fti-20210908
0001681459false00016814592021-09-082021-09-08

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

September 8, 2021
Date of Report (Date of earliest event reported)

TechnipFMC plc
(Exact name of registrant as specified in its charter)
                 
United Kingdom001-3798398-1283037
(State or other jurisdiction of incorporation)(Commission File Number)(I.R.S. Employer Identification No.)

Hadrian House,
Wincomblee Road
Newcastle Upon Tyne
United KingdomNE6 3PL
(Address of principal executive offices)(Zip Code)
+44 191-295-0303
(Registrant's telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)
______________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Ordinary shares, $1.00 par value per shareFTINew York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 8.01    Other Events
TechnipFMC plc (the "Company") is filing this Current Report on Form 8-K solely to revise certain financial information and related disclosures included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 5, 2021 (the “2020 Form 10-K”).
On February 16, 2021, the Company completed the separation of its former 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 its shareholders of 50.1 percent of the outstanding shares of Technip Energies N.V. Each shareholder of the Company received one ordinary share of Technip Energies N.V. for every five ordinary shares of the Company held at 5:00 p.m., New York City time on the record date, February 17, 2021. For all periods presented in this Form 8-K, the historical results of operations of the former Technip Energies reportable segment and its assets and liabilities have been included within discontinued operations in the Company's consolidated financial statements.
This Form 8-K is being filed solely to recast financial information to revise certain related disclosures contained in the 2020 Form 10-K to reflect the Spin-off and to reflect the retrospective changes for all periods presented. The following items of the 2020 Form 10-K are being revised (collectively, the "Revised Sections") as reflected in Exhibit 99.1 to this Current Report on Form 8-K.
Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations;
Part II, Item 7A. Quantitative and Qualitative Disclosures about Market Risk;
Part II, Item 8. Financial Statements and Supplementary Data; and
Part IV, Item 15(a)(2), Financial Statement Schedule

The disclosures in the Revised Sections were updated to reflect the Company’s results as if the discontinued operations criteria for its former Technip Energies reportable segment had been met during the periods being presented. Other than Note 25 of Part II, Item 8 "Financial Statements and Supplementary Data," the Revised Sections, including Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Company’s Business Outlook contained therein, do not reflect events occurring after the filing of the 2020 Form 10-K and do not modify or update the disclosures therein in any way for any information, uncertainties, transactions, risks, events or trends occurring, or known to management, other than as specifically required to reflect the discontinued operations presentation. Other than the Revised Sections filed with this Current Report on Form 8-K, all other information in the 2020 Form 10-K remains unchanged and has not been otherwise updated for events occurring after the filing of the 2020 Form 10-K, and continues to speak only as of the original filing date.
More recent information, including risk factors, is contained in the Company’s quarterly reports on Form 10-Q for the quarterly periods ended March 31, 2021 (the "Q1 Form 10-Q") and June 30, 2021 (the "Q2 Form 10-Q") and other filings made by the Company with the SEC. Such filings contain important information regarding events, developments, and updates affecting the Company and its expectations, including those that have occurred since the filing of the 2020 Form 10-K. Accordingly, this Current Report on Form 8-K should be read in conjunction with the Q1 Form 10-Q, Q2 Form 10-Q and other filings made by the Company with the SEC subsequent to the filing of the 2020 Form 10-K.
Item 9.01    Financial Statements and Exhibits

(d) Exhibits

Exhibit No.    Description

23.1    Consent of the Independent Registered Public Accounting Firm

99.1    Revised Sections of the 2020 Form 10-K

104    Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


TechnipFMC plc
By: /s/ Alf Melin
Dated:September 8, 2021Name: Alf Melin
Title: Executive Vice President and Chief Financial Officer

Document


Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-240355) of TechnipFMC plc of our report dated March 5, 2021, except with respect to our opinion on the consolidated financial statements insofar as it relates to the effects of discontinued operations discussed in Note 2, as to which the date is September 8, 2021, relating to the financial statements and financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Current Report on Form 8-K.


/s/PricewaterhouseCoopers
Houston, Texas
September 8, 2021

Document

PART II
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

All references to “TechnipFMC,” the “Company,” “we,” or “our” refer to TechnipFMC plc, a public limited company incorporated and organized under the laws of England and Wales, with registered number 09909709, and with its registered office at Hadrian House, Wincomblee Road, Newcastle Upon Tyne, NE6 3PL, United Kingdom.

TechnipFMC plc (the "Company") is filing this Current Report on Form 8-K (including this Exhibit 99.1, the “Form 8-K”) solely to revise certain financial information and related disclosures included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 5, 2021 (the “2020 Form 10-K”).

On February 16, 2021, the Company completed the separation of its former 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 its shareholders of 50.1 percent of the outstanding shares of Technip Energies N.V. Each shareholder of the Company received one ordinary share of Technip Energies N.V. for every five ordinary shares of the Company held at 5:00 p.m., New York City time on the record date, February 17, 2021. For all periods presented in this Form 8-K, the historical results of operations of the former Technip Energies reportable segment and its assets and liabilities have been included within discontinued operations in the Company's consolidated financial statements.

This Form 8-K is being filed solely to recast financial information to revise certain related disclosures contained in the 2020 Form 10-K to reflect the Spin-off and to reflect the retrospective changes for all periods presented. The following items of the 2020 Form 10-K are being revised (collectively, the "Revised Sections") as reflected in Exhibit 99.1 to this Current Report on Form 8-K.
Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations;
Part II, Item 7A. Quantitative and Qualitative Disclosures about Market Risk;
Part II, Item 8. Financial Statements and Supplementary Data;
Part IV, Item 15(a)(2), Financial Statement Schedule
EXECUTIVE OVERVIEW        
We are a global leader in energy projects, technologies, systems and services. We have manufacturing operations worldwide, strategically located to facilitate efficient delivery of these products, technologies, systems and services to our customers. We report our results of operations in the following segments: Subsea 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 7 to our consolidated financial statements.
We focus on economic and industry-specific drivers and key risk factors affecting our business segments as we formulate our strategic plans and make decisions related to allocating capital and human resources. The results of our segments are primarily driven by changes in capital spending by oil and gas companies, which largely depend upon current and anticipated future crude oil and natural gas demand, production volumes, and consequently, commodity prices. We use crude oil and natural gas prices as an indicator of demand. Additionally, we use both onshore and offshore rig count as an indicator of demand, which consequently influences the level of worldwide production activity and spending decisions. We also focus on key risk factors when determining our overall strategy and making decisions for capital allocation. These factors include risks associated with the global economic outlook, product obsolescence and the competitive environment. We address these risks in our business strategies, which incorporate continuing development of leading edge technologies and cultivating strong customer relationships.
Our Subsea segment is affected by changes in commodity prices and trends in deepwater oil and natural gas production and benefits from the current market fundamentals supporting the demand for new liquefied natural gas facilities.
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Our Surface Technologies segment is primarily affected by changes in commodity prices and trends in land-based and shallow water oil and natural gas production. We have developed close working relationships with our customers. Our results reflect our ability to build long-term alliances with oil and natural gas companies and to provide solutions for their needs in a timely and cost-effective manner. We believe that by closely working with our customers, we enhance our competitive advantage, improve our operating results and strengthen our market positions.
As we evaluate our operating results, we consider business segment performance indicators like segment revenue, operating profit and capital employed, in addition to the level of inbound orders and order backlog. A significant proportion of our revenue is recognized under the percentage of completion method of accounting. Cash receipts from such arrangements typically occur at milestones achieved under stated contract terms. Consequently, the timing of revenue recognition is not always correlated with the timing of customer payments. We aim to structure our contracts to receive advance payments that we typically use to fund engineering efforts and inventory purchases. Working capital (excluding cash) and net debt are therefore key performance indicators of cash flows.
In both of our segments, we serve customers from around the world. During 2020, approximately 80 percent of our total sales were recognized outside of the United States. We evaluate international markets and pursue opportunities that fit our technological capabilities and strategies.
The Spin-off

On February 16, 2021, we completed the separation of the Technip Energies business segment. The transaction was structured as a spin-off (the “Spin-off”), which occurred by way of a pro rata dividend (the “Distribution”) to our shareholders of 50.1 percent of the outstanding shares of Technip Energies N.V. Each of our shareholders received one ordinary share of Technip Energies N.V. for every five ordinary shares of TechnipFMC held at 5:00 p.m., New York City time on the record date, February 17, 2021. Technip Energies N.V. is now an independent public company and its shares trade under the ticker symbol “TE” on the Euronext Paris stock exchange.
BUSINESS OUTLOOK
Overall outlook – While economic activity continues to be impacted by the COVID-19 pandemic, the short-term outlook for crude oil has improved as the OPEC+ countries better manage the oversupplied market. Long-term demand for energy is still forecast to rise, and we believe this outlook will ultimately provide our customers with the confidence to increase investments in new sources of oil and natural gas production.

Subsea – The volatile, and generally low crude oil price environment of the last several years led many of our customers to reduce their capital spending plans and defer new deepwater projects. Order activity in 2020 was particularly impacted by the sharp decline in commodity prices, driven in part by the reduced economic activity, and the general uncertainty related to the pandemic. The reduction and deferral of new projects resulted in delayed subsea project inbound for the industry.

The trajectory and pace of further recovery and expansion in the subsea market is subject to more stringent capital discipline and the allocation of capital our clients dedicate to developing offshore oil and gas fields amongst their entire portfolio of projects. The risk of project sanctioning delays still exists in the current environment; however, innovative approaches to subsea projects, like our unique integrated offering, iEPCI™ (“iEPCI”) solution, have improved project economics, and many offshore discoveries can be developed economically at today’s crude oil prices. In the long-term, deepwater development is expected to remain a significant part of many of our customers’ portfolios.

As the subsea industry continues to evolve, we have taken actions to further streamline our organization, achieve standardization, and reduce cycle times. The rationalization of our global footprint will also further leverage the benefits of our integrated offering. We aim to continuously align our operations with activity levels, while preserving our core capacity in order to deliver current projects in backlog and future order activity.

We have experienced renewed operator confidence in advancing subsea activity as a result of the improved economic outlook, lower market volatility and higher oil price. With crude now trending back above $50 per barrel, the opportunity set of large subsea projects to be sanctioned over the next 24 months has expanded.

Front-end engineering and design (“FEED”) activity is also improving, with solid momentum experienced in the second half of 2020. FEED activity in the current year is expected to return to the more robust levels seen in 2019, which further supports our view of a sustainable recovery for deepwater. We expect at least 60% of the projects
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undergoing studies in 2021 to include an iEPCI solution, many of which could be directly awarded to our Company upon reaching final investment decision.

TechnipFMC is increasingly less dependent on larger, publicly tendered projects.
We anticipate that an increasing share of our inbound orders will result from projects that will be directly awarded to our Company, many of which come from our alliance partners;

We anticipate higher activity in subsea services, with the industry’s largest installed base; and

We expect a higher mix of iEPCI project awards, demonstrating strong geographic diversity and new adopters of our unique, integrated approach to subsea development.

For 2021, we believe that Subsea inbound orders will meet or exceed the $4 billion achieved in 2020. We expect Brazil to be the most active region of the world for new project orders, driven by continued investment in the pre-salt field discoveries. We anticipate additional market growth potential coming from the North Sea, Asia Pacific and Africa. The strong front end activity we are experiencing today should further support project award momentum into 2022.

Surface Technologies – Surface Technologies’ performance is typically driven by variations in global drilling activity, creating a dynamic environment. Operating results can be further impacted by stimulation activity and the completions intensity of shale applications in the Americas.

