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What changed in TechnipFMC plc's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of TechnipFMC plc's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+403 added−429 removedSource: 10-K (2024-02-27) vs 10-K (2023-02-24)

Top changes in TechnipFMC plc's 2023 10-K

403 paragraphs added · 429 removed · 273 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

110 edited+56 added−86 removed16 unchanged
Biggest changeThe partnership secured an Option Agreement for area N3 in the United Kingdom’s Western Isles from the Crown Estate Scotland in the ScotWind leasing round in January 2022; • A partnership with Floating Power Plant, a renewable energy technology company, for an offshore green hydrogen pilot for the Canary Islands which will leverage Deep Purple TM (see below); • A strategic investment in Orbital Marine Power, the world's most powerful floating tidal energy turbine, which we believe to be the most mature tidal technology.
Biggest changeOur efforts and achievements in this area include: • Partnership with Magnora ASA, Magnora Offshore Wind, to develop floating offshore wind projects; • Partnership with Floating Power Plant, a renewable energy technology company, for an offshore green hydrogen pilot in the Canary Islands which will leverage our Deep Purple TM system to deliver stable, renewable, and scalable energy offshore; • Strategic investment in Orbital Marine Power, owner of the world's most powerful floating tidal energy turbine, which we believe to be the most mature tidal technology; • Development of best-in-class 66KV dynamic inter array cables, (“DIAC”), which are a key component of our engineered system used by floating renewables infrastructure to transmit electricity generated offshore to the onshore power grid; and • Development of advanced integrated water column solutions, including the engineering of the optimum coupled DIAC and mooring and anchoring system. 12 Hydrogen solutions.
We provide complete skid solutions, from design consultation through startup and commissioning. We offer a diverse line of reciprocating pumps, customized according to the application with pressure ranges available up to 10,000 psi and flow rates up to 1,500 gallons per minute. Measurement .
We provide complete skid solutions, from design consultation through startup and commissioning. We offer a diverse line of reciprocating pumps, customized according to the application with pressure ranges available up to 10,000 psi and flow rates up to 1,500 gallons per minute. Measurement Solutions .
(b) Section 16 officer under the Exchange Act. No family relationships exist among any of the above-listed officers, and there are no arrangements or understandings between any of the above-listed officers and any other person pursuant to which they serve as an officer.
(b) Section 16 officer under the Exchange Act. 18 No family relationships exist among any of the above-listed officers, and there are no arrangements or understandings between any of the above-listed officers and any other person pursuant to which they serve as an officer.
Systems are placed on the seafloor and are used to control the flow of crude oil and natural gas from the reservoir to a host processing facility, such as a floating production facility, a fixed platform, or an onshore facility.
Systems are placed on the seafloor and are used to control the flow of oil and natural gas from the reservoir to a host processing facility, such as a floating production facility, a fixed platform, or an onshore facility.
These offerings are differentiated by our comprehensive portfolio of in-house compact, modular, and digital technologies, and are designed to enhance field project economics and reduce operating expenditures with an integrated system that spans from wellhead to pipeline. Our E-Mission TM suite addresses ways to reduce carbon intensity in the production of oil and gas products.
These offerings are differentiated by our comprehensive portfolio of in-house compact, modular, and digital technologies, and are designed to enhance field project economics and reduce operating expenditures with an integrated system that spans from wellhead to pipeline. 9 Our E-Mission TM suite addresses ways to reduce carbon intensity in the production of oil and natural gas products.
More than 85 Guyanese women and men are at the heart of our world-class Service Center, with this number projected to grow in response to the increased activity in the area over the next several years. The Guyana Service Base consists of a low bay, storage, and testing capabilities for both drilling and completion activities.
More than 100 Guyanese women and men are at the heart of our world-class Service Center, with this number projected to grow in response to the increased activity in the area over the next several years. The Guyana Service Base consists of a low bay, storage, and testing capabilities for both drilling and completion activities.
In the third quarter of 2022, we renewed our TechnipFMC and Halliburton technology alliance. This extends our agreement signed in 2017 with a focus on the development of innovative technologies for use in All-Electric Wells, Subsea Interventions, Subsea Fiber Optics and Carbon Capture and Storage.
In the third quarter of 2022, we renewed the TechnipFMC and Halliburton technology alliance. This extends our agreement signed in 2017 with a focus on the development of innovative technologies for use in all-electric wells, subsea interventions, subsea fiber optics, and carbon transportation and storage.
Website Access to Reports and Proxy Statement Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements, and Forms 3, 4, and 5 filed on behalf of directors and executive officers, and amendments to each of those reports and statements, are available free of charge through our website at www.technipfmc.com, under “Investors” as soon as reasonably practicable after such material is electronically filed with, or furnished to, the U.S.
Website Access to Reports and Proxy Statement Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements, and Forms 3, 4, and 5 filed on behalf of directors and executive officers, and amendments to each of those reports and statements, are available free of charge through our website at www.technipfmc.com, under “Investors” as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC.
TechnipFMC aspires to lead the offshore floating renewables industry by leveraging our differentiated technologies, product standardization, and system integration approach. This emerging market is predicted to grow from very limited today, to an installed base of 15 gigawatts by 2030.
Offshore floating renewables. TechnipFMC aspires to lead the offshore floating renewables industry by leveraging our differentiated technologies, product standardization, and system integration approach. This emerging market is predicted to grow from very limited today, to an installed base of 11 gigawatts by 2030.
We believe the available supplies of raw materials are adequate to meet our needs, leveraging our CTO strategy. Research and Development We are engaged in research and development (“R&D”) activities directed toward the improvement of existing products and services, the design of specialized products to meet customer needs, and the development of new products, processes, and services.
We believe the available supplies of raw materials are adequate to meet our needs, leveraging our CTO strategy. Research and Development We are engaged in research and development (“R&D”) activities directed toward the improvement of existing products and services, the design of specialized products to meet client needs, and the development of new products, processes, and services.
A large part of our product development spending has focused on the improved design and standardization of our Subsea products to meet our customer needs. Patents, Trademarks, and Other Intellectual Property We own a number of patents, trademarks, and licenses that are cumulatively important to our businesses.
A large part of our product development spending has focused on the improved design and standardization of our Subsea products to meet our client needs. Patents, Trademarks, and Other Intellectual Property We own a number of patents, trademarks, and licenses that are cumulatively important to our businesses.
Our separation systems offering includes internal components for oil and gas multiphase separation, in-line deliquidizers, and solids removal, as well as fully assembled separation modules and packages designed and fabricated for oil and gas separation, fracturing flowback treatment, solids removal, and primary produced water treatment. Standard Pumps and Skid Systems .
Our separation systems offering includes internal components for oil and natural gas multiphase separation, in-line separation, and solids removal, as well as fully assembled separation modules and packages designed and fabricated for oil and natural gas separation, fracturing flowback treatment, solids removal, and primary produced water treatment. Standard Pumps and Skid Systems .
By teaming up on certain field domains, we are able to develop disruptive technologies to improve productivity, reduce cost, and lower emissions of our clients. We believe the alliance has a superior value proposition, leveraging TechnipFMC’s pioneering integrated ecosystems (such as iEPCI) and technology leadership with Halliburton’s subsurface, well completion, and production knowledge and service offering.
By collaborating on certain field domains, we are able to develop disruptive technologies to improve productivity, reduce cost, and lower emissions of our clients. We believe the alliance has a superior value proposition, leveraging TechnipFMC’s pioneering integrated ecosystems (such as iEPCI) and technology leadership with Halliburton’s subsurface, well completion, and production knowledge and service offering.
Segment and Geographic Financial Information The majority of our consolidated revenue and segment operating profits is generated in markets outside of the United States. Each segment’s revenue is dependent upon worldwide oil and gas exploration and production activity.
Segment and Geographic Financial Information The majority of our consolidated revenue and segment operating profit is generated in markets outside of the United States. Each segment’s revenue is dependent upon worldwide oil and natural gas exploration and production activity.
The following table indicates the names and ages of our executive officers as of February 24, 2023, including all offices and positions held by each in the past five years: Name Age Current Position and Business Experience (Start Date) Douglas J.
The following table indicates the names and ages of our executive officers as of February 27, 2024, including all offices and positions held by each in the past five years: Name Age Current Position and Business Experience (Start Date) Douglas J.
The Company’s European Works Council (“EWC”) meets at least twice a year with management and all of our eligible European entities joined the EWC by the end of 2019. 20 INFORMATION ABOUT OUR EXECUTIVE OFFICERS Information regarding our executive officers called for by Item 401(b) of Regulation S-K is hereby included in Part I, Item 1 “Business” of this Annual Report on Form 10-K.
The Company’s European Works Council (“EWC”) includes all our eligible European entities and meets at least twice a year with management. INFORMATION ABOUT OUR EXECUTIVE OFFICERS Information regarding our executive officers called for by Item 401(b) of Regulation S-K is hereby included in Part I, Item 1 “Business” of this Annual Report on Form 10-K.
Dependence on Key Customers Generally, our customers in the Subsea segment are major integrated oil companies, national oil companies, and independent exploration and production companies. Petrobras accounted for more than 10 percent of our 2022 consolidated revenue.
Dependence on Key Customers Generally, our customers in the Subsea segment are major integrated oil companies, national oil companies, and independent exploration and production companies. Petrobras accounted for more than 16 percent of our 2023 consolidated revenue.
Asset Services include all service offerings for the asset: • Maintenance Services: test, modification, refurbishment and upgrade of subsea equipment and tooling; • Asset Integrity Services: optimizing the performance of the subsea asset through product and field data, including inspection, maintenance and repair ("IMR"); and • Production Management Services: enhanced well and field production, including real-time virtual metering and flow assurance services.
Asset Services include the following offerings: • Maintenance: test, modification, refurbishment and upgrade of subsea equipment and tooling; • Asset integrity: optimizing the performance of the subsea asset through product and field data, including inspection, maintenance, and repair ("IMR"); and • Production management: enhanced well and field production, including real-time virtual metering and flow assurance services. Robotics .
In December 2022, we celebrated International Day of Persons with Disabilities.
In December 2023, we celebrated International Day of Persons with Disabilities.
In 2022, there were almost 28,000 pieces of creative and innovative learning content available, with ongoing releases of new and meaningful courses, to support skills development for our employees and enhance their performance in their roles.
In 2023, there were more than 32,000 pieces of creative and innovative learning content available, with ongoing releases of new and meaningful courses, to support skills development for our employees and enhance their performance in their roles.
As part of our ongoing R&D focus, we seek patents when appropriate for new products, product improvements, and related service innovations. We have approximately 3,800 issued patents and pending patent applications worldwide. Further, we license intellectual property rights to or from third parties. We also own numerous trademarks and trade names and have approximately 410 registrations and pending applications worldwide.
As part of our ongoing R&D focus, we seek patents when appropriate for new products, product improvements, and related service innovations. Further, we license intellectual property rights to or from third parties. We also own numerous trademarks and trade names worldwide.
ENRGs contribute in three ways: • Encouraging meaningful employee engagement and development of future leaders; • Acting as a resource for attraction and retention of talent; and • Sharing new ideas and perspectives for a changing workforce.
We continue to promote ENRGs globally by improving participation and sponsorship. ENRGs contribute in three ways: • Encouraging meaningful employee engagement and development of future leaders; • Acting as a resource for attraction and retention of talent; and • Sharing new ideas and perspectives for a changing workforce.
Our competitors include Aker Solutions ASA, Baker Hughes Company (“Baker Hughes”), Dril-Quip, Inc., McDermott International, Inc. (“McDermott”), National Oilwell Varco, Oceaneering International, Inc., SLB, and Subsea 7 S.A. 7 Seasonality Seasonal weather conditions generally subdues drilling activity, reducing vessel utilization and demand for subsea services as certain activities cannot be performed.
Our competitors include Baker Hughes Company, Dril-Quip, Inc., McDermott International, Inc., NOV Inc., Oceaneering International, Inc., SLB, and Subsea 7 S.A. Seasonality Seasonal weather conditions generally subdue drilling activity, reducing vessel utilization and demand for subsea services as certain activities cannot be performed.
Securities and Exchange Commission (the “SEC”). Alternatively, our reports may be accessed through the website maintained by the SEC at www.sec.gov.
Alternatively, our reports may be accessed through the website maintained by the SEC at www.sec.gov.
Our employment decisions related to recruitment, selection, evaluation, compensation, and development, among others, are not influenced by unlawful or unfair discrimination on the basis of race, religion, gender, age, ethnic origin, nationality, sexual orientation, gender identity or gender reassignment, marital status, or disability.
It is our policy that employment decisions, including those related to recruitment, selection, evaluation, compensation, and development, among others, not be influenced by unlawful or unfair discrimination on the basis of race, religion, gender, age, ethnic origin, nationality, sexual orientation, gender identity or gender reassignment, marital status, disability, or any other legally protected characteristic.
By leveraging digital solutions to optimize the performance of assets on the production site, E-Mission TM helps to reduce flaring and CO 2 emissions, predicting methane escape events by using artificial intelligence, thereby preventing such events ever happening. Our iProduction TM system is the first automated integrated production platform for onshore unconventionals.
By leveraging digital solutions to optimize the performance of assets on the production site, it helps to reduce flaring and CO 2 emissions, predicting methane escape events by using machine learning, thereby helping to prevent such events from ever happening. Our iProduction TM system is the first automated integrated production platform for onshore unconventional resources.
Development of subsea fields, particularly in deepwater environments, involves substantial capital investments. Operators have also sought the security of alliances with us to ensure timely and cost-effective delivery of subsea and other energy-related systems that provide integrated solutions to meet their needs. Our alliances establish important ongoing relationships with our customers.
Operators have also sought alliances with us to ensure timely and cost-effective delivery of subsea and other energy-related systems that provide integrated solutions to meet their needs. Our alliances establish important ongoing relationships with our customers.
Employees around the world are able to share their own stories to better assist and educate us as we continue to push the message that “it’s okay not to be okay.” Internal Communication We have a robust internal communications strategy and support communication channels that ensure that we communicate with our employees in a timely and effective manner.
Employees around the world are able to share their own stories to better assist and educate us as we continue to push the message that “it’s okay not to be okay.” Our global well-being program from Workplace Options provides all our employees with access to mental health resources, counseling and health coaching. 17 Internal Communication We have a robust internal communications strategy and support communication channels that ensure that we communicate with our employees in a timely and effective manner.
Our products are also used for the geothermal production, CO 2 injection for CCS projects, and we have recently qualified designs to support underground hydrogen storage solutions. Stimulation and Pressure Pumping . Our iComplete™ (“iComplete”) offering is the first integrated pressure control system for the onshore conventional stimulation market.
Our products are also used for geothermal production and CO 2 injection, and we have qualified designs to support underground hydrogen storage solutions. Stimulation and Pressure Pumping . We design and manufacture equipment used in well completion and stimulation activities. Our iComplete™ offering is the first integrated pressure control system for the onshore unconventional stimulation market.
Competition We are the only fully integrated company that can provide the complete suite of subsea production equipment, umbilicals, and flowlines with the complete portfolio of installation and LOF services, enabling us to develop a subsea field as a single company. We compete with companies that supply some of the components, as well as installation companies.
Competition We are the only fully integrated company that can provide the complete suite of SPS and SURF equipment with the installation and life of field services, enabling us to develop a subsea field as a single company. We compete with companies that supply various components and services of a subsea development.
Surface Technologies 9 The Surface Technologies segment designs, manufactures, and services products and systems used by companies involved in land and shallow water exploration and production of crude oil and natural gas, as well as some specialized equipment supporting carbon capture and storage ("CCS"), hydrogen storage, and geothermal.
Surface Technologies Our Surface Technologies segment designs, manufactures, and services fully integrated products and systems used by companies involved in land and shallow water exploration and production of oil and natural gas, as well as specialized equipment supporting integrated carbon transportation and storage ("iCTS TM "), hydrogen storage, and geothermal production.
Some of our systems are designed to withstand exposure to the extreme hydrostatic pressure of deepwater environments, as well as internal pressures of up to 20,000 pounds per square inch (“psi”) and temperatures of up to 400º F.
The design and manufacture of our subsea systems requires a high degree of technical expertise and innovation. Some of our systems are designed to withstand exposure to the extreme hydrostatic pressure of deepwater environments, as well as internal pressures of up to 20,000 pounds per square inch (psi) and temperatures of up to 400º F.
The Bridge has 44 chartered global knowledge-sharing networks. The related knowledge repository, The Well, has more than 5,100 pages (up from 4,000 in 2021), which received more than 824,000 visits in 2022 (up from 650,000 in 2021). The Well is connected with the Company’s competency management platform and provides direct access to competency-based content.
The related knowledge repository, The Well, has more than 5,450 pages (up from 5,100 in 2022), which received more than 1.3 million visits in 2023 (up from 824,000 in 2022). The Well is connected with the Company’s competency management platform and provides direct access to competency-based content.
Pferdehirt (a) 59 Chair and Chief Executive Officer (2019) Chief Executive Officer (2017) Alf Melin (a) 53 Executive Vice President and Chief Financial Officer (2021) Senior Vice President, Finance Operations (2017) Senior Vice President, Surface Americas (2017) Victoria Lazar (a) 57 Executive Vice President, Chief Legal Officer and Secretary (2020) Senior Vice President, General Counsel and Corporate Secretary of Bristow Group (2020) Executive Counsel, M&A of General Electric (2019) Associate General Counsel of Baker Hughes, a GE Company (2018) Luana Duffé (a) 41 Executive Vice President, New Energy business (2021) Vice President, Subsea Projects & Commercial and Country Manager for Brazil (2020) Vice President, Subsea Projects and Brazil Country Manager (2019) Vice President, Subsea Strategy (2018) Corporate Development Director (2018) Nisha Rai (a) 47 Executive Vice President, People and Culture (2021) Vice President of Total Rewards (2020) Vice President Head of Human Resources of MRC Global (2017) Justin Rounce (a) 56 Executive Vice President and Chief Technology Officer (2018) President, Valves & Measurement of Schlumberger Limited (2018) Jonathan Landes (a) 50 President, Subsea (2020) Senior Vice President, Subsea Commercial (2017) President, Subsea Projects North America (2017) Thierry Conti (a) 39 President, Surface Technologies (2022) Senior Vice President, Subsea Commercial & Strategy (2020) Senior Vice President, Subsea Product Management (2019) Krisztina Doroghazi (b) 51 Senior Vice President, Controller, and Chief Accounting Officer (2018) __________________ (a) Member of the Executive Leadership Team and a Rule 3b-7 executive officer and Section 16 officer under the Exchange Act.
