In a free-shaft gas turbine engine the static efficiency is a more realistic figure of merit for the power turbine than the frequently used total efficiency. The influence on these two efficiencies of design work coefficient and flow coefficient is examined. The effect of an annular diffuser located behind the power turbine for partial recovery of the otherwise-unavailable kinetic energy is discussed, both at design and off-design operating conditions. Test results from power turbines and exhaust diffusers serve to illustrate the application of some of the concepts considered.