The North America shale market is sensitive to oil price fluctuations. The average rig count declined by just over 50 percent in 2020, with drilling and completion spending estimated to have declined by a similar amount. North America activity improved over the second half of the year as the rig count increased following the rising oil price. The rig count exited 2020 below prior year-end levels but has experienced further improvement in the current year.

In 2021, we expect our completions-related revenue to outperform the overall market, driven by increased market adoption of iComplete™ – our fully integrated, digitally-enabled pressure control system. iComplete™ has already achieved significant market penetration since its introduction in the third quarter of 2020, with 10 customers utilizing the new integrated system.

Despite the sequential improvement in market activity, full year revenue for North America is expected to be flat to down modestly versus 2020.

Drilling activity in international markets is less cyclical than North America as most activity is driven by national oil companies, which tend to maintain a longer term view that exhibits less variability in capital spend. Additionally, we continue to benefit from our exposure to the Middle East and Asia Pacific, both of which are being supported by strong gas-related activity.

In recent years, our international revenue has become a greater proportion of total segment revenue. We expect a gradual and steady recovery in well count in 2021 to drive modest international market growth, with spending increases led by national oil companies, particularly in the Middle East.

Our unique capabilities in the international markets, which demand higher specification equipment, global services and local content, provide a platform for us to extend our leadership positions. We remain levered to these more resilient markets where we expect to source approximately 65% of our full year Surface Technologies revenue in 2021.



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CONSOLIDATED RESULTS OF OPERATIONS
 Year Ended December 31,Change
(In millions, except percentages)2020201920182020 vs. 20192019 vs. 2018
Revenue$6,530.6 $6,950.2 $6,271.7 $(419.6)(6.0)%$678.5 10.8 %
Costs and expenses
Cost of sales5,835.8 5,892.1 5,127.7 (56.3)(1.0)%764.4 14.9 %
Selling, general and administrative expense724.1 795.7 776.6 (71.6)(9.0)%19.1 2.5 %
Research and development expense75.3 149.5 157.3 (74.2)(49.6)%(7.8)(5.0)%
Impairment, restructuring and other expense3,402.0 2,456.7 1,815.4 945.3 38.5 %641.3 35.3 %
Merger transaction and integration costs — 14.2 18.4 (14.2)(100.0)%(4.2)(22.8)%
Total costs and expenses10,037.2 9,308.2 7,895.4 729.0 7.8 %1,412.8 17.9 %
Other income (expense), net25.1 (181.6)(67.0)206.7 113.8 %(114.6)(171.0)%
Income from equity affiliates64.6 59.8 80.9 4.8 8.0 %(21.1)(26.1)%
Net interest expense(81.8)(91.3)(113.4)9.5 10.4 %22.1 19.5 %
Loss before income taxes(3,498.7)(2,571.1)(1,723.2)(927.6)(36.1)%(847.9)(49.2)%
Provision for income taxes19.4 79.0 71.3 (59.6)(75.4)%7.7 10.8 %
Loss from continuing operations(3,518.1)(2,650.1)(1,794.5)(868.0)(32.8)%(855.6)(47.7)%
(Income) loss from continuing operations attributable to non-controlling interests(34.5)4.6 (10.9)(39.1)(850.0)%15.5 142.2 %
Loss from continuing operations attributable to TechnipFMC plc(3,552.6)(2,645.5)(1,805.4)$(907.1)(34.3)%$(840.1)(46.5)%
Income (loss) from discontinued operations280.2 238.0 (116.3)42.2 17.7 %354.3 304.6 %
(Income) loss from discontinued operations attributable to non-controlling interests(15.2)(7.7)0.1 (7.5)(97.4)%(7.8)(7,800.0)%
Net loss attributable to TechnipFMC plc$(3,287.6)$(2,415.2)$(1,921.6)$(872.4)(36.1)%$(493.6)(25.7)%

Results of Operations in 2020 Compared to 2019
Revenue
Revenue decreased by $419.6 million in 2020 compared to 2019. Subsea revenue remained flat year-over-year. Surface Technologies revenue decreased, primarily as a result of the significant decline in operator activity in North America, with partial positive impact from order intake timing in international markets. In addition, our consolidated revenues were negatively impacted by operational challenges associated with the COVID-19 related disruptions.
Gross Profit
Gross profit (revenue less cost of sales) as a percentage of sales decreased to 10.6% in 2020 compared to 15.2% in 2019. Subsea gross profit decreased due to a more competitively priced backlog and the negative operational impacts related to COVID-19. Surface Technologies gross profit was negatively impacted by the year-over-year decline in North American drilling and completions activity, which was partially offset by the lower costs from our accelerated cost reduction initiative implemented during 2020.
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Selling, General and Administrative Expense
Selling, general and administrative expense decreased by $71.6 million year-over-year, primarily as a result of decreased corporate expenses. During the beginning of 2020, in response to the deteriorated market environment, driven in part by the COVID-19 pandemic, we implemented a series of cost reduction initiatives that resulted in significant savings and extended to both business segments and support functions.
Impairment, Restructuring and Other Expenses
We incurred $3,402.0 million of restructuring, impairment and other expenses in 2020. These charges primarily included $3,083.4 million of goodwill impairment, $190.4 million of long-lived assets impairment, $57.8 million of COVID-19 related expenses, and $70.4 million for restructuring and severance expenses. COVID-19 related expenses represent unplanned, one-off, incremental and non-recoverable costs incurred solely as a result of the COVID-19 pandemic situation, which would not have been incurred otherwise. COVID-19 related expenses primarily included (a) employee payroll and travel, operational disruptions associated with quarantining, personnel travel restrictions to job sites, and shutdown of manufacturing plants and sites; (b) supply chain and related expediting costs of accelerated shipments for previously ordered and undelivered products; (c) costs associated with implementing additional information technology to support remote working environments; and (d) facilities-related expenses to ensure safe working environments. COVID-19 related expenses exclude costs associated with project and/or operational inefficiencies, time delays in performance delivery, indirect costs increases and potentially reimbursable or recoverable expenses. During 2019, we incurred $2,456.7 million of restructuring, impairment and other expenses, which included $1,988.7 million and $491.6 million of goodwill and long-lived assets impairments, respectively. See Note 19 to our consolidated financial statements for further details.
Merger Transaction and Integration Costs
Prior to the initial announcement of the planned Spin-off of Technip Energies in August 2019, we incurred merger transaction and integration costs of $14.2 million during the first half of 2019 relating to the continuation of the integration activities following the merger of equals between FMC Technologies, Inc., a U.S. Delaware corporation and Technip S.A., a French société anonyme, completed on January 16, 2017 (the “Merger”). No such costs were incurred subsequently in 2019 or in 2020.

Other Income (Expense), Net
Other income (expense), net, primarily reflects foreign currency gains and losses, including gains and losses associated with the remeasurement of net cash positions, gains and losses on sales of property, plant and equipment and other non-operating gains and losses. During 2020, we recognized $25.1 million of other income, which primarily included $23.1 million of gains on sales of property, plant and equipment and other assets. During 2019, we recognized $181.6 million of other expenses, which primarily included $135.5 million of net foreign exchange losses and $33.0 million of legal provision, net of settlements. The change in foreign exchange losses is primarily due to a reduction in foreign exchange losses from unhedged currencies, more favorable hedging costs, and the effects of a weakened U.S. dollar on naturally hedged projects.
Net Interest Expense
Net interest expense decreased $9.5 million in 2020 compared to 2019, primarily as a result of lower outstanding debt balances during 2020.
Provision for Income Taxes
Our provision for income taxes for 2020 and 2019 reflected effective tax rates of (0.6)% and (3.1)%, respectively. The year-over-year change in the effective tax rate was primarily due to the impact of nondeductible goodwill impairments, increase in adjustment on prior year taxes, offset in part by the amount of tax expense associated with movements in valuation allowances.
Our effective tax rate can fluctuate depending on our country mix of earnings, which may change based on changes in the jurisdictions in which we operate.


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Results of Operations in 2019 Compared to 2018
Revenue
Revenue increased by $678.5 million in 2019 compared to 2018, primarily as a result of improved project activity. Subsea revenue increased year-over-year with higher project-related activity, including increased revenue from iEPCI and increased demand in subsea services. Surface Technologies revenue increased primarily as a result of improved order backlog from international markets, primarily in the Middle East and Asia Pacific regions.

Gross Profit
Gross profit (revenue less cost of sales) as a percentage of sales decreased to 15.2% in 2019 compared to 18.2% in 2018. Subsea gross profit decreased due to a more competitively priced backlog and Surface Technologies gross profit was negatively impacted by the year-over-year decline in North American drilling and completions activity.
Selling, General and Administrative Expense
Selling, general and administrative expense increased by $19.1 million year-over-year, primarily as a result of increased corporate expense driven largely by accelerated IT spending as well as additional performance incentive compensation awards.

Impairment, Restructuring and Other Expenses
We incurred $2,456.7 million of restructuring, impairment and other expenses in 2019, which included $1,988.7 million and $491.6 million of goodwill and long-lived assets impairments, respectively. See Note 19 to our consolidated financial statements for further details.
Merger Transaction and Integration Costs
Prior to the initial announcement of the planned Spin-off of Technip Energies in August 2019, we incurred merger transaction and integration costs of $14.2 million during the first half of 2019, compared to $18.4 million incurred during 2018, relating to the continuation of the integration activities following the Merger.
Other Income (Expense), Net
Other income (expense), net, primarily reflects foreign currency gains and losses, including gains and losses associated with the remeasurement of net cash positions, gains and losses on sales of property, plant and equipment and other non-operating gains and losses. During 2019, we recognized $181.6 million of other expenses, which primarily included $135.5 million of net foreign exchange losses. During 2018, we recognized $67.0 million of other expenses, which primarily included $72.0 million of net foreign exchange losses.
Net Interest Expense
Net interest expense decreased $22.1 million in 2019 compared to 2018, primarily as a result of lower outstanding debt balances during 2019.
Provision for Income Taxes
Our provision for income taxes for 2019 and 2018 reflected effective tax rates of (3.1)% and (4.1)%, respectively. The year-over-year change in the effective tax rate was primarily due to the impact of nondeductible goodwill impairments and an increase in the adjustment on prior year taxes, partially offset by the amount of tax expense associated with movements in valuation allowances.
Our effective tax rate can fluctuate depending on our country mix of earnings, which may change based on changes in the jurisdictions in which we operate.
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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 7 to our consolidated financial statements 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 subsidiaries functioning in their local currencies are translated into U.S. dollars based upon the average exchange rate during the period. While the U.S. dollar results reported reflect the actual economics of the period reported upon, the variances from prior periods include the impact of translating earnings at different rates.
Subsea
 Year Ended December 31,Favorable/(Unfavorable)
(In millions, except %)2020201920182020 vs. 20192019 vs. 2018
Revenue$5,471.4 $5,419.5 $4,762.8 $51.9 1.0 %$656.7 13.8 %
Operating loss$(2,815.5)$(1,442.7)$(1,540.6)$(1,372.8)(95.2)%$97.9 6.4 %
Operating loss as a percentage of revenue(51.5)%(26.6)%(32.3)%(24.9) pts.5.7  pts.

