UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



x	~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2017~~March 31, 2020

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____ .

Commission File Number:001-37983



¨	~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~For the transition period from to~~

~~Commission File Number~~ ~~001-37983~~

TechnipFMC plc

(Exact name of registrant as specified in its charter)



~~England and Wales~~United Kingdom	98-1283037
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One St. Paul’s Churchyard
London
United Kingdom	EC4M 8AP
(Address of principal executive offices)	(Zip Code)

~~+44 203-429-3950~~

+44203-429-3950

(Registrant’s telephone number, including area code)



Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Ordinary shares, $1.00 par value per share	FTI	New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesx☒ No o☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yesx☒ No ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	o☒	Accelerated filer	o☐
Non-accelerated filer ~~(Do not check if a smaller reporting company)~~	x ☐	Smaller reporting company	o☐
		Emerging growth company	o☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o ☐No x☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.



Class		Outstanding at ~~November 3, 2017~~April 29, 2020
Ordinary shares, $1.00 par value per share		~~466,429,009~~448,303,413

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q of TechnipFMC plc (the “Company,” “we,” “us,” or “our”) contains “forward-looking statements” as defined in Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements usually relate to future events and anticipated revenues, earnings, cash flows or other aspects of our operations or operating results. Forward-looking statements are often identified by the words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” “may,” “estimate,” “outlook” and similar expressions, including the negative thereof. The absence of these words, however, does not mean that the statements are not forward-looking. These forward-looking statements are based on our current expectations, beliefs and assumptions concerning future developments and business conditions and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate.

All of our forward-looking statements involve risks and uncertainties (some of which are significant or beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. Known material factors that could cause actual results to differ materially from those contemplated in the forward-looking statements include those set forth in Part II, Item 1A, “Risk Factors” and elsewhere inof this Quarterly Report on Form 10-Q, as well as the following:

We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any of our forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except to the extent required by law.

PART I—I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

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

TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

Three Months Ended Nine Months Ended
September 30, September 30,
(In millions) 2017 2016 2017 2016
Net income $ 117.9
$ 301.7
$ 261.7
$ 526.1
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments ⁽¹⁾
0.2
(2.3 ) (34.7 ) (27.2 )
Net unrealized gains (losses) on available-for-sale securities:
Net unrealized gains (losses) arising during the period —
(3.7 ) —
1.3
Reclassification adjustment for net gains (losses) included in net income —
—
—
—
Net unrealized gains (losses) on available-for-sale securities ⁽²⁾
—
(3.7 ) —
1.3
Net gains (losses) on hedging instruments:
Net gains (losses) arising during the period 32.7
(51.7 ) 74.9
(9.0 )
Reclassification adjustment for net losses included in net income 19.5
13.8
74.3
76.4
Net gains (losses) on hedging instruments ⁽³⁾
52.2
(37.9 ) 149.2
67.4
Pension and other post-retirement benefits:
Net losses arising during the period (2.8 ) (0.3 ) (4.0 ) (16.5 )
Reclassification adjustment for amortization of prior service cost included in net income 0.2
0.2
0.4
0.4
Reclassification adjustment for amortization of net actuarial loss included in net income 0.5
0.1
1.4
0.5
Net pension and other post-retirement costs ⁽⁴⁾
(2.1 ) —
(2.2 ) (15.6 )
Other comprehensive income (loss), net of tax 50.3
(43.9 ) 112.3
25.9
Comprehensive income 168.2
257.8
374.0
552.0
Comprehensive (income) loss attributable to noncontrolling interest 2.6
(14.0 ) 4.8
(13.0 )
Comprehensive income attributable to TechnipFMC plc $ 170.8
$ 243.8
$ 378.8
$ 539.0



	Three Months Ended
	March 31,
(In millions)	2020			2019
Net income (loss)	$	(3,245.7	)	$	19.8
Foreign currency translation adjustments^(a)	(217.9		)	20.9

Net gains (losses) on hedging instruments
Net gains (losses) arising during the period	(89.3		)	16.0
Reclassification adjustment for net losses included in net income	0.1			(0.3		)
Net gains (losses) on hedging instruments^(b)	(89.2		)	15.7

Pension and other post-retirement benefits
Net gains (losses) arising during the period	(0.7		)	0.5
Reclassification adjustment for amortization of prior service cost included in net income	0.3			0.3
Reclassification adjustment for amortization of net actuarial loss included in net income	2.2			—
Net pension and other postretirement benefits^(c)	1.8			0.8
Other comprehensive (income) losses, net of tax	(305.3		)	37.4
Comprehensive income (loss)	(3,551.0		)	57.2
Comprehensive loss attributable to non-controlling interest	0.7			0.4
Comprehensive income (loss) attributable to TechnipFMC plc	$	(3,550.3	)	$	57.6

~~_______________________~~

~~Net of income tax (expense) benefit of $(12.1) and $(4.8)for the three months ended September 30, 2017 and 2016, respectively, and $(49.4) and $(25.7) for the nine months ended September 30, 2017 and 2016, respectively.~~

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

~~TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES~~

September 30, 2017 December 31, 2016
(In millions, except par value data)
Assets
Cash and cash equivalents $ 6,896.1
$ 6,269.3
Trade receivables, net of allowances of $106.7 in 2017 and $85.6 in 2016 2,724.3
2,024.5
Costs and estimated earnings in excess of billings on uncompleted contracts 1,317.9
485.8
Inventories, net (Note 6) 930.7
334.7
Derivative financial instruments (Note 17) 125.9
47.2
Income taxes receivable 391.3
265.0
Advances paid to suppliers 619.2
711.5
Other current assets (Note 7) 1,129.6
799.2
Total current assets 14,135.0
10,937.2
Investments in equity affiliates 229.4
177.8
Property, plant and equipment, net of accumulated depreciation of $2,008.9 in 2017 and $1,691.8 in 2016
3,950.0
2,620.1
Goodwill 8,896.0
3,718.3
Intangible assets, net of accumulated amortization of $446.9 in 2017 and $245.9 in 2016 1,391.8
173.7
Deferred income taxes 562.1
621.6
Derivative financial instruments (Note 17) 84.1
190.8
Other assets 379.8
250.2
Total assets $ 29,628.2
$ 18,689.7
Liabilities and equity
Short-term debt and current portion of long-term debt (Note 10) $ 473.2
$ 683.6
Accounts payable, trade 4,647.7
3,837.7
Advance payments 137.9
411.1
Billings in excess of costs and estimated earnings on uncompleted contracts 3,026.4
3,323.0
Accrued payroll 438.5
307.7
Derivative financial instruments (Note 17) 106.3
183.0
Income taxes payable 315.1
317.5
Other current liabilities (Note 9) 2,436.3
1,825.3
Total current liabilities 11,581.4
10,888.9
Long-term debt, less current portion (Note 10) 3,167.4
1,869.3
Accrued pension and other post-retirement benefits, less current portion 352.1
160.8
Derivative financial instruments (Note 17) 59.7
227.7
Deferred income taxes 269.9
130.5
Other liabilities (Note 11) 472.8
300.6
Commitments and contingent liabilities (Note 12)

Stockholders’ equity (Note 13):
Ordinary shares, $1.00 par value and €0.7625 in 2017 and 2016, respectively; 525.0 shares and 119.2 shares authorized in 2017 and 2016, respectively; 467.1 shares and 119.2 shares issued in 2017 and 2016, respectively; 0.1 and 3.2 shares canceled in 2017 and 2016, respectively; 467.0 and 118.9 shares outstanding in 2017 and 2016, respectively 467.1
114.7
Ordinary shares held in employee benefit trust, at cost; 0.1 shares in 2017 (5.0 ) —
Treasury stock, at cost; no shares and 0.3 shares in 2017 and 2016, respectively —
(44.5 )
Capital in excess of par value of ordinary shares 10,529.8
2,694.7
Retained earnings 3,683.3
3,416.1
Accumulated other comprehensive loss (945.8 ) (1,057.4 )
Total TechnipFMC plc stockholders’ equity 13,729.4
5,123.6
Noncontrolling interests (4.5 ) (11.7 )
Total equity 13,724.9
5,111.9
Total liabilities and equity $ 29,628.2
$ 18,689.7

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

TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED ~~STATEMENTS OF CASH FLOWS~~BALANCE SHEETS (UNAUDITED)

(In millions) Nine Months Ended
September 30,
2017 2016
Cash provided (required) by operating activities:
Net income $ 261.7
$ 526.1
Adjustments to reconcile net income to cash provided (required) by operating activities:
Depreciation 276.8
209.9
Amortization 184.9
13.7
Employee benefit plan and stock-based compensation costs 30.5
15.9
Unrealized (gain) loss on derivative instruments and foreign exchange (70.5 ) 18.2
Deferred income tax provision (benefit) 3.5
(79.3 )
Impairments (Note 5) 9.0
—
Other (15.4 ) (32.4 )
Changes in operating assets and liabilities, net of effects of acquisitions:
Trade receivables, net and costs in excess of billings 225.8
(727.8 )
Inventories, net 198.0
68.4
Accounts payable, trade 150.2
131.2
Advance payments and billings in excess of costs (1,195.3 ) (72.5 )
Income taxes payable (receivable), net (88.1 ) 118.6
Other assets and liabilities, net 307.9
78.4
Cash provided by operating activities 279.0
268.4
Cash provided (required) by investing activities:
Capital expenditures (170.4 ) (107.6 )
Cash acquired in merger of FMC Technologies, Inc. and Technip S.A. (Note 2) 1,479.2
—
Cash divested from deconsolidation —
(89.8 )
Proceeds from sale of assets 13.6
10.1
Other 12.0
—
Cash provided (required) by investing activities 1,334.4
(187.3 )
Cash provided (required) by financing activities:
Net decrease in short-term debt (28.4 ) (4.5 )
Net increase (decrease) in commercial paper (363.0 ) —
Proceeds from issuance of long-term debt 7.3
449.6
Repayments of long-term debt (547.2 ) (765.2 )
Purchase of treasury stock (1.3 ) (151.3 )
Dividends paid —
(112.4 )
Payments related to taxes withheld on stock-based compensation (46.6 ) —
Other (76.9 ) 0.3
Cash required by financing activities (1,056.1 ) (583.5 )
Effect of changes in foreign exchange rates on cash and cash equivalents 69.5
121.8
Increase (decrease) in cash and cash equivalents 626.8
(380.6 )
Cash and cash equivalents, beginning of period 6,269.3
3,178.0
Cash and cash equivalents, end of period $ 6,896.1
$ 2,797.4



(In millions, except par value data)	March 31, 2020			December 31, 2019
Assets
Cash and cash equivalents	$	4,999.4		$	5,190.2
Trade receivables, net of allowances of $100.8 in 2020 and $95.4 in 2019	2,208.8			2,287.1
Contract assets	1,402.9			1,520.0
Inventories, net (Note 8)	1,347.5			1,416.0
Derivative financial instruments (Note 20)	353.3			101.9
Income taxes receivable	269.9			264.6
Advances paid to suppliers	279.7			242.9
Other current assets (Note 9)	968.6			863.7
Total current assets	11,830.1			11,886.4
Investments in equity affiliates	321.3			300.4
Property, plant and equipment, net of accumulated depreciation of $2,355.0 in 2020 and $2,288.8 in 2019	2,852.5			3,162.0
Operating lease right-of-use assets	826.4			892.6
Goodwill	2,461.0			5,598.3
Intangible assets, net of accumulated amortization of $779.7 in 2020 and $763.4 in 2019	1,049.5			1,086.6
Deferred income taxes	238.5			260.5
Derivative financial instruments (Note 20)	84.0			39.5
Other assets	264.3			292.5
Total assets	$	19,927.6		$	23,518.8

Liabilities and equity
Short-term debt and current portion of long-term debt (Note 14)	$	586.7		$	495.4
Operating lease liabilities	245.0			275.1
Accounts payable, trade	2,551.2			2,659.8
Contract liabilities	4,653.5			4,585.1
Accrued payroll	368.7			411.5
Derivative financial instruments (Note 20)	485.6			141.3
Income taxes payable	120.4			75.7
Other current liabilities (Note 9)	1,403.5			1,494.5
Total current liabilities	10,414.6			10,138.4
Long-term debt, less current portion (Note 14)	3,823.9			3,980.0
Operating lease liabilities	644.9			681.7
Deferred income taxes	57.7			138.2
Accrued pension and other post-retirement benefits, less current portion	347.4			368.6
Derivative financial instruments (Note 20)	98.2			52.7
Other liabilities	416.6			430.0
Total liabilities	15,803.3			15,789.6
Commitments and contingent liabilities (Note 18)
Mezzanine equity
Redeemable non-controlling interest	39.5			41.1
Stockholders’ equity (Note 15)
Ordinary shares, $1.00 par value; 618.3 shares and 618.3 shares authorized in 2020 and 2019, respectively; 448.3 shares and 447.1 shares issued and outstanding in 2020 and 2019, respectively; 0.0 and 4.0 shares canceled in 2020 and 2019, respectively	448.3			447.1
Capital in excess of par value of ordinary shares	10,196.8			10,182.8
(Accumulated deficit) retained earnings	(4,887.0		)	(1,563.1		)
Accumulated other comprehensive loss	(1,701.7		)	(1,407.5		)
Total TechnipFMC plc stockholders’ equity	4,056.4			7,659.3
Non-controlling interests	28.4			28.8
Total equity	4,084.8			7,688.1
Total liabilities and equity	$	19,927.6		$	23,518.8

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

TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)



(In millions)	Three Months Ended
	March 31,
	2020			2019
Cash provided (required) by operating activities
Net income (loss)	$	(3,245.7	)	$	19.8
Adjustments to reconcile net income to cash provided (required) by operating activities
Depreciation	89.5			88.9
Amortization	30.9			30.5
Impairments	3,188.0			0.9
Employee benefit plan and share-based compensation costs	18.3			20.9
Deferred income tax provision (benefit), net	(54.3		)	(90.8		)
Unrealized loss on derivative instruments and foreign exchange	105.6			29.2
Income from equity affiliates, net of dividends received	(25.4		)	(9.9		)
Other	47.2			72.7
Changes in operating assets and liabilities, net of effects of acquisitions
Trade receivables, net and contract assets	(50.5		)	131.8
Inventories, net	(30.2		)	(61.5		)
Accounts payable, trade	(4.2		)	(148.6		)
Contract liabilities	181.5			186.1
Income taxes payable (receivable), net	34.0			20.8
Other current assets and liabilities, net	(375.2		)	(126.3		)
Other noncurrent assets and liabilities, net	118.4			(43.1		)
Cash provided by operating activities	27.9			121.4

Cash provided (required) by investing activities
Capital expenditures	(83.5		)	(178.2		)
Payment to acquire debt securities	—			(59.7		)
Cash received from divestiture	2.5			—
Proceeds from sale of assets	7.5			0.9
Cash required by investing activities	(73.5		)	(237.0		)

Cash required by financing activities
Net increase in short-term debt	87.0			114.5
Net decrease in commercial paper	(578.5		)	(450.4		)
Proceeds from revolving credit facility	500.0			—
Proceeds from issuance of long-term debt	—			96.2
Purchase of ordinary shares	—			(33.0		)
Payments related to taxes withheld on share-based compensation	(3.2		)	—
Settlements of mandatorily redeemable financial liability	(4.2		)	(174.9		)
Cash provided (required) by financing activities	1.1			(447.6		)
Effect of changes in foreign exchange rates on cash and cash equivalents	(146.3		)	(11.5		)
Decrease in cash and cash equivalents	(190.8		)	(574.7		)
Cash and cash equivalents, beginning of period	5,190.2			5,540.0
Cash and cash equivalents, end of period	$	4,999.4		$	4,965.3

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

TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

THREE MONTHS ENDED MARCH 31, 2020

Ordinary Shares Held in

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

TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements of TechnipFMC plc and its consolidated subsidiaries (“TechnipFMC”, the “Company,” “we,” “us,” or “our”) have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and rules and regulations of the Securities and Exchange Commission (“SEC”) pertaining to interim financial information. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted. These unaudited condensed consolidated financial statements should be read together with our audited consolidated financial statements contained in our Annual Report on Form 10-K (“Form 10-K”) for the year ended December 31, 2019.

Our accounting policies are in accordance with GAAP. The preparation of financial statements in conformity with these accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Ultimate results could differ from our estimates.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments as well as adjustments to our financial position pursuant to a business combination, necessary for a fair statement of our financial condition and operating results as of and for the periods presented. Revenue, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these financial statements may not be representative of the results that may be expected for the year ending December 31, ~~2017.~~2020.

In this Quarterly Report on Form 10-Q, we are reporting the results of our operations for the three months and nine months ended September 30, 2017, which consist of the combined results of operations of Technip S.A. (“Technip”) and FMC Technologies, Inc. (“FMC Technologies”). DueReclassifications – Certain prior-year amounts have been reclassified to conform to the merger of FMC Technologies and Technip, FMC Technologies’ results of operations have been included in our financial statements for periods subsequent to the consummation of the merger on January 16, 2017.

Since TechnipFMC is the successor company to Technip, we are presenting the results of Technip’s operations for the three months and nine months ended September 30, 2016 and as of December 31, 2016. Refer to Note 2 for further information related to the merger of FMC Technologies and Technip.

~~Principles of consolidation—The consolidated financial statements include the accounts of TechnipFMC and its majority-owned subsidiaries and affiliates. Intercompany accounts and transactions are eliminated in consolidation.~~

~~Use of estimates~~—The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Such estimates include, but are not limited to, estimates of total contract profit or loss on long-term construction-type contracts; estimated realizable value on excess and obsolete inventory; estimates related to pension accounting; estimates related to fair value for purposes of assessing goodwill, long-lived assets and intangible assets for impairment; estimates related to income taxes; and estimates related to contingencies, including liquidated damages.

~~Investments in the common stock of unconsolidated affiliates~~—The equity method of accounting is used to account for investments in unconsolidated affiliates where we have the ability to exert significant influence over the affiliate’s operating and financial policies. The cost method of accounting is used where significant influence over the affiliate is not present.

Investments in unconsolidated affiliates are assessed for impairment whenever events or changes in facts and circumstances indicate the carrying value of the investments may not be fully recoverable. When such a condition is subjectively determined to be other than temporary, the carrying value of the investment is written down to fair value. Management’s assessment as to whether any decline in value is other than temporary is based on our ability and intent to hold the investment and whether evidence indicating the carrying value of the investment is recoverable within a reasonable period of time outweighs evidence to the contrary. Management generally considers our investments in equity method investees to be strategic, long-term investments and completes its assessments for impairment with a long-term viewpoint.

Investments in which ownership is less than 20% or that do not represent significant investments are reported in other assets on the consolidated balance sheets. Where no active market exists and where no other valuation method can be used, these financial assets are maintained at historical cost, less any accumulated impairment losses.

~~Business combinations—~~Business combinations are accounted for using the acquisition method of accounting. Under the acquisition method, assets acquired and liabilities assumed are recorded at their respective fair values as of the acquisition date. Determining the fair value of assets and liabilities involves significant judgment regarding methods and assumptions used to

calculate estimated fair values. The purchase price is allocated to the assets, assumed liabilities and identifiable intangible assets based on their estimated fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Transaction related costs are expensed as incurred.

~~Revenue recognition~~—Revenue is generally recognized once the following four criteria are met: i) persuasive evidence of an arrangement exists, ii) delivery of the equipment has occurred (which is upon shipment or when customer-specific acceptance requirements are met) or services have been rendered, iii) the price of the equipment or service is fixed or determinable, and iv) collectability is reasonably assured. We record our sales net of any value added, sales or use tax.

For certain construction-type manufacturing and assembly projects that involve significant design and engineering efforts to satisfy detailed customer specifications, revenue is recognized using the percentage of completion method of accounting. Under the percentage of completion method, revenue is recognized as work progresses on each contract. We apply the ratio of costs incurred to date to total estimated contract costs at completion or ~~on physical progress defined for the main deliverables under the contracts~~. If it is not possible to form a reliable estimate of progress toward completion, no revenue or costs are recognized until the project is complete or substantially complete. Any expected losses on construction-type contracts in progress are charged to earnings, in total, in the period the losses are identified.

Modifications to construction-type contracts, referred to as “change orders,” effectively change the provisions of the original contract, and may, for example, alter the specifications or design, method or manner of performance, equipment, materials, sites and/or period for completion of the work. If a change order represents a firm price commitment from a customer, we account for the revised estimate as if it had been included in the original estimate, effectively recognizing the pro rata impact of the new estimate on our calculation of progress toward completion in the period in which the firm commitment is received. If a change order is unpriced: (1) we include the costs of contract performance in our calculation of progress toward completion in the period in which the costs are incurred or become probable; and (2) when it is determined that the revenue is probable of recovery, we include the change order revenue, limited to the costs incurred to date related to the change order, in our calculation of progress toward completion. Unpriced change orders included in revenue were immaterial to our consolidated revenue for all periods presented. Margin is not recorded on unpriced change orders unless realization is assured beyond a reasonable doubt. The assessment of realization may be based upon our previous experience with the customer or based upon our receipt of a firm price commitment from the customer.

Progress billings are generally issued upon completion of certain phases of the work as stipulated in the contract. Revenue in excess of progress billings are reported in costs and estimated earnings in excess of billings on uncompleted contracts in our condensed consolidated balance sheets. Progress billings and cash collections in excess of revenue recognized on a contract are classified as billings in excess of costs and estimated earnings on uncompleted contracts and advance payments, respectively, in our condensed consolidated balance sheets. Revenue generated from the installation portion of construction-type contracts is included in service and product revenue in our condensed consolidated statements of income.

~~Cash equivalents—Cash equivalents are highly-liquid, short-term instruments with original maturities of generally three months or less from their date of purchase.~~

~~Trade receivables, net of allowances~~—An allowance for doubtful accounts is provided on receivables equal to the estimated uncollectible amounts. This estimate is based on historical collection experience and a specific review of each customer’s receivables balance.

~~Inventories~~—Inventories are stated at the lower of cost or net realizable value. Inventory costs include those costs directly attributable to products, including all manufacturing overhead, but excluding costs to distribute. The first-in, first-out (“FIFO”) or weighted average methods are used to determine the cost for most other inventories. Cost for a significant portion of the U.S. domiciled inventories is determined on the last-in, first-out (“LIFO”) method. Write-down on inventories are recorded when the net realizable value of inventories is lower than their net book value.

~~Impairment of property, plant and equipment~~—Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate the carrying value of the long-lived asset may not be recoverable. The carrying value of an asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If it is determined that an impairment loss has occurred, the impairment loss is measured as the amount by which the carrying value of the long-lived asset exceeds its fair value.

~~Long-lived assets classified as held for sale are reported at the lower of carrying value or fair value less cost to sell.~~

~~Goodwill~~—Goodwill is not subject to amortization but is tested for impairment on an annual basis (or more frequently if impairment indicators arise). We have established October 31 as the date of our annual test for impairment of goodwill.

Reporting units with goodwill are tested for impairment using a quantitative impairment test. The test compares the fair value of the reporting unit (measured as the present value of expected future cash flows) to its carrying amount. If the fair value of the reporting unit is less than its carrying amount, then an impairment loss is recorded.

~~Debt instruments—~~Debt instruments include convertible and synthetic bonds, senior and private placement notes and other borrowings. Issuance fees and redemption premium on all debt instruments are included in the cost of debt in the condensed consolidated balance sheets, as an adjustment to the nominal amount of the debt.

~~Fair value measurements~~—Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The fair value framework requires the categorization of assets and liabilities measured at fair value into three levels based upon the assumptions (inputs) used to price the assets or liabilities, with the exception of certain assets and liabilities measured using the net asset value practical expedient, which are not required to be leveled. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

~~Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.~~

~~Level 2~~: Observable inputs other than quoted prices included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

~~Level 3: Unobservable inputs reflecting management’s own assumptions about the assumptions market participants would use in pricing the asset or liability.~~

~~Income taxes~~—Current income taxes are provided on income reported for financial statement purposes, adjusted for transactions that do not enter into the computation of income taxes payable in the same year. Deferred tax assets and liabilities are measured using enacted tax rates for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. A valuation allowance is established whenever management believes that it is more likely than not that deferred tax assets may not be realizable.

Income taxes are not provided on our equity in undistributed earnings of foreign subsidiaries or affiliates to the extent we have determined that the earnings are indefinitely reinvested. Income taxes are provided on such earnings in the period in which we can no longer support that such earnings are indefinitely reinvested.

~~Tax benefits related to uncertain tax positions are recognized when it is more likely than not, based on the technical merits, that the position will be sustained upon examination.~~

~~We classify interest expense and penalties recognized on underpayments of income taxes as income tax expense.~~

~~Stock-based employee compensation~~—The measurement of stock-based compensation expense on restricted stock awards is based on the market price at the grant date and the number of shares awarded. We used the Cox Ross Rubinstein binomial model to measure the fair value of stock options granted prior to December 31, 2016 and Black-Scholes options pricing model to measure the fair value of stock options granted on or after January 1, 2017. The stock-based compensation expense for each award is recognized ratably over the applicable service period, after taking into account estimated forfeitures, or the period beginning at the start of the service period and ending when an employee becomes eligible for retirement.

~~Ordinary shares held in employee benefit trust~~—Our ordinary shares are purchased by the plan administrator of the FMC Technologies, Inc. Non-Qualified Savings and Investment Plan and placed in a trust that we own. Purchased shares are recorded at cost and classified as a reduction of stockholders’ equity on the condensed consolidated balance sheets.

~~Treasury shares~~—Treasury shares held are recorded as a reduction to stockholders’ equity using the cost method. Any gain or loss related to the sale of treasury shares is included in stockholders’ equity. Canceled treasury shares are accounted for using the constructive retirement method.

~~Earnings per ordinary share (“EPS”)~~—Basic EPS is computed using the weighted-average number of ordinary shares outstanding during the year. We use the treasury stock method to compute diluted EPS which gives effect to the potential dilution of earnings that could have occurred if additional shares were issued for awards granted under our incentive compensation and stock plan. The treasury stock method assumes proceeds that would be obtained upon exercise of awards granted under our incentive compensation and stock plan are used to purchase outstanding ordinary shares at the average market price during the period.

Convertible bonds that could be converted into or be exchangeable for new or existing shares would additionally result in a dilution of earnings per share. The ordinary shares assumed to be converted as of the issuance date are included to compute

~~diluted EPS under the if-converted method. Additionally, the net profit of the period is adjusted as if converted for the after-tax interest expense related to these dilutive shares.~~

~~Foreign currency~~—Financial statements of operations for which the U.S. dollar is not the functional currency, and which are located in non-highly inflationary countries, are translated into U.S. dollars prior to consolidation. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date, while income statement accounts are translated at the average exchange rate for each period. For these operations, translation gains and losses are recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity until the foreign entity is sold or liquidated. For operations in highly inflationary countries and where the local currency is not the functional currency, inventories, property, plant and equipment, and other non-current assets are converted to U.S. dollars at historical exchange rates, and all gains or losses from conversion are included in net income. Foreign currency effects on cash, cash equivalents and debt in hyperinflationary economies are included in interest income or expense.

For certain committed and anticipated future cash flows and recognized assets and liabilities which are denominated in a foreign currency, we may choose to manage our risk against changes in the exchange rates, when compared against the functional currency, through the economic netting of exposures instead of derivative instruments. Cash outflows or liabilities in a foreign currency are matched against cash inflows or assets in the same currency, such that movements in exchanges rates will result in offsetting gains or losses. Due to the inherent unpredictability of the timing of cash flows, gains and losses in the current period may be economically offset by gains and losses in a future period. All gains and losses are recorded in our consolidated statements of income in the period in which they are incurred. Gains and losses from the remeasurement of assets and liabilities are recognized in other income (expense), net.

~~Derivative instruments—~~Derivatives are recognized on the condensed consolidated balance sheets at fair value, with classification as current or non-current based upon the maturity of the derivative instrument. Changes in the fair value of derivative instruments are recorded in current earnings or deferred in accumulated other comprehensive income (loss), depending on the type of hedging transaction and whether a derivative is designated as, and is effective as, a hedge. Each instrument is accounted for individually and assets and liabilities are not offset.

