TechnipFMC plcFTI

TechnipFMC plc Income Taxes Disclosure

10-KFiled Feb 19, 20266 min read
INCOME TAXES
Components of income before income taxes - U.S. and outside U.S. components of income before income taxes were as follows:
Year Ended December 31,
(In millions)202520242023
United States$404.8 $261.8 $15.2 
Outside United States865.2 678.6 191.3 
Income before income taxes$1,270.0 $940.4 $206.5 

Provision for income tax - The provision for income taxes consisted of:
 Year Ended December 31,
(In millions)202520242023
Current
United States$16.2 $21.9 $7.3 
Outside United States250.7 309.3 201.6 
Total current income taxes expense266.9 331.2 208.9 
Deferred
United States34.0 (141.5)— 
Outside United States2.0 (104.6)(54.2)
Total deferred income taxes expense (benefit)36.0 (246.1)(54.2)
Provision for income taxes$302.9 $85.1 $154.7 
Deferred tax assets and liabilities - Significant components of deferred tax assets and liabilities were as follows: 
 Year Ended December 31,
(In millions)20252024
Deferred tax assets attributable to
Leases$226.3 $200.7 
Interest expense carryforward 222.9 178.1 
Net operating loss carryforwards213.5 280.7 
Other tax credits183.7 179.5 
Accrued expenses137.1 78.9 
Non-deductible interest119.6 104.0 
Foreign tax credit carryforwards66.2 107.7 
Capital loss25.3 24.9 
Provisions for pensions and other long-term employee benefits10.4 26.8 
Contingencies22.7 56.6 
Other23.7 37.1 
Deferred tax assets1,251.4 1,275.0 
Valuation allowance(745.8)(754.4)
Deferred tax assets, net of valuation allowance505.6 520.6 
Deferred tax liabilities attributable to
Leases216.1 198.7 
Foreign exchange62.4 13.6 
Property, plant and equipment, intangibles and other assets55.7 54.4 
Tax on undistributed earnings not indefinitely reinvested19.5 25.7 
Other— 22.9 
Deferred tax liabilities353.7 315.3 
Net deferred tax assets$151.9 $205.3 

Valuation Allowance. As of December 31, 2025 and 2024, we had a valuation allowance balance of $745.8 million and $754.4 million, respectively. The decrease is mainly due to a release of $142.8 million in 2025, partially offset by an increase of $134.2 million in deferred tax assets that we currently do not have sufficient positive evidence to recognize a benefit. The release of the valuation allowance was influenced by our strengthened financial performance, clarified tax positions, and increased confidence in the realizability of our deferred tax assets.
As of December 31, 2024, we recorded a $194.9 million release of valuation allowance and established an allowance of $63.9 million. This resulted in $23.2 million of income tax expense and $40.7 million recognized in other comprehensive loss.
Non-deductible interest. As of December 31, 2025, deferred tax assets include tax benefits associated with restricted interest, which are scheduled to expire during the period from 2026 to 2035. A valuation allowance has been established for the portion of deferred tax assets that is considered more likely than not to expire prior to utilization.
Foreign tax credit carryforwards. As of December 31, 2025, deferred tax assets include U.S. foreign tax credit carryforwards of $66.2 million, which are subject to expiration between 2028 and 2035, contingent upon their utilization. Based on future forecasts of operating results and taxable income, management believes it is more likely than not that the majority of credits will be utilized prior to expiration.
Net operating loss carryforwards. At December 31, 2025, we had $273.7 million of tax-effected net operating loss carryforwards, with approximately $60.2 million estimated to be utilized against our unrecognized tax benefits. The ultimate realization of these deferred tax assets depends on our ability to generate sufficient taxable income in the appropriate taxing jurisdiction. Our deferred tax assets from net operating losses will expire as follows:
(In millions)Net Operating Loss
2026-2030$13.4 
2031-203537.1 
2036-20462.0 
Non-Expiring161.0 
$213.5 

Unrecognized tax benefits - The following table presents a summary of changes in our unrecognized tax benefits: 
(In millions)Federal, State and
Foreign Tax
Balance at December 31, 2023
$66.1 
Reductions for tax positions related to prior years(16.2)
Additions for tax positions related to current year72.7 
Reductions for tax positions due to settlements0.3 
Reductions for tax positions due to statute expirations(4.0)
Balance at December 31, 2024
118.9 
Additions for tax positions related to prior years17.6 
Additions for tax positions related to current year12.6 
Reductions for tax positions due to settlements(3.1)
Reductions for tax positions due to statute expirations(4.5)
Balance at December 31, 2025
$141.5 

