discount rate
Assumptions
Year Ended December 31,
2023
14.6%
2022
14.1%
The assumptions considered were the long-term growth expectation in the business, cost and margin,
however these were not considered key assumptions given the overall value of the goodwill and
significant headroom.
NOTE 12. OTHER NON-CURRENT ASSETS
Other non-current assets consisted of the following:
(In millions)
December 31,
2023
2022
Non-current financial assets at amortized cost, gross
$
130.3 $
104.2
Dofcon loan receivable (Note 9)
Trade receivables - non-current
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
85.0
47.4
(3.0)
259.7
2.1
24.3
$
286.1 $
—
—
0.3
104.5
1.9
19.8
126.2
TechnipFMC 203
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,
2023
2022
723.8 $
227.8
951.6 $
1,021.3
35.8
1,057.1
570.5 $
480.3
40.1
28.3
51.9
7.0
6.0
42.4
89.0
59.2
6.3
—
247.8
951.6 $
379.9
1,057.1
4.7 $
223.1
227.8 $
21.7
14.1
35.8
$
$
$
$
$
$
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.
Included within the balance of Other cash and cash equivalents as of December 31, 2023 were
$211.0 million in the Wells Fargo Govt. Money Market Fund, $10.0 million in an account at HSBC for
Mutual Funds and $1.7 million in various fixed deposit short-term investments accruing interest at an
average of 7.56% per year.
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 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, 2023 and 2022 were determined as follows for both trade receivables
and contract assets:
204 TechnipFMC
(In millions)
Gross amount
Opening loss allowance
(Increase) decrease in loss allowance
Used allowance reversals
Unused allowance reversals
Effects of foreign exchange and other
Closing loss allowance
Total, net
December 31,
2023
2022
Trade
Receivables
Contract
Assets
Trade
Receivables
Contract
Assets (1)
$
1,172.6 $
1,037.4 $
1,000.0 $
1,043.7
(31.5)
(3.0)
—
—
—
(34.5)
3.5
(1.9)
—
—
(3.0)
(1.4)
(29.0)
(5.4)
3.2
11.3
(11.6)
(31.5)
1.9
—
—
—
1.6
3.5
$
1,138.1 $
1,036.0 $
968.5 $
1,047.2
(1) The December 31, 2022 balances for contract loss provisions of $63.1 million have been reclassified from contract assets to
current provisions. See Note 21.
See Note 30 for further details 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,
2023
2022
$
$
401.3 $
148.2
557.2
317.4
152.0
583.7
1,106.7 $
1,053.1
All amounts in the table above are reported net of obsolescence reserves of $99.7 million and $108.2
million as of December 31, 2023 and 2022, respectively. Inventories recognized as expense during the
years ended December 31, 2023 and 2022, respectively, amounted to $2,915.6 million and $2,594.3
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,
2023
2022
$
9.1 $
9.1
196.0
96.8
83.5
1.3
11.3
27.4
416.3
$
425.4 $
12.4
12.4
185.6
138.9
61.9
15.7
12.3
24.1
438.5
450.9
TechnipFMC 205
NOTE 17. STOCKHOLDERS’ EQUITY
17.1 Changes in TechnipFMC’s ordinary shares and treasury shares
As of December 31, 2023 and 2022, TechnipFMC’s share capital was 432,847,108 ordinary shares and
442,208,014 ordinary shares, respectively.
The movements in share capital were as follows:
(Number of shares in millions)
December 31, 2021
Stock awards
Shares repurchased and cancelled
December 31, 2022
Stock awards
Shares repurchased and cancelled
December 31, 2023
17.2 Dividends
Ordinary
Shares Issued
450.7
1.6
(10.1)
442.2
3.0
(12.3)
432.9
In July 2023, the Company announced the initiation of a quarterly cash dividend and stated its intent to
pay dividends on a quarterly basis. On July 25, 2023 and October 24, 2023, Board of Directors
authorized and declared a quarterly cash dividend of $0.05 per share. The cash dividends paid during
the years ended December 31, 2023, 2022 and 2021 were $43.5 million, nil and nil, respectively.
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 representative of an 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”. Therefore, we are not permitted to pay dividends out of share capital, which
includes share premium.
The 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.
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.
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. On July 26, 2023, the Board of
Directors authorized additional share repurchase of up to $400.0 million. Together with the existing
program, the Company’s total share repurchase authorization was increased to $800.0 million of our
outstanding ordinary shares under our share repurchase program. Pursuant to this share repurchase
program, we repurchased $205.1 million of ordinary shares during the year ended December 31, 2023.
Since the initial share repurchase authorization in July 2022, we have purchased an aggregate amount of
$305.3 million of ordinary shares through December 31, 2023. Based upon the remaining repurchase
authority of $494.7 million and the closing stock price as of December 31, 2023, approximately
24.6 million ordinary shares could be subject to repurchase. All shares repurchased were immediately
cancelled.
206 TechnipFMC
As of December 31, 2023, 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
1,325.4 $
20.27
—
We had no unregistered sales of equity securities during the years ended December 31, 2023 and 2022.
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)
12.2 $
(783.3) $
(839.6) $
(4.9) $
(844.5)
Cash Flow
Hedges (1)
$
(68.5) $
69.9
37.9
(26.6)
81.2
(4.1)
77.1
(In millions)
December 31, 2021
Net gain/(loss) before
reclassification to
statement of income, net
of tax
Reclassification to
statement of income, net
of tax
December 31, 2022
$
(33.9) $
50.1 $
(809.9) $
(35.3)
—
—
(35.3)
(793.7) $
—
(9.0) $
(35.3)
(802.7)
Net gain/(loss) before
reclassification to
statement of income, net
of tax
Reclassification to
statement of income, net
of tax
30.9
(28.5)
107.4
109.8
3.8
113.6
7.1
—
—
7.1
—
7.1
December 31, 2023
$
4.1 $
21.6 $
(702.5) $
(676.8) $
(5.2) $
(682.0)
(1) Recorded under this heading is the effective portion of the change in fair value of the derivative financial instruments qualified as
cash flow hedging.
17.5 Non-controlling interests
Non-controlling interests amounting to $35.4 million and $36.5 million as of December 31, 2023 and
2022, respectively, did not represent a material component of TechnipFMC’s consolidated financial
statements in the years ended December 31, 2023, and 2022.
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.
TechnipFMC 207
The exercise price for options is determined by the Committee but cannot be less than the fair market
value of our ordinary shares at the grant date. Restricted share and performance share unit grants
generally vest after three years of service.
Under the Plan, our Board of Directors has the authority to grant non-employee directors share options,
restricted shares, restricted share units and performance shares. Unless otherwise determined by our
Board of Directors, awards to non-employee directors generally vest one year from the date of grant. 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, 2023, outstanding awards to active and retired non-employee directors
included 101.0 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,
2023
2022
$
45.8 $
10.1
40.5
8.8
As of December 31, 2023 and 2022, 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,
2023
2022
43.4 $
0.93
52.6
1.26
(Shares in thousands)
Non-vested as of January 1
Granted
Vested
Cancelled/forfeited
Non-vested as of December 31
2023
2022
Weighted-
Average
Grant Date Fair
Value
Shares
Weighted-
Average
Grant Date Fair
Value
Shares
9,721.7 $
1,778.1 $
(4,143.3) $
(438.8) $
6,917.7 $
7.81
14.06
7.35
8.47
9.65
9,589.5 $
2,874.1 $
(2,193.8) $
(548.1) $
9,721.7 $
11.35
7.89
16.57
7.99
7.81
The total grant date fair value of restricted stock share units vested during the years ended
December 31, 2023 and 2022 was $30.5 million and $36.4 million, respectively.
208 TechnipFMC
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, 2022, performance is based on results of return on invested capital
(50%) and total shareholder return (“TSR”) (50%).
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,
2023
2022
$
21.70
$
11.34
69.4 %
4.4 %
3.0
65.9 %
1.8 %
3.0
(1) The weighted-average fair value was based on performance share units granted during the period.
(2) Expected volatility is based on normalized historical volatility of our shares over a preceding period commensurate with the
expected term of the performance share units.
(3) The risk-free rate for the expected term of the performance share units is based on the U.S. Treasury yield curve in effect at the
time of grant.
(4) For awards subject to service-based vesting, due to the lack of historical exercise and post-vesting termination patterns of the post-
Merger employee base, the expected term was estimated using a simplified method for all awards granted in 2023, 2022 and 2021.
A summary of the non-vested performance share units' activity is as follows:
(Shares in thousands)
Balance as of December 31, 2021
Granted
Cancelled/forfeited
Balance as of December 31, 2022
Granted
Cancelled/forfeited
Balance as of December 31, 2023
Weighted
Average Grant
Date Fair Value
Shares
2,309.6 $
2,427.0 $
(223.6) $
4,513.0 $
1,291.6 $
(324.9) $
5,479.7 $
13.26
9.49
11.07
10.44
17.86
11.85
12.11
The total grant date fair value of performance shares vested during years ended December 31, 2023 and
2022 was nil and nil, 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 net income (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, 2023 and 2022.
TechnipFMC 209
The following is a summary of share option activity during year ended December 31, 2023:
(Shares in thousands)
Balance as of December 31, 2022
Exercised
Cancelled
Balance as of December 31, 2023
Exercisable as of December 31, 2023
Weighted
average
exercise price
Weighted
average
remaining life
Shares
1,441.2 $
(58.7) $
(57.1) $
1,325.4 $
1,325.4 $
20.31
16.46
25.16
20.27
20.27
5.3
—
—
4.3
4.3
The aggregate intrinsic value of stock options outstanding and stock options exercisable as of
December 31, 2023 was both $1.4 million.
Cash received from the share option exercises was $1.1 million and nil during each of the years ended
December 31, 2023 and 2022. The total intrinsic value of share options exercised during each of the
years ended December 31, 2023 and 2022 was $0.3 million and nil, respectively. 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, 2023:
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 $)
519.3
676.0
130.1
1,325.4
5.2
3.6
3.9
4.3
$
$
$
$
16.46
22.22
25.29
20.27
519.3 $
676.0 $
130.1 $
1,325.4 $
16.46
22.22
25.29
20.27
The following summarizes significant ranges of outstanding and exercisable 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
210 TechnipFMC
NOTE 19. DEBT
19.1 Debt
Short-term debt and current portion of long-term debt consisted of the following:
(In millions)
December 31,
2023
2022
Carrying value
Fair Value
Carrying value
Fair Value
3.15% 2013 Private placement due 2023
$
— $
— $
138.6 $
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:
—
135.9
17.9
—
135.9
17.9
133.4
127.5
19.3
136.6
131.6
127.5
19.3
$
153.8 $
153.8 $
418.8 $
415.0
(In millions)
December 31, 2023
December 31, 2022
Carrying value
Fair Value
Carrying value
Fair Value
5.75% 2020 Private placement due 2025
$
219.9 $
224.3
$
211.6 $
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
3.15% 2013 Private placement due 2023
3.15% 2013 Private placement due 2023
Total short-term debt and current portion of long-
term
200.6
82.9
108.1
108.3
245.3
965.1
153.8
—
—
153.8
203.2
78.2
92.7
85.0
245.3
928.7
153.8
—
—
153.8
199.7
80.0
104.1
104.4
299.5
999.3
146.8
138.6
133.4
418.8
Total debt
$
1,118.9 $
1,082.5
$
1,418.1 $
217.4
199.8
76.7
81.2
73.0
299.5
947.6
146.8
136.6
131.6
415.0
1,362.6
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 statements of financial position. The deferred debt issuance costs are
amortized to interest expense over the term of the Revolving Credit Facility.