Hedge accounting is only applied when the derivative is deemed to be highly effective at offsetting changes in anticipated cash flows of the hedged item or transaction. Changes in fair value of derivatives that are designated as cash flow hedges are deferred in accumulated other comprehensive income (loss) until the underlying transactions are recognized in earnings. At such time, related deferred hedging gains or losses are recorded in earnings on the same line as the hedged item. Effectiveness is assessed at the inception of the hedge and on a quarterly basis. Effectiveness of forward contract cash flow hedges are assessed based solely on changes in fair value attributable to the change in the spot rate. The change in the fair value of the contract related to the change in forward rates is excluded from the assessment of hedge effectiveness. Changes in this excluded component of the derivative instrument, along with any ineffectiveness identified, are recorded in earnings as incurred. We document our risk management strategy and hedge effectiveness at the inception of, and during the term of, each hedge.

We also use forward contracts to hedge foreign currency assets and liabilities, for which we do not apply hedge accounting. The changes in fair value of these contracts are recognized in other income (expense), net on our condensed consolidated statements of income, as they occur and offset gains or losses on the remeasurement of the related asset or liability.year’s presentation.

NOTE 2. ~~MERGER OF FMC TECHNOLOGIES AND TECHNIP~~PLANNED SEPARATION TRANSACTION

~~Description~~On August 26, 2019, we announced that our Board of Directors had unanimously approved a plan to separate our Onshore/Offshore segment and Loading Systems and process automation businesses into an independent, publicly traded company (“Technip Energies”). In connection with the planned transaction, we renamed our Onshore/Offshore segment to Technip Energies in the first quarter of 2020. Due to the COVID-19 pandemic, the sharp decline in commodity prices, and the heightened volatility in global equity markets, on March 15, 2020, we announced the postponement of the ~~merger~~completion of ~~FMC Technologies~~the transaction until the markets sufficiently recover. The transaction will be subject to general market conditions, regulatory approvals, consultation of employee representatives, where applicable, and ~~Technip~~final approval from our Board of Directors. We have incurred $27.1 million of separation costs associated with the planned transaction for the three months ended March 31, 2020.

NOTE 3. BUSINESS COMBINATION TRANSACTIONS

On ~~June 14, 2016, FMC Technologies and Technip entered into a definitive business combination agreement providing for~~December 30, 2019, we completed the business combination among FMC Technologies, FMC Technologies SIS Limited, a private limited company incorporated under the laws of England and Wales and a wholly-owned subsidiary of FMC Technologies, and Technip. On August 4, 2016, the legal name of FMC Technologies SIS Limited was changed to TechnipFMC Limited, and on January 11, 2017, was subsequently re-registered as TechnipFMC plc, a public limited company incorporated under the laws of England and Wales.

~~On January 16, 2017, the business combination was completed. Pursuant to the terms~~acquisition of the ~~definitive business combination agreement,~~remaining 50% interest in Technip ~~merged with and into TechnipFMC, with TechnipFMC continuing as the surviving company (the “Technip Merger”~~Odebrecht PLSV CV (“TOP CV”), and each ordinary share of Technip (the “Technip Shares”), other than Technip Shares owned by Technip or its wholly-owned subsidiaries, were exchanged for 2.0 ordinary shares of TechnipFMC, subject to the terms of the definitive business combination agreement. Immediately following the Technip Merger, a wholly-owned indirect subsidiary of TechnipFMC (“Merger Sub”) merged with and into FMC Technologies, with FMC Technologies continuing as the surviving company and. TOP CV was formed as a ~~wholly-owned indirect subsidiary of TechnipFMC (the “FMCTI Merger”),~~joint venture between Technip SA and ~~each share of common stock~~

~~of FMC Technologies (the “FMCTI Shares”~~Ocyan SA to provide pipeline installation ships to Petroleo Brasileiro SA (“Petrobras”)~~, other than FMCTI Shares owned by FMC Technologies, TechnipFMC, Merger Sub or~~ for their ~~wholly-owned subsidiaries, were exchanged for 1.0 ordinary share of TechnipFMC, subject to the terms of the definitive business combination agreement.~~

~~Under the acquisition method of accounting, Technip was identified as the accounting acquirer and acquired a 100% interest~~work in ~~FMC Technologies.~~

The merger of FMC Technologies and Technip (the “Merger”) has created a larger and more diversified company that is better equipped to respond to economic and industry developments and better positioned to develop and build on its offerings in the subsea, surface, and onshore/offshore markets as compared to the former companies on a standalone basis. More importantly, the Merger has brought about the ability of the combined company to (i) standardize its product and service offerings to customers, (ii) reduce costs to customers, and (iii) provide integrated product offerings to the oil and gas ~~industry~~fields offshore Brazil with results reported in our Subsea segment using the equity method of accounting. Subsequent to this transaction the investment became a fully consolidated entity. In connection with the ~~aim to innovate the markets in which the combined company operates.~~

~~We incurred merger transaction and integration costs of $9.2 million and $87.2~~acquisition, we acquired $391.0 million in assets, including two vessels valued at $335.2 million. In addition, we assumed $239.9 million of liabilities, including a $203.1 million term loan.

There were no significant acquisitions or other type of business combinations during the three ~~and nine~~ months ended ~~September 30, 2017, respectively,~~March 31, 2020 and ~~$14.0 million and $30.7 million in the three and nine months ended September 30, 2016.~~

~~Description of FMC Technologies as Accounting Acquiree~~

FMC Technologies is a global provider of technology solutions for the energy industry. FMC Technologies designs, manufactures and services technologically sophisticated systems and products, including subsea production and processing systems, surface wellhead production systems, high pressure fluid control equipment, measurement solutions and marine loading systems for the energy industry. Subsea systems produced by FMC Technologies are used in the offshore production of crude oil and natural gas and are placed on the seafloor to control the flow of crude oil and natural gas from the reservoir to a host processing facility. Additionally, FMC Technologies provides a full range of drilling, completion and production wellhead systems for both standard and custom-engineered applications. Surface wellhead production systems, or trees, are used to control and regulate the flow of crude oil and natural gas from the well and are used in both onshore and offshore applications.

~~Consideration Transferred~~

~~The acquisition-date fair value of the consideration transferred consisted of the following:~~

(In millions, except per share data)
Total FMC Technologies, Inc. shares subject to exchange as of January 16, 2017 228.9
FMC Technologies, Inc. exchange ratio ⁽¹⁾
0.5
Shares of TechnipFMC issued 114.4
Value per share of Technip as of January 16, 2017 ⁽²⁾
$ 71.4
Total purchase consideration $ 8,170.7

~~_______________________~~

~~Assets Acquired and Liabilities Assumed~~

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date. The purchase price allocation is subject to revision as additional information about fair value of assets and liabilities becomes available. Additional information that existed as of the acquisition date but at that time was unknown to us may become known during the remainder of the measurement period. As part of the ongoing review of the purchase price allocation, a $210.0 million adjustment to deferred tax balances was recorded during the third quarter of 2017 which reduced goodwill. This adjustment had no impact to the consolidated statements of income.

~~The final purchase price allocation will be based on final appraisals and other analysis of fair values of acquired assets and liabilities.~~

(In millions)
Assets:
Cash $ 1,479.2
Accounts receivable 1,247.4
Inventory 764.8
Income taxes receivable 139.2
Other current assets 282.2
Property, plant and equipment 1,293.3
Intangible assets 1,390.3
Deferred income taxes 67.0
Other long-term assets 167.3
Total identifiable assets acquired 6,830.7
Liabilities:
Short-term and current portion of long-term debt 319.5
Accounts payable, trade 386.0
Advance payments 454.0
Income taxes payable 92.1
Other current liabilities 524.3
Long-term debt, less current portion 1,444.2
Accrued pension and other post-retirement benefits, less current portion 195.5
Deferred income taxes 226.8
Other long-term liabilities 138.7
Total liabilities assumed 3,781.1
Net identifiable assets acquired 3,049.6
Goodwill 5,121.1
Net assets acquired $ 8,170.7

~~Segment Allocation of Goodwill~~

~~Goodwill is preliminary due to the draft status of the purchase valuation. The allocation to the reporting segments based on the draft valuation is as follows:~~

(In millions) Allocated Goodwill
Subsea $ 2,508.2
Onshore/Offshore 1,622.9
Surface Technologies 990.0
Total $ 5,121.1

Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the expected revenue and cost synergies of the combined company, which are further described above. Goodwill recognized as a result of the acquisition is not deductible for tax purposes.

~~Acquired Identifiable Intangible Assets~~

~~The identifiable intangible assets acquired include the following:~~

(In millions, except estimated useful lives) Fair Value
Estimated
Useful Lives
Acquired technology $ 240.0
10
Backlog 175.0
2
Customer relationships 285.0
10
Tradenames 635.0
20
Software 55.3
Various
Total identifiable intangible assets acquired $ 1,390.3

FMC Technologies’ results of operations have been included in our financial statements for periods subsequent to the consummation of the Merger on January 16, 2017. FMC Technologies contributed revenues and a net loss of $2,522.6 million and $130.1 million, respectively, for the period from January 17, 2017 through September 30, 2017.

~~Pro Forma Impact of the Merger (unaudited)~~

The following unaudited supplemental pro forma results present consolidated information as if the Merger had been completed as of January 1, 2016. The pro forma results do not include any potential synergies, cost savings or other expected benefits of the Merger. Accordingly, the pro forma results should not be considered indicative of the results that would have occurred if the Merger had been consummated as of January 1, 2016, nor are they indicative of future results. For comparative purposes, the weighted average shares outstanding used for the diluted earnings per share calculation for the three and ~~nine~~ ~~months ended September 30, 2017 was also used to calculate the diluted earnings per share for the three and~~ ~~nine~~ ~~months ended September 30, 2016.~~

Three Months Ended September 30, Nine Months Ended September 30,
(In millions, except per share data)
2017
Actual

2016
Pro Forma

2017
Pro Forma

2016
Pro Forma
Revenue $ 4,140.9
$ 3,454.8
$ 11,486.8
$ 10,587.2
Net income attributable to TechnipFMC adjusted for dilutive effects $ 121.0
$ 306.9
$ 182.4
$ 436.1
Diluted earnings per share $ 0.26
$ 0.65
$ 0.39
$ 0.93
2019.

NOTE 3.4. NEW ACCOUNTING STANDARDS

Recently Adopted Accounting Standards under GAAP

Effective January 1, ~~2017,~~2020, we adopted ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” This update modifies the disclosure requirement on fair value measurements in Topic 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively. The adoption of this update concerns presentation and disclosure only as it relates to our consolidated financial statements. See Note 21 for our fair value measurements disclosure.

Effective January 1, 2020, we adopted ASU No. 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting ~~Standards Update (“ASU”) No. 2016-09,~~ ~~“Improvements to Employee Share-Based Payment Accounting.~~for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force).”~~Among other amendments, this~~ This update requires that ~~excess tax benefits or deficiencies~~the implementation costs incurred in a cloud computing arrangement that is a service contract are deferred if they would be recognized as income tax expense or benefit in the income statement and eliminates the requirement to reclassify excess tax benefits and deficiencies from operating activities to financing activities in the statement of cash flows. This updated guidance also gives an entity the election to either (i) estimate the forfeiture rate of employee stock-based awards or (ii) account for forfeitures as they occur. We elected to retrospectively classify excess tax benefits and deficiencies as operating activity and these amounts, which were immaterial for all periods presented, are reflected in the income taxes payable, net line item in the accompanying condensed consolidated statement of cash flows. In addition, we elected to continue to estimate forfeiturescapitalized based on the ~~grant date~~requirements for capitalizing implementation costs incurred to ~~account for the estimated number of awards for which the requisite service period will not be rendered.~~develop or obtain internal-use software. The adoption of this update did not have a material impact on our consolidated financial statements.

Effective January 1, ~~2017,~~2020, we adopted ASU No. ~~2015-11,~~ 2018-18, “~~Simplifying~~Collaborative Arrangements (Topic 808)—Clarifying the ~~Measurement of Inventory~~.Interaction between Topic 808 and Topic 606.” This update ~~requires in scope inventory to be measured at the lower of cost or net realizable value rather than at the lower of cost or market under~~

~~existing guidance. We adopted the updated guidance prospectively. The adoption of this update did not have a material impact on our consolidated financial statements.~~

~~Effective January 1, 2017, we adopted ASU No. 2014-15, “Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern.~~” This update states that substantial doubt exists if it is probable that an entity will be unable to meet its current and future obligations. Disclosures are required if conditions give rise to substantial doubt. However, management will need to assess if its plans will alleviate substantial doubt to determine the specific disclosures. We adopted this guidance prospectively. The adoption of this update concerns disclosure only as it relates to our consolidated financial statements.

~~Effective September 30, 2017, we early adopted ASU No. 2017-04,~~ ~~“Simplifying the Test for Goodwill Impairment.”~~ This update eliminates step two from the goodwill impairment test. An annual or interim goodwill test should be performed by comparing the fair value of a reporting unit with its carrying amount. Income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should also be considered when measuring any applicable goodwill impairment loss. This updated guidance also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and if it fails that qualitative assessment, to perform step two of the goodwill impairment test. Any goodwill amount allocated to a reporting unit with a zero or negative carrying amount net of assets is required to be disclosed. The adoption of this update did not have a material impact on our consolidated financial statements.

~~Recently Issued Accounting Standards~~

~~In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09,~~ ~~“Revenue from Contracts with Customers.”~~ This update requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU will supersede most existing GAAP related to revenue recognition and will supersede some cost guidance in existing GAAP related to construction-type and production-type contract accounting. Additionally, the ASU will significantly increase disclosures related to revenue recognition. In August 2015, the FASB issued ASU No. 2015-14 which deferred the effective date of ASU No. 2014-09 by one year, and as a result, is now effective for us on January 1, 2018. In March 2016, the FASB issued ASU No. 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” which clarifies the ~~implementation~~interaction between the guidance ~~on principal versus agent considerations. Early application is permitted to~~for certain collaborative arrangements and the ~~original effective date of January 1, 2017. Entities are permitted to apply the amendments either retrospectively to each prior~~Revenue Recognition financial accounting and reporting ~~period presented or retrospectively with~~standard. An entity should recognize the cumulative effect of initially applying the ~~ASU recognized at~~amendments as an adjustment to the opening balance of retained earnings of the later of the earliest annual period presented and the annual period that includes the date of the entity’s initial ~~application. As part~~application of Topic 606. The adoption of this update concerns presentation and disclosure only with no material impact to our ~~assessment work-to-date,~~consolidated results.

Effective January 1, 2020, we ~~have formed an implementation work team, conducted training for the relevant staff regarding the potential impacts the new ASU's revenue recognition model~~adopted ASU No. 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and ~~are continuing our contract analysis~~Hedging, and ~~policy review. We have engaged external resources to assist us in our efforts~~Topic 825, Financial Instruments.” The update clarifies and improves areas of ~~completing the analysis of potential changes to current accounting practices. During the remainder of 2017, we will quantify the potential impacts~~guidance related to the financial statements upon adoption of the ASU, as well as advance design and implementation of required processes, systems and internal control changes necessary to address the impacts identified in the assessment. We are currently unable to reasonably estimate the impact the new revenue recognition criteria will have on our consolidated financial statements and related disclosures. Our evaluation of the new guidance is ongoing, which includes investigating and understanding the impact of adoption on earnings from equity method investments. We intend to adopt the new standard utilizing the modified retrospective method which will result in a cumulative effect adjustment as of January 1, 2018.

~~In January 2016, the FASB~~recently issued standards including (1) ASU No. 2016-01, ~~“Recognition~~“Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Liabilities”, (2) ASU No. 2016-13, “Financial ~~Liabilities.~~Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ~~This~~, and (3) ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities”. The adoption of this update ~~addresses certain aspects of recognition, measurement,~~concerns presentation and disclosure ~~of financial instruments. Among other amendments, this update requires equity investments not accounted for under the equity method of accounting~~only with no material impact to be measured at fair value with changes in fair value recognized in net income. An entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. This updated guidance also simplifies the impairment assessment of equity investments without readily determinable fair values and eliminates the requirement to disclose significant assumptions and methods used to estimate the fair value of financial instruments measured at amortized cost. The updated guidance further requires the use of an exit price notion when measuring the fair value of financial instruments for disclosure purposes. The amendments in this ASU are effective for us on January 1, 2018. All amendments are required to be adopted on a modified retrospective basis, with two exceptions. The amendments related to equity investments without readily determinable fair values and the requirement to use an exit price notion are required to be adopted prospectively. Early adoption is not permitted. We are currently evaluating the impact of this ASU on our consolidated financial ~~statements.~~results.

~~In February 2016, the FASB issued~~Effective January 1, 2020, we adopted ASU No. ~~2016-02,~~ 2016-13, “~~Leases.”~~Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. This update ~~requires that~~introduces a ~~lessee recognize in the statement~~new model for recognizing credit losses on financial instruments based on an estimate of ~~financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset~~current expected credit losses.

Adoption of ASU No. 2016-13 “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Similar to current guidance, the update continues to differentiate between finance leases and operating leases, however this distinction now primarily relates to differences in the manner of expense recognition over time and in the classification of lease payments in the statement of cash flows. The updated guidance leaves the accounting for leases by lessors largely unchanged from existing GAAP. Early application is permitted. Entities are required to use a modified retrospective adoption, with certain relief provisions, for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements when adopted. The guidance will become effective for us on January 1, 2019. The impacts that adoption of the ASU is expected to have on our consolidated financial statements and related disclosures are being evaluated. Additionally, we have not determined the effect of the ASU on our internal control over financial reporting or other changes in business practices and processes.

In June 2016, the ~~FASB~~Financial Accounting Standard Board (“FASB”) issued ASU No. 2016-13, ~~“Financial Instruments~~—“Financial Instruments—Credit ~~Losses.~~Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This update introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The updated guidance applies to ~~(i)~~(1) loans, accounts receivable, trade receivables, and other financial assets measured at amortized cost, ~~(ii)~~(2) loan commitments and other off-balance sheet credit exposures, ~~(iii)~~(3) debt securities and other financial assets measured at fair value through other comprehensive income, and ~~(iv)~~(4) beneficial interests in securitized financial assets.

Topic 326 was subsequently amended to provide a practical expedient for transition and targeted improvements to the new credit losses standard (ASU 2018-19). We adopted the new credit losses standard as of January 1, 2020, using a modified retrospective transition method through a cumulative-effect adjustment to beginning retained earnings in the period of adoption. The effect of adopting Topic 326 was a decrease in retained earnings of $7.8 million, which includes a $2.1 million increase in noncurrent deferred tax assets, with a corresponding decrease in trade receivables, loans, and debt notes receivable.

Financial assets at amortized cost include trade receivables, loans issued to third or related parties, and held to maturity debt securities. These financial assets were presented under other current assets or other assets, as applicable. Contract assets are subject to the credit losses standard per revenue recognition standard.

Trade receivables and contracts assets constitute a homogeneous portfolio, and therefore, to measure the expected credit losses, trade receivables and contract assets have been grouped together. The contract assets relate to unbilled work in progress and have substantially the same risk characteristics as the trade receivables for the same types of contracts. We have therefore concluded that the expected loss rates for trade receivables are a reasonable approximation of the loss rates for the contract assets.

The following table summarizes the balances of financial assets and non-financial asset at amortized cost as of January 1, 2020:



(In millions)	As reported at December 31, 2019		Impact of ASC 326			Balance at January 1, 2020
Asset category
Loans and Receivables:
Trade receivables, net	2,287.1		$	(3.8	)	$	2,283.3
Loans receivable, net	138.5		(1.5		)	137.0
Security deposits and other, net	36.6		(1.0		)	35.6
Held-to-maturity
Debt securities at amortized cost	71.9		(1.1		)	70.8
Total financial assets	$	2,534.1	$	(7.4	)	$	2,526.7

Non-financial assets
Contract assets, net	$	1,520.0	$	(2.5	)	$	1,517.5

We manage our receivable portfolios using published default risk as a key credit quality indicator for our loans and receivables. Our loans receivable and security deposits were related to sales of fixed assets or businesses, loans to related parties for capital expenditure purposes, or security deposits for lease arrangements. Trade receivables due within one year or less are not required to be included in this disclosure.

We manage our held-to-maturity debt securities using published credit ratings as a key credit quality indicator as our held-to-maturity debt securities consist of government bonds.

The table below summarizes the amortized cost basis of financial assets by years of origination and credit quality. The key credit quality indicator is updated as of March 31, 2020.



(In millions)	Year of origination	Balance at March 31, 2020
Loans receivables, security deposits and other
Moody’s rating Ba2	2019	$	169.3

Debt securities at amortized cost
Moody’s rating B3	2019	70.8
Total financial assets		$	240.1

For contract assets, trade receivables, loans receivable, and security deposits and other, we have elected to calculate an expected credit loss based on loss rates from historical data. We develop loss-rate statistics on the basis of the amount written off over the life of the financial assets and contract assets and adjust these historical credit loss trends for forward-looking factors specific to the debtors and the economic environment to determine lifetime expected losses.

For held-to-maturity debt securities at amortized cost we evaluate whether the debt securities are considered to have low credit risk at the reporting date using available, reasonable, and supportable information.

The table below shows the roll-forward of allowance for credit losses for the three months ended March 31, 2020.



	Balance at March 31, 2020
(In millions)	Trade receivables			Contract assets		Loans receivable			Security deposit and other			Held-to-maturity debt securities
Beginning balance in allowance for credit losses	$	99.2		$	4.0	$	9.5		$	1.6		$	1.1
Current period provision for expected credit losses	3.7			1.4		(0.5		)	(0.2		)	—
Write-offs charged against the allowance	(0.8		)	—		—			—			—
Recoveries	(1.3		)	—		—			—			—
Ending balance in the allowance for credit losses	$	100.8		$	5.4	$	9.0		$	1.4		$	1.1

Other than trade receivables due in one year or less, we do not have any financial assets that are past due or are on non-accrual status.

Recently Issued Accounting Standards under GAAP

In August 2018, the FASB issued ASU No. 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans.” This update amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit pension and other post-retirement plans. The amendments in this ASU are effective for us on January 1, ~~2020 and~~2021. Early adoption is permitted. The amendments in this update are required to be adopted retrospectively. We are currently evaluating the impact of this ASU on ~~a modified retrospective basis. Early~~our consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes to Topic 740—Simplifying the Accounting for Income Taxes”. The amendments simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. This update also improves and simplifies areas of generally accepted accounting principles (GAAP) for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements. This update is effective for us January 1, 2021 and early adoption is permitted. We are currently evaluating the impact of this ASU on our consolidated financial statements.

In ~~August 2016,~~January 2020, the FASB issued ASU No. ~~2016-15~~2020-01, "Investments—Equity Securities (Topic 321)", ~~“Classification~~“Investments—Equity Method and Joint Ventures (Topic 323)”, and “Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815”, and made targeted improvements to address certain aspects of ~~Certain Cash Receipts and Cash Payments.”~~ accounting for financial instruments. This update ~~amends~~clarifies that a company should consider observable transactions that require a company to either apply or discontinue the ~~existing guidance~~equity method of accounting under Topic 323, Investments—Equity Method and Joint Ventures, for the ~~statement~~purposes of ~~cash flows~~applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. The new ASU also clarifies that, when determining the accounting for certain forward contracts and ~~provides guidance on eight classification issues related to~~purchased options a company should not consider whether underlying securities would be accounted for under the ~~statement of cash flows.~~equity method or fair value option upon settlement or exercise. The ~~amendments in this ASU are~~amendment is effective ~~for us on~~from January 1, ~~2018~~2021 and are required to be adopted retrospectively. For issues that are impracticable to adopt retrospectively, the amendments may be adopted prospectively as of the earliest date practicable. Early adoption is permitted. We are currently evaluating the impact of this ASU on our consolidated statements of cash flows.

~~In October 2016, the FASB issued ASU No. 2016-16,~~ ~~“Intra-Entity Transfers of Assets Other Than Inventory.”~~ This update requires that income tax consequences are recognized on an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments in this ASU are effective for us on January 1, 2018 and are required to be adopted on a modified retrospective basis. Earlyearly adoption is permitted. We are currently evaluating the impact of this ASU on our consolidated financial statements.

In ~~January 2017,~~March 2020, the FASB issued ASU No. ~~2017-01,~~ 2020-04, “~~Clarifying the Definition of a Business.”~~ ~~This update clarifies the definition of a business and provides a screen to determine when a set of assets and activities is not a business. The screen requires that when substantially all~~Facilitation of the ~~fair value~~Effects of ~~the gross assets acquired or disposed of is concentrated in a single identifiable asset or a group of similar identifiable assets, such set of assets is not a business.~~ Reference Rate Reform on Financial Reporting (Topic 848)”. The amendments in this ~~ASU~~update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The amendments in this update are effective ~~for us on January 1, 2018 and are required to be adopted prospectively. Early adoption is permitted.~~as of March 12, 2020 through December 31, 2022. We are currently evaluating the impact of this ASU on our consolidated financial statements.

The majority of our revenue is from long-term contracts associated with designing and manufacturing products and systems and providing services to customers involved in exploration and production of crude oil and natural gas.

Disaggregation of Revenue

Revenues are disaggregated by geographic location and contract types.

The following tables present products and services revenue by geography for each reportable segment for the three months ended March 31, 2020 and 2019:



	Reportable Segments
	Three Months Ended
	March 31, 2020						March 31, 2019
(In millions)	Subsea		Technip Energies		Surface Technologies		Subsea		Technip Energies		Surface Technologies
Europe, Russia, Central Asia	$	423.1	$	607.3	$	50.3	$	399.6	$	641.6	$	55.8
Americas	436.5		296.7		149.3		377.1		160.4		193.2
Asia Pacific	137.6		283.8		34.3		99.7		301.9		45.0
Africa	214.6		209.8		13.6		145.8		60.4		11.3
Middle East	21.8		150.1		50.5		135.2		170.8		52.6
Total products and services revenue	$	1,233.6	$	1,547.7	$	298.0	$	1,157.4	$	1,335.1	$	357.9

The following tables represent revenue by contract type for each reportable segment for the three months ended March 31, 2020 and 2019:



	Reportable Segments
	Three Months Ended
	March 31, 2020						March 31, 2019
(In millions)	Subsea		Technip Energies		Surface Technologies		Subsea		Technip Energies		Surface Technologies
Services	$	717.5	$	1,534.1	$	56.1	$	645.6	$	1,335.1	$	70.4
Products	516.1		13.6		241.9		511.8		—		287.5
Total products and services revenue	1,233.6		1,547.7		298.0		1,157.4		1,335.1		357.9
Lease	19.5		—		31.5		27.9		—		34.7
Total revenue	$	1,253.1	$	1,547.7	$	329.5	$	1,185.3	$	1,335.1	$	392.6

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, costs and estimated earnings in excess of billings on uncompleted contracts (contract assets), and billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities) on the consolidated balance sheets.

Contract Assets -Contract Assetsinclude unbilled amounts typically resulting from sales under long-term contracts when revenue is recognized over time and revenue recognized exceeds the amount billed to the customer, and right to payment is not just subject to the passage of time. Amounts may not exceed their net realizable value. Costs and estimated earnings in excess of billings on uncompleted contracts are generally classified as current.

Contract Liabilities - We sometimes receive advances or deposits from our customers, before revenue is recognized, resulting in contract liabilities.

The following table provides information about net contract liabilities as of March 31, 2020 and December 31, 2019:



(In millions)	March 31, 2020			December 31, 2019			$ change			% change
Contract assets	$	1,402.9		$	1,520.0		$	(117.1	)	(7.7	)
Contract (liabilities)	(4,653.5		)	(4,585.1		)	(68.4		)	(1.5	)
Net contract liabilities	$	(3,250.6	)	$	(3,065.1	)	$	(185.5	)	(6.1	)

The decrease in our contract assets from December 31, 2019 to March 31, 2020 was primarily due to the timing of milestones.

The increase in our contract liabilities was primarily due to additional cash received, excluding amounts recognized as revenue during the period.

In ~~February 2017,~~order to determine revenue recognized in the ~~FASB issued ASU 2017-05,~~ ~~“Clarifying~~period from contract liabilities, we first allocate revenue to the ~~Scope~~individual contract liability balance outstanding at the beginning of ~~Asset Derecognition Guidance~~the period until the revenue exceeds that balance. Revenue recognized for the three months ended March 31, 2020 and ~~Accounting~~2019 that was included in the contract liabilities balance at December 31, 2019 and 2018 was $417.1 million and $867.2 million, respectively.

