- Fourth-quarter revenue of $7.9 billion increased 5%
sequentially and 27% year on year
- Fourth-quarter GAAP EPS of $0.74 increased 17% sequentially and
76% year on year
- Fourth-quarter EPS, excluding charges and credits, of $0.71
increased 13% sequentially and 73% year on year
- Fourth-quarter cash flow from operations was $1.6 billion and
free cash flow was $0.9 billion
- Board approved a 43% increase in quarterly cash dividend to
$0.25 per share
- Full-year revenue of $28.1 billion increased 23% year on
year
- Full-year GAAP EPS of $2.39 increased 81% year on year
- Full-year EPS, excluding charges and credits, of $2.18
increased 70% year on year
- Full-year net income attributable to SLB of $3.4 billion
increased 83% year on year
- Full-year adjusted EBITDA of $6.5 billion increased 31% year on
year
- Full-year cash flow from operations was $3.7 billion
SLB (NYSE: SLB) today announced results for the fourth-quarter
and full-year 2022.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20230118006018/en/
The exterior of the SLB corporate
headquarters, Houston. (Photo: Business Wire)
Fourth-Quarter Results
(Stated in millions, except per share amounts)
Three Months
Ended Change Dec. 31,2022 Sept. 30,2022 Dec.
31,2021
Sequential Year-on-year Revenue
$7,879
$7,477
$6,225
5%
27%
Income before taxes - GAAP basis
$1,347
$1,134
$755
19%
78%
Income before taxes margin - GAAP basis
17.1%
15.2%
12.1%
192 bps
495 bps
Net income attributable to SLB - GAAP basis
$1,065
$907
$601
17%
77%
Diluted EPS - GAAP basis
$0.74
$0.63
$0.42
17%
76%
Adjusted EBITDA*
$1,921
$1,756
$1,381
9%
39%
Adjusted EBITDA margin*
24.4%
23.5%
22.2%
89 bps
219 bps
Pretax segment operating income*
$1,557
$1,400
$986
11%
58%
Pretax segment operating margin*
19.8%
18.7%
15.8%
104 bps
393 bps
Net income attributable to SLB, excluding charges & credits*
$1,026
$907
$587
13%
75%
Diluted EPS, excluding charges & credits*
$0.71
$0.63
$0.41
13%
73%
Revenue by Geography
International
$6,194
$5,881
$4,898
5%
26%
North America
1,633
1,543
1,281
6%
27%
Other
52
53
46
n/m
n/m
$7,879
$7,477
$6,225
5%
27%
*These are non-GAAP financial measures. See sections titled
"Charges & Credits", "Divisions", and "Supplemental
Information" for details. n/m = not meaningful (Stated in millions)
Three Months Ended Change Dec. 31,2022 Sept.
30,2022 Dec. 31,2021
Sequential Year-on-year
Revenue by
Division Digital & Integration
$1,012
$900
$889
12%
14%
Reservoir Performance
1,554
1,456
1,287
7%
21%
Well Construction
3,229
3,084
2,388
5%
35%
Production Systems
2,215
2,150
1,765
3%
26%
Other
(132)
(113)
(104)
n/m
n/m
$7,879
$7,477
$6,225
5%
27%
Pretax Operating Income by Division
Digital & Integration
$382
$305
$335
25%
14%
Reservoir Performance
282
244
200
16%
41%
Well Construction
679
664
368
2%
85%
Production Systems
238
224
159
6%
49%
Other
(24)
(37)
(76)
n/m
n/m
$1,557
$1,400
$986
11%
58%
Pretax Operating Margin by Division
Digital & Integration
37.7%
33.9%
37.7%
386 bps
-2 bps
Reservoir Performance
18.2%
16.7%
15.5%
146 bps
265 bps
Well Construction
21.0%
21.5%
15.4%
-50 bps
564 bps
Production Systems
10.8%
10.4%
9.0%
32 bps
173 bps
Other
n/m
n/m
n/m
n/m
n/m
19.8%
18.7%
15.8%
104 bps
393 bps
n/m = not meaningful
SLB CEO Olivier Le Peuch commented, “We delivered strong
fourth-quarter results and concluded a remarkable year for SLB with
great success. Revenue grew across all Divisions and geographical
areas, with robust year-end sales in digital and particularly
strong service activity offshore and in the Middle East where we
witnessed a significant inflection as capacity expansion projects
mobilized.
“Sequentially, fourth-quarter revenue grew 5%; EPS, excluding
charges and credits, expanded to $0.71; and adjusted EBITDA margins
grew to 24.4%—219 basis points (bps) higher than the same quarter
last year—exceeding our target exit rate. More importantly,
fourth-quarter pretax segment operating margins and EPS were the
highest since 2015, reflecting our enhanced earnings power and
potential as activity growth momentum is sustained through the next
few years.