On April 24, 2023, we entered into a fifth amendment (the “Amendment No. 5”) to the Revolving Credit
Facility (as amended, the “Credit Agreement”), dated February 16, 2021, which increases the
commitments available to the Company to $1.25 billion and extends the term to five years from the date
of the Amendment No. 5. The Credit Agreement also provides for a $250.0 million letter of credit sub-
facility.
Availability of borrowings under the Credit Agreement is reduced by the outstanding letters of credit
issued against the facility. As of December 31, 2023, there were $54.2 million letters of credit
outstanding and availability of borrowings under the Credit Agreement was $1,195.8 million.
Borrowings under the Credit Agreement bear interest at the following rates, plus an applicable margin,
depending on currency:
•
U.S. dollar-denominated loans bear interest, at the Company’s option, at a base rate or an
adjusted rate linked to the Secured Overnight Financing Rate (“Adjusted Term SOFR”); and
TechnipFMC 211
•
Euro-denominated loans bear interest on an adjusted rate linked to the Euro interbank offered
rate (“EURIBOR”).
The applicable margin for borrowings under the Credit Agreement ranges from 2.50% to 3.50% for Term
Benchmark (as defined in the Credit Agreement) loans and 1.50% to 2.50% for base rate loans, depending
on a total leverage ratio. The Credit Agreement is subject to customary representations and warranties,
covenants, events of default, mandatory repayment provisions and financial covenants.
Letter of Credit Facility - On April 24, 2023, the Company entered into a new $500 million five-year
senior secured performance letters of credit facility (the “Performance LC Credit Agreement”). The
commitments under the Performance LC Credit Agreement may be increased to $1.0 billion, subject to
the satisfaction of certain customary conditions precedent. The Performance LC Credit Agreement
permits the Company and its subsidiaries to have access to performance letters of credit denominated in
a variety of currencies to support the contracting activities with counterparties that require or request a
performance or similar guarantee. It contains substantially the same customary representations and
warranties, covenants, events of default, mandatory repayment provisions and financial covenants as the
Credit Agreement and benefits from the same guarantees and security as the Credit Agreement on a pari
passu basis.
Upon the occurrence of an Investment Grade Debt Rating by any two of three Rating Agencies and the
satisfaction of certain other conditions precedent, the collateral securing the Credit Agreement, the
Performance LC Credit Agreement, and the guarantees provided by certain subsidiaries of the Company
shall be automatically released (“fall-away”) and certain negative covenants will no longer apply to the
Company.
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 statements of financial position. 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.
As of December 31, 2023, 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 senior
notes (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.
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% which matured
during October 2023 (the “Tranche B 2023 Notes) and €125.0 million bearing interest of 3.15% which
also matured during 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.
During 2023, we repaid the outstanding $270.2 million of our 3.15% October 2023 “Tranche B & C 2023
Notes”.
212 TechnipFMC
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% which
matured in 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 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 the outstanding $161.0 million of our 3.40% June 2022 "Tranche A 2022 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 structured entity, which is fully consolidated in our consolidated
financial statements. The transaction was funded through debt of $96.2 million and expiring on January
8, 2031.
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. These agreements
expired in January 2023 and were renewed until January 13, 2025, with an extension option for an
additional five years. As a result we have a financial liability of $51.6 million and 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.
19.2 Secured financial debts excluding finance leases
Secured debts are as follows:
(In millions)
Guarantee
December 31,
2023
Without
Guarantee
Total
Guarantee
2022
Without
Guarantee
Current facilities and other
$
— $
17.7 $
17.7 $
— $
122.3 $
Short-term portion of long-term debt
24.2
111.9
136.1
22.7
273.8
Total
122.3
296.5
Total short-term debt and current
portion of long-term
Total long-term debt, less current portion
and finance leases
24.2
129.6
153.8
22.7
396.1
418.8
374.0
591.1
965.1
338.0
661.3
999.3
Total debt excluding finance leases
$
398.2 $
720.7 $ 1,118.9 $
360.7 $ 1,057.4 $ 1,418.1
TechnipFMC 213
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 on the consolidated statement of financial position and recognize changes in that funded status
on the consolidated statements of other 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, 98.5% 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.
Non-US 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 $0.3 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 2024. All of the
contributions are expected to be in the form of cash.
214 TechnipFMC
The following table summarizes expected benefit payments from our various pension and post-
retirement benefit plans through 2031 as of December 31, 2023. Actual benefit payments may differ
from expected benefit payments.
(In millions)
2024
2025
2026
2027
2028-2033
Total
Expected benefit
payments
$
$
54.7
54.6
55.0
59.0
378.3
601.6
20.2 Remeasurement effects recognized in the consolidated other comprehensive income (OCI)
(In millions)
December 31,
2023
2022
Actuarial loss due to experience on defined benefit obligation
$
19.5 $
13.9
Actuarial (gain) loss 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
(6.3)
25.7
(0.2)
(3.2)
Actuarial (income) loss recognized in other comprehensive income
$
35.5 $
1.1
(384.9)
319.6
1.1
(49.2)
20.3 Defined benefit asset (liability) recognized in the consolidated statements of financial position
As of December 31, 2023, the net defined benefit liability of $127.5 million is comprised of a defined
benefit asset of $55.4 million and defined benefit liability of $182.9 million as recognized on the
consolidated statement of financial position. As of December 31, 2022, there was a gross defined benefit
liability of $105.9 million recognized on the consolidated statement of financial position.
TechnipFMC 215
The amounts recognized on the consolidated statement of financial position and the movements in the
net defined benefit obligation over the year are as follows:
(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 gain/loss recognized in other comprehensive income
Actuarial gain on (defined benefit obligation) / loss on (plan assets)
- Experience
- Financial assumptions
- Demographic assumptions
Actuarial loss on plan assets
Change in irrecoverable surplus other than interest
Contributions and benefits paid
Contributions by employer
Benefits paid by employer
Benefits paid from plan assets
Exchange difference and other
December 31, 2022
(In millions)
December 31, 2022
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 gain/loss recognized in other comprehensive income
Actuarial loss on (defined benefit obligation) / gain on (plan assets)
- Experience
- Financial assumptions
- Demographic assumptions
Actuarial gain on plan assets
Change in irrecoverable surplus other than interest
Contributions and benefits paid
Contributions by employer
Benefits paid by employer
Benefits paid from plan assets
Exchange difference
Other
MSB benefit obligations classified as held for sale
December 31, 2023
Defined
Benefit
Obligation
Fair Value of
Plan Assets
Net Defined
Benefit
Obligation
$
1,293.5 $
1,132.6 $
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)
160.9
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
Defined
Benefit
Obligation
Fair Value of
Plan Assets
Net Defined
Benefit
Obligation
$
842.1 $
736.2 $
51.9
3.4
43.6
0.4
4.5
38.9
38.9
19.5
25.7
(6.3)
—
—
(54.8)
—
(4.6)
(50.2)
19.0
(1.4)
(15.1)
38.5
—
38.5
—
—
3.4
3.4
—
—
—
0.2
3.2
(44.5)
5.7
—
(50.2)
20.3
(0.8)
—
$
880.6 $
753.1 $
105.9
13.4
3.4
5.1
0.4
4.5
35.5
35.5
19.5
25.7
(6.3)
(0.2)
(3.2)
(10.3)
(5.7)
(4.6)
—
(1.3)
(0.6)
(15.1)
127.5
216 TechnipFMC
In 2023 and 2022, the discounted defined benefit obligation included $818.0 million and $787.0 million
for funded plans and $62.4 million and $54.6 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, 2023 and 2022.
(In millions)
December 31, 2022
Defined Benefit Obligation
Fair Value of Plan Assets
Net Defined Benefit (Asset) Obligation
December 31, 2023
Defined Benefit Obligation
Fair Value of Plan Assets
Net Defined Benefit (Asset) Obligation
United Kingdom United States
Other
Total
$
$
$
$
293.0 $
500.6 $
48.0 $
353.7
377.3
4.7
(60.7) $
123.3 $
43.3 $
316.3 $
518.4 $
45.6 $
369.8
371.5
11.5
(53.5) $
146.9 $
34.1 $
841.6
735.7
105.9
880.3
752.8
127.5
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(1)
United States
December 31, 2023
Bonds
Shares
Real Estate
Cash
Other
Total
— %
11 %
21 %
— %
74 %
54 %
— %
13 %
— %
— %
3 %
2 %
100 %
— %
23 %
100 %
100 %
100 %
December 31, 2022
Bonds
Shares
Real Estate
Cash
Other
Total
— %
11 %
8 %
— %
63 %
83 %
— %
13 %
— %
— %
13 %
10 %
100 %
— %
— %
100 %
100 %
101 %
(1) Plan asset percentages as of December 31, 2022 were reclassified between bonds, shares and real estate.
20.4 Actuarial assumptions
Eurozone
United Kingdom
United States
December 31, 2023
Future Salary
Increase
(above Inflation
Rate)
3.0% to 3.5%
N/A
N/A
Discount Rate
3.2 %
4.7 %
5.1 %
Healthcare Cost
Increase Rate
Inflation
Rate
NA
NA
NA
2.2 %
2.7% to 3.2%
2.5
TechnipFMC 217
December 31, 2022
Future Salary
Increase
(above Inflation
Rate)
Discount Rate
Healthcare Cost
Increase Rate
Inflation
Rate
3.7% to 3.8%
2.2% to 3.5%
4.9 %
5.4 %
N/A
4.0 %
NA
NA
NA
2.2% to 2.3%
2.9% to 3.4%
NA
Eurozone
United Kingdom
United States
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, 2023
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
26
21
21
29
24
23
28
22
21
31
25
23
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
(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, 2023 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, 2023
remain unchanged compared to 2022. A 25% decrease in the discount rate would increase the defined
benefit obligation by approximately 2.8%. A 25% increase in the discount rate would decrease the
defined benefit obligation by approximately (3.0)%. A one-year decrease in the life expectancy would
decrease the defined benefit obligation by approximately (2.9)%. A one year increase in the life
expectancy would increase the defined benefit obligation by approximately 2.5%. A 25% increase in
inflation rates would increase the defined benefit obligation by 0.9%. A 25% decrease in inflation rates
would decrease the defined benefit obligation by (0.9)%.
218 TechnipFMC
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, 2023 and 2022, our liability for the Non-Qualified Plan was $23.8 million and $20.2
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, 2023 and 2022, we had investments for the Non-Qualified Plan
totaling $23.0 million and $18.5 million at fair market value, respectively.
We recognized expense of $21.1 million and $19.8 million for matching contributions to these plans in
2023 and 2022, respectively. Additionally, we recognized expense of $4.4 million and $8.7 million for
non-elective contributions in 2023 and 2022, respectively.
