XML 99 R14.htm IDEA: XBRL DOCUMENT v3.20.1
Revenue
 3 Months Ended
Mar. 31, 2020
Revenue from Contract with Customer [Abstract]  
Revenue REVENUE
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


Contract Balances
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 Assets include unbilled amounts typically resulting from sales under long-term contracts when revenue is recognized over time and revenue recognized exceeds the amount billed to the customer, and right to payment is not just subject to the passage of time. Amounts may not exceed their net realizable value. Costs and estimated earnings in excess of billings on uncompleted contracts are generally classified as current.
Contract Liabilities - We 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 order to determine revenue recognized in the period from contract liabilities, we first allocate revenue to the individual contract liability balance outstanding at the beginning of the period until the revenue exceeds that balance. Revenue recognized for the three months ended March 31, 2020 and 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 the three months ended March 31, 2020 and 2019 from our performance obligations satisfied in previous periods had favorable impacts of $57.3 million and $167.7 million, respectively. This 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 unfilled, confirmed customer orders is estimated at each reporting date. As of March 31, 2020, the aggregate amount of 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