TechnipFMC plc

CONSOLIDATED RESULTS OF OPERATIONS OF TECHNIPFMC PLC

THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

Revenue

Revenue increased $291.5 million during the three months ended September 30, 2024, compared to the same period in 2023. Subsea revenue increased by $319.8 million, primarily driven by a 49.6 percent higher backlog as of December 31, 2023, when compared to December 31, 2022, which resulted in increased revenue from higher iEPCI, supply of flexible pipe and installation activities particularly in the United Kingdom, Australia, Angola, and Guyana. Surface Technologies revenue decreased by $28.3 million, compared to the same period in 2023, primarily due to lower drilling and completion activity in Europe, North America and the sale of MSB during the three months ended March 31, 2024 by $52.2 million. This decrease was partially offset by $23.9 million of revenue growth from higher equipment delivery across the rest of the world, with the majority of the increase occurring in the Middle East.

Gross Profit

Gross profit increased to $493.8 million during the three months ended September 30, 2024, compared to $366.9 million in the prior year period. Subsea gross profit increased year-over-year by $124.6 million, of which $55.7 million was due to volume increase and $68.9 million due to favorable activity mix. Surface Technologies gross profit decreased year-over-year by $0.6 million, primarily due to lower drilling and completion activity in Europe, North America and the sale of MSB in the three months ended March 31, 2024 resulting in a decrease of $11.7 million, partially offset by $6.9 million of higher profitability from continued growth in the Middle East and an additional $4.2 million increase from other operating locations such as Asia Pacific and Latin America.

Selling, General and Administrative Expense

Selling, general and administrative expense increased $3.6 million year-over-year, driven by higher employee costs in support of increased business activities.

Other Expense, Net

Other income (expense), net, includes gains and losses associated with the remeasurement of net monetary assets and liabilities, gains and losses on sales of property, plant and equipment, and non-operating gains and losses. The $34.2 million year-over-year decrease in net expense was driven by the decrease in foreign currency loss of $43.3 million, primarily related to the net impact of hedging positions year-over-year. This decrease was partially offset by a net decrease in miscellaneous other net non-operating charges.

Income from Equity Affiliates

For the three months ended September 30, 2024 and 2023, we recorded income from equity method affiliates of $8.4 million and $20.6 million, respectively. The year-over-year decline was driven by a decrease in operational activity of our joint ventures.

Net Interest Expense

Net interest expense of $15.9 million decreased by $10.8 million in the three months ended September 30, 2024, compared to the same period in 2023, primarily due to the net decrease in outstanding debt.

Provision for Income Taxes

Our provision for income taxes for thethree months ended September 30, 2024 and 2023 reflected effective tax rates of (2.2) percent and 17.2 percent, respectively. The change in the effective tax rate was largely due to the release of a valuation allowance in the United States with a positive net tax discrete benefit of $60.6 million, the change in geographical profit mix year-over-year and tax adjustments related to the reassessment of prior year tax accruals. During the third quarter of 2024, the Company determined it was more likely than not the Company would be able to realize the benefit of a portion of the deferred tax assets in the United States, resulting in a partial release of the valuation allowance.

Our effective tax rate can fluctuate depending on our country mix of earnings, since our foreign earnings are generally subject to higher tax rates than those of the United Kingdom.

CONSOLIDATED RESULTS OF OPERATIONS OF TECHNIPFMC PLC

NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

Revenue

Revenue increased by $969.5 million during the nine months ended September 30, 2024, compared to the same period in 2023. Subsea revenue increased by $1,057.7 million, driven by conversion of increased backlog, which was 49.6 percent higher as of December 31, 2023, when compared to December 31, 2022, and resulted in increased revenue from higher installation, iEPCI, supply of flexible pipe and services activities particularly in Angola, the United States, Guyana, Australia, Brazil and the United Kingdom. Surface Technologies revenue decreased by $88.2 million, compared to the same period in 2023. The decline was primarily due to lower drilling and completion activity in Europe, North America and the sale of MSB during the three months ended March 31, 2024, which collectively decreased revenues by $139.6 million. This decrease was partially offset by a $51.4 million of revenue growth from higher equipment delivery across the rest of the world, with the majority of the increase occurring in the Middle East.

Gross Profit

Gross profit increased to $1,336.1 million in 2024 compared to $920.5 million in 2023. Subsea gross profit increased year-over-year by $403.1 million, of which $183.0 million was due to volume increase and $220.1 million due to favorable activity mix. Surface Technologies gross profit decreased by $3.5 million compared to the same period in 2023, primarily due to lower drilling and completion activity in Europe, North America and the sale of MSB in the three months ended March 31, 2024 resulting in a decrease of $33.6 million, partially offset by $30.1 million of higher profitability from growth and higher operational leverage and efficiency across international markets such as Middle East, Asia Pacific, and Latin America.

Selling, General and Administrative Expense

Selling, general and administrative expense increased by $34.4 million during the nine months ended September 30, 2024, compared to the same period in 2023, driven by higher employee costs in support of increased business activities.

Other Expense, Net

Other income (expense), net, includes gains and losses associated with the remeasurement of net monetary assets and liabilities, gains and losses on sales of property, plant and equipment, and non-operating gains and losses. The net decrease inexpense of $161.4 million was driven by the $126.5 million non-recurring legal settlement charge recognized during the nine months ended September 30, 2023. Foreign currency loss decreased by $67.3 million, due to exposures to certain currencies with limited derivative hedging markets such as Angolan kwanza and the net impact of hedging positions during the nine months ended September 30, 2023. These decreases are partially offset by a net increase in miscellaneous other non-operating charges.

Gain on disposal of Measurement Solutions business

For the nine months ended September 30, 2024, we recognized a gain of $75.2 million from the sale of equity interests and assets of MSB.

Income from Equity Affiliates

For the nine months ended September 30, 2024 and 2023, we recorded income from equity method affiliates of$12.4 million and $35.9 million, respectively. The year-over-year decline was driven by a decrease in operational activity of our joint ventures.

Net Interest Expense

Net interest expense of $50.0 million decreased by $25.7 million in the nine months ended September 30, 2024, compared to the same period in 2023, primarily due to a net reduction in outstanding debt and higher interest income.

Provision for Income Taxes

Our provision for income taxes for the nine months ended September 30, 2024 and 2023 reflected effective tax rates of 14.1 percent and 95.1 percent, respectively. The change in the effective tax rate was largely due to the release of a valuation allowance in the United States with a positive net tax discrete benefit of $60.6 million, the change in geographical profit mix year-over-year and tax adjustments related to the reassessment of prior year tax accruals. During the third quarter of 2024, the Company determined it was more likely than not the Company would be able to realize the benefit of a portion of the deferred tax assets in the United States, resulting in a partial release of the valuation allowance.

Our effective tax rate can fluctuate depending on our country mix of earnings, since our foreign earnings are generally subject to higher tax rates than in the United Kingdom.