NOTE 21. PROVISIONS (CURRENT AND NON-CURRENT)
Movements in each class of provision as of December 31, 2022 are as follows:
(In millions)
As of
December
31, 2021
Increase
Used
Reversals
Unused
Reversals
Foreign
exchange
differences
Other
As of
December
31, 2022
Restructuring obligations
$
12.1 $
1.2 $
(4.0) $
(7.0) $
(0.2) $
(0.4) $
Other non-current provisions
Total non-current provisions
Contingencies related to
contracts
Tax
Litigation (1)
Restructuring obligations
Contract loss provision (3)
Other current provisions (2)
Total current provisions
Total provisions
5.2
17.3
33.4
18.5
103.2
20.3
86.5
102.1
1.2
2.4
20.5
2.9
9.5
2.6
125.8
90.3
(3.6)
(7.6)
(0.1)
(7.1)
(10.6)
(17.8)
(0.1)
(9.8)
(14.2)
(136.3)
(105.2)
(1.5)
(6.6)
(1.5)
—
(18.2)
(45.6)
(52.7) $
0.1
(0.1)
(5.0)
(1.7)
2.2
0.7
—
2.1
1.6
1.2
(7.0)
—
—
0.5
—
0.5
1.7
4.4
6.1
13.5
18.1
98.5
8.4
76.0
71.6
364.0
381.3 $ 254.0 $
251.6
(276.2)
(283.8) $
$
(1.7)
(1.8) $
(6.0)
(4.8) $
286.1
292.2
TechnipFMC 219
Movements in each class of provision as of December 31, 2023 are as follows:
(In millions)
As of
December
31, 2022
Increase
Used
Reversals
Unused
Reversals
Foreign
exchange
differences
Other
As of
December
31, 2023
Restructuring obligations
$
1.7 $
0.9 $
(1.4) $
— $
(0.1) $
(0.5) $
Other non-current provisions
Total non-current provisions
Contingencies related to
contracts
Tax
Litigation (1)
Restructuring obligations
Contract loss provision (3)
Other current provisions (2)
Total current provisions
4.4
6.1
13.5
18.1
98.5
8.4
76.0
71.6
286.1
0.3
1.2
6.8
—
21.3
14.5
51.2
132.2
226.0
(0.2)
(1.6)
(0.4)
(9.4)
(71.9)
(7.8)
(87.6)
(80.8)
(257.9)
(0.1)
(0.1)
(3.4)
(0.3)
(1.7)
(0.6)
—
(3.3)
(9.3)
0.2
0.1
—
(0.5)
(0.3)
(0.2)
0.6
2.5
—
—
1.3
4.1
—
—
0.1
—
16.8
16.7
Total provisions
$
292.2 $
227.2 $
(259.5) $
(9.4) $
4.2 $ 16.2 $
0.6
4.6
5.2
16.0
9.0
48.7
14.6
39.6
137.8
265.7
270.9
(1) Litigation - Includes provision of $70.0 million for the year ended December 31, 2022, regarding the investigation by the French
authorities (Parquet National Financier) related to offshore platform projects awarded to Technip S.A. between 2007-2008 in West
Africa. See detailed description below in section Litigation in Note 21.
(2) Other current provisions - The majority of this balance is related to our annual bonus plan of $136.2 million and $70.8 million as of
December 31, 2023 and 2022, respectively.
(3) Contract loss provisions - The December 31, 2022 balances for contract loss provisions of $63.1 million and $12.9 million have been
reclassified from contract assets and contract liabilities to current provisions, respectively. The December 31, 2021 balances for
contract loss provisions of $4.4 million and $82.1 million have been reclassified from contract assets and contract liabilities to current
provisions, respectively. Contract provisions recognized in relation to an IFRS 15 contract should be presented as provisions, and not as
contract liabilities, as they would not meet the definition of a contract liability as per IFRS 15.
The accounting policy principles utilized to evaluate the amounts and types of provisions for liabilities
and charges are described in Note 1. We have provisions of the following nature:
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.
Litigation - On June 25, 2019, we announced a global resolution to pay a total of $301.3 million to the
U.S. Department of Justice (“DOJ”), the SEC, and Brazilian authorities (Federal Prosecution Service
(“MPF”), the Comptroller General of Brazil (“CGU”) and the Attorney General of Brazil (“AGU”)) to resolve
these anti-corruption investigations related to historic conduct by Technip S.A. in Brazil and historic
conduct by FMC Technologies concerning services provided by a vendor, Unaoil S.A.M. 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 consented to the entry of an Administrative Order issued by the SEC
related to Unaoil.
220 TechnipFMC
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.
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.
As previously disclosed, we have also resolved an investigation by French authorities (the Parquet
National Financier (“PNF”)). On June 22, 2023, the Company, through its subsidiary Technip UK Limited,
along with Technip Energies France SAS, a subsidiary of Technip Energies NV, reached a resolution with
the PNF of all outstanding matters, including its investigations into historical projects in Equatorial
Guinea, Ghana, and Angola. The resolution took the form of a convention judiciaire d'interet public (“CJIP”),
which does not involve any admission of liability or guilt.
Under the terms of the CJIP, Technip UK and Technip Energies France will pay a public interest fine of
€154.8 million and €54.1 million, respectively, for a total of €208.9 million ("Legal settlement liability").
Under the companies’ separation agreements, TechnipFMC is responsible for €179.45 million to be paid
in installments through July 2024, and Technip Energies is responsible for the remaining €29.45 million.
During the three-months ended June 30, 2023, we recorded a $126.5 million liability incremental to our
existing provision. After making a scheduled installment payment of €24.7 million on July 13, 2023, we
have an outstanding balance of €154.8 million that is translated to $171.1 million and is recorded in
other current liabilities in our consolidated statement of financial position as of December 31, 2023. The
outstanding $171.1 million Legal settlement liability is classified as a financial liability at amortized
costs. See Note 23.
TechnipFMC fully cooperated with the PNF and was not required to retain a monitor. The CJIP received
final approval by the President of the Tribunal Judiciaire of Paris at a hearing on June 28, 2023.
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, 2023 and 2022, and that the ultimate
resolution of such matters will not materially affect our consolidated financial position, results of
operations, or cash flows.
Contract loss provision - The provision balances include estimated contract losses and final project costs
related mainly to long-term construction projects.
TechnipFMC 221
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
2023
Year Ended December 31,
2023
2022
$
$
4.9 $
9.8
5.3
20.0 $
(13.0)
10.4
3.7
1.1
During the year ended December 31, 2023, we incurred $20.0 million of restructuring, impairment and
other expenses, out of which we incurred $8.2 million of restructuring and severance expenses, primarily
associated with exiting operations in Canada and the closure of sites in Mexico and Angola. We also
incurred restructuring charges of $3.9 million in Singapore and Argentina. We incurred $5.2 million of
costs associated with the disposal of the MSB. Additionally, we incurred $1.7 million of asset impairment
in the U.K.
2022
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.
NOTE 23. OTHER LIABILITIES (CURRENT AND NON-CURRENT)
Other current liabilities are as follows:
(In millions)
Legal settlement liability (Note 21)
Current financial liabilities at amortized cost, total
Other taxes payable
Warranty obligations (Note 25)
Social security liability
Other(1)
Other current liabilities, total
Total other current liabilities
(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(1)
Total non-current liabilities
(1) Includes miscellaneous accruals.
December 31,
2023
2022
$
171.1 $
171.1
78.5
45.0
81.9
164.2
369.6
$
540.7 $
—
—
65.3
74.2
70.9
175.4
385.8
385.8
December 31,
2023
2022
$
$
23.8 $
0.3
55.6
79.7 $
20.2
0.3
57.4
77.9
222 TechnipFMC
NOTE 24. ACCOUNTS PAYABLE, TRADE
Trade payables amounted to $1,355.1 million as of December 31, 2023 as compared to $1,282.0 million
as of December 31, 2022. 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, 2023 and 2022. A reconciliation of warranty obligations for the
years ended December 31, 2023 and 2022 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,
2023
2022
$
$
74.2 $
16.5
(40.5)
(5.2)
45.0 $
86.2
18.2
(19.0)
(11.2)
74.2
NOTE 26. COMMITMENTS AND CONTINGENT LIABILITIES
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.
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 statements of financial
position, results of operations, or cash flows.
Guarantees made
by
our
consolidated
subsidiaries
consisted
of
the
December 31,
following:
(In millions)
Financial guarantees (1)
Performance guarantees (2)
Maximum potential undiscounted payments
2023
2022
$
$
231.9 $
1,821.7
2,053.6 $
170.2
1,458.2
1,628.4
(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. Financial guarantees are in the scope of IFRS 9, however the
fair value is immaterial both as of December 31, 2023 and 2022, respectively. The maximum potential liability on the contracts is
disclosed in the table above.
(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.
TechnipFMC 223
NOTE 27. FINANCIAL INSTRUMENTS
27.1 Financial assets and liabilities by category
Financial assets and financial liabilities are as follows:
(In millions)
Pension assets
Trade receivables, net
Other financial assets (Note 12)
Derivative financial instruments (Note 27)
Cash and cash equivalents (Note 13)
Total financial assets
Legal settlement liability (Note 21)
Long-term debt, less current portion (Note 19)
Non-current lease liabilities (Note 4)
Short-term debt and current portion of long-term debt
(Note 19)
Accounts payable, trade
Derivative financial instruments (Note 27)
Current lease liabilities (Note 4)
Total financial liabilities
(In millions)
Pension assets
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, 2023
Analysis by Category of Financial Instruments
Carrying Value
At Fair Value
through Profit
or Loss
Assets/
Liabilities at
Amortized cost
Designated as
cash flow
hedges
$
11.3 $
11.3 $
— $
1,138.1
295.2
213.8
951.6
—
26.4
(0.1)
951.6
1,138.1
268.8
—
—
2,610.0 $
989.2 $
1,406.9 $
171.1 $
— $
171.1 $
$
$
965.1
705.3
153.8
1,355.1
204.7
149.0
—
—
—
—
12.0
—
965.1
705.3
153.8
1,355.1
—
149.0
$
3,704.1 $
12.0 $
3,499.4 $
—
—
—
213.9
—
213.9
—
—
—
—
—
192.7
—
192.7
December 31, 2022
Analysis by Category of Financial Instruments
Carrying Value
At Fair Value
through Profit
or Loss
Assets/
Liabilities at
Amortized cost
Designated as
cash flow
hedges
$
12.3 $
12.3 $
— $
$
$
968.5
138.6
289.9
—
21.7
27.9
1,057.1
1,057.1
968.5
116.9
—
—
2,466.4 $
1,119.0 $
1,085.4 $
999.3 $
— $
999.3 $
685.8
418.8
1,282.0
350.2
186.7
—
—
—
14.1
—
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
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 on the consolidated statement of financial
position. 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.
224 TechnipFMC
(In millions)
Investments:
Traded securities(1)
Money market and stable value funds
Derivative financial instruments:
Foreign exchange contracts
Total assets
Derivative financial instruments:
Foreign exchange contracts
Total liabilities
(In millions)
Investments:
Traded securities(1)
Money market and stable value funds
Derivative financial instruments:
Foreign exchange contracts
Total assets
Derivative financial instruments:
Foreign exchange contracts
Total liabilities
Level 1
Level 2
Level 3
Total
December 31, 2023
$
24.3 $
—
—
— $
2.1
213.8
— $
—
—
$
$
$
24.3 $
215.9 $
— $
— $
— $
204.7 $
204.7 $
— $
— $
24.3
2.1
213.8
240.2
204.7
204.7
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
(1) Includes equity securities, fixed income and other investments measured at fair value.