Pferdehirt (a) 60 Chair and Chief Executive Officer (2019) Chief Executive Officer (2017) Alf Melin (a) 54 Executive Vice President and Chief Financial Officer (2021) Senior Vice President, Finance Operations (2017) Senior Vice President, Surface Americas (2017) Cristina Aalders (a) 43 Executive Vice President, Chief Legal Officer and Secretary (2023) Vice President, Chief Compliance Officer (2021) Vice President, Legal, Surface Technologies (2019) Luana Duffé (a) 42 Executive Vice President, New Energy business (2021) Vice President, Subsea Projects & Commercial and Country Manager for Brazil (2020) Vice President, Subsea Projects and Brazil Country Manager (2019) Vice President, Subsea Strategy (2018) Corporate Development Director (2018) Nisha Rai (a) 48 Executive Vice President, People and Culture (2021) Vice President of Total Rewards (2020) Vice President Head of Human Resources of MRC Global (2017) Justin Rounce (a) 57 Executive Vice President and Chief Technology Officer (2018) President, Valves & Measurement of Schlumberger Limited (2018) Jonathan Landes (a) 51 President, Subsea (2020) Senior Vice President, Subsea Commercial (2017) President, Subsea Projects North America (2017) Thierry Conti (a) 40 President, Surface Technologies (2022) Senior Vice President, Subsea Commercial & Strategy (2020) Senior Vice President, Subsea Product Management (2019) David Light (b) 39 Senior Vice President, Controller and Chief Accounting Officer (2023) Vice President, Internal Audit and Controls (2021) Vice President, Integrated Internal Controls (2020) (a) Member of the Executive Leadership Team and a Rule 3b-7 executive officer and Section 16 officer under the Exchange Act.
Our CTO Subsea 2.0 program attributes include: • Pre-engineered standard configurations; • Pre-approved and qualified supply chain; • Pre-defined quality, code, and surveillance requirements; • Optimized manufacturing with dedicated capacity; and • Pre-defined and developed services.
CTO also allows us to drive manufacturing efficiency to improve throughput and increase capacity of the existing manufacturing assets. Our CTO Subsea 2.0 program attributes include: • Pre-engineered standard configurations; • Pre-approved and qualified supply chain; • Pre-defined quality, code, and surveillance requirements; • Optimized manufacturing with dedicated capacity; and • Pre-defined and developed services.
Product Development We are industrializing our Subsea business with Subsea 2.0 by using pre-engineered modular architectures to achieve a fully flexible suite of product offerings, while making an evolutionary shift from unique project requirements to a CTO execution model. 8 Our Subsea 2.0 configurable product platform consists of pre-engineered products designed to provide the flexibility to accommodate customer needs and functional requirements, combining field-proven and new technologies.
Product Development We are industrializing our Subsea business with Subsea 2.0 by using pre-engineered modular architectures to achieve a fully flexible suite of product offerings, while making an evolutionary shift from unique project requirements to a CTO execution model.
We have a fleet of 17 vessels. These are used for the installation and servicing of our products. We have sole ownership of nine vessels, ownership of six vessels as part of joint ventures, and two vessels operated under charter agreements. Subsea Services .
We have a fleet of 16 vessels, which typically perform the installation of our products and systems. We have sole ownership of eight vessels, ownership of six vessels as part of joint ventures, and two vessels operated under charter agreements. Subsea Services .
We encourage our employees to actively engage in ‘doing something good'’ through active engagement in health, education, and local employment. Initiatives include our global volunteering program, which encourages employees to perform four hours of volunteering each year at the Company’s expense, and promoting science, technology, engineering and mathematics (“STEM”) careers.
Initiatives include our global volunteering program, which encourages employees to perform four hours of volunteering each year at the Company’s expense, and promoting science, technology, engineering and mathematics (“STEM”) careers.
The integration of ROV, 6 manipulators and tooling, advanced automation, and computer vision technology, enables a transition to highly-automated subsea robotics, which reduces task time from hours to minutes, ensuring predictable results every time.
The Company manufactures GEMINI ® , a fully integrated, next generation ROV intervention system that provides unprecedented subsea productivity for our clients. The integration of ROV, manipulators and tooling, advanced automation, and computer vision technology, enables a transition to highly-automated subsea robotics, which reduces task time from hours to minutes, ensuring predictable results every time.
Order Backlog Information regarding order backlog is incorporated herein by reference from the section entitled “Inbound Orders and Order Backlog” in Part II, Item 7 of this Annual Report on Form 10-K.
Order Backlog Information regarding order backlog is incorporated herein by reference from the section entitled “Inbound Orders and Order Backlog” in Part II, Item 7 of this Annual Report on Form 10-K. 13 Governmental Regulations We are subject to a number of environmental and other governmental and regulatory requirements related to our operations globally.
Employment decisions are based only on relevant qualifications, performance, demonstrated skills, experience, and other job-related factors, with our goal of creating a diverse, tolerant, equitable and inclusive workforce.
Furthermore, we are committed to hiring and employee development decisions that are fair, objective, and not based on protected characteristics. Our policy is for employment decisions to be based only on relevant qualifications, performance, demonstrated skills, experience, and other job-related factors, with our goal of creating a diverse, tolerant, equitable and inclusive workforce.
Employees in all regions access these and other knowledge management social learning tools such as an Experts Explain webinar series and Illuminate podcasts to increase their knowledge about business and technical topics, and to share their own knowledge. 17 Learning and Training Engagement in our iLearn learning platform continues to see significant growth and use, as we continue to embrace our digital transformation and more engaging content.
Employees in all regions access these and other knowledge management social learning tools such as an Experts Explain webinar series and Illuminate podcasts to increase their knowledge about business and technical topics, and to share their own knowledge.
While these alliances do not contractually commit our customers to purchase our systems and services, they have historically led to, and we expect that they would continue to result in, such purchases. The commitment to our customers goes beyond project delivery, and we nurture these alliances with transparency and collaboration to better understand their needs to ensure customer success.
While these alliances do not contractually obligate our customers to purchase our systems and services, they have resulted in a growing number of direct awards to the Company. The commitment to our customers goes beyond project delivery, and we foster these alliances with transparency and collaboration to better understand their needs and ensure customer success.
Extensive knowledge in flexible pipes, manifold and check valve technology has been adapted to make this a very reliable and predictable system. This is combined with our digital offering CyberFrac TM to improve safety by reducing manpower in the red zone, and boost efficiency in the field by automating operations and reducing unplanned stoppages by providing predictive analytics.
Our extensive knowledge of flexible pipe, manifold, and check valve technologies has been adapted to make this a very reliable and predictable system. iComplete™ utilizes our digital offering CyberFrac™ to improve safety by reducing manpower in high-risk areas (“red zone”), boost efficiency by automating operations and reduce unplanned stoppages by using predictive analytics.
We are committed to the development of our employees, and our employee guidelines are specified in our Code of Business Conduct, which applies to all employees, regardless of their roles, and no matter where they work. 15 We believe that all our employees are entitled to fair treatment, courtesy, and respect, wherever they work: in the office, on vessels, on industrial and construction sites, or in client offices.
We are committed to the development of our employees, and our employee guidelines are specified in our Code of Business Conduct, which applies to all employees, regardless of their roles, and no matter where they work.
Building on our solid foundations, we delivered impactful courses, initiatives, and solutions across all of our business segments, in addition to being particularly focused on leadership, technology, and project management.
The importance of being able to offer learning and knowledge-sharing opportunities in a digital, 24/7, and global environment has been key to our success. Building on our solid foundations, we delivered impactful courses, initiatives, and solutions across all of our business segments, in addition to being particularly focused on leadership, technology, and project management.
Subsea Umbilicals, Risers and Flowlines . We are a leading provider of SURF infrastructure. We develop, engineer, manufacture and install umbilicals, rigid pipelines and flexible pipes, connections and tie-ins for subsea systems.
We develop, engineer, manufacture and install umbilicals, flexible, hybrid-flexible and rigid pipelines, connections, and tie-ins for subsea systems.
The effectiveness of internal communication is continually monitored and adjusted based on a focus group feedback program that reaches multiple levels across the Company. New digital tools help us gauge the effectiveness of our digital communication platforms.
The effectiveness of internal communication is monitored and adjusted based on various forms of feedback from multiple levels across the Company. Digital tools help us gauge the effectiveness of our digital communication platforms—from email to intranet to internal social media.
Our system can also manage continuous pumping, multi-well operations, and ties in data from adjacent wells to monitor potential breakthroughs. All of this significantly reduces safety risk as well as the cost of operations for our customers. Fracturing Tree and Manifold Systems . During the completion of a shale well, the well undergoes hydraulic fracturing.
Our system can also manage continuous pumping and multi-well operations and integrate data from adjacent wells. Together, this significantly reduces safety risks and the cost of operations for our clients. Fracturing Tree and Manifold Systems . During the completion of a shale well, the well undergoes hydraulic fracturing. During this phase, durable and wear-resistant wellsite equipment is temporarily deployed.
Our Subsea segment provides integrated design, engineering, procurement, manufacturing, fabrication, installation, and life of field services for subsea systems, subsea field infrastructure, and subsea pipeline systems used in oil and gas production and transportation.
BUSINESS SEGMENTS Subsea Our Subsea segment provides integrated design, engineering, procurement, manufacturing, fabrication, installation, and life of field services for subsea systems, subsea field infrastructure, and subsea pipeline systems used in oil and natural gas production and transportation. 4 We are an industry leader in front-end engineering and design (“FEED”), subsea production systems (“SPS”), subsea flexible pipe, subsea umbilicals, risers, and flowlines (“SURF”), and subsea robotics.
Surface wellheads and production trees are systems which are designed for onshore unconventional, onshore conventional, and offshore platform applications, and are typically sold directly to exploration and production operators during the drilling and completion phases of the well lifecycle.
The production tree is comprised of valves, actuators and chokes which can be combined into various configurations, depending on client-specific requirements. These systems are designed for onshore unconventional, onshore conventional, and offshore platform applications, and are typically sold directly to exploration and production operators during the drilling and completion phases of the well lifecycle.
By pivoting from bespoke Engineer to Order ("ETO") solutions unique to every project to pre-engineered CTO products, we can leverage the efficiencies our execution model creates and bring value to our clients through reduced lead time, an optimized execution model, and improved predictability and reliability for delivery.
Our CTO execution model requires no product engineering work to deliver these configurable products to our clients, which ensures quality, manufacturing, supply chain, and services are fully industrialized in order to deliver the value offered with Subsea 2.0. 7 By pivoting from bespoke Engineer-to-Order solutions, to pre-engineered CTO products, we can leverage the efficiencies our execution model creates and bring value to our clients through reduced lead time, an optimized execution model, and improved predictability and reliability for delivery.
Our subsea processing systems, which include subsea boosting, subsea gas compression, and subsea separation, are designed to accelerate production, increase recovery, extend field life, lower greenhouse gas emissions, and/or lower operators’ production costs for greenfield, subsea tie-back and brownfield applications. To provide these products, systems, and services, we utilize our engineering, project management, procurement, manufacturing, and assembly and test capabilities.
Our subsea processing systems, which include subsea boosting, subsea gas compression, and subsea separation, are designed to accelerate production, increase recovery, extend field life, lower greenhouse gas emissions, and lower operators’ production costs for greenfield and brownfield applications. Subsea Umbilicals, Risers and Flowlines (SURF) . We are a leading provider of SURF infrastructure.
Competition We are the only pure-play global supplier in the Surface Technologies market space and are a market leader for many of our products and services. Some of the factors that distinguish us from other companies in the same sector include our technological innovation, reliability, product quality, and our problem solving capability.
No single Surface Technologies customer accounted for 10 percent or more of our 2023 consolidated revenue. Competition We are a market leader for many of our products and services. Some of the factors that distinguish TechnipFMC from other companies in the sector include our technological innovation, integrated solutions, reliability, and product quality.
By capitalizing on our subsea expertise, core competencies, and integration capabilities, we will empower the production of oil and gas and new energies, while reducing carbon emissions. Through our established Subsea services and our transformative offerings including iEPCI and the Subsea 2.0™ (“Subsea 2.0”).
By capitalizing on our subsea expertise, core competencies, and integration capabilities, we will continue to improve the project economics of both oil and natural gas and new energies, while reducing carbon emissions.
We distinguish our offerings by three key strengths: Core Technology . We are committed to applying technology within our core products to solve real customer problems, leveraging the benefits of smarter designs. Decarbonization .
We distinguish our offerings through three key strengths: Core Technology . We are committed to applying technology within our core products to solve client problems, leveraging the benefits of smarter designs. Decarbonization . We are developing new ways for our clients to make the production of oil and natural gas less carbon intensive. Digital and Automation .
Workforce Overview Our workforce consists of the following: As of December 31, 2022 2021 2020 Permanent employees 20,301 19,103 19,078 Temporary employees (fixed-term) 1,671 1,507 1,054 Employees on payroll 21,972 20,610 20,132 Contracted workforce 1,374 1,392 635 Total workforce 23,346 22,002 20,767 Attracting Talent In 2022, we revisited our Employee Value Proposition ("EVP") with active involvement of leaders, new employees and a cross-section of experienced employees to ensure it resonates with everyone and aligns with Company ambitions.
Workforce Overview Our workforce consists of the following: As of December 31, 2023 2022 2021 Permanent employees 21,469 20,301 19,103 Temporary employees (fixed-term) 1,293 1,671 1,507 Employees on payroll 22,762 21,972 20,610 Contracted workforce 2,265 1,374 1,392 Total workforce 25,027 23,346 22,002 Attracting Talent Our Employee Value Proposition ("EVP") is part of the way we attract, engage and retain our people.
Our efforts in this area include: • Deep Purple™ is our system to provide sustainable offshore renewable energy production by integrating wind energy and hydrogen production and storage.
Our efforts and achievements in this area include: • Deep Purple™, which is our sustainable energy solution that provides renewable and scalable energy production offshore by integrating hydrogen production, compression, storage, and re-electrification via a fuel cell.
Our efforts in this area include: • Development of our Integrated Carbon Transportation and Storage System, (“iCTS™”); • A strategic alliance with Talos Energy to accelerate carbon transportation and storage (“CTS”); • The acquisition of Magma Global, manufacturer of the key gas transportation technologies thermoplastic composite pipe and hybrid flexible pipe; and • An agreement to commercialize PETRONAS’ unique natural gas processing membrane which reduces emissions of CO 2 and hydrogen sulfide by integrating the technology into our onshore and offshore production portfolio.
Our efforts and achievements in this area include: • Development of our integrated carbon transportation and storage system, or iCTS TM ; • Development and manufacturing of new gas transportation technologies, including thermoplastic composite pipe and hybrid flexible pipe; • Agreement to commercialize PETRONAS’ unique natural gas processing membrane which reduces emissions of CO 2 and hydrogen sulfide by integrating the technology into our onshore and offshore production offering; and • Awards for several commercial contracts for carbon injection wellheads to be used for permanent sequestration in the Middle East, Australia, and the Netherlands.
Our iLOF offering is designed to unlock the full potential of subsea infrastructures during operations by transforming the way subsea services are delivered and proactively addressing the challenges operators face over the life of subsea fields. We provide production optimization, asset life extension insight, proactive debottlenecking, and condition-based maintenance.
Our integrated life of field offering, iLOF™, is designed to unlock the full potential of subsea infrastructures during operations by proactively addressing the challenges operators face over the life of subsea fields. Subsea Segment Products and Services Subsea Production Systems (SPS) . Our SPS are used in the offshore production of oil and natural gas.
We are making measurement smarter with integrated flow measurement and automation solutions, from the wellhead to the final point of sale. We deliver accurate and reliable measurement for the transportation, distribution, and storage of energy products by truck, rail, vessel, aircraft, and pipeline. We have the right products and systems to help with any application challenge.
We deliver accurate and reliable measurement solutions for the transportation, distribution, and storage of energy products by truck, rail, vessel, aircraft, and pipeline. We are making measurement smarter with integrated flow measurement and automation solutions. Our clients can also reduce complexity by working with one supplier that can provide measurement and control systems, automation, and key data insights.
Our Surface Technologies product families include drilling, stimulation, production, measurement, digital and services. We manufacture most of our products internally in facilities located worldwide. Principal Products and Services Drilling . We provide a full range of drilling and completion systems for both standard and custom engineered applications.
Surface Technologies provides integrated solutions for onshore applications in drilling, stimulation, production, measurement, digital, and services globally. 8 Principal Products and Services Drilling . We provide a full range of drilling and completion systems for both standard and custom-engineered applications. The client base for drilling and completion offerings is energy production, transportation, and storage companies.
We have adapted this product for use in high pressure, high volume stimulation and our PumpFlex TM and WellFlex TM products are being incorporated into most shale operations and are an integral part of our iComplete TM system. Our product is the only mechanical solution available today and has shown excellent wear resistance and durability in this very onerous application.
We have been a leading supplier of flexible pipe since the 1970s and our Coflexip ® product is an industry standard for drilling and stimulation operations offshore. We have adapted this product for use in high-pressure, high-volume stimulation. Our PumpFlex™, WellFlex™, and PadFlex™ products are incorporated into most shale operations and are an integral part of our iComplete™ system.
Services . We offer our customers a comprehensive suite of service packages to ensure optimal performance and reliability of our equipment, upstream and midstream. These service packages include all phases of the asset’s life cycle: from the early planning stages through testing and installation, commissioning, and operations, replacement and upgrade, maintenance, storage, preservation, intervention, integrity, decommissioning, and abandonment.