In addition, net revenue recognized for ~~Partial Sales~~the three months ended March 31, 2020 and 2019 from our performance obligations satisfied in previous periods had favorable impacts of ~~Nonfinancial Assets.”~~$57.3 million and $167.7 million, respectively. This ~~update defines an in-substance nonfinancial asset, unifies guidance~~primarily relates to the changes in the estimate of the stage of completion that impacted revenue.

Transaction Price Allocated to the Remaining Unsatisfied Performance Obligations

Remaining unsatisfied performance obligations (“RUPO” or “order backlog”) represent the transaction price for products and services for which we have a material right but work has not been performed. Transaction price of the order backlog includes the base transaction price, variable consideration and changes in transaction price. The order backlog table does not include contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. The transaction price of order backlog related to ~~partial sales~~unfilled, confirmed customer orders is estimated at each reporting date. As of ~~nonfinancial assets, eliminates rules specifically addressing~~March 31, 2020, the ~~sale~~aggregate amount of ~~real estate, removes exceptions~~the transaction price allocated to order backlog was $21,962.1 million. We expect to recognize revenue on approximately 37.4% of the order backlog through 2020 and 62.6% thereafter.

The following table details the order backlog for each business segment as of March 31, 2020:



(In millions)	2020		2021		Thereafter
Subsea	$	3,100.0	$	2,800.0	$	1,873.5
Technip Energies	4,828.3		5,232.0		3,706.3
Surface Technologies	283.8		136.8		1.4
Total order backlog	$	8,212.1	$	8,168.8	$	5,581.2

NOTE 6. BUSINESS SEGMENTS

Management’s determination of our reporting segments was made on the basis of our strategic priorities within each segment and the differences in the products and services we provide, which corresponds to the ~~financial asset derecognition model,~~manner in which our Chairman and ~~clarifies the accounting for contributions of nonfinancial assets~~Chief Executive Officer, as our chief operating decision maker, reviews and evaluates operating performance to ~~joint ventures. The amendments in this ASU are effective for us January 1, 2018 and are required~~make decisions about resources to be ~~adopted with either a full retrospective approach or a modified retrospective approach.~~ allocated to the segment.

We ~~are currently evaluating~~report the ~~impact~~results of ~~this ASU on~~operations in the following segments:

Subsea - designs and manufactures products and systems, performs engineering, procurement and project management, and provides services used by oil and gas companies involved in offshore exploration and production of crude oil and natural gas.

Technip Energies - offers extensive experience, knowledge and unique project management capabilities in Onshore and Offshore hydrocarbon infrastructure businesses; it also combines its leading engineering and construction capabilities with its technological know-how, products and services to develop new solutions that will support the world’s energy transition.

Surface Technologies - designs and manufactures products and systems and provides services used by oil and gas companies involved in land and shallow water exploration and production of crude oil and natural gas; designs, manufactures, and supplies technologically advanced high-pressure valves and fittings for oilfield service companies; and also provides flowback and well testing services.

Beginning in the first quarter of 2020, in anticipation of our ~~consolidated financial statements.~~separation transaction, we renamed our Onshore/Offshore segment to Technip Energies, which includes our Loading Systems business that was previously reported in the Surface Technologies segment and our process automation business, Cybernetix, that was previously reported in the Subsea segment. Prior year information has not been restated due to these businesses not being material.

~~In March 2017, the FASB issued ASU No. 2017-07,~~ ~~“Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.”~~ ~~This update requires employers to disaggregate the service cost component~~

Segment operating profit is defined as total segment revenue less segment operating expenses. Income (loss) from ~~the other components of net benefit cost and disclose the amount of net benefit cost that~~equity method investments is included in ~~the income statement or capitalized in assets, by line item.~~computing segment operating profit. The updated guidance requires employers to report the service cost component in the same line item(s) as other compensation costs and to report other pension-related costs (which include interest costs, amortization of pension-related costs from prior periods, and the gains or losses on plan assets) separately and exclude them from the subtotal of operating income. The updated guidance also allows only the service cost component to be eligible for capitalization when applicable. The amendments in this ASU are effective for us on January 1, 2018. Early adoption is permitted. The guidance requires adoption on a retrospective basis for the presentation of the service cost component and the other components of net periodic pension cost and net periodic post-retirement benefit cost in the income statement and on a prospective basis for the capitalization of the service cost component of net periodic pension cost and net periodic post-retirement benefit in assets. We are currently evaluating the impact of this ASU on our consolidated financial statements.

~~In May 2017, the FASB issued ASU No. 2017-09,~~ ~~“Scope of Modification Accounting.”~~ This update provides clarity on when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The amendments in this ASU are effective for us January 1, 2018 and are required to be adopted prospectively. We are currently evaluating the impact of this ASU on our consolidated financial statements.

~~In July 2017, the FASB issued ASU No. 2017-11, “~~(Part I) Accounting for Certain Financial Instruments with Down Round Features; (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception.” This update allows companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity’s own stock. As a result, financial instruments (or embedded conversion features) with down round features may no longer be required to be accounted for as derivative liabilities. An entity will recognize the value of a down round feature only when it is triggered and the strike price hasfollowing items have been adjusted downward. For equity-classified freestanding financial instruments, an entity will treat the value of the effect of the down round as a dividend and a reduction of income available to common shareholdersexcluded in computing ~~basic earnings per share. For convertible instruments~~segment operating profit: corporate staff expense, net interest income (expense) associated with ~~embedded conversion features containing down round provisions, entities will recognize the value of the down round~~corporate debt facilities, income taxes, and other revenue and other expense, net.

Segment revenue and segment operating profit were as a beneficial conversion discount to be amortized to earnings. The amendments in this ASU are effective for us January 1, 2019. Early adoption is permitted. The guidance in this ASU is to be applied using a full or modified retrospective approach. We are currently evaluating the impact of this ASU on our consolidated financial statements.follows:



	Three Months Ended
	March 31,
(In millions)	2020			2019
Segment revenue
Subsea	$	1,253.1		$	1,185.3
Technip Energies	1,547.7			1,335.1
Surface Technologies	329.5			392.6
Total revenue	$	3,130.3		$	2,913.0

Segment operating profit (loss)
Subsea	$	(2,750.7	)	$	49.9
Technip Energies	151.2			155.7
Surface Technologies	(424.0		)	10.5
Total segment operating profit (loss)	$	(3,023.5	)	$	216.1

Corporate items
Corporate expense^(a)	$	(112.2	)	$	(93.6	)
Net interest expense	(72.3		)	(88.2		)
Total corporate items	(184.5		)	(181.8		)
Income (loss) before income taxes^(b)	$	(3,208.0	)	$	34.3

~~In August 2017, the FASB issued ASU No. 2017-12,~~ ~~“Targeted Improvements to Accounting for Hedging Activities.”~~ This update improves the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements and make certain targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. The amendments in this update better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and presentation of hedge results. The amendments in this ASU are effective for us January 1, 2019. Early adoption is permitted. For cash flow and net investment hedges

Segment assets were as of the adoption date, the guidance requires a modified retrospective approach. The amended presentation and disclosure guidance is required to be adopted prospectively. We are currently evaluating the impact of this ASU on our consolidated financial statements.follows:



(In millions)	March 31, 2020			December 31, 2019
Segment assets
Subsea	$	7,510.5		$	10,824.2
Technip Energies	4,747.7			4,448.8
Surface Technologies	1,739.6			2,246.4
Intercompany eliminations	(26.4		)	(33.9		)
Total segment assets	13,971.4			17,485.5
Corporate ^(a)	5,956.2			6,033.3
Total assets	$	19,927.6		$	23,518.8

NOTE 4.7. EARNINGS (LOSS) PER SHARE

A reconciliation of the number of shares used for the basic and diluted earnings per share calculation was as follows:



	Three Months Ended
	March 31,
(In millions, except per share data)	2020			2019
Net income (loss) attributable to TechnipFMC plc	$	(3,256.1	)	$	20.9

Weighted average number of shares outstanding	447.5			450.1
Dilutive effect of restricted stock units	—			1.0
Dilutive effect of performance shares	—			2.2
Total shares and dilutive securities	447.5			453.3

Basic earnings (loss) per share attributable to TechnipFMC plc	$	(7.28	)	$	0.05
Diluted earnings (loss) per share attributable to TechnipFMC plc	$	(7.28	)	$	0.05

Three Months Ended Nine Months Ended
September 30, September 30,
(In millions, except per share data) 2017 2016 2017 2016
Net income attributable to TechnipFMC plc $ 121.0
$ 302.4
$ 267.2
$ 527.1
After-tax interest expense related to dilutive shares —
0.4
—
1.1
Net income attributable to TechnipFMC plc adjusted for dilutive effects 121.0
302.8
267.2
528.2
Weighted average number of shares outstanding 467.2
121.0
466.8
119.6
Dilutive effect of restricted stock units 0.7
—
0.1
—
Dilutive effect of stock options —
—
0.1
—
Dilutive effect of performance shares 1.8
0.7
1.3
0.5
Dilutive effect of convertible bonds —
5.2
—
5.2
Total shares and dilutive securities 469.7
126.9
468.3
125.3

Basic earnings per share attributable to TechnipFMC plc $ 0.26
$ 2.50
$ 0.57
$ 4.41
Diluted earnings per share attributable to TechnipFMC plc $ 0.26
$ 2.39
$ 0.57
$ 4.22
As of March 31, 2020, the net result was a loss. Certain restricted stock units and performance shares had an anti-dilutive effect; as a consequence, potential shares linked to those instruments were not taken into account in the diluted weighted average number of shares or in the calculation of diluted earnings (loss) per share.

NOTE ~~5. IMPAIRMENT, RESTRUCTURING AND OTHER EXPENSE~~

~~Impairment, restructuring and other expense was as follows:~~

Three Months Ended Nine Months Ended
September 30, September 30,
(In millions) 2017 2016 2017 2016
Subsea $ 22.8
$ 3.7
$ 35.5
$ 24.0
Onshore/Offshore 28.9
5.2
0.9
69.8
Surface Technologies 7.8
—
12.0
—
Corporate and other (0.1 ) 1.3
8.4
15.9
Total impairment, restructuring and other expense $ 59.4
$ 10.2

$ 56.8
$ 109.7

~~Asset impairments—~~We conduct impairment tests on long-lived assets whenever events or changes in circumstances indicate the carrying value may not be recoverable. The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition over the asset’s remaining useful life. Our review of recoverability of the carrying value of our assets considers several assumptions including the intended use and service potential of the asset.

~~Restructuring and other~~—As a result of the decline in crude oil prices and its effect on the demand for products and services in the oilfield services industry worldwide, we initiated a company-wide reduction in workforce and facility consolidation intended to reduce costs and better align our workforce with current and anticipated activity levels, which resulted in the continued recognition of severance costs relating to termination benefits and other restructuring charges. In the nine months ended September 30, 2016, as part of our restructuring plan, we divested and deconsolidated our wholly owned subsidiaries Technip Germany Holding GmBH and Technip Germany GmBH.

~~NOTE 6.~~8. INVENTORIES

Inventories consisted of the following:



(In millions)	March 31, 2020		December 31, 2019
Raw materials	$	301.4	$	347.5
Work in process	304.9		290.2
Finished goods	741.2		778.3
Inventories, net	$	1,347.5	$	1,416.0

(In millions) September 30,
2017 December 31,
2016
Raw materials $ 250.8
$ 272.9
Work in process 175.1
36.1
Finished goods 587.8
64.6
1,013.7
373.6
Valuation adjustments (83.0 ) (38.9 )
Inventories, net $ 930.7
$ 334.7

NOTE 7.9. OTHER CURRENT ASSETS & OTHER CURRENT LIABILITIES

Other current assets consisted of the following:



(In millions)	March 31, 2020		December 31, 2019
Value-added tax receivables	438.0		395.2
Sundry receivables	112.0		69.6
Prepaid expenses	110.1		66.8
Other taxes receivables	89.7		100.7
Held-to-maturity investments	49.7		49.7
Current financial assets at amortized cost	41.1		42.0
Asset held for sale	11.2		25.8
Other	116.8		113.9
Total other current assets	$	968.6	$	863.7

Other current liabilities consisted of the following:



(In millions)	March 31, 2020		December 31, 2019
Value added tax and other taxes payable	257.7		240.4
Warranty accruals and project contingencies	219.6		310.1
Legal provisions	173.1		183.6
Redeemable financial liability	131.4		129.1
Social security liability	121.5		116.5
Provision	43.1		53.2
Compensation accrual	21.6		89.6
Current portion of accrued pension and other post-retirement benefits	19.8		14.9
Liabilities held for sale	9.3		9.3
Other accrued liabilities	406.4		347.8
Total other current liabilities	$	1,403.5	$	1,494.5

(In millions) September 30,
2017 December 31, 2016
Value added tax receivables $ 484.3
$ 319.4
Other tax receivables 183.6
124.9
Prepaid expenses 132.1
106.4
Other 329.6
248.5
Other current assets $ 1,129.6
$ 799.2

NOTE 10. WARRANTY OBLIGATIONS

A reconciliation of warranty obligations for the three months ended March 31, 2020 and 2019 is as following:



	Three Months Ended
	March 31,
(In millions)	2020			2019
Balance at beginning of period	$	193.5		$	234.4
Warranty expenses	10.6			7.2
Adjustment to existing accruals	(52.4		)	(56.1		)
Claims paid	(3.1		)	(4.0		)
Balance at end of period	$	148.6		$	181.5

NOTE 8.11. EQUITY METHOD INVESTMENTS

Our income ~~(loss)~~ from equity affiliates included in each of our reporting segments was as follows:



	Three Months Ended
	March 31,
(In millions)	2020		2019
Subsea	$	21.1	$	15.1
Technip Energies	7.7		(1.2		)
Income from equity affiliates	$	28.8	$	13.9

Three Months Ended Nine Months Ended
September 30, September 30,
(In millions) 2017 2016 2017 2016
Subsea $ 18.7
$ 37.1
$ 40.4
$ 27.1
Onshore/Offshore (1.4 ) 30.3
(1.0 ) 45.7
Surface Technologies —
—
—
—
Income from equity affiliates $ 17.3
$ 67.4
$ 39.4
$ 72.8

NOTE ~~9. OTHER CURRENT LIABILITIES~~12. RELATED PARTY TRANSACTIONS

Receivables, payables, revenues, and expenses, which are included in our consolidated financial statements for all transactions with related parties, defined as entities related to our directors and main shareholders as well as the partners of our consolidated joint ventures, were as follows.

~~Other current liabilities~~Trade receivables consisted of receivables due from the following related parties:



(In millions)	March 31, 2020		December 31, 2019
TP JGC Coral France SNC	$	45.8	$	40.1
TTSJV W.L.L.	23.0		22.4
Others	12.6		14.3
Total trade receivables	$	81.4	$	76.8

TP JGC Coral France SNC and TTSJV W.L.L. are equity method affiliates.

Trade payables consisted of payables due to the following related parties:



(In millions)	March 31, 2020		December 31, 2019
Chiyoda	$	26.5	$	24.8
JGC Corporation	15.1		15.1
IFP Energies nouvelles	1.2		2.4
Dofcon Navegacao	0.2		2.1
Others	2.7		6.7
Total trade payables	$	45.7	$	51.1

Chiyoda and JGC Corporation are joint venture partners on our Yamal project. A member of our Board of Directors is an executive officer of IFP Energies nouvelles. Dofcon Navegacao is an equity method affiliate.

Additionally, we have a note receivables balance of $40.2 million and $65.2 million at March 31, 2020 and December 31, 2019, respectively. The note receivables balance includes $37.5 million and $62.5 million with Dofcon Brasil AS as of March 31, 2020 and December 31, 2019, respectively. Dofcon Brasil AS is a variable interest entity (“VIE”) and accounted for as an equity method affiliate. These are included in other assets on our consolidated balance sheets.

Revenue consisted of amounts from the following related parties:



	Three Months Ended
	March 31,
(In millions)	2020		2019
TTSJV W.L.L.	$	15.6	$	52.8
TP JGC Coral France SNC	12.6		26.7
Anadarko Petroleum Company	—		44.5
TOP CV	—		1.3
Others	8.7		14.2
Total revenue	$	36.9	$	139.5

A member of our Board of Directors (the “Director”) served on the Board of Directors of Anadarko Petroleum Company (“Anadarko”) until August 2019. In August 2019, Anadarko was acquired by Occidental Petroleum Corporation (“Occidental”). As a result, the Director no longer serves as a member of the Board of Directors of Anadarko. The Director is not an officer or director of Occidental.

TOP CV was previously an equity method affiliate that became a fully consolidated subsidiary on December 30, 2019. Refer to Note 3 for more information related to this transaction.

Expenses consisted of amount to the following related parties:



	Three Months Ended
	March 31,
(In millions)	2020		2019
Dofcon Navegacao	$	8.0	$	—
Chiyoda	3.5		14.2
IFP Energies nouvelles	1.1		1.0
Magma Global Limited	0.7		1.9
Arkema S.A.	0.4		—
JGC Corporation	0.2		14.3
Serimax Holdings SAS	0.2		17.5
Others	6.4		3.8
Total expenses	$	20.5	$	52.7

Magma Global Limited and Serimax Holdings SAS are equity method affiliates. A member of our Board of Directors serves on the Board of Directors for Arkema S.A.

NOTE 13. GOODWILL AND INTANGIBLE ASSETS

During the first quarter of 2020, triggering events were identified which led to performing interim goodwill impairment testing in our reporting units as of March 31, 2020. These events included the COVID-19 pandemic breakout, commodity price declines, and a significant decrease in our market capitalization as well as those of our peers and customers.

The fair value for our reporting units was valued using a market approach. An appropriate control premium was considered for each of the reporting units and applied to the output of the market approach.

The impairment assessment resulted in a conclusion that goodwill in the Subsea and Surface Technologies segments was impaired by $2,747.5 million and $335.9 million, respectively. The impairment assessment also concluded the fair value of the Technip Energies reporting unit was in excess of its carrying amount.

The following table summarizes the movements of the carrying values of the goodwill of our reporting segments for the three months ended March 31, 2020:



(In millions)	Subsea			Technip Energies			Surface			Total
December 31, 2019	2,814.1			2,423.6			$	360.6		5,598.3
Transfers ^(a)	(21.2		)	46.1			(24.9		)	—
Impairments	(2,747.5		)	—			(335.9		)	(3,083.4		)
Translation	(45.4		)	(8.7		)	0.2			(53.9		)
March 31, 2020	$	—		$	2,461.0		$	—		$	2,461.0


(a)	Beginning in the first quarter of 2020, Technip Energies includes our Loading Systems business that was previously reported in the Surface Technologies segment and our process automation business, Cybernetix, that was previously reported in the Subsea segment. Refer to Note 6 for more information.

NOTE 14. DEBT

Long-term debt consisted of the following:



(In millions)	March 31, 2020			December 31, 2019
Revolving credit facility	$	500.0		$	—
Bilateral credit facilities	—			—
Commercial paper	1,374.1			1,967.0
Synthetic bonds due 2021	483.5			492.9
3.45% Senior Notes due 2022	500.0			500.0
5.00% 2010 Private placement notes due 2020	218.9			224.6
3.40% 2012 Private placement notes due 2022	164.3			168.5
3.15% 2013 Private placement notes due 2023	141.9			146.0
3.15% 2013 Private placement notes due 2023	136.9			140.4
4.00% 2012 Private placement notes due 2027	82.2			84.2
4.00% 2012 Private placement notes due 2032	109.5			112.3
3.75% 2013 Private placement notes due 2033	109.5			112.3
Bank borrowings	555.6			513.3
Other	41.7			23.0
Unamortized issuing fees	(7.5		)	(9.1		)
Total debt	4,410.6			4,475.4
Less: current borrowings	586.7			495.4
Long-term debt	$	3,823.9		$	3,980.0

(In millions) September 30,
2017 December 31, 2016
Accruals on completed contracts $ 306.6
$ 271.9
Deferred income on contracts 414.9
407.6
Contingencies related to contracts 439.7
370.1
Other taxes payable 261.7
143.5
Social security liability 110.6
66.3
Redeemable financial liability 77.0
33.7
Other 825.8
532.2
Total other current liabilities $ 2,436.3
$ 1,825.3

~~NOTE 10. DEBT~~

~~Long-term debt consisted of the following:~~

(In millions) September 30,
2017 December 31,
2016
Revolving credit facility $ —
$ —
Bilateral credit facilities —
—
Commercial paper 839.8
210.8
Synthetic bonds due 2021 490.9
428.0
Convertible bonds due 2017 —
524.5
2.00% Senior Notes due 2017 300.0
—
3.45% Senior Notes due 2022 500.0
—
5.00% Notes due 2020 236.3
209.7
3.40% Notes due 2022 177.9
158.0
3.15% Notes due 2023 153.3
136.1
3.15% Notes due 2023 148.1
131.4
4.00% Notes due 2027 88.9
79.0
4.00% Notes due 2032 114.1
101.2
3.75% Notes due 2033 114.8
101.8
Bank borrowings 437.0
452.1
Other 39.5
20.3
Total long-term debt 3,640.6
2,552.9
Less: current portion (473.2 ) (683.6 )
Long-term debt, less current portion $ 3,167.4
$ 1,869.3

Revolving credit facility— - On January 17, 2017, we acceded to a new $2.5 billion senior unsecured revolving credit facility agreement (“facility agreement”) between FMC Technologies, Inc. ~~and~~, Technip Eurocash SNC (the “Borrowers”), and TechnipFMC plc (the “Additional Borrower”) with JPMorgan Chase Bank, National Association (“JPMorgan”), as agent and an arranger, SG Americas Securities LLC as an arranger, and the lenders party thereto.

The facility agreement provides for the establishment of a multicurrency, revolving credit facility, which includes a $1.5 billion letter of credit subfacility. Subject to certain conditions, the Borrowers may request the aggregate commitments under the facility agreement be increased by an additional $500.0 million. ~~The facility expires in~~On November 26, 2018, we entered into an agreement which extends the expiration date to January ~~2022.~~2023.

Borrowings under the facility agreement bear interest at the following rates, plus an applicable margin, depending on currency:

U.S. dollar-denominated loans bear interest, at the Borrowers’ option, at a base rate or an adjusted rate linked to the London interbank offered rate (“Adjusted LIBOR”);

sterling-denominated loans bear interest at Adjusted LIBOR; and

euro-denominated loans bear interest at the Euro interbank offered rate (“EURIBOR”).

Depending on ~~the~~our credit rating, ~~of TechnipFMC,~~ the applicable margin for revolving loans varies (i) in the case of Adjusted LIBOR and EURIBOR loans, from 0.820% to 1.300% and (ii) in the case of base rate loans, from 0.000% to 0.300%. The “base rate” is the highest of (a) the prime rate announced by JPMorgan, (b) the greater of the Federal Funds Rate and the Overnight Bank Funding Rate plus ~~0.5%~~0.50% or (c) one-month Adjusted LIBOR plus ~~1.0%~~1.00%.

The facility agreement contains usual and customary covenants, representations and warranties and events of default for credit facilities of this type, including financial ~~covenants.~~covenants requiring that our total capitalization ratio not exceed 60% at the end of any financial quarter. The facility agreement also contains covenants restricting our ability and our subsidiaries’ ability to incur additional liens and indebtedness, enter into asset sales or make certain investments.

As of March 31, 2020, we were in compliance with all restrictive covenants under our revolving credit facility.

Bilateral credit facilities— - We have access to ~~four~~a €100.0 million bilateral credit ~~facilities in the aggregate of €340.0 million. The bilateral credit facilities consist of:~~

~~two credit facilities of €80.0 million each~~facility expiring in May ~~2019;~~2021.

~~a credit facility of €80.0 million expiring in June 2019; and~~

~~a credit facility of €100.0 million expiring in May 2021.~~

~~Each~~The bilateral credit facility contains usual and customary covenants, representations and warranties and events of default for credit facilities of this type.

Commercial paper— - Under our commercial paper program, we have the ability to access $1.5 billion and €1.0 billion of short-term financing through our commercial paper dealers, subject to the limit of unused capacity of our revolving facility agreement. As we have both the ability and intent to refinance these obligations on a long-term basis, our commercial paper borrowings were classified as long-term debt in the ~~condensed~~ consolidated balance sheets as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016.~~2019. Commercial paper borrowings are issued at market interest rates. As of ~~September 30, 2017,~~March 31, 2020, our commercial paper borrowings had a weighted average interest rate of ~~1.56%~~2.57% on the U.S. dollar denominated borrowings and ~~(0.26)~~(0.27)% on the Euro denominated borrowings.

Synthetic bonds~~—On~~ - As we have both the ability and intent to refinance this obligation on a long-term basis, our synthetic bonds due January ~~25, 2016, we issued €375.0 million principal amount of 0.875% convertible bonds with a maturity date of January 25,~~ 2021 and a redemption at par of the bonds which have not been converted. On March 3, 2016, we issued additional convertible bonds for a principal amount of €75.0 million issued on the same terms, fully fungible with and assimilated to the bonds issued on January 25, 2016. The issuance of these non-dilutive cash-settled convertible bonds (“Synthetic Bonds”), which are linked to our ordinary shares were backed simultaneously by the purchase of cash-settled equity call options in order to hedge our economic exposure to the potential exercise of the conversion rights embeddedclassified as long-term debt in the Synthetic Bonds. As the Synthetic Bonds will only be cash settled, they will not result in the issuance of new ordinary shares or the delivery of existing ordinary shares upon conversion. Interest on the Synthetic Bonds is payable semi-annually in arrears on January 25 and July 25 of each year, beginning July 26, 2016. Net proceeds from the Synthetic Bonds were used for general corporate purposes and to finance the purchase of the call options. The Synthetic Bonds are our unsecured obligations. The Synthetic Bonds will rank equally in right of payment with all of our existing and future unsubordinated debt.

The Synthetic Bonds issued on January 25, 2016 were issued at par. The Synthetic Bonds issued on March 3, 2016 were issued at a premium of 112.43802% resulting from an adjustment over the 3-day trading period following the issuance resulting in a share reference price of €48.8355.

A 40.0% conversion premium was applied to the share reference price of €40.7940. The share reference price was computed using the average of the daily volume weighted average price of our ordinary shares on the Euronext Paris market over the 10 consecutive trading days from January 21 to February 3, 2016. The initial conversion price of the bonds was then fixed at €57.1116.

The Synthetic Bonds each have a nominal value of €100.0 thousand with a conversion ratio of 3,464.6193 and a conversion price of €28.8632. Any bondholder may, at its sole option, request the conversion in cash of all or part of the bonds it owns, beginning November 15, 2020 to the 38th business day before the maturity date.

~~Convertible bonds~~—On December 15, 2011, we issued 5,178,455 bonds convertible (the “2011-2017 Convertible Bonds”) into and/or exchangeable for new or existing shares (“OCEANE”) for approximately €497.6 million with a maturity date of January 1, 2017. Net proceeds from the issuance were used to partially restore our cashconsolidated balance ~~position following the acquisition of Global Industries, Ltd. in December 2011 for a cash consideration of $936.4 million.~~

~~At maturity, all outstanding amounts under the 2011-2017 Convertible Bonds were repaid.~~

~~Senior Notes~~—On February 28, 2017, we commenced offers to exchange any and all outstanding notes issued by FMC Technologies for up to $800.0 million aggregate principal amount of new notes issued by TechnipFMC and cash. In conjunction with the offers to exchange, FMC Technologies solicited consents to adopt certain proposed amendments to each of the indentures governing the previously issued notes to eliminate certain covenants, restrictive provisions and events of defaults from such indentures.

On March 29, 2017, we settled the offers to exchange and consent solicitations (the “Exchange Offers”) for (i) any and all 2.00% senior notes due October 1, 2017 (the “2017 FMC Notes”) issued by FMC Technologies for up to an aggregate principal amount of $300.0 million of new 2.00% senior notes due October 1, 2017 (the “2017 Senior Notes’) issued by TechnipFMC and cash, and (ii) any and all 3.45% senior notes due October 1, 2022 (the “2022 FMC Notes”) issued by FMC Technologies for up to an aggregate principal amount of $500.0 million in new 3.45% senior notes due October 1, 2022 (the “2022 Senior Notes”) issued by TechnipFMC with registration rights and cash. Pursuant to the Exchange Offers, we issued approximately $215.4 million in aggregate principal amount of 2017 Senior Notes and $459.8 million in aggregate principal amount of 2022

Senior Notes (collectively the “Senior Notes”). Interest on the 2017 Senior Notes is payable on October 1, 2017. Interest on the 2022 Senior Notes is payable semi-annually in arrears on April 1 and October 1 of each year, beginning October 1, 2017.