During the years ended December 31, 2023 and 2022, 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 year, 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.
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 statements 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 derivative financial instruments 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
derivative financial instruments. For derivative financial instruments that qualify as a cash flow hedge,
the effective portion of the gain or loss of the derivative financial instrument, which does not include the
time value component of a forward currency rate, is reported as a component on the consolidated
statement of OCI and reclassified into the consolidated statement of income in the same period or
periods during which the hedged transaction affects earnings. For derivative financial 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.
TechnipFMC 225
We hold the following types of derivative financial 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 on our consolidated statement of financial position.
We held the following material net positions as of December 31, 2023 and 2022 in local currency (LC):
(In millions except for rates)
1-12 months
12-24 months
Beyond 24
months
Total
December 31, 2023
Maturity
Australian dollar
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Brazilian real
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
British pound
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Canadian dollar
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Czech koruna
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
298.5
1.5
202.7
1,895.6
4.8
391.6
(394.8)
0.8
(502.2)
0.6
1.3
0.4
309.9
22.4
13.9
1,092.3
0.9
1,207.2
1,402.0
83.1
16.9
66,755.3
15,439.0
4.3
189.0
4.6
41.1
28.5
17.0
1.7
3,440.6
10.2
338.5
8.4
1.5
5.7
(119.1)
4.8
(24.6)
122.0
0.8
155.2
0.2
1.3
0.2
120.8
22.4
5.4
203.2
0.9
224.6
—
83.1
—
—
—
1.5
—
—
4.8
—
107.7
0.8
137.0
—
1.3
—
—
22.4
—
37.3
0.9
41.2
—
83.1
—
—
15,439.0
15,439.0
—
—
4.6
—
—
17.0
—
—
(1.8)
4.6
(0.4)
—
17.0
—
2,221.0
10.2
218.5
306.9
1.5
208.4
1,776.5
4.8
367.0
(165.1)
0.8
(210.0)
0.8
1.3
0.6
430.7
22.4
19.3
1,332.8
0.9
1,473.0
1,402.0
83.1
16.9
66,755.3
15,439.0
4.3
187.2
4.6
40.7
28.5
17.0
1.7
(231.3)
10.2
(22.8)
5,430.3
10.2
534.2
226 TechnipFMC
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)
Average forward rate (LC/USD)
USD equivalent
Kuwaiti dinar
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Polish zloty
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
U.S. dollar
145.0
1.3
109.8
76.0
10.0
7.6
(7.0)
3.6
(1.9)
—
0.3
—
24.4
3.9
6.2
3.5
1.3
2.7
23.9
10.0
2.4
—
3.6
—
(0.5)
0.3
(1.7)
—
3.9
—
—
1.3
—
—
10.0
—
—
3.6
—
0.3
—
—
3.9
—
148.5
1.3
112.5
99.9
10.0
10.0
(7.0)
3.6
(1.9)
(0.5)
0.3
(1.7)
24.4
3.9
6.2
(1,839.9)
(588.9)
(160.1)
(2,588.9)
(In millions except for rates)
1-12 months
12-24 months
Beyond 24
months
Total
December 31, 2022
Maturity
Australian dollar
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Brazilian real
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
British pound
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Canadian dollar
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
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)
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
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
TechnipFMC 227
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
Kuwaiti dinar
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
U.S. dollar
15,592.0
15,592.0
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
13.4
10.4
1.3
—
(18.3)
4.4
(4.1)
—
19.6
—
947.5
9.9
96.2
8.6
1.3
6.4
5.5
10.4
0.5
(4.0)
0.3
(13.2)
(0.1)
0.3
(0.3)
(1,333.3)
(224.8)
—
—
4.4
—
—
19.6
—
2.1
9.9
0.2
—
1.3
—
—
10.4
—
—
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
18.9
10.4
1.8
(4.1)
0.3
(13.5)
(1,557.7)
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 financial 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.
228 TechnipFMC
As of December 31, 2023 and 2022 our portfolio of these instruments included the following material
net positions:
(In millions except rates)
Brazilian real
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Euro
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
Norwegian krone
Notional amount (LC)
Average forward rate (LC/USD)
USD equivalent
U.S. dollar (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)
December 31, 2023
1-12 months
12-24 months
Beyond 24
months
Total
14.9
4.8
3.1
(11.6)
0.9
(12.8)
3.3
10.2
0.3
9.6
—
4.8
—
(0.4)
0.9
(0.5)
4.2
10.2
0.4
0.1
—
4.8
—
—
0.9
—
—
10.2
—
—
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)
—
5.2
—
—
0.9
—
—
9.9
—
—
—
5.2
—
—
0.9
—
—
9.9
—
—
14.9
—
3.1
(12.0)
—
(13.3)
7.5
—
0.7
9.7
97.3
5.2
18.7
(1.9)
0.9
(2.0)
(24.6)
9.9
(2.5)
(12.5)
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.
TechnipFMC 229
The following table presents the location and fair value amounts of derivative instruments reported on
the consolidated statements of financial position:
(In millions)
Assets
Liabilities
Assets
Liabilities
December 31, 2023
December 31, 2022
Derivatives designated as hedging instruments
Foreign exchange contracts
Current - Derivative financial instruments
$
183.5 $
167.9 $
254.8 $
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
30.4
213.9
(0.1)
(0.1)
24.8
192.7
12.0
12.0
7.2
262.0
27.9
27.9
Total derivatives
Cash flow hedges
$
213.8 $
204.7 $
289.9 $
332.5
3.6
336.1
14.1
14.1
350.2
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 Company 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 $(2.0) million and $(1.0) million for 2023 and 2022, 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 gain (loss) of $4.1 million and $(33.9) million as of 2023 and 2022, respectively. We
expect to transfer approximately $25.6 million earnings from the consolidated statements of other
comprehensive income to the consolidated statements of income 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 2027.
230 TechnipFMC
The following represents the effect of cash flow hedge accounting on the consolidated statements of
income for the years ended December 31, 2023 and 2022:
(In millions)
Year Ended December 31, 2023
Year Ended December 31, 2022
(13.1)
(1.0)
78.1
64.0
Revenue
Cost of
sales
Other income
(expense), net
Revenue
Cost of
sales
Other income
(expense), net
Ineffective amounts
—
—
(2.0)
—
—
$
(12.6) $
25.6 $
(5.5) $
(7.4) $
(14.5) $
(12.6)
25.6
(7.5)
(7.4)
(14.5)
(14.1)
Total amount of income (expense) presented
in the consolidated statements of income
associated with hedges and derivatives
Amounts reclassified from accumulated
OCI to income (loss)
Total cash flow hedge gain (loss)
recognized in income
Gain (loss) recognized in income on
derivatives not designated as hedging
instruments
Total(a)
$
(12.7) $
24.6 $
(31.8) $
(7.7) $
(15.2) $
(0.1)
(1.0)
(24.3)
(0.3)
(0.7)
(a) The total effect of cash flow hedge accounting on selling, general and administrative expense is not
material for each of the years ended December 31, 2023 and 2022.
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
Effective portion of changes in fair value
Amount reclassified to statement of income
Tax effect
Balance at end of period
Cash flow hedge reserve
Year Ended December 31,
2023
2022
$
$
(33.9) $
33.9
7.1
(3.0)
4.1 $
(68.5)
77.9
(35.3)
(8.0)
(33.9)
27.3 Offsetting financial assets and financial liabilities
We execute derivative contracts with counterparties that consent to a master netting agreement, which
permits net settlement of the gross derivative assets against gross derivative liabilities. Each instrument
is accounted for individually and assets and liabilities are not offset. As of December 31, 2023 and 2022
we had no collateralized derivative contracts.
The following tables present both gross information and net information of recognized derivative
instruments:
(In millions)
Gross
Amount
Recognized
December 31, 2023
Gross
Amounts Not
Offset
Permitted
Under Master
Netting
Agreements
Net Amount
Gross
Amount
Recognized
December 31, 2022
Gross
Amounts Not
Offset
Permitted
Under Master
Netting
Agreements
Net Amount
Derivative assets
Derivative liabilities
$
$
213.8 $
204.7
(103.4) $
(103.4) $
110.4 $
101.3 $
289.9 $
350.2 $
(142.5) $
(142.5) $
147.4
207.7
NOTE 28. PAYROLL STAFF
As of December 31, 2023, TechnipFMC had approximately 21,000 full-time employees.
TechnipFMC 231
The average monthly number of employees (including executive directors) employed by TechnipFMC
during the years ended December 31, 2023 and 2022 are as follows:
By function:
Production / Services
Selling and distribution
General and administrative
Total
2023
2022
15,440
1,927
4,105
21,472
14,866
1,858
3,979
20,703
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,
2023
2022
$
$
14.2 $
2.5
16.7 $
16.6
1.3
17.9
As of December 31, 2023 and 2022, we did not have any material accounts payable outstanding with
our related parties.
Loan receivables as of December 31, 2023 includes $85.0 million to Dofcon, for which interest income of
$3.4 million has been recorded during the year ended December 31, 2023.
Revenue consisted of these amounts from the following related parties:
(In millions)
Dofcon
Others
Total revenue
Expenses consisted of these amounts to the following related parties:
(In millions)
Dofcon
Others
Total expenses
29.2 Executive compensation
Year Ended December 31,
2023
2022
8.1 $
12.4
20.5 $
21.3
7.8
29.1
Year Ended December 31,
2023
2022
25.3 $
27.5
52.8 $
14.4
31.8
46.2
$
$
$
$
The below table sets forth the single figure of remuneration for the years ended December 31, 2023 and
2022 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.
232 TechnipFMC
(In millions)
Salary
Taxable benefits
Annual incentive
Long-term incentive awards
Pension-related benefits
Total remuneration
Chief Executive Officer
2023
2022
$
1.3 $
0.1
6.1
43.0
0.3
$
50.8 $
1.2
0.1
5.0
—
0.2
6.5
Total remuneration for non-executive directors was $2.5 million and $2.4 million for the years ended
December 31, 2023 and 2022, respectively.
NOTE 30. MARKET RELATED EXPOSURE
30.1 Liquidity risk
Most of our cash is managed centrally and flows through centralized bank accounts controlled and
maintained by TechnipFMC globally and in many operating jurisdictions to best meet the liquidity needs
of our global operations.
Net debt
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 statements 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,
2023
2022
$
951.6 $
1,057.1
153.8
965.1
854.3
418.8
999.3
872.5
$
(1,021.6) $
(1,233.5)
Reconciliation of liabilities from financing activities is as follows:
(In millions)
Non-cash changes
Opening
balance at
12/31/2022
Cash
flows
Exchange
rate
Bond
effects
amortization
Other
changes (1)
Closing
balance at
12/31/2023
Long-term debt, less current portion
$
999.3 $
—
$
36.0 $
2.2 $
(72.4) $
965.1
Short-term debt and current portion of
long-term debt
Liabilities from leases
418.8
872.5
(341.6)
(141.0)
3.9
(6.1)
—
—
72.7
128.9
153.8
854.3
Liabilities from financing activities
$ 2,290.6 $
(482.6) $
33.8 $
2.2 $
129.2 $
1,973.2
(1) This relates to reclassification from non-current to current debt. Liabilities from finance leases relates to the addition of new leases.