These service packages include all phases of the asset’s life cycle from early planning stages through testing and installation, commissioning, and operations, replacement and upgrade, maintenance, storage, preservation, intervention, integrity, decommissioning, and abandonment. Dependence on Key Customers Surface Technologies’ customers include major integrated oil companies, national oil companies, independent exploration and production companies and oil and natural gas service companies.
Based on the success of the Forsys Subsea joint venture and its innovative approach to integrated solutions, in May 2016 Technip and FMC Technologies announced that the companies would combine through a merger of equals to create a global subsea leader, TechnipFMC, that would drive change by redefining the production of oil and gas.
History On January 17, 2017, FMC Technologies, Inc. and Technip S.A. combined through a merger of equals to create a global subsea leader, TechnipFMC, that would drive change by redefining the development of the subsea infrastructure used in the production of oil and natural gas through a new integrated commercial model.
Our first-mover advantage and ability to convert iFEED studies into iEPCI contracts, often as direct awards, creates a unique set of opportunities for us that are not available to our peers.
Our first-mover advantage and ability to convert iFEED studies into iEPCI contracts, often as direct awards, creates a unique set of opportunities for us. This allows us to deliver a fully integrated – and technologically differentiated – subsea system, and to better manage the complete work scope through a single contracting mechanism and a single interface.
The new facility will offer a broader range of capabilities and greater in-country value-add, supporting our full portfolio with high technology equipment in the drilling, completion, production, and pressure control sectors. 12 In 2022, we also committed to investing in a new manufacturing space at our ICAD facility in Abu Dhabi, and in September became the first company to be API6A qualified.
The new facility extends our range of capabilities and offers greater in-country value-add, supporting our full portfolio with high technology equipment in the drilling, completion, production, and pressure control sectors.
We encouraged and included more people from our business to share their inspiring experiences and stories that truly reflect the diversity and plurality we have in the Company. People from different cultures, generations, genders, races, disabilities, and sexual preferences are represented by what they all have in common: inspiring experiences lived at TechnipFMC.
People from different cultures, generations, genders, races, disabilities, and sexual preferences are represented by what they all have in common: inspiring experiences lived at TechnipFMC. We continue to explore how best we can share these experiences with external candidates as well as internally through different channels.
Equal opportunity and fair representation Three of our Foundational Beliefs – integrity, respect, and sustainability – are tangibly embedded in our commitment to diversity, equity, inclusion and fair representation.
Equal Opportunity and Fair Representation Three of our Foundational Beliefs – integrity, respect, and sustainability – are tangibly embedded in our commitment to equal opportunity and fair representation. While we recognize the importance of equal opportunity and fair representation to our long-term value and performance, we also recognize the importance of pursuing these aims in legally compliant manners.
As committed by our Chair and CEO in 2020, we annually mark the month of October as mental health awareness month with several activities to promote awareness. The 2022 activities included Take 5 Moments, webinars, employees podcasts, a virtual yoga event and a Global Wellbeing Questionnaire, which allows people to learn more about their physical, emotional, and practical wellbeing.
Our 2023 activities included Take 5 Moments, webinars, employees podcasts, a virtual yoga event and a Global Wellbeing Questionnaire, which allows people to learn more about their physical, emotional, and practical well-being. A new Global Wellbeing & Mental Health Viva Engage page was created for employees to stimulate discussions around the topic.
Our global recruitment system is being optimized to provide a more dynamic, modern and attractive experience with relevant content. Our onboarding program will be further simplified, with better global alignment and more efficient communication to make the experience of new employees and line managers more streamlined and connected.
Our onboarding program will be further simplified, with better global alignment and more efficient communication to make the experience of new employees and line managers more streamlined and connected. Key performance indicators linked to talent acquisition are now available and accessible to key stakeholders through our internal tracking platform.
The wellhead is a system of spools and sealing devices from which the entire downhole well string hangs and provides the structural support for surface production trees. Production trees are comprised of valves, actuators and chokes which can be combined into various configurations, depending on customer-specific requirements.
Surface Wellheads and Production Trees . Our products are used to control and regulate the flow of oil and natural gas from the well. The wellhead is a system of spools and sealing devices from which the entire downhole well string hangs and provides the structural support for surface production trees.
We believe offshore will be the next frontier of the energy transition and are ready to accelerate and grow our contribution. This is the role of New Energy business at TechnipFMC. Our goal is to be a key enabler of the carbon transportation and storage and offshore renewables industry.
This is the role of our New Energy business at TechnipFMC, where we will serve as system architect and integrator, from technology development through project delivery and life of field services. We believe offshore will be the next frontier of the energy transition, and our Company is ready to accelerate and grow our contribution.
Our systems and products include subsea trees, chokes and flow modules, manifold pipeline systems, controls and automation systems, well access systems, multiphase and wet-gas flow meters, and additional technologies. The design and manufacture of our subsea systems requires a high degree of technical expertise and innovation.
Our products and integrated systems include subsea trees, chokes and flow modules, manifold pipeline systems, controls and automation systems, well access systems, multiphase and wet-gas flow meters, and additional technologies. We offer both electro-hydraulic and all-electric Subsea Production Systems, depending on the specific needs of the customer or field.
By integrating the SPS and SURF work scopes, we are able to drive greater value to our clients through more efficient field layout and execution of the installation campaign.
We also have the capability to install and service these products and systems using our fleet of highly specialized vessels. We are able to drive even greater value to our clients by integrating the SPS and SURF through more efficient design and installation of subsea field architecture.
Our systems are based on standard, field-proven building blocks and designed for minimal maintenance during life of field operations. Separation and Processing Systems . TechnipFMC provides industry-leading technology for the separation of oil, gas, sand, and water. These solutions are used in onshore production facilities and on offshore platforms worldwide.
We provide industry-leading technology for the separation of oil, gas, sand, and water. These solutions are used in onshore production facilities and on offshore platforms worldwide. Our family of separation products delivers client success by increasing efficiency and throughput and reducing the footprint of processing facilities.
Employee attrition in 2022 was marginally higher than in 2021 at 8.9 percent reflective of trends across the industry and beyond. However, key talent attrition was lower at 7.7 percent as a result of dedicated efforts on providing learning and development opportunities and key talent moves identified in succession plans.
Both employee attrition and key talent attrition in 2023 were lower compared to 2022 at around 7 percent and 6 percent, respectively. This was a result of the initiatives above, our focus on competitive compensation and benefits programs, dedicated efforts on providing learning and development opportunities and key talent moves identified in succession plans.
We actively pursue alliances with companies engaged in the subsea development of oil and natural gas to promote our integrated systems for subsea production. These alliances are typically related to the procurement of subsea production equipment, although some of them are related to engineering, procurement, construction, and installation (“EPCI”) services.
These alliances are typically related to the procurement of subsea production equipment, although some are related to engineering, procurement, construction, and installation services. Development of subsea fields, particularly in deepwater environments, involves substantial capital investments.
These control systems will have the flexibility to manage a wide range of functionalities, from manifold/tree valve and choke actuation to downhole and seabed reservoir monitoring systems. Existing equipment developed by our Surface Technologies and Subsea businesses can be leveraged to achieve this aim.
Integrated control systems will provide flexibility to manage a wide range of functionalities, from surface and subsea injection equipment to downhole and seabed reservoir monitoring systems.
We also provide services associated with our surface wellhead and production tree portfolio, including service personnel and rental tooling life of field maintenance, repair, and refurbishment as well as digital monitoring and remote operational control and automation.
Our surface wellheads and production trees are used worldwide and include a full range of system configurations from conventional wellheads, to high-pressure, high-temperature production tree systems for extreme production applications. We provide services for these systems, including service personnel and rental tooling, life of field maintenance, as well as digital monitoring and remote operational control and automation.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Related to Legal Proceedings, Tax, and Regulatory Matters • The industries in which we operate or have operated expose us to potential liabilities, including the installation or use of our products, which may not be covered by insurance or may be in excess of policy limits, or for which expected recoveries may not be realized. • Our operations require us to comply with existing and future laws and regulations, violations of which could have a material adverse effect on our financial condition, results of operations, or cash flows. • As an English public limited company, we must meet certain additional financial requirements before we may declare dividends or repurchase shares and certain capital structure decisions may require stockholder approval which may limit our flexibility to manage our capital structure. • Uninsured claims and litigation against us could adversely impact our financial condition, results of operations, or cash flows. 22 • The IRS may not agree that we should be treated as a foreign corporation for U.S. federal tax purposes and may seek to impose an excise tax on gains recognized by certain individuals. • U.S. tax laws and/or guidance could also affect our ability to engage in certain acquisition strategies and certain internal restructurings. • We are subject to the tax laws of numerous jurisdictions; and challenges to the interpretation of, or future changes to, such laws could adversely affect us. • We intend to be treated exclusively as a resident of the United Kingdom for tax purposes, but other tax authorities may seek to treat us as a tax resident of another jurisdiction, and we may not qualify for benefits under tax treaties entered into between the United Kingdom and other countries.
Biggest changeRisks Related to Legal Proceedings, Tax, and Regulatory Matters • The industries in which we operate or have operated expose us to potential liabilities, including the installation or use of our products, which may not be covered by insurance or may be in excess of policy limits, or for which expected recoveries may not be realized. • Our operations require us to comply with existing and future laws and regulations, including laws and regulations related to environment, climate change and greenhouse gas emissions, privacy, data protection, and data security, violations of which could have a material adverse effect on our financial condition, results of operations, or cash flows. 19 • As an English public limited company, we must meet certain additional financial requirements before we may declare dividends or repurchase shares and certain capital structure decisions may require stockholder approval which may limit our flexibility to manage our capital structure. • Uninsured claims and litigation against us could adversely impact our financial condition, results of operations, or cash flows. • We are subject to compliance risk with tax laws of numerous jurisdictions, and challenges to our interpretation of, or future changes to, tax laws could adversely affect us.
The GDPR, UK GDPR and implementing legislation in the EEA and UK impose several stringent requirements for controllers and processors of personal data which have increased our obligations, including, for example, by requiring more robust disclosures to individuals, notifications, in some cases, of data breaches to regulators and data subjects, and a record of processing and other policies and procedures to be maintained to adhere to the accountability principle.
The GDPR, UK GDPR and implementing legislation in the EEA impose several stringent requirements for controllers and processors of personal data which have increased our obligations, including, for example, by requiring more robust disclosures to individuals, notifications, in some cases, of data breaches to regulators and data subjects, and a record of processing and other policies and procedures to be maintained to adhere to the accountability principle.
Factors affecting the prices of oil and natural gas include, but are not limited to, the following: • demand for hydrocarbons, which is affected by worldwide population growth, economic growth rates, and general economic and business conditions; • costs of exploring for, producing, and delivering oil and natural gas; • political and economic uncertainty, socio-political unrest and geopolitical conflicts, including the continued conflict between Russia and Ukraine, which has resulted in substantial reduction of natural gas imports from Russia to Europe and significant volatility in the costs of both wholesale gas and power; • governmental laws, policies, regulations and subsidies related to or affecting the production, use, and exportation/importation of oil and natural gas; 23 • the ability or willingness of the Organization of Petroleum Exporting Countries and the 10 other oil producing countries, including Russia, Mexico and Kazakhstan (“OPEC+”) to set and maintain production level for oil; • oil refining and transportation capacity and shifts in end-customer preferences toward fuel efficiency and the use of natural gas; • technological advances affecting energy consumption; • development, exploitation, relative price, and availability of alternative sources of energy and our customers’ shift of capital to the development of these sources; • volatility in, and access to, capital and credit markets, which may affect our customers’ activity levels, and spending for our products and services; • decrease in investors’ interest in hydrocarbon producers because of environmental and sustainability initiatives; and • natural disasters.
Factors affecting the prices of oil and natural gas include, but are not limited to, the following: • demand for hydrocarbons, which is affected by worldwide population growth, economic growth rates, and general economic and business conditions; • costs of exploring for, producing, and delivering oil and natural gas; • political and economic uncertainty, socio-political unrest and geopolitical conflicts, including the continued conflict between Russia and Ukraine, which has resulted in substantial reduction of natural gas imports from Russia to Europe and significant volatility in the costs of both wholesale gas and power; • governmental laws, policies, regulations and subsidies related to or affecting the production, use, and exportation/importation of oil and natural gas; • the ability or willingness of the Organization of Petroleum Exporting Countries and the 10 other oil producing countries, including Russia, Mexico and Kazakhstan (“OPEC+”) to set and maintain production level for oil; • oil refining and transportation capacity and shifts in end-customer preferences toward fuel efficiency and the use of natural gas; • technological advances affecting energy consumption; • development, exploitation, relative price, and availability of alternative sources of energy and our customers’ shift of capital to the development of these sources; • volatility in, and access to, capital and credit markets, which may affect our customers’ activity levels, and spending for our products and services; • decrease in investors’ interest in hydrocarbon producers because of environmental and sustainability initiatives; and • natural disasters.
The oil and natural gas market remains quite volatile, and price recovery and business activity levels are dependent on variables beyond our control, such as geopolitical stability, increasing attention to global climate change resulting in pressure upon shareholders, financial institutions and/or financial markets to modify their relationships with oil and gas companies and to limit investments and/or funding to such companies, increasing likelihood of governmental regulations, enforcement, and investigations and private litigation due to increasing attention to global climate change, OPEC+’s actions to regulate its production capacity, changes in demand patterns, and international sanctions and tariffs.
The oil and natural gas market remains quite volatile, and price recovery and business activity levels are dependent on variables beyond 20 our control, such as geopolitical stability, increasing attention to global climate change resulting in pressure upon shareholders, financial institutions and/or financial markets to modify their relationships with oil and natural gas companies and to limit investments and/or funding to such companies, increasing likelihood of governmental regulations, enforcement, and investigations and private litigation due to increasing attention to global climate change, OPEC+’s actions to regulate its production capacity, changes in demand patterns, and international sanctions and tariffs.
Risks Related to Our Operations • We may lose money on fixed-price contracts. • Our failure to timely deliver our backlog could affect future sales, profitability, and customer relationships. • We face risks relating to our reliance on subcontractors, suppliers, and our joint venture partners. • A failure or breach of our IT infrastructure or that of our subcontractors, suppliers, or joint venture partners, including as a result of cyber-attacks, could adversely impact our business and results of operations. • Pirates endanger our maritime employees and assets. • New capital asset construction projects for vessels and manufacturing facilities are subject to risks, including delays and cost overruns.
Risks Related to Our Operations • We may lose money on fixed-price contracts. • Our failure to timely deliver our backlog could affect future sales, profitability, and customer relationships. • We face risks relating to our reliance on subcontractors, suppliers, and our joint venture partners. • A failure or breach of our IT infrastructure or that of our subcontractors, suppliers, or joint venture partners, including as a result of cyber-attacks, could adversely impact our business and results of operations. • Pirates and maritime conflicts endanger our maritime employees and assets. • New capital asset construction projects for vessels and manufacturing facilities are subject to risks, including delays and cost overruns.
The failure of 30 our or others’ security controls and measures to prevent, detect, contain or remediate cyberattacks or other significant security incidents could disrupt our business and result in numerous adverse consequences, including reduced effectiveness and efficiency of operations, inappropriate disclosure of confidential and proprietary information, including personal data, litigation or regulatory investigations, actions and fines included for a breach of data protection laws, reputational harm, increased overhead costs including due to compliance requirements, and loss of important information, which could have a material adverse effect on our business and results of operations.
The failure of our or others’ security controls and measures to prevent, detect, contain or remediate cyberattacks or other significant security incidents could disrupt our business and result in numerous adverse consequences, including reduced effectiveness and efficiency of operations, inappropriate disclosure of confidential and proprietary information, including personal data, litigation or regulatory investigations, actions and fines included for a breach of data protection laws, reputational harm, increased overhead costs including due to compliance requirements, and loss of important information, which could have a material adverse effect on our business and results of operations.
In addition, there can be no assurance that there will not be a change in law or interpretation, including with retroactive effect, that might cause us to be treated as a domestic corporation for U.S. federal income tax purposes. U.S. tax laws and/or guidance could affect our ability to engage in certain acquisition strategies and certain internal restructurings.
In addition, there can be no assurance that there will not be a change in law or interpretation, including with retroactive effect, which might cause us to be treated as a domestic corporation for U.S. federal income tax purposes. U.S. tax laws and/or guidance could affect our ability to engage in certain acquisition strategies and certain internal restructurings.
Although it is intended that we will be treated as having our exclusive place of tax residence in the United Kingdom, the French tax authorities may claim, for the period prior to the reorganization, that we were a tax resident of France if we were to have failed 36 to maintain our “place of effective management” in the United Kingdom over that period as a result of the activities of such permanent establishment.
Although it is intended that we will be treated as having our exclusive place of tax residence in the United Kingdom, the French tax authorities may claim, for the period prior to the reorganization, that we were a tax resident of France if we were to have failed to maintain our “place of effective management” in the United Kingdom over that period as a result of the activities of such permanent establishment.
The ability to meet customer delivery schedules for this backlog is dependent upon a number of factors, including, but not limited to, access to raw materials required for production, an adequately trained and capable workforce, subcontractor performance, project engineering expertise and execution, sufficient manufacturing plant capacity, and appropriate planning and scheduling of 29 manufacturing resources.
The ability to meet customer delivery schedules for this backlog is dependent upon a number of factors, including, but not limited to, access to raw materials required for production, an adequately trained and capable workforce, subcontractor performance, project engineering expertise and execution, sufficient manufacturing plant capacity, and appropriate planning and scheduling of manufacturing resources.
However, our insurance policies are subject to exclusions, 33 limitations, and other conditions and may not apply in all cases, for example, where willful wrongdoing on our part is alleged. Additionally, the nature and amount of that insurance may not be sufficient to fully indemnify us against liabilities arising out of pending and future claims and litigation.