2020 Compared With 2019
Subsea revenue remained flat at $5.5 billion, primarily due to operational challenges driven by the COVID-19 pandemic. However, despite these challenges and related disruptions, we continued to demonstrate strong execution of our backlog.
Subsea operating loss is primarily due to significant impairment and other non-recurring charges. The operating loss included $2,957.5 million of goodwill and long-lived assets impairments, restructuring and other charges and COVID-19 related expenses compared to $1,748.4 million in 2019. Non-recurring charges incurred related to COVID-19 disruptions during 2020 were $50.1 million. See Note 19 to our consolidated financial statements for further details.
2019 Compared With 2018
Subsea revenue increased $656.7 million year-over-year, primarily due to increased project revenue from iEPCI, particularly projects in Asia, the North Sea and the Mediterranean that progressed towards completion, partially offset by decreased activity in Australia. The increase of Subsea Services activity across the globe further added to the year-over-year growth in revenue.

Subsea operating loss improved primarily due to a more competitively priced backlog being executed. This operating loss included $1,748.4 million of asset impairment charges primarily related to the impairment of goodwill and long-lived assets compared to $1,797.6 million in 2018. See Note 19 to our consolidated financial statements for further details.

Refer to “Non-GAAP Measures” for more information regarding our segment operating results.
Surface Technologies
 Year Ended December 31,Favorable/(Unfavorable)
(In millions, except %)2020201920182020 vs. 20192019 vs. 2018
Revenue$1,059.2 $1,530.7 $1,508.9$(471.5)(30.8)%$21.8 1.4 %
Operating profit (loss)$(429.3)$(662.7)$163.2$233.4 35.2 %$(825.9)(506.1)%
Operating profit (loss) as a percentage of revenue(40.5)%(43.3)%10.8 %2.8  pts.(54.1) pts.
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2020 Compared With 2019
Surface Technologies revenue decreased $471.5 million, or 30.8% year-over-year, primarily driven by the significant reduction in operator activity in North America. Revenue outside of North America displayed resilience, with a more modest decline due to reduced activity levels. Nearly 62% of total segment revenue was generated outside of North America in the period.
Surface Technologies operating loss was primarily due to impairment and other non-recurring charges. The operating loss included $440.2 million of goodwill and long-lived assets impairments, restructuring and other charges and COVID-19 related expenses compared to $725.3 million incurred in 2019. Operating loss was also negatively impacted by the reduced demand in North America driven by the significant decline in rig count and completions-related activity, which was partially offset by lower costs from our accelerated cost reduction actions initiated in the first quarter of 2020. Non-recurring charges incurred related to COVID-19 disruptions during the period were $7.7 million. See Note 19 to our consolidated financial statements for further details.
2019 Compared With 2018
Surface Technologies revenue increased $21.8 million year-over-year primarily driven by increased activity in the Middle East & Asia Pacific markets primarily driven by increased demand for drilling and completion and pressure control equipment and services, partially offset by negative drilling and completions market activity in North America as customers curbed capital spending.

Surface Technologies operating profit as a percent of revenue decreased significantly year-over-year. The decrease was primarily due to a $725.3 million charge for impairment and restructuring and other charges, in particular related to goodwill. This compared to a $11.9 million charge in the prior year. See Note 19 to our consolidated financial statements for further details.

Operating profit was also negatively impacted by reduced demand for flowline, hydraulic fracturing services, wellhead systems and pressure control equipment in North America, partially offset by increased demand for products and services in the Middle East and Asia Pacific.

Refer to : “Non-GAAP Measures” for more information regarding our segment operating results.
Corporate Items
 Year Ended December 31,Favorable/(Unfavorable)
(In millions, except %)2020201920182020 vs. 20192019 vs. 2018
Corporate expense$(131.9)$(238.9)$(160.4)$107.0 44.8 %$(78.5)(48.9)%

2020 Compared With 2019
Corporate expenses decreased by $107.0 million, or 44.8%, during 2020. The reduction in corporate expenses is primarily due to a $33.0 million decrease in legal provision, net of settlements; a $55.9 million decrease due to lower activity and the impact of cost reductions implemented in 2020 and a $16.6 million decrease in integration expenses.
2019 Compared With 2018
Corporate expenses increased by $78.5 million, or 48.9%, during 2019 primarily as a result of accelerated IT spending as well as additional performance incentive compensation awards.
Refer to “Non-GAAP Measures” for more information regarding our segment operating results.
8


NON-GAAP MEASURES
In addition to financial results determined in accordance with U.S. generally accepted accounting principles (“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:
Income (loss) from continuing operations, excluding charges and credits, as well as measures derived from it (excluding charges and credits);
Income (loss) before interest income, interest expense and income taxes, excluding charges and credits (“Adjusted Operating profit”);
Adjusted diluted earnings (loss) per share from continuing operations attributable to TechnipFMC plc;
Depreciation and amortization, excluding charges and credits (“Adjusted Depreciation and amortization”);
Earnings before net interest expense, income taxes, depreciation and amortization, excluding charges and credits (“Adjusted EBITDA”);
Corporate expenses excluding charges and credits;
Net debt; and
Free cash flow (deficit) from continuing operations.
Management believes that the exclusion of charges and credits from these financial measures enables investors and management to more effectively evaluate our 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 GAAP.
The following is a reconciliation of the most comparable financial measures under GAAP to the non-GAAP financial measures.















9


Year Ended
December 31, 2020
Loss from continuing operations attributable to TechnipFMC plcIncome attributable to non-controlling interests from continuing operationsProvision (benefit) for income taxesNet interest expenseLoss before net interest expense and income taxes (Operating profit)Depreciation and amortizationEarnings before net interest expense, income taxes, depreciation and amortization (EBITDA)
TechnipFMC plc, as reported$(3,552.6)$34.5 $19.4 $81.8 $(3,416.9)$412.1 $(3,004.8)
Charges and (credits):
Impairment and other charges3,260.4 — 13.4 — 3,273.8 — 3,273.8 
Restructuring and other charges65.4 — 5.0 — 70.4 — 70.4 
Direct COVID-19 expenses51.6 — 6.2 — 57.8 — 57.8 
Purchase price accounting adjustment6.6 — 1.9 — 8.5 (8.5)— 
Adjusted financial measures$(168.6)$34.5 $45.9 $81.8 $(6.4)$403.6 $397.2 
Diluted loss per share from continuing operations attributable to TechnipFMC plc, as reported$(7.92)
Adjusted diluted loss per share from continuing operations attributable to TechnipFMC plc$(0.38)


Year Ended
December 31, 2019
Loss from continuing operations attributable to TechnipFMC plcLoss attributable to non-controlling interests from continuing operationsProvision (benefit) for income taxesNet interest expenseIncome (loss) before net interest expense and income taxes (Operating profit)Depreciation and amortizationEarnings before net interest expense, income taxes, depreciation and amortization (EBITDA)
TechnipFMC plc, as reported$(2,645.5)$(4.6)$79.0 $91.3 $(2,479.8)$467.7 $(2,012.1)
Charges and (credits):
Impairment and other charges2,361.6 — 118.7 — 2,480.3 — 2,480.3 
Restructuring and other charges(0.7)— (1.8)— (2.5)— (2.5)
Merger transaction and integration costs10.3 — 3.9 — 14.2 — 14.2 
Legal provisions, net24.7 — 8.3 — 33.0 — 33.0 
Purchase price accounting adjustment26.0 — 8.0 — 34.0 (34.0)— 
Adjusted financial measures$(223.6)$(4.6)$216.1 $91.3 $79.2 $433.7 $512.9 
Diluted loss per share from continuing operations attributable to TechnipFMC plc, as reported$(5.91)
Adjusted diluted loss per share from continuing operations attributable to TechnipFMC plc$(0.50)






10


Year Ended
December 31, 2018
Income (loss) from continuing operations attributable to TechnipFMC plcIncome attributable to non-controlling interests from continuing operationsProvision (benefit) for income taxesNet interest expenseIncome (loss) before net interest expense and income taxes (Operating profit)Depreciation and amortizationEarnings before net interest expense, income taxes, depreciation and amortization (EBITDA)
TechnipFMC plc, as reported$(1,805.4)$10.9 $71.3 $113.4 $(1,609.8)$515.2 $(1,094.6)
Charges and (credits):
Impairment and other charges1,688.6 — 93.9 — 1,782.5 — 1,782.5 
Restructuring and other charges27.9 — 5.0 — 32.9 — 32.9 
Integration costs14.3 — 4.1 — 18.4 — 18.4 
Gain on divestitures(2.0)— (1.3)— (3.3)— (3.3)
Legal provision, net20.0 — 20.0 — 20.0 
Purchase price accounting adjustments67.9 — 20.9 — 88.8 (88.8)— 
Adjusted financial measures$11.3 $10.9 $193.9 $113.4 $329.5 $426.4 $755.9 
Diluted loss per share from continuing operations attributable to TechnipFMC plc, as reported$(3.94)
Adjusted diluted earnings per share from continuing operations attributable to TechnipFMC plc$0.02 














11


Year Ended
December 31, 2020
SubseaSurface TechnologiesCorporate ExpenseForeign Exchange, netTotal
Revenue$5,471.4 $1,059.2 $— $— $6,530.6 
Operating loss, as reported (pre-tax)$(2,815.5)$(429.3)$(131.9)$(40.2)$(3,416.9)
Charges and (credits):
Impairment and other charges2,854.5 419.3 — — 3,273.8 
Restructuring and other charges*52.9 13.2 4.3 — 70.4 
Direct COVID-19 expenses50.1 7.7 — — 57.8 
Purchase price accounting adjustments8.5 — — — 8.5 
Subtotal2,966.0 440.2 4.3 — 3,410.5 
Adjusted Operating profit (loss)150.5 10.9 (127.6)(40.2)(6.4)
Adjusted Depreciation and amortization316.4 70.1 17.1 — 403.6 
Adjusted EBITDA$466.9 $81.0 $(110.5)$(40.2)$397.2 
Operating profit margin, as reported(51.5)%(40.5)%(52.3)%
Adjusted Operating profit margin2.8 %1.0 %-0.1 %
Adjusted EBITDA margin8.5 %7.6 %6.1 %
*On December 30, 2019, we completed the acquisition of the remaining 50% of Technip Odebrecht PLSV CV. A $7.3 million gain was recorded within restructuring and other charges in the Subsea segment during 2020.
12


Year Ended
December 31, 2019
SubseaSurface TechnologiesCorporate ExpenseForeign Exchange, netTotal
Revenue$5,419.5 $1,530.7 $— $— $6,950.2 
Operating loss, as reported (pre-tax)$(1,442.7)$(662.7)$(238.9)$(135.5)$(2,479.8)
Charges and (credits):
Impairment and other charges*1,794.8 685.5 — — 2,480.3 
Restructuring and other charges*(46.4)39.8 4.1 — (2.5)
Merger transaction and integration costs— — 14.2 — 14.2 
Legal provision, net— — 33.0 — 33.0 
Purchase price accounting adjustments34.0 — — — 34.0 
Subtotal1,782.4 725.3 51.3 — 2,559.0 
Adjusted Operating profit (loss)339.7 62.6 (187.6)(135.5)79.2 
Adjusted Depreciation and amortization311.2 106.9 15.6 — 433.7 
Adjusted EBITDA$650.9 $169.5 $(172.0)$(135.5)$512.9 
Operating profit margin, as reported(26.6)%(43.3)%(35.7)%
Adjusted Operating profit margin6.3 %4.1 %1.1 %
Adjusted EBITDA margin12.0 %11.1 %7.4 %
*On December 30, 2019, we completed the acquisition of the remaining 50 percent of Technip Odebrecht PLSV CV, which resulted in a net loss of $0.9 million that was recorded in the Subsea segment. The net loss was comprised of an impairment charge of $84.2 million included within impairment and other charges and a gain on bargain purchase of $83.3 million included within restructuring and other charges.