~~The terms of the Senior Notes are governed by the indenture, dated~~sheets as of March ~~29, 2017 between TechnipFMC and U.S.~~ 31, 2020.

Bank National Association, as trustee (the “Trustee”), as amended and supplemented by the First Supplemental Indenture between TechnipFMC and the Trustee (the “First Supplemental Indenture”) relating to the issuance of the 2017 Notes and the Second Supplemental Indenture between TechnipFMC and the Trustee (the “Second Supplemental Indenture”) relating to the issuance of the 2022 Notes.

At any time prior to July 1, 2022, in the case of the 2022 Notes, we may redeem some or all of the Senior Notes at the redemption prices specified in the First Supplemental Indenture and Second Supplemental Indenture, respectively. At any time on or after July 1, 2022, we may redeem the 2022 Notes at the redemption price equal to 100% of the principal amount of the 2022 Notes redeemed. The Senior Notes are our senior unsecured obligations. The Senior Notes will rank equally in right of payment with all of our existing and future unsubordinated debt, and will rank senior in right of payment to all of our future subordinated debt.

~~Private Placement Notes~~—On July 27, 2010, we completed the private placement of €200.0 million aggregate principal amount of 5.0% notes due July 2020 (the “2020 Notes”). Interest on the 2020 Notes is payable annually in arrears on July 27 of each year, beginning July 27, 2011. Net proceeds of the 2020 Notes were used to partially finance the 2004-2011 bond issue, which was repaid at its maturity date on May 26, 2011. The 2020 Notes contain contains usual and customary covenants and events of default for notes of this type. In the event of a change of control resulting in a downgrade in the rating of the notes below BBB-, the 2020 Notes may be redeemed early by any bondholder, at its sole discretion. The 2020 Notes are our unsecured obligations. The 2020 Notes will rank equally in right of payment with all of our existing and future unsubordinated debt.

In June 2012, we completed the private placement of €325.0 million aggregate principal amount of notes. The notes were issued in three tranches with €150.0 million bearing interest at 3.40% and due June 2022 (the “Tranche A 2022 Notes”), €75.0 million bearing interest of 4.0% and due June 2027 (the “Tranche B 2027 Notes”) and €100.0 million bearing interest of 4.0% and due June 2032 (the “Tranche C 2032 Notes” and, collectively with the “Tranche A 2022 Notes and the “Tranche B 2027 Notes”, the “2012 Private Placement Notes”). Interest on the Tranche A 2022 Notes and the Tranche C 2032 Notes is payable annually in arrears on June 14 of each year beginning June 14, 2013. Interest on the Tranche B 2027 Notes is payable annually in arrears on June 15 of each year, beginning June 15, 2013. Net proceeds of the 2012 Private Placement Notes were used for general corporate purposes. The 2012 Private Placement Notes contain usual and customary covenants and events of default for notes of this type. In the event of a change of control resulting in a downgrade in the rating of the notes below BBB-, the 2012 Private Placement Notes may be redeemed early by any bondholder, at its sole discretion. The 2012 Private Placement Notes are our unsecured obligations. The 2012 Private Placement Notes will rank equally in right of payment with all of our existing and future unsubordinated debt.

In October 2013, we completed the private placement of €355.0 million aggregate principal amount of senior notes. The notes were issued in three tranches with €100.0 million bearing interest at 3.75% and due October 2033 (the “Tranche A 2033 Notes”), €130.0 million bearing interest of 3.15% and due October 2023 (the “Tranche B 2023 Notes) and €125.0 million bearing interest of 3.15% and due October 2023 (the “Tranche C 2023 Notes” and, collectively with the “Tranche A 2033 Notes and the “Tranche B 2023 Notes”, the “2013 Private Placement Notes”). Interest on the Tranche A 2033 Notes is payable annually in arrears on October 7 each year, beginning October 7, 2014. Interest on the Tranche B 2023 Notes is payable annually in arrears on October 16 of each year beginning October 16, 2014. Interest on the Tranche C 2023 Notes is payable annually in arrears on October 18 of each year, beginning October 18, 2014. Net proceeds of the 2013 Private Placement Notes were used for general corporate purposes. The 2013 Private Placement Notes contain contains usual and customary covenants and events of default for notes of this type. In the event of a change of control resulting in a downgrade in the rating of the notes below BBB-, the 2013 Private Placement Notes may be redeemed early by any bondholder, at its sole discretion. The 2013 Private Placement Notes are our unsecured obligations. The 2013 Private Placement Notes will rank equally in right of payment with all of our existing and future unsubordinated debt.

~~Term loan~~—borrowings - In December 2016, we entered into a £160.0 million term loan agreement to finance the Deep Explorer, a diving support vessel (“DSV”), maturing December 2028. Under the loan agreement, interest accrues at an annual rate of 2.813%. This loan agreement contains usual and customary covenants and events of default for loans of this type.

On December 30, 2019, we completed the acquisition of the remaining 50% interest in TOP CV. In connection with the acquisition, we assumed liabilities that included a $203.1 million term loan of which $16.0 million is due June 30, 2020 with the remaining balance due September 30, 2020. Immediately following the acquisition, we paid $13.1 million towards the outstanding balance. The debt is fully collateralized against our two vessels, Coral do Atlantico and Deep Star.

In January 2019, we executed a sale-leaseback transaction to finance the purchase of a deepwater DSV, Deep Discoverer (the “Vessel”) for the full transaction price of $116.8 million. The sale-leaseback agreement (“Charter”) was entered into with a French joint-stock company owned by Credit Industrial et Commercial (“CIC”) which was formed for the sole purpose to purchase and act as the lessor of the Vessel. It is a VIE, which is fully consolidated in our condensed consolidated financial statements. The transaction was funded through debt of $96.2 million which is primarily long-term, expiring on January 8, 2031.

Foreign committed credit—- We have committed credit lines at many of our international subsidiaries for immaterial amounts. We utilize these facilities for asset financing and to provide a more efficient daily source of liquidity. The effective interest rates depend upon the local national market.

NOTE ~~11. OTHER LIABILITIES~~15. STOCKHOLDERS’ EQUITY

~~During~~There were no cash dividends paid during the three months ended ~~December~~March 31, ~~2016,~~2020 and 2019. Dividends declared on February 25, 2020 were subsequently paid on April 8, 2020. Dividends declared on February 19, 2019 were subsequently paid on April 3, 2019.

As an English public limited company, we ~~obtained voting control interests~~are required under U.K. law to have available “distributable reserves” to conduct share repurchases or pay dividends to shareholders. Distributable reserves are a statutory requirement and are not linked to a GAAP reported amount (e.g., retained earnings). The declaration and payment of dividends require the authorization of our Board of Directors, provided that such dividends on issued share capital may be paid only out of our “distributable reserves” on our statutory balance sheet. Therefore, we are not permitted to pay dividends out of share capital, which includes share premium. On November 27, 2019, we redeemed 50,000 redeemable shares of £1 each and cancelled one deferred ordinary share of £1 in ~~legal onshore/offshore contract entities which own and account for~~ the ~~design, engineering and construction~~capital of the ~~Yamal LNG plant. Prior to~~Company.

In April 2017, the ~~amendments~~Board of Directors authorized the repurchase of $500.0 million in ordinary shares under our share repurchase program. We implemented our share repurchase plan in September 2017. The Board of Directors authorized an extension of this program, adding $300.0 million in December 2018 for a total of $800.0 million in ordinary shares. There were no ordinary shares repurchased during the three months ended March 31, 2020 under our authorized share repurchase program. The $500.0 million part of the ~~contractual terms that provided us with voting interest control, we~~program was completed on December 20, 2018. We intend to cancel repurchased shares and not hold them in treasury. Canceled treasury shares are accounted for ~~these entities~~using the constructive retirement method.

Accumulated other comprehensive income (loss) consisted of the following:



(In millions)	Foreign Currency Translation			Hedging			Defined Pension and Other Post-Retirement Benefits			Accumulated Other Comprehensive Loss attributable to TechnipFMC plc			Accumulated Other Comprehensive Loss attributable to non-controlling interest
December 31, 2019	$	(1,230.1	)	$	(5.8	)	$	(171.6	)	$	(1,407.5	)	$	(4.7	)
Other comprehensive income (loss) before reclassifications, net of tax	(206.8		)	(89.3		)	(0.7		)	(296.8		)	(11.1		)
Reclassification adjustment for net losses (gains) included in net income (loss), net of tax	—			0.1			2.5			2.6			—
Other comprehensive income (loss), net of tax	(206.8		)	(89.2		)	1.8			(294.2		)	(11.1		)
March 31, 2020	$	(1,436.9	)	$	(95.0	)	$	(169.8	)	$	(1,701.7	)	$	(15.8	)

Reclassifications out of accumulated other comprehensive income (loss) consisted of the following:



	Three Months Ended
	March 31,
(In millions)	2020			2019
Details about Accumulated Other Comprehensive Income (loss) Components	Amount Reclassified out of Accumulated Other Comprehensive Loss						Affected Line Item in the Condensed Consolidated Statements of Income
Gains (losses) on hedging instruments
Foreign exchange contracts	$	(11.1	)	$	0.7		Revenue
	9.8			2.6			Cost of sales
	—			0.1			Selling, general and administrative expense
	1.0			(2.4		)	Other income (expense), net
	(0.3		)	1.0			Income (loss) before income taxes
	(0.2		)	0.7			Provision for income taxes (Note 19)
	$	(0.1	)	$	0.3		Net income (loss)
Pension and other post-retirement benefits
Amortization of prior service credit (cost)	(0.3		)	(0.4		)	(a)
Amortization of net actuarial loss	(2.8		)	—			(a)
	(3.1		)	(0.4		)	Income (loss) before income taxes
	(0.6		)	(0.1		)	Provision for income taxes (Note 19)
	$	(2.5	)	$	(0.3	)	Net income (loss)


(a)	These accumulated other comprehensive income components are included in the computation of net periodic pension cost.

NOTE 16. SHARE-BASED COMPENSATION

Under the Amended and Restated TechnipFMC plc Incentive Award Plan (the “Plan”), we may grant certain incentives and awards to our officers, employees, non-employee directors, and consultants of the Company and its subsidiaries. Awards may include share options, share appreciation rights, performance stock units, restricted stock units, restricted shares or other awards authorized under the ~~equity method of accounting based on our previously held interests in each of these entities. Since nearly all substantive processes to perform and execute~~Plan. Under the ~~obligations of the underlying contract are conducted by TechnipFMC~~Plan, 24.1 million ordinary shares were authorized for awards.

We recognize compensation expense and the ~~noncontrolling interest holders, we accounted~~corresponding tax benefits for ~~these entities as an asset acquisition upon our obtaining control~~awards under the Plan. Share-based compensation expense for non-vested share options and ~~recognized a net gain of $7.7 million during 2016. As of December 31, 2016, total assets, liabilities~~time-based and equity related to these entities were consolidated onto our balance sheet and our results of operations for the three and nine months ended September 30, 2017 reflect the consolidated results of operations related to these entities.

~~In addition to the recognition of an intangible asset related to the acquired asset in the underlying entities, a mandatorily redeemable financial liability of $174.8 million~~performance-based restricted stock units was recognized as of December 31, 2016 to account for the fair value of the non-controlling interests, for which $33.7 million was recorded as other current liabilities. During the three and nine month periods ended September 30, 2017 we revalued the liability to reflect current expectations about the obligation. We recognized a loss of $73.3$21.6 million and ~~$202.9~~$20.4 million for the three months ended March 31, 2020 and ~~the nine months ended September 30, 2017,~~2019, respectively. Changes in the fair value of the financial liability are recorded as interest expense on the condensed consolidated statements of income. Refer to Note 9 for further information regarding our other current liabilities. Refer to Note 18 for further information regarding the fair value measurement assumptions of the mandatorily redeemable financial liability and related changes in its fair value.

~~NOTE 12. COMMITMENTS AND CONTINGENT LIABILITIES~~

~~Contingent liabilities associated with guarantees—~~In the ordinary course of business, we enter into standby letters of credit, performance bonds, surety bonds and other guarantees with financial institutions for the benefit of our customers, vendors and other parties. The majority of these financial instruments expire within five years. Management does not expect any of these financial instruments to result in losses that, if incurred, would have a material adverse effect on our consolidated financial position, results of operations or cash flows.

~~Guarantees consisted of the following:~~

(In millions) September 30, 2017
Financial guarantees ⁽¹⁾
$ 839.6
Performance guarantees ⁽²⁾
3,733.8
Maximum potential undiscounted payments $ 4,573.4

~~_______________________~~


⁽¹⁾	Financial guarantees represent contracts that contingently require a guarantor to make payments to a guaranteed party based on changes in an underlying agreement that is related to an asset, a liability, or an equity security of the guaranteed party. These tend to be drawn down only if there is a failure to fulfill our financial obligations.


⁽²⁾	Performance guarantees represent contracts that contingently require a guarantor to make payments to a guaranteed party based on another entity's failure to perform under a nonfinancial obligating agreement. Events that trigger payment are performance related, such as failure to ship a product or provide a service.

~~Contingent liabilities associated with legal matters—~~We are involved in various pending or potential legal actions or disputes in the ordinary course of our business. Management is unable to predict the ultimate outcome of these actions because of their inherent uncertainty. However, management believes that the most probable, ultimate resolution of these matters will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

NOTE ~~13. STOCKHOLDERS’ EQUITY~~17. IMPAIRMENT, RESTRUCTURING AND OTHER EXPENSES

~~There~~Impairment, restructuring and other expenses were ~~no cash dividends declared during~~as follows:



	Three Months Ended
	March 31,
(In millions)	2020		2019
Subsea	$	2,773.6	$	2.3
Technip Energies	6.8		3.8
Surface Technologies	424.4		1.5
Corporate and other	3.6		8.9
Total impairment, restructuring and other expenses	$	3,208.4	$	16.5

During the ~~nine~~first quarter of 2020, triggering events were identified which led to impairments of certain long-lived assets, including goodwill.

During the three months ended ~~September 30, 2017~~March 31, 2020, impairment charges of $3,188.0 million were recorded. These charges included goodwill impairment charges of $2,747.5 million and ~~2016.~~$335.9 million in our Subsea and Surface Technologies segments, respectively. Refer to Note 13 for more information on the methods used in goodwill impairment testing.

~~Dividends paid during~~For other long-lived assets, a conclusion was made that the ~~nine~~market uncertainty was a triggering event for certain asset groups that serve short-cycle businesses in our Subsea and Surface Technologies segments. When assessing these asset groups for recoverability, this required the use of unobservable inputs that require significant judgment. Such judgments include expected future asset utilization while taking into account reduced future capital spending by certain customers in response to market conditions. As a result of this assessment, impairment charges of $29.0 million for Subsea, consisting mostly of installation and service equipment, and $75.6 million for Surface Technologies, consisting of North America-based fracturing and wellhead assets were recorded.

During the three months ended ~~September 30, 2016 for dividends declared~~March 31, 2020 restructuring and other expenses of $20.4 million primarily consisted of severance and other employee related costs and COVID-19 related expenses across all segments.

Prolonged uncertainty in energy markets could lead to further future reductions in capital spending from our customer base. In turn, this may lead to changes in our strategy. Such conditions may result in further restructuring and/or impairment charges in future periods.

NOTE 18. COMMITMENTS AND CONTINGENT LIABILITIES

Contingent liabilities associated with guarantees - In the ordinary course of business, we enter into standby letters of credit, performance bonds, surety bonds, and other guarantees with financial institutions for the ~~year ended December 31, 2015 were €236.6 million. The dividends were paid partially in cash and shares. Dividends paid in cash and shares were €100.8 million and €135.8 million, respectively.~~

As an English public limited company, we are required under U.K. law to have available “distributable reserves” to conduct share repurchases or pay dividends to shareholders. Distributable reserves are a statutory requirement and are not linked to a U.S. GAAP reported amount (e.g. retained earnings). As of September 30, 2017 we had distributable reserves in excess of $10.1 billion.

~~The following is a summary~~benefit of our ~~capital stock activity for the nine months ended September 30, 2017~~customers, vendors, and ~~2016:~~other parties. The majority of these financial instruments expire within five years. Management does not expect any of these financial instruments to result in losses that, if incurred, would have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

(Number of shares in millions) Ordinary Shares Issued
Ordinary Shares
Held in
Employee
Benefit Trust
Treasury Stock
Balance as of December 31, 2015 119.0
—
0.8
Stock awards 0.1
—
(0.3 )
Treasury stock purchases —
—
2.6
Dividends paid 3.2
—
—
Balance as of September 30, 2016 122.3
—
3.1

Balance as of December 31, 2016 119.2
—
0.3
Net capital increases due to the merger of FMC Technologies and Technip 347.4
—
—
Stock awards 0.6
—
—
Treasury stock cancellation due to the merger of FMC Technologies and Technip —
—
(0.3 )
Treasury stock purchases —
—
0.1
Treasury stock cancellations (0.1 ) —
(0.1 )
Net stock purchased for (sold from) employee benefit trust —
0.1
—
Balance as of September 30, 2017 467.1
0.1
—

In April 2017, the Board of Directors authorized the repurchase of $500.0 million in ordinary shares under our share repurchase program. We implemented our share repurchase plan in September 2017. We repurchased $3.6 million of ordinary shares during the nine months ended September 30, 2017 under our authorized share repurchase program. Based upon the remaining share authorization amount and the closing stock price as of September 30, 2017, approximately 18.4 million ordinary shares could be subject to repurchase. We intend to cancel repurchased shares and not hold them in treasury. Canceled treasury shares are accounted for using the constructive retirement method.

~~Accumulated other comprehensive loss~~Guarantees consisted of the following:

(In millions)
Foreign Currency
Translation
Available-For-Sale Securities Hedging Instruments Defined Pension and Other Post-retirement Benefits
Accumulated Other
Comprehensive Loss
Accumulated other comprehensive loss as of December 31, 2016 $ (849.8 ) $ —
$ (126.9 ) $ (80.7 ) $ (1,057.4 )
Other comprehensive income (loss) before reclassifications, net of tax (34.7 ) —
74.9
(4.0 ) 36.2
Reclassification adjustment for net losses (gains) included in net income, net of tax —
—
74.3
1.8
76.1
Other comprehensive income (loss), net of tax (34.7 ) —
149.2
(2.2 ) 112.3
Accumulated other comprehensive income (loss) (884.5 ) —
22.3
(82.9 ) (945.1 )
Accumulated other comprehensive income attributable to noncontrolling interest (0.7 ) —
—
—
(0.7 )
Accumulated other comprehensive income (loss) attributable to TechnipFMC as of September 30, 2017 $ (885.2 ) $ —
$ 22.3
$ (82.9 ) $ (945.8 )



(In millions)	March 31, 2020		December 31, 2019
Financial guarantees ^(a)	$	930.0	$	945.5
Performance guarantees ^(b)	4,969.2		4,916.0
Maximum potential undiscounted payments	$	5,899.2	$	5,861.5

~~Reclassifications out of accumulated other comprehensive loss consisted of the following:~~

Three Months Ended Nine Months Ended
(In millions) September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Details about Accumulated Other Comprehensive Loss Components
Amount Reclassified out of Accumulated Other
Comprehensive Loss
Affected Line Item in the Condensed Consolidated Statements of Income
Gains (losses) on available-for-sale securities $ —
$ —
$ —
$ —
Other expense, net

Gains (losses) on hedging instruments
Foreign exchange contracts: $ (6.3 ) $ —
$ (31.6 ) $ —
Revenue
0.2
—
1.7
—
Cost of sales
0.5
—
0.7
—
Selling, general and administrative expense
—
—
(0.1 ) —
Research and development expense
(20.4 ) (18.1 ) (70.6 ) (107.9 ) Other (expense), net
(26.0 ) (18.1 ) (99.9 ) (107.9 ) Income before income taxes
(6.3 ) (4.3 ) (25.6 ) (31.5 ) Provision (benefit) for income taxes
$ (19.7 ) $ (13.8 ) $ (74.3 ) $ (76.4 ) Net income
Defined pension and other post-retirement benefits
Amortization of actuarial gain (loss) $ (0.7 ) $ (0.2 ) $ (1.9 ) $ (0.7 )
^(a)
Amortization of prior service credit (cost) (0.3 ) (0.2 ) (0.6 ) (0.6 )
^(a)
(1.0 ) (0.4 ) (2.5 ) (1.3 ) Income before income taxes
(0.3 ) (0.1 ) (0.7 ) (0.4 ) Provision (benefit) for income taxes
$ (0.7 ) $ (0.3 ) $ (1.8 ) $ (0.9 ) Net income

~~_______________________~~



(a)	Financial guarantees represent contracts that contingently require a guarantor to make payments to a guaranteed party based on changes in an underlying agreement that is related to an asset, a liability or an equity security of the guaranteed party. These ~~accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 15 for additional details).~~tend to be drawn down only if there is a failure to fulfill our financial obligations.


(b)	Performance guarantees represent contracts that contingently require a guarantor to make payments to a guaranteed party based on another entity's failure to perform under a nonfinancial obligating agreement. Events that trigger payment are performance-related, such as failure to ship a product or provide a service.

Management believes the ultimate resolution of our known contingencies will not materially adverse affect our consolidated financial position, results of operations, or cash flows.

Contingent liabilities associated with legal and tax matters - We are involved in various pending or potential legal and tax actions or disputes in the ordinary course of our business. These actions and disputes can involve our agents, suppliers, clients, and venture partners and can include claims related to payment of fees, service quality, and ownership arrangements including certain put or call options. Management is unable to predict the ultimate outcome of these actions because of their inherent uncertainty. However, management believes that the most probable, ultimate resolution of these matters will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

On March 28, 2016, FMC Technologies received an inquiry from the U.S. Department of Justice (“DOJ”) related to the DOJ's investigation of whether certain services Unaoil S.A.M. provided to its clients, including FMC Technologies, violated the U.S. Foreign Corrupt Practices Act (“FCPA”). On March 29, 2016, Technip S.A. also received an inquiry from the DOJ related to Unaoil. We cooperated with the DOJ's investigations and, with regard to FMC Technologies, a related investigation by the U.S. Securities and Exchange Commission (“SEC”).

In late 2016, Technip S.A. was contacted by the DOJ regarding its investigation of offshore platform projects awarded between 2003 and 2007, performed in Brazil by a joint venture company in which Technip S.A. was a minority participant, and we have also raised with DOJ certain other projects performed by Technip S.A. subsidiaries in Brazil between 2002 and 2013. The DOJ has also inquired about projects in Ghana and Equatorial Guinea that were awarded to Technip S.A. subsidiaries in 2008 and 2009, respectively. We cooperated with the DOJ in its investigation into potential violations of the FCPA in connection with these projects. We contacted and cooperated with the Brazilian authorities (Federal Prosecution Service (“MPF”), the Comptroller General of Brazil (“CGU”) and the Attorney General of Brazil (“AGU”)) with their investigation concerning the projects in Brazil and have also contacted and are cooperating with French authorities (the Parquet National Financier (“PNF”)) with their investigation about these existing matters.

On June 25, 2019, we announced a global resolution to pay a total of $301.3 million to the DOJ, the SEC, the MPF, and the CGU/AGU to resolve these anti-corruption investigations. We will not be required to have a monitor and will, instead, provide reports on our anti-corruption program to the Brazilian and U.S. authorities for two and three years, respectively.

As part of this resolution, we entered into a three-year Deferred Prosecution Agreement (“DPA”) with the DOJ related to charges of conspiracy to violate the FCPA related to conduct in Brazil and with Unaoil. In addition, Technip USA, Inc., a U.S. subsidiary, pled guilty to one count of conspiracy to violate the FCPA related to conduct in Brazil. We will also provide the DOJ reports on our anti-corruption program during the term of the DPA.

In Brazil, our subsidiaries Technip Brasil - Engenharia, Instalações E Apoio Marítimo Ltda. and Flexibrás Tubos Flexíveis Ltda. entered into leniency agreements with both the MPF and the CGU/AGU. We have committed, as part of those agreements, to make certain enhancements to their compliance programs in Brazil during a two-year self-reporting period, which aligns with our commitment to cooperation and transparency with the compliance community in Brazil and globally.

In September 2019, the SEC approved our previously disclosed agreement in principle with the SEC Staff and issued an Administrative Order, pursuant to which we paid the SEC $5.1 million, which was included in the global resolution of $301.3 million.

To date, the investigation by PNF related to historical projects in Equatorial Guinea and Ghana has not reached resolution. We remain committed to finding a resolution with the PNF and will maintain a $70.0 million provision related to this investigation. As we continue to progress our discussions with PNF towards resolution, the amount of a settlement could exceed this provision.

There is no certainty that a settlement with PNF will be reached or that the settlement will not exceed current accruals. The PNF has a broad range of potential sanctions under anticorruption laws and regulations that it may seek to impose in appropriate circumstances including, but not limited to, fines, penalties, and modifications to business practices and compliance programs. Any of these measures, if applicable to us, as well as potential customer reaction to such measures, could have a material adverse impact on our business, results of operations, and financial condition. If we cannot reach a resolution with the PNF, we could be subject to criminal proceedings in France, the outcome of which cannot be predicted.

Contingent liabilities associated with liquidated damages - Some of our contracts contain provisions that require us to pay liquidated damages if we are responsible for the failure to meet specified contractual milestone dates and the applicable customer asserts a conforming claim under these provisions. These contracts define the conditions under which our customers may make claims against us for liquidated damages. Based upon the evaluation of our performance and other commercial and legal analysis, management believes we have appropriately recognized probable liquidated damages at March 31, 2020 and December 31, 2019, and that the ultimate resolution of such matters will not materially affect our consolidated financial position, results of operations, or cash flows.

NOTE ~~14.~~19. INCOME TAXES

As a result of the Merger described in Note 2, TechnipFMC plc is a public limited company incorporated under the laws of England and Wales. Therefore, our earnings are subject to the United Kingdom statutory rate of 19.3% beginning on the effective date of the Merger. Previously these earnings were subject to the French statutory rate of 34.4%. Our ~~consolidated effective~~provision for income ~~tax rate information has been presented accordingly. The Merger transaction was generally a non-taxable event for the significant jurisdictions in which we operate.~~

~~Our income tax provision (benefit)~~taxes for the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019 reflected effective tax rates of ~~48.6%~~(1.2)% and ~~25.4%, respectively. Our income tax provision (benefit) for the nine months ended September 30, 2017 and 2016, reflected effective tax rates of 48.8% and 22.6%~~42.2%, respectively. The year-over-year ~~increases~~decrease in the effective tax rate ~~were~~was primarily due to ~~an unfavorable~~the impact of nondeductible goodwill impairments and a favorable change in ~~the forecasted~~actual country mix of earnings. Our effective tax rate can fluctuate depending on our country mix of earnings, ~~and increases in~~since our ~~valuation allowances due~~foreign earnings are generally subject to ~~additional losses generated for which no~~higher tax ~~benefit is expected to be realized. In addition, individual tax items, combined with lower profitability~~rates than in the ~~current period, had a greater impact on the effective rate in the three and nine months ended September 30, 2017 as compared to the same periods in 2016.~~

~~The effective income tax rate was different from the statutory income tax rate due to the following:~~

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 2017 2016
Statutory income tax rate 19.3 % 34.4 % 19.3 % 34.4 %
Net difference resulting from:
Foreign earnings subject to different tax rates 10.8 % (14.2 )% 9.4 % (17.9 )%
Branch profits tax 0.5 % — % (1.4 )% — %
Deemed dividends 0.4 % — % 1.4 % — %
State, local and provincial tax 2.6 % 2.0 % 5.1 % 3.3 %
Valuation allowance 12.9 % 5.2 % 13.9 % 7.0 %
Other 2.1 % (2.0 )% 1.1 % (4.2 )%
Effective tax rate 48.6 % 25.4 % 48.8 % 22.6 %
United Kingdom.

