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REVENUE
 12 Months Ended
Dec. 31, 2022
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.
Revenue Recognition by Segment
The following is a description of principal activities separated by reportable segments from which TechnipFMC generates its revenue. See Note 6 for more detailed information about reportable segments.
Subsea
Our Subsea segment manufactures and designs 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. Systems and services may be sold separately or as combined integrated systems and services offered within one contract. Many of the systems and products TechnipFMC supplies for subsea applications are engineered to meet the unique demands of our customers’ field properties and are typically ordered one to two years prior to installation. We often receive advance payments and progress billings from our customers in order to fund initial development and working capital requirements.
Under Subsea engineering, procurement, construction and installation contracts, revenue is principally generated from long-term contracts with customers. We have determined these contracts generally have one performance obligation as the delivered product is highly customized to customer and field specifications. We generally recognize revenue over time for such contracts as the customized products do not have an alternative use for TechnipFMC and we have an enforceable right to payment plus a reasonable profit for performance completed to date.
Our Subsea segment also performs an array of subsea services including (i) installation services, (ii) asset management services (iii) product optimization, (iv) inspection, maintenance and repair services, and (v) well access and intervention services, where revenue is generally earned through the execution of either installation-type or maintenance-type contracts. For either contract type, management has determined that the performance of the service generally represents one single performance obligation. We have determined that revenue from these contracts is recognized over time as the customer simultaneously receives and consumes the benefit of the services.
Surface Technologies
Our Surface Technologies segment designs, manufactures and supplies technologically advanced wellhead systems and high pressure valves and pumps used in stimulation activities for oilfield service companies and provides installation, flowback and other services for exploration and production companies.
We provide a full range of drilling, completion and production wellhead systems for both standard and custom-engineered applications. Under pressure control product contracts, we design and manufacture flowline products, under the Weco®/Chiksan® trademarks, articulating frac arm manifold trailers, well service pumps, compact valves and reciprocating pumps used in well completion and stimulation activities by major oilfield service companies. Performance obligations within these systems are satisfied either through delivery of a standardized product or equipment or the delivery of a customized product or equipment.
For contracts with a standardized product or equipment performance obligation, management has determined that because there is limited customization to products sold within such contracts and the asset delivered can be resold to another customer, revenue should be recognized as of a point in time, upon transfer of control to the customer and after the customer acceptance provisions have been met.
For contracts with a customized product or equipment performance obligation, the revenue is recognized over time, as the manufacturing of our product does not create an asset with an alternative use for us and we have an enforceable right to payment plus a reasonable profit for performance completed to date.
This segment also designs, manufactures and services measurement products globally. Contract types include standard product or equipment and maintenance-type services where we have determined that each contract under this product line represents one performance obligation.
Revenue from standard measurement equipment contracts is recognized at a point in time, while maintenance-type contracts are typically priced at a daily or hourly rate. We have determined that revenue for these contracts is recognized over time because the customer simultaneously receives and consumes the benefit of the services.
Disaggregation of Revenue
We disaggregate revenue by geographic location and contract type. The following table presents total revenue by geography for each reportable segment for the years ended December 31, 2022, 2021 and 2020:
Reportable Segments
Year Ended December 31,
202220212020
(In millions)SubseaSurface TechnologiesSubseaSurface TechnologiesSubseaSurface Technologies
Europe, Central Asia$1,550.1 $166.7 $1,404.4 $191.5 1,664.1 192.7 
Latin America1,460.1 112.1 1,157.7 86.7 1,042.4 76.6 
Africa865.6 37.6 1,057.3 44.0 908.6 46.9 
North America780.6 552.0 753.6 372.7 899.7 367.9 
Asia Pacific687.5 97.2 927.4 104.2 772.1 131.0 
Middle East117.3 273.6 28.7 275.3 184.5 244.1 
Total revenue$5,461.2 $1,239.2 $5,329.1 $1,074.4 $5,471.4 $1,059.2 

The following table represents revenue by contract type for each reportable segment for the years ended December 31, 2022, 2021 and 2020:
Reportable Segments
Year Ended December 31,
202220212020
(In millions)SubseaSurface TechnologiesSubseaSurface TechnologiesSubseaSurface Technologies
Services$3,410.4 $217.9 $3,282.0 $158.7 $3,121.1 $150.2 
Products1,993.8 863.2 2,002.5 801.9 2,295.4 821.9 
Lease(a)
57.0 158.1 44.6 113.8 54.9 87.1 
Total revenue$5,461.2 $1,239.2 $5,329.1 $1,074.4 $5,471.4 $1,059.2 
(a)Represents revenue not subject to ASC Topic 606.
Contract Balances
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, costs and estimated earnings in excess of billings on uncompleted contracts (contract assets), and billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities) in the consolidated balance sheets. Any expected contract losses are recorded in the period in which they become probable.
Contract Assets - Contract Assets include unbilled amounts typically resulting from sales under long-term contracts when revenue is recognized over time and revenue recognized exceeds the amount billed to the customer, and right to payment is not just subject to the passage of time. Amounts may not exceed their net realizable value. Costs and estimated earnings in excess of billings on uncompleted contracts are generally classified as current.
Contract Liabilities - We sometimes receive advances or deposits from our customers, before revenue is recognized, resulting in contract liabilities.
The following table provides information about net contract assets (liabilities) as of December 31, 2022 and 2021:
December 31,
(In millions)20222021$ change% change
Contract assets$981.6 $966.0 $15.6 1.6 
Contract (liabilities)(1,156.4)(1,012.9)(143.5)(14.2)
Net contract (liabilities)$(174.8)$(46.9)$(127.9)(272.7)
The increase in our contract assets from December 31, 2021 to December 31, 2022 was due to the timing of project milestones.
The increase in our contract liabilities was driven from an overall portfolio and client mix enabling an acceleration of cash payments in advance.
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. Any subsequent revenue we recognize increases contract asset balance. Revenue recognized for the years ended December 31, 2022 and 2021 that were included in the contract liabilities balance as of December 31, 2021 and 2020 was $607.4 million and $305.3 million, respectively.
In addition, net revenue recognized for the years ended December 31, 2022 and 2021 from our performance obligations satisfied in previous periods had favorable impacts of $160.8 million and $25.9 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 December 31, 2022, the aggregate amount of the transaction price allocated to order backlog was $9,353.0 million. TechnipFMC expects to recognize revenue on approximately 47.6% of the order backlog through 2023 and 52.4% thereafter.
The following table details the order backlog for each business segment as of December 31, 2022:
(In millions)20232024Thereafter
Subsea$3,919.0 $2,900.6 $1,311.9 
Surface Technologies537.4 126.8 557.3 
Total remaining unsatisfied performance obligations$4,456.4 $3,027.4 $1,869.2