13


Year Ended
December 31, 2018
SubseaSurface TechnologiesCorporate ExpenseForeign Exchange, netTotal
Revenue$4,762.8 $1,508.9 $— $— $6,271.7 
Operating loss, as reported (pre-tax)$(1,540.6)$163.2 $(160.4)$(72.0)$(1,609.8)
Charges and (credits):
Impairment and other charges1,779.9 2.6 — — 1,782.5 
Restructuring and other charges17.7 9.3 5.9 — 32.9 
Integration costs— — 18.4 — 18.4 
Gain on divestitures(3.3)— — — (3.3)
Legal provision, net— — 20.0 — 20.0 
Purchase price accounting adjustments81.9 7.1 (0.2)— 88.8 
Subtotal1,876.2 19.0 44.1 — 1,939.3 
Adjusted Operating profit (loss)335.6 182.2 (116.3)(72.0)329.5 
Adjusted Depreciation and amortization357.8 58.6 10.0 — 426.4 
Adjusted EBITDA$693.4 $240.8 $(106.3)$(72.0)$755.9 
Operating profit margin, as reported(32.3)%10.8 %(25.7)%
Adjusted Operating profit margin7.0 %12.1 %5.3 %
Adjusted EBITDA margin14.6 %16.0 %12.1 %
14


INBOUND ORDERS AND ORDER BACKLOG
Inbound orders - Inbound orders represent the estimated sales value of confirmed customer orders received during the reporting period. The significant decline in commodity prices, due in part to the lower demand resulting from COVID-19 contributed to the decrease in the inbound orders during 2020.
 Inbound Orders
Year Ended December 31,
(In millions)20202019
Subsea$4,003.0 $7,992.6 
Surface Technologies1,061.2 1,619.9 
Total inbound orders$5,064.2 $9,612.5 
Order backlog - Order backlog is calculated as the estimated sales value of unfilled, confirmed customer orders at the reporting date. Backlog reflects the current expectations for the timing of project execution. The scheduling of some future work included in our order backlog has been impacted by COVID-19 related disruptions and remains subject to future adjustment. See Note 6 to our consolidated financial statements for further details.
 Order Backlog
December 31,
(In millions)20202019
Subsea$6,876.0 $8,472.8 
Surface Technologies413.5 412.5 
Total order backlog$7,289.5 $8,885.3 
Subsea - Order backlog for Subsea as of December 31, 2020, decreased by $1.6 billion from December 31, 2019. Subsea backlog of $6.9 billion as of December 31, 2020, was composed of various subsea projects, including Total Mozambique LNG; Eni Coral and Merakes; Petrobras Mero I and Mero II; Energean Karish; ExxonMobil Payara; Reliance MJ-1; Equinor Johan Sverdrup Phase 2; Husky West White Rose; BP Platina; Chevron Gorgon Stage 2; and Woodside Pyxis and Lambert Deep.
Surface Technologies - Order backlog for Surface Technologies as of December 31, 2020, increased by $1.0 million compared to December 31, 2019. Given the short-cycle nature of the business, most orders are quickly converted into sales revenue; longer contracts are typically converted within twelve months.
Non-consolidated backlog - As of December 31, 2020, we had $640.2 million of non-consolidated order backlog in our Subsea segment. Non-consolidated order backlog reflects the proportional share of backlog related to joint ventures that is not consolidated due to our minority ownership position.
15


LIQUIDITY AND CAPITAL RESOURCES
Most of our cash is managed centrally and flows through centralized bank accounts controlled and maintained by TechnipFMC globally and in many operating jurisdictions to best meet the liquidity needs of our global operations.
Net Debt - Net debt, is a non-GAAP financial measure reflecting cash and cash equivalents, net of debt. Management uses this non-GAAP financial measure to evaluate our capital structure and financial leverage. We believe net debt 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 GAAP 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 balance sheets.
(In millions)December 31, 2020December 31, 2019
Cash and cash equivalents$1,269.2 $1,563.1 
Short-term debt and current portion of long-term debt(624.7)(491.6)
Long-term debt, less current portion(2,835.5)(3,328.6)
Net debt$(2,191.0)$(2,257.1)
Cash Flows
Cash flows for the years ended December 31, 2020, 2019 and 2018 were as follows:
 Year Ended December 31,
(In millions)202020192018
Cash provided by operating activities from continuing operations$772.4 $357.7 $56.2 
Cash required by investing activities from continuing operations(120.8)(378.5)(446.5)
Cash required by financing activities from continuing operations(651.9)(165.6)(115.0)
Effect of exchange rate changes on cash and cash equivalents223.5 5.9 (106.9)
Decrease in cash and cash equivalents$223.2 $(180.5)$(612.2)
Working capital$717.7 $91.0 $(332.5)
Free cash flow (deficit) from continuing operations$516.3 $(55.0)$(298.9)
2020 Compared With 2019
Operating cash flows from continuing operations - During 2020 and 2019, we generated $772.4 million and $357.7 million, respectively, in operating cash flows from continuing operations. The increase of $414.7 million in cash generated by operating activities from continuing operations in 2020 as compared to 2019 was primarily due to timing differences on project milestones and vendor payments.
Investing cash flows from continuing operations - Investing activities from continuing operations used $120.8 million and $378.5 million of cash in 2020 and 2019, respectively. The decrease in cash used by investing activities during 2020 was primarily due to decreased capital expenditures, decreased payments to acquire debt securities and increased proceeds from the sale of assets. In 2019, we purchased a deepwater dive support vessel, Deep Discoverer for $116.8 million, that was subsequently funded through a sale-leaseback transaction.
Financing cash flows from continuing operations - Financing activities from continuing operations used $651.9 million and $165.6 million in 2020 and 2019, respectively. The increase of $486.3 million in cash used for financing activities was due primarily to the increased debt pay down activity during 2020 of $796.7 million, partially offset by our efforts and commitment to preserve cash, which included reduction in cash dividends of $173.6 million and reduction in share repurchases of $92.7 million.


16


2019 Compared With 2018
Operating cash flows from continuing operations - During 2019 and 2018, we generated $357.7 million and $56.2 million, respectively, in operating cash flows from continuing operations. The increase of $301.5 million in cash generated by operating activities from continuing operations was primarily due to timing differences on project milestones and vendor payments.
Investing cash flows from continuing operations - Investing activities from continuing operations used $378.5 million and $446.5 million of cash in 2019 and 2018, respectively. The decrease in cash used by investing activities during 2019 was primarily due to decrease in cash used for business acquisitions.
Financing cash flows from continuing operations - Financing activities from continuing operations used $165.6 million and $115.0 million in 2019 and 2018, respectively. The increase of $50.6 million in cash used for financing activities was due primarily to the increased commercial paper pay down activity during 2019.
Working capital represents total changes in operating current assets and liabilities.
Free cash flow (deficit) from continuing operations is defined as operating cash flows from continuing operations less capital expenditures. The following table reconciles cash provided by operating activities from continuing operations, which is the most directly comparable financial measure determined in accordance with GAAP, to free cash flow (non-GAAP measure).
Year Ended December 31,
(In millions)202020192018
Cash provided by operating activities from continuing operations$772.4 $357.7 $56.2 
Capital expenditures(256.1)(412.7)(355.1)
Free cash flow (deficit) from continuing operations$516.3 $(55.0)$(298.9)

Debt and Liquidity

Significant Funding and Liquidity Activities - During 2020, we completed the following transactions in order to enhance our total liquidity position:
Repaid $233.9 million of 5.00% 2010 private placement notes;
Repaid the remaining outstanding balance of $190.0 million of the term loan assumed in connection with the acquisition of the remaining 50% interest in TOP CV.
Issued €200 million aggregate principal amount of 4.500% Private Placement Notes due June 30, 2025. Within three months of the effective date of the Spin-off of Technip Energies, if there is a downgrade by a nationally recognized rating agency of the corporate rating of TechnipFMC from an investment grade to a non-investment grade rating or a withdrawal of any such rating, the interest rate applicable to the Private Placement Notes will be increased to 5.75%;
Entered into a new, six-month €500 million senior unsecured revolving credit facility agreement, which may be extended for two additional three-month periods (the “Euro Facility”); and
Entered into the Bank of England’s COVID Corporate Financing Facility program (the “CCFF Program”), which allows us to issue up to £600 million of unsecured commercial paper notes.
17


Total borrowings as of December 31, 2020 and 2019 were as follows: 
(In millions)December 31,
20202019
Commercial paper$1,043.7 $1,315.6 
Synthetic bonds due 2021551.2 492.9 
3.45% Senior Notes due 2022500.0 500.0 
5.00% Notes due 2020— 224.6 
3.40% Notes due 2022184.0 168.5 
3.15% Notes due 2023159.5 146.0 
3.15% Notes due 2023153.4 140.4 
4.50% Notes due 2025245.4 — 
4.00% Notes due 202792.0 84.2 
4.00% Notes due 2032122.7 112.3 
3.75% Notes due 2033122.7 112.3 
Bank borrowings and Other298.4 532.5 
Unamortized debt issuance costs and discounts(12.8)(9.1)
Total borrowings$3,460.2 $3,820.2 

Credit Facilities - The following is a summary of our credit facilities as of December 31, 2020:
(In millions)
Description
AmountDebt
Outstanding
Commercial
Paper
Outstanding 
(a)
Letters
of Credit
Unused
Capacity
Maturity
Revolving credit facility$2,500.0 $— $225.8 $— $2,274.2 January 2023
CCFF Program£600.0 £— £600.0 £— £— March 2021
Euro Facility500.0 — — — 500.0 February 2021
Bilateral credit facility100.0 — — — 100.0 May 2021
(a)Under our commercial paper program, we have the ability to access up to $1.5 billion and €1.0 billion of financing through our commercial paper dealers. Our available capacity under our revolving credit facility is reduced by any outstanding commercial paper.
Committed credit available under our revolving credit facilities provides the ability to issue our commercial paper obligations on a long-term basis. We had $225.8 million of commercial paper issued under our facilities as of December 31, 2020. In addition, we had $817.9 million of Notes outstanding under the CCFF Program. When we have both the ability and intent to refinance certain obligations on a long-term basis, the obligations are classified as long-term, as such, the commercial paper borrowings were classified as long-term debt in our consolidated balance sheet as of December 31, 2020.
On June 12, 2020, we entered into Amendment No. 1 to the Facility Agreement and into an Amendment and Restatement Agreement to our Euro Facility. The amendments, which are effective through the respective expirations of the Facility Agreement and Euro Facility, permit us to include the gross book value of $3.2 billion of goodwill (fully impaired in the quarter ended March 31, 2020) in the calculation of consolidated net worth, which is used in the calculation of our quarterly compliance with the total capitalization ratio under the Facility Agreement and Euro Facility.
The amended and restated Facility Agreement and Euro Facility contain usual and customary covenants, representations and warranties, and events of default for credit facilities of this type, including financial covenants requiring that our total capitalization ratio not exceed 60% at the end of any financial quarter. The Facility Agreement and Euro Facility also contain covenants restricting our ability and our subsidiaries’ ability to incur additional liens and indebtedness, enter into asset sales, or make certain investments.
As of December 31, 2020, we were in compliance with all restrictive covenants under our credit facilities.
Refer to Note 24 to our consolidated financial statements for further information related to credit risk.
18


Credit Ratings - As of February 25, 2021, our credit ratings with Standard and Poor’s (S&P) are BB+ for our long-term unsecured debt and B for commercial paper program. Our credit ratings with Moody’s are Ba1 for our long-term unsecured debt.
Credit Risk Analysis
For the purposes of mitigating the effect of the changes in exchange rates, we hold derivative financial instruments. Valuations of derivative assets and liabilities reflect the fair value of the instruments, including the values associated with counterparty risk. These values must also take into account our credit standing, thus including the valuation of the derivative instrument and the value of the net credit differential between the counterparties to the derivative contract. Adjustments to our derivative assets and liabilities related to credit risk were not material for any period presented.
The income approach was used as the valuation technique to measure the fair value of foreign currency derivative instruments on a recurring basis. This approach calculates the present value of the future cash flow by measuring the change from the derivative contract rate and the published market indicative currency rate, multiplied by the contract notional values. Credit risk is then incorporated by reducing the derivative’s fair value in asset positions by the result of multiplying the present value of the portfolio by the counterparty’s published credit spread. Portfolios in a liability 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. See Notes 23 and 24 to our consolidated financial statements for further details.

