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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2024

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file No.: 1-4601

img114888901_0.jpg 

Schlumberger N.V. (Schlumberger Limited)

(Exact name of registrant as specified in its charter)

Curaçao

52-0684746

(State or other jurisdiction of
incorporation or organization)

(IRS Employer
Identification No.)

 

 

 

42 rue Saint-Dominique

Paris, France

75007

 

 

 

5599 San Felipe

Houston, Texas, United States of America

77056

 

 

 

62 Buckingham Gate

 

 

London, United Kingdom

 

SW1E 6AJ

 

 

 

Parkstraat 83

The Hague, The Netherlands

2514 JG

(Addresses of principal executive offices)

(Zip Codes)

Registrant’s telephone number in the United States, including area code, is: (713) 513-2000

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

common stock, par value $0.01 per share

SLB

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class

Outstanding at March 31, 2024

COMMON STOCK, $0.01 PAR VALUE PER SHARE

1,429,337,724

 

 

 


 

SCHLUMBERGER LIMITED

First Quarter 2024 Form 10-Q

Table of Contents

 

Page

PART I

Financial Information

 

 

 

 

Item 1.

Financial Statements

3

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

14

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

19

 

 

 

 

Item 4.

Controls and Procedures

19

 

 

 

 

PART II

Other Information

 

 

 

 

 

Item 1.

Legal Proceedings

20

 

 

 

 

Item 1A.

Risk Factors

20

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

20

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

20

 

 

 

 

Item 4.

Mine Safety Disclosures

20

 

 

 

 

Item 5.

Other Information

21

 

 

 

 

Item 6.

Exhibits

22

 

 


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

 

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

(Unaudited)

(Stated in millions, except per share amounts)

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

Revenue

 

 

 

 

 

Services

$

5,676

 

 

$

5,334

 

Product sales

 

3,031

 

 

 

2,402

 

Total Revenue

 

8,707

 

 

 

7,736

 

Interest & other income

 

84

 

 

 

92

 

Expenses

 

 

 

Cost of services

 

4,415

 

 

 

4,129

 

Cost of sales

 

2,592

 

 

 

2,156

 

Research & engineering

 

182

 

 

 

174

 

General & administrative

 

121

 

 

 

91

 

Merger & integration

 

11

 

 

 

-

 

Interest

 

113

 

 

 

117

 

Income before taxes

 

1,357

 

 

 

1,161

 

Tax expense

 

259

 

 

 

217

 

Net income

 

1,098

 

 

 

944

 

Net income attributable to noncontrolling interests

 

30

 

 

 

10

 

Net income attributable to SLB

$

1,068

 

 

$

934

 

 

 

 

Basic income per share of SLB

$

0.75

 

 

$

0.65

 

 

 

 

Diluted income per share of SLB

$

0.74

 

 

$

0.65

 

Average shares outstanding:

 

 

 

Basic

 

1,431

 

 

 

1,426

 

Assuming dilution

 

1,447

 

 

 

1,446

 

See Notes to Consolidated Financial Statements

3


 

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Unaudited)

 

(Stated in millions)

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

2024

 

2023

 

Net income

$

1,098

 

$

944

 

Currency translation adjustments

 

 

Unrealized net change arising during the period

 

23

 

 

(34

)

Cash flow hedges

 

 

Net loss on cash flow hedges

 

(17

)

 

(33

)

Reclassification to net income of net realized gain

 

(1

)

 

(5

)

Pension and other postretirement benefit plans

 

 

 

Amortization to net income of net actuarial gain

 

-

 

 

(2

)

Amortization to net income of net prior service credit

 

(6

)

 

(6

)

Income taxes on pension and other postretirement benefit plans

 

1

 

 

2

 

Other

 

5

 

 

 

-

 

Comprehensive income

 

1,103

 

 

866

 

Comprehensive income attributable to noncontrolling interests

 

30

 

 

10

 

Comprehensive income attributable to SLB

$

1,073

 