~~NOTE 15. PENSION AND OTHER POST-RETIREMENT BENEFITS~~

~~The components of net periodic benefit cost were as follows:~~

Pension Benefits
Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(In millions) U.S. Int’l U.S. Int’l U.S. Int’l U.S. Int’l
Service cost $ 2.7
$ 5.9
$ —
$ 2.9
$ 7.6
$ 15.8
$ —
$ 8.8
Interest cost 7.0
5.5
—
2.7
19.7
15.0
—
8.2
Expected return on plan assets (12.7 ) (9.7 ) —
(2.1 ) (35.9 ) (26.7 ) —
(6.3 )
Amortization of prior service cost (credit) —
0.3
—
0.2
—
0.6
—
0.6
Amortization of actuarial loss (gain), net —
0.7
—
0.2
—
1.9
—
0.7
Curtailment cost —
—
—
—
—
—
—
0.1
Net periodic benefit cost $ (3.0 ) $ 2.7
$ —
$ 3.9
$ (8.6 ) $ 6.6
$ —
$ 12.1

Other Post-retirement Benefits
Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 2017 2016
Interest cost $ 0.1
$ —
$ 0.2
$ —
Net periodic benefit cost $ 0.1
$ —
$ 0.2
$ —

~~During the nine months ended September 30, 2017, we contributed $2.5 million to our U.S. pension benefit plans and $24.9 million to our international pension benefit plans.~~

~~NOTE 16. STOCK-BASED COMPENSATION~~

On January 11, 2017, we adopted the TechnipFMC plc Incentive Award Plan (the “Plan”). The Plan provides certain incentives and awards to officers, employees, non-employee directors and consultants of TechnipFMC and its subsidiaries. The Plan allows our Board of Directors to make various types of awards to non-employee directors and the Compensation Committee (the “Committee”) of the Board of Directors to make various types of awards to other eligible individuals. Awards may include stock options, stock appreciation rights, performance units, restricted stock units, restricted stock or other awards authorized under the Plan. All awards are subject to the Plan’s provisions, including all stock-based grants previously issued by FMC Technologies and Technip prior to consummation of the Merger. Under the Plan, 24.1 million ordinary shares were authorized for awards.

We recognize compensation expense and the corresponding tax benefits for awards under the Plan. Stock-based compensation expense for nonvested stock units was $10.2 million and $5.5 million for the three months ended September 30, 2017 and 2016, respectively, and $34.9 million and $14.9 million for the nine months ended September 30, 2017 and 2016, respectively.

~~NOTE 17. DERIVATIVE FINANCIAL INSTRUMENTS~~

For purposes of mitigating the effect of changes in exchange rates, we hold derivative financial instruments to hedge the risks of certain identifiable and anticipated transactions and recorded assets and liabilities in our consolidated balance sheets. The types of risks hedged are those relating to the variability of future earnings and cash flows caused by movements in foreign currency exchange rates. Our policy is to hold derivatives only for the purpose of hedging risks associated with anticipated foreign currency purchases and sales created in the normal course of business and not for trading purposes where the objective is solely to generate profit.

Generally, we enter into hedging relationships such that changes in the fair values or cash flows of the transactions being hedged are expected to be offset by corresponding changes in the fair value of the derivatives. For derivative instruments that qualify as a cash flow hedge, the effective portion of the gain or loss of the derivative, which does not include the time value component of a forward currency rate, is reported as a component of other comprehensive income (“OCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. For derivative instruments not designated as hedging instruments, any change in the fair value of those instruments are reflected in earnings in the period such change occurs.

~~We hold the following types of derivative instruments:~~

~~Foreign exchange rate forward contracts~~—The purpose of these instruments is to hedge the risk of changes in future cash flows of anticipated purchase or sale commitments denominated in foreign currencies and recorded assets and liabilities in our consolidated balance sheets. At September 30, 2017, we held the following material net positions:

Net Notional Amount
Bought (Sold)
(In millions) USD Equivalent
Australian dollar 293.9
233.6
Brazilian real 755.6
238.6
British pound 233.9
315.7
Canadian dollar (188.4 ) (151.2 )
Euro 641.7
761.2
Japanese yen (1,507.6 ) (13.4 )
Malaysian ringgit 259.5
61.8
Norwegian krone (1,567.2 ) (196.9 )
Singapore dollar 65.0
48.0
U.S. dollar (1,259.1 ) (1,259.1 )

~~Foreign exchange rate instruments embedded in purchase and sale contracts—The purpose of these instruments is to match offsetting currency payments and receipts for particular projects, or comply with government restrictions on the currency used~~

~~to purchase goods in certain countries. At September 30, 2017, our portfolio of these instruments included the following material net positions:~~

Net Notional Amount
Bought (Sold)
(In millions) USD Equivalent
Norwegian krone (339.5 ) (42.7 )
U.S. dollar 49.2
49.2

Fair value amounts for all outstanding derivative instruments have been determined using available market information and commonly accepted valuation methodologies. Refer to Note 18 to these consolidated financial statements for further disclosures related to the fair value measurement process. Accordingly, the estimates presented may not be indicative of the amounts that we would realize in a current market exchange and may not be indicative of the gains or losses we may ultimately incur when these contracts are settled.

~~The following table presents the location and fair value amounts of derivative instruments reported in the consolidated balance sheets.~~

September 30, 2017 December 31, 2016
(In millions) Assets Liabilities Assets Liabilities
Derivatives designated as hedging instruments:
Foreign exchange contracts:
Current – Derivative financial instruments $ 109.7
$ 83.9
$ 47.2
$ 183.0
Long-term – Derivative financial instruments 33.5
4.8
10.7
47.6
Total derivatives designated as hedging instruments 143.2
88.7
57.9
230.6
Derivatives not designated as hedging instruments:
Foreign exchange contracts:
Current – Derivative financial instruments 16.2
22.4
—
—
Long-term – Derivative financial instruments 3.3
7.6
—
—
Total derivatives not designated as hedging instruments 19.5
30.0
—
—
Long-term – Derivative financial instruments
– Synthetic Bonds – Call Option Premium
47.3
—
180.1
—
Long-term – Derivative financial instruments
– Synthetic Bonds – Embedded Derivatives
—
47.3
—
180.1
Total derivatives $ 210.0
$ 166.0
$ 238.0
$ 410.7

We recognized a gain of $10.8 million and a loss of $2.3 million for the three months ended September 30, 2017 and 2016, respectively, and a gain of $26.9 million and a loss of $2.1 million for the nine months ended September 30, 2017 and 2016, respectively, due to hedge ineffectiveness as it was probable that the original forecasted transaction would not occur. Cash flow derivative hedges of forecasted transactions, net of tax, which qualify for hedge accounting, resulted in an accumulated other comprehensive gain of $22.3 million and a loss of $126.9 million at September 30, 2017, and December 31, 2016, respectively. We expect to transfer an approximate $25.7 million gain from accumulated OCI to earnings during the next 12 months when the anticipated transactions actually occur. All anticipated transactions currently being hedged are expected to occur by the second half of 2020.

~~The following table presents the location of gains (losses) on the consolidated statements of income related to derivative instruments designated as fair value hedges.~~

Location of Fair Value Hedge Gain (Loss) Recognized in Income
Gain (Loss) Recognized in
Income
Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 2017 2016
Other income (expense), net $ 12.2
$ 25.5
$ 61.9
$ 37.0

The following tables present the location of gains (losses) on the consolidated statements of other comprehensive income and/or the consolidated statements of income related to derivative instruments designated as cash flow hedges.

Gain (Loss) Recognized in
OCI (Effective Portion)
Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 2017 2016
Foreign exchange contracts $ 38.3
$ (51.2 ) $ 98.7
$ (14.8 )

Location of Cash Flow Hedge Gain (Loss) Reclassified from
Accumulated OCI into Income
Gain (Loss) Reclassified from Accumulated
OCI into Income (Effective Portion)
Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 2017 2016
Foreign exchange contracts:
Revenue $ (6.3 ) $ —
$ (31.6 ) $ —
Cost of sales 0.2
—
1.7
—
Selling, general and administrative expense 0.5
—
0.7
—
Research and development expense —
—
(0.1 ) —
Other income (expense), net (20.4 ) (18.1 ) (70.6 ) (107.9 )
Total $ (26.0 ) $ (18.1 ) $ (99.9 ) $ (107.9 )

Location of Cash Flow Hedge Gain (Loss) Recognized in Income Gain (Loss) Recognized in Income (Ineffective Portion
and Amount Excluded from Effectiveness Testing)
Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 2017 2016
Foreign exchange contracts:
Revenue $ 3.7
$ —
$ 7.9
$ —
Cost of sales (2.8 ) —
(7.3 ) —
Other income (expense), net 10.6
1.7
24.6
(2.9 )
Total $ 11.5
$ 1.7
$ 25.2
$ (2.9 )

~~The following table presents the location of gains (losses) on the consolidated statements of income related to derivative instruments not designated as hedging instruments.~~

Location of Gain (Loss) Recognized in Income
Gain (Loss) Recognized in Income on Derivatives
(Instruments Not Designated as Hedging Instruments)
Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 2017 2016
Foreign exchange contracts:
Revenue $ 0.7
$ —
$ 0.7
$ —
Cost of sales 0.1
—
(0.4 ) —
Other income (expense), net (5.6 ) 1.1
26.6
(1.4 )
Total $ (4.8 ) $ 1.1
$ 26.9
$ (1.4 )

~~Balance Sheet Offsetting~~—We execute derivative contracts only with counterparties that consent to a master netting agreement, which permits net settlement of the gross derivative assets against gross derivative liabilities. Each instrument is accounted for individually and assets and liabilities are not offset. As of September 30, 2017 and December 31, 2016, we had no collateralized derivative contracts. The following tables present both gross information and net information of recognized derivative instruments:

September 30, 2017 December 31, 2016
(In millions) Gross Amount Recognized Gross Amounts Not Offset Permitted Under Master Netting Agreements Net Amount Gross Amount Recognized Gross Amounts Not Offset Permitted Under Master Netting Agreements Net Amount
Derivative assets $ 210.0
$ (33.3 ) $ 176.7
$ 238.0
$ (57.9 ) $ 180.1

September 30, 2017 December 31, 2016
(In millions) Gross Amount Recognized Gross Amounts Not Offset Permitted Under Master Netting Agreements Net Amount Gross Amount Recognized Gross Amounts Not Offset Permitted Under Master Netting Agreements Net Amount
Derivative liabilities $ 166.0
$ (33.3 ) $ 132.7
$ 410.7
$ (57.9 ) $ 352.8

NOTE ~~18.~~20. DERIVATIVE FINANCIAL INSTRUMENTS

For purposes of mitigating the effect of changes in exchange rates, we hold derivative financial instruments to hedge the risks of certain identifiable and anticipated transactions and recorded assets and liabilities in our consolidated balance sheets. The types of risks hedged are those relating to the variability of future earnings and cash flows caused by movements in foreign currency exchange rates. Our policy is to hold derivatives only for the purpose of hedging risks associated with anticipated foreign currency purchases and sales created in the normal course of business, and not for trading purposes where the objective is solely to generate profit.

We hold the following types of derivative instruments:

Foreign exchange rate forward contracts - The purpose of these instruments is to hedge the risk of changes in future cash flows of anticipated purchase or sale commitments denominated in foreign currencies and recorded assets and liabilities in our consolidated balance sheets. At March 31, 2020, we held the following material net positions:



	Net Notional Amount Bought (Sold)
(In millions)			USD Equivalent
Euro	618.1		677.0
Brazilian real	1,396.2		268.6
Norwegian krone	2,572.8		245.1
British pound	120.2		148.4
Singapore dollar	153.1		107.4
Malaysian ringgit	323.8		75.0
Japanese yen	2,158.2		19.9
Hong Kong dollar	(94.5	)	(12.2	)
Mexican peso	(310.0	)	(12.9	)
Canadian dollar	(87.2	)	(61.2	)
U.S. dollar	(1,820.5	)	(1,820.5	)

Foreign exchange rate instruments embedded in purchase and sale contracts - The purpose of these instruments is to match offsetting currency payments and receipts for particular projects or comply with government restrictions on the currency used to purchase goods in certain countries. At March 31, 2020, our portfolio of these instruments included the following material net positions:



	Net Notional Amount Bought (Sold)
(In millions)			USD Equivalent
Brazilian real	59.6		11.5
Euro	(7.1	)	(7.7	)
Norwegian krone	(109.9	)	(10.5	)
U.S. dollar	6.1		6.1

Fair value amounts for all outstanding derivative instruments have been determined using available market information and commonly accepted valuation methodologies. Refer to Note 21 to these consolidated financial statements for more information related to the fair value measurement process. Accordingly, the estimates presented may not be indicative of the amounts that we would realize in a current market exchange and may not be indicative of the gains or losses we may ultimately incur when these contracts are settled.

The following table presents the location and fair value amounts of derivative instruments reported in the consolidated balance sheets:



	March 31, 2020				December 31, 2019
(In millions)	Assets		Liabilities		Assets		Liabilities
Derivatives designated as hedging instruments
Foreign exchange contracts
Current - Derivative financial instruments	$	342.8	$	465.8	$	94.3	$	125.0
Long-term - Derivative financial instruments	82.7		97.7		34.8		48.0
Total derivatives designated as hedging instruments	425.5		563.5		129.1		173.0
Derivatives not designated as hedging instruments
Foreign exchange contracts
Current - Derivative financial instruments	10.5		19.8		7.6		16.3
Long-term - Derivative financial instruments	1.0		0.2		0.4		0.4
Total derivatives not designated as hedging instruments	11.5		20.0		8.0		16.7
Long-term - Derivative financial instruments - Synthetic Bonds - Call Option Premium	0.3		—		4.3		—
Long-term - Derivative financial instruments - Synthetic Bonds - Embedded Derivatives	—		0.3		—		4.3
Total derivatives	$	437.3	$	583.8	$	141.4	$	194.0

Cash flow hedges of forecasted transactions qualifying for hedge accounting, net of tax, resulted in accumulated other comprehensive losses of $95.0 million and $5.8 million at March 31, 2020 and December 31, 2019, respectively. We expect to transfer an approximate $63.7 million loss from accumulated OCI to earnings during the next 12 months when the anticipated transactions actually occur. All anticipated transactions currently being hedged are expected to occur by the second half of 2023.

The following tables present the location of gains (losses) on the consolidated statements of income related to derivative instruments designated as cash flow hedges:



	Gain (Loss) Recognized in OCI
	Three Months Ended
	March 31,
(In millions)	2020			2019
Foreign exchange contracts	$	(112.0	)	$	16.6

The following represents the effect of cash flow hedge accounting on the consolidated statements of income for the three months ended March 31, 2020 and 2019:



(In millions)	Three Months Ended March 31, 2020											Three Months Ended March 31, 2019
Total amount of income (expense) presented in the consolidated statements of income associated with hedges and derivatives	Revenue			Cost of sales			Selling, general and administrative expense		Other income (expense), net			Revenue			Cost of sales			Selling, general and administrative expense		Other income (expense), net
Cash Flow hedge gain (loss) recognized in income
Foreign Exchange Contracts
Amounts reclassified from accumulated OCI to income	$	(11.1	)	$	9.8		$	—	$	1.0		$	0.7		$	2.6		$	0.1	$	(2.4	)
Amounts excluded from effectiveness testing	1.2			(2.2		)	—		(11.6		)	(0.3		)	(4.1		)	—		(9.6		)
Total cash flow hedge gain (loss) recognized in income	(9.9		)	7.6			—		(10.6		)	0.4			(1.5		)	0.1		(12.0		)
Total hedge gain (loss) recognized in income	$	(9.9	)	$	7.6		$	—	$	(10.6	)	$	0.4		$	(1.5	)	$	0.1	$	(12.0	)

Gain (loss) recognized in income on derivatives not designated as hedging instruments	(0.1		)	0.6			—		(8.7		)	(1.0		)	—			—		(3.3		)
Total	$	(10.0	)	$	8.2		$	—	$	(19.3	)	$	(0.6	)	$	(1.5	)	$	0.1	$	(15.3	)

Balance Sheet Offsetting - We execute derivative contracts with counterparties that consent to a master netting agreement, which permits net settlement of the gross derivative assets against gross derivative liabilities. Each instrument is accounted for individually and assets and liabilities are not offset. As of March 31, 2020 and December 31, 2019, we had no collateralized derivative contracts. The following tables present both gross information and net information of recognized derivative instruments:



	March 31, 2020							December 31, 2019
(In millions)	Gross Amount Recognized		Gross Amounts Not Offset, Permitted Under Master Netting Agreements			Net Amount		Gross Amount Recognized		Gross Amounts Not Offset, Permitted Under Master Netting Agreements			Net Amount
Derivative assets	$	437.3	$	(349.2	)	$	88.1	$	141.4	$	(112.5	)	$	28.9
Derivative liabilities	$	583.8	$	(349.2	)	$	234.6	$	194.0	$	(112.5	)	$	81.5

NOTE 21. FAIR VALUE MEASUREMENTS

Assets and liabilities measured at fair value on a recurring basis were as follows:



	March 31, 2020								December 31, 2019
(In millions)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets
Investments
Equity securities^(a)	$	35.9	$	35.9	$	—	$	—	$	54.8	$	54.8	$	—	$	—
Money market fund	1.7		—		1.7		—		1.5		—		1.5		—
Stable value fund^(b)	1.8		—		—		—		2.1		—		—		—
Held-to-maturity debt securities	71.9		—		71.9		—		71.9		—		71.9		—
Derivative financial instruments
Synthetic bonds - call option premium	0.3		—		0.3		—		4.3		—		4.3		—
Foreign exchange contracts	437.0		—		437.0		—		137.1		—		137.1		—
Assets held for sale	11.2		—		—		11.2		25.8		—		—		25.8
Total assets	$	559.8	$	35.9	$	510.9	$	11.2	$	297.5	$	54.8	$	214.8	$	25.8
Liabilities
Redeemable financial liability	$	300.1	$	—	$	—	$	300.1	$	268.8	$	—	$	—	$	268.8
Derivative financial instruments
Synthetic bonds - embedded derivatives	0.3		—		0.3		—		4.3		—		4.3		—
Foreign exchange contracts	583.5		—		583.5		—		189.7		—		189.7		—
Liabilities held for sale	9.3		—		—		9.3		9.3		—		—		9.3
Total liabilities	$	893.2	$	—	$	583.8	$	309.4	$	472.1	$	—	$	194.0	$	278.1

September 30, 2017 December 31, 2016
(In millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3
Assets
Investments:
Nonqualified Plan:
Traded securities ⁽¹⁾
$ 27.5
$ 27.5
$ —
$ —
$ —
$ —
$ —
$ —
Money market fund 1.9
—
1.9
—
—
—
—
—
Stable value fund ⁽²⁾
0.8
—

Available-for-sale securities 24.6
24.6
—
—
27.9
27.9
—
—
Derivative financial instruments:
Synthetic bonds - call option premium 47.3
—
47.3
—
180.1
—
180.1
—
Foreign exchange contracts 162.7
—
162.7
—
57.9
—
57.9
—
Total assets $ 264.8
$ 52.1
$ 211.9
$ —
$ 265.9
$ 27.9
$ 238.0
$ —
Liabilities
Redeemable financial liability $ 301.1
$ —
$ —
$ 301.1
$ 174.8
$ —
$ —
$ 174.8
Derivative financial instruments:
Synthetic bonds - embedded derivatives 47.3
—
47.3
—
180.1
—
180.1
—
Foreign exchange contracts 118.7
—
118.7
—
230.6
—
230.6
—
Total liabilities $ 467.1
$ —
$ 166.0
$ 301.1
$ 585.5
$ —
$ 410.7
$ 174.8

~~_______________________~~


⁽¹⁾ (a)	Includes ~~equity securities,~~ fixed income and other investments measured at fair value.


⁽²⁾ (b)	Certain investments that are measured at fair value using net asset value per share (or its equivalent) have not been classified in the fair value hierarchy.

~~Non-qualified plan—~~Equity securities and Available-for-sale securities - The fair value measurement of our traded securities and Available-for-sale securities is based on quoted prices that we have the ability to access in public markets. ~~Our stable~~

Stable value fund and Money market fund - Stable value fund and money market fund are valued at the net asset value of the shares held at the end of the quarter, which is based on the fair value of the underlying investments using information reported by our investment advisor at quarter-end.

~~Available-for-sale investments—~~Held-to-maturity debt securities - Held-to-maturity debt securities consist of government bonds. These investments are stated at amortized cost, which approximates fair value.

Assets and liabilities held for sale - The fair value ~~measurement~~ of our ~~available-for-sale investments is based on quoted prices~~assets and liabilities held for sale was determined using a market approach that ~~we have~~took into consideration the ~~ability to access in public markets.~~expected sales price.

Mandatorily redeemable financial ~~liability—We determined~~liability - In the fourth quarter of 2016, we obtained voting control interests in legal Technip Energies contract entities which own and account for the design, engineering and construction of the Yamal LNG plant. As part of this transaction, we recognized the fair value of the mandatorily redeemable financial liability using a discounted cash flow model. ~~Refer to Note 11 for further information related to this liability.~~ The key ~~assumption~~assumptions used in applying the income approach isare the selected discount rates and the expected dividends to be distributed in the future to the ~~noncontrolling~~non-controlling interest holders. Expected dividends to be distributed isare based on the ~~noncontrolling~~non-controlling interests’ share of the expected profitability of the underlying contract, ~~the selected~~a 16.8% discount rate and the overall timing of completion of the project.

A mandatorily redeemable financial liability of $300.1 million was recognized as of March 31, 2020 to account for the fair value of the non-controlling interests. See Note 9 to our condensed consolidated financial statements of this Quarterly Report for additional disclosure related to the short-term portion of the mandatorily redeemable financial liability.

A decrease of one percentage point in the discount rate would have increased the liability by ~~$6.3~~$2.7 million as of ~~September 30, 2017.~~March 31, 2020. The fair value measurement is based upon significant unobservable inputs not observable in the market and is consequently classified as a Level 3 fair value measurement.

~~Changes~~Change in the fair value of our Level 3 mandatorily redeemable financial liability is recorded as interest expense on the consolidated statements of income and is presented ~~below. Since~~below:



	Three Months Ended
	March 31,
(In millions)	2020			2019
Balance at beginning of period	$	268.8		$	408.5
Less: Gains (losses) recognized in net interest expense	(35.5		)	(84.7		)
Less: Settlements	4.2			174.9
Balance at end of period	$	300.1		$	318.3

Redeemable non-controlling interest - In the ~~liability~~first quarter of 2018, we acquired a 51% share in Island Offshore Subsea AS that was ~~created during~~subsequently renamed to TIOS AS. The non-controlling interest is recorded as mezzanine equity at fair value. The fair value measurement is based upon significant unobservable inputs not observable in the ~~three months ended~~market and is consequently classified as a Level 3 fair value measurement. As of March 31, 2020and December 31, ~~2016, no changes in~~2019, the fair value ~~are presented for the prior period.~~of our redeemable non-controlling interest was $39.5 million and $41.1 million, respectively.

(In millions)
Nine Months Ended
September 30, 2017
Balance at beginning of period $ 174.8
Less: Gains (losses) recognized in profit and loss statement (202.9 )
Less: Settlements 76.6
Balance at end of period $ 301.1

Derivative financial ~~instruments—~~instruments - We use the income approach as the valuation technique to measure the fair value of foreign currency derivative instruments on a recurring basis. This approach calculates the present value of the future cash flow by measuring the change from the derivative contract rate and the published market indicative currency rate, multiplied by the contract notional values. Credit risk is then incorporated by reducing the derivative’s fair value in asset positions by the result of multiplying the present value of the portfolio by the counterparty’s published credit spread. Portfolios in a liability position are adjusted by the same calculation; however, a spread representing our credit spread is used. Our credit spread, and the credit spread of other counterparties not publicly available, are approximated by using the spread of similar companies in the same industry, of similar size and with the same credit rating.

At the present time, we have no credit-risk-related contingent features in our agreements with the financial institutions that would require us to post collateral for derivative positions in a liability position.

~~Refer~~See Note 20 to ~~Note 17~~our condensed consolidated financial statements of this Quarterly Report for additional disclosure related to derivative financial instruments.

Nonrecurring Fair Value Measurements

Fair value of long-lived, non-financial assets - Long-lived, non-financial assets are measured at fair value on a non-recurring basis for the purposes of calculating impairment, when the recoverable amount of the assets has been determined to be less than the book value of the assets. During 2019, we recorded certain long-lived asset impairments primarily related to vessels and machinery and equipment in our Subsea segment. Due to the intent to sell our G1201 vessel and subsequently signed Memorandum of Agreement (MOA) with a third party, we reviewed the carrying value of its sister vessel, the G1200, as of September 30, 2019. As a result of this assessment, an impairment charge was recorded on the two vessels to bring their carrying value to a combined fair value of $104.0 million as of September 30, 2019. The fair value measurements of these vessels were based on the transaction price in the MOA, which is a Level 2 observable input as per the fair value hierarchy. For the remaining long-lived assets which we impaired in 2019, we measured their fair value by estimating the amount and timing of net future cash flows, which are Level 3 unobservable inputs, and discounting them using a risk-adjusted rate of interest of 10.8%. As of December 31, 2019, these impaired assets were recorded at their fair value of $238.5 million.

During the first quarter of 2020 we recorded impairments to installation and service equipment assets in our Subsea segment and North America-based fracturing and wellhead assets in our Surface Technologies segments. As of March 31, 2020, these impaired assets were recorded at their fair value of $269.6 million. We measured their fair value by estimating the amount and timing of net future cash flows, which are Level 3 unobservable inputs, and discounting them using a risk-adjusted rate of interest of 10.8%.

Other fair value ~~disclosures:~~disclosures

Fair value of debt— - The respective carrying value and fair value of our Synthetic ~~Bonds,~~bonds and our Senior Notes and private placement notes ~~are~~on a combined basis as ~~follows:~~of March 31, 2020 was $1,946.7 million and $1,893.8 million, respectively. The respective carrying value and fair value of our Synthetic bonds and our Senior Notes and private placement notes on a combined basis as of December 31, 2019 were $1,981.2 million and $2,078.2 million, respectively.

September 30, 2017 December 31, 2016
(In millions)
Carrying Amount ⁽¹⁾

Fair Value ⁽²⁾

Carrying Amount ⁽¹⁾

Fair Value ⁽²⁾
Synthetic bonds due 2021 $ 490.9
$ 619.4
$ 428.0
$ 663.2
2.00% Senior Notes due 2017 300.0
300.0
—
—
3.45% Senior Notes due 2022 500.0
501.5
—
—
5.00% Notes due 2020 236.3
263.7
209.7
237.7
3.40% Notes due 2022 177.9
194.5
158.0
177.6
3.15% Notes due 2023 153.3
165.1
136.1
152.0
3.15% Notes due 2023 148.1
160.5
131.4
142.5
4.00% Notes due 2027 88.9
98.6
79.0
89.5
4.00% Notes due 2032 114.1
135.1
101.2
122.9
3.75% Notes due 2033 114.8
121.9
101.8
103.4

~~_______________________~~


⁽¹⁾	~~Carrying amounts are shown net of unamortized debt discounts and premiums and unamortized debt issuance costs.~~


⁽²⁾	Fair values are based on Level 1 quoted market rates, except for the 4.00% Notes due 2027 which is based on Level 2, quoted market rates on similar liabilities with an appropriate credit spread applied.

Other fair value ~~disclosures—~~disclosures - The carrying amounts of cash and cash equivalents, trade receivables, accounts payable, short-term debt, commercial paper, debt associated with our bank borrowings, credit facilities, ~~convertible bonds,~~ as well as amounts included in other current assets and other current liabilities that meet the definition of financial instruments, approximate fair value.

Credit ~~risk—~~risk - By their nature, financial instruments involve risk, including credit risk, for non-performance by counterparties. Financial instruments that potentially subject us to credit risk primarily consist of trade receivables and derivative contracts. We manage the credit risk on financial instruments by transacting only with what management believes are financially secure counterparties, requiring credit approvals and credit limits, and monitoring counterparties’ financial condition. Our maximum exposure to credit loss in the event of non-performance by the counterparty is limited to the amount drawn and outstanding on the financial instrument. Allowances for losses on trade receivables are established based on collectability assessments. We mitigate credit risk on derivative contracts by executing contracts only with counterparties that consent to a master netting agreement, which permits the net settlement of gross derivative assets against gross derivative liabilities.

