Charges and Credits

12 Months Ended

Dec. 31, 2023

Restructuring and Related Activities [Abstract]

Charges and Credits

3. Charges and Credits

2023

SLB recorded the following charges and credits during 2023:

	(Stated in millions)
	Pretax Charge (Credit)			Tax Benefit (Expense)			Noncontrolling Interests		Net
First quarter:
Gain on sale of Liberty shares	$	(36	)	$	(8	)	$	-	$	(28	)
Fourth quarter:
Merger and integration		56			8			8		40
Currency devaluation loss in Argentina		90			-			-		90
	$	110		$	-		$	8	$	102

First quarter 2023:

•On December 31, 2020, SLB contributed its onshore hydraulic fracturing business in the United States and Canada, including its pressure pumping, pumpdown perforating and Permian frac sand business, to Liberty Energy Inc. (“Liberty”) in exchange for an equity interest in Liberty. During the first quarter of 2023, SLB sold all of its remaining approximately 9 million shares of Liberty and received net proceeds of $137 million. As a result, SLB recognized a gain of $36 million which is classified in Interest & other income in the Consolidated Statement of Income.

Fourth quarter 2023:

•In connection with SLB’s acquisition of the Aker Solutions (“Aker”) subsea business (see Note 6 – Acquisition), SLB recorded the following charges: $23 million of acquisition-related transaction costs, including advisory and legal fees; $11 million relating to the amortization of purchase accounting adjustments associated with the write-up of acquired inventories to its estimated fair value; and $22 million of other merger and integration-related costs. $45 million of these costs are classified in Merger & integration in the Consolidated Statement of Income with the remaining $11 million classified in Cost of sales.

•Although SLB’s functional currency in Argentina is the US dollar, a portion of its transactions are denominated in pesos. During the fourth quarter of 2023, Argentina devalued its peso relative to the US dollar by approximately 55%. As a result, SLB recorded a $90 million devaluation charge. $61 million of this charge is classified in Cost of services in the Consolidated Statement of Income, with the remaining $29 million classified in Cost of sales. SLB’s peso-denominated net assets in Argentina were approximately $75 million at December 31, 2023, primarily consisting of cash.

2022

SLB recorded the following charges and credits during 2022, all of which are classified in Interest & other income, net in the Consolidated Statement of Income:

	(Stated in millions)
	Pretax Charge (Credit)			Tax Benefit (Expense)			Net
First quarter:
Gain on sale of Liberty shares	$	(26	)	$	(4	)	$	(22	)
Second quarter:
Gain on sale of Liberty shares		(215	)		(14	)		(201	)
Gain on sale of real estate		(43	)		(2	)		(41	)
Fourth quarter:
Gain on sale of Liberty shares		(84	)		(19	)		(65	)
Loss on Blue Chip Swap transactions		139			-			139
Gain on ADC equity investment		(107	)		(3	)		(104	)
Gain on repurchase of bonds		(11	)		(2	)		(9	)
	$	(347	)	$	(44	)	$	(303	)

•During 2022, SLB sold 47.8 million of its shares of Liberty and received proceeds of $730 million. These transactions resulted in gains of $325 million. As of December 31, 2022, SLB had a 5% equity interest in Liberty.

•The Central Bank of Argentina maintains certain currency controls that limit SLB’s ability to access US dollars in Argentina and remit cash from its operations in Argentina. A legal indirect foreign exchange mechanism exists, in the form of capital market

transactions known as Blue Chip Swaps, which effectively results in a parallel US dollar exchange rate. During the fourth quarter of 2022, SLB entered into Blue Chip Swap transactions that resulted in a loss of $139 million.

•During the fourth quarter of 2022, SLB repurchased $395 million of its 3.75% Senior Notes due 2024, and $409 million of its 4.00% Senior Notes due 2025 for $790 million, resulting in a gain of $11 million after considering the write-off of the related deferred financing fees and other costs.

•SLB accounts for its investment in the Arabian Drilling Company (“ADC”), an onshore and offshore gas and oil rig drilling company in Saudi Arabia, under the equity method. During the fourth quarter of 2022, ADC completed an initial public offering (“IPO”). In connection with the IPO, SLB sold a portion of its interest in a secondary offering that resulted in SLB receiving net proceeds of $223 million. As a result of these transactions, SLB’s ownership interest in ADC decreased from 49% to approximately 34%. SLB recognized a gain of $107 million, representing the gain on the sale of a portion of its interest as well as the effect of the ownership dilution of its equity investment due to the IPO. As of December 31, 2023, the fair value of SLB’s investment in ADC, based on the quoted market price of ADC’s shares, was approximately $1.4 billion and the carrying value of its investment was $602 million. SLB accounts for its share of ADC’s net income on a one-quarter lag.

•During the second quarter of 2022, SLB sold certain real estate and received proceeds of $120 million. As a result of this transaction, SLB recognized a gain of $43 million.

2021

SLB recorded the following charges and credits during 2021, all of which are classified in Interest & other income, net in the Consolidated Statement of Income:

	(Stated in millions)
	Pretax Charge (Credit)			Tax Benefit (Expense)			Net
Third quarter:
Unrealized gain on marketable securities	$	(47	)	$	(11	)	$	(36	)
Fourth quarter:
Gain on sale of Liberty shares		(28	)		(4	)		(24	)
Early repayment of bonds		10			-			10
	$	(65	)	$	(15	)	$	(50	)

Third quarter 2021:

•During the third quarter of 2021, a start-up company that SLB previously invested in was acquired. As a result of this transaction, SLB’s ownership interest was converted into shares of a publicly traded company. SLB recognized an unrealized pretax gain of $47 million to increase the carrying value of this investment to its estimated fair value of approximately $55 million.

Fourth quarter 2021:

•SLB sold 9.5 million of its shares of Liberty and received proceeds of $109 million. As a result of this transaction SLB recognized a gain of $28 million.

•On November 30, 2021, SLB deposited sufficient funds with the trustee for its $1.0 billion of 2.40% Senior Notes due 2022 to satisfy and discharge all of its obligations relating to such notes. As a result of this transaction, SLB recorded a charge of $10 million.