TechnipFMC 233
(In millions)
Non-cash changes
Opening
balance at
12/31/2021
Exchange
Closing
Cash
flows
rate
Bond
effects
amortization
Other
changes (1)
balance at
12/31/2022
Long-term debt, less current portion
$ 1,778.5 $
(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.
Cash flows
Operating cash flows from continuing operations - During 2023, we generated $742.9 million in operating
cash flows from continuing operations, as compared to $443.7 million in 2022, resulting in a $299.2
million increase compared to 2022. The increase in cash generated by operating activities from
continuing operations in 2023 as compared to 2022 was primarily due to improved profitability, timing
differences on project milestones, payments to vendors for inventory, fluctuations in derivative assets
and liabilities and timing of income tax payments.
Investing cash flows from continuing operations - Investing activities from continuing operations used
$72.0 million of cash during 2023. Investing cash flows from continuing operations generated $157.5
million cash during 2022. The decrease of $229.5 million in cash from investing activities was primarily
due to the absence of $288.5 million proceeds received from sales of our investment in Technip Energies
during 2022 and an increase in capital expenditures of $55.4 million. This cash use was partially offset
by an increase in proceeds from sales of assets of $54.5 million during 2023 primarily related to the sale
of the Apache II pipelay vessel and other investing activities.
Financing cash flows from continuing operations - Financing activities from continuing operations used
$760.1 million and $883.6 million in 2023 and 2022, respectively. The decrease of $123.5 million in
cash used for financing activities was due primarily to the decreased debt pay down and issuance
activity of $228.1 million, partially offset by $104.9 million of increase of share repurchases during
2023.
Debt and Liquidity
Total borrowings as of December 31, 2023 and 2022 were $1,118.9 million and $1,418.1 million,
respectively. See Note 19 for further details.
Availability of borrowings under the Credit Agreement is reduced by the outstanding letters of credit
issued against the facility. As of December 31, 2023, there were $54.2 million letters of credit
outstanding and availability of borrowings under the Credit Agreement was $1,195.8 million.
During 2023, we repaid $270.2 million of our 3.15% 2013 Private placement notes “Tranche B & C 2023
Notes”.
During 2022, we repaid $161.0 million of our 3.40% 2012 Private placement notes and we completed a
tender offer and purchase 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, 2023, we were in compliance with all restrictive covenants under our credit
facilities. See Note 19 for further details.
234 TechnipFMC
Credit Ratings - As of December 31, 2023 our credit ratings with Standard and Poor’s (“S&P”) were BB+
for long-term unsecured, guaranteed debt (2021 Notes) and for the long-term unsecured debt (the
Private placement notes). On March 7, 2024 both the issuer credit rating and the correspondent rated
Notes were upgraded by S&P to BBB-. 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
Legal settlement liability
Finance lease liabilities
Total financial liabilities as
of December 31, 2023
(In millions)
Debt
Interest on debt
Accounts payable, trade
Derivative financial
instruments
Finance lease liabilities
Total financial liabilities as
of December 31, 2022
2024
2025
2026
2027
2028
2029 and
beyond
Total
$
153.8 $
332.1 $
261.5 $
108.0 $
25.3 $
238.2 $ 1,118.9
61.3
1,355.1
179.9
171.1
196.4
42.4
—
21.0
—
149.5
18.8
—
2.7
—
12.5
—
1.1
—
116.6
100.5
10.3
—
—
—
84.9
37.0
—
—
—
182.3
1,355.1
204.7
171.1
584.2
1,232.1
$ 2,117.6 $
545.0 $
399.6 $
222.1 $
120.5 $
859.4 $ 4,264.2
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
30.2 Foreign currency exchange rate risk
We conduct operations around the world in a number of different currencies. Many of our significant
foreign subsidiaries have designated the local currency as their functional currency. Our earnings are,
therefore, subject to change due to fluctuations in foreign currency exchange rates when the earnings in
foreign currencies are translated into U.S. dollars. We do not hedge this translation impact on earnings. A
10% increase or decrease in the average exchange rates of all foreign currencies as of December 31,
2023, would have changed our revenue and income before income taxes attributable to TechnipFMC by
approximately $381.8 million and $21.4 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
consolidated 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.
TechnipFMC 235
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 $115.3 million in the net fair value of cash flow hedges reflected in our consolidated statement of
financial position as of December 31, 2023.
Argentine operations
We apply provisions of IAS 29 to the financial statements of our subsidiaries in Argentina whose
functional currency is the currency of a hyper-inflationary economy. Non-monetary assets, liabilities and
equity items are restated in terms of the measuring unit current at the statement of financial position
date with the resultant monetary gain (losses) recognized in other income and expenses. The prior year
comparatives, for both monetary and non-monetary items, are restated in terms of the measuring unit
current at the end of the latest reporting period. We applied Argentina Consumer Price Index ("Argentina
CPI") to restate the financial statements of our subsidiaries in Argentina at the end of the reporting
period and the movement in Argentina CPI during the current and the previous reporting period. As a
result of IAS 29 restatement procedures we recorded a monetary gain of $16.2 million in Other income
(expense), net in the consolidated statement of income for the year ended December 31, 2023.
The Central Bank of Argentina has maintained certain currency controls that limited our ability to access
U.S. dollars in Argentina and to remit cash from our Argentine operations. The new president of Argentina
was inaugurated on December 10, 2023, and the proposed certain significant economic changes had
significant impact on the foreign currency-related effects of business transactions in Argentina. Due to
the Argentine peso devaluation, primarily following the Presidential Inauguration, we recognized a
foreign exchange loss of approximately $70.5 million for the year ended December 31, 2023. We have
taken various actions to address the situation to reduce our foreign exchange exposure.
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,
2023
December 31,
2022
$
$
888.6 $
230.3
1,118.9 $
1,153.9
264.2
1,418.1
Sensitivity analysis as of December 31, 2023
TechnipFMC’s floating rate debt amounted to $230.3 million compared to an aggregate total debt of
$1,118.9 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, 2023, the net short-term cash position of TechnipFMC (cash and cash equivalents,
less short-term financial debts) amounted to $648.8 million.
As of December 31, 2023, a 1% (100 basis points) increase in interest rates would lower the fair value of
the fixed rate Senior notes and Private placements by $18.7 million before tax. A 1% (100 basis points)
decrease in interest rates would raise the fair value by $14.6 million before tax.
236 TechnipFMC
A 1% (100 basis points) increase in interest rates would generate an additional net income of $8.0
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, 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.
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 synthetic bonds, convertible bonds 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 net income 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.
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.
TechnipFMC utilizes a “pooled” approach to estimate expected credit losses for financial assets with
similar risk characteristics based on internal or external expected loss assumptions from groups of
similar assets. The common risk characteristics that are used to pool similar risk assets include collateral
type, credit rating/scores, industry, geographical location and duration of financial assets.
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. 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.
The expected loss rates are based on historical losses experienced over a period of 12 months before
December 31, 2023 or December 31, 2022, 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.
TechnipFMC 237
Credit risk exposure on our trade receivables and contract assets using a provision matrix are set out as
follows:
(In millions)
Carrying value, net
Current
Less than 3
months
3 to 12
months Over 1 year
Total Trade
Receivables
Contract
Assets
$
731.3 $
84.0 $
135.4 $
187.4 $
1,138.1 $
1,036.0
December 31, 2023
Days past due
December 31, 2022
Days past due
(In millions)
Carrying value, net
Current
Less than 3
months
3 to 12
months
Over 1 year
Total Trade
Receivables
Contract
Assets (1)
$
502.1 $
146.0 $
106.4 $
214.0 $
968.5 $
1,047.2
(1) The December 31, 2022 balances for contract loss provisions of $63.1 million have been reclassified from contract assets to
current provisions. See Note 21.
NOTE 31. AUDITORS’ REMUNERATION
Fees payable to TechnipFMC’s auditors and its associates are as follows:
(In millions)
2023
2022
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
$
$
$
10.4 $
3.0
13.4 $
0.1 $
0.1 $
9.8
2.9
12.7
0.1
0.1
NOTE 32. SUBSIDIARIES, JOINT VENTURE UNDERTAKINGS AND EQUITY AFFILIATES
All subsidiaries are consolidated in the financial statements. Ownership interests noted in the table below
reflect holdings of ordinary shares. All consolidated companies close their accounts as of December 31.
TechnipFMC’s subsidiaries, joint venture undertakings and equity affiliates as of December 31, 2023 are
listed below:
32.1 Directly owned subsidiaries
Company Name
FRANCE
Address
Share Class
Group
interest
held in %
Technip Offshore International SAS
1BIS Place de la Défense Tour Trinity 92400 Courbevoie
Ordinary shares 100
UNITED KINGDOM
TechnipFMC Finance Limited
TechnipFMC Group Holdings Limited
VENEZUELA
Technip Bolivar, C.A.
Hadrian House, Wincomblee Road,
Newcastle Upon Tyne, NE6 3PL
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
238 TechnipFMC
32.2 Indirectly owned subsidiaries
Company Name
ALGERIA
Address
Share Class
Group
interest
held in %
FMC Technologies Algeria SARL
09 Rue Naama Sebti ex Paul Langevin, El Mouradia, 16
035 Alger, Algérie
Ordinary shares 99.98
ANGOLA
Angoflex Industrial Limitada
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
TechnipFMC Angola, Limitada
Rua Major Marcelino Dias, Edifício ICON 2014, 8º andar
Luanda – Angol
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
BAHAMAS
AMC Angola Offshore Ltd
BRAZIL
FMC Technologies do Brasil Ltda
Ground Floor, 1 William Street, Perth, Western Australia
6000, Australia
c/o Trident Corporate Services Limited
Provident House
East Hill Street, Nassau
Ordinary
Shares
Ordinary
Shares
Ordinary
Shares
70
60
49
Equity interest
100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Rodovia Presidente Dutra, n° 2660, Pavuna,cidade e
Estado do Rio de Janeiro 21535-900, Brazil
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
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
Braswims Equipamentos Submarinos
LTDA
AVENIDA HENRIQUE VALADARES, 23, ROOM 501 PART,
RIO DE JANEIRO
Equity interest
100
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
Equity interest
100
Ordinary shares 100
CHINA
FMC Technologies (Shanghai) Co.,
Ltd
Room 1603-1, Building A, Vanke Center,No. 55,
Dingan,Shanghai, China 200020, China
FMC Technologies (Shenzhen) Co.,
Ltd.
Room H, 12/F, Times Plaza, 1 Taizi Road,
Shekou, Nanshan District, 518607 Shenzhen
Equity interest
100
Equity interest
100
EGYPT
FMC Technologies Egypt LLC
EQUATORIAL GUINEA
2nd floor, building No. 80 located at Road 250 Maadi El
Sarayat, Maadi
Ordinary shares 100
TechnipFMC Equatorial Guinea SARL Carretera de Aeropuerto, KM 5, APDO 925, Malabo
Ordinary shares 65
FRANCE
Angoflex SAS
1BIS Place de la Défense Tour Trinity 92400 Courbevoie
Ordinary shares 100
TechnipFMC 239
Flexi France SAS
Rue Jean Huré
76580 Le Trait
FMC Technologies Overseas, SAS
FMC Technologies SAS
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
Compagnie Française De
Réalisations Industrielles, Cofri SAS
1BIS Place de la Défense Tour Trinity 92400 Courbevoie
Ordinary shares 100
Seal Engineering SAS
19, Avenue Feuchères 30000 Nîmes
Ordinary shares 100
TechnipFMC Subsea France SAS
1BIS Place de la Défense Tour Trinity 92400 Courbevoie
Ordinary shares 100
Boite Postale (B.P) 277 Port Genti
Equity interest
99
GABON
FMC Gabon S.A.R.L.
