Impairment, Restructuring and Other Expenses

6 Months Ended

Jun. 30, 2020

Restructuring and Related Activities [Abstract]

Impairment, Restructuring and Other Expenses

IMPAIRMENT, RESTRUCTURING AND OTHER EXPENSES

Impairment, restructuring and other expenses were as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2020		2019		2020		2019
Subsea	$	95.8	$	4.5	$	2,869.4	$	6.8
Technip Energies	35.9		2.1		42.7		5.9
Surface Technologies	6.7		1.2		431.1		2.7
Corporate and other	1.9		1.4		5.5		10.3
Total impairment, restructuring and other expenses	$	140.3	$	9.2	$	3,348.7	$	25.7

Goodwill and Long-Lived Assets Impairments

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

During the three and six months ended June 30, 2020, impairment charges of $33.7 million and $3,221.7 million were recorded, respectively. These charges included goodwill impairment charges of $2,747.5 million and $335.9 million in our Subsea and Surface Technologies segments, respectively, recorded during the six months ended June 30, 2020. See Note 13 for further details.

For other long-lived assets, a conclusion was made that the market uncertainty was a triggering event for certain asset groups that serve short-cycle businesses in our Subsea and Surface Technologies segments. Assessing these asset groups for recoverability required the use of unobservable inputs that involves 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, during the three and six months ended June 30, 2020, impairment charges for Subsea of $32.5 million and $61.5 million, respectively, consisting mostly of installation and service equipment, and $1.2 million and $76.8 million, respectively, for Surface Technologies, consisting mainly of North America-based fracturing and wellhead assets, were recorded.

Restructuring and Other Expenses

In addition, during the three and six months ended June 30, 2020, we recorded restructuring and other charges of $106.6 million and $127.0 million, respectively. Restructuring and other charges primarily consisted of severance and other employee related costs and COVID-19 related expenses across all segments. Restructuring and other expenses were as follows:

	Three Months Ended June 30, 2020				Six Months Ended June 30, 2020
(In millions)	Restructuring and other charges		COVID-19 expenses		Restructuring and other charges		COVID-19 expenses
Subsea	$	35.9	$	27.4	$	29.0	$	31.4
Technip Energies	11.1		24.8		14.0		28.7
Surface Technologies	1.3		4.2		13.1		5.3
Corporate and other	1.9		—		5.5		—
Total	$	50.2	$	56.4	$	61.6	$	65.4

COVID-19 related expenses represent unplanned, one-off, incremental and non-recoverable costs incurred solely as a result of COVID-19 pandemic situation, which would not have been incurred otherwise. COVID-19 related expenses primarily included (a) employee payroll and travel, operational disruptions associated with quarantining, personnel travel restrictions to job sites, and shutdown of manufacturing plants and sites; (b) supply chain and related expediting costs of accelerated shipments for previously ordered and undelivered products; (c) costs associated with implementing additional information technology to support remote working environments; and (d) facilities-related expenses to ensure safe working environments.

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. We will continue to take actions designed to mitigate the adverse effects of the rapidly changing market environment and expect to continue to adjust our cost structure to market conditions. If market conditions continue to deteriorate, we may record additional restructuring charges and additional impairments of our long-lived assets and equity method investments.