At this time, we have no credit-risk-related contingent features in our agreements with the financial institutions that would require us to post collateral for derivative positions in a liability position.
Financial Position Outlook
Overview
We are committed to a strong balance sheet and ample liquidity that that will enable us to avoid distress in cyclical troughs and access capital markets throughout the cycle. We believe our liquidity has and continues to exceed the level required to achieve this goal.
Our objective in financing our business is to maintain sufficient liquidity, adequate financial resources and financial flexibility in order to fund the requirements of our business. Our capital expenditures can be adjusted and managed to match market demand and activity levels. Based on current market conditions and our future expectations, our capital expenditures for 2021 are estimated to be approximately $250.0 million. Projected capital expenditures do not include any contingent capital that may be needed to respond to a contract award.
Spin-off
In connection with the Spin-off, we executed a series of refinancing transactions, in order to provide a capital structure with sufficient cash resources to support future operating and investment plans.
Debt Issuance
On February 16, 2021, we entered into a Revolving Credit Facility that provides for aggregate revolving capacity of up to $1.0 billion. Availability of borrowings under the Revolving Credit Facility is reduced by any outstanding letters of credit issued against the facility. At February 25, 2021, there were no outstanding letters of credit and availability of borrowings under the Revolving Credit Facility was $800 million.
On January 29, 2021, we issued $1.0 billion of 6.5% senior notes due 2026 (the “2021 Notes”). The interest on the 2021 Notes is paid semi-annually on February 1 and August 1 of each year, beginning on August 1, 2021. The 2021 Notes are senior unsecured obligations and are guaranteed on a senior unsecured basis by substantially all of our wholly-owned U.S. subsidiaries and non-U.S. subsidiaries in Brazil, the Netherlands, Norway, Singapore and the United Kingdom.
Repayment of Debt
19


The proceeds from the debt issuance described above along with the available cash on hand were used to fund:

The repayment of all $522.8 million of the outstanding Synthetic Convertible Bonds that matured in January 2021.
The repayment of all $500.0 million aggregate principal amount of outstanding 3.45% Senior Notes due 2022.
The termination of the $2.5 billion senior unsecured revolving credit facility we entered into on January 17, 2017; the termination of the €500.0 million Euro Facility entered into on May 19, 2020; and the termination of CCFF Program entered into on May 19, 2020. In connection with the termination of these credit facilities, we repaid most of the outstanding commercial paper borrowings, which were $1,525.9 million as of December 31, 2020.
We will continue to be strategically focused on cash and liquidity preservation. Subsequent to the completion of the Spin-off and sale of shares to BPI, we owned 45.7% of the outstanding shares of Technip Energies. We intend to conduct an orderly sale of our remaining stake in Technip Energies over time and will use the proceeds (net of broker fees and discounts) from future sales to further reduce our net leverage, see Note 25 to our consolidated financial statements for further details.

CONTRACTUAL OBLIGATIONS
The following is a summary of our contractual obligations as of December 31, 2020:
Payments Due by Period
(In millions)Total
payments
Less than
1 year
1-3
years
3-5
years
After 5
years
Debt (a)
$3,460.2 $636.2 $2,095.4 $294.0 $434.6 
Interest on debt (a)
242.3 58.1 69.3 42.9 72.0 
Operating leases (b)
828.3 94.3 233.8 138.8 361.4 
Purchase obligations (c)
1,094.8 958.6 136.2 — — 
Pension and other post-retirement benefits (d)
7.1 7.1 — — — 
Unrecognized tax benefits (e)
28.4 (1.3)0.6 29.1 — 
Total contractual obligations$5,661.1 $1,753.0 $2,535.3 $504.8 $868.0 
(a)Our available debt is dependent upon our compliance with covenants, including negative covenants related to liens and our total capitalization ratio. Any violation of covenants or other events of default, which are not waived or cured, or changes in our credit rating could have a material impact on our ability to maintain our committed financing arrangements.
Due to our intent and ability to refinance commercial paper obligations on a long-term basis under our revolving credit facility and the variable interest rates associated with these debt instruments, only interest on our Senior Notes is included in the table. During 2020, we paid $96.0 million for interest charges, net of interest capitalized.
(b)We lease office space, manufacturing facilities and various types of manufacturing and data processing equipment. Leases of real estate generally provide for payment of property taxes, insurance and repairs by us. Substantially all of our leases are classified as operating leases.
(c)In the normal course of business, we enter into agreements with our suppliers to purchase raw materials or services. These agreements include a requirement that our supplier provide products or services to our specifications and require us to make a firm purchase commitment to our supplier. As substantially all of these commitments are associated with purchases made to fulfill our customers’ orders, the costs associated with these agreements will ultimately be reflected in cost of sales in our consolidated statements of income.
(d)We expect to contribute approximately $18.9 million to our international pension plans during 2021. Required contributions for future years depend on factors that cannot be determined at this time. Additionally, we expect to pay directly to beneficiaries approximately $2.4 million for our international unfunded pension plan and $4.7 million for our U.S. Non-Qualified unfunded pension plan during 2021.
(e)It is reasonably possible that $1.3 million of assets for unrecognized tax benefits will be settled during 2021, and this amount is reflected in income taxes payable in our consolidated balance sheet as of December 31, 2020. Although unrecognized tax benefits are not contractual obligations, they are presented in this table because they represent demands on our liquidity.
20