GERMANY
F.A. Sening GmbH
Smith Meter GmbH
Regentstraße 1
25474 Ellerbek
Regentstraße 1
25474 Ellerbek
GHANA
FMC Technologies (Ghana) Limited
Commercial Port Gate 2 Takoradi
P.O. Box CT 42, Cantonments, Accra
GNPC-TechnipFMC Engineering
Services Limited
6th Floor, One Airport Square, Airport City, Accra PMB CT
305 Cantonments, Accr
Ordinary shares 70
TechnipFMC (Ghana) Limited
6th Floor, One Airport Square,
00233, Accra
GUYANA
TechnipFMC Guyana INC.
HONG KONG
FMC Technologies Energy (Hong
Kong) Limited
FMC Technologies Energy Holdings
(Shanghai) Ltd.
INDIA
FMC Technologies India Private
Limited
INDONESIA
PT FMC Santana Petroleum
Equipment Indonesia
PT FMC Technologies Subsea
Indonesia
PT Technip Indonesia
IRAQ
F.M.C Petroleum Services Ltd.
Advanced Oil Services LLC
ISLE OF MAN
Subtec Asia Ltd
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
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
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
Metropolitan Tower, 15th Floor, JL. R. A.
Kartini Kav, 14 (T.B Simatupang), Cilandak
Jakarta Selatan 12430
Ordinary shares 80.39
Ordinary shares 95
Ordinary shares 9
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
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 49
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
240 TechnipFMC
ITALY
FMC Technologies S.r.l. a socio unico Via Thomas Alva Edison n.110 ed. A
Equity interest
100
20099 Sesto San Giovanni (MI),
CHANNEL ISLANDS
CSO Oil & Gas Technology (West
Africa) Ltd
KAZAKHSTAN
FMC Technologies Kazakhstan LLP
26 New Street, St. Helier, Jersey, JE2 3RA, Channel Islands Ordinary shares 100
43/5 building, industrial area 3, birlik h.e., Kyzyktobe r.d.,
Munaily district | Aktau, Mangystau | 130006
Equity interest
100
LUXEMBOURG
FMC Technologies Global Rental
Tools S.a r.l
FMC Technologies Tool Holdings
S.ar.l
8-10 avenue de la Gare
1610 Luxembourg
8-10 avenue de la Gare
1610 Luxembourg
MALAYSIA
Asiaflex Products Sdn. Bhd.
Flexiasia Sdn Bhd
FMC Petroleum Equipment
(Malaysia) Sdn. Bhd.
FMC Technologies Global Supply
Sdn. Bhd.
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
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 29
Ordinary shares 100
Ordinary shares 100
FMC Wellhead Equipment Sdn. Bhd. Suite 13.03, 13th Floor
Ordinary shares 49
Technip Marine (M) Sdn Bhd
MAURITIUS
207 Jalan Tun Razak
50400 Kuala Lumpur
Suite 13.03, 13th Floor
207 Jalan Tun Razak
50400 Kuala Lumpur
Ordinary shares 100
Coflexip Stena Offshore (Mauritius)
Ltd.
IQ EQ Corporate Services (Mauritius) Ltd, (Formerly SGG
Corporate Services (Mauritius)
Ordinary shares 100
GIL Mauritius Holdings Ltd
IQ EQ Corporate Services (Mauritius) Ltd, (Formerly SGG
Corporate Services (Mauritius)
Ordinary shares 100
Global Construction Mauritius
Services Ltd (In Liquidation)
IQ EQ Corporate Services (Mauritius) Ltd, (Formerly SGG
Corporate Services (Mauritius)
Ordinary shares 100
MEXICO
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.
Vasco de Quiroga 3000
Edificio Calakmul piso 6
Colonia Santa Fe CP 01210
México, D.F. México
Global Industries Services, S. de R.L.
de C.V.
Vasco de Quiroga 3000, Edificio Calakmul piso 6
Colonia Santa Fe CP 01210
Global Offshore Mexico, S. de R.L. de
C.V.
Vasco de Quiroga 3000, Edificio Calakmul piso 6
Colonia Santa Fe CP 01210
Global Vessels Mexico, S. de R.L. de
C.V.
Vasco de Quiroga 3000, Edificio Calakmul piso 6
Colonia Santa Fe CP 01210
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Class A, B and
N
100
Ordinary shares 100
Ordinary shares 100
TechnipFMC 241
MOZAMBIQUE
Technip Mozambique Lda
MYANMAR
Technip Myanmar Co. Ltd
NETHERLANDS
Edifico Topazio, Av, Vladimir Lenine, 8th Floor,Mozambique,
Mozambique
Ordinary shares 100
No. 18 G/F, Ground Floor
Tha Pyay Nyo Street, Shin Saw Pu Quarter
Sanchaung Township
11201
FMC Separation Systems B.V.
Delta 101, 6825MN, Amsterdam
Technip Holding Benelux B.V.
FMC Technologies B.V.
Zuidplein 126, WTC, Tower H, 15e, Amsterdam 1077XV,
Netherlands
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
TechnipFMC International Holdings
B.V.
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
TechnipFMC Pipelaying BV
NIGERIA
Neptune Maritime Nigeria Ltd.
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
Zuidplein 126, WTC, Tower H, 15th Fl.
Amsterdam 1077XV
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
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 99.93
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 99.98
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares
Preferred
99.97
99.97
Ordinary shares 100
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
242 TechnipFMC
TIOS AS
TIOS Crewing AS
Agat Technology AS
POLAND
Lagerveien 23, 4033, Stavanger
Lagerveien 23, 4022, Stavanger
Lagerveien 23, 4022, Stavanger
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
FMC Technologies Sp.z.o.o.
Al. Jana Pawła II 43B Krakow 31-864 Poland
Ordinary shares 100
PORTUGAL
Angoltech, SGPS, LDA.
Lusotechnip Engenharia, Sociedade
Unipessoal Lda.
RUSSIAN FEDERATION
FMC Eurasia LLC
SAUDI ARABIA
FMC Technologies Saudi Arabia
Limited
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
Ordinary shares 100
Ordinary shares 100
4, Lesnoy Lane 4, Business centre "White Stone",Moscow
125047, Russian Federation
Ordinary shares 100
PO Box 3076
2nd Industrial City
Dammam 34326, Eastern Province
Ordinary shares 100
Global Al Rushaid Offshore Ltd
P O Box No 31685, 31952 Al Khoba
Ordinary shares 50
SINGAPORE
FMC Technologies Global Services
Pte. Ltd.
149 Gul Circle
629605 Singapore
FMC Technologies Singapore Pte.
Ltd.
Technip Singapore Pte. Ltd.
149 Gul Circle
629605 Singapore
149 Gul Circle
629605 Singapore
SOUTH AFRICA
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
FMC Technologies (Pty.) Ltd.
Koper Street Brackenfell 7560, Cape Town
Ordinary shares 100
SPAIN
Global Industries Offshore Spain, S.L. Arturo Soria 263B
Ordinary shares 100
SWITZERLAND
FMC Kongsberg International GmbH Bahnofstrasse 10
28003 Madrid
6300 Zurich
Bahnofstrasse 10
6300 Zurich
18th Floor, Sathorn Thani Building 2, No. 92/52,
North Sathorn Road, Kwaeng Silom, Khet Bangrak,
Bangkok 10500
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
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
FMC Technologies GmbH
THAILAND
Global Industries Offshore Thailand,
Ltd.
TUNISIA
FMC Technologies Service SARL
UNITED ARAB EMIRATES
Technip Middle East FZCO
Technipfmc Industries-Sole
Proprietorship L.L.C.
UNITED KINGDOM
AABB Limited
TechnipFMC Gulf FZE
Office LB15325, Jebel Ali Free Zone Dubai
Ordinary shares 100
Abu Dhabi, Mussaffah -ICAD III 98NR24, Abu Dhabi
Capital
100
Control Systems International (UK)
Limited
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
Ordinary
Shares
100
Ordinary shares 100
Crosby Services International Ltd.
Enterprise Drive, Westhill, Aberdeenshire, AB32 6TQ
Ordinary shares 100
Forsys Subsea Limited
Birchin Court, 20 Birchin Lane, London, EC3V 9DU, U.K.
Dissolved
March 22, 2023
TechnipFMC 243
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
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 Limited
Technip UK Limited
Technip-Coflexip UK Holdings Ltd
TechnipFMC DSV3 Limited
TechnipFMC (Europe) 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.
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
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Dissolved July
4, 2023
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
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 Subsea
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.
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
Ordinary shares 100
Ordinary shares 100
244 TechnipFMC
FMC Technologies Energy LLC
FMC Technologies, Inc.
FMC Technologies Measurement
Solutions, Inc.
FMC Technologies Overseas Ltd.
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
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 Limited
TechnipFMC Umbilicals, Inc.
TechnipFMC USA, Inc
TechnipFMC US Holdings Inc.
TechnipFMC US LLC 1
TechnipFMC US LLC 2
The Red Adair Company, L.L.C.
VENEZUELA
FMC Wellhead de Venezuela, S.A.
VIETNAM
FMC Technologies (Vietnam) Co.,
Ltd.
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
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
No. 29, Le Duan Street
Ben Nghe Ward, Distric 1
Ho Chi Minh City
Ordinary shares 100
Membership
interest
Membership
interest
100
100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Ordinary shares 100
Membership
Interest
Membership
Interest
Membership
interest
100
100
100
Ordinary shares 100
Equity interest
100
TechnipFMC 245
32.3 Joint ventures
Company Name
NORWAY
Dofcon Brasil AS
Magnora Offshore Wind AS
Technip-DeepOcean PRS JV DA
FRANCE
Serimax Holdings SAS
32.4 Associated undertakings
Address
Thormohlens Gate 53 C
5006 Bergen
Karenslyst Allé 2, 9
Floor, Oslo, 0278
th
Killingøy
5515 Haugesund
346 rue de la Belle Etoile
95700 Roissy en France
Company Name
FINLAND
Creowave Oy
NORWAY
Address
Yrttipellontie 10 H
90230 Oulu
Kongsberg Technology Training Centre
AS
Kirkegårdsveien 45
3616 KONGSBERG
Share Class
Group
interest
held in %
Ordinary shares 50
Ordinary shares 20
No capital
50
Ordinary shares 20
Share Class
Group
interest
held in %
Ordinary shares 24.9
Ordinary shares 33.31
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
FMC/KOS West Africa Limited
Control Systems International (UK) Limited
FMC Kongsberg Services Limited
Schilling Robotics Limited
Spoolbase UK Limited
Subsea I & C Services Limited
Subsea Maritime Services Limited
Subsea Offshore Services Limited
Technip Offshore Manning Services Limited
Technip-Coflexip UK Holdings Limited
TechnipFMC (Europe) Limited
TechnipFMC Corporate Holdings Limited
TechnipFMC DSV3 Limited
TechnipFMC Finance Limited
TechnipFMC Group Holdings Limited
TechnipFMC International Finance Limited
TechnipFMC International UK Limited
West Africa Subsea Services Limited
Company number
00621727
03244592
04869111
04848086
05315706
09460007
09919636
09681629
04055455
02424225
11437449
12346753
11489082
14501545
14501041
11112457
11112462
10345570
246 TechnipFMC
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 years 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.