$

856

 

 

See Notes to Consolidated Financial Statements

 

4


 

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

 

(Stated in millions)

 

 

 

 

 

 

 

 

Mar. 31,

 

 

 

 

 

2024

 

 

Dec. 31,

 

 

(Unaudited)

 

 

2023

 

ASSETS

 

 

 

 

 

Current Assets

 

 

 

 

 

Cash

$

2,788

 

 

$

2,900

 

Short-term investments

 

703

 

 

 

1,089

 

Receivables less allowance for doubtful accounts (2024 - $333; 2023 - $337)

 

8,222

 

 

 

7,812

 

Inventories

 

4,549

 

 

 

4,387

 

Other current assets

 

1,438

 

 

 

1,530

 

 

17,700

 

 

 

17,718

 

Investments in Affiliated Companies

 

1,606

 

 

 

1,624

 

Fixed Assets less accumulated depreciation

 

7,253

 

 

 

7,240

 

Goodwill

 

14,086

 

 

 

14,084

 

Intangible Assets

 

3,167

 

 

 

3,239

 

Other Assets

 

4,044

 

 

 

4,052

 

$

47,856

 

 

$

47,957

 

LIABILITIES AND EQUITY

 

 

 

Current Liabilities

 

 

 

 

Accounts payable and accrued liabilities

$

10,051

 

 

$

10,904

 

Estimated liability for taxes on income

 

987

 

 

 

994

 

Short-term borrowings and current portion of long-term debt

 

1,430

 

 

 

1,123

 

Dividends payable

 

411

 

 

 

374

 

 

12,879

 

 

 

13,395

 

Long-term Debt

 

10,740

 

 

 

10,842

 

Postretirement Benefits

 

177

 

 

 

175

 

Deferred Taxes

 

115

 

 

 

140

 

Other Liabilities

 

2,022

 

 

 

2,046

 

 

25,933

 

 

 

26,598

 

Equity

 

 

 

Common stock

 

11,344

 

 

 

11,624

 

Treasury stock

 

(531

)

 

 

(678

)

Retained earnings

 

14,172

 

 

 

13,497

 

Accumulated other comprehensive loss

 

(4,249

)

 

 

(4,254

)

SLB stockholders’ equity

 

20,736

 

 

 

20,189

 

Noncontrolling interests

 

1,187

 

 

 

1,170

 

 

21,923

 

 

 

21,359

 

$

47,856

 

 

$

47,957

 

 

 

See Notes to Consolidated Financial Statements

 

5


 

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

 

(Stated in millions)

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

Cash flows from operating activities:

 

 

 

Net income

$

1,098

 

 

$

944

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Charges and credits

 

25

 

 

 

(36

)

Depreciation and amortization (1)

 

600

 

 

 

563

 

Deferred taxes

 

(30

)

 

 

112

 

Stock-based compensation expense

 

100

 

 

 

81

 

Earnings of equity method investments, less dividends received

 

(16

)

 

 

(32

)

Change in assets and liabilities: (2)

 

 

 

Increase in receivables

 

(429

)

 

 

(509

)

Increase in inventories

 

(172

)

 

 

(288

)

Decrease in other current assets

 

46

 

 

 

54

 

Decrease (increase) in other assets

 

7

 

 

 

(10

)

Decrease in accounts payable and accrued liabilities

 

(885

)

 

 

(473

)

Decrease in estimated liability for taxes on income

 

(46

)

 

 

(84

)

Other

 

29

 

 

 

8

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

327

 

 

 

330

 

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(399

)

 

 

(410

)

APS investments

 

(121

)

 

 

(133

)

Exploration data costs capitalized

 

(29

)

 

 

(52

)

Business acquisitions and investments, net of cash acquired

 

(27

)

 

 

(244

)

Proceeds from sale of Liberty shares

 

-

 

 

 

137

 

Sale of short-term investments, net

 

390

 

 

 

236

 