However, our insurance policies are subject to exclusions, limitations, and other conditions and may not apply in all cases, for example, where willful wrongdoing on our part is alleged. Additionally, the nature and amount of that insurance may not be sufficient to fully indemnify us against liabilities arising out of pending and future claims and litigation.
Our insurance coverage may not cover all of the costs and liabilities we incur as the result of these events, and if our business continuity and/or disaster recovery plans do not effectively and timely resolve issues resulting from a cyber-attack, we may suffer material adverse effects on our business. Pirates endanger our maritime employees and assets.
Our insurance coverage may not cover all of the costs and liabilities we incur as the result of these events, and if our business continuity and/or disaster recovery plans do not effectively and timely resolve issues resulting from a cyber-attack, we may suffer material adverse effects on our business. Pirates and maritime conflicts endanger our maritime employees and assets.
Because we are a U.K. incorporated entity, we would be considered a foreign corporation (and, therefore, a non-U.S. tax resident) under these rules. Section 7874 of the Code (“Section 7874”) provides an exception under which a foreign incorporated entity may, in certain circumstances, be treated as a domestic corporation for U.S. federal income tax purposes.
Because we are a U.K. incorporated entity, we would be considered a foreign corporation (and, therefore, a non-U.S. tax 31 resident) under these rules. Section 7874 of the Code (“Section 7874”) provides an exception under which a foreign incorporated entity may, in certain circumstances, be treated as a domestic corporation for U.S. federal income tax purposes.
The directors may also decide to pay interim dividends if it appears to them that the profits available for distribution justify such payment. When recommending or declaring payment of a dividend, the directors are required under English law to comply with their duties, including considering our future financial requirements.
The directors may also decide to pay interim dividends if it appears to them that the profits available for distribution justify such payment. When recommending or declaring payment of a 29 dividend, the directors are required under English law to comply with their duties, including considering our future financial requirements.
Moreover, our ability to hedge certain currencies in which we conduct operations, specifically currencies in countries such as Angola and Nigeria, may be limited; therefore, we may be subject to increased foreign currency exposures. As a result, fluctuations in foreign currency exchange rates may adversely affect our financial condition, results of operations, or cash flows.
Moreover, our ability to hedge certain currencies in which we conduct operations, specifically currencies in countries such as Angola, Nigeria, and Argentina, may be limited; therefore, we may be subject to increased foreign currency exposures. As a result, fluctuations in foreign currency exchange rates may adversely affect our financial condition, results of operations, or cash flows.
Any substantial or extended decline in these expenditures may result in the reduced pace of discovery and development of new reserves of oil and gas and the reduced exploration of existing wells, which could adversely affect demand for our products and services and, in certain instances, result in the cancellation, modification, or re-scheduling of existing orders in our backlog.
Any substantial or extended decline in these expenditures may result in the reduced pace of discovery and development of new reserves of oil and natural gas and the reduced exploration of existing wells, which could adversely affect demand for our products and services and, in certain instances, result in the cancellation, modification, or re-scheduling of existing orders in our backlog.
These laws and regulations, as well as any new laws and regulations affecting exploration and development of drilling for crude oil and natural gas, are becoming increasingly strict and could adversely affect our business and operating results by increasing our costs, limiting the demand for our products and services, or restricting our operations.
These laws and regulations, as well as any new laws and regulations affecting exploration and development of drilling for oil and natural gas, are becoming increasingly strict and could adversely affect our business and operating results by increasing our costs, limiting the demand for our products and services, or restricting our operations.
Further changes, including with retroactive effect, in the tax laws of the United States (such as the recent United States Inflation Reduction Act which, among other changes, introduced a 15 percent corporate minimum tax on certain United States corporations and a 1 percent excise tax on certain stock redemptions by United States corporations, which the U.S.
Further changes, including with retroactive effect, in the tax laws of the United States (such as the recent United States Inflation Reduction Act which, among other changes, introduced a 15 percent corporate 32 minimum tax on certain United States corporations and a 1 percent excise tax on certain stock redemptions by United States corporations, which the U.S.
These contracts may contain clauses related to liquidated damages or financial incentives regarding on-time delivery, and a failure by us to deliver in accordance with customer expectations could subject us to liquidated damages or loss of financial incentives, reduce our margins on these contracts, or result in damage to existing customer relationships.
These contracts may contain clauses related to liquidated damages or 25 financial incentives regarding on-time delivery, and a failure by us to deliver in accordance with customer expectations could subject us to liquidated damages or loss of financial incentives, reduce our margins on these contracts, or result in damage to existing customer relationships.
The occurrence of any such violation could subject us to penalties and material adverse consequences on our business, financial condition, results of operations, or cash flows. Compliance with environmental and climate change-related laws and regulations may adversely affect our business and results of operations.
The occurrence of any such violation could subject us to penalties and material adverse consequences on our business, financial condition, results of operations, or cash flows. 28 Compliance with environmental and climate change-related laws and regulations may adversely affect our business and results of operations.
While we have subsea and surface expertise, as well as capabilities in project integration, we are exploring opportunities that are new to us, and therefore involve uncertainties and risks. The market for renewable energy is also intensively competitive and rapidly evolving.
While we have subsea and surface expertise, as well as capabilities in project integration, we are exploring opportunities that are new to us, and therefore involve uncertainties and risks. The market for alternative and renewable energy is also intensively competitive and rapidly evolving.
If any of these events occurs, we may be unable to meet evolving industry requirements or do so at prices acceptable to our customers, which could adversely affect our financial condition, results of operations, or cash flows.
If any of these events occurs, we may be unable to 21 meet evolving industry requirements or do so at prices acceptable to our customers, which could adversely affect our financial condition, results of operations, or cash flows.
In addition, if we determine that an other-than-temporary decline in the fair value exists for a company in which we have invested, we may have to write down that investment to its fair value and recognize the related write-down as an investment loss.
In addition, if we determine that an other-than-temporary decline in the fair value exists for a company in which we have invested, we may have to write down that investment to its fair value and recognize the related write-down as an impairment loss.
Risks Related to Our Business and Industry Demand for our products and services depends on oil and gas industry activity and expenditure levels, which are directly affected by trends in the demand for and price of crude oil and natural gas.
Risks Related to Our Business and Industry Demand for our products and services depends on oil and natural gas industry activity and expenditure levels, which are directly affected by trends in the demand for and price of oil and natural gas.
The oil and gas industry has historically experienced periodic downturns, which have been characterized by diminished demand for oilfield services and downward pressure on the prices we charge.
The oil and natural gas industry has historically experienced periodic downturns, which have been characterized by diminished demand for oilfield services and downward pressure on the prices we charge.
We are substantially dependent on conditions in the oil and gas industry, including (i) the level of exploration, development and production activity and (ii) capital spending.
We are substantially dependent on conditions in the oil and natural gas industry, including (i) the level of exploration, development, and production activity and (ii) capital spending.
In addition, negative attitudes toward or perceptions of fossil fuel products and their relationship to the environment and climate change may reduce the demand for production of oil and gas in areas of the world where our customers operate or otherwise limit our customers’ access to capital or ability to conduct operations, including via new regulation, and reduce future demand for our products and services.
In addition, negative attitudes toward or perceptions of fossil fuel products and their relationship to the environment and climate change may reduce the demand or authorization for production of oil and natural gas in areas of the world where our customers operate or otherwise limit our customers’ access to capital or ability to conduct operations, including via new regulation, and reduce future demand for our products and services.
We expect regulatory requirements related to, and investor focus on, ESG (including sustainability) matters to continue to expand in the EU, the United States, and more globally.
We expect regulatory requirements related to, and investor focus on, ESG (including sustainability) matters to continue to expand in the EU, the United States, Brazil, and more globally.
We, as well as other critical business partners, may be unable to anticipate, detect or prevent future attacks, particularly because the methodologies utilized by attackers change frequently or are not recognized until launched, and attackers are increasingly using techniques and tools designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
We, as well as other critical business partners, may be unable to anticipate, detect or prevent future attacks, particularly because the methodologies utilized by attackers change frequently or are not recognized until launched, and attackers are increasingly using techniques and tools (such as AI) designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
In addition, our financial results, our substantial indebtedness and our credit ratings could adversely affect the availability and terms of our financing. Our acquisition and divestiture activities involve substantial risks. 27 We have made and expect to continue to pursue acquisitions, dispositions, or other investments that may strategically fit our business and/or growth objectives.
In addition, our financial results, our substantial indebtedness and our credit ratings could adversely affect the availability and terms of our financing. 23 Our acquisition and divestiture activities involve substantial risks. We have made and expect to continue to pursue acquisitions, dispositions, or other investments that may strategically fit our business and/or growth objectives.
If the demand for renewable energy fails to grow sufficiently, if new geopolitical, legislative or regulatory initiatives emerge and governments around the world reduce subsidies and economic incentives on renewable energy projects, or if market opportunities manifest themselves in areas that we do not focus on, our New Energy business may not succeed.
If the demand for alternative and renewable energy sources fails to grow sufficiently, if new geopolitical, legislative or regulatory initiatives emerge and governments around the world reduce subsidies and economic incentives on renewable energy projects, or if market opportunities manifest themselves in areas that we do not focus on, our New Energy business may not succeed.
Bribery Act of 2010 (the “Bribery Act”), the anti-corruption provisions of French law n° 2016-1691 dated December 9, 2016 relating to Transparency, Anti-corruption and Modernization of the Business Practice (“Sapin II Law”), the Brazilian law nº 12,846/13, or the Brazilian Anti-Bribery Act (also known as the Brazilian Clean Company Act), and economic and trade sanctions, including those administered by the United Nations, the European Union, the Office of Foreign Assets Control of the U.S.
Bribery Act of 2010 (the “Bribery Act”), the anti-corruption provisions of French law n° 2016-1691 dated December 9, 2016 relating to Transparency, Anti-corruption and Modernization of the Business Practice, the Brazilian law nº 12,846/13, or the Brazilian Anti-Bribery Act (also known as the Brazilian Clean Company Act), and economic and trade sanctions, including those administered by the United Nations, the European Union, the Office of Foreign Assets Control of the U.S.
English law currently provides that we will be regarded as a U.K. resident for tax purposes from incorporation and shall remain so unless (i) we are concurrently a resident in another jurisdiction (applying the tax residence rules of that jurisdiction) that has a double tax treaty with the United Kingdom and (ii) there is a tiebreaker provision in that tax treaty which allocates exclusive residence to that other jurisdiction.
English law currently provides that we will be regarded as a UK resident for tax purposes from incorporation and shall remain so unless (i) we are concurrently a resident in another jurisdiction (applying the tax residence rules of that jurisdiction) that has a double tax treaty with the United Kingdom and (ii) there is a tiebreaker provision in that tax treaty which allocates exclusive residence to that other jurisdiction.
In addition, the tools, techniques, methodologies, programs, and components we use to provide our services may infringe upon the intellectual property rights of others. Infringement claims generally result in significant legal and other costs. The resolution of these claims could require us to pay damages, enter into license agreements or develop alternative technologies.
In addition, the tools, techniques, methodologies, programs, and components we use to provide our services, including through our use of AI, may infringe upon the intellectual property rights of others. Infringement claims generally result in significant legal and other costs. The resolution of these claims could require us to pay damages, enter into license agreements or develop alternative technologies.
However, our ability to qualify for such benefits will depend on whether we are treated as a U.K. tax resident, the requirements contained in each treaty and applicable domestic laws, on the facts and circumstances surrounding our operations and management, and on the relevant interpretation of the tax authorities and courts.
However, our ability to qualify for such benefits will depend on whether we are treated as a UK tax resident, the requirements contained in each treaty and applicable domestic laws, on the facts and circumstances surrounding our operations and management, and on the relevant interpretation of the tax authorities and courts.
We face material piracy risks in the Gulf of Guinea, the Somali Basin, and the Gulf of Aden, and, to a lesser extent, in Southeast Asia, Malacca, and the Singapore Straits. Piracy represents a risk for both our projects and our vessels, which operate and transport through sensitive maritime areas.
We face material piracy and maritime conflict risks in the Gulf of Guinea, the Somali Basin, the Gulf of Aden, and the Red Sea, and, to a lesser extent, in Southeast Asia, Malacca, and the Singapore Straits. Piracy represents a risk for both our projects and our vessels, which operate and transport through sensitive maritime areas.
While we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) or commitments to improve the ESG profile of our company and/or products, such initiatives or achievements of such commitments may be costly and may not have the desired effect.
While we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) or commitments to improve the ESG profile of our company and/or products or respond to stakeholder concerns, such initiatives or achievements of such commitments may be costly and may not have the desired effect.
In addition, acute or chronic physical impacts of climate change, such as sea level rise, coastal storm surge, inland flooding from intense rainfall and hurricane-strength winds may damage our facilities or the facilities of key third parties.
In addition, acute or chronic physical impacts of climate change, such as sea level rise, coastal storm surge, inland flooding from intense rainfall and hurricane-strength winds may damage our facilities or the facilities of key third parties, or result in operational interruptions.
Uncertainties with respect to the energy transition may adversely affect our business. As a result of our evolution in the renewable energies arena, we are exploring opportunities in greenhouse gas removal, offshore floating renewables, and hydrogen.
We are exploring investments in energy transition, and uncertainties with respect to these markets may adversely affect our business. Uncertainties with respect to the energy transition may adversely affect our business. As a result of our evolution in the renewable energies arena, we are exploring opportunities in greenhouse gas removal, offshore floating renewables, and hydrogen.
We rely on third parties to support the operation of our IT hardware, software infrastructure, and cloud services, and in certain instances, utilize web-based and software-as-a-service applications, across a broad array of services and functions (e.g., human resources, finance, data transmission, communications, risk compliance, among others).
We rely on third parties to provide IT Systems, for example, to support the operation of our IT hardware, software infrastructure, and cloud services, and in certain instances, we utilize web-based and software-as-a-service applications, across a broad array of services and functions (e.g., human resources, finance, data transmission, communications, risk compliance, among others).
Increasing concentrations of greenhouse gases in the Earth’s atmosphere may produce climate changes that increase variation from normal weather patterns, such as increased frequency and severity of storms, floods, droughts, and other climatic events, as well as changes to temperature and precipitation patterns, which could further impact our operations.
Increasing concentrations of greenhouse gases in the Earth’s atmosphere may produce climate changes that increase variation from normal weather patterns, such as increased frequency and severity of storms, floods, droughts, and other climatic events, as well as longer-term climatic changes, such as shifting temperature and precipitation patterns, which could further impact our operations.
The loss of qualified employees or failure to retain and motivate additional highly skilled employees required for the operation and expansion of our business could hinder our operation and expansion, as well as our ability to successfully conduct research activities and develop marketable products and services. Seasonal and weather conditions could adversely affect demand for our services and operations.
The loss of qualified employees or failure to recruit, retain and motivate additional highly skilled employees required for the operation and expansion of our business could hinder our operation and expansion, as well as our ability to successfully conduct research activities and develop marketable products and services. 33 Seasonal, weather, and other climatic conditions could adversely affect demand for our services and operations.
In addition, the restrictive covenants in the credit agreement, dated February 16, 2021, (as amended) that governs our $1.0 billion three-year senior secured multi-currency revolving credit facility (the “Revolving Credit Facility”) require us to maintain specified financial ratios and satisfy other financial condition tests.
In addition, the restrictive covenants in the credit agreement, dated February 16, 2021, (as amended) that governs our $1.25 billion senior secured multi-currency revolving credit facility (as amended, the “Revolving Credit Facility”) require us to maintain specified financial ratios and satisfy other financial condition tests.
The U.K.’s Information Commissioner’s Office has published new data transfer standard contracts for transfers from the U.K. under the UK GDPR. This new documentation has been mandatory for relevant, new data transfers since September 21, 2022; existing standard contractual clauses arrangements must be migrated to the new documentation by March 21, 2024.
The UK’s Information Commissioner’s Office has published new data transfer standard contracts for transfers from the UK under the UK GDPR. This new documentation has been mandatory for relevant, new data transfers since September 21, 2022; existing standard contractual clauses arrangements must be migrated to the new documentation by March 21, 2024.
Our existing and future debt may limit cash flows available to invest in the ongoing needs of our business and could prevent us from fulfilling our obligations under our outstanding debt. 26 We have substantial existing debt. As of December 31, 2022, our total debt was $1.4 billion.
Our existing and future debt may limit cash flows available to invest in the ongoing needs of our business and could prevent us from fulfilling our obligations under our outstanding debt. We have substantial existing debt. As of December 31, 2023, our total debt was $1.1 billion.
These factors include, but are not limited to, the following: • nationalization and expropriation; • potentially burdensome taxation; • inflationary and recessionary markets, including capital and equity markets; • volatility in economic conditions including tightening of credit markets, inflation, rising interest rates, and currency exchange rate fluctuations and devaluations; • civil unrest, labor issues, political instability, disease outbreaks, terrorist attacks, cyber terrorism, military activity, and wars, including the continued conflict between Russia and Ukraine; • increasing attention to global climate change resulting in pressure from shareholders, financial institutions and/or financial markets; • supply disruptions in key oil producing countries; • the ability of OPEC+ to set and maintain production levels and pricing; • trade restrictions, trade protection measures, price controls, or trade disputes; • sanctions, such as prohibitions or restrictions by the United States against countries that are the targets of economic sanctions, or are designated as state sponsors of terrorism; • foreign ownership restrictions; • import or export licensing requirements; • restrictions on operations, trade practices, trade partners (including as a result of the United Kingdom’s withdrawal from the European Union), and investment decisions resulting from domestic and foreign laws, and regulations; • regime changes; • changes in, and the administration of, treaties, laws, and regulations including in response to public health issues; • inability to repatriate income or capital; • reductions in the availability of qualified personnel; • foreign currency fluctuations or currency restrictions; and • fluctuations in the interest rate component of forward foreign currency rates.