~~NOTE 19. BUSINESS SEGMENTS~~

Management’s determination of our reporting segments was made on the basis of our strategic priorities within each segment and the differences in the products and services we provide, which corresponds to the manner in which our Chief Executive Officer, as our chief operating decision maker, reviews and evaluates operating performance to make decisions about resources to be allocated to the segment.

Upon completion of the Merger, we reorganized our reporting structure and aligned our segments and the underlying businesses to execute the strategy of TechnipFMC. As a result, we report the results of operations in the following segments: Subsea, Onshore/Offshore and Surface Technologies.

~~Our reportable segments are:~~

~~Subsea~~—manufactures and designs products and systems, performs engineering, procurement and project management and provides services used by oil and gas companies involved in deepwater exploration and production of crude oil and natural gas.

~~Onshore/Offshore~~—designs and builds onshore facilities related to the production, treatment and transportation of oil and gas; and designs, manufactures and installs fixed and floating platforms for the production and processing of oil and gas reserves for companies in the oil and gas industry.

~~Surface Technologies~~—designs and manufactures systems and provides services used by oil and gas companies involved in land and offshore exploration and production of crude oil and natural gas; designs, manufactures and supplies technologically advanced high pressure valves and fittings for oilfield service companies; and also provides flowback and well testing services for exploration companies in the oil and gas industry.

Total revenue by segment includes intersegment sales, which are made at prices approximating those that the selling entity is able to obtain on external sales. Segment operating profit is defined as total segment revenue less segment operating expenses. Income (loss) from equity method investments is included in computing segment operating profit. Refer to Note 8 for additional information. The following items have been excluded in computing segment operating profit: corporate staff expense, net interest income (expense) associated with corporate debt facilities, income taxes, and other revenue and other expense, net.

~~Segment revenue and segment operating profit were as follows:~~

Three Months Ended Nine Months Ended
September 30, September 30,
(In millions) 2017 2016 2017 2016
Segment revenue
Subsea $ 1,478.2
$ 1,560.3
$ 4,585.2
$ 4,624.7
Onshore/Offshore 2,308.1
815.4
5,885.0
2,527.2
Surface Technologies 353.9
—
902.3
—
Other revenueand intercompany eliminations
0.7
—
1.4
—
Total revenue $ 4,140.9
$ 2,375.7
$ 11,373.9
$ 7,151.9
Income before income taxes:
Segment operating profit (loss):

Subsea $ 102.8
$ 282.0
$ 393.1
$ 669.9
Onshore/Offshore 206.4
70.9
553.7
139.8
Surface Technologies 49.0
—
29.4
—
Total segment operating profit 358.2
352.9
976.2
809.7
Corporate items:
Corporate expense ⁽¹⁾
(42.3 ) 51.7
(224.3 ) (108.4 )
Net interest expense (86.3 ) (0.4 ) (240.5 ) (21.4 )
Total corporate items (128.6 ) 51.3
(464.8 ) (129.8 )
Income before income taxes ⁽²⁾
$ 229.6
$ 404.2
$ 511.4
$ 679.9

~~_______________________~~


⁽¹⁾	Corporate expense primarily includes corporate staff expenses, stock-based compensation expenses, other employee benefits, certain foreign exchange gains and losses, and merger-related transaction expenses.


⁽²⁾	~~Includes amounts attributable to noncontrolling interests.~~

~~Segment assets were as follows:~~

(In millions) September 30, 2017 December 31, 2016
Segment assets:
Subsea $ 13,757.6
$ 7,823.1
Onshore/Offshore 5,114.5
3,229.3
Surface Technologies 2,413.6
—
Intercompany eliminations (17.0 ) —
Total segment assets 21,268.7
11,052.4
Corporate ⁽¹⁾
8,359.5
7,637.3
Total assets $ 29,628.2
$ 18,689.7

~~_______________________~~


⁽¹⁾	Corporate includes cash, LIFO adjustments, deferred income tax balances, property, plant and equipment not associated with a specific segment, pension assets and the fair value of derivative financial instruments.

~~NOTE 20. SUBSEQUENT EVENT~~

~~Dividends declared~~—On October 25, 2017, we announced that our Board of Directors had authorized and declared an initial quarterly cash dividend of $0.13 per ordinary share to be paid to shareholders of record as of November 21, 2017. The ex-dividend date will be November 20, 2017, and the payment date is expected to be on or shortly after December 1, 2017.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

BUSINESS OUTLOOK

Overall ~~Outlook—~~Outlook - The price of crude oil ~~recovered~~dropped significantly during the first quarter of 2020 as a result of excess

market supply. Continued strength in ~~2016 when compared~~supply from OPEC+ countries came at a time of significant demand

destruction related to the ~~prior year,~~outbreak of the COVID-19 pandemic. The short-term outlook for a price recovery is largely

dependent on COVID-19 developments and the ~~price has remained stable throughout much~~resumption of ~~2017. Nonetheless, the~~normal business activities. Global oil and gas ~~industry continues~~

producers will also need to ~~experience~~reduce output to balance the ~~overall impacts of the steep decline in crude oil prices experienced in prior years~~oversupplied market. Long-term demand is still forecast to

rise, and there are some lingering uncertainties in the crude oil price outlook. Despite OPEC’s implementation of a cap on crude oil production in 2017, uncertainty in the crude oil price outlook remains as to the effectiveness and duration of both concurrent OPEC and non-OPEC production cuts, the associated impact on worldwide production, and inventory levels. The sustainability of the crude oil price recovery and business activity levels is dependent on a number of variables, but many analysts continue to believe the market corrections necessary to address the oversupply of crude oil are in place and beginning to contribute to sustainable industry improvement. As long-term demand rises and production continues to naturally decline, we believe ~~commodity prices should continue to demonstrate an ability for continued improvement, increasing both~~this outlook will ultimately provide our ~~cash flows and~~customers with the confidence ~~of our customers~~ to increase ~~their~~ investments in new sources of oil and natural gas production. We continue to believe that offshore and deepwater developments will remain a significant part of our customers’ portfolios in the long-term. TechnipFMC’s strong positioning in transition fuels, such as natural gas, will also allow us to play a key role in the energy transition markets.

~~Subsea—~~

COVID-19 - During the first quarter, we experienced operational impacts as a result of COVID-19. These impacts included supply chain disruptions; productivity declines; and logistics constraints. There has been a resumption of activity from some suppliers, and we expect that other supply chain impacts will subside as regional restrictions are removed. We believe, given the long-cycle nature of our projects, that we will be able to mitigate a majority of the impacts related to supply chain disruption.

Even though many of our offices remained open, we experienced productivity declines as a result of the pandemic. The energy sector was deemed to be an essential business in most countries, which provided us the flexibility to keep offices and manufacturing centers open. We allowed all non-essential personnel to work from home but in some cases we experienced reduced productivity as employees transitioned to the new work environment. We also experienced productivity declines in our manufacturing facilities as employee groups were isolated where there was an event of COVID-19 exposure.

We also experienced logistics impacts related to the movement of personnel and equipment due to new COVID-19 regulations. Specifically, these impacts included delays in crew changes on vessels due to quarantine periods and limitations on travel to and from points of embarkation.

In addition to these operational impacts, we incurred incremental, direct costs related to voluntary measures implemented to ensure the safety of employees, contractors, suppliers, and clients. We activated a COVID-19 Incident Management Team in order to administer a consistent response throughout our global operations and provide coordinated support to localized events. Specific actions taken by the team included the following:


–	Established a thorough Business Continuity Planning process, which included the work from home initiative, when practical, to support continuity of operations;


–	Adopted enhanced sanitation practices across all offices and facilities, implemented personal hygiene protocols and measures to restrict non-essential business travel, and restricted non-essential visitors from visiting our offices and facilities;


–	Provided personal protective equipment and performed proactive health screening and testing of offshore personnel and required employees to self-quarantine when they may have been exposed to, or shown any symptoms of COVID-19;


–	Collaborated more closely with clients to mitigate COVID-19 impacts in order to advance projects and meet customer requirements, albeit at reduced productivity in some instances; and


–	Engaged with critical vendors regarding their own pandemic preparedness plans to minimize the impact to our business operations.

Senior management is continuously monitoring the situation and providing frequent communications to both employees and external clients and partners. Regulatory directives and COVID-19 case management continued to result in the periodic full or partial operational disruption of some of our facilities, vessels, and suppliers beyond the first quarter, and we expect some level of disruption to continue in the second quarter.

More specific impacts of COVID-19 and the commodity price decline as well as the outlook for the business segments are provided below.

Subsea - The impact of the low crude oil price environment ~~over the last two years~~has led many of our customers to significantly reduce their capital spending plans or defer new deepwater projects. We began to reduce our workforce and adjust manufacturing capacity to align our operations with the anticipated decreases in activity in 2016 due to delayed Subsea project inbound, and to mitigate the impact to operating margins. We have benefited from these restructuring actions by attaining more cost-effective manufacturing and we continue to take additional actions as business activityplans. TechnipFMC continues to ~~slow. Subsea revenue~~engage with its customers and alliance partners as they work to update their business plans. We did not receive any cancellations for projects in backlog during the period.

We believe that deepwater will ~~decrease in 2017~~become an even more prevalent piece of the energy mix as project economics remain attractive, particularly for ~~the third consecutive year. However, even with lower Subsea revenue expectations, the operational improvements and cost reductions made in the prior year, combined with additional actions taken in~~brownfield developments. Sanctioning on a number of greenfield projects is likely to shift from the current year, ~~have protected operating margins in 2017, while still providing us with the capability to respond to the eventual market recovery.~~impacting our previous projection for 2020 orders. We ~~also recognize the need to~~ continue to ~~invest in our people~~evaluate nearly $15 billion of large project opportunities, of which approximately 50% are still likely to ~~ensure that~~move forward over the next 24 months. All other projects remain active but potentially extend beyond this timeframe. Over the next 12 months, we ~~preserve~~believe as much as 20% of the core competencies and capabilities that are delivering the strong results in 2017 and will be needed to respond to the market recovery. Our customers are continuing to take aggressive actions to improve their project economics and we are monitoring customer activity in the context of current oil prices. The risk$15 billion of project ~~sanctioning delays continues~~opportunities are likely to ~~be high~~reach Final Investment Decision, and TechnipFMC is well-positioned for many of these opportunities.

Beyond project activity, we generate additional revenue from subsea services activity where we benefit from the industry’s largest installed base of subsea equipment in operation today. We anticipate resiliency in services activity as a result of the ~~current environment, however, project economics have improved considerably now, and consequently, many offshore discoveries could be developed economically at today’s crude oil prices.~~ expected shift by some clients from greenfield developments to brownfield intervention.

We continue to work closely with our customers through early engagement in iFEED™ and ~~believe that with~~the use of iEPCI™ to allow more project Final Investment Decisions through the cycle. iEPCI™ can support our ~~unique business model we can further~~clients’ initiatives to improve subsea project economics by helping to reduce their project break-even levels by offering cost-effective approaches to their project developments, including customer acceptance of integrated business models to help achieve the cost-reduction goalscost and accelerate ~~achievement of~~time to first oil. InTechnipFMC’s integrated commercial model now accounts for a significant portion of its orders and revenue and will serve as our standard approach to new business going forward.

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

Technip Energies - Given the long ~~term,~~cycle nature of the business, the resilience and maturity of the projects in backlog and our diversified global footprint, we ~~continue~~have been able to ~~believe that deep-water development will remain~~mitigate a significant ~~part~~portion of ~~our customers’ portfolios. However, further delays in project sanctions in~~COVID-19 operational impacts. The near-term effects relate more to operational efficiencies and timing issues and not the ~~near term would lead us to take further actions to ensure our cost base is aligned with the market outlook.~~stoppage of projects.

~~Onshore/Offshore—The Offshore market faces many of the same constraints as the Subsea business due to industry challenges to improve project economics. Meanwhile,~~ Onshore market activity continues to provide a tangible set of opportunities, ~~and in particular for~~albeit at lower levels than previously forecast. We expect natural gas ~~projects as natural gas continues~~and renewables to take a larger share of global energy ~~demand. Activity in LNG is fueled~~demand as evidenced by the ~~potential~~record level of new LNG capacity sanctioned in 2019. Although the near-term outlook for ~~sustained modest~~project sanctioning has changed due to COVID-19 and the challenging macroeconomic backdrop, the long-term fundamentals for natural gas ~~prices, representing~~- and LNG in particular - remain strong given its critical role as a transition fuel.

As an ~~important opportunity set~~industry leader, TechnipFMC is well positioned for ~~our business. We remain confident that the industry will make further~~growth in new liquefaction and regasification capacity as well as opportunities in biofuels, green chemistry, and other energy alternatives. Our active engagement in several LNG ~~investments in the near to intermediate term. We also see opportunities for refining and petrochemical projects - areas that we know well. As Onshore market activity levels remain stable, it~~FEED studies across multiple geographies provides ~~our business with the opportunity to remain actively engaged in and pursuing front-end engineering studies which provide the~~a platform for early engagement with clients ~~which~~and can significantly de-risk project ~~execution. Market~~execution while also supporting our pursuit of EPC contracts. We anticipate one of these project opportunities ~~for downstream front-end engineering studies~~to be sanctioned in the current year. Additionally, we continue to selectively pursue refining, petrochemical, fertilizer and ~~full engineering, procurement and construction projects are most prevalent~~renewables project opportunities in the Middle East, Africa, ~~and~~ Asia ~~markets in LNG, refining~~ and ~~petrochemicals.~~

~~Surface Technologies—While~~ North America ~~rig count and operating~~as these sectors typically prove to be more resilient through a downturn.

Offshore market activity ~~have steadily improved over~~is expected to weaken in the last year, the recovery has been constrained to certain oil and gas producing basins that have the ability to generate acceptable returns. The market recovery began in late 2016 in North America and has continued through the first nine monthsnear-term as sanctioning on a number of ~~2017. To our benefit, we have experienced stronger demand for pressure control equipment driven by this increased activity. The pace of~~

~~improvement~~greenfield projects is likely to ~~slow~~shift from the current year. Recent discoveries of offshore fields with reserves in regions such as Australia and East Africa are expected to benefit future activity; however, the timing of increased investment in these regions could be deferred. In the long-term, new upstream investment will also be required as gas becomes a bigger portion of the global energy mix.

Surface Technologies - North American activity continued to decline sequentially in the first quarter of 2020 in both drilling and completions related activity, negatively impacting volume and pricing. As a result of the significant reductions to operator’s capital spending, market expectations ~~of more moderate~~now suggest the U.S. rig count ~~growth. However, our restructuring~~for the second quarter could be down approximately 50% versus the end of 2019 and decline further over the remainder of the

year. We are taking aggressive actions ~~taken~~ in ~~2016 have reduced~~response to these market conditions to reduce working capital investment and structural costs, and ~~accordingly, we are presently capturing the economic benefits of the higher activity levels.~~ this will result in reductions to both workforce and facility capacity.

Activity outside North America slowed in our international surface business has been strong but continues to experience competitive pricing pressure. Pricing has stabilized but we have not seen significant recovery. We expect this competitive pricing environment to continue and to have some negative impact on operating margins into the first ~~half~~quarter of ~~2018.~~

~~Pro Forma Results~~2020 primarily due to COVID-19 related disruptions. However, we still expect activity in international markets to be more resilient than North America. TechnipFMC believes that we will benefit from our high level of ~~Operations~~

~~Unaudited supplemental pro forma results~~vertical integration outside of ~~operations for the three months~~North America which provides us with more control over manufacturing and ~~nine months ended September 30, 2016 present consolidated information as if (i) the Merger~~product deliveries and ~~(ii) the consolidation~~less dependency on external supply chains. We anticipate that our business mix outside of ~~legal onshore/offshore contract entities which own and~~North America will account for ~~the design, engineering and construction~~as much as 60% of the Yamal LNG plant (“Yamal”) had been completed as of January 1, 2016. The pro forma results do not include any potential synergies, cost savings or other expected benefits of these transactions. Accordingly, the pro forma results should not be considered indicative of the results that would have occurred if the transactions had been consummated as of January 1, 2016, nor are they indicative of future results. In order to provide comparability to the prior year pro forma results, the impact of purchase price accounting adjustments have been reflected on an equal basis.total segment revenue in 2020.

~~Refer to Note 2 for further information related to the Merger and refer to Note 11 for further information related to Yamal.~~

Due to the size of the aforementioned transactions relative to the size of historical results of operations and for purposes of comparability, management’s discussion of the consolidated and segment results of operations are provided on the basis of comparing actual results of operations for the three and nine months ended September 30, 2017 to pro forma results of operations for the three and nine months ended September 30, 2016.

CONSOLIDATED RESULTS OF OPERATIONS OF TECHNIPFMC PLC

THREE MONTHS ENDED ~~SEPTEMBER 30, 2017~~MARCH 31, 2020 AND ~~2016~~

2019

Three Months Ended September 30,
Change
(2017 vs. 2016 Pro Forma)
(In millions, except %) 2017
2016
Pro Forma**
2016 $ %
Revenue $ 4,140.9
$ 5,038.2
$ 2,375.7
(897.3 ) (17.8 )
Costs and expenses:
Cost of sales 3,468.2
4,294.7
1,931.0
(826.5 ) (19.2 )
Selling, general and administrative expense 284.4
282.8
143.0
1.6
0.6
Research and development expense 51.1
45.3
22.0
5.8
12.8
Impairment, restructuring and other expense 59.4
34.0
10.2
25.4
74.7
Merger transaction and integration costs 9.2
44.6
14.0
(35.4 ) (79.4 )
Total costs and expenses 3,872.3
4,701.4
2,120.2
(829.1 ) (17.6 )
Other income (expense), net 30.0
81.0
81.7
(51.0 ) (63.0 )
Net interest expense (86.3 ) (13.9 ) (0.4 ) (72.4 ) *
Income from equity affiliates 17.3
46.5
67.4
(29.2 ) (62.8 )
Income before income taxes 229.6
450.4
404.2
(220.8 ) (49.0 )
Provision for income taxes 111.7
110.4
102.5
1.3
1.2
Income from continuing operations 117.9
340.0
301.7
(222.1 ) (65.3 )
Loss from discontinued operations, net of income taxes —
(14.0 ) —
14.0
*
Net income 117.9
326.0
301.7
(208.1 ) (63.8 )
Net loss attributable to noncontrolling interests 3.1
1.0
0.7
2.1
*
Net income attributable to TechnipFMC plc $ 121.0
$ 327.0
$ 302.4
(206.0 ) (63.0 )

~~_______________________~~



*	~~Not meaningful~~
**	Refer to “Pro Forma Results of Operations” above for further information related to the presentation of and transactions included in pro forma results for the three months ended September 30, 2016.



	Three Months Ended
	March 31,						Change
(In millions, except %)	2020			2019			$		%
Revenue	$	3,130.3		$	2,913.0		217.3		7.5

Costs and expenses
Cost of sales	2,701.7			2,411.9			289.8		12.0
Selling, general and administrative expense	293.9			297.8			(3.9	)	(1.3	)
Research and development expense	35.2			39.9			(4.7	)	(11.8	)
Impairment, restructuring and other expenses (Note 17)	3,208.4			16.5			3,191.9		19,344.8
Separation costs (Note 2)	27.1			—			27.1		n/a
Merger transaction and integration costs	—			12.1			(12.1	)	n/a
Total costs and expenses	6,266.3			2,778.2			3,488.1		125.6

Other income (expense), net	(28.5		)	(26.2		)	(2.3	)	(8.8	)
Income from equity affiliates (Note 11)	28.8			13.9			14.9		107.2
Net interest expense	(72.3		)	(88.2		)	15.9		18.0
Income (loss) before income taxes	(3,208.0		)	34.3			(3,242.3	)	(9,452.8	)
Provision for income taxes (Note 19)	37.7			14.5			23.2		160.0
Net income (loss)	(3,245.7		)	19.8			(3,265.5	)	(16,492.4	)
Net (income) loss attributable to non-controlling interests	(10.4		)	1.1			(11.5	)	(1,045.5	)
Net income (loss) attributable to TechnipFMC plc	$	(3,256.1	)	$	20.9		(3,277.0	)	(15,679.4	)

Revenue

Revenue ~~decreased $897.3~~increased $217.3 million in the ~~third quarter~~first three months of ~~2017~~2020 compared to the prior-year ~~quarter~~period, primarily as a result of increased project activity. Subsea revenue increased year-over-year due to higher project-related activity, including increased revenue from integrated project execution (iEPCI™) in the United States and Norway, partially offset by foreign exchange translation due to the strengthening U.S. dollar and COVID-19 related disruptions. Increased revenue in Technip Energies was primarily driven by higher activity in Europe, and North America and in our Process Technology business. The continued ramp up of Arctic LNG 2 and increased activity on downstream projects more than offset the decline in revenue from Yamal LNG which continues to progress through the warranty phase. Technip Energies revenue was also negatively impacted by COVID-19 related disruptions. Surface Technologies revenue decreased versus the prior-year period, primarily as a ~~pro forma basis, primarily resulting from a~~result of the sharp decline in ~~Subsea activities in~~North America activity, the ~~Europe~~reallocation of the Loading Systems business to Technip Energies, and ~~Africa region due to lower order activity during 2015 and 2016, leading to a lower backlog~~the impact of business coming into the current year. Revenue also modestly decreased for Onshore/Offshore businesses year-over-year on a pro forma basis, due to the completion of several projects since the prior year period, partially offset by increased activity in the Middle East and Africa regions. Partially offsetting the net decreases in Subsea and Onshore/Offshore were the benefits of increased Surface well completion activities in North America.COVID-19 related disruptions.

Gross ~~profit~~Profit

Gross profit (revenue less cost of sales) ~~increased~~ as a percentage of sales decreased to ~~16.2%~~13.7% in the ~~third quarter~~first three months of ~~2017, from 14.8%~~2020, compared to 17.2% in the prior-year ~~quarter on a pro forma basis. The improvement in~~period. Subsea gross profit ~~as a percentage of sales was primarily~~decreased due to the reduction of cost of sales year-over-year on a pro forma basis as a result of the realization of cost reduction opportunities on certain projects and a more favorable cost structure, the successful progression of several major projects with good margin performance, and improved product mix related to fluid control sales.

~~Selling, general and administrative expense~~

Selling, general and administrative expense increased $1.6 million year-over-year on a pro forma basis, resulting from higher expenses associated with long-term incentive plans and new grants, partially offset by the benefit of lower headcount across all reporting segments and decreased sales commissions.

~~Impairment, restructuring and other expense~~

Impairment, restructuring and other expense increased by $25.4 million year-over-year on a pro forma basis. Impairment, restructuring and other expense for the third quarter of 2017 included $8.2 million of impairment expense. In recent years, we have implemented restructuring plans across our businesses to reduce costs and better align our workforce with anticipated activity levels. In the current period we have also incurred expenses of $10.9 million due to lost productivity associated with the impacts of Hurricane Harvey.

~~Merger transaction and integration costs~~

Merger transaction and integration costs of $9.2 million were incurred in the third quarter of 2017 due to integration expenses associated with the Merger. A significant portion of the expenses recorded in the period are related to facility lease termination charges, with a substantially lower portion related to integration activities pertaining to combining the two legacy companies. Refer to Note 2 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

~~Other income (expense), net~~

Other income (expense), net, primarily reflects foreign currency gains and losses, including gains and losses associated with the remeasurement of net cash positions. In the third quarter of 2017, we recognized $19.3 million of net foreign exchange gains, compared with $83.5 million of foreign exchange gains in the prior year period.

~~Net interest expense~~

The increase in interest expense was due to the changes in the fair value of the financial liability. During the three month period ended September 30, 2017, we revalued the liability to reflect current expectations about the obligation and recognized a loss of $73.3 million. Refer to Note 11 for further information regarding our other liabilities. Refer to Note 18 for further information regarding the fair value measurement assumptions of the mandatorily redeemable financial liability and related changes in its fair value.

~~Provision (benefit) for income taxes~~

Our income tax provision for the third quarter of 2017 and the third quarter of 2016 on a historical basis reflected effective tax rates of 48.6% and 25.4%, respectively. The year-over-year increase in the effective tax rate was primarily due to an unfavorable change in the forecasted country mix of earnings and increases in our valuation allowance due to additional losses generated during the year for which no tax benefit is expected to be realized. In addition, individual tax items, combined with lower profitability in the current period, had a greater impact on the effective rate in the three months ended September 30, 2017 as compared to the same period in 2016.

~~CONSOLIDATED RESULTS OF OPERATIONS~~

~~NINE MONTHS ENDED SEPTEMBER 30,~~ ~~2017~~ ~~AND~~ ~~2016~~

Nine Months Ended September 30,
Change
(2017 vs. 2016 Pro Forma)
(In millions, except %) 2017
2016
Pro Forma**
2016 $ %
Revenue $ 11,373.9
$ 14,689.1
$ 7,151.9
$ (3,315.2 ) (22.6 )
Costs and expenses:
Cost of sales 9,610.5
12,648.4
5,863.7
(3,037.9 ) (24.0 )
Selling, general and administrative expense 806.5
934.9
434.0
(128.4 ) (13.7 )
Research and development expense 143.6
157.3
67.8
(13.7 ) (8.7 )
Impairment, restructuring and other expense 56.8
185.1
109.7
(128.3 ) (69.3 )
Merger transaction and integration costs 87.2
61.3
30.7
25.9
42.3
Total costs and expenses 10,704.6
13,987.0
6,505.9
(3,282.4 ) (23.5 )
Other income (expense), net 43.2
(28.8 ) (17.5 ) 72.0
*
Net interest expense (240.5 ) (14.5 ) (21.4 ) (226.0 ) *
Income from equity affiliates 39.4
28.9
72.8
10.5
36.3
Income from continuing operations before income taxes 511.4
687.7
679.9
(176.3 ) (25.6 )
Provision for income taxes 249.7
196.3
153.8
53.4
27.2
Income from continuing operations 261.7
491.4
526.1
(229.7 ) (46.7 )
Loss from discontinued operations, net of income taxes —
(14.0 ) —
14.0
*
Net income 261.7
477.4
526.1
(215.7 ) (45.2 )
Net loss attributable to noncontrolling interests 5.5
1.4
1.0
4.1
*
Net income attributable to TechnipFMC plc $ 267.2
$ 478.8
$ 527.1
$ (211.6 ) (44.2 )

~~_______________________~~



*	~~Not meaningful~~
**	~~Refer to “Pro Forma Results of Operations” above for further information related to the presentation of and transactions included in pro forma results for the nine months ended September 30, 2016.~~

~~Revenue~~

Revenue decreased $3,315.2 million in the first nine months of 2017 compared to the prior-year period on a pro forma basis, primarily resulting from a sharp decline in Subsea activities in the Europe and Africa region due to lower order activity during 2015 and 2016, leading to a lower priced backlog ~~of business coming into~~as well as impacts from supply chain delays, including disruption from the current year. The decrease was also attributable to the completion of several projects and lower vessel utilization. Revenue also decreased across all Onshore/Offshore businesses year-over-year on a pro forma basis, primarily driven by lower levels of project backlog coming into the year impacting our Middle East, North America and South America businesses.

~~Gross profit~~

COVID-19 pandemic.Gross profit ~~(revenue less cost of sales) increased~~declined in Technip Energies due in large part to a reduced contribution from Yamal LNG as ~~a percentage of sales to 15.5% in~~ the ~~first nine months of 2017, from 13.9% in~~project has reached physical completion last year and is progressing through the ~~prior-year on a pro forma basis. The improvement in~~warranty phase. Surface Technologies gross profit ~~as a percentage of sales~~ was negatively impacted primarily ~~due to~~by the ~~reduction of cost of sales~~ year-over-year ~~on a pro forma basis as a result of the realization of cost reduction opportunities on certain projects~~decline in North American drilling and ~~a lower overall cost structure, the successful progression of several major projects with good gross margin performance and the benefit of a better product mix.~~completions activity.