Other

 

35

 

 

 

(81

)

NET CASH USED IN INVESTING ACTIVITIES

 

(151

)

 

 

(547

)

Cash flows from financing activities:

 

 

 

Dividends paid

 

(357

)

 

 

(249

)

Proceeds from employee stock purchase plan

 

100

 

 

 

86

 

Proceeds from exercise of stock options

 

15

 

 

 

35

 

Taxes paid on net settled stock-based compensation awards

 

(78

)

 

 

(88

)

Stock repurchase program

 

(270

)

 

 

(230

)

Proceeds from issuance of long-term debt

 

345

 

 

 

559

 

Net decrease in short-term borrowings

 

(9

)

 

 

(50

)

Other

 

(13

)

 

 

(1

)

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES

 

(267

)

 

 

62

 

Net increase in cash before translation effect

 

(91

)

 

 

(155

)

Translation effect on cash

 

(21

)

 

 

1

 

Cash, beginning of period

 

2,900

 

 

 

1,655

 

Cash, end of period

$

2,788

 

 

$

1,501

 

 

(1)
Includes depreciation of fixed assets and amortization of intangible assets, exploration data costs, and APS investments.
(2)
Net of the effect of business acquisitions.

 

See Notes to Consolidated Financial Statements

6


 

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(Unaudited)

 

 

(Stated in millions, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Other

 

 

 

Common Stock

 

Retained

 

Comprehensive

 

Noncontrolling

 

January 1, 2024 – March 31, 2024

 

Issued

 

In Treasury

 

Earnings

 

Loss

 

Interests

 

Total

Balance, January 1, 2024

 

$11,624

 

$(678)

 

$13,497

 

$(4,254)

 

$1,170

 

$21,359

Net income

 

 

 

1,068

 

 

30

 

1,098

Currency translation adjustments

 

 

 

 

23

 

 

 

23

Changes in fair value of cash flow hedges

 

 

 

 

(18)

 

 

(18)

Pension and other postretirement benefit plans

 

 

 

 

(5)

 

 

(5)

Shares sold to optionees, less shares exchanged

 

(6)

 

21

 

 

 

 

15

Vesting of restricted stock, net of taxes withheld

 

(338)

 

260

 

 

 

 

(78)

Employee stock purchase plan

 

(36)

 

136

 

 

 

 

100

Stock repurchase program

 

 

(270)

 

 

 

 

(270)

Stock-based compensation expense

 

100

 

 

 

 

 

100

Dividends declared ($0.275 per share)

 

 

 

(393)

 

 

 

(393)

Other

 

 

 

 

 

 

 

5

 

(13)

 

(8)

Balance, March 31, 2024

 

$11,344

 

$(531)

 

$14,172

 

$(4,249)

 

$1,187

 

$21,923

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Other

 

 

 

Common Stock

 

Retained

 

Comprehensive

 

Noncontrolling

 

January 1, 2023 – March 31, 2023

 

Issued

 

In Treasury

 

Earnings

 

Loss

 

Interests

 

Total

Balance, January 1, 2023

 

$11,837

 

$(1,016)

 

$10,719

 

$(3,855)

 

$304

 

$17,989

Net income

 

 

 

934

 

 

10

 

944

Currency translation adjustments

 

 

 

 

(34)

 

 

 

(34)

Changes in fair value of cash flow hedges

 

 

 

 

(38)

 

 

(38)

Pension and other postretirement benefit plans

 

 

 

 

(6)

 

 

(6)

Shares sold to optionees, less shares exchanged

 

(28)

 

63

 

 

 

 

35

Vesting of restricted stock, net of taxes withheld

 

(503)

 

415

 

 

 

 

(88)

Employee stock purchase plan

 

(123)

 

209

 

 

 

 

86

Stock repurchase program

 

 

(230)

 

 

 

 

(230)

Stock-based compensation expense

 

81

 

 

 

 

 

81

Dividends declared ($0.25 per share)