These factors include, but are not limited to, the following: • nationalization and expropriation; • potentially burdensome taxation; • inflationary and recessionary markets, including capital and equity markets; • volatility in economic conditions including tightening of credit markets, inflation, rising interest rates, and currency exchange rate fluctuations and devaluations; • civil unrest, labor issues, political instability, disease outbreaks, terrorist attacks, cyber terrorism, military activity, and wars, including the continued conflict between Russia and Ukraine and Hamas and Israel; • public health crisis such as the COVID-19 pandemic; • increasing attention to global climate change resulting in pressure from shareholders, financial institutions and/or financial markets; • supply disruptions in key oil producing countries; • the ability of OPEC+ to set and maintain production levels and pricing; • trade restrictions, trade protection measures, price controls, or trade disputes; • sanctions, such as prohibitions or restrictions by the United States against countries that are the targets of economic sanctions, or are designated as state sponsors of terrorism; • foreign ownership restrictions; • import or export licensing requirements; • restrictions on operations, trade practices, trade partners (including as a result of the United Kingdom’s withdrawal from the European Union), and investment decisions resulting from domestic and foreign laws, and regulations; • regime changes; • changes in, and the administration of, treaties, laws, and regulations including in response to public health issues; • inability to repatriate income or capital; • reductions in the availability of qualified personnel; • foreign currency fluctuations or currency restrictions; and • fluctuations in the interest rate component of forward foreign currency rates. 22 DTC may cease to act as the depository and clearing agency for our shares.
Threats to our IT systems and to those of our subcontractors, suppliers and joint venture partners arise from numerous sources, not all of which are within our or their control, including fraud or malice on the part of insiders or third parties, accidental technological failure, electrical or telecommunication outages, failures of computer servers or other damage to our property or assets, outbreaks of hostilities, terrorist acts, and social engineering (e.g., phishing).
Threats to our IT Systems and to those of our subcontractors, suppliers and joint venture partners arise from numerous sources, not all of which are within our or their control, including but not limited to fraud or malice on the part of insiders or third parties, accidental technological failure or unknown vulnerabilities in hardware or software, electrical or telecommunication outages, failures of computer servers or other damage to our property or assets, outbreaks of hostilities, terrorist acts, and social engineering (e.g., phishing).
For instance, in October 2021, the OECD released additional proposals under Base Erosion and Profit Shifting that provide for a global minimum tax of 15 percent, and to date approximately 140 countries have tentatively signed a framework agreeing in principle to this initiative.
For instance, in October 2021, the OECD released additional proposals under Base Erosion and Profit Shifting that provide for a global minimum tax of 15 percent, so-called “pillar two,” and to date approximately 140 countries have tentatively signed a framework agreeing in principle to this initiative.
We are also subject to evolving EU and UK privacy laws on cookies and e-marketing.
We are also subject to evolving EU and UK privacy laws on cookies, tracking technologies, and e-marketing.
In addition, the U.S. Congress, the U.K. Government, the European Union, the Organization for Economic Co-operation and Development (the “OECD”), and other government agencies in jurisdictions where we and our affiliates do business have an extended focus on issues related to the taxation of multinational corporations.
Government, the European Union, the Organization for Economic Co-operation and Development (the “OECD”), and other government agencies in jurisdictions where we and our affiliates do business have an extended focus on issues related to the taxation of multinational corporations.
Disruptions in the political, regulatory, economic, and social conditions of the countries in which we conduct business could adversely affect our business or results of operations. 25 We operate in various countries across the world.
Disruptions in the political, regulatory, economic, and social conditions or public health crises in the countries in which we conduct business could adversely affect our business or results of operations. We operate in various countries across the world.
If subcontractors, suppliers or joint venture partners refuse to adhere to their contractual obligations with us, or are unable to do so due to a deterioration of their financial condition, we may be unable to find a suitable replacement at a comparable price, or at all.
If subcontractors, suppliers or joint venture partners refuse to adhere to their contractual obligations with us, or are unable to do so due to a deterioration of their financial condition or other event such as a major cyberattack, we may be unable to find a suitable replacement at a comparable price, or at all.
Climate change continues to attract considerable public and scientific attention. As a result, numerous laws, regulations, and proposals have been made and are likely to continue to be made at the international, national, regional, and state levels of government to monitor and limit emissions of carbon dioxide, methane, and other “greenhouse gases” (“GHGs”).
As a result, numerous laws, regulations, and proposals have been made and are likely to continue to be made at the international, national, regional, and state levels of government to monitor and limit emissions of carbon dioxide, methane, and other “greenhouse gases” (“GHGs”).
Furthermore, under standard terms in the surety market, sureties issue bonds on a project-by-project basis and can decline to issue bonds at any time or require the posting of additional collateral as a condition to issuing or renewing any bonds.
The letters of credit would 34 reduce availability under our credit facility. Furthermore, under standard terms in the surety market, sureties issue bonds on a project-by-project basis and can decline to issue bonds at any time or require the posting of additional collateral as a condition to issuing or renewing any bonds.
We compete on the basis of a number of different factors, such as product offerings, project execution, customer service, and price. In order to compete effectively we must develop and implement innovative technologies and processes, and execute our clients’ projects effectively.
We compete on the basis of a number of different factors, such as product offerings, project execution, customer service, and price. In order to compete effectively, we must develop and implement innovative technologies and processes, including building artificial intelligence (“AI”) capabilities into our products and services, and execute our clients’ projects effectively.
Our operations and manufacturing activities are governed by international, regional, transnational, and national laws and regulations in every place where we operate relating to matters such as environmental protection, health and safety, labor and employment, import/export controls, currency exchange, bribery and corruption, and taxation. 31 These laws and regulations are complex, frequently change, and have tended to become more stringent over time.
Our operations and manufacturing activities are governed by international, regional, transnational, and national laws and regulations in every place where we operate relating to matters such as environmental protection, health and safety, labor and employment, import/export controls, currency exchange, bribery and corruption, and taxation.
You should read this summary together with the more detailed description of each risk factor contained below. 21 Risks Related to Our Business and Industry • Demand for our products and services depends on oil and gas industry activity and expenditure levels and the demand for and price of crude oil and natural gas. • Competition and unanticipated changes relating to competitive factors in our industry, including ongoing industry consolidation, may impact our results of operations. • Our success depends on our ability to develop, implement, and protect new technologies and services and intellectual property related thereto. • Cumulative loss of several major contracts, customers, or alliances may have an adverse effect on us, and the credit and commercial terms of certain contracts may subject us to further risks. • The COVID-19 pandemic, and any resurgence thereof, and disruptions in the political, regulatory, economic, and social conditions of the countries in which we conduct business, could adversely affect our business or results of operations. • The Depository Trust Company (“DTC”) may cease to act as a depository and clearing agency for our shares. • Our existing and future debt may limit cash flows available to our operations and to service our outstanding debt, and the terms thereof may restrict our ability to access the capital markets. • Our acquisition and divestiture activities involve substantial risks. • Increasing scrutiny and expectations regearing Environmental, Social and Governance (“ESG”) matters could result in additional costs or risks or otherwise adversely affect our business. • Uncertainties with respect to the energy transition may adversely affect our business.
Risks Related to Our Business and Industry • Demand for our products and services depends on oil and natural gas industry activity and expenditure levels and the demand for and price of oil and natural gas. • Competition and unanticipated changes relating to competitive factors in our industry, including ongoing industry consolidation, may impact our results of operations. • Our success depends on our ability to develop, implement, and protect new technologies and services and intellectual property related thereto. • Cumulative loss of several major contracts, customers, or alliances may have an adverse effect on us, and the credit and commercial terms of certain contracts may subject us to further risks. • Disruptions in the political, regulatory, economic, and social conditions or public health crises in the countries in which we conduct business, could adversely affect our business or results of operations. • The Depository Trust Company (“DTC”) may cease to act as a depository and clearing agency for our shares. • Our existing and future debt may limit cash flows available to our operations and to service our outstanding debt, and the restrictive covenants thereof may restrict our ability to take certain corporate actions. • Our acquisition and divestiture activities involve substantial risks. • Increasing scrutiny and expectations regarding ESG matters could result in additional costs or risks or otherwise adversely affect our business. • Uncertainties with respect to the energy transition may adversely affect our business.
The implementation of this global minimum tax, however, is contingent upon the independent actions of participating countries and is subject to further negotiation among OECD member states. New tax initiatives, directives, and rules, such as the U.S.
The implementation of this global minimum tax, however, is contingent upon the independent actions of participating countries and is subject to further negotiation among OECD member states.
As the enforcement landscape further develops, and supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the standard contractual clauses cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.
As the enforcement landscape further develops, and supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the standard contractual clauses cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, we may have to stop using certain tools and vendors and make other operational changes, we have had to and will have to implement revised standard contractual clauses for existing customer arrangements within required time frames, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.
LIBOR, EURIBOR and certain other interest “benchmarks” may be subject to further regulatory guidance and/or reform that could cause interest rates under our current or future debt agreements to perform differently than in the past or cause other unanticipated consequences.
SOFR has limited history, and the future performance of SOFR cannot be predicted based on historical performance. SOFR, EURIBOR and certain other interest “benchmarks” may be subject to further regulatory guidance and/or reform that could cause interest rates under our current or future debt agreements to perform differently than in the past or cause other unanticipated consequences.
Such risks have the potential to significantly harm our crews and to negatively impact the execution schedule for our projects. If our maritime employees or assets are endangered, additional time may be required to find an alternative solution, which may delay project realization and negatively impact our business, financial condition, or results of operations.
If our maritime employees or assets are endangered, additional time may be required to find an alternative solution, which may delay project realization and negatively impact our business, financial condition, or results of operations.
Risks Related to Legal Proceedings, Tax and Regulatory Matters The industries in which we operate or have operated expose us to potential liabilities, including as a result of the installation or use of our products, which may not be covered by insurance or may be in excess of policy limits, or for which expected recoveries may not be realized.
Additionally, capital expenditures for construction projects could materially exceed the initially planned investments, or there could be delays in putting such assets into operation. 27 Risks Related to Legal Proceedings, Tax and Regulatory Matters The industries in which we operate or have operated expose us to potential liabilities, including as a result of the installation or use of our products, which may not be covered by insurance or may be in excess of policy limits, or for which expected recoveries may not be realized.
In addition, we are subject to the GDPR and UK GDPR’s rules on transferring personal data outside of the EEA and UK (including to the United States), and recent legal developments in Europe have created complexity and uncertainty regarding such transfers.
In addition, we are subject to the GDPR and UK GDPR’s rules on transferring personal data outside of the EEA and UK (including to the United States).
We will be required to implement the latest UK data transfer documentation for data transfers subject to the UK GDPR within the relevant time frames.
We will be required to implement the latest UK data transfer documentation for data transfers subject to the UK GDPR within the relevant time frames. We expect the existing legal complexity and uncertainty regarding international personal data transfers to continue.
If regulators start to enforce the strict approach in recent guidance, this could lead to substantial costs, and require significant systems changes.
If regulators start to enforce the strict approach to opt-in consent for all but essential use cases, as seen in recent guidance and decisions, this could lead to substantial costs, require significant systems changes.
We are subject to the tax laws of numerous jurisdictions; challenges to the interpretation of, or future changes to, such laws could adversely affect us. We and our subsidiaries are subject to tax laws and regulations in the United Kingdom, the United States, France, and numerous other jurisdictions in which we and our subsidiaries operate.
We and our subsidiaries are subject to tax laws and regulations in the United Kingdom, the United States, France, and numerous other jurisdictions in which we and our subsidiaries operate.
General Risk Factors • Our businesses are dependent on the continuing services of our key managers and employees. • Seasonal and weather conditions could adversely affect demand for our services and operations. • Currency exchange rate fluctuations could adversely affect our financial condition, results of operations, or cash flows. • We are exposed to risks in connection with our defined benefit pension plan commitments. • We may be unable to obtain sufficient bonding capacity for certain contracts, and the need for performance and surety bonds could reduce availability under our credit facility. • Our revenues and earnings could be adversely affected by high levels of inflation resulting in increased supply costs and impacts on pricing and demand. • Our operating results, sales, profits, cash flows, liquidity, financial position, wage expenses, employee retention and capital expenditures could be adversely affected by rising interest rates, which have increased the cost of borrowing and increased volatility in the capital markets.
General Risk Factors • Our businesses are dependent on the continuing services of our key managers and employees. • Seasonal, weather, and other climatic conditions could adversely affect demand for our services and operations. • Currency exchange rate fluctuations could adversely affect our financial condition, results of operations, or cash flows. • We are exposed to risks in connection with our defined benefit pension plan commitments. • We may be unable to obtain sufficient bonding capacity for certain contracts, and the need for performance and surety bonds could reduce availability under our credit facility.
Our success depends on the ongoing development and implementation of new product designs, including the processes used by us to produce and market our products. We continually attempt to develop new technologies for use in our business. However, there is no guarantee of future demand for those technologies because customers may be reluctant or unwilling to adopt our new technologies.
We continually attempt to develop new technologies for use in our business, including AI and machine learning. However, there is no guarantee of future demand for those technologies because the market for the new technologies may not develop or customers may be reluctant or unwilling to adopt our new technologies.
Summary Risk Factors The following is a summary of some of the risks and uncertainties that could materially adversely affect our business, financial condition and results of operations.
Summary Risk Factors The following is a summary of some of the risks and uncertainties that could materially adversely affect our business, financial condition and results of operations. You should read this summary together with the more detailed description of each risk factor contained below.
Even if this is not the case, our current actions may subsequently be determined to be insufficient by various stakeholders, and we may be subject to investor or regulator engagement on our ESG initiatives and disclosures, even if such initiatives are currently voluntary.
Even if this is not the case, our current actions may subsequently be determined to be insufficient by various stakeholders, and any failure, or perceived failure, to comply with or advance certain ESG initiatives (including the timeline and manner in which we complete such initiatives) may result in various adverse impacts, including reputational damage or, investor or regulator engagement on our ESG initiatives and disclosures, even if such initiatives are currently voluntary.
A failure or breach of our IT infrastructure or that of our subcontractors, suppliers or joint venture partners, including as a result of cyber-attacks, could adversely impact our business and results of operations. The efficient operation of our business is dependent on the security and integrity of our IT systems, physical assets, and data that we process and maintain.
A failure or breach of our IT infrastructure or that of our subcontractors, suppliers or joint venture partners, including as a result of cyber-attacks, could adversely impact our business and results of operations.
DTC is a widely used mechanism that allows for rapid electronic transfers of securities between the participants in their respective systems, which include many large banks and brokerage firms. DTC has general discretion to cease to act as the depository and clearing agency for our shares.
Our shares were issued into the facilities of The Depository Trust Company (“DTC”) with respect to shares listed on the NYSE. DTC is a widely used mechanism that allows for rapid electronic transfers of securities between the participants in their respective systems, which include many large banks and brokerage firms.
Our systems and physical assets may be vulnerable to damages from such attacks, as well as from natural disasters, failures or security vulnerabilities in hardware or software, power fluctuations, unauthorized access to data and systems, theft, loss or destruction of data (including confidential customer, employee or contractor information), human error, and other similar disruptions, and we cannot give assurance that any security measures we have implemented or may in the future implement will be sufficient to identify and prevent or mitigate such disruptions.
Accordingly, our IT Systems, Confidential Information, and physical assets are vulnerable to compromise and damage from such attacks, as well as from natural disasters, failures or security vulnerabilities in hardware or software, power fluctuations, unauthorized access to data and systems, theft, loss or destruction of data (including confidential customer, employee or contractor information), human error, and other similar disruptions.
In addition, we may also face regulatory investigations and enforcement action, reputational damage, and civil claims including representative actions and other class action type litigation, potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm. 34 We are likely to be required to expend significant capital and other resources to ensure ongoing compliance with the GDPR, UK GDPR and other applicable data protection legislation, and we may be required to put in place additional control mechanisms which could be onerous and adversely affect our business, financial condition, results of operations, or cash flows.
We are likely to be required to expend significant capital and other resources to ensure ongoing compliance with the GDPR, UK GDPR and other applicable data protection legislation, and we may be required to put in place additional control mechanisms which could be onerous and adversely affect our business, financial condition, results of operations, or cash flows.
Additionally, our competitors may be able to independently develop technology that is similar to ours without infringing on our patents or gaining access to our trade secrets.
There is also uncertainty around the validity and enforceability of intellectual property rights related to our use, development, and deployment of AI. Additionally, our competitors may be able to independently develop technology that is similar to ours without infringing on our patents or gaining access to our trade secrets.
In the event the scope of these laws and regulations expand in the future, the incremental cost of compliance could adversely impact our financial condition, results of operations, or cash flows. Our international operations are subject to anti-corruption laws and regulations, such as the U.S. Foreign Corrupt Practices Act (“FCPA”), the U.K.
In the event the scope of these laws and regulations expand in the future, or we introduce new features in our products and services, such as AI, that subject us to new and evolving laws and regulations, the incremental cost of compliance could adversely impact our financial condition, results of operations, or cash flows.
For example, in the United States, the SEC has proposed climate-related disclosure requirements addressing governance, strategy, risk management, emissions metrics, and financial impacts, among other things, which could require us to incur additional costs for monitoring and compliance. 32 Existing or future laws and regulations relating to greenhouse gas emissions and climate change may adversely affect our business.
For example, in the United States, various policymakers, including the SEC and the State of California, have adopted (or are considering adopting) climate-related disclosure requirements addressing governance, strategy, risk management, emissions metrics, and financial impacts, among other things, which could require us to incur additional costs for monitoring and compliance.
The interpretation and application of these laws and regulations could be challenged by the relevant governmental authorities, which could result in administrative or judicial procedures, actions, or sanctions, which could be material. 35 On December 22, 2017, the Tax Cuts and Jobs Act was signed into law in the United States, which made extensive changes to the U.S. taxation of multinational companies, and is subject to continuing regulatory and possible legislative changes, especially given the new Administration and Congress in the United States.
On December 22, 2017, the Tax Cuts and Jobs Act was signed into law in the United States, which made extensive changes to the U.S. taxation of multinational companies, and is subject to continuing regulatory and possible legislative changes. In addition, the U.S. Congress, the U.K.