An Outstanding Year of Success with Significant
Tailwinds
“We concluded the year with 23% growth in revenue; 70% growth in
EPS, excluding charges and credits; adjusted EBITDA margin
expansion of 152 bps; cash flow from operations of $3.7 billion;
and 13% ROCE, its highest level since 2014.
“Overall, 2022 was transformative for SLB as we set new safety,
operational, and performance benchmarks for our customers and
strengthened our market position both internationally and in North
America. We launched our bold new brand identity, reinforcing our
leadership position in energy technology, digital, and
sustainability, and demonstrated our ability to deliver superior
earnings in this early phase of a structural upcycle in energy.
“In North America, we seized the growth cycle throughout the
year, increased our pretax operating margins close to 600 bps, and
almost doubled our pretax operating income. We effectively
harnessed our refocused portfolio, fit-for-basin technology, and
performance differentiation to gain greater market access and
improved pricing, particularly in the drilling markets where we
significantly outperformed rig count growth. Today, we have built
one of the highest-quality oilfield services and equipment
businesses in North America through the implementation of our
returns-focused strategy.
“In the international markets, after a first half of the year
that was impacted by geopolitical conflict and supply chain
bottlenecks, activity began to visibly inflect in the second half
of the year, resulting in full year revenue growth of 20% and
margin expansion of more than 150 bps. We laid the foundation for
further growth and margin expansion through pricing improvements
and a solid pipeline of incremental contract awards. In the Middle
East, SLB is well positioned to be a key beneficiary of this
visible market expansion, and we expect record levels of upstream
investment by NOCs to continue in the next few years. During the
year, we secured a sizeable share of tender awards in the region,
driven by our differentiated performance, fit-for-purpose
technology, and best-in-class local content. Similarly, across
offshore basins, we continue to consolidate our advantaged position
with new contract awards, particularly in Latin America and
Africa.
“In this context, our investments in capex and inventory
increased as we exited the year in support of new international and
offshore project mobilizations. These factors, combined with
lower-than-expected year-end collections, resulted in free cash
flow reducing to $0.9 billion for the fourth quarter. Despite these
effects, we continued to strengthen our balance sheet during the
quarter by reducing both net and gross debt.
“Beyond our financial results, we made significant progress in
our sustainability initiatives during the year. We reduced our
Scope 1 and 2 carbon emissions intensity and launched several new
Transition Technologies* to support the decarbonization of oil and
gas. Our Transition Technologies portfolio revenue grew more than
30% year on year, and we project it will cross the $1 billion
revenue mark in 2023.
“Finally, we initiated increased returns to shareholders,
demonstrating confidence in our strategy, our financial
outperformance, and our commitment to superior returns. We
increased our dividend by 40% in April 2022, followed by a further
43% increase today, and we resumed our share buyback program this
month.
“I am extremely proud of our full-year results, and I would like
to extend my thanks to the entire team for their outstanding
performance.”
Primed for Strong Growth and Returns—A Distinctive New Phase in
the Upcycle
Le Peuch said, “The fourth quarter affirmed a distinctive new
phase in the upcycle. In the Middle East, revenue increased by
double digits sequentially, with growth in Saudi Arabia, Iraq, and
the United Arab Emirates in the solid teens, affirming the
much-anticipated acceleration of activity in the region. Offshore
activity continued to strengthen, partially offset by seasonality
in the Northern Hemisphere. In North America, US land rig count
remains at robust levels, although the pace of growth is
moderating. Additionally, pricing continues to trend favorably,
extending beyond North America and into the international regions,
supported by new technology and very tight equipment and service
capacity in certain markets.
“These activity dynamics, improved pricing, and our commercial
success—particularly in the Middle East, offshore, and North
American markets—combine to set a very strong foundation for
outperformance in 2023.
“Looking ahead, we believe the macro backdrop and market
fundamentals that underpin a strong multi-year upcycle for energy
remain very compelling in oil and gas and in low-carbon energy
resources. First, oil and gas demand is forecast by the
International Energy Agency (IEA) to grow by 1.9 million barrels
per day in 2023 despite concerns for a potential economic slowdown
in certain regions. In parallel, markets remain very tightly
supplied. Second, energy security is prompting a sense of urgency
to make further investments to ensure capacity expansion and
diversity of supply. And third, the secular trends of digital and
decarbonization are set to accelerate with significant digital
technology advancements, favorable government policy support, and
increased spending on low-carbon initiatives and resources.
“Based on these factors, global upstream spending projections
continue to trend positively. Activity growth is expected to be
broad-based, marked by an acceleration in international basins.