The balances reported for uncertain tax benefits represent amounts where the company is unsure whether its tax treatment will be sustained upon examination by tax authorities. However, these reported balances do not include the interest and penalties that may accrue as a result of these uncertain benefits. For the years ended December 31, 2025, 2024, and 2023, the company has separately accrued interest and penalties of $13.8 million, $14.4 million, and $2.8 million, respectively.
Interest and penalties associated with these uncertain tax benefits are recognized as a component of income tax expense in our consolidated statements of income. As of December 31, 2025, the Company has recorded a benefit of $(0.6) million for interest and penalties. The benefit is due to reversal of prior year accruals as a result of statute of limitations. As of December 31, 2024 and 2023, the company has an increase accrual for interest and penalties of $11.6 million and $1.7 million, respectively.
The aggregate of principal, interest, and penalties is presented within Other liabilities or offset against the deferred tax balance, depending on the expected manner of settlement. At December 31, 2025, the total unrecognized tax benefits, net of any available net operating loss carryforwards, amounted to $80.9 million. If these unrecognized tax benefits are ultimately realized in the Company’s favor, they would have a favorable impact on the effective tax rate and result in the recognition of additional tax benefits in the consolidated statements of income.
We operate in numerous jurisdictions around the world and could be subject to multiple tax audits at any given time. The Company has significant operations in the United States, United Kingdom, Brazil, France, Norway, Portugal, Malaysia and many other jurisdictions. Tax years that remain subject to examination by major tax jurisdictions vary by legal entity, but are generally open in the U.S. for tax years after 2022 and outside the U.S. for tax years ending after 2014.
TechnipFMC plc is a public limited company incorporated under the laws of England and Wales. Therefore, our earnings are subject to the United Kingdom statutory rate which is 25.0%.
Effective income tax rate reconciliation - The effective income tax rate was different from the statutory United Kingdom income tax rate due to the following:
Year Ended December 31,
(in millions, except percentages)2025
AmountPercent
Income before income taxes$1,270.0 
United Kingdom Federal tax rate differential317.5 25.0 %
Foreign tax effects
Brazil
Withholding taxes22.6 1.8 %
Changes in valuation allowances(76.8)(6.0)%
Other6.6 0.5 %
United States
Federal tax rate differential(19.0)(1.5)%
Tax credits(19.5)(1.5)%
Changes in valuation allowances(24.3)(1.9)%
Other(7.3)(0.6)%
Other foreign jurisdictions
Other (a)
41.3 3.3 %
Tax credits(15.1)(1.2)%
Nontaxable or nondeductible items14.1 1.1 %
Changes in valuation allowances61.5 4.8 %
Unrecognized tax benefits2.7 0.2 %
Other(1.4)(0.1)%
Effective tax rate$302.9 23.9 %
(a)Includes other foreign jurisdictions that do not exceed the reporting threshold at the jurisdiction level in total or for individual reconciling items of the same nature within each jurisdiction.


 Year Ended December 31,
 20242023
Statutory income tax rate25.0 %25.0 %
Net difference resulting from
Foreign earnings subject to different tax rates(3.8)%70.1 %
Adjustments to prior year taxes2.3 %34.2 %
Net change in unrecognized tax benefits7.3 %(0.1)%
Changes in valuation allowance(21.9)%(53.1)%
Deferred tax asset / liability revaluation for tax rate change(0.7)%(0.6)%
Other0.8 %(0.6)%
Effective income tax rate9.0 %74.9 %

Income taxes paid (net of refunds received) - was as follows:
Year Ended  December 31,
Income taxes paid2025
(in millions)
United Kingdom$17.2 
Foreign
Brazil97.6 
Portugal41.1 
Australia32.5 
United States24.2 
Angola24.2 
Guyana19.0 
Other103.4 
Total payments$359.2 

Income tax holidays. We did not benefit from income tax holidays in 2025.

Historical Timeline

Fiscal YearFiled
2025Feb 19, 2026Showing above
2024Feb 27, 2025
2023Feb 27, 2024
2022Feb 24, 2023
2021Feb 28, 2022
2020Mar 5, 2021
2019Mar 3, 2020
2018Mar 11, 2019
2017Apr 2, 2018

About Income Taxes Disclosures

The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.

Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.

Other Available Disclosures

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