Selling, ~~general~~General and ~~administrative expense~~Administrative Expense

Selling, general and administrative expense decreased ~~$128.4~~$3.9 million year-over-year, onprimarily as a ~~pro forma basis, resulting from lower headcount across all reporting segments and~~result of decreased ~~sales commissions.~~corporate expenses.

Impairment, Restructuring and Other Expense

We incurred $3,208.4 million of restructuring and ~~other expense~~

~~Impairment, restructuring~~impairment charges primarily related to goodwill and ~~other expense decreased by $128.3 million year-over-year on a pro forma basis. Impairment, restructuring and other expense for~~fixed asset impairments during the first ~~nine~~three months of ~~2017 included $9.0 million of impairment expense.~~

In recent years, we have implemented restructuring plans across our businesses to reduce costs and better align our workforce with anticipated activity levels. Thus, we previously incurred significant restructuring expenses in 2016. In the current period we have also incurred expenses of $10.9 million due to lost productivity associated with the impacts of Hurricane Harvey. In recent years, we have implemented restructuring plans across our businesses to reduce costs and better align our workforce with anticipated activity levels. Thus, we previously incurred significant restructuring expenses in 2016.2020. See Note 17 for further details.

Merger ~~transaction~~Transaction and ~~integration costs~~Integration Costs

We incurred merger transaction and integration costs of ~~$87.2~~$12.1 million during the first ~~nine~~three months of ~~2017~~2019, before the announcement of the planned separation transaction due to the ~~Merger. A significant portion~~continuation of the ~~expenses recorded in the period are related to transaction and leased facility termination fees, with a lower portion related to~~ integration activities pertaining to combining the two legacy companies.

Separation Costs

We incurred $27.1 million of separation costs associated with the preparation of the separation transaction during the first three months of 2020. Due to the COVID-19 pandemic, the sharp decline in commodity prices, and the heightened volatility in global equity markets, we have postponed the completion of the transaction until the markets sufficiently recover. Refer to Note 2 ~~to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.~~for more information regarding the planned transaction.

Other ~~income~~Income (expense), ~~net~~Net

Other income (expense), net, primarily reflects foreign currency gains and losses, including gains and losses associated with the remeasurement of net cash positions. In the first ~~nine~~three months of ~~2017,~~2020, we recognized ~~$0.3~~$43.3 million of net foreign exchange ~~gains,~~losses, compared with ~~$13.6~~$11.6 million of net foreign exchange losses in the prior year period. The increase in foreign exchange losses during the first three months of 2020 resulted from the effects of the strengthening U.S. dollar on naturally hedged projects and increased hedging costs due to high volatility in the currency and interest rate markets.

Net Interest Expense

Net interest expense

~~The increase~~ decreased $15.9 million in ~~interest expense was~~the first three months of 2020 compared to 2019, primarily due to the ~~changes~~change in the fair value of the redeemable financial liability. ~~During~~We revalued the ~~nine month period ended September 30, 2017 we revalued the~~mandatorily redeemable financial liability to reflect current expectations about the obligation and recognized a ~~loss~~charge of ~~$202.9~~$35.5 million. ~~Refer to~~See Note ~~11 for further information regarding our other liabilities. Refer to Note 18~~21 for further information regarding the fair value measurement assumptions of the mandatorily redeemable financial liability and related changes in its fair value. Interest income decreased as a result of a $9.0 million decrease in Yamal deposits as well as a $13.7 million impact due to the valuation of marketable securities.

Provision for ~~income taxes~~Income Taxes

~~Our income~~The effective tax ~~provisions~~rate was (1.2)% and 42.2% for the first ~~nine~~three months of ~~2017~~2020 and ~~2016 reflected effective tax rates of 48.8% and 22.6%, respectively~~. 2019, respectively.The year-over-year ~~increase~~change in the effective tax rate was primarily due to ~~an unfavorable~~the impact of nondeductible goodwill impairments and a favorable change in ~~the forecasted~~actual country mix of earnings ~~and increases in~~. Our effective tax rate can fluctuate depending on our ~~valuation allowance due~~country mix of earnings, since our foreign earnings are generally subject to ~~additional losses generated during the year for which no~~higher tax ~~benefit is expected to be realized. In addition, individual tax items, combined with lower profitability~~rates than in the ~~current period, had a greater impact on the effective rate in the nine months ended September 30, 2017 as compared to the same period in 2016.~~United Kingdom.

SEGMENT RESULTS OF OPERATIONS OF TECHNIPFMC PLC

THREE MONTHS ENDED ~~SEPTEMBER 30, 2017~~MARCH 31, 2020 AND ~~2016~~2019

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. ~~Refer to~~See Note 196 to our condensed consolidated financial statements ~~included in Part I, Item 1~~ of this Quarterly Report ~~on Form 10-Q~~ for ~~further~~more information.

Subsea


														Three Months Ended
	Three Months Ended September 30,									Favorable/(Unfavorable) (2017 vs. 2016 Pro Forma)				March 31,						Favorable/(Unfavorable)
(In millions, except %)	2017			2016 Pro Forma			2016			$		%		2020			2019			$		%
Revenue	$	1,478.2		$	2,346.6		$	1,560.3		(868.4	)	(37.0	)	$	1,253.1		$	1,185.3		67.8		5.7
Operating profit	$	102.8		$	357.7		$	282.0		(254.9	)	(71.3	)
Operating profit (loss)														$	(2,750.7	)	$	49.9		(2,800.6	)	n/a

Operating profit as a percentage of revenue	7.0		%	15.2		%	18.1		%			(8.2	) pts.
Operating profit (loss) as a percentage of revenue														(219.5		)%	4.2		%			(223.7) pts.

Subsea revenue ~~decreased $868.4~~increased $67.8 million, or 5.7% year-over-year, ~~on a pro forma basis,~~ primarily due to ~~lower~~growth in integrated project ~~activity~~execution (iEPCI^TM) revenue in the ~~Europe~~United States and ~~Africa region and lower activity in our Europe, Africa and North America Subsea services businesses. The lower project activity~~Norway. Revenue growth was ~~substantially~~negatively impacted by foreign exchange translation of $66 million due to the ~~reduced backlog levels at~~strengthening U.S. dollar and delays in supply chain affecting project progress, partially due to disruptions related to COVID-19. Execution saw some impact from labor mobility and transportation delays due to COVID-19, with further impact from our efforts to safeguard the ~~beginning~~health and safety of ~~the period as a result of slower project awards in 2015~~our employees, contractors, and ~~2016. Additionally, the decrease in revenue was attributable to the completion of several projects during the third quarter of 2017.~~customer personnel.

Subsea operating ~~profit as a percent~~loss is primarily due to significant impairment charges. This operating loss included $2,773.6 million of revenue decreased year-over-year on a pro forma basis and was driven primarily by lower project and subsea service activity levels, reduced vessel utilization, and a $18.2 million increase on a pro forma basis inasset impairment, restructuring and other ~~severance charges.~~charges primarily related to the impairment of goodwill and long-lived assets compared to $2.3 million in 2019. Refer to Note 17 to our consolidated financial statements for more information related to these asset impairments.

Refer to ‘Non-GAAP Measures’ below for more information regarding our segment operating results.

Technip Energies^(a)



	Three Months Ended
	March 31,						Favorable/(Unfavorable)
(In millions, except %)	2020			2019			$		%
Revenue	$	1,547.7		$	1,335.1		212.6		15.9
Operating profit	$	151.2		$	155.7		(4.5	)	(2.9	)

Operating profit as a percentage of revenue	9.8		%	11.7		%			(1.9) pts.

_{(a) In connection with the planned separation transaction, in the first quarter of 2020, we renamed our Onshore/Offshore segment Technip Energies. Refer to Note 2 for more information on the planned separation transaction.}

Technip Energies revenue increased $212.6 million, or 15.9% year-over-year, primarily drivenby higher activity in Europe and North America and in our Process Technology business. The continued ramp-up of Arctic LNG 2 and increased activity on downstream projects more than offset the decline in revenues from Yamal LNG which continues to progress through the warranty phase.

Operating profit decreased year-over-year, primarily due to a reduced contribution from Yamal LNG and lower margin realization on early stage projects, including Arctic LNG 2. Project execution remained strong across the portfolio.

Refer to ‘Non-GAAP Measures’ below for more information regarding our segment operating results.

Surface Technologies



	Three Months Ended
	March 31,						Favorable/(Unfavorable)
(In millions, except %)	2020			2019			$		%
Revenue	$	329.5		$	392.6		(63.1	)	(16.1	)
Operating profit (loss)	$	(424.0	)	$	10.5		(434.5	)	n/a

Operating profit (loss) as a percentage of revenue	(128.7		)%	2.7		%			(131.4) pts.

Surface Technologies revenue decreased $63.1 million, or 16.1% year-over-year, primarily driven by the sharp decline in North America activity and the reallocation of the Loading Systems business to Technip Energies. Despite travel and supply chain impacts of COVID-19, revenue outside North America increased modestly and represented just over 50% of total Surface Technologies revenue in the ~~third quarter of 2017 included $22.8 million of~~period.

Surface Technologies operating loss was primarily due to impairment and restructuring and other ~~severance~~ charges, ~~compared~~in particular related to ~~$4.6~~goodwill. Refer to Note 7 for more information. Operating profit was also negatively impacted by the reduced demand in North America.

Refer to ‘Non-GAAP Measures’ below for more information regarding our segment operating results.

Corporate Items



	Three Months Ended
	March 31,						Favorable/(Unfavorable)
(In millions, except %)	2020			2019			$		%
Corporate expense	$	(112.2	)	$	(93.6	)	(18.6	)	(19.9	)

Corporate expense excluding foreign exchange losses and credits decreased by $22.8 million as shown in the ~~third quarter~~below non-GAAP table, primarily due to cost cutting measures implemented during the first three months of ~~2016 on a pro forma basis.~~2020.

~~Onshore/Offshore~~

Three Months Ended September 30, Favorable/(Unfavorable) (2017 vs. 2016 Pro Forma)
(In millions, except %) 2017
2016
Pro Forma
2016 $ %
Revenue $ 2,308.1
$ 2,398.8
$ 815.4
(90.7 ) (3.8 )
Operating profit $ 206.4
$ 118.6
$ 70.9
87.8
74.0

Operating profit as a percentage of revenue 8.9 % 4.9 % 8.7 % 4.0 pts.



	Three Months Ended
	March 31,
	2020		2019
Corporate expense, reported	$	112.2	$	93.6
Less charges and (credits)	30.7		21.0
Corporate expense, adjusted	81.5		72.6
Less foreign exchange losses	43.3		11.6
Corporate expense, adjusted and before foreign exchange losses	$	38.2	$	61.0

~~Onshore/Offshore revenue decreased $90.7 million year-over-year on a pro forma basis.~~

NON-GAAP MEASURES

In ~~December 2016,~~addition to financial results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), we ~~increased our stake~~provide non-GAAP financial measures (as defined in ~~the Yamal joint venture and became the controlling shareholder, resulting in full consolidation~~Item 10 of Regulation S-K of the ~~joint venture into the consolidated financial statements. Revenues declined due to lower activity in North America due to the delivery~~Securities Exchange Act of ~~several projects in 2016 and early 2017, partially offset by increased activity in the Middle East and Asia Pacific.~~

~~Onshore/Offshore operating profit~~1934, as ~~a percentage of revenue increased year-over-year on a pro forma basis, primarily due to the successful progression of several major projects, including Yamal and Prelude FLNG.~~

Operating profit in the third quarter of 2017 included $28.9 million of impairment, restructuring and other severance charges compared to $5.2 million in the third quarter of 2016 on a pro forma basis.

~~Surface Technologies~~

Three Months Ended September 30, Favorable/(Unfavorable) (2017 vs. 2016 Pro Forma)
(In millions, except %) 2017
2016
Pro Forma
2016 $ %
Revenue $ 353.9
$ 295.2
$ —
58.7
19.9
Operating profit (loss) $ 49.0
$ (17.4 ) $ —
66.4
*

Operating profit (loss) as a percentage of revenue 13.8 % (5.9 )%

19.7

~~_______________________~~ amended) below.


*–	~~Not meaningful~~Net income, excluding charges and credits, as well as measures derived from it (excluding charges and credits;

Surface Technologies revenue increased $58.7 million year-over-year on a pro forma basis. Revenue increased in our surface international and surface Americas businesses year-over-year on a pro forma basis, partially offset by a decrease in revenue in our loading systems and measurement solutions businesses. The increase was driven primarily by higher activity in North America due to improved rig count and completion intensity, partially offset by the flow-through to revenue of more competitively priced backlog in international markets and lower activity in our measurement solutions and loading systems businesses

Surface Technologies operating profit as a percent of revenue increased year-over-year on a pro forma basis and was driven primarily by increased volume in flowline and well service pump products in our surface Americas business, and a $7.4 million decrease in impairment, restructuring and other severance charges.

~~Operating profit in the third quarter of 2017 included $7.8 million of impairment, restructuring and other severance charges compared to $15.2 million in 2016 on a pro forma basis.~~

~~Corporate Items~~

Three Months Ended September 30, Favorable/(Unfavorable) (2017 vs. 2016 Pro Forma)
(In millions, except %) 2017
2016
Pro Forma
2016 $ %
Corporate expense $ (42.3 ) $ 5.4
$ 51.7
(47.7 ) *

~~_______________________~~


*–	~~Not meaningful~~Income before net interest expense and taxes, excluding charges and credits ("Adjusted Operating profit");

Corporate expense increased year-over-year on a proforma basis. Corporate expense in the third quarter of 2017 included $13.2 million of business combination transaction and integration costs related to the Merger and $19.3 million of foreign currency exchange gains.

~~SEGMENT RESULTS OF OPERATIONS~~

~~NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016~~

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. Refer to Note 19 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.

~~Subsea~~

Nine Months Ended September 30, Favorable/(Unfavorable) (2017 vs. 2016 Pro Forma)
(In millions, except %)
2017 ⁽¹⁾

2016
Pro Forma
2016 $ %
Revenue $ 4,585.2
$ 7,126.4
$ 4,624.7
(2,541.2 ) (35.7 )
Operating profit $ 393.1
$ 836.3
$ 669.9
(443.2 ) (53.0 )

Operating profit as a percent of revenue 8.6 % 11.7 % 14.5 % (3.1 ) pts.

~~_______________________~~


⁽¹⁾ –	Due to the Merger, there were 8.5 months included in the first nine months of 2017 for legacy FMC Technologies, compared with nine months in 2016. Refer to Note 2 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.Depreciation and amortization, excluding charges and credits (“Adjusted Depreciation and amortization”);

Subsea revenue decreased $2,541.2 million year-over-year on a pro forma basis primarily due to lower project activity in the Europe and Africa region and lower activity in our Europe, Africa and North America Subsea services businesses. The lower project activity was substantially due to the reduced backlog levels at the beginning of the period as a result of slower project awards in 2015 and 2016. Additionally, the decrease in revenue was attributable to the completion of several projects during the first nine months of 2017, lower subsea service activity, and lower vessel utilization year-over-year on a pro forma basis primarily due to high vessel campaigns in Africa and Asia in the prior year.

Subsea operating profit as a percent of revenue decreased year-over-year on a pro forma basis due to lower revenue in our Subsea projects business across most Subsea regions. Excluding impairment, restructuring and other severance charges, on a comparable basis, operating profit as a percentage of revenue improved slightly year-over-year on a pro forma basis due to a better project mix and execution.

Subsea operating profit for the first nine months of 2017 included $35.5 million in restructuring, impairment and other severance charges compared to $29.6 million in the prior year on a pro forma basis.

~~Onshore/Offshore~~

Nine Months Ended September 30, Favorable/(Unfavorable) (2017 vs. 2016 Pro Forma)
(In millions, except %) 2017
2016
Pro Forma
2016 $ %
Revenue $ 5,885.0
$ 6,629.1
$ 2,527.2
(744.1 ) (11.2 )
Operating profit $ 553.7
$ 239.5
$ 139.8
314.2
131.2

Operating profit as a percent of revenue 9.4 % 3.6 % 5.5 % 5.8 pts.

Onshore/Offshore revenue decreased $744.1 million year-over-year. In December 2016, we increased our stake in the Yamal joint venture and became the controlling shareholder, resulting in full consolidation of the joint venture into the consolidated financial statements. Revenues were lower due to reduced project activity across all geographical regions. Additionally, the decrease in revenue was attributable to lower activity in North America and South America due to the delivery of several projects in 2016 and early 2017.

Onshore/Offshore operating profit as a percentage of revenue increased year-over-year on a pro forma basis due to a favorable mix of project margins, successful progression of several major projects including Yamal and Prelude FLNG, and the successful resolution of contract disputes.

Operating profit in the first nine months of 2017 compared to the first nine months of 2016 on a pro forma basis was favorably impacted by a decrease of $68.9 million related to impairment, restructuring and other severance charges in the prior year.

~~Surface Technologies~~

Nine Months Ended September 30, Favorable/(Unfavorable) (2017 vs. 2016 Pro Forma)
(In millions, except %) 2017
2016
Pro Forma
2016 $ %
Revenue $ 902.3
$ 948.6
$ —
(46.3 ) (4.9 )
Operating profit (loss) $ 29.4
$ (116.7 ) $ —
146.1
*

Operating profit (loss) as a percent of revenue 3.3 % (12.3 )% 15.6 pts.

~~_______________________~~


*–	~~Not meaningful~~Earnings before net interest expense, income taxes, depreciation and amortization, excluding charges and credits ("Adjusted EBITDA");

Surface Technologies revenue decreased $46.3 million year-over-year on a pro forma basis. Revenue decreased in our surface international, measurement solutions and loading systems businesses year-over-year on a pro forma basis, partially offset by an increase in revenue in our surface Americas businesses. The decrease was driven primarily by the flow-through to revenue of more competitively priced backlog in international markets and lower activity in our measurement solutions and loading systems businesses.

Surface Technologies operating profit as a percent of revenue increased year-over-year on a pro forma basis and was driven primarily by increased volume in flowline and well service pump products in our surface Americas business and a $48.9 million decrease in impairment, restructuring and other severance charges.

~~Operating profit in the first nine months of 2017 included $12.0 million of impairment, restructuring and other severance charges compared to $60.9 million in 2016 on a pro forma basis.~~

~~Corporate Items~~

Nine Months Ended September 30, Favorable/(Unfavorable) (2017 vs. 2016 Pro Forma)
(In millions, except %) 2017
2016
Pro Forma
2016 $ %
Corporate expense $ (224.3 ) $ (256.9 ) $ (108.4 ) 32.6
*

~~_______________________~~


*–	~~Not meaningful~~Corporate expenses excluding charges and credits and excluding foreign exchange losses; and


–	Net (debt) cash

are non-GAAP financial measures.

~~Corporate expense decreased year-over-year on~~

Management believes that the exclusion of charges and credits from these financial measures enables investors and management to more effectively evaluate our operations and consolidated results of operations period-over-period, and to identify operating trends that could otherwise be masked or misleading to both investors and management by the excluded items. These measures are also used by management as performance measures in determining certain incentive compensation. The foregoing non-GAAP financial measures should be considered in addition to, not as a ~~proforma basis. Corporate expense~~substitute for or superior to, other measures of financial performance prepared in accordance with GAAP.

The following is a reconciliation of the ~~first nine months~~most comparable financial measures under GAAP to the non-GAAP financial measures.

CONSOLIDATED RESULTS OF OPERATIONS OF TECHNIPFMC PLC

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES



	Three Months Ended
	March 31, 2020
	Net income (loss) attributable to TechnipFMC plc			Net income (loss) attributable to non-controlling interests		Provision (benefit) for income taxes			Net interest expense		Income (loss) before net interest expense and income taxes (Operating profit)			Depreciation and amortization			Earnings before net interest expense, income taxes, depreciation and amortization (EBITDA)
TechnipFMC plc, as reported	$	(3,256.1	)	$	10.4	$	37.7		$	72.3	$	(3,135.7	)	$	120.4		$	(3,015.3	)

Charges and (credits):
Impairment and other charges	3,159.9			—		28.1			—		3,188.0			—			3,188.0
Restructuring and other charges	8.6			—		2.8			—		11.4			—			11.4
Direct COVID-19 expenses	6.8			—		2.2			—		9.0			—			9.0
Separation costs	20.2			—		6.9			—		27.1			—			27.1
Purchase price accounting adjustment	6.5			—		2.0			—		8.5			(8.5		)	—
Valuation allowance	5.0			—		(5.0		)	—		—			—			—
Adjusted financial measures	$	(49.1	)	$	10.4	$	74.7		$	72.3	$	108.3		$	111.9		$	220.2

Diluted earnings (loss) per share attributable to TechnipFMC plc, as reported	$	(7.28	)
Adjusted diluted earnings per share attributable to TechnipFMC plc	$	(0.11	)



	Three Months Ended
	March 31, 2019
	Net income (loss) attributable to TechnipFMC plc			Net income (loss) attributable to non-controlling interests			Provision (benefit) for income taxes		Net interest expense		Income (loss) before net interest expense and income taxes (Operating profit)		Depreciation and amortization			Earnings before net interest expense, income taxes, depreciation and amortization (EBITDA)
TechnipFMC plc, as reported	$	20.9		$	(1.1	)	$	14.5	$	88.2	$	122.5	$	119.4		$	241.9

Charges and (credits):
Impairment and other charges	0.5			—			0.2		—		0.7		—			0.7
Restructuring and other severance charges	11.6			—			4.2		—		15.8		—			15.8
Business combinations transaction and integration costs	8.9			—			3.2		—		12.1		—			12.1
Reorganization	19.2			—			6.1		—		25.3		—			25.3
Purchase price accounting adjustment	6.5			—			2.0		—		8.5		(8.5		)	—
Valuation allowance	(40.3		)	—			40.3		—		—		—			—
Adjusted financial measures	$	27.3		$	(1.1	)	$	70.5	$	88.2	$	184.9	$	110.9		$	295.8

Diluted earnings (loss) per share attributable to TechnipFMC plc, as reported	$	0.05
Adjusted diluted earnings per share attributable to TechnipFMC plc	$	0.06

CONSOLIDATED RESULTS OF OPERATIONS OF TECHNIPFMC PLC

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES



	Three Months Ended
	March 31, 2020
	Subsea			Technip Energies			Surface Technologies			Corporate and Other			Total
Revenue	$	1,253.1		$	1,547.7		$	329.5		$	—		$	3,130.3

Operating profit (loss), as reported (pre-tax)	$	(2,750.7	)	$	151.2		$	(424.0	)	$	(112.2	)	$	(3,135.7	)

Charges and (credits):
Impairment and other charges	2,776.5			—			411.5			—			3,188.0
Restructuring and other charges*	(6.9		)	2.9			11.8			3.6			11.4
Direct COVID-19 expenses	4.0			3.9			1.1			—			9.0
Separation costs	—			—			—			27.1			27.1
Reorganization	—			—			—			—			—
Legal provision, net	—			—			—			—			—
Purchase price accounting adjustments	8.5			—			—			—			8.5
Subtotal	2,782.1			6.8			424.4			30.7			3,244.0

Adjusted Operating profit (loss)	31.4			158.0			0.4			(81.5		)	108.3

Adjusted Depreciation and amortization	73.4			9.1			24.1			5.3			111.9

Adjusted EBITDA	$	104.8		$	167.1		$	24.5		$	(76.2	)	$	220.2

Operating profit margin, as reported	(219.5		)%	9.8		%	(128.7		)%				(100.2		)%

Adjusted Operating profit margin	2.5		%	10.2		%	0.1		%				3.5		%

Adjusted EBITDA margin	8.4		%	10.8		%	7.4		%				7.0		%

*On December 30, 2019, we completed the acquisition of ~~2017 primarily reflected $8.4~~the remaining 50% of Technip Odebrecht PLSV CV. A $7.3 million ~~of impairment,~~gain recorded within restructuring and other ~~severance~~ charges ~~and $87.2 million of business combination transaction and integration costs related~~in the Subsea segment during the three months ended March 31, 2020 relates to ~~the Merger.~~this transaction.



	Three Months Ended
	March 31, 2019
	Subsea			Technip Energies			Surface Technologies			Corporate and Other			Total
Revenue	$	1,185.3		$	1,335.1		$	392.6		$	—		$	2,913.0

Operating profit (loss), as reported (pre-tax)	$	49.9		$	155.7		$	10.5		$	(93.6	)	$	122.5

Charges and (credits):
Impairment and other charges	0.7			—			—			—			0.7
Restructuring and other severance charges	1.6			3.8			1.5			8.9			15.8
Business combination transaction and integration costs	—			—			—			12.1			12.1
Reorganization	—			25.3			—			—			25.3
Purchase price accounting adjustments - amortization related	8.5			—			—			—			8.5
Subtotal	10.8			29.1			1.5			21.0			62.4

Adjusted Operating profit (loss)	60.7			184.8			12.0			(72.6		)	184.9

Adjusted Depreciation and amortization	79.0			10.0			18.1			3.8			110.9

Adjusted EBITDA	$	139.7		$	194.8		$	30.1		$	(68.8	)	$	295.8

Operating profit margin, as reported	4.2		%	11.7		%	2.7		%				4.2		%

Adjusted Operating profit margin	5.1		%	13.8		%	3.1		%				6.3		%

Adjusted EBITDA margin	11.8		%	14.6		%	7.7		%				10.2		%

INBOUND ORDERS AND ORDER BACKLOG

Inbound ~~orders—~~orders - Inbound orders represent the estimated sales value of confirmed customer orders received during the reporting period.COVID-19 has had a minimal impact on our ability to finalize sales contracts required to recognize new inbound orders in the quarter. However, the significant decline in commodity prices, due in part to the lower demand resulting from COVID-19, is expected to negatively impact the near-term outlook for inbound orders.


									Inbound Orders
	Inbound Orders								Three Months Ended
	Three Months Ended September 30,				Nine Months Ended September 30,				March 31,
(In millions)	2017		2016		2017		2016		2020		2019
Subsea	$	979.8	$	550.8	$	3,418.8	$	1,881.3	$	1,172.1	2,677.6
Onshore/Offshore	1,153.0		1,155.6		2,938.7		2,497.6
Technip Energies									560.6		3,138.9
Surface Technologies	329.1		—		846.9		—		366.3		368.0
Total inbound orders	$	2,461.9	$	1,706.4	$	7,204.4	$	4,378.9	$	2,099.0	$	6,184.5

Order ~~backlog—~~backlog - Order backlog is calculated as the estimated sales value of unfilled, confirmed customer orders at the reporting date.

Backlog reflects the current expectations for the timing of project execution. The scheduling of some future work included in our backlog has been impacted by COVID-19 related disruptions and remains subject to future adjustment. See “Transaction Price Allocated to the Remaining Unsatisfied Performance Obligations” Note 5 to our condensed consolidated financial statements of this Quarterly Report for more information on order backlog.


	Order Backlog						Order Backlog
(In millions)	September 30, 2017		December 31, 2016		September 30, 2016		March 31, 2020		December 31, 2019
Subsea	$	5,948.9	$	4,909.0	$	5,662.9	$	7,773.5	$	8,479.8
Onshore/Offshore	7,559.3		11,834.9		8,035.9
Technip Energies							13,766.6		15,298.1
Surface Technologies	394.2		—		—		422.0		473.2
Total order backlog	$	13,902.4	$	16,743.9	$	13,698.8	$	21,962.1	$	24,251.1

~~Subsea.~~Subsea -Order backlog for Subsea at ~~September 30, 2017, increased~~March 31, 2020 decreased by ~~$1,039.9 million~~$0.7 billion compared to December 31, ~~2016.~~2019. Subsea backlog of ~~$5.9~~$7.8 billion at ~~September 30, 2017,~~March 31, 2020 was composed of various subsea projects, including ~~Total’s Kaombo; Petrobras’ pipelay support vessel~~Total Golfinho; Eni Coral and ~~pre-salt tree awards; Mellitah’s Bahr Essalam; Shell’s Appomattox; Eni’s Coral; Woodside’s Greater Enfield; Statoil’s Peregrino~~Merakes; Petrobras Mero I; Energean Karish; ExxonMobil Liza Phase ~~II;~~2; Neptune Duva & Giøa P1 and ~~BP’s Shah Deniz.~~Seagull; Reliance MJ1; Lundin Edvard Grieg; BP Thunderhorse South Extension 2; Equinor Johan Sverdrup Phase 2; Husky West White Rose; BP Platina, and Woodside Pyxis and Lambert Deep.