The following table summarizes the components of income from discontinued operations, net of tax that
were recognized during the year ended December 31, 2022:
(In millions)
Costs and expenses
Loss from discontinued operations before income taxes
Provision for income taxes
Loss from discontinued operations attributable to TechnipFMC plc
Year ended
December 31, 2022
$
$
(26.4)
(26.4)
18.9
(45.3)
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.
The following table summarizes the details of Technip Energies share sales during the year ended
December 31, 2022:
(In millions)
Proceeds from sale of additional shares, net of transaction costs
Carrying value of 12% shares sold
Fair value measurement of financial investment in Technip Energies
Loss on financial investment in Technip Energies
Investment in Technip Energies
Year ended
December 31, 2022
$
$
288.5
(301.6)
(14.6)
(27.7)
On February 16, 2021, 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
TechnipFMC 247
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 value 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.
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
On February 20, 2024, the Company announced that its Board of Directors has authorized and declared a
quarterly cash dividend of $0.05 per share, payable on April 3, 2024 to shareholders of record as of the
close of business on the New York Stock Exchange on March 19, 2024. The ex-dividend date is March 18,
2024.
On February 28, 2024, FMC Technologies Pension Plan Limited (the Trustee of the Company's U.K.
pension plan) and Just Retirement Limited (the insurer) entered into a buy-in policy with a first payment
start date on April 24, 2024.
On March 7, 2024, both the Company's issuer credit rating and the correspondent rated Notes were
upgraded by S&P to BBB-.
On March 11, 2024, the Company completed the sale of equity interests and assets of MSB to One Equity
Partners. See Note 2 for details.
248 TechnipFMC
COMPANY FINANCIAL STATEMENTS
TECHNIPFMC PLC
FOR THE YEAR ENDED DECEMBER 31, 2023
Company No. 09909709
TechnipFMC 249
COMPANY STATEMENTS OF FINANCIAL POSITION
(In millions)
Assets
Investments in subsidiaries
Loan receivables – related parties
Other assets
Total non-current assets
Cash and cash equivalents
Trade and other receivables, net
Loan receivables - related parties
Income taxes receivable
Other current assets
Total current assets
Total assets
Equity and Liabilities
Ordinary shares
Retained earnings, net income and other reserves
Total shareholders’ equity
Long-term debt
Loan payables – related parties (1)
Total non-current liabilities (1)
Short-term debt
Trade and other payables
Loan payables – related parties (1)
Current income tax liabilities
Total current liabilities (1)
Total liabilities
Total equity and liabilities
As of January 1
Loss for the year
Other changes in retained earnings
Retained earnings
December 31,
2023
December 31,
2022
Note
$
4,084.8 $
4,084.8
$
5,682.2 $
7
$
432.9 $
1,511.9
28.9
5,625.6
0.8
47.0
—
6.6
2.2
56.6
1,915.6
2,348.5
719.7
1,211.6
1,931.3
16.8
1,385.6
—
—
1,402.4
3,333.7
5,682.2 $
—
—
4,084.8
3.7
24.5
4,441.3
8.8
20.0
4,498.3
8,583.1
442.2
2,222.3
2,664.5
699.6
768.9
1,468.5
290.4
753.5
3,406.2
—
4,450.1
5,918.6
8,583.1
3
4
6
4
8
9
8
10
9
$
$
2,222.3 $
2,551.9
(95.9)
(210.8)
(280.0)
(49.6)
$
1,915.6 $
2,222.3
(1) To appropriately reflect the nature of loan payables due to related parties, $2,637.3 million of the previously reported December
31, 2022 balance for non-current "Loan payables – related parties" has been reclassified to current "Loan payables – related parties".
The disclosure provided in Note 9 in the Company's 2022 U.K. Annual Report was not impacted by these reclassifications and was
accurately presented. The effect of the reclassification has no further impact, including at December 31, 2021, and hence an additional
statement of financial position has not been presented.
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 15, 2024
250 TechnipFMC
COMPANY STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(In millions)
Ordinary
Shares
Retained Earnings, Net
Income/(Loss) and Other
reserves
Total Shareholders’
Equity
Balance as of December 31, 2021
$
450.7 $
2,551.9 $
Net loss
Issuance of ordinary shares (Note 7)
Shares repurchased and cancelled (Note 7)
Share-based compensation (Note 7)
—
1.6
(10.1)
—
(280.0)
—
(90.1)
40.5
Balance as of December 31, 2022
$
442.2 $
2,222.3 $
Net loss
Dividends (Note 7)
Issuance of ordinary shares (Note 7)
Shares repurchased and cancelled (Note 7)
Share-based compensation (Note 7)
Other
—
—
2.9
(12.2)
—
—
(95.9)
(43.5)
(20.1)
(192.8)
45.8
(0.2)
3,002.6
(280.0)
1.6
(100.2)
40.5
2,664.5
(95.9)
(43.5)
(17.2)
(205.0)
45.8
(0.2)
Balance as of December 31, 2023
$
432.9 $
1,915.6 $
2,348.5
The accompanying notes are an integral part of the consolidated financial statements.
TechnipFMC 251
NOTES TO THE COMPANY FINANCIAL STATEMENTS
NOTE 1 - GENERAL CORPORATE INFORMATION
TechnipFMC is a public limited company by shares, incorporated and domiciled in England and Wales
("United Kingdom" or "U.K."), with registered number 09909709, 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, United Kingdom. On February 18, 2022,
following a comprehensive review of the strategic objectives, we voluntarily delisted TechnipFMC’s
shares from Euronext Paris.
Nature of operations - TechnipFMC plc 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. We have operational headquarters in
Houston, Texas, United States, and we principally operate across two business segments: Subsea and
Surface Technologies.
NOTE 2 - ACCOUNTING PRINCIPLES
2.1 Basis of preparation
The Company's financial statements for the year ended December 31, 2023 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 International Financial Reporting Standards ("IFRS") in full. The disclosure exemptions
adopted by the Company are as follows:
•
•
•
•
•
•
•
No detailed disclosures in relation to financial instruments;
No statements of cash flows;
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 Company's 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 for the years ended
December 31, 2023 and 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 statement of income 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 Company's 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.
252 TechnipFMC
2.2 Changes in accounting policies and disclosures
a)
Standards, amendments and interpretations effective in 2023
The Company has applied the following new standard and amendments to International Financial
Reporting Standards ("IFRS") and International Accounting Standards ("IAS") for the first time in its
financial statements for the year ended December 31, 2023.
•
•
•
•
IFRS 17, “Insurance Contracts”
Amendments to IAS 8, "Accounting policies, Changes in Accounting Estimates and Errors:
Definition of Accounting Estimates"
Amendments to IAS 12, "Taxation", relating to Deferred tax related to assets and liabilities arising
from a single transaction
Amendments to IAS 1, "Presentation of Financial Statements" and IFRS Practice Statement 2,
"Disclosure of Accounting Policies"
These amendments did not have any impact on the Company's accounting policies and did not require
retrospective adjustments.
Amendment to IAS 12 “International Tax Reform"
On May 23, 2023, the IASB issued the Amendment to IAS 12 “International Tax Reform - Pillar Two Model
Rules”, which introduces a mandatory temporary exception to the requirements of IAS 12 for the
recognition and specific disclosure of deferred tax assets and liabilities arising from the OECD “Pillar Two
Model Rules”. The amendments provide a temporary exception from the requirement to recognize and
disclose deferred taxes arising from enacted or substantively enacted tax law that implements the Pillar
Two model rules published by the OECD, including tax law that implements qualified domestic minimum
top-up tax (‘QDMTT’) described in those rules. The amendments to IAS 12 make it clear that entities
subject to Pillar Two rules must ignore the deferred tax implications of enacted or substantively enacted
Pillar Two legislation in their IFRS financial statements. However, for annual reporting periods beginning
on or after January 1, 2023, these entities will need to provide some additional disclosures about current
taxes in their annual financial reports. The Company applied the exception to recognizing and disclosing
information about deferred tax assets and liabilities related to Pillar Two income taxes, as provided in
the amendments to IAS 12 issued in May 2023. See additional disclosures in Note 5.
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, 2023
Certain new accounting standards and interpretations have been published that are not mandatory for
December 31, 2023 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 financial statements.
Amendment to IAS 12 “International Tax Reform - Pillar Two Model Rules”
The Company is within the scope of the OECD “Pillar Two Model Rules”. Pillar Two legislation was enacted
in U.K. on July 19, 2023, the jurisdiction in which the Company is incorporated, and will come into effect
from January 1, 2024. Since the Pillar Two legislation was not effective at the reporting date, the
Company has no related current tax exposure. The group applies the exception to recognizing and
disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes, as
provided in the amendments to IAS 12 issued in May 2023. The Company has performed an assessment
of the potential exposure to Pillar Two income taxes. The Company does not expect a material exposure
to Pillar Two income taxes.
Amendments to IAS 1 "Presentation of financial statements" on classification of liabilities as current or non-
current
TechnipFMC 253
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 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 financial statements.
Amendment to IAS 7 and IFRS 7 “Supplier Finance Arrangements”
On May 25, 2023, the IASB issued the Amendment to IAS 7 and IFRS 7 “Supplier Finance Arrangements”,
which requires entities to provide additional information on supplier finance contracts allowing the users
of the financial statements to assess how these supplier contracts affect liabilities and cash flows and to
understand the effect on the exposure to liquidity risks. The amendments will be effective on or after
January 1, 2024. We are currently evaluating the impact of this amendment on our financial statements
and do not expect that the adoption of the amendment will have a significant impact on the Company's
financial statements.
Amendments to IFRS 16 "Leases" Lease Liability in a Sale and Leaseback
In September 2022, the IASB finalized narrow-scope amendments to the requirements for sale and
leaseback transactions in IFRS 16 Leases which explain how an entity accounts for a sale and leaseback
after the date of the transaction. The amendments specify that, in measuring the lease liability
subsequent to the sale and leaseback, the seller-lessee determines ‘lease payments’ and ‘revised lease
payments’ in a way that does not result in the seller-lessee recognizing any amount of the gain or loss
that relates to the right of use that it retains. This could particularly impact sale and leaseback
transactions where the lease payments include variable payments that do not depend on an index or a
rate. The amendments will be effective on or after January 1, 2024. We are currently evaluating the
impact of this amendment on our financial statements and do not expect that the adoption of the
amendment will have a significant impact on the Company's financial statements.
Amendments to IAS 21 - Lack of Exchangeability
An entity is impacted by the amendments when it has a transaction or an operation in a foreign currency
that is not exchangeable into another currency at a measurement date for a specified purpose. A
currency is exchangeable when there is an ability to obtain the other currency (with a normal
administrative delay), and the transaction would take place through a market or exchange mechanism
that creates enforceable rights and obligations. Assessing exchangeability between two currencies
requires an analysis of different factors; such as the time frame for the exchange, the ability to obtain
the other currency, markets or exchange mechanisms, the purpose of obtaining the other currency, and
the ability to obtain only limited amounts of the other currency. When a currency is not exchangeable
into another currency, the spot exchange rate needs to be estimated. The amendments to IAS 21 do not
provide detailed requirements on how to estimate the spot exchange rate. Instead, they set out a
framework under which an entity can determine the spot exchange rate at the measurement date. The
amendments will be effective on or after January 1, 2025. We are currently evaluating the impact of this
amendment on the financial statements and do not expect that the adoption of the amendments will
have a significant impact on the Company's 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.