OTHER OFF-BALANCE SHEET ARRANGEMENTS
The following is a summary of other off-balance sheet arrangements for our consolidated subsidiaries as of December 31, 2020:
 Amount of Commitment Expiration per Period
(In millions)Total
amount
Less than
1 year
1-3
years
3-5
years
After 5
years
Financial guarantees (a)
$104.9 $3.9 $58.3 $23.4 $19.3 
Performance guarantees (b)
1,353.9 110.1 948.8 277.9 17.1 
Total other off-balance sheet arrangements $1,458.8 $114.0 $1,007.1 $301.3 $36.4 
(a)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.
(b)Performance guarantees represent contracts that contingently require a guarantor to make payments to a guaranteed party based on another entity's failure to perform under a nonfinancial obligating agreement. Events that trigger payment are performance-related, such as failure to ship a product or provide a service.
CRITICAL ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with GAAP requires management to make certain estimates, judgments and assumptions about future events that affect the reported amounts of assets and liabilities at the date of the financial statements, the reported amounts of revenue and expenses during the periods presented and the related disclosures in the accompanying notes to the financial statements. Management has reviewed these critical accounting estimates with the Audit Committee of our Board of Directors. We believe the following critical accounting estimates used in preparing our financial statements address all important accounting areas where the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change. See Note 1 to our consolidated financial statements for further details.
Revenue Recognition
The majority of our revenue is derived from long-term contracts that can span several years. We account for revenue in accordance with Accounting Standard Codification (“ASC”) Topic 606, Revenues from Contracts with Customers. The unit of account in ASC Topic 606 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. Our 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, primarily for the subsea exploration and production equipment projects that involve the design, engineering, manufacturing, construction, and assembly of complex, customer-specific systems. Because of control transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. We generally use the cost-to-cost measure of progress for our contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred.
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 award fees, incentive fees, or other provisions that can either increase or decrease the transaction price. We include estimated amounts in the transaction price when we believe we have an enforceable right to the modification, the amount can be estimated reliably, and its realization is probable. The estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.
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We execute contracts with our customers that clearly describe the equipment, systems, and/or services. After analyzing the drawings and specifications of the contract requirements, our 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 our total cost to complete the project. After work on a project begins, assumptions that form the basis for our calculation of total project cost are examined on a regular basis and our estimates are updated to reflect the most current information and management’s best judgment.
Adjustments to estimates of contract revenue, total contract cost, or extent of progress toward completion are often required as work progresses under the contract and as experience is gained, even though the scope of work required under the contract may not change. The nature of accounting for long-term contracts is such that refinements of the estimating process for changing conditions and new developments are continuous and characteristic of the process. Consequently, the amount of revenue recognized over time is sensitive to changes in our estimates of total contract costs. There are many factors, including, but not limited to, the ability to properly execute the engineering and design phases consistent with our customers’ expectations, the availability and costs of labor and material resources, productivity, and weather, all of which can affect the accuracy of our cost estimates, and ultimately, our future profitability.
Our operating loss for the year ended December 31, 2020 was negatively impacted by approximately $(61.6) million, as a result of changes in contract estimates related to projects that were in progress as of December 31, 2019. During the year ended December 31, 2020, we recognized changes in our estimates that had an impact on our margin in the amounts of $(56.5) million and $(5.1) million in our Subsea and Surface Technologies segments, respectively. The changes in contract estimates are attributed to better than expected performance throughout our execution of our projects.
Our operating loss for the year ended December 31, 2019 was positively impacted by approximately $317.1 million, as a result of changes in contract estimates related to projects that were in progress as of December 31, 2018. During the year ended December 31, 2019, we recognized changes in our estimates that had an impact on our margin in the amounts of $324.7 million and $(7.6) million in our Subsea and Surface Technologies segments, respectively. The changes in contract estimates are attributed to better than expected performance throughout our execution of our projects.
Our operating profit for the year ended December 31, 2018 was positively impacted by approximately $174.2 million, as a result of changes in contract estimates related to projects that were in progress as of December 31, 2017. During the year ended December 31, 2018, we recognized changes in our estimates that had an impact on our margin in the amounts of $169.9 million and $4.3 million in our Subsea and Surface technologies segments, respectively. The changes in contract estimates are attributed to better than expected performance throughout our execution of our projects.
Accounting for Income Taxes
Our income tax expense, deferred tax assets and liabilities, and reserves for uncertain tax positions reflect management’s best assessment of estimated future taxes to be paid. We are subject to income taxes in the United Kingdom and numerous foreign jurisdictions. Significant judgments and estimates are required in determining our consolidated income tax expense.
In determining our current income tax provision, we assess temporary differences resulting from differing treatments of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are recorded in our consolidated balance sheets. When we maintain deferred tax assets, we must assess the likelihood that these assets will be recovered through adjustments to future taxable income. To the extent, we believe recovery is not likely, we establish a valuation allowance. We record a valuation allowance to reduce the asset to a value we believe will be recoverable based on our expectation of future taxable income. We believe the accounting estimate related to the valuation allowance is a critical accounting estimate because it is highly susceptible to change from period to period, requires management to make assumptions about our future income over the lives of the deferred tax assets, and finally, the impact of increasing or decreasing the valuation allowance is potentially material to our results of operations.
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Forecasting future income requires us to use a significant amount of judgment. In estimating future income, we use our internal operating budgets and long-range planning projections. We develop our budgets and long-range projections based on recent results, trends, economic and industry forecasts influencing our segments’ performance, our backlog, planned timing of new product launches and customer sales commitments. Significant changes in our judgment related to the expected realizability of a deferred tax asset results in an adjustment to the associated valuation allowance.
As of December 31, 2020, we have provided a valuation allowance against the related deferred tax assets where we believe it is not more likely than not that we will generate future taxable income sufficient to realize such assets.
The calculation of our income tax expense involves dealing with uncertainties in the application of complex tax laws and regulations in numerous jurisdictions in which we operate. We recognize tax benefits related to uncertain tax positions when, in our judgment, it is more likely than not that such positions will be sustained on examination, including resolutions of any related appeals or litigation, based on the technical merits. We adjust our liabilities for uncertain tax positions when our judgment changes as a result of new information previously unavailable. Due to the complexity of some of these uncertainties, their ultimate resolution may result in payments that are materially different from our current estimates. Any such differences will be reflected as adjustments to income tax expense in the periods in which they are determined.
Accounting for Pension and Other Post-retirement Benefit Plans
The determination of the projected benefit obligations of our pension and other post-retirement benefit plans are important to the recorded amounts of such obligations in our consolidated balance sheets and to the amount of pension expense in our consolidated statements of income. In order to measure the obligations and expense associated with our pension benefits, management must make a variety of estimates, including discount rates used to value certain liabilities, expected return on plan assets set aside to fund these costs, rate of compensation increase, employee turnover rates, retirement rates, mortality rates and other factors. We update 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 our recognition of different amounts of expense over different periods of time.
Due to the specialized and statistical nature of these calculations which attempt to anticipate future events, we engage third-party specialists to assist management in evaluating our assumptions as well as appropriately measuring the costs and obligations associated with these pension benefits. The discount rate and expected long-term rate of return on plan assets are primarily based on investment yields available and the historical performance of our plan assets, respectively. The timing and amount of cash outflows related to the bonds included in the indices matches estimated defined benefits payments. These measures are critical accounting estimates because they are subject to management’s judgment and can materially affect net income.
The actuarial assumptions and estimates made by management in determining our 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 we believe the assumptions and estimates used are appropriate, differences in actual experience or changes in plan participant assumptions may materially affect our financial position or results of operations.
The following table illustrates the sensitivity of changes in the discount rate and expected long-term return on plan assets on pension expense and the projected benefit obligation:
(In millions, except basis points)Increase (Decrease) in 2020 Pension Expense Before Income TaxesIncrease (Decrease) in Projected Benefit Obligation as of December 31, 2020
25 basis point decrease in discount rate$3.3 $53.1 
25 basis point increase in discount rate$(3.3)$(56.1)
25 basis point decrease in expected long-term rate of return on plan assets$2.6 N/A
25 basis point increase in expected long-term rate of return on plan assets$(2.6)N/A
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Determination of Fair Value in Business Combinations
Accounting for the acquisition of a business requires the allocation of the purchase price to the various assets acquired and liabilities assumed at their respective fair values. The determination of fair value requires the use of significant estimates and assumptions, and in making these determinations, management uses all available information. If necessary, we have up to one year after the acquisition closing date to finalize these fair value determinations. For tangible and identifiable intangible assets acquired in a business combination, the determination of fair value utilizes several valuation methodologies including discounted cash flows which has assumptions with respect to the timing and amount of future revenue and expenses associated with an asset. The assumptions made in performing these valuations include, but are not limited to, discount rates, future revenues and operating costs, projections of capital costs, and other assumptions believed to be consistent with those used by principal market participants. Due to the specialized nature of these calculations, we engage third-party specialists to assist management in evaluating our assumptions as well as appropriately measuring the fair value of assets acquired and liabilities assumed. See Note 3 to our consolidated financial statements for further details.
Impairment of Long-Lived and Intangible Assets
Long-lived assets, including vessels, property, plant and equipment, identifiable intangible assets being amortized and capitalized software costs are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of the long-lived asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If it is determined that an impairment loss has occurred, the loss is measured as the amount by which the carrying amount of the long-lived asset exceeds its fair value. The determination of future cash flows as well as the estimated fair value of long-lived assets involves significant estimates on the part of management. Because there usually is a lack of quoted market prices for long-lived assets, fair value of impaired assets is typically determined based on the present values of expected future cash flows using discount rates believed to be consistent with those used by principal market participants, or based on a multiple of operating cash flows validated with historical market transactions of similar assets where possible. The expected future cash flows used for impairment reviews and related fair value calculations are based on judgmental assessments of revenue, forecasted utilization, operating costs and capital decisions and all available information at the date of review. If future market conditions deteriorate beyond our current expectations and assumptions, impairments of long-lived assets may be identified if we conclude that the carrying amounts are no longer recoverable.
Impairment of Goodwill
Goodwill represents the excess of cost over the fair market value of net assets acquired in business combinations. Goodwill is not subject to amortization but is tested for impairment at a reporting unit level on an annual basis, or more frequently if impairment indicators arise. We have established October 31 as the date of our annual test for impairment of goodwill. We identify a potential impairment by comparing the fair value of the applicable reporting unit to its net book value, including goodwill. If the net book value exceeds the fair value of the reporting unit, we measure the impairment by comparing the carrying value of the reporting unit to its fair value. Reporting units with goodwill are tested for impairment using a quantitative impairment test.
When using the quantitative impairment test, determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. We estimate the fair value of our reporting units using a discounted future cash flow model. The majority of the estimates and assumptions used in a discounted future cash flow model involve unobservable inputs reflecting management’s own assumptions about the assumptions market participants would use in estimating the fair value of a business. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, discount rates and future economic and market conditions. Our 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.
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The income approach estimates fair value by discounting each reporting unit’s estimated future cash flows using a weighted-average cost of capital that reflects current market conditions and the risk profile of the reporting unit. To arrive at our future cash flows, we use 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 our business strategy. We believe this approach is an appropriate valuation method. Under the market multiple approach, we determine the estimated fair value of each of our reporting units by applying transaction multiples to each reporting unit’s projected EBITDA and then averaging that estimate with similar historical calculations using either a one, two or three year average. Our reporting unit valuations were determined primarily by utilizing the income approach, with a lesser weighting attributed the market multiple approach.
During the first quarter of 2020 a severe decline in the Company’s market capitalization, significant decline in crude oil prices and the growing pandemic caused by COVID-19 triggered the need for an impairment test at March 31, 2020. We utilized a market approach to measure the fair value of our reporting units as of March 31, 2020. In measuring a fair value of the Company we used the Company’s market capitalization. An appropriate control premium was considered for each of the reporting units and applied to the output of the market approach. An interim impairment test during the first quarter of 2020 resulted in $2,747.5 million and $335.9 million of goodwill impairment charges recorded in our Subsea and Surface Technologies segments, respectively. As a result of the impairment assessment during the first quarter of 2020 the goodwill in our Subsea and Surface Technologies segments was fully impaired as of March 31, 2020.
During our 2019 and 2018 annual impairment test the following significant estimates were used by management in determining the fair values of our reporting units in order to test the remaining goodwill at October 31:
20192018
Year of cash flows before terminal value45
Discount rates12.5% to 15.0%12.5% to 13.0%
EBITDA multiples7.0 - 8.5x8.5 - 11.5x
During the year ended December 31, 2019, we recorded $1,321.9 million and $666.8 million of goodwill impairment charges in our Subsea and Surface Technologies segments, respectively.
During the year ended December 31, 2018, we recorded $1,383.0 million of goodwill impairment charges in our Subsea segment.
See Notes 15 and 19 to our consolidated financial statements for further details.
OTHER MATTERS
On March 28, 2016, FMC Technologies received an inquiry from the U.S. Department of Justice (“DOJ”) related to the DOJ's investigation of whether certain services Unaoil S.A.M. provided to its clients, including FMC Technologies, violated the FCPA. On March 29, 2016, Technip S.A. also received an inquiry from the DOJ related to Unaoil. We cooperated with the DOJ's investigations and, with regard to FMC Technologies, a related investigation by the SEC.
In late 2016, Technip S.A. was contacted by the DOJ regarding its investigation of offshore platform projects awarded between 2003 and 2007, performed in Brazil by a joint venture company in which Technip S.A. was a minority participant, and we have also raised with DOJ certain other projects performed by Technip S.A. subsidiaries in Brazil between 2002 and 2013. The DOJ has also inquired about projects in Ghana and Equatorial Guinea that were awarded to Technip S.A. subsidiaries in 2008 and 2009, respectively. We cooperated with the DOJ in its investigation into potential violations of the FCPA in connection with these projects. We contacted and cooperated with the Brazilian authorities (Federal Prosecution Service (“MPF”), the Comptroller General of Brazil (“CGU”) and the Attorney General of Brazil (“AGU”)) with their investigation concerning the projects in Brazil and have also contacted and are cooperating with French authorities (the Parquet National Financier (“PNF”)) about these existing matters.
On June 25, 2019, we announced a global resolution to pay a total of $301.3 million to the DOJ, the SEC, the MPF, and the CGU/AGU to resolve these anti-corruption investigations. We will not be required to have a monitor and will,
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instead, provide reports on our anti-corruption program to the Brazilian and U.S. authorities for two and three years, respectively.
As part of this resolution, we entered into a three-year Deferred Prosecution Agreement (“DPA”) with the DOJ related to charges of conspiracy to violate the FCPA related to conduct in Brazil and with Unaoil. In addition, Technip USA, Inc., a U.S. subsidiary, pled guilty to one count of conspiracy to violate the FCPA related to conduct in Brazil. We will also provide the DOJ reports on our anti-corruption program during the term of the DPA.
In Brazil, our subsidiaries Technip Brasil - Engenharia, Instalações E Apoio Marítimo Ltda. and Flexibrás Tubos Flexíveis Ltda. entered into leniency agreements with both the MPF and the CGU/AGU. We have committed, as part of those agreements, to make certain enhancements to their compliance programs in Brazil during a two-year self-reporting period, which aligns with our commitment to cooperation and transparency with the compliance community in Brazil and globally.
In September 2019, the SEC approved our previously disclosed agreement in principle with the SEC Staff and issued an Administrative Order, pursuant to which we paid the SEC $5.1 million, which was included in the global resolution of $301.3 million.
To date, the investigation by PNF related to historical projects in Equatorial Guinea and Ghana has not reached resolution. We remain committed to finding a resolution with the PNF and will maintain a $70.0 million provision related to this investigation. As we continue to progress our discussions with PNF towards resolution, the amount of a settlement could exceed this provision.
There is no certainty that a settlement with PNF will be reached or that the settlement will not exceed current accruals. The PNF has a broad range of potential sanctions under anti-corruption laws and regulations that it may seek to impose in appropriate circumstances including, but not limited to, fines, penalties, and modifications to business practices and compliance programs. Any of these measures, if applicable to us, as well as potential customer reaction to such measures, could have a material adverse impact on our business, results of operations, and financial condition. If we cannot reach a resolution with the PNF, we could be subject to criminal proceedings in France, the outcome of which cannot be predicted.
RECENTLY ISSUED ACCOUNTING STANDARDS
See Note 4 to our consolidated financial statements for further details.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are subject to financial market risks, including fluctuations in foreign currency exchange rates and interest rates. In order to manage and mitigate our exposure to these risks, we may use derivative financial instruments in accordance with established policies and procedures. We do not use derivative financial instruments where the objective is to generate profits solely from trading activities. As of December 31, 2020 and 2019, substantially all of our derivative holdings consisted of foreign currency forward contracts and foreign currency instruments embedded in purchase and sale contracts.
These forward-looking disclosures only address potential impacts from market risks as they affect our financial instruments and do not include other potential effects that could impact our business as a result of changes in foreign currency exchange rates, interest rates, commodity prices or equity prices.
Foreign Currency Exchange Rate Risk
We conduct operations around the world in a number of different currencies. Many of our significant foreign subsidiaries have designated the local currency as their functional currency. Our earnings are therefore subject to change due to fluctuations in foreign currency exchange rates when the earnings in foreign currencies are translated into U.S. dollars. We do not hedge this translation impact on earnings. A 10% increase or decrease in the average exchange rates of all foreign currencies as of December 31, 2020, would have changed our revenue and income before income taxes attributable to TechnipFMC by approximately $326.7 million and $24.1 million, respectively.
When transactions are denominated in currencies other than our subsidiaries’ respective functional currencies, we manage these exposures through the use of derivative instruments. We primarily use foreign currency forward contracts to hedge the foreign currency fluctuation associated with firmly committed and forecasted foreign currency denominated payments and receipts. The derivative instruments associated with these anticipated transactions are usually designated and qualify as cash flow hedges, and as such the gains and losses associated with these instruments are recorded in other comprehensive income until such time that the underlying transactions are recognized. Unless these cash flow contracts are deemed to be ineffective or are not designated as cash flow hedges at inception, changes in the derivative fair value will not have an immediate impact on our results of operations since the gains and losses associated with these instruments are recorded in other comprehensive income. When the anticipated transactions occur, these changes in value of derivative instrument positions will be offset against changes in the value of the underlying transaction. When an anticipated transaction in a currency other than the functional currency of an entity is recognized as an asset or liability on the balance sheet, we also hedge the foreign currency fluctuation of these assets and liabilities with derivative instruments after netting our exposures worldwide. These derivative instruments do not qualify as cash flow hedges.
Occasionally, we enter into contracts or other arrangements containing terms and conditions that qualify as embedded derivative instruments and are subject to fluctuations in foreign exchange rates. In those situations, we enter into derivative foreign exchange contracts that hedge the price or cost fluctuations due to movements in the foreign exchange rates. These derivative instruments are not designated as cash flow hedges.
For our foreign currency forward contracts hedging anticipated transactions that are accounted for as cash flow hedges, a 10% increase in the value of the U.S. dollar would have resulted in an additional loss of $68.4 million in the net fair value of cash flow hedges reflected in our consolidated balance sheet as of December 31, 2020.
Interest Rate Risk
As of December 31, 2020, we had commercial paper of approximately $1.0 billion with a weighted average interest rate of 0.41%. Using sensitivity analysis to measure the impact of a 10% adverse movement in the interest rate, or three basis points, would result in an increase to interest expense of $0.4 million.
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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 do not have significant exposure in the unrealized valuation of our forward foreign currency contracts to relative changes in interest rates between countries in our results of operations. To the extent any one interest rate increases by 10% across all tenors and other countries’ interest rates remain fixed, and assuming no change in discount rates, we would expect to recognize a decrease of $1.5 million in unrealized earnings in the period of change. Based on our portfolio as of December 31, 2020, we have material positions with exposure to interest rates in the United States, Canada, Australia, Brazil, the United Kingdom, Singapore, the European Community, and Norway.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of TechnipFMC plc