Those letters of credit and surety bond arrangements generally protect customers against our failure to perform our obligations under the applicable contracts. If we are unable to renew or obtain a sufficient level of bonding capacity in the future, we may be precluded from bidding for certain contracts or contracting with certain customers.
If we are unable to renew or obtain a sufficient level of bonding capacity in the future, we may be precluded from bidding for certain contracts or contracting with certain customers. Additionally, even if we are able to successfully renew or obtain performance or payment bonds, we may be required to post letters of credit in connection with the bonds.
The security and privacy measures implemented by such third parties, as well as the measures implemented by any entities we acquire or with whom we do business, may not be sufficient to identify or prevent cyber-attacks, and any such attacks may have a material adverse effect on our business.
Third parties are also involved in helping us collect, process and maintain aspects of our Confidential Information. The security and privacy measures implemented by third parties on whom we rely for internal and external operations may not be sufficient to identify or prevent cyber-attacks, and 26 any such attacks may have a material adverse effect on our business.
We may be unable to obtain sufficient bonding capacity for certain contracts, and the need for performance and surety bonds could reduce availability under our credit facility. In line with industry practice, we are often required to post standby letters of credit to customers or enter into surety bond arrangements in favor of customers.
In line with industry practice, we are often required to post standby letters of credit to customers or enter into surety bond arrangements in favor of customers. Those letters of credit and surety bond arrangements generally protect customers against our failure to perform our obligations under the applicable contracts.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeJohn’s (Newfoundland), Canada Subsea Stephenville (Texas), United States Surface Theodore (Alabama), United States Subsea South America Georgetown, Guyana Subsea Macaé, Brazil Subsea Neuquén, Argentina Surface Rio de Janeiro, Brazil Subsea, Surface São João da Barra, Brazil Subsea Veracruz, Mexico Surface Vitória, Brazil Subsea Yopal, Columbia Surface 39 The following table shows marine vessels in which we held an interest or operated as of December 31, 2022: Vessel Name Vessel Type Special Equipment Deep Blue PLSV Reeled pipelay/flexible pipelay/umbilical systems Deep Energy PLSV Reeled pipelay/flexible pipelay/umbilical systems Apache II PLSV Reeled pipelay/umbilical systems Deep Orient HCV Construction/installation systems North Sea Atlantic HCV Construction/installation systems Skandi Africa HCV Construction/installation systems Deep Arctic DSV/HCV Diver support systems Deep Discoverer DSV/HCV Diver support systems Deep Explorer DSV/HCV Diver support systems Skandi Vitória PLSV Flexible pipelay/umbilical systems Skandi Niterói PLSV Flexible pipelay/umbilical systems Coral do Atlantico PLSV Flexible pipelay/umbilical systems Deep Star PLSV Flexible pipelay/umbilical systems Skandi Açu PLSV Flexible pipelay/umbilical systems Skandi Búzios PLSV Flexible pipelay/umbilical systems Skandi Olinda PLSV Flexible pipelay/umbilical systems Skandi Recife PLSV Flexible pipelay/umbilical systems PLSV: Pipelay Support Vessel HCV: Heavy Duty Construction Vessel DSV: Diving Support Vessel
Biggest changeJohn’s (Newfoundland), Canada Subsea Stephenville (Texas), United States Surface Theodore (Alabama), United States Subsea Veracruz, Mexico Surface South America Georgetown, Guyana Subsea Macaé, Brazil Subsea Neuquén, Argentina Surface Rio de Janeiro, Brazil Subsea, Surface São João da Barra, Brazil Subsea Vitória, Brazil Subsea Yopal, Colombia Surface 37 The following table shows marine vessels in which we held an interest or operated as of December 31, 2023: Vessel Name Vessel Type Special Equipment Deep Blue PLSV Reeled pipelay/flexible pipelay/umbilical systems Deep Energy PLSV Reeled pipelay/flexible pipelay/umbilical systems Deep Orient HCV Construction/installation systems North Sea Atlantic HCV Construction/installation systems Skandi Africa HCV Construction/installation systems Deep Arctic DSV/HCV Diver support systems Deep Discoverer DSV/HCV Diver support systems Deep Explorer DSV/HCV Diver support systems Skandi Vitória PLSV Flexible pipelay/umbilical systems Skandi Niterói PLSV Flexible pipelay/umbilical systems Coral do Atlantico PLSV Flexible pipelay/umbilical systems Deep Star PLSV Flexible pipelay/umbilical systems Skandi Açu PLSV Flexible pipelay/umbilical systems Skandi Búzios PLSV Flexible pipelay/umbilical systems Skandi Olinda PLSV Flexible pipelay/umbilical systems Skandi Recife PLSV Flexible pipelay/umbilical systems PLSV: Pipelay Support Vessel HCV: Heavy Duty Construction Vessel DSV: Diving Support Vessel
The following table shows our principal properties by reporting segment at December 31, 2022: Location Segment Africa Hassi Messaoud, Algeria Surface Lagos, Nigeria Subsea Lobito, Angola Subsea Luanda, Angola Subsea Malabo, Equatorial Guinea Subsea Port Harcourt, Nigeria Subsea Takoradi, Ghana Subsea Asia Chennai, India Subsea Hyderabad, India Subsea, Surface Jakarta, Indonesia Surface Johor, Malaysia Subsea Kuala Lumpur, Malaysia Subsea Noida, India Subsea, Surface Nusajaya, Malaysia Subsea, Surface Singapore Subsea, Surface Australia 38 Location Segment Henderson, Australia Subsea Perth, Australia Subsea Europe Aberdeen, United Kingdom Surface Aktau, Kazakhstan Subsea, Surface Arnhem, The Netherlands Surface Atyrau, Kazakhstan Subsea, Surface Bergen, Norway Subsea Courbevoie (Paris - La Défense), France Subsea Dunfermline, United Kingdom Subsea, Surface Ellerbek, Germany Surface Evanton, United Kingdom Subsea Horten, Norway Subsea Kongsberg, Norway Subsea, Surface Krakow, Poland Subsea Le Trait, France Subsea Lisbon, Portugal Subsea Lysaker, Norway Subsea Newcastle, United Kingdom Subsea Orkanger, Norway Subsea Sens, France Surface Stavanger, Norway Subsea, Surface Veenoord, Netherlands Surface Westhill, United Kingdom Subsea Middle East Abu Dhabi, United Arab Emirates Surface Dhahran, Saudi Arabia Surface Doha, Qatar Surface North America Brighton (Colorado), United States Surface Charleroi (Pennsylvania), United States Surface Davis (California), United States Subsea Erie (Pennsylvania), United States Surface Houston (Texas), United States Subsea, Surface Odessa (Texas), United States Surface San Antonio (Texas), United States Surface St.
The following table shows our principal real estate properties by reporting segment at December 31, 2023: Location Segment Africa Hassi Messaoud, Algeria Surface Lagos, Nigeria Subsea Lobito, Angola Subsea Luanda, Angola Subsea Malabo, Equatorial Guinea Subsea Port Harcourt, Nigeria Subsea Takoradi, Ghana Subsea Asia Hyderabad, India Subsea, Surface Jakarta, Indonesia Subsea, Surface Johor, Malaysia Subsea Kuala Lumpur, Malaysia Subsea Noida, India Subsea, Surface Nusajaya, Malaysia Subsea, Surface Singapore Subsea, Surface Australia Henderson, Australia Subsea Perth, Australia Subsea Europe Aberdeen, United Kingdom Subsea, Surface Aktau, Kazakhstan Subsea, Surface Arnhem, The Netherlands Surface Atyrau, Kazakhstan Subsea, Surface 36 Location Segment Bergen, Norway Subsea Courbevoie (Paris - La Défense), France Subsea Dunfermline, United Kingdom Subsea, Surface Ellerbek, Germany Surface Evanton, United Kingdom Subsea Horten, Norway Subsea Kongsberg, Norway Subsea, Surface Krakow, Poland Subsea Le Trait, France Subsea Lisbon, Portugal Subsea Lysaker, Norway Subsea Newcastle, United Kingdom Subsea Orkanger, Norway Subsea Sens, France Surface Stavanger, Norway Subsea, Surface Veenoord, Netherlands Surface Westhill, United Kingdom Subsea Middle East Abu Dhabi, United Arab Emirates Surface Dhahran, Saudi Arabia Surface Doha, Qatar Surface North America Brighton (Colorado), United States Surface Charleroi (Pennsylvania), United States Surface Davis (California), United States Subsea Erie (Pennsylvania), United States Surface Houston (Texas), United States Subsea, Surface Odessa (Texas), United States Surface San Antonio (Texas), United States Surface St.
We also believe that our leases are at competitive or market rates and do not anticipate any difficulty in leasing suitable additional space upon expiration of our current lease terms.
We also believe that our real estate leases are at competitive or market rates and do not anticipate any difficulty in leasing suitable additional space upon expiration of our current lease terms.
ITEM 2. PROPERTIES Our corporate headquarters is in Newcastle, England. We also maintain corporate offices in Houston, Texas, where significant worldwide global support activity occurs. In addition, we own or lease numerous properties throughout the world.
ITEM 2. PROPERTIES Our corporate headquarters is in Newcastle, England. We also maintain corporate offices in Houston, Texas, where significant worldwide global support activity occurs. In addition, we own or lease numerous real estate properties, machinery, equipment, and other properties throughout the world.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities The following table summarizes repurchases of our ordinary shares during the three months ended December 31, 2022: ISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares Purchased (a) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs October 1, 2022—October 31, 2022 175,000 $ 10.60 175,000 32,863,490 November 1, 2022—November 30, 2022 2,975,000 $ 11.77 2,975,000 25,238,165 December 1, 2022—December 31, 2022 1,082,047 $ 12.14 1,082,047 24,593,823 Total 4,232,047 $ 11.81 4,232,047 24,593,823 ____________________ (a) In July 2022, we announced a repurchase plan approved by our Board of Directors authorizing up to $400.0 million to repurchase shares of our issued and outstanding ordinary shares through open market purchases.
Biggest changeWe had no unregistered sales of equity securities during the year ended December 31, 2023. 38 Issuer Purchases of Equity Securities The following table summarizes repurchases of our ordinary shares during the three months ended December 31, 2023: ISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares Purchased (a) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs October 1, 2023—October 31, 2023 210,000 $ 21.44 210,000 25,334,002 November 1, 2023—November 30, 2023 1,529,005 $ 21.18 1,529,005 24,748,264 December 1, 2023—December 31, 2023 932,761 $ 19.42 932,761 24,561,303 Total 2,671,766 $ 20.59 2,671,766 24,561,303 ___________________ (a) On July 27, 2022, we announced a repurchase plan approved by our Board of Directors authorizing the repurchase of up to $400.0 million of our issued and outstanding ordinary shares through open market purchases.
The Company intends to initiate a quarterly dividend in the second half of 2023. As of February 20, 2023, according to data provided by our transfer agent, there were 3,640 shareholders of record. However, many of our shareholders hold their shares in "street name" by a nominee of Depository Trust Company, which is a single shareholder of record.
As of February 22, 2024, according to data provided by our transfer agent, there were 3,524 shareholders of record. However, many of our shareholders hold their shares in "street name" by a nominee of Depository Trust Company, which is a single shareholder of record.
The comparison assumes $100 was invested, including reinvestment of dividends, if any, in our ordinary shares on January 1, 2018 and in both of the indexes on the same date.
The comparison assumes $100 was invested, including reinvestment of dividends, if any, in our ordinary shares on January 1, 2019 and in both of the indexes on the same date. The results shown in the graph below are not necessarily indicative of future performance.
Performance Graph The graph below compares the cumulative total shareholder return on our ordinary shares for the period from January 1, 2018 to December 31, 2022 with the Standard & Poor’s 500 Index (“S&P 500 Index”) and PHLX Oil Services Index.
For the three months ended December 31, 2023, we repurchased 2,671,766 shares for a total cost of $55.0 million at an average price of $20.59 per share. 39 Performance Graph The graph below compares the cumulative total shareholder return on our ordinary shares for the period from January 1, 2019 to December 31, 2023 with the Standard & Poor’s 500 Index (“S&P 500 Index”) and PHLX Oil Services Index.
We estimate that there were approximately 53,200 shareholders whose shares were held in “street name” by banks, brokers, or other financial institutions as of December 31, 2022. 40 We had no unregistered sales of equity securities during the year ended December 31, 2022.
We estimate that there were approximately 80,000 shareholders whose shares were held in “street name” by banks, brokers, or other financial institutions as of February 22, 2024.
Removed
For the three months ended December 31, 2022, we repurchased 4,232,047 shares for a total cost of $50.1 million at an average price of $11.81 per share.
Added
In July 2023, the Company announced the initiation of a quarterly cash dividend and stated its intent to pay dividends on a quarterly basis. Our Board of Directors authorized and declared the following dividend during the three months ended December 31, 2023.
Removed
The results shown in the graph below are not necessarily indicative of future performance. 41 As of December 31, 2018 2019 2020 2021 2022 TechnipFMC plc $ 63.68 $ 71.37 $ 31.94 $ 27.03 $ 55.67 S&P 500 Index 95.61 125.70 148.82 191.50 156.78 PHLX Oil Services Index 54.78 54.48 31.56 38.10 61.53 ITEM 6. [RESERVED]
Added
Additional share repurchase of up to $400.0 million was authorized by the Board of Directors on July 26, 2023, increasing the total share repurchase authorization to $800.0 million.
Added
As of December 31, 2019 2020 2021 2022 2023 TechnipFMC plc $ 112.07 $ 50.15 $ 42.45 $ 87.41 $ 145.16 S&P 500 Index 131.48 155.65 200.29 163.99 207.05 PHLX Oil Services Index 99.45 57.60 69.55 112.31 114.47 ITEM 6. [RESERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear Ended December 31, Change (In millions, except percentages) 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 Revenue $ 6,700.4 $ 6,403.5 $ 6,530.6 $ 296.9 4.6 % $ (127.1) (1.9) % Costs and expenses Cost of sales 5,804.1 5,579.6 5,835.8 224.5 4.0 % (256.2) (4.4) % Selling, general and administrative expense 616.8 644.9 724.1 (28.1) (4.4) % (79.2) (10.9) % Research and development expense 67.0 78.4 75.3 (11.4) (14.5) % 3.1 4.1 % Impairment, restructuring and other expense 15.2 66.7 3,402.0 (51.5) (77.2) % (3,335.3) (98.0) % Total costs and expenses 6,503.1 6,369.6 10,037.2 133.5 2.1 % (3,667.6) (36.5) % Other income, net 5.4 46.6 25.1 (41.2) (88.4) % 21.5 85.7 % Income from equity affiliates 44.6 0.6 64.6 44.0 7,333.3 % (64.0) (99.1) % Income (loss) from investment in Technip Energies (27.7) 322.2 — (349.9) (108.6) % 322.2 — % Loss on early extinguishment of debt (29.8) (61.9) — 32.1 51.9 % (61.9) — % Net interest expense (120.9) (143.3) (81.8) 22.4 15.6 % (61.5) (75.2) % Income (loss) before income taxes 68.9 198.1 (3,498.7) (129.2) (65.2) % 3,696.8 105.7 % Provision for income taxes 105.4 111.1 19.4 (5.7) (5.1) % 91.7 472.7 % Income (loss) from continuing operations (36.5) 87.0 (3,518.1) (123.5) (142.0) % 3,605.1 102.5 % (Income) loss from continuing operations attributable to non-controlling interests (25.4) 0.8 (34.5) (26.2) (3,275.0) % 35.3 102.3 % Income (loss) from continuing operations attributable to TechnipFMC plc (61.9) 87.8 (3,552.6) (149.7) (170.5) % 3,640.4 102.5 % Loss from discontinued operations (45.3) (72.6) 280.2 27.3 37.6 % (352.8) (125.9) % Income from discontinued operations attributable to non-controlling interests — (1.9) (15.2) 1.9 100.0 % 13.3 87.5 % Net income (loss) attributable to TechnipFMC plc $ (107.2) $ 13.3 $ (3,287.6) $ (120.5) (906.0) % $ 3,300.9 100.4 % Results of Operations in 2022 Compared to 2021 Revenue Revenue increased by $296.9 million in 2022, compared to 2021.
Biggest changeYear Ended December 31, Change (In millions, except percentages) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Revenue $ 7,824.2 $ 6,700.4 $ 6,403.5 $ 1,123.8 16.8 % $ 296.9 4.6 % Costs and expenses Cost of sales 6,550.1 5,804.1 5,579.6 746.0 12.9 % 224.5 4.0 % Selling, general and administrative expense 675.9 616.8 644.9 59.1 9.6 % (28.1) (4.4) % Research and development expense 69.0 67.0 78.4 2.0 3.0 % (11.4) (14.5) % Restructuring, impairment and other expenses 20.0 15.2 66.7 4.8 31.6 % (51.5) (77.2) % Total costs and expenses 7,315.0 6,503.1 6,369.6 811.9 12.5 % 133.5 2.1 % Other income (expense), net (248.3) 5.4 46.6 (253.7) (4,698.1) % (41.2) (88.4) % Income from equity affiliates 34.4 44.6 0.6 (10.2) (22.9) % 44.0 7,333.3 % Income (loss) from investment in Technip Energies — (27.7) 322.2 27.7 100.0 % (349.9) (108.6) % Loss on early extinguishment of debt — (29.8) (61.9) 29.8 100.0 % 32.1 51.9 % Net interest expense (88.7) (120.9) (143.3) 32.2 26.6 % 22.4 15.6 % Income before income taxes 206.6 68.9 198.1 137.7 199.9 % (129.2) (65.2) % Provision for income taxes 154.7 105.4 111.1 49.3 46.8 % (5.7) (5.1) % Income (loss) from continuing operations 51.9 (36.5) 87.0 88.4 242.2 % (123.5) (142.0) % (Income) loss from continuing operations attributable to non-controlling interests 4.3 (25.4) 0.8 29.7 116.9 % (26.2) (3,275.0) % Income (loss) from continuing operations attributable to TechnipFMC plc 56.2 (61.9) 87.8 118.1 190.8 % (149.7) (170.5) % Loss from discontinued operations — (45.3) (72.6) 45.3 100.0 % 27.3 37.6 % Income from discontinued operations attributable to non-controlling interests — — (1.9) — — % 1.9 100.0 % Net income (loss) attributable to TechnipFMC plc $ 56.2 $ (107.2) $ 13.3 $ 163.4 152.4 % $ (120.5) (906.0) % Results of Operations in 2023 Compared to 2022 Revenue Revenue increased $1,123.8 million in 2023, compared to the same period in 2022.