At each statement of financial position date, the Company reviews the carrying values 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 value, the carrying value of
the asset is reduced to its recoverable amount. An impairment loss is recognized immediately on the
income statement.
254 TechnipFMC
Where an impairment loss subsequently reverses, the carrying value of the asset is increased to the
revised estimate of its recoverable amount, to the extent that the increased carrying value does not
exceed the carrying value 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 on 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 "Financial
Instruments" ("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 value of a loan receivable.
c)
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. 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 Company's statement of
income 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 on the Company's 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
expired. 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 value is recognized in the Company's 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.
TechnipFMC 255
At the closing statement of financial position 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 Company's 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 Company's financial statement, the statement of income of the Company’s branch is
translated into U.S. dollar ("USD") at the average exchange rate prevailing during the year. Statements of
financial position are translated at the exchange rate at the closing date. Differences arising in the
translation of the Company's financial statements of the branch are recorded in other comprehensive
income ("OCI") 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 Company's statement of income.
g)
Share capital and dividend distribution
Ordinary 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 Company's statement of changes in shareholders'
equity. Interim dividends are recognized when paid.
h)
Taxation
Corporate tax is payable on taxable income 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 income 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 statement of financial position date.
i)
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 FVOCI.
Financial assets at FVTPL 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 at FVTPL are carried in the Company's statement of financial position at fair value with
net changes in fair value recognized in the Company's statement of income.
j)
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.
256 TechnipFMC
k)
Reclassifications
Certain prior-year amounts have been reclassified to conform to the current year's presentation. Refer to
the statement of financial position for reclassifications recorded as of December 31, 2022.
2.4 Use of critical accounting estimates, judgments and assumptions
The preparation of the Company's financial statements requires the use of critical accounting estimates,
judgements 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 expenses. 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 $10.7 million and
$2.4 million as of December 31, 2023 and 2022, respectively. 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 value may not be recoverable. No impairment indicators were identified as of December 31,
2023.
Judgements
2023
During the year ended December 31, 2023, we did not have any significant transactions that required a
critical judgment in applying the Company's accounting policies.
2022
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 value 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.
There have been no other critical judgments made in applying the Company’s accounting policies.
TechnipFMC 257
NOTE 3 - INVESTMENTS IN SUBSIDIARIES
The movements in carrying value of investments in subsidiaries are as follows:
(In millions)
Net carrying value as of 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)
2023
2022
$
4,084.8 $
10,052.4
—
—
—
—
(4,300.0)
(1,834.0)
(444.7)
611.1
Net carrying value as of December 31,
$
4,084.8 $
4,084.8
(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 value 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. See Note 11.
During 2023 there were no changes to wholly-owned subsidiary undertakings.
During 2022 the Company transferred a number of wholly-owned subsidiary undertakings to other
wholly-owned subsidiaries for the issue of shares. These transactions did not substantially change the
risk, timing or amount of cash flows available to the Company and accordingly they were recorded at
cost with no change to the total carrying value of investments or any gain or loss.
During the year ended December 31, 2023 and 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, 2023 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
Address
Share Class
Effective interest
held in %
Technip Offshore International SAS 1bis Place de la Défense Tour Trinity 92400 Courbevoie Ordinary shares 100
UNITED KINGDOM
TechnipFMC Group Holdings
Limited
Hadrian House, Wincomblee Road,
Newcastle upon Tyne, NE6 3PL, U.K.
TechnipFMC Finance Limited
Hadrian House, Wincomblee Road,
Newcastle Upon Tyne, NE6 3PL
Ordinary shares 100
Ordinary shares 100
VENEZUELA
Technip Bolivar, C.A.
523 Zona Industrial Matanzas, Planta De Bauxilum
Puerto Ordaz Ciudad Bolivar
Ordinary shares 99.88
NOTE 4 - LOAN RECEIVABLES - RELATED PARTIES
(In millions)
Loan receivables - current
Loan receivables - non-current
Total loan receivables - related parties
December 31,
2023
2022
$
$
— $
4,441.3
1,511.9
—
1,511.9 $
4,441.3
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, 2023 and 2022.
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
258 TechnipFMC
is in the amount of $4,300 million and interest rate of 6.05% is repayable on demand with no repayment
date.
During 2023 the Company signed an amendment to the Corporate Holdings Ltd loan. According to the
agreement the loan receivable due from Corporate Holdings Ltd was settled with the outstanding loan
due to TechnipFMC Corporate Holdings Ltd. As of December 31, 2023 the outstanding loan receivable
from Corporate Holdings Ltd is in the amount of $1,511.9 and interest rate of 6.31% repayable on
December 31, 2026.
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 23.5%. The income/ (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 nil as of December 31, 2023 and 2022, respectively.
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
There were no deferred tax asset movements in 2023.
NOTE 6 - TRADE AND OTHER RECEIVABLES
(In millions)
Trade receivables - related parties
Prepaid expenses
Total trade and other receivables, net
December 31,
2023
2022
— $
—
—
—
— $
(1.8)
1.8
—
—
—
December 31,
2023
2022
37.9 $
9.1
47.0 $
16.2
8.3
24.5
$
$
$
$
The Company’s trade receivables from related parties are stated net of loss allowance of nil as of
December 31, 2023 and 2022. There was no material expected credit loss for trade and other
receivables as of December 31, 2023 and 2022.
TechnipFMC 259
NOTE 7 - STOCKHOLDERS’ EQUITY
7.1 Changes in the Company’s ordinary shares
As of December 31, 2023, TechnipFMC’s share capital was 432,847,108 ordinary shares. As of December
31, 2022, TechnipFMC's share capital was 442,208,014 ordinary shares. The movements in ordinary
shares were as follows:
(In millions of shares)
December 31, 2021
Stock awards
Shares repurchased and cancelled
December 31, 2022
Stock awards
Shares repurchased and cancelled
December 31, 2023
Ordinary Shares
450.7
1.6
(10.1)
442.2
2.9
(12.2)
432.9
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”. 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 income available for distribution justify the payment. When
recommending or declaring payment of a dividend, the directors are required under U.K. law to comply
with their duties, including considering its future financial requirements.
The additional information required in relation to shareholder’s equity is provided in Note 17 to
TechnipFMC consolidated financial statements.
7.2 Dividends
On July 26, 2023, the Company announced the initiation of a quarterly cash dividend. On July 25, 2023
and October 24, 2023, Board of Directors authorized and declared a quarterly cash dividend of $0.05 per
share. The cash dividends paid during the years ended December 31, 2023 and 2022 were $43.5 million
and nil, respectively.
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. On July 26, 2023, the Board of
Directors authorized additional share repurchase of up to $400.0 million. Together with the existing
program, the Company’s total share repurchase authorization was increased to $800.0 million of our
outstanding ordinary shares under our share repurchase program. Pursuant to this share repurchase
program, we repurchased $205.1 million of ordinary shares during the year ended December 31, 2023.
Since the initial share repurchase authorization in July 2022, we have purchased an aggregate amount of
$305.3 million of ordinary shares through December 31, 2023. Based upon the remaining repurchase
authority of $494.7 million and the closing stock price as of December 31, 2023, 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
arrangements. Details of the directors’ remuneration is provided in the Directors’ Remuneration Report in
this U.K. Annual Report.
260 TechnipFMC
NOTE 8 - DEBT (SHORT-TERM AND LONG-TERM)
Debt consisted of the following:
(In millions)
5.75% Notes due 2025
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
Other
Total short-term debt and current portion of long-term debt
December 31,
2023
2022
$
219.8 $
200.6
82.9
108.1
108.3
719.7
—
—
16.8
16.8
Total debt
$
736.5 $
211.6
199.7
80.0
104.1
104.4
699.8
138.6
133.4
18.4
290.4
990.2
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,
2023
2022
Borrowings from TechnipFMC Corporate Holdings Ltd (UK)
$
— $
Borrowings from TechnipFMC (Europe) Ltd
Short-term loan payables - related parties
Borrowing from TechnipFMC International Holdings BV
Borrowing from Technip Coflexip UK Holdings Ltd
Borrowings from Technip Holding Benelux BV
Borrowing from TechnipFMC (Europe) Ltd
Borrowings from TechnipFMC International (UK) Ltd
Long-term loan payables - related parties
Total loan payables - related parties
—
—
29.6
38.3
294.0
405.1
444.6
1,211.6
3,011.7
394.5
3,406.2
28.7
37.1
284.8
—
418.3
768.9
$
1,211.6 $
4,175.1
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.
•
•
•
During 2023 the Company signed an amendment to the Corporate Holdings Ltd borrowings.
According to the agreement the loan receivable due from Corporate Holdings Ltd was settled
with the outstanding loan payable to TechnipFMC Corporate Holdings Ltd. As of December 31,
2022, the loan payable to TechnipFMC Corporate Holdings Ltd was $3,011.7 million. 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 with 5 year term and interest rates of 4.83%, 4.68% and
2.69% respectively.
As of December 31, 2023, loan from TechnipFMC International Ltd was in the amount of $444.6
million with a five-year term and interest rate of 2.69%. During 2022, the loan was extinguished.
As of December 31, 2022, loan from TechnipFMC International Limited is in the amount of
$417.5 million with a three-year term and interest rate of 6.19%.
Loan from TechnipFMC (Europe) Limited is in the amount of $405.1 million and $394.5 million as
of December 31, 2023 and 2022, respectively, with a 5 year term and interest rate of 2.69%.
TechnipFMC 261
•
•
•
Loan from Technip Holding Benelux BV is in the amount of $294.0 million and $284.8 million as
of December 31, 2023 and 2022, respectively, with a 5 year term and interest rate of 3.22%.
Loan from Technip Coflexip UK Holdings Limited is in the amount of $38.3 million and $37.1
million as of December 31, 2023 and 2022, respectively, with a 5 year term and interest rate of
3.22%.
Loan from TechnipFMC International Holdings BV is in the amount of $29.6 million and $28.7
million as of December 31, 2023 and 2022, respectively, with a 5 year term and interest rate of
3.22%.
NOTE 10 - TRADE AND OTHER PAYABLES
Trade and other payables consist of the following:
(In millions)
Overdraft with cash pool
Trade payables - related parties
Other current liabilities
Trade and other payables
December 31,
2023
2022
$
$
1,370.0 $
15.0
0.6
1,385.6 $
732.5
18.4
2.6
753.5
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 values 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
There were no contributions in 2023.
NOTE 12 - SUBSEQUENT EVENTS
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 20, 2024, the Company announced that its Board of Directors has authorized and declared a
quarterly cash dividend of $0.05 per share, payable on April 3, 2024 to shareholders of record as of the
close of business on the New York Stock Exchange on March 19, 2024. The ex-dividend date is March 18,
2024.
On March 7, 2024 both the Company's issuer credit rating and the correspondent rated Notes were
upgraded by S&P to BBB-.
262 TechnipFMC