TechnipFMC : 2020 UK Annual Report and Accounts

U.K. Annual Report and Accounts

for the year ended December 31, 2020

Driving change in energy

This U.K. Annual Report and Accounts of TechnipFMC plc ("TechnipFMC," the "Company," "we," or "our") comprises the Strategic Report, Directors' Report, Directors' Remuneration Report, Remuneration Policy, and the TechnipFMC plc consolidated IFRS financial statements contained herein ("U.K. Annual Report").

This U.K. Annual Report is available for inspection at www.technipfmc.com and will be included in the materials for the 2021 annual general meeting of shareholders to be held on May 20, 2021 (the "2021 Annual Meeting").

U.K. Annual Report and Accounts

Contents

Strategic Report	1
Letter from Our Chairman and CEO	1
2020 At-a-Glance	4
Company Overview	7
Business Segments	10
Business Review	32
Corporate Responsibility and Sustainability - Non-financial
Information Statement	47
Core Values and Foundational Beliefs	47
Code of Business Conduct	48
Corporate Responsibility and Sustainability 2018-2020	49
Supporting Communities	51
Advancing Gender Diversity	57
Respecting the Environment	61
Corporate Responsibility and Sustainability 2021-2023	71
Employee and Social Matters	73
Our Compliance Program	77
Supply Chain and Customer Matters	81
Health and Safety	82
Decision making and section 172 of the Companies Act	85
Principal Risks and Uncertainties	87
Directors' Report	106
Directors	106
Share Capital and Articles of Association of the Company	107
Share Repurchases	108
Significant Shareholdings	109
Directors' Indemnities	109
Company Details and Branches Outside the United Kingdom	110
Dividend	110
Employee Engagement and Business Relationship	110
Greenhouse Gas Emissions and Energy Consumption	110
Events since December 31, 2020	110
Future Developments	111
Change in Control	111
Political Donations	111
Financial Risk Management Objectives/Policies and Hedging Arrangements	111

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U.K. Annual Report and Accounts

Research and Development	112
Directors' Responsibility Statements	112
Directors' Remuneration Report	114
Introduction and Compliance Statement	114
Letter from the Chairman of the Compensation Committee	114
Annual Report on Remuneration: At-a-Glance - 2020 Highlights	119
Annual Report on Remuneration: Report for the Year Ended
December 31, 2020	128
Elements of 2020 Executive Compensation	132
Statement of Directors' Shareholding and Share Interests	148
Application of the policy in 2021	155
Activities of the Compensation Committee in 2020	159
Statement of Voting at Annual Shareholders' Meeting	161
Remuneration Policy	162
Approach to Recruitment Remuneration	169
Service Agreements	170
Illustrations of Application of Directors' Remuneration Policy	171
Policy on Payment for Loss of Office	173
Potential Payments upon Change in Control	174
Future Policy Table for Non-Executive Directors	175
Differences between Remuneration Policy for Executive Directors
and Other Employees	177
Statement of consideration of employment conditions elsewhere
in the Company	177
Statement of consideration of shareholder views	177
Changes in the Remuneration Policy	178
Independent auditors' report to the members of TechnipFMC plc	179
Consolidated Financial Statements	186
1. Consolidated Statements of Income	187
2. Consolidated Statements of Other Comprehensive Income	188
3. Consolidated Statements of Financial Position	189
4. Consolidated Statements of Cash Flows	191
5. Consolidated Statements of Changes in Stockholders' Equity	193
6. Notes to Consolidated Financial Statements	194
Company Financial Statements	295
1. Company Statement of Financial Position	296
2. Company Statement of Changes in Shareholders' Equity	298
3. Notes to the Company Financial Statements	299

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U.K. Annual Report and Accounts

Strategic Report

Letter from Our Chairman and CEO

April 9, 2021

Dear Shareholders,

2020 was a year like no other. We faced unprecedented global challenges due to the COVID-19 pandemic and the sharp drop in demand for oil and natural gas. Throughout this period, the physical and mental health and well-being of our people and those of the communities in which we work remained our top priority. Still, there were many notable accomplishments in 2020 as a result of the tireless efforts and unwavering commitment of our global teams. Through collaboration, we found solutions that allowed us to move projects forward safely, earning recognition from clients and others in the industry. And thanks to the determination, innovation and resilience of our women and men, we protected our backlog and remained focused on project execution, enabling us to deliver strong performance and achieve our financial guidance across all segments.

We also took a series of strategic actions to bolster profitability and improve liquidity and cash flow. We reduced cash outlays in the year through a revision to our dividend policy and a reduction in capital expenditures, focusing on the most value-enhancing opportunities. We achieved more than $350 million in annualized run-rate cost savings. And we revised executive compensation, effective May 1, 2020, to reflect a 30% reduction to the Chairman and CEO salary and the Board of Directors' retainer, and a 20% reduction to the salaries of the Executive Leadership team.

Throughout 2020, we continued our work to separate TechnipFMC into two industry leading, pure-play companies, with the transaction completed through the partial Spin-off of Technip Energies on February 16, 2021. TechnipFMC now exists as a fully integrated technology and services provider to the traditional and new energy industries. Our clients continue to demonstrate their confidence in our unique value proposition and in the two weeks following the Spin-off, we announced three integrated Engineering, Procurement, Construction and Installation ("iEPCI™") projects, a market where we expect to see continued growth.

Our achievements in 2020

In Subsea, we achieved full-year inbound orders of $4 billion in a very difficult market environment, driven by a higher mix of service and small project activity. We had further success with our iEPCI™ model, including the award of BP's Platina project offshore Angola. There were Subsea 2.0™ milestones, with the first trees installed on the Shell BC-10 and Woodside Pyxis projects. And as part of our digital transformation, we introduced Subsea Studio™, a digital front-end design offering that will be extended to incorporate the execution and field management phases of a project.

Inbound orders for Technip Energies exceeded $5 billion for the year, driven by EPC contract awards for Sempra LNG and IEnova's Energía Costa Azul LNG Facility in Mexico, Assiut National Oil Processing Company's new hydrocracking complex in Egypt, and Shell's Moerdijk Plant in the Netherlands to modernize ethylene furnaces and reduce total site emissions.

In October, Technip Energies further extended its leading position in hydrogen, announcing a strategic partnership and investment with McPhy to accelerate the development of large scale and competitive green hydrogen solutions.

In Surface Technologies, the more resilient international markets accounted for over 60% of total segment revenue, with increased activity in technology-driven businesses. International orders in the year included contract awards for high-pressure gas equipment and in-country services in Kuwait, and orders for high-specification equipment in the United Arab Emirates. In North America, we continued to leverage our subsea expertise by bringing digital innovation into the surface arena. Here we are enhancing the customer experience by providing improved economics, better performance and reduced emissions through the commercialization of proprietary technologies.

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