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. We execute contracts with our customers that clearly describe the equipment, systems, and/or services.
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. 50 We execute contracts with our customers that clearly describe the equipment, systems, and/or services.
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.
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. 47 The following table provides a reconciliation of our cash and cash equivalents to net debt, utilizing details of classifications from our consolidated balance sheets.
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.
Due to the complexity of some of these uncertainties, their ultimate resolution may result in payments that are materially 51 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.
The discount rate and expected long-term rate of return on plan assets are 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 53 matches estimated defined benefits payments.
The discount rate and expected long-term rate of return on plan assets are 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.
Discussions of 2020 items and year-to-year comparisons between 2021 and 2020 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022.
Refer to respective notes to the consolidated financial statements for further information about our share repurchase program ( Note 18 ), long-term debt obligations ( Note 16 ), guarantees (Notes 12 and 20) and lease payments obligations ( Note 4 ). Financial Position Outlook We are committed to a strong balance sheet.
Refer to respective notes to the consolidated financial statements for further information about our share repurchase program ( Note 18 ), long-term debt obligations ( Note 16 ), guarantees ( Notes 12 and 20 ) and lease payment obligations ( Note 4 ). Financial Position Outlook We are committed to a strong balance sheet.
As of December 31, 2022, 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.
As of December 31, 2023, 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 following t able 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 2022 Pension Expense Before Income Taxes Increase (Decrease) in Projected Benefit Obligation as of December 31, 2022 25 basis point decrease in discount rate $ 1.4 $ — 25 basis point increase in discount rate $ (1.4) $ — 25 basis point decrease in expected long-term rate of return on plan assets $ 2.8 N/A 25 basis point increase in expected long-term rate of return on plan assets $ (2.8) N/A 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 following t able 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 2023 Pension Expense Before Income Taxes Increase (Decrease) in Projected Benefit Obligation as of December 31, 2023 25 basis point decrease in discount rate $ 1.4 $ 25.9 25 basis point increase in discount rate $ (1.3) $ (24.7) 25 basis point decrease in expected long-term rate of return on plan assets $ 1.9 N/A 25 basis point increase in expected long-term rate of return on plan assets $ (1.9) N/A 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.
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.
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.
Year Ended December 31, (In millions) 2022 2021 2020 Cash provided by operating activities from continuing operations $ 352.1 $ 715.0 $ 772.4 Capital expenditures (157.9) (191.7) (256.1) Free cash flow from continuing operations $ 194.2 $ 523.3 $ 516.3 Debt and Liquidity We are committed to maintaining a capital structure that provides sufficient cash resources to support future operating and investment plans.
Year Ended December 31, (In millions) 2023 2022 2021 Cash provided by operating activities from continuing operations $ 693.0 $ 352.1 $ 715.0 Capital expenditures (225.2) (157.9) (191.7) Free cash flow from continuing operations $ 467.8 $ 194.2 $ 523.3 Debt and Liquidity We are committed to maintaining a capital structure that provides sufficient cash resources to support future operating and investment plans.
As of December 31, 2022, we had $1.2 billion of purchase obligations, more than 90 percent of which is short-term. Substantially all of these commitments are associated with purchases made to fulfill our customer’s orders, the costs associated with these agreements will ultimately be reflected in cost of sales in our consolidated statement of income.
As of December 31, 2023, we had $1.6 billion of purchase obligations, more than 93 percent of which is short-term. Substantially all of these commitments are associated with 49 purchases made to fulfill our customer’s orders, the costs associated with these agreements will ultimately be reflected in cost of sales in our consolidated statements of income.
Income (Loss) from Investment in Technip Energies For the years ended December 31, 2022 and 2021, we recorded a $27.7 million loss and $322.2 million of income, respectively, as a result of our investment in Technip Energies. The amounts recognized represent fair value revaluation gains (losses) of our investment. See Note 12 to our consolidated financial statements for further details.
Income (Loss) from Investment in Technip Energies For the year ended December 31, 2022 we recorded a loss of $27.7 million as a result of our investment in Technip Energies. The amounts recognized represented the fair value revaluation gains (losses) of our investment. See Note 12 to our consolidated financial statements for further details.
Credit Ratings - Our credit ratings with Standard and Poor’s (“S&P”) are BB+ for our long-term unsecured, guaranteed debt (2021 Notes) and BB for our long-term unsecured debt (the Private Placement notes). Our credit rating with Moody’s is Ba1 for our long-term unsecured, guaranteed debt. See Note 16 for further details regarding our debt.
See Note 16 to our consolidated financial statements for further detail. Credit Ratings - Our credit ratings with Standard and Poor’s (“S&P”) are BB+ for our long-term unsecured, guaranteed debt (2021 Notes) and BB for our long-term unsecured debt (the Private Placement Notes). Our credit rating with Moody’s is Ba1 for our long-term unsecured, guaranteed debt.
Credit Risk Analysis For the purposes of mitigating the effect of the changes in exchange rates, we hold derivative financial instruments. Valuations of derivative assets and liabilities reflect the fair value of the instruments, including the values associated with counterparty risk.
See Note 16 for further details regarding our debt. Credit Risk Analysis For the purposes of mitigating the effect of the changes in exchange rates, we hold derivative financial instruments. Valuations of derivative assets and liabilities reflect the fair value of the instruments, including the values associated with counterparty risk.
Loss on Early Extinguishment of Debt We recognized $29.8 million of loss on early extinguishment of debt during the year ended December 31, 2022, which related to premium paid and write-off of debt issuance costs in connection with the repurchase of the 2021 Notes.
Loss on Early Extinguishment of Debt We recognized a $29.8 million loss on early extinguishment of debt for the year ended December 31, 2022, which related to premium paid and write-off of debt issuance costs in connection with the repurchase of the 2021 Notes and the repayment of our 3.45% Senior Notes due 2022.
Inbound Orders Year Ended December 31, (In millions) 2022 2021 Subsea $ 6,738.3 $ 4,960.9 Surface Technologies 1,340.8 1,793.3 Total inbound orders $ 8,079.1 $ 6,754.2 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.
Inbound Orders Year Ended December 31, (In millions) 2023 2022 Subsea $ 9,749.0 $ 6,738.3 Surface Technologies 1,233.9 1,340.8 Total inbound orders $ 10,982.9 $ 8,079.1 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.
As a result, the energy industry has accelerated its efforts to address the essential need for hydrocarbons today to ensure the continuity of affordable energy while also playing an essential role in the energy transition. We are in the midst of a multi-year growth cycle for energy demand.
As a result, the energy industry has accelerated its efforts to address the essential need for hydrocarbons today to ensure the continuity of affordable energy while also playing an essential role in the energy transition.
Year Ended December 31, (In millions) 2022 2021 Cash and cash equivalents $ 1,057.1 $ 1,327.4 Short-term debt and current portion of long-term debt (367.3) (277.6) Long-term debt, less current portion (999.3) (1,727.3) Net debt $ (309.5) $ (677.5) 49 Cash Flows Cash flows for the years ended December 31, 2022, 2021 and 2020 were as follows: Year Ended December 31, (In millions) 2022 2021 2020 Cash provided by operating activities from continuing operations $ 352.1 $ 715.0 $ 772.4 Cash provided (required) by investing activities from continuing operations 162.2 821.8 (120.8) Cash required by financing activities from continuing operations (796.7) (1,447.3) (651.9) Net cash attributable to discontinued operations — (3,555.9) (605.6) Effect of exchange rate changes on cash and cash equivalents 12.1 (14.0) 223.5 Decrease in cash and cash equivalents $ (270.3) $ (3,480.4) $ (382.4) (Increase) decrease in working capital from continuing operations $ (81.1) $ 497.5 $ 717.7 Free cash flow from continuing operations $ 194.2 $ 523.3 $ 516.3 Operating cash flows from continuing operations - During 2022 and 2021, we generated $352.1 million and $715.0 million, respectively, in operating cash flows from continuing operations.
Year Ended December 31, (In millions) 2023 2022 Cash and cash equivalents $ 951.7 $ 1,057.1 Short-term debt and current portion of long-term debt (153.8) (367.3) Long-term debt, less current portion (913.5) (999.3) Net debt $ (115.6) $ (309.5) Cash Flows Cash flows for the years ended December 31, 2023, 2022 and 2021 were as follows: Year Ended December 31, (In millions) 2023 2022 2021 Cash provided by operating activities from continuing operations $ 693.0 $ 352.1 $ 715.0 Cash provided (required) by investing activities from continuing operations (125.6) 162.2 821.8 Cash required by financing activities from continuing operations (656.5) (796.7) (1,447.3) Net cash attributable to discontinued operations — — (3,555.9) Effect of exchange rate changes on cash and cash equivalents (16.3) 12.1 (14.0) Decrease in cash and cash equivalents $ (105.4) $ (270.3) $ (3,480.4) (Increase) decrease in working capital from continuing operations $ 302.2 $ (81.1) $ 497.5 Free cash flow from continuing operations $ 467.8 $ 194.2 $ 523.3 Operating cash flows from continuing operations — During 2023 and 2022, we generated $693.0 million and $352.1 million, respectively, in operating cash flows from continuing operations.
See Note 5 to our consolidated financial statements for further details. Order Backlog December 31, (In millions) 2022 2021 Subsea $ 8,131.5 $ 6,533.0 Surface Technologies 1,221.5 1,124.7 Total order backlog $ 9,353.0 $ 7,657.7 Subsea - Order backlog for Subsea as of December 31, 2022, increased by $1.6 billion from December 31, 2021.
See Note 5 to our consolidated financial statements for further details. Order Backlog December 31, (In millions) 2023 2022 Subsea $ 12,164.1 $ 8,131.5 Surface Technologies 1,066.9 1,221.5 Total order backlog $ 13,231.0 $ 9,353.0 Subsea — Order backlog for Subsea as of December 31, 2023, increased by $4.0 billion from December 31, 2022.
Surface Technologies Year Ended December 31, Favorable/(Unfavorable) (In millions, except %) 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 Revenue $ 1,239.2 $ 1,074.4 $ 1,059.2 $ 164.8 15.3 % $ 15.2 1.4 % Operating profit (loss) $ 58.3 $ 42.0 $ (429.3) $ 16.3 38.8 % $ 471.3 109.8 % Operating profit (loss) as a percentage of revenue 4.7 % 3.9 % (40.5) % 0.8 pts. 44.4 pts.
Surface Technologies Year Ended December 31, Favorable/(Unfavorable) (In millions, except %) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Revenue $ 1,389.4 $ 1,239.2 $ 1,074.4 $ 150.2 12.1 % $ 164.8 15.3 % Operating profit (loss) $ 114.6 $ 58.3 $ 42.0 $ 56.3 96.6 % $ 16.3 38.8 % Operating profit (loss) as a percentage of revenue 8.2 % 4.7 % 3.9 % 3.5 pts. 0.8 pts.
Subsea Year Ended December 31, Favorable/(Unfavorable) (In millions, except %) 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 Revenue $ 5,461.2 $ 5,329.1 $ 5,471.4 $ 132.1 2.5 % $ (142.3) (2.6) % Operating profit (loss) $ 317.6 $ 141.4 $ (2,815.5) $ 176.2 124.6 % $ 2,956.9 105.0 % Operating profit (loss) as a percentage of revenue 5.8 % 2.7 % (51.5) % 3.1 pts. 54.2 pts.
Subsea Year Ended December 31, Favorable/(Unfavorable) (In millions, except %) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Revenue $ 6,434.8 $ 5,461.2 $ 5,329.1 $ 973.6 17.8 % $ 132.1 2.5 % Operating profit (loss) $ 543.6 $ 317.6 $ 141.4 $ 226.0 71.2 % $ 176.2 124.6 % Operating profit (loss) as a percentage of revenue 8.4 % 5.8 % 2.7 % 2.6 pts. 3.1 pts.
Drilling activity in international markets is less cyclical than North America as most activities are undertaken 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 North Sea, Asia Pacific and the Middle East.
Drilling activity in international markets is less cyclical than North America as most activities are undertaken by national oil companies which tend to maintain a longer-term view that exhibits less variability in capital spend.
The decrease of $362.9 million in cash generated by operating activities from continuing operations in 2022, as compared to 2021, was due to timing differences on project milestones, vendor payments for inventory, and timing of income tax refund.
The increase of $340.9 million in cash generated by operating activities from continuing operations in 2023, as compared to 2022, was due to timing differences on project milestones, payments to vendors for inventory, fluctuations in derivative assets and liabilities and timing of income tax payments.
Subsea backlog of $8.1 billion as of December 31, 2022, was composed of various subsea projects, including Petrobras Buzios 6, Mero I, Mero II and Marlim; Total Energies Mozambique LNG, Lapa North East and Clov 3; ExxonMobil Yellowtail and Payara; Shell Jackdaw and Gumusut; Husky West White Rose; Equinor Halten East; Tullow Jubilee South East; Wintershall Maria and Dvalin; and Harbour Talbot.
Subsea backlog of $12.2 billion as of December 31, 2023, was composed of various subsea projects, including Petrobras Buzios 6, Mero I, Mero II and Marlim; Total Energies Mozambique LNG, Lapa North East and Clov 3; ExxonMobil Yellowtail and Uaru; AkerBP Utsira; Azule Energy Agogo; Shell Jackdaw and Dover; Husky West White Rose; Equinor Raia, Rosebank and Irpa, Verdande; Tullow Jubilee South East; Wintershall Maria and Dvalin; and Harbour Talbot.
The change in working capital represents total changes in operating current assets and liabilities. Free cash flow from continuing operations is defined as operating cash flows from continuing operations less capital expenditures.
The change in working capital represents total changes in current assets and liabilities. 48 Free cash flow from continuing operations is defined as operating cash flows from continuing operations less capital expenditures. Management uses this non-GAAP financial measure to evaluate our financial condition.
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).
We believe free cash flow from continuing operations is a meaningful financial measure that may assist investors in understanding our financial condition and results of operations. 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).
We also provided the DOJ reports on our anti-corruption program during the term of the DPA. In Brazil, on June 25, 2019 our subsidiaries Technip Brasil - Engenharia, Instalações E Apoio Marítimo Ltda. and Flexibrás Tubos Flexíveis Ltda. entered into leniency agreements with both the MPF and the CGU/AGU.
We also consented to the entry of an Administrative Order issued by the SEC related to Unaoil. In Brazil, on June 25, 2019, our subsidiaries Technip Brasil - Engenharia, Instalações E Apoio Marítimo Ltda. and Flexibrás Tubos Flexíveis Ltda. entered into leniency agreements with both the MPF and the CGU/AGU.
Certain items have been excluded in computing segment operating profit and are included in corporate items. See Note 6 to our consolidated financial statements for further details.
See Note 25 t o our consolidated financial statements for further details. 45 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 6 to our consolidated financial statements for further details.
In maintaining our commitment to sustainable leverage and liquidity, we expect to be able to continue to generate free cash flow available for investment in growth and distribution to shareholders through the business cycle. 51 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.
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.
Net Interest Expense Net interest expense decreased by $22.4 million in 2022, compared to 2021, largely due to the reduction in outstanding debt. Provision for Income Taxes Our provision for income taxes for 2022 and 2021 reflected effective tax rates of 153.0% and 56.1%, respectively.
See Note 16 to our consolidated financial statements for further details. Net Interest Expense Net interest expense decreased by $32.2 million in 2023, compared to 2022, largely due to the reduction in outstanding debt and higher interest income. Provision for Income Taxes Our provision for income taxes for 2023 and 2022 reflected effective tax rates of 74.9% and 153.1%, respectively.
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. OTHER MATTERS On March 28, 2016, FMC Technologies received an inquiry from the U.S.
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. 52 OTHER MATTERS On June 25, 2019, we announced a global resolution to pay a total of $301.3 million to the U.S.
Income from Equity Affiliates For the years ended December 31, 2022 and 2021, we recorded an income of $44.6 million and $0.6 million, respectively, from equity method affiliates. Income generated by our equity method investments during 2022 increased year-over-year, driven by an increase in operational activity of our equity method investments.
Income from Equity Affiliates For the years ended December 31, 2023 and 2022, we recorded income of $34.4 million and $44.6 million, respectively, from equity method affiliates. Income generated by our equity method investments during 2023 decreased year-over-year, driven by a decrease in operational activity of our joint ventures. See Note 3 to our consolidated financial statements for further details.
Financing cash flows from continuing operations - Financing activities from continuing operations used $796.7 million and $1,447.3 million in 2022 and 2021, respectively. The decrease of $650.6 million in cash used for financing activities was due to the decreased debt pay down and issuance activity of $742.9 million, partially offset by $100.2 million of share repurchases during 2022.
The decrease of $140.2 million in cash used for financing activities was mainly due to the decreased debt pay down and issuance activity of $249.6 million during 2023, partially offset by $104.9 million of increase of share repurchases during 2023.
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. 52 Our operating income for the year ended December 31, 2022 was positively impacted by approximately $104.9 million, as a result of changes in contract estimates related to projects that were in progress as of December 31, 2021.
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.
Surface Technologies - Order backlog for Surface Technologies as of December 31, 2022 increased by $96.8 million, compared to December 31, 2021. LIQUIDITY AND CAPITAL RESOURCES Most of our cash is managed centrally and flows through bank accounts controlled and maintained by TechnipFMC globally in various jurisdictions to best meet the liquidity needs of our global operations.
