LEASES

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

LEASES

LEASES

Lessee Arrangements

We lease real estate, including land, buildings and warehouses, machinery/equipment, vessels, vehicles, and various types of manufacturing and data processing equipment, from a lessee perspective. Leases of real estate generally provide for payment of property taxes, insurance, and repairs by us. Substantially all our leases are classified as operating leases.

The following table is a summary of the Company’s components of net lease cost for the years ended December 31, 2022, 2021, and 2020:

	Year Ended December 31,
(In millions)	2022		2021		2020
Operating and Finance lease costs	$	177.9	$	175.9	$	195.6
Short-term lease costs	14.0		5.2		11.0
Less: sublease income (1)	3.6		2.4		2.8
Net lease cost	$	188.3	$	178.7	$	203.8

(1) TechnipFMC currently subleases certain of its leased real estate and vessels to third parties.

Supplemental cash flow information related to leases for the years ended December 31, 2022, and 2021 is as follows:

	Year Ended December 31,
(In millions)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from leases	$	171.0	$	176.5
Right-of-use assets obtained in exchange for lease liabilities
Operating leases	$	279.4	$	114.9
Finance leases	$	8.6	$	24.6

Supplemental balance sheet information related to leases as of December 31, 2022 and 2021 is as follows:

	December 31,
(In millions, except lease term and discount rate)	2022		2021
Weighted average remaining lease term
Operating leases	11.5 years		13.3 years
Finance leases	0.6 years		1.1 years
Weighted average discount rate
Operating leases	5.8	%	5.9	%
Finance leases	3.2	%	1.2	%

Maturities of operating and finance lease liabilities as of December 31, 2022 are as follows:

(In millions)	Maturity of Operating Lease Liabilities		Maturity of Finance Lease Liabilities
2023	$	184.3	$	105.3
2024	148.7		2.7
2025	118.9		2.7
2026	96.2		1.9
2027	84.9		0.3
Thereafter	640.6		—
Total lease payments	1,273.6		112.9
Less: Imputed interest	401.8		59.6
Total lease liabilities (a)	$	871.8	$	53.3

(a)Includes the current portion of $188.0 million.

Lessor Arrangements

We lease real estate including land, buildings and warehouses, machinery/equipment, and vessels from a lessor perspective. We determine if an arrangement is a lease at inception by assessing whether an identified asset exists and if the customer has the right to control the use of the identified asset. We use our implicit rate for our lessor arrangements. We have elected the practical expedient available for lessors to not separate lease and non-lease components for vessels. If the non-lease component is predominant in our contracts, we account for the contracts under the revenue recognition guidance in ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606). If the lease component is predominant in our contracts, we account for the contracts under the lease guidance in Topic 842. We estimate the amount we expect to derive from the underlying asset following the end of the lease term based on remaining economic life. Our lessor arrangements generally do not include any residual value guarantees. We recognize lessee payments of lessor costs such as taxes and insurance on a net basis when the lessee pays those costs directly to a third party or when the amount paid by the lessee is not readily determinable.

Our operating lease revenue, including variable revenue, was $215.1 million, $158.4 million and $142.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. During the next five years, we expect to receive

$36.6 million in total undiscounted cash flows, of which $23.8 million is expected to be received in 2023 and $3.0 million is expected to be received in 2024.

LEASES

LEASES

Lessee Arrangements

We lease real estate, including land, buildings and warehouses, machinery/equipment, vessels, vehicles, and various types of manufacturing and data processing equipment, from a lessee perspective. Leases of real estate generally provide for payment of property taxes, insurance, and repairs by us. Substantially all our leases are classified as operating leases.

The following table is a summary of the Company’s components of net lease cost for the years ended December 31, 2022, 2021, and 2020:

	Year Ended December 31,
(In millions)	2022		2021		2020
Operating and Finance lease costs	$	177.9	$	175.9	$	195.6
Short-term lease costs	14.0		5.2		11.0
Less: sublease income (1)	3.6		2.4		2.8
Net lease cost	$	188.3	$	178.7	$	203.8

(1) TechnipFMC currently subleases certain of its leased real estate and vessels to third parties.

Supplemental cash flow information related to leases for the years ended December 31, 2022, and 2021 is as follows:

	Year Ended December 31,
(In millions)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from leases	$	171.0	$	176.5
Right-of-use assets obtained in exchange for lease liabilities
Operating leases	$	279.4	$	114.9
Finance leases	$	8.6	$	24.6

Supplemental balance sheet information related to leases as of December 31, 2022 and 2021 is as follows:

	December 31,
(In millions, except lease term and discount rate)	2022		2021
Weighted average remaining lease term
Operating leases	11.5 years		13.3 years
Finance leases	0.6 years		1.1 years
Weighted average discount rate
Operating leases	5.8	%	5.9	%
Finance leases	3.2	%	1.2	%

Maturities of operating and finance lease liabilities as of December 31, 2022 are as follows:

(In millions)	Maturity of Operating Lease Liabilities		Maturity of Finance Lease Liabilities
2023	$	184.3	$	105.3
2024	148.7		2.7
2025	118.9		2.7
2026	96.2		1.9
2027	84.9		0.3
Thereafter	640.6		—
Total lease payments	1,273.6		112.9
Less: Imputed interest	401.8		59.6
Total lease liabilities (a)	$	871.8	$	53.3

(a)Includes the current portion of $188.0 million.