 

 

 

(357)

 

 

 

(357)

Dividends paid to noncontrolling interest

 

 

 

 

 

 

 

 

 

(2)

 

(2)

Balance, March 31, 2023

 

$11,264

 

$(559)

 

$11,296

 

$(3,933)

 

$312

 

$18,380

 

 

 

 

 

 

SHARES OF COMMON STOCK

(Unaudited)

 

 

 

(Stated in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

Issued

 

 

In Treasury

 

 

Outstanding

 

Balance, January 1, 2024

 

1,439

 

 

 

(12

)

 

 

1,427

 

Vesting of restricted stock

 

-

 

 

 

5

 

 

 

5

 

Shares issued under employee stock purchase plan

 

-

 

 

 

2

 

 

 

2

 

Stock repurchase program

 

-

 

 

 

(5

)

 

 

(5

)

Balance, March 31, 2024

 

1,439

 

 

 

(10

)

 

 

1,429

 

 

 

See Notes to Consolidated Financial Statements

 

7


 

SCHLUMBERGER LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

1. Basis of Presentation

The accompanying unaudited consolidated financial statements of Schlumberger Limited and its subsidiaries (“SLB”) have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of SLB management, all adjustments considered necessary for a fair statement have been included in the accompanying unaudited financial statements. All intercompany transactions and balances have been eliminated in consolidation. Operating results for the three-month period ended March 31, 2024 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2024. The December 31, 2023 balance sheet information has been derived from the SLB 2023 audited financial statements. For further information, refer to the Consolidated Financial Statements and notes thereto included in the SLB Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on January 24, 2024.

 

Recently Announced Transaction

On April 2, 2024, SLB announced a definitive agreement to purchase ChampionX Corporation ("ChampionX") in an all-stock transaction. ChampionX is a global leader in chemistry solutions, artificial lift systems, and highly engineered equipment and technologies that help companies drill for and produce oil and gas safely, efficiently, and sustainably around the world. Under the terms of the agreement, ChampionX shareholders will receive 0.735 shares of SLB common stock in exchange for each ChampionX share. At the closing of the transaction ChampionX shareholders will own approximately 9% of SLB's outstanding shares of common stock. ChampionX reported revenue of approximately $3.8 billion in 2023. The transaction is subject to ChampionX stockholder approval, regulatory approvals and other customary closing conditions. It is anticipated that the closing of the transaction will occur before the end of 2024.

2. Charges and Credits

2024

In connection with SLB's October 2023 acquisition of the Aker Solutions ("Aker") subsea business, SLB recorded $25 million of pretax charges during the first quarter of 2024 consisting of: $14 million relating to the amortization of purchase accounting adjustments associated with the write-up of acquired inventories to its estimated fair value and $11 million of other merger and integration-related costs. $14 million of these costs are classified in Cost of Sales in the Consolidated Statement of Income, with the remaining $11 million classified in Merger & integration.

 

 

(Stated in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling

 

 

 

 

 

Pretax Charge

 

 

Tax Benefit

 

 

Interests

 

 

Net

 

Merger and integration

$

25

 

 

$

6

 

 

$

5

 

 

$

14

 

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 pretax gain of $36 million ($28 million after-tax) which is classified in Interest & other income in the Consolidated Statement of Income.

3. Earnings per Share

The following is a reconciliation from basic earnings per share of SLB to diluted earnings per share of SLB:

 

 

(Stated in millions, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

 

2023

 

 

Net Income
Attributable
to SLB

 

 

Average
Shares
Outstanding

 

 

Earnings per
Share

 

 

Net Income
Attributable
to SLB

 

 

Average
Shares
Outstanding

 

 

Earnings per
Share

 

First Quarter

 

 

 

 

 

 

 

 

 

 

 

Basic

$

1,068

 

 

 

1,431

 

 

$

0.75

 

 

$

934

 

 

 

1,426

 

 

$

0.65

 