LIQUIDITY AND CAPITAL RESOURCES Most of our cash is managed centrally and flows through bank accounts controlled and maintained by TechnipFMC globally in various jurisdictions to best meet the liquidity needs of our global operations. Net Debt — Net debt is a non-GAAP financial measure reflecting cash and cash equivalents, net of debt.
The decrease of $659.6 million in cash provided by investing activities was due to a $612.4 million decrease in proceeds received from sales of our investment in Technip Energies and a decrease in proceeds from sales of assets, partially offset by a decrease in capital expenditures during 2022.
The decrease of $287.8 million in cash from investing activities was primarily due to the absence of $288.5 million proceeds received from sales of our investment in Technip Energies during 2022 and an increase in capital expenditures of $67.3 million.
The year-over-year increase in the effective tax rate was largely due to the change in geographical profit mix year over year. 47 Our effective tax rate can fluctuate depending on our country mix of earnings, since our foreign earnings are generally subject to higher tax rates than in the United Kingdom.
Our effective tax rate can fluctuate depending on our country mix of earnings, since our foreign earnings are generally subject to higher tax rates than in the United Kingdom. Discontinued Operations Loss from discontinued operations, net of income taxes, was $45.3 million for the year ended December 31, 2022.
All obligations to regulatory authorities related to the enforcement matters in the United States and Brazil have been completed and the Company has been unconditionally released by both jurisdictions. To date, the investigation by the PNF related to historical projects in Equatorial Guinea and Ghana has not reached resolution.
All obligations to regulatory authorities related to the enforcement matters in the United States and Brazil have been completed and the Company has been unconditionally released by both jurisdictions. As previously disclosed, we have also resolved an investigation by French authorities (the Parquet National Financier (“PNF”)).
Other Income, Net Other income, 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 non-operating gains and losses.
Selling, General and Administrative Expense Selling, general and administrative expense increased by $59.1 million year-over-year, as a result of increased activity in both segments. Other Income (Expense), Net Other income (expense), net includes gains and losses associated with the remeasurement of net cash positions, gains and losses on sales of property, plant and equipment and non-operating gains and losses.
An extended period of underinvestment has contributed to a current supply deficit that will ultimately require increased upstream spending, lending support to a constructive view on the longer-term outlook for oil prices. With long-term energy demand forecast to increase, the conflict in Ukraine has highlighted the need for greater energy security across the globe.
An extended period of underinvestment also contributed to a supply deficit that has required increased upstream spending, lending support to a constructive view on the longer-term outlook for oil and natural gas prices. 41 We see continued strength ahead, driven by the resiliency and durability of the current market. The demand for energy will continue to grow.
As of December 31, 2022 there were $45.4 million letters of credit outstanding and availability of borrowings under the Revolving Credit Facility was $954.6 million. As of December 31, 2022 TechnipFMC was in compliance with all debt covenants. See Note 16 to our consolidated financial statements for further detail.
Availability of borrowings under the Revolving Credit Facility is reduced by the outstanding letters of credit issued against the facility. As of December 31, 2023 there were $54.2 million letters of credit outstanding and availability of borrowings under the Revolving Credit Facility was $1,195.8 million. As of December 31, 2023 TechnipFMC was in compliance with all debt covenants.
With CTO, we have designed an environment, process, culture and tools which are scalable and, more importantly, are transformational to the future of our company.
This technology provides simplification of unique project requirements by leveraging a configure-to-order (CTO) model that further improves the economics of our customer’s projects while driving greater efficiencies for TechnipFMC. With CTO, we have designed an environment, process, culture, and tools which are scalable and, more importantly, are transformational to the future of our company.
We are also committed to the energy transition, where we believe that offshore will play a meaningful role in the transition to renewable energy resources and reduction of carbon emissions. We are making real progress through our three main pillars of greenhouse gas removal, offshore floating renewables and hydrogen.
While we are confident that conventional resources will remain a large part of the energy mix for an extended period, we are also committed to the energy transition. Here, we believe that offshore will play a meaningful role in the transition to renewable energy resources and reduction of carbon emissions.
Our growing backlog also provides us with greater visibility for growth in 2023. TechnipFMC’s unique capabilities in these markets, which demand higher specification equipment, global services and local content, provide a platform for us to extend our leadership positions.
We continue to benefit from our exposure to the North Sea, Asia Pacific and the Middle East. International markets represented a significant portion of total segment revenue in 2023, totaling 59 percent. TechnipFMC’s unique capabilities in these markets, which demand higher specification equipment, global services, and local content, provide a platform for us to extend our leadership positions.
Investing cash flows from continuing operations - Investing activities from continuing operations provided $162.2 million in 2022 and $821.8 million of cash in 2021.
Investing cash flows from continuing operations — We used $125.6 million of cash in investing activities from continuing operations during 2023 as compared to $162.2 million cash generated in investing cash flows from continuing operations during 2022.
RECENTLY ISSUED ACCOUNTING STANDARDS See Note 2 to our consolidated financial statements for further details.
The CJIP received final approval by the President of the Tribunal Judiciaire of Paris at a hearing on June 28, 2023. RECENTLY ISSUED ACCOUNTING STANDARDS See Note 2 to our consolidated financial statements for further details.
Oil prices continue to be supported by regional geopolitical tensions and the industry’s more disciplined capital spend, particularly for OPEC+ countries focused on realizing a price that supports both economic growth and energy investment.
The price of oil has been supported by regional geopolitical tensions and the industry’s more disciplined capital spend, particularly for OPEC+ countries focused on production levels that support both economic growth and energy investment. This includes Aramco’s recent decision to forego an expansion in its productive capacity above the current level of 12 million barrels per day (MMBD).
We have been successful in building on our partnerships and alliances to further position ourselves as the leading offshore energy architect, with several notable developments in 2022. • We signed the Option to Lease Agreement for the ScotWind N3 area through our partnership in offshore renewables, Magnora Offshore Wind.
We are making real progress through our three main pillars of greenhouse gas removal, offshore floating renewables and hydrogen solutions. We have also been successful in building on our partnerships and alliances to further position ourselves as the leading architect for offshore energy.
Surface Technologies revenue increased, as a result of the increase in operator activity in North America, driven by an increase in U.S. rig count year-over-year. 46 Gross Profit Gross profit (revenue less cost of sales) as a percentage of sales increased to 13.4% in 2022 compared to 12.9% in 2021.
Surface Technologies revenue increased $150.2 million, year-over-year, as a result of increased operator activity across the world, primarily from the Middle East. 44 Gross Profit Gross profit (revenue less cost of sales) increased to $1,274.1 million in 2023 compared to $896.3 million in 2022.
During the year ended December 31, 2022, we recognized changes in our estimates that had an impact on our margin in the amounts of $104.6 million and $0.3 million in our Subsea and Surface Technologies segments, respectively. The changes in contract estimates are attrib uted to improved performanc e throughout our execution of our projects.
Our gross profit for the year ended December 31, 2023 was negatively impacted on a net basis by approximately $92.3 million , as a result of aggregate changes in contract estimates related to projects that were in progress as of December 31, 2022 with $91.0 million and $1.3 million in our Subsea and Surface Technologies segments, respectively.
As the subsea industry continues to evolve, we are driving simplification, standardization, and industrialization to reduce cycle times. The industrialization of our project business through the introduction of configure-to-order (CTO) is another way in which we are driving real change in our industry that further improves the economics of our customer’s projects while driving greater efficiencies for TechnipFMC.
As the subsea industry continues to evolve, we are driving simplification, standardization, and industrialization to reduce cycle times and further reduce costs. An example of this is Subsea 2.0, our pre-engineered configurable product offering.
Corporate Items Year Ended December 31, Favorable/(Unfavorable) (In millions, except %) 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 Corporate expense $ (104.7) $ (118.1) $ (131.9) $ 13.4 11.3 % $ 13.8 10.5 % Corporate expense decreased by $13.4 million o r 11.3% year-over-year, driven by the decreased costs associated with our support functions. 48 INBOUND ORDERS AND ORDER BACKLOG Inbound orders - Inbound orders represent the estimated sales value of confirmed customer orders received during the reporting period.
Corporate Items Year Ended December 31, Favorable/(Unfavorable) (In millions, except %) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Corporate expense $ (243.9) $ (104.7) $ (118.1) $ (139.2) (133.0) % $ 13.4 11.3 % 46 Corporate expense increased by $139.2 million year-over-year, mostly due to a non-recurring legal settlement charge of $126.5 million incurred during 2023.
The Middle East remains one of our largest market opportunities in the current decade. 45 CONSOLIDATED RESULTS OF OPERATIONS This section of this Annual Report on Form 10-K generally discusses 2022 and 2021 items and year-to-year comparisons between 2022 and 2021.
We also expect North America to play an important role in meeting increased natural gas demand due in part to sanctions placed upon Russian supply. 43 CONSOLIDATED RESULTS OF OPERATIONS This section of this Annual Report on Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
Subsea revenue increased by $132.1 million, due to higher project installation activity in Brazil and the United Kingdom, which was partially offset by the negative impact of foreign exchange. Subsea operating profit for the year ended December 31, 2022, increased versus the prior year, due to the improved margins in backlog and an increased mix of installation and service activities.
Subsea operating profit for the year ended December 31, 2023, increased by $226.0 million, of which $123.4 million came from volume, combined with $201.1 million due to a favorable activity mix, partially offset by a $98.5 million increase in operating expense.
Based on current market conditions and our future expectations, our capital expenditures for 2023 are estimated to be approximately $250 million. Projected capital expenditures do not include any contingent capital that may be needed to respond to contract awards.
Projected capital expenditures do not include any contingent capital that may be needed to respond to contract awards. In maintaining our commitment to sustainable leverage and liquidity, we expect to be able to continue to generate cash flow available for investment in growth and distribution to shareholders through the business cycle.
Removed
A summarized description of our products and services and annual financial data for each segment can be found in Note 6 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.
Added
A summarized description of our products and services and annual financial data for each segment can be found in Note 6 to our consolidated financial statements. 40 Total Company • Inbound orders improved to $11.0 billion, driven largely by growth in offshore activity • Cash flow from operations of $693.0 million, increased year-over-year by $340.9 million and free cash flow of $467.8 million more than doubled when compared to the prior year • Initiated quarterly cash dividend that represented $0.20 per share on an annualized basis, and authorized additional share repurchase of up to $400.0 million, which increased total authorization to $800.0 million • Established new commitment to return more than 60% of annual free cash flow to shareholders through at least 2025 • Received the National Ocean Industries Association’s ESG Excellence Award, which recognized our commitment to ESG actions, including efforts in fair representation and inclusion and in energy transition technologies Subsea • Inbound orders increased 45% year-over-year to $9.7 billion, driven by growth in both projects and services activity • Record year of integrated project awards for our Company, including our largest iEPCI™ contract ever for Equinor’s Raia project (formerly BM-C-33), following a successful iFEED™ • Direct awards, iEPCI™ projects and Subsea Services exceeded 70% of total Subsea orders, reflecting the positive outcomes of our differentiated offerings, strong client relationships, and project selectivity • Increased adoption of Subsea 2.0™ product platform, including three new clients – Equinor, ExxonMobil and Chevron Surface • Inbound orders of $1.2 billion primarily supported by international markets • Continued ramp up in production at our Saudi Arabia facility, as well as successful execution on our 10-year framework agreement with Abu Dhabi National Oil Company • Experienced increased client adoption of our E-Mission™ solution, the industry’s only real-time monitoring and control system that reduces methane flaring by up to 50% and maximizes oil production Several new energy initiatives progressed with the award of multiple commercial contracts for surface wellheads and tree systems for onshore CO 2 injection in the Middle East, Netherlands, and Australia.
Removed
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.
Added
In addition, we delivered a hydrogen wellhead for HyPSTER and completed and commissioned our Deep Purple Pilot™ project in Norway, which is our solution for Long Duration Energy Storage (LDES) using hydrogen as the energy carrier to help meet the growing demand for power. We finished the year having delivered on many notable achievements.
Removed
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.
Added
Importantly, these results reflect major milestones on our more ambitious journey ahead. We enter 2024 with a strong market outlook and a further step-up in our targeted financial performance. BUSINESS OUTLOOK Overall Outlook – The global economy remains resilient as we enter the new year despite multiple headwinds, including aggressive monetary tightening undertaken to curb high inflation.
Removed
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.
Added
Interest rates remain elevated, but inflation has eased and central banks are poised to shift to more accommodative policies in an effort to maintain stable economic growth. These actions are anticipated to support continued growth in energy demand in 2024.
Removed
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.
Added
With long-term energy demand also forecast to increase, the conflicts in Ukraine and Israel have further highlighted the need for greater energy security across the globe.
Removed
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.
Added
However, we believe the market’s evolution will differ from the past, driven by three major trends. First, a shift in capital flows, which we believe will largely be directed to the offshore and Middle East markets. Second, an increased role for new technologies to drive further innovation and market expansion, particularly in the offshore market.
Removed
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.
Added
And third, an expanded role for subsea services, driven by the needs of growing and aging infrastructure. These trends allow TechnipFMC to leverage our full suite of integrated solutions, differentiated technologies, and the industry’s most comprehensive subsea services offering.
Removed
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.
Added
Our most recent success was driven by our leadership in subsea processing, technology innovation, and integrated solutions with the award of the Mero 3 HISEP® project, which is the first iEPCI contract ever awarded by Petrobras.
Removed
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 2022, approxim ately 80 percent of our total sales were recognized outside of the United States.
Added
The significance of this project for the subsea industry cannot be overstated, as this will be the first to use subsea processing to capture CO 2 rich dense gases directly from the well stream for injection back into the reservoir. This also allows all of the work scope to take place on the seafloor.
Removed
We evaluate international markets and pursue opportunities that fit our technological capabilities and strategies. 42 The Spin-off On February 16, 2021, we completed the separation of the Technip Energies business segment. The transaction was structured as a Spin-off, which occurred by way of a Distribution to our shareholders of 50.1 percent of the outstanding shares in Technip Energies N.V.
Added
In addition to reducing greenhouse gas emission intensity, HISEP® technologies will increase production capacity by debottlenecking the gas processing plant that currently resides on the floating production storage and offloading unit (“FPSO”). By moving the gas processing entirely to the seafloor, future FPSO and topside designs can be further simplified, driving significant improvement in project economics.
Removed
Each of our shareholders received one ordinary share of Technip Energies N.V. for every five ordinary shares of TechnipFMC held at 5:00 p.m., New York City time on the record date, February 17, 2021. Technip Energies N.V. is now an independent public company and its shares are traded under the ticker symbol “TE” on the Euronext Paris stock exchange.
Added
With the award of the Mero 3 HISEP® contract in January 2024, our New Energy business has now achieved more than $1 billion of inbound orders – nearly two years earlier than previously anticipated. We continue to further refine our positioning and mature our offering, particularly in carbon transportation and storage, an area we believe could drive further near-term orders.
Removed
As of December 31, 2022, we fully divested our remaining ownership interest in Technip Energies. Beginning in the first quarter of 2021, Technip Energies’ historical financial results for periods prior to the Distribution are reflected in our consolidated financial statements as discontinued operations.
Added
Subsea – Innovative approaches to subsea projects, like our iEPCI solution, have improved project economics through more efficient design and installation of the entire subsea field architecture.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThese 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. 55 Foreign Currency Exchange Rate Risk We conduct operations around the world in a number of different currencies.
Biggest changeAs of December 31, 2023 and 2022, substantially all of our derivative holdings consisted of foreign currency forward contracts and foreign currency instruments embedded in purchase and sale contracts. 53 These 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.
For our foreign currency forward contracts hedging anticipated transactions that are accounted for as cash flow hedges, a 10% increase in the value of the U.S. dollar would have resulted in an additional loss of $61.9 million in the net fair value of cash flow hedges reflected in our consolidated balance sheet as of December 31, 2022.
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 approximately $115.3 million in the net fair value of cash flow hedges reflected in our consolidated balance sheet as of December 31, 2023.
Based on our portfolio as of December 31, 2022, we have material positions with exposure to interest rates in the United States, Brazil, the United Kingdom, Singapore, the European Community, and Norway. 56
Based on our portfolio as of December 31, 2023, we have material positions with exposure to interest rates in the United States, Brazil, the United Kingdom, Singapore, and Norway. 54
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 $1.2 million in unrealized earnings in the period of change.
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 $3.8 million in unrealized earnings from foreign currency contracts designated as cash flow hedges in the period of change.
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.
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.
A 10% increase or decrease in the average exchange rates of all foreign currencies as of December 31, 2022, would have changed our revenue and income before income taxes attributable to TechnipFMC by approximately $318.6 million and $2.1 million, respectively.
We do not hedge this translation impact on earnings. A 10% increase or decrease in the average exchange rates of all foreign currencies over 2023 would have changed our revenue and income before income taxes attributable to TechnipFMC by approximately $381.8 million and $21.4 million, respectively.
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We do not use derivative financial instruments for speculative purposes. As of December 31, 2022 and 2021, substantially all of our derivative holdings consisted of foreign currency forward contracts and foreign currency instruments embedded in purchase and sale contracts.
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We do not use derivative financial instruments for speculative purposes.
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We apply highly inflationary accounting to the results of operations of our subsidiaries in Argentina as the cumulative inflation rate in these economies for a three-year period meets or exceeds 100%, in accordance with U.S. GAAP. As a result, monetary assets and liabilities denominated in local currencies are remeasured to the U.S.
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Dollar at each balance sheet date, with remeasurement gains and losses recognized in consolidated statements of income. The Central Bank of Argentina has maintained certain currency controls that limited our ability to access U.S. dollars in Argentina and to remit cash from our Argentine operations.
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The new president of Argentina was inaugurated on December 10, 2023, and proposed certain significant economic changes that had a significant impact on the foreign currency-related effects of business transactions in Argentina.
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Due to the Argentine Peso devaluation, primarily following the Presidential Inauguration, we recognized a foreign exchange loss of $14.5 million during the fourth quarter of 2023 and approximately $23.8 million for the year ended December 31, 2023. We have taken various actions to address the situation to reduce our foreign exchange exposure.

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