Lessor Arrangements

We lease real estate including land, buildings and warehouses, machinery/equipment, and vessels from a lessor perspective. We determine if an arrangement is a lease at inception by assessing whether an identified asset exists and if the customer has the right to control the use of the identified asset. We use our implicit rate for our lessor arrangements. We have elected the practical expedient available for lessors to not separate lease and non-lease components for vessels. If the non-lease component is predominant in our contracts, we account for the contracts under the revenue recognition guidance in ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606). If the lease component is predominant in our contracts, we account for the contracts under the lease guidance in Topic 842. We estimate the amount we expect to derive from the underlying asset following the end of the lease term based on remaining economic life. Our lessor arrangements generally do not include any residual value guarantees. We recognize lessee payments of lessor costs such as taxes and insurance on a net basis when the lessee pays those costs directly to a third party or when the amount paid by the lessee is not readily determinable.

Our operating lease revenue, including variable revenue, was $215.1 million, $158.4 million and $142.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. During the next five years, we expect to receive

$36.6 million in total undiscounted cash flows, of which $23.8 million is expected to be received in 2023 and $3.0 million is expected to be received in 2024

LEASES

LEASES

Lessee Arrangements

We lease real estate, including land, buildings and warehouses, machinery/equipment, vessels, vehicles, and various types of manufacturing and data processing equipment, from a lessee perspective. Leases of real estate generally provide for payment of property taxes, insurance, and repairs by us. Substantially all our leases are classified as operating leases.

The following table is a summary of the Company’s components of net lease cost for the years ended December 31, 2022, 2021, and 2020:

	Year Ended December 31,
(In millions)	2022		2021		2020
Operating and Finance lease costs	$	177.9	$	175.9	$	195.6
Short-term lease costs	14.0		5.2		11.0
Less: sublease income (1)	3.6		2.4		2.8
Net lease cost	$	188.3	$	178.7	$	203.8

(1) TechnipFMC currently subleases certain of its leased real estate and vessels to third parties.

Supplemental cash flow information related to leases for the years ended December 31, 2022, and 2021 is as follows:

	Year Ended December 31,
(In millions)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from leases	$	171.0	$	176.5
Right-of-use assets obtained in exchange for lease liabilities
Operating leases	$	279.4	$	114.9
Finance leases	$	8.6	$	24.6

Supplemental balance sheet information related to leases as of December 31, 2022 and 2021 is as follows:

	December 31,
(In millions, except lease term and discount rate)	2022		2021
Weighted average remaining lease term
Operating leases	11.5 years		13.3 years
Finance leases	0.6 years		1.1 years
Weighted average discount rate
Operating leases	5.8	%	5.9	%
Finance leases	3.2	%	1.2	%

Maturities of operating and finance lease liabilities as of December 31, 2022 are as follows:

(In millions)	Maturity of Operating Lease Liabilities		Maturity of Finance Lease Liabilities
2023	$	184.3	$	105.3
2024	148.7		2.7
2025	118.9		2.7
2026	96.2		1.9
2027	84.9		0.3
Thereafter	640.6		—
Total lease payments	1,273.6		112.9
Less: Imputed interest	401.8		59.6
Total lease liabilities (a)	$	871.8	$	53.3

(a)Includes the current portion of $188.0 million.

Lessor Arrangements

We lease real estate including land, buildings and warehouses, machinery/equipment, and vessels from a lessor perspective. We determine if an arrangement is a lease at inception by assessing whether an identified asset exists and if the customer has the right to control the use of the identified asset. We use our implicit rate for our lessor arrangements. We have elected the practical expedient available for lessors to not separate lease and non-lease components for vessels. If the non-lease component is predominant in our contracts, we account for the contracts under the revenue recognition guidance in ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606). If the lease component is predominant in our contracts, we account for the contracts under the lease guidance in Topic 842. We estimate the amount we expect to derive from the underlying asset following the end of the lease term based on remaining economic life. Our lessor arrangements generally do not include any residual value guarantees. We recognize lessee payments of lessor costs such as taxes and insurance on a net basis when the lessee pays those costs directly to a third party or when the amount paid by the lessee is not readily determinable.

Our operating lease revenue, including variable revenue, was $215.1 million, $158.4 million and $142.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. During the next five years, we expect to receive

$36.6 million in total undiscounted cash flows, of which $23.8 million is expected to be received in 2023 and $3.0 million is expected to be received in 2024