Assumed exercise of stock options

 

-

 

 

 

1

 

 

 

 

 

-

 

 

 

2

 

 

 

Unvested restricted stock

 

-

 

 

 

15

 

 

 

 

 

-

 

 

 

18

 

 

 

Diluted

$

1,068

 

 

 

1,447

 

 

$

0.74

 

 

$

934

 

 

 

1,446

 

 

$

0.65

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8


 

 

The number of outstanding options to purchase shares of SLB common stock that were not included in the computation of diluted income per share, because to do so would have had an antidilutive effect, was as follows:

(Stated in millions)

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

Employee stock options

 

20

 

 

 

24

 

 

4. Inventories

A summary of inventories, which are stated at the lower of average cost or net realizable value, is as follows:

(Stated in millions)

 

 

 

 

 

 

 

 

Mar. 31,

 

 

Dec. 31,

 

 

2024

 

 

2023

 

Raw materials & field materials

$

2,400

 

$

2,296

 

Work in progress

 

813

 

 

 

762

 

Finished goods

 

1,336

 

 

1,329

 

$

4,549

 

$

4,387

 

 

5. Fixed Assets

Fixed assets consist of the following:

 

(Stated in millions)

 

 

 

 

 

 

 

 

Mar. 31,

 

 

Dec. 31,

 

 

2024

 

 

2023

 

Property, plant & equipment

$

29,934

 

$

29,965

 

Less: Accumulated depreciation

 

22,681

 

 

22,725

 

$

7,253

 

$

7,240

 

 

Depreciation expense relating to fixed assets was $377 million and $347 million in the first quarter of 2024 and 2023, respectively.

6. Intangible Assets

Intangible assets consist of the following:

 

 

(Stated in millions)

 

 

 

Mar. 31, 2024

 

Dec. 31, 2023

 

Gross

 

Accumulated

 

 

Net Book

 

Gross

 

Accumulated

 

 

Net Book

 

Book Value

 

Amortization

 

 

Value

 

Book Value

 

Amortization

 

 

Value

 

Customer relationships

$

1,886

 

$

731

 

$

1,155

 

$

1,887

 

$

709

 

$

1,178

 

Technology/technical know-how

 

1,516

 

 

 

795

 

 

721

 

 

1,516

 

 

770

 

 

746

 

Tradenames

 

795

 

 

274

 

 

521

 

 

795

 

 

265

 

 

530

 

Other

 

1,592

 

 

822

 

 

770

 

 

1,582

 

 

797

 

 

785

 

$

5,789

 

$

2,622

 

$

3,167

 

$

5,780

 

$

2,541

 

$

3,239

 

 

Amortization expense charged to income was $81 million during the first quarter of 2024 and $76 million during the first quarter of 2023.

Based on the carrying value of intangible assets at March 31, 2024, amortization expense for the subsequent five years is estimated to be: remaining three quarters of 2024—$244 million; 2025—$306 million; 2026—$297 million; 2027—$293 million; 2028—$283 million; and 2029—$270 million.

9


 

7. Long-term Debt

Long-term Debt consists of the following:

 

(Stated in millions)

 

 

 

 

 

 

 

 

Mar. 31,

 

 

Dec. 31,

 

 

2024

 

 

2023

 

3.90% Senior Notes due 2028

$

1,473

 

$

1,469

 

2.65% Senior Notes due 2030

 

1,250

 

 

 

1,250

 

1.375% Guaranteed Notes due 2026

 

1,080

 

 

 

1,104

 

2.00% Guaranteed Notes due 2032

 

1,074

 

 

 

1,098

 

0.25% Notes due 2027

 

972

 

 

 

994

 

0.50% Notes due 2031

 

971

 

 

 

992

 

4.30% Senior Notes due 2029

 

847

 

 

847

 

1.00% Guaranteed Notes due 2026

 

648

 

 

662

 

4.00% Senior Notes due 2025

 

523

 

 

523

 