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of TechnipFMC plc and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of income, of comprehensive income, of changes in stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended December 31, 2020 appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting (not presented herein) appearing under Item 9A of the Company’s 2020 Annual Report on Form 10-K. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting
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includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition - Determination of Estimated Costs to Complete for Long-Term Contracts

As described in Note 6 (not presented herein) to the consolidated financial statements appearing under Item 8 of the Company’s 2020 Annual Report on Form 10-K, approximately 86% of the total revenue of $13.1 billion for the year ended December 31, 2020 is generated from long-term contracts. As disclosed by management, for the Company’s 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 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. The Company generally uses the cost-to-cost measure of progress for its contracts because it best depicts the transfer of control to the customer which occurs as the Company incurs costs on the 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, management’s estimation of total revenue and cost at completion is complex, subject to many variables and requires significant judgment. 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 materials resources, productivity and weather, all of which can affect the accuracy of cost estimates, and ultimately, future profitability. On February 16, 2021, the Company completed the separation of the Technip Energies business segment. As a result, Technip Energies is presented as discontinued operations in the consolidated statements of income for all periods presented. Therefore, the Company’s revenue of $13.1 billion for the year ended December 31, 2020 is comprised of $6.53 billion from continuing operations and $6.52 billion from discontinued operations.

The principal considerations for our determination that performing procedures relating to revenue recognition - determination of estimated costs to complete for long-term contracts is a critical audit matter are the significant judgment by management when determining the estimated costs to complete for long-term contracts, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the estimates of costs to complete.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the determination of estimated costs to complete for long-term contracts. These procedures also included, among others, testing management’s process for determining the estimated costs to complete for a selection of long-term contracts by (i) obtaining executed purchase orders and agreements, (ii) evaluating the appropriateness of the method to measure progress towards completion, (iii) testing the completeness and accuracy of the underlying data used by management, and (iv) evaluating the reasonableness of significant assumptions related to the estimates of costs to complete. Evaluating the reasonableness of significant assumptions involved assessing management’s ability to reasonably estimate costs to complete long-term contracts, as applicable, by (i) performing procedures to assess the reasonableness of estimated costs to complete, (ii) testing management’s process to evaluate the timely identification of circumstances
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which may warrant a modification to a previous cost estimate, (iii) testing management’s process to evaluate contract contingencies relative to the contractual terms and actual progress of contracts, and (iv) performing procedures to assess the reasonableness of changes in life of project margin.

Long-Lived Asset Impairments - Certain Asset Groups in the Subsea and Surface Segments

As described in Notes 1, 2, 14, and 19 to the consolidated financial statements, the Company’s consolidated net property, plant and equipment was $2,861.8 million as of December 31, 2020 (comprised of $2,756.2 million in continuing operations and $105.6 million in discontinued operations). For the year ended December 31, 2020, the Company recorded impairment charges in relation to certain asset groups in the Subsea and Surface segments in the amount of $88.4 million and $82.0 million, respectively. Management conducts impairment tests on long-lived assets whenever events or changes in circumstances indicate the carrying value may not be recoverable. The carrying value of an asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If it is determined that an impairment loss has occurred, the impairment loss is measured as the amount by which the carrying value of the long-lived asset exceeds its fair value. Due to the substantial decline in global demand for oil caused by the COVID-19 pandemic, management reviewed the corresponding impact on the asset group’s service potential and determined the carrying amount of the asset groups exceeded their fair value. As disclosed by management, the determination of future cash flows as well as the estimated fair value of long-lived assets involves significant estimates on the part of management. The expected future cash flows used for impairment reviews and related fair value calculations are based on judgmental assessments of future revenue, forecasted utilization, operating costs, and capital decisions and all available information at the date of review.

The principal considerations for our determination that performing procedures relating to the long-lived asset impairments – certain asset groups in the Subsea and Surface segments is a critical audit matter are the significant judgment by management when determining the fair value estimates, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to future revenue for certain asset groups in the Subsea segment and future revenue and operating costs for certain asset groups in the Surface segment.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s long-lived assets impairment assessments, including controls over management’s determination of the fair value of certain asset groups in the Subsea and Surface segments. These procedures also included, among others testing management’s process for developing the fair value estimates by (i) evaluating the appropriateness of the method used; (ii) testing the completeness and accuracy of the underlying data used in estimating the net future cash flows; and (iii) evaluating the reasonableness of significant assumptions related to future revenue for certain asset groups in the Subsea segment and future revenue and operating costs for certain asset groups in the Surface segment. Evaluating management’s significant assumptions involved evaluating whether the significant assumptions used by management were reasonable considering the current and past performance of the business in which the assets operate in and whether they were consistent with evidence obtained in other areas of the audit.



/s/ PricewaterhouseCoopers LLP
Houston, Texas
March 5, 2021, except with respect to our opinion on the consolidated financial statements insofar as it relates to the effects of discontinued operations discussed in Note 2, as to which the date is September 8, 2021.

We have served as the Company’s auditor since 2017.
31


TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
 Year Ended
(In millions, except per share data)202020192018
Revenue
Service revenue$3,266.8 $3,412.0 $2,856.7 
Product revenue3,121.8 3,271.7 3,192.3 
Lease revenue142.0 266.5 222.7 
Total revenue6,530.6 6,950.2 6,271.7 
Costs and expenses
Cost of service revenue2,946.9 2,769.5 2,365.4 
Cost of product revenue2,772.2 2,954.7 2,618.9 
Cost of lease revenue116.7 167.9 143.4 
Selling, general and administrative expense724.1 795.7 776.6 
Research and development expense75.3 149.5 157.3 
Impairment, restructuring and other expense (Note 19)3,402.0 2,456.7 1,815.4 
Merger transaction and integration costs— 14.2 18.4 
Total costs and expenses10,037.2 9,308.2 7,895.4 
Other income (expense), net25.1 (181.6)(67.0)
Income from equity affiliates (Note 12)64.6 59.8 80.9 
Loss before interest income, interest expense and income taxes(3,416.9)(2,479.8)(1,609.8)
Interest income52.3 43.6 34.3 
Interest expense(134.1)(134.9)(147.7)
Loss before income taxes(3,498.7)(2,571.1)(1,723.2)
Provision for income taxes (Note 21)19.4 79.0 71.3 
Loss from continuing operations(3,518.1)(2,650.1)(1,794.5)
(Income) loss from continuing operations attributable to non-controlling interests(34.5)4.6 (10.9)
Loss from continuing operations attributable to TechnipFMC plc(3,552.6)(2,645.5)(1,805.4)
Income (loss) from discontinued operations280.2 238.0 (116.3)
(Income) loss from discontinued operations attributable to non-controlling interests(15.2)(7.7)0.1 
Net loss attributable to TechnipFMC plc$(3,287.6)$(2,415.2)$(1,921.6)
Loss per share from continuing operations attributable to TechnipFMC plc
Basic and diluted$(7.92)$(5.91)$(3.94)
Earnings (loss) per share from discontinued operations attributable to TechnipFMC plc
Basic and diluted$0.59 $0.51 $(0.25)
Total loss per share attributable to TechnipFMC plc
Basic and diluted$(7.33)$(5.39)$(4.20)
Weighted average shares outstanding (Note 8)
Basic and diluted448.7 448.0 458.0 
The accompanying notes are an integral part of the consolidated financial statements.
32


TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 Year Ended
(In millions)202020192018
Net loss attributable to TechnipFMC plc$(3,287.6)$(2,415.2)$(1,921.6)
(Income) loss from continuing operations attributable to non-controlling interests(34.5)4.6 (10.9)
(Income) loss from discontinued operations attributable to non-controlling interests(15.2)(7.7)0.1 
Net loss attributable to TechnipFMC plc, including non-controlling interests(3,237.9)(2,412.1)(1,910.8)
Foreign currency translation adjustments
Net gains (losses) arising during the period(169.1)15.6 (183.3)
Reclassification adjustment for net gains included in net loss— (12.0)(41.1)
Foreign currency translation adjustments(a)
(169.1)3.6 (224.4)
Net gains (losses) on hedging instruments
Net gains (losses) arising during the period25.4 8.9 (58.7)
Reclassification adjustment for net losses (gains) included in net income13.0 18.2 (2.0)
Net gains (losses) on hedging instruments (b)
38.4 27.1 (60.7)
Pension and other post-retirement benefits
Net losses arising during the period(88.3)(81.5)(72.4)
Prior service cost arising during the period(4.6)(0.7)(2.1)
Reclassification adjustment for settlement losses (gains) included in net income 1.4 0.2 (2.5)
Reclassification adjustment for amortization of prior service cost included in net income0.9 2.0 1.2 
Reclassification adjustment for amortization of net actuarial loss included in net income6.9 0.8 0.3 
Net pension and other post-retirement benefits (c)
(83.7)(79.2)(75.5)
Other comprehensive loss, net of tax(214.4)(48.5)(360.6)
Comprehensive loss(3,452.3)(2,460.6)(2,271.4)
Comprehensive income attributable to non-controlling interests(50.3)(2.4)(6.3)
Comprehensive loss attributable to TechnipFMC plc$(3,502.6)$(2,463.0)$(2,277.7)
(a)Net of income tax (expense) benefit of nil, $7.9 and $3.6 for the years ended December 31, 2020, 2019 and 2018, respectively.
(b)Net of income tax (expense) benefit of $(9.7), $(6.9) and $16.6 for the years ended December 31, 2020, 2019 and 2018, respectively.
(c)Net of income tax (expense) benefit of $25.5, $20.3 and $15.5 for the years ended December 31, 2020, 2019 and 2018, respectively.


