REVENUE

3 Months Ended

Mar. 31, 2024

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 the exploration and production of oil and natural gas.

Disaggregation of Revenue

Revenues are disaggregated by geographic location and contract types.

The following tables present total revenue by geography for each reportable segment for the three months ended March 31, 2024 and 2023:

	Reportable segments
	Three Months Ended
	March 31, 2024				March 31, 2023
(In millions)	Subsea		Surface Technologies		Subsea		Surface Technologies
Latin America	$	676.8	$	25.3	$	440.4	$	27.2
Europe and Central Asia	358.9		36.7		378.5		44.2
North America	317.0		125.1		249.9		146.1
Africa	295.7		12.8		210.5		9.7
Asia Pacific	91.0		23.2		71.9		17.9
Middle East	(4.6)		84.1		36.4		84.7
Total revenue	$	1,734.8	$	307.2	$	1,387.6	$	329.8

The following tables present total revenue by contract type for each reportable segment for the three months ended March 31, 2024 and 2023:

	Reportable segments
	Three Months Ended
	March 31, 2024				March 31, 2023
(In millions)	Subsea		Surface Technologies		Subsea		Surface Technologies
Services	$	1,117.5	$	48.3	$	815.3	$	52.8
Products	597.6		216.3		564.8		230.3
Lease	19.7		42.6		7.5		46.7
Total revenue	$	1,734.8	$	307.2	$	1,387.6	$	329.8

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 condensed 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 March 31, 2024 and December 31, 2023:

(In millions)	March 31, 2024		December 31, 2023
Contract assets	$	1,062.7	$	1,010.1
Contract liabilities	(1,331.6)		(1,485.8)
Net contract liabilities	$	(268.9)	$	(475.7)

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 the contract asset balance. Revenue recognized for the three months ended March 31, 2024 and 2023 that was included in the contract liabilities balance as of December 31, 2023 and 2022 was $479.6 million and $347.7 million, respectively.

In addition, net revenue recognized from our performance obligations satisfied or partially satisfied in previous periods had a favorable impact of $0.6 million and unfavorable impact of $(2.6) million for the three months ended March 31, 2024 and 2023, respectively. One project was materially and favorably impacted for the three months ended March 31, 2024 by $23.5 million as result of improved performance in the delivery and was offset by individually immaterial net negative impacts of $22.9 million. For the three months ended March 31, 2023, there were no projects with individually material impacts.

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. The 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, 2024, the aggregate amount of the transaction price allocated to order backlog was $13.5 billion. TechnipFMC expects to recognize revenue on approximately 35.1% of the order backlog through 2024 and 64.9% thereafter.

The following table details the order backlog for each business segment as of March 31, 2024:

(In millions)	2024		2025		Thereafter
Subsea	$	4,315.0	$	3,876.0	$	4,264.5
Surface Technologies	422.4		219.2		395.4
Total order backlog	$	4,737.4	$	4,095.2	$	4,659.9