1.40% Senior Notes due 2025

 

499

 

 

 

499

 

4.50% Senior Notes due 2028

 

497

 

 

497

 

4.85% Senior Notes due 2033

 

497

 

 

497

 

7.00% Notes due 2038

 

199

 

 

 

200

 

5.95% Notes due 2041

 

112

 

 

 

112

 

5.13% Notes due 2043

 

98

 

 

 

98

 

$

10,740

 

$

10,842

 

 

The estimated fair value of SLB’s Long-term Debt, based on quoted market prices at March 31, 2024 and December 31, 2023, was $10.0 billion and $10.2 billion, respectively.

 

At March 31, 2024, SLB had committed credit facility agreements aggregating $5.0 billion with commercial banks, of which $4.7 billion was available and unused. These committed facilities, of which $2.0 billion matures in February 2027 and $3.0 billion matures in December 2028, support commercial paper programs in the United States and Europe. Borrowings under the commercial paper programs at March 31, 2024 were $345 million, all of which were classified in Short-term borrowings and current portion of long-term debt in the Consolidated Balance Sheet. There were no borrowings under the commercial paper programs at December 31, 2023.

 

Schlumberger Limited fully and unconditionally guarantees the securities issued by certain of its subsidiaries, including securities issued by Schlumberger Investment S.A. and Schlumberger Finance Canada Ltd., both indirect wholly-owned subsidiaries of Schlumberger Limited.

8. Derivative Instruments and Hedging Activities

SLB’s functional currency is primarily the US dollar. However, outside the United States, a significant portion of SLB’s expenses is incurred in foreign currencies. Therefore, when the US dollar weakens (strengthens) in relation to the foreign currencies of the countries in which SLB conducts business, the US dollar-reported expenses will increase (decrease).

 

Changes in foreign currency exchange rates expose SLB to risks on future cash flows relating to its fixed rate debt denominated in currencies other than the functional currency. SLB uses cross-currency interest rate swaps to provide a hedge against these risks. These contracts are accounted for as cash flow hedges, with the fair value of the derivative recorded on the Consolidated Balance Sheet and in Accumulated other comprehensive loss. Amounts recorded in Accumulated other comprehensive loss are reclassified into earnings in the same period or periods that the hedged item is recognized in earnings.

 

Details regarding SLB’s outstanding cross-currency interest rate swaps as of March 31, 2024, were as follows:

During 2019, a US-dollar functional currency subsidiary of SLB issued €1.5 billion of Euro-denominated debt. SLB entered into cross-currency interest rate swaps in order to hedge changes in the US dollar value of its €0.5 billion 0.00% Notes due 2024, €0.5 billion 0.25% Notes due 2027 and €0.5 billion 0.50% Notes due 2031. These cross-currency interest rate swaps effectively convert the Euro-denominated notes to US-dollar denominated debt with fixed annual interest rates of 2.29%, 2.51% and 2.76%, respectively.
During 2020, a US-dollar functional currency subsidiary of SLB issued €0.8 billion of Euro-denominated debt. SLB entered into cross-currency interest rate swaps to hedge changes in the US dollar value of its €0.4 billion of 0.25% Notes due 2027 and €0.4 billion of 0.50% Notes due 2031. These cross-currency interest rate swaps effectively convert the Euro-denominated notes to US-dollar denominated debt with fixed annual interest rates of 1.87% and 2.20%, respectively.
During 2020, a US-dollar functional currency subsidiary of SLB issued €2.0 billion of Euro-denominated debt. SLB entered into cross-currency interest rate swaps to hedge changes in the US dollar value of its €1.0 billion of 1.375% Guaranteed Notes due 2026 and €1.0 billion of 2.00% Guaranteed Notes due 2032. These cross-currency interest rate swaps effectively convert the Euro-denominated notes to US-dollar denominated debt with fixed annual interest rates of 2.77% and 3.49%, respectively.

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During 2020, a Canadian dollar fu