The accompanying notes are an integral part of the consolidated financial statements.
33


TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except par value data)December 31,
Assets20202019
Cash and cash equivalents$1,269.2 $1,563.1 
Trade receivables, net of allowances of $40.2 in 2020 and $57.4 in 2019
987.7 1,242.1 
Contract assets, net of allowances of $2.4 in 2020 and $2.5 in 2019
886.8 1,082.8 
Inventories, net (Note 9)1,252.8 1,406.1 
Derivative financial instruments (Note 23)268.7 85.1 
Income taxes receivable274.7 223.5 
Advances paid to suppliers96.3 99.4 
Other current assets (Note 10)683.4 622.6 
Current assets of discontinued operations5,725.1 5,561.7 
Total current assets11,444.7 11,886.4 
Investments in equity affiliates (Note 12)305.5 240.8 
Property, plant and equipment, net (Note 14)2,756.2 3,040.3 
Operating lease right-of-use assets (Note 5)784.9 628.8 
Finance lease right-of-use assets (Note 5)27.5 — 
Goodwill (Note 15)— 3,128.5 
Intangible assets, net (Note 15)851.3 958.5 
Deferred income taxes (Note 21)34.2 53.4 
Derivative financial instruments (Note 23)29.2 37.9 
Other assets175.6 239.7 
Non-current assets of discontinued operations3,283.5 3,304.5 
Total assets$19,692.6 $23,518.8 
Liabilities and equity
Short-term debt and current portion of long-term debt (Note 16)$624.7 $491.6 
Operating lease liabilities (Note 5)195.5 198.4 
Finance lease liabilities (Note 5)26.9 — 
Accounts payable, trade1,201.0 1,327.9 
Contract liabilities1,046.8 979.2 
Accrued payroll186.8 183.2 
Derivative financial instruments (Note 23)157.5 93.9 
Income taxes payable61.2 56.9 
Other current liabilities (Note 10)818.3 938.7 
Current liabilities of discontinued operations6,096.5 5,868.6 
Total current liabilities10,415.2 10,138.4 
Long-term debt, less current portion (Note 16)2,835.5 3,328.6 
Operating lease liabilities, less current portion (Note 5)632.8 438.7 
Deferred income taxes (Note 21)79.3 133.1 
Accrued pension and other post-retirement benefits, less current portion (Note 22)268.4 217.3 
Derivative financial instruments (Note 23)18.8 37.3 
Other liabilities103.3 235.7 
Non-current liabilities of discontinued operations1,081.3 1,260.5 
Total liabilities15,434.6 15,789.6 
Commitments and contingent liabilities (Note 20)
Mezzanine equity
Redeemable non-controlling interest43.7 41.1 
Stockholders’ equity (Note 17)
Ordinary shares, $1 par value; 618.3 shares authorized in 2020 and 2019; 449.5 shares and 447.1 shares issued and outstanding in 2020 and 2019, respectively; nil and 4.0 shares canceled in 2020 and 2019, respectively
449.5 447.1 
Capital in excess of par value of ordinary shares10,242.4 10,182.8 
Accumulated deficit (4,915.2)(1,563.1)
Accumulated other comprehensive loss(1,622.5)(1,407.5)
Total TechnipFMC plc stockholders’ equity4,154.2 7,659.3 
Non-controlling interests40.4 40.0 
Non-controlling interests of discontinued operations19.7 (11.2)
Total equity4,214.3 7,688.1 
Total liabilities and equity$19,692.6 $23,518.8 
The accompanying notes are an integral part of the consolidated financial statements.
34


TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Year Ended December 31,
(In millions)202020192018
Cash provided (required) by operating activities
Net loss from continuing operations$(3,518.1)$(2,650.1)$(1,794.5)
Adjustments to reconcile net loss to cash provided (required) by operating activities
Depreciation308.7 363.0 348.7 
Amortization103.4 104.7 166.5 
Impairments (Note 19)3,273.8 2,480.3 1,782.5 
Employee benefit plan and share-based compensation costs36.4 48.6 10.7 
Deferred income tax provision (benefit), net(31.8)27.9 10.1 
Unrealized loss (gain) on derivative instruments and foreign exchange(13.3)22.4 74.1 
Income from equity affiliates, net of dividends received(58.2)(58.9)(76.9)
Other(32.7)(97.1)(7.5)
Changes in operating assets and liabilities, net of effects of acquisitions
Trade receivables, net and contract assets433.4 (142.5)(311.8)
Inventories, net87.4 (173.3)(340.6)
Accounts payable, trade(236.4)(56.1)(313.5)
Contract liabilities(61.8)352.0 322.4 
Income taxes payable (receivable), net(56.1)(31.1)(198.0)
Other current assets and liabilities, net551.2 142.0 509.0 
Other non-current assets and liabilities, net(13.5)25.9 (125.0)
Cash provided by operating activities from continuing operations772.4 357.7 56.2 
Cash provided (required) by operating activities from discontinued operations(115.5)490.8 (241.7)
Cash provided (required) by operating activities656.9 848.5 (185.5)
Cash required by investing activities
Capital expenditures(256.1)(412.7)(355.1)
Payment to acquire debt securities(3.9)(71.6)— 
Proceeds from sale of debt securities51.5 18.9 — 
Acquisitions, net of cash acquired— 16.0 (116.0)
Cash received from (used by) divestitures8.8 (2.1)7.5 
Proceeds from sale of assets45.5 7.4 17.1 
Proceeds from repayment of advance to joint venture26.7 62.0 — 
Other6.7 3.6 — 
Cash required by investing activities from continuing operations(120.8)(378.5)(446.5)
Cash required by investing activities from discontinued operations(59.8)(41.3)(13.7)
Cash required by investing activities(180.6)(419.8)(460.2)
Cash required by financing activities
Net decrease in short-term debt(31.9)(49.6)(34.9)
Net increase (decrease) in commercial paper(340.9)113.3 600.6 
Proceeds from issuance of long-term debt223.2 96.2 — 
Repayments of long-term debt(423.9)— — 
Purchase of ordinary shares— (92.7)(442.6)
Dividends paid(59.2)(232.8)(238.1)
Payments related to taxes withheld on share-based compensation(7.4)— — 
Acquisition of non-controlling interest(11.8)— — 
Cash required by financing activities from continuing operations(651.9)(165.6)(115.0)
Cash required by financing activities from discontinued operations(430.3)(618.8)(329.8)
Cash required by financing activities(1,082.2)(784.4)(444.8)
Effect of changes in foreign exchange rates on cash and cash equivalents223.5 5.9 (106.9)
Decrease in cash and cash equivalents(382.4)(349.8)(1,197.4)
Cash and cash equivalents in the statement of cash flows, beginning of year5,190.2 5,540.0 6,737.4 
Cash and cash equivalents in the statement of cash flows, end of year$4,807.8 $5,190.2 $5,540.0 
Year Ended December 31,
(In millions)202020192018
Supplemental disclosures of cash flow information attributable to continuing operations
Cash paid for interest (net of interest capitalized)$96.0 $91.5 $98.3 
Cash paid for income taxes (net of refunds received)$107.8 $104.2 $139.9 
35




The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Consolidated Balance Sheets to the total of the amounts in the Consolidated Statements of Cash Flows:
Year Ended December 31,
(In millions)202020192018
Cash and cash equivalents$1,269.2 $1,563.1 $1,713.4 
Cash and cash equivalents attributable to discontinued operations3,538.6 3,627.1 3,826.6 
Total cash and cash equivalents in the statement of cash flows$4,807.8 $5,190.2 $5,540.0 
The accompanying notes are an integral part of the consolidated financial statements.
36


TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In millions)Ordinary SharesOrdinary Shares Held in
Treasury and
Employee
Benefit
Trust
Capital in
Excess of Par
Value of
Ordinary Shares
Retained
Earnings
(Accumulated
Deficit)
Accumulated
Other
Comprehensive
Income
(Loss)
Non-
controlling
Interest
Total
Stockholders’
Equity
Balance as of December 31, 2017$465.1 $(4.8)$10,483.3 $3,406.0 $(1,003.7)$21.5 $13,367.4 
Adoption of accounting standards (Note 6)— — — (91.5)— 0.1 (91.4)
Net income (loss)— — — (1,921.6)— 10.8 (1,910.8)
Other comprehensive loss— — — — (356.0)(4.6)(360.6)
Cancellation of treasury shares (Note 17)(14.8)— (333.5)(94.5)— — (442.8)
Issuance of ordinary shares0.2 — — — — — 0.2 
Net sales of ordinary shares for employee benefit trust— 2.4 — — — — 2.4 
Cash dividends declared ($0.52 per share) (Note 17)
— — — (238.1)— — (238.1)
Share-based compensation (Note 18)— — 49.1 — — — 49.1 
Other— — (1.9)11.9 — 3.5 13.5 
Balance as of December 31, 2018$450.5 $(2.4)$10,197.0 $1,072.2 $(1,359.7)$31.3 $10,388.9 
Adoption of accounting standards (Note 5)— — — 1.8 — — 1.8 
Net income (loss)— — — (2,415.2)— 3.1 (2,412.1)
Other comprehensive loss— — — — (47.8)(0.7)(48.5)
Cancellation of treasury shares (Note 17)(4.0)— (88.7)— — — (92.7)
Issuance of ordinary shares0.6 — — — — — 0.6 
Net sales of ordinary shares for employee benefit trust— 2.4 — — — — 2.4 
Cash dividends declared ($0.52 per share) (Note 17)
— — — (232.8)— — (232.8)
Share-based compensation (Note 18)— — 74.5 — — — 74.5 
Other— — — 10.9 — (4.9)6.0 
Balance as of December 31, 2019$447.1 $— $10,182.8 $(1,563.1)$(1,407.5)$28.8 $7,688.1 
Adoption of accounting standards (Note 4)— — — (7.8)— — (7.8)
Net income (loss)— — — (3,287.6)— 49.7 (3,237.9)
Other comprehensive loss— — — — (215.0)0.6 (214.4)
Issuance of ordinary shares2.4 — (9.4)— — — (7.0)
Cash dividends declared ($0.13 per share) (Note 17)
— — — (59.2)— — (59.2)
Share-based compensation (Note 18)— — 69.0 — — — 69.0