~~Onshore/Offshore.Onshore/Offshore~~Technip Energies - Technip Energies order backlog at ~~September 30, 2017,~~March 31, 2020 decreased by ~~$4.3~~$1.5 billion compared to December 31, ~~2016. Onshore/Offshore~~2019. Technip Energies backlog of ~~$7.6~~$13.8 billion at March 31, 2020 was composed of various projects, including Arctic LNG 2, Yamal LNG; ~~Enoc’s Jebel Ali~~Midor refinery expansion; ~~Sibur’s Zapsib-2; Total’s Martin Linge; Adma Opco’s Umm Lulu Phase 2; Shell’s Prelude FLNG;~~BP Tortue FPSO; Long Son Petrochemicals; ExxonMobil Beaumont refinery expansion; HURL fertilizer plants; Petronas Kasawari; Energean Karish; Neste bio-diesel expansion; and ~~Eni’s Ghana onshore receiving gas terminal.~~Motor Oil Hellas New Naphta Complex.

Surface Technologies - Order backlog for Surface Technologies at March 31, 2020 decreased by $51.2 million compared to December 31, 2019. Given the short-cycle nature of the business, most orders are quickly converted into sales revenue; longer contracts are typically converted within 12 months.

Non-consolidated backlog - Non-consolidated backlog reflects the proportional share of backlog related to joint ventures that is not consolidated due to our minority ownership position.



	Non-consolidated backlog
(In millions)	March 31, 2020
Subsea	$	761.6
Technip Energies	2,350.2
Total order backlog	$	3,111.8

LIQUIDITY AND CAPITAL RESOURCES

Most of our cash is ~~held in the treasury centralizing companies of~~managed centrally and flowed through centralized bank accounts controlled and maintained by TechnipFMC globally and in ~~foreign~~many operating jurisdictions to best meet the liquidity needs of our global operations. Cash held by subsidiaries of our U.S. domiciled companies could be repatriated to the United States, but under current law, any such repatriation would be subject to U.S. federal income tax, as adjusted for applicable foreign tax credits. We have provided for U.S. federal income taxes on earnings not distributed to the U.S. parent companies where we have determined that such earnings are not indefinitely reinvested.

We expect to meet the continuing funding requirements of our global operations with cash generated by such operations ~~cash from earnings of operations that are not indefinitely reinvested in the jurisdictions where generated~~ and our existing revolving credit facility. ~~We would make a provision for additional U.S. tax due to repatriated cash required to fund U.S. operations not previously provided, which may be material to our cash flows and results of operations.~~

Net (Debt) Cash— - Net (debt) cash, 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, or net cash, is a meaningful financial measure that may assist investors in understanding our financial condition and recognizing underlying trends in our capital structure. Net (debt) cash should not be considered an alternative to, or more meaningful than, cash and cash equivalents as determined in accordance with 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) cash, utilizing details of classifications from our condensed consolidated balance ~~sheets.~~sheets:

(In millions) September 30, 2017 December 31, 2016
Cash and cash equivalents $ 6,896.1
$ 6,269.3
Less: Short-term debt and current portion of long-term debt 473.2
683.6
Less: Long-term debt, less current portion 3,167.4
1,869.3
Net (debt) cash $ 3,255.5
$ 3,716.4

The gross change in the debt and cash components of our net (debt) cash position was primarily due to the Merger. Refer to Note 2 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.



(In millions)	March 31, 2020			December 31, 2019
Cash and cash equivalents	$	4,999.4		$	5,190.2
Short-term debt and current portion of long-term debt	(586.7		)	(495.4		)
Long-term debt, less current portion	(3,823.9		)	(3,980.0		)
Net cash	$	588.8		$	714.8

WeOperating cash flows -During the three months ended March 31, 2020 and 2019, we generated ~~$279.0~~$27.9 million and ~~$268.4~~$121.4 million in cash flows from operating activities, ~~during the nine months ended September 30, 2017 and 2016,~~ respectively. The ~~slight increase~~decrease of $93.5 million in cash ~~provided~~generated by operating activities was primarily due to ~~the change in trade receivables, costs in excess of billings, advance payments~~timing differences on project milestones and ~~billings in excess of costs. Our working capital balances can vary significantly depending on the payment and delivery terms on key contracts in our portfolio of projects.~~vendor payments.

Investing cash flows - Investing activities ~~provided $1,334.4~~used $73.5 million and ~~used $187.3~~$237.0 million of cash during the three months ended March 31, 2020 and 2019, respectively. The decrease of $163.5 million in cash ~~flows during the nine months ended September 30, 2017 and 2016, respectively. The increase in cash provided~~used by investing activities was primarily due to decreased capital expenditures and decreased payments to acquire debt securities during the ~~Merger. Refer to Note 2 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.~~three months ended March 31, 2020.

Financing cash flows - Financing activities ~~used $1,056.1~~generated $1.1 million ~~and $583.5 million in~~of cash ~~flows~~ during the ~~nine~~three months ended ~~September 30, 2017 and 2016, respectively.~~March 31, 2020 as compared to $447.6 million required during the three months ended March 31, 2019, resulting in a $448.7 million increase compared to the three months ended March 31, 2019. The ~~decrease in cash flows from financing activities~~increase was primarily due to increased proceeds from the ~~payments related to taxes withheld on stock-based compensation~~revolving credit facility, decreased settlement of the mandatorily redeemable financial liability and ~~a decrease in our~~decreased purchases of ordinary shares, partially offset by decreased borrowings of commercial paper ~~position during the nine months ended September 30, 2017.~~



~~PART I—Financial Information~~	Page
~~Item 1.~~PART I — Financial ~~Statements (unaudited)~~Information	5
~~Condensed Consolidated~~Item 1. Financial Statements ~~of Income~~(Unaudited)	5
Condensed Consolidated Statements of Income	5
Condensed Consolidated Statements of Comprehensive Income	6
Condensed Consolidated Balance Sheets	7
Condensed Consolidated Statements of Cash Flows	8
Condensed Consolidated Statements of Changes in Stockholders’ Equity	9
Notes to Condensed Consolidated Financial Statements	10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3933
Business Outlook	3933
Consolidated Results of Operations	4136
Segment Results of Operations	38
Non-GAAP Measures	40
Inbound Orders and Order Backlog	44
Liquidity and Capital Resources	45
~~Inbound Orders and Order Backlog~~Critical Accounting Estimates	4947
~~Liquidity and Capital Resources~~Other Matters	5047
~~Critical Accounting Estimates~~	53
~~Off-Balance Sheet Arrangements~~	56
~~Other Matters~~	56
~~Recently Issued Accounting Standards~~	56
Item 3. Quantitative and Qualitative Disclosures About Market Risk	5748
Item 4. Controls and Procedures	5848
PART ~~II—~~II — Other Information
~~Item 1. Legal Proceedings~~	5949
Item ~~1A. Risk Factors~~1. Legal Proceedings	5949
Item 1A. Risk Factors	49
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	7050
Item 3. Defaults Upon Senior Securities	7050
Item 4. Mine Safety Disclosures	7050
Item 5. Other Information	7050
Item 6. Exhibits	7050
Signature	51


	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
(In millions, except per share data)	2017			2016			2017			2016			2020			2019
Revenue:
Revenue
Service revenue	$	3,374.9		$	2,360.0		$	9,301.0		$	7,089.6		$	2,307.7		$	2,051.1
Product revenue	710.9			15.7			1,928.2			62.3			771.6			799.3
Lease and other revenue	55.1			—			144.7			—
Lease revenue													51.0			62.6
Total revenue	4,140.9			2,375.7			11,373.9			7,151.9			3,130.3			2,913.0
Costs and expenses:

Costs and expenses
Cost of service revenue	2,841.3			1,925.4			7,728.4			5,825.4			1,991.4			1,644.2
Cost of product revenue	589.4			5.6			1,781.9			38.3			672.3			721.7
Cost of lease and other revenue	37.5			—			100.2			—
Cost of lease revenue													38.0			46.0
Selling, general and administrative expense	284.4			143.0			806.5			434.0			293.9			297.8
Research and development expense	51.1			22.0			143.6			67.8			35.2			39.9
Impairment, restructuring and other expense (Note 5)	59.4			10.2			56.8			109.7
Merger transaction and integration costs (Note 2)	9.2			14.0			87.2			30.7
Impairment, restructuring and other expenses (Note 17)													3,208.4			16.5
Separation costs (Note 2)													27.1			—
Merger transaction and integration costs													—			12.1
Total costs and expenses	3,872.3			2,120.2			10,704.6			6,505.9			6,266.3			2,778.2

Other income (expense), net	30.0			81.7			43.2			(17.5		)	(28.5		)	(26.2		)
Income from equity affiliates (Note 8)	17.3			67.4			39.4			72.8
Income before net interest expense and income taxes	315.9			404.6			751.9			701.3
Income from equity affiliates (Note 11)													28.8			13.9
Income (Loss) before net interest expense and income taxes													(3,135.7		)	122.5
Net interest expense	(86.3		)	(0.4		)	(240.5		)	(21.4		)	(72.3		)	(88.2		)
Income before income taxes	229.6			404.2			511.4			679.9
Provision for income taxes (Note 14)	111.7			102.5			249.7			153.8
Net income	117.9			301.7			261.7			526.1
Net loss attributable to noncontrolling interests	3.1			0.7			5.5			1.0
Net income attributable to TechnipFMC plc	$	121.0		$	302.4		$	267.2		$	527.1
Income (loss) before income taxes													(3,208.0		)	34.3
Provision for income taxes (Note 19)													37.7			14.5
Net income (loss)													(3,245.7		)	19.8
Net (income) loss attributable to non-controlling interests													(10.4		)	1.1
Net income (loss) attributable to TechnipFMC plc													$	(3,256.1	)	$	20.9

Earnings per share attributable to TechnipFMC plc (Note 4):
Earnings (loss) per share attributable to TechnipFMC plc (Note 7)
Basic	$	0.26		$	2.50		$	0.57		$	4.41		$	(7.28	)	$	0.05
Diluted	$	0.26		$	2.39		$	0.57		$	4.22		$	(7.28	)	$	0.05
Weighted average shares outstanding (Note 4):

Weighted average shares outstanding (Note 7)
Basic	467.2			121.0			466.8			119.6			447.5			450.1
Diluted	469.7			126.9			468.3			125.3			447.5			453.3


⁽¹⁾ (a)	Net of income tax (expense) benefit of ~~(0.9)~~NaN and ~~nil~~NaN for the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016, respectively, and $(4.8) and nil for the nine months ended September 30, 2017 and 2016,~~2019, respectively.


⁽³⁾	~~Net of income tax (expense) benefit of $(12.1) and $(4.8)for the three months ended September 30, 2017 and 2016, respectively, and $(49.4) and $(25.7) for the nine months ended September 30, 2017 and 2016, respectively.~~


⁽⁴⁾ (c)	Net of income tax (expense) benefit of ~~$0.7~~$(0.6) million and ~~$0.2~~$(0.1) million for the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016, respectively, and $1.1 and $0.4 for the nine months ended September 30, 2017 and 2016,~~2019, respectively.


(In millions)	Ordinary Shares			Ordinary Shares Held in Treasury and Employee Benefit Trust			Capital in Excess of Par Value of Ordinary Shares			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Non- controlling Interest			Total Stockholders’ Equity		Ordinary Shares			Ordinary Shares Held in Treasury and Employee Benefit Trust			Capital in Excess of Par Value of Ordinary Shares			(Accumulated deficit) retained earnings			Accumulated Other Comprehensive Income (Loss)			Non-controlling Interest			Total Stockholders’ Equity
Balance as of December 31, 2016	$	114.7		$	(44.5	)	$	2,694.7		$	3,416.1	$	(1,057.4	)	$	(11.7	)	$	5,111.9
Balance as of December 31, 2018																				$	450.5		$	(2.4	)	$	10,197.0		$	1,072.2		$	(1,359.7	)	$	31.3		$	10,388.9
Adoption of accounting standards																				—			—			—			1.8			—			—			1.8
Net income (loss)	—			—			—			267.2		—			(5.5		)	261.7		—			—			—			20.9			—			(1.1		)	19.8
Other comprehensive income	—			—			—			—		111.6			0.7			112.3		—			—			—			—			36.7			0.7			37.4
Issuance of ordinary shares due to the merger of FMC Technologies and Technip	351.9			(6.6		)	7,825.4			—		—			—			8,170.7
Cancellation of treasury stock (Note 13)	(0.1		)	44.5			(26.6		)	—		—			—			17.8
Cancellation of ordinary shares																				(2.2		)	—			(47.9		)	—			—			—			(50.1		)
Net sales of ordinary shares for employee benefit trust	—			1.6			—			—		—			—			1.6		—			2.4			—			—			—			—			2.4
Cash dividends declared ($0.13 per share)																				—			—			—			(58.5		)	—			—			(58.5		)
Share-based compensation (Note 16)																				—			—			20.4			—			—			—			20.4
Other																				—			—			—			11.5			—			—			11.5
Balance as of March 31, 2019																				$	448.3		$	—		$	10,169.5		$	1,047.9		$	(1,323.0	)	$	30.9		$	10,373.6

Balance as of December 31, 2019																				$	447.1		$	—		$	10,182.8		$	(1,563.1	)	$	(1,407.5	)	$	28.8		$	7,688.1
Adoption of accounting standards (Note 4)																				—			—			—			(7.8		)	—			—			(7.8		)
Net income (loss)																				—			—			—			(3,256.1		)	—			10.4			(3,245.7		)
Other comprehensive loss																				—			—			—			—			(294.2		)	(11.1		)	(305.3		)
Issuance of ordinary shares	0.6			—			—			—		—			—			0.6		1.2			—			(7.6		)	—			—			—			(6.4		)
Stock-based compensation (Note 16)	—			—			34.9			—		—			—			34.9
Cash dividends declared ($0.13 per share)																				—			—			—			(59.2		)	—			—			(59.2		)
Share-based compensation (Note 16)																				—			—			21.6			—			—			—			21.6
Other				—			1.4			—		—			12.0			13.4		—			—			—			(0.8		)	—			0.3			(0.5		)
Balance as of September 30, 2017	$	467.1		$	(5.0	)	$	10,529.8		$	3,683.3	$	(945.8	)	$	(4.5	)	$	13,724.9
Balance as of March 31, 2020																				$	448.3		$	—		$	10,196.8		$	(4,887.0	)	$	(1,701.7	)	$	28.4		$	4,084.8



(In millions, except per share data)
Total FMC Technologies, Inc. shares subject to exchange as of January 16, 2017	228.9
FMC Technologies, Inc. exchange ratio ⁽¹⁾	0.5
Shares of TechnipFMC issued	114.4
Value per share of Technip as of January 16, 2017 ⁽²⁾	$	71.4
Total purchase consideration	$	8,170.7


⁽²⁾	~~Closing price of Technip’s ordinary shares on Euronext Paris on January 16, 2017 in Euro converted at the Euro to U.S. dollar exchange rate of $1.0594 on January 16, 2017.~~



(In millions)
Assets:
Cash	$	1,479.2
Accounts receivable	1,247.4
Inventory	764.8
Income taxes receivable	139.2
Other current assets	282.2
Property, plant and equipment	1,293.3
Intangible assets	1,390.3
Deferred income taxes	67.0
Other long-term assets	167.3
Total identifiable assets acquired	6,830.7
Liabilities:
Short-term and current portion of long-term debt	319.5
Accounts payable, trade	386.0
Advance payments	454.0
Income taxes payable	92.1
Other current liabilities	524.3
Long-term debt, less current portion	1,444.2
Accrued pension and other post-retirement benefits, less current portion	195.5
Deferred income taxes	226.8
Other long-term liabilities	138.7
Total liabilities assumed	3,781.1
Net identifiable assets acquired	3,049.6
Goodwill	5,121.1
Net assets acquired	$	8,170.7



(In millions)	Allocated Goodwill
Subsea	$	2,508.2
Onshore/Offshore	1,622.9
Surface Technologies	990.0
Total	$	5,121.1



(In millions, except estimated useful lives)	Fair Value		Estimated Useful Lives
Acquired technology	$	240.0	10
Backlog	175.0		2
Customer relationships	285.0		10
Tradenames	635.0		20
Software	55.3		Various
Total identifiable intangible assets acquired	$	1,390.3


(b)	Includes amounts attributable to non-controlling interests.



(In millions)	September 30, 2017			December 31, 2016
Raw materials	$	250.8		$	272.9
Work in process	175.1			36.1
Finished goods	587.8			64.6
	1,013.7			373.6
Valuation adjustments	(83.0		)	(38.9		)
Inventories, net	$	930.7		$	334.7



(In millions)	September 30, 2017
Financial guarantees ⁽¹⁾	$	839.6
Performance guarantees ⁽²⁾	3,733.8
Maximum potential undiscounted payments	$	4,573.4



(Number of shares in millions)	Ordinary Shares Issued		Ordinary Shares Held in Employee Benefit Trust	Treasury Stock
Balance as of December 31, 2015	119.0		—	0.8
Stock awards	0.1		—	(0.3	)
Treasury stock purchases	—		—	2.6
Dividends paid	3.2		—	—
Balance as of September 30, 2016	122.3		—	3.1

Balance as of December 31, 2016	119.2		—	0.3
Net capital increases due to the merger of FMC Technologies and Technip	347.4		—	—
Stock awards	0.6		—	—
Treasury stock cancellation due to the merger of FMC Technologies and Technip	—		—	(0.3	)
Treasury stock purchases	—		—	0.1
Treasury stock cancellations	(0.1	)	—	(0.1	)
Net stock purchased for (sold from) employee benefit trust	—		0.1	—
Balance as of September 30, 2017	467.1		0.1	—



(In millions)	Foreign Currency Translation			Available-For-Sale Securities		Hedging Instruments			Defined Pension and Other Post-retirement Benefits			Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss as of December 31, 2016	$	(849.8	)	$	—	$	(126.9	)	$	(80.7	)	$	(1,057.4	)
Other comprehensive income (loss) before reclassifications, net of tax	(34.7		)	—		74.9			(4.0		)	36.2
Reclassification adjustment for net losses (gains) included in net income, net of tax	—			—		74.3			1.8			76.1
Other comprehensive income (loss), net of tax	(34.7		)	—		149.2			(2.2		)	112.3
Accumulated other comprehensive income (loss)	(884.5		)	—		22.3			(82.9		)	(945.1		)
Accumulated other comprehensive income attributable to noncontrolling interest	(0.7		)	—		—			—			(0.7		)
Accumulated other comprehensive income (loss) attributable to TechnipFMC as of September 30, 2017	$	(885.2	)	$	—	$	22.3		$	(82.9	)	$	(945.8	)



	Pension Benefits
	Three Months Ended September 30,											Nine Months Ended September 30,
	2017						2016					2017						2016
(In millions)	U.S.			Int’l			U.S.		Int’l			U.S.			Int’l			U.S.		Int’l
Service cost	$	2.7		$	5.9		$	—	$	2.9		$	7.6		$	15.8		$	—	$	8.8
Interest cost	7.0			5.5			—		2.7			19.7			15.0			—		8.2
Expected return on plan assets	(12.7		)	(9.7		)	—		(2.1		)	(35.9		)	(26.7		)	—		(6.3		)
Amortization of prior service cost (credit)	—			0.3			—		0.2			—			0.6			—		0.6
Amortization of actuarial loss (gain), net	—			0.7			—		0.2			—			1.9			—		0.7
Curtailment cost	—			—			—		—			—			—			—		0.1
Net periodic benefit cost	$	(3.0	)	$	2.7		$	—	$	3.9		$	(8.6	)	$	6.6		$	—	$	12.1



	Other Post-retirement Benefits
	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2017		2016		2017		2016
Interest cost	$	0.1	$	—	$	0.2	$	—
Net periodic benefit cost	$	0.1	$	—	$	0.2	$	—



Location of Fair Value Hedge Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income
	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2017		2016		2017		2016
Other income (expense), net	$	12.2	$	25.5	$	61.9	$	37.0



Location of Cash Flow Hedge Gain (Loss) Reclassified from Accumulated OCI into Income	Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
	Three Months Ended September 30,						Nine Months Ended September 30,
(In millions)	2017			2016			2017			2016
Foreign exchange contracts:
Revenue	$	(6.3	)	$	—		$	(31.6	)	$	—
Cost of sales	0.2			—			1.7			—
Selling, general and administrative expense	0.5			—			0.7			—
Research and development expense	—			—			(0.1		)	—
Other income (expense), net	(20.4		)	(18.1		)	(70.6		)	(107.9		)
Total	$	(26.0	)	$	(18.1	)	$	(99.9	)	$	(107.9	)

Location of Cash Flow Hedge Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	Three Months Ended September 30,						Nine Months Ended September 30,
(In millions)	2017			2016			2017			2016
Foreign exchange contracts:
Revenue	$	3.7		$	—		$	7.9		$	—
Cost of sales	(2.8		)	—			(7.3		)	—
Other income (expense), net	10.6			1.7			24.6			(2.9		)
Total	$	11.5		$	1.7		$	25.2		$	(2.9	)



(In millions)	Nine Months Ended September 30, 2017
Balance at beginning of period	$	174.8
Less: Gains (losses) recognized in profit and loss statement	(202.9		)
Less: Settlements	76.6
Balance at end of period	$	301.1



	Three Months Ended September 30,									Change (2017 vs. 2016 Pro Forma)
(In millions, except %)	2017			2016 Pro Forma**			2016			$		%
Revenue	$	4,140.9		$	5,038.2		$	2,375.7		(897.3	)	(17.8	)
Costs and expenses:
Cost of sales	3,468.2			4,294.7			1,931.0			(826.5	)	(19.2	)
Selling, general and administrative expense	284.4			282.8			143.0			1.6		0.6
Research and development expense	51.1			45.3			22.0			5.8		12.8
Impairment, restructuring and other expense	59.4			34.0			10.2			25.4		74.7
Merger transaction and integration costs	9.2			44.6			14.0			(35.4	)	(79.4	)
Total costs and expenses	3,872.3			4,701.4			2,120.2			(829.1	)	(17.6	)
Other income (expense), net	30.0			81.0			81.7			(51.0	)	(63.0	)
Net interest expense	(86.3		)	(13.9		)	(0.4		)	(72.4	)	*
Income from equity affiliates	17.3			46.5			67.4			(29.2	)	(62.8	)
Income before income taxes	229.6			450.4			404.2			(220.8	)	(49.0	)
Provision for income taxes	111.7			110.4			102.5			1.3		1.2
Income from continuing operations	117.9			340.0			301.7			(222.1	)	(65.3	)
Loss from discontinued operations, net of income taxes	—			(14.0		)	—			14.0		*
Net income	117.9			326.0			301.7			(208.1	)	(63.8	)
Net loss attributable to noncontrolling interests	3.1			1.0			0.7			2.1		*
Net income attributable to TechnipFMC plc	$	121.0		$	327.0		$	302.4		(206.0	)	(63.0	)



(In millions) Description	Amount		Debt Outstanding		Commercial Paper Outstanding ^(a)		Letters of Credit		Unused Capacity		Maturity
Five-year revolving credit facility	$	2,500.0	$	—	$	839.8	$	—	$	1,660.2	January 2022


^(a)	Under our commercial paper program, we have the ability to access up to $1.5 billion and €1.0 billion of financing through our commercial paper dealers. Our available capacity under our revolving credit facility is reduced by any outstanding commercial paper.



(In millions, except basis points)	Increase (Decrease) in 2016 Pension Expense Before Income Taxes			Increase (Decrease) in Projected Benefit Obligation at December 31, 2016
50 basis point decrease in discount rate	$	0.3		$	29.4
50 basis point increase in discount rate	$	(0.2	)	$	(27.0	)
50 basis point decrease in expected long-term rate of return on plan assets	$	—		—
50 basis point increase in expected long-term rate of return on plan assets	$	—		—



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 ^(b)
July 1, 2017—July 31, 2017	590	$	28.22	—	—
August 1, 2017—August 31, 2017	300	$	25.58	—	—
September 1, 2017—September 30, 2017	130,240	$	27.47	129,800	18,375,011
Total	131,130			129,800	18,375,011



Period	Total Number of Shares Purchased	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 ^(a)
January 1, 2020 – January 31, 2020	—	$	—	—	14,286,427
February 1, 2020 – February 29, 2020	—	$	—	—	14,286,427
March 1, 2020 – March 31, 2020	—	$	—	—	14,286,427
Total	—			—	14,286,427



Exhibit ~~No.~~Number		Exhibit Description
~~2.1~~10.1**		Business Combination Agreement, dated as of June 14, 2016, by and among FMC Technologies, Inc., TechnipFMC plc (f/k/a FMC Technologies SIS Limited) and Technip S.A. (incorporated by reference from Annex A-1 to the Registration Statement on Form S-4, as amended, filed on October 21, 2016) (File No. 333-213067)
~~3.1~~	~~Articles of Association of TechnipFMC plc (incorporated by reference from Exhibit 3.1 to the Current Report on Form 8-K filed on January 17, 2017) (File No. 001-37983)~~
~~4.1~~	Indenture, dated March 29, 2017, between TechnipFMC plc and U.S. Bank National Association (incorporated by reference from Exhibit 4.1 to the Current Report on Form 8-K filed on March 30, 2017) (File No. 001-37983)
~~4.2~~	First Supplemental Indenture, dated March 29, 2017, between TechnipFMC plc and U.S. Bank National Association, as trustee (including the form of 2.00% Senior Notes due 2017) (incorporated by reference from Exhibit 4.2 to the Current Report on Form 8-K filed on March 30, 2017) (File No. 001-37983)
~~4.3~~	Second Supplemental Indenture, dated March 29, 2017, between TechnipFMC plc and U.S. Bank National Association, as trustee (including the form of 3.45% Senior Notes due 2022) (incorporated by reference from Exhibit 4.3 to the Current Report on Form 8-K filed on March 30, 2017) (File No. 001-37983)
~~4.4~~	Registration Rights Agreement, dated March 29, 2017, between TechnipFMC plc, and each of Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC, as dealer managers (incorporated by reference from Exhibit 4.4 to the Current Report on Form 8-K filed on March 30, 2017) (File No. 001-37983)
~~10.1~~	Form of Restricted Stock Unit ~~Grant~~ Agreement pursuant to the Amended and Restated TechnipFMC plc Incentive Award Plan (Employee) ~~(incorporated by reference from Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on August 4, 2017) (File No. 001-37983)~~.
~~10.2~~10.2**		Form of ~~Restricted~~Performance Stock Unit ~~Grant~~ Agreement pursuant to the Amended and Restated TechnipFMC plc Incentive Award Plan ~~(Non-Employee Director) (incorporated by reference from Exhibit 10.2 to the Quarterly Report on Form 10-Q filed on August 4, 2017) (File No. 001-37983)~~
~~10.3~~	~~Form of Performance Stock Unit Grant Agreement pursuant to the TechnipFMC plc Incentive Award Plan~~ (Employee) ~~(incorporated by reference from Exhibit 10.3 to the Quarterly Report on Form 10-Q filed on August 4, 2017) (File No. 001-37983)~~
~~10.4~~	~~Performance Stock Unit Grant Agreement pursuant to the TechnipFMC plc Incentive Award Plan (Employee)~~
~~10.5~~	Form of NonQualified Stock Option Grant Agreement pursuant to the TechnipFMC plc Incentive Award Plan (Employee) (incorporated by reference from Exhibit 10.4 to the Quarterly Report on Form 10-Q filed on August 4, 2017) (File No. 001-37983).
31.1		Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a).
31.2		Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a).
32.1*		Certification of Chief Executive Officer Under Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. ~~1350~~1350.
32.2*		Certification of Chief Financial Officer Under Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. ~~1350~~1350.
101.INS		XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema ~~Document~~Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase ~~Document~~Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase ~~Document~~Document.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase ~~Document~~Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase ~~Document~~Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


**	Indicates a management contract or compensatory plan or arrangement.




/s/ ~~Maryann T. Mannen~~	Krisztina Doroghazi
~~Maryann T. Mannen~~	Krisztina Doroghazi
~~Executive~~Senior Vice President, Controller and Chief ~~Financial~~Accounting Officer ~~(Principal Financial~~ (Principal Accounting Officer and a Duly Authorized Officer)