These positive activity dynamics will be amplified by higher
service pricing and tighter service sector capacity. The impact of
loosening COVID-19 restrictions and an earlier than expected
reopening of China could support further upside potential over
2023.
“Overall, the combination of these effects will result in a very
favorable mix for SLB with significant growth opportunities in our
Core, Digital, and New Energy. We expect another year of very
strong growth and margin expansion. We have a clear strategy, an
advantaged portfolio, and the right team in place to drive our
business forward. I look forward to another successful year for our
customers and our shareholders.”
Other Events
On October 26, 2022, SLB announced it entered into an agreement
to acquire Gyrodata Incorporated, a global company specializing in
gyroscopic wellbore positioning and survey technology. The
acquisition will integrate Gyrodata’s wellbore placement and
surveying technologies within SLB’s Well Construction business, to
bring customers innovative drilling solutions. The transaction is
subject to regulatory approvals and is expected to close in the
first quarter of 2023.
In December 2022, SLB repurchased $804 million of its
outstanding notes, consisting of $395 million of 3.75% Senior Notes
due 2024 and $409 million of 4.00% Senior Notes due 2025.
On January 19, 2023, SLB’s Board of Directors approved a 43%
increase in SLB’s quarterly cash dividend from $0.175 per share of
outstanding common stock to $0.25 per share, beginning with the
dividend payable on April 6, 2023, to stockholders of record on
February 8, 2023.
Fourth-Quarter Revenue by Geographical Area
(Stated in millions)
Three Months Ended Change
Dec. 31,2022 Sept. 30,2022 Dec. 31,2021
Sequential
Year-on-year North America
$1,633
$1,543
$1,281
6%
27%
Latin America
1,619
1,508
1,204
7%
34%
Europe/CIS/Africa
2,067
2,039
1,587
1%
30%
Middle East & Asia
2,508
2,334
2,107
7%
19%
Eliminations & other
52
53
46
n/m
n/m
$7,879
$7,477
$6,225
5%
27%
International
$6,194
$5,881
$4,898
5%
26%
North America
$1,633
$1,543
$1,281
6%
27%
n/m = not meaningful
International
Revenue in Latin America of $1.6 billion increased 7%
sequentially due to higher Well Construction revenue from increased
drilling activity and improved pricing, mainly in Mexico and
Brazil. Increased Production Systems sales in Brazil and higher APS
project activity in Ecuador also contributed to the sequential
revenue growth. Year on year, revenue grew 34% due to higher
drilling activity and increased pricing across the area. Higher APS
project activity in Ecuador, increased stimulation and drilling
activity in Argentina, and higher Production Systems sales and
drilling in Brazil also contributed to the year-on-year revenue
growth.
Europe/CIS/Africa revenue of $2.1 billion increased 1%
sequentially due to strong activity across all Divisions in Africa,
mainly in Angola, Central & East Africa, and higher reservoir
evaluation and intervention activity in the Caspian, Azerbaijan,
and Turkmenistan. These increases, however, were almost fully
offset by activity declines in Russia, Scandinavia, and Europe due
to the onset of seasonal effects. Compared to the same quarter last
year, revenue grew 30% due to strong Well Construction activity and
improved pricing across the area, higher Production Systems sales
in Europe and Scandinavia, and activity increases in Africa across
Divisions.
Revenue in the Middle East & Asia of $2.5 billion
increased 7% sequentially mainly due to double-digit growth across
the Middle East, primarily in Saudi Arabia, the United Arab
Emirates, Iraq, and Qatar, from strong activity led by Well
Construction and Production Systems. Asia was sequentially flat as
revenue growth in East Asia, India, and Australia was offset by
declines in Indonesia and China, with the latter due to the onset
of seasonal effects. Year on year, revenue increased 19% due to
increased activity across Divisions in Asia and higher activity
from new projects in the Middle East—notably, increased drilling
and stimulation activity in Saudi Arabia, the United Arab Emirates,
Iraq, and Qatar.
North America
North America revenue of $1.6 billion increased 6%
sequentially driven by strong year-end exploration data licensing
sales in the US Gulf of Mexico boosting North America offshore
revenue. US land revenue increased sequentially due to drilling
revenue growth, which outperformed the rig count growth. Compared
to the same quarter last year, North America revenue grew 27%. All
Divisions experienced significant year-on-year revenue growth, led
by Well Construction and Production Systems.
Fourth-Quarter Results by Division
Digital & Integration
(Stated in millions)
Three Months Ended Change
Dec. 31,2022 Sept. 30,2022 Dec. 31,2021
Sequential
Year-on-year Revenue International
$723
$671
$624
8%
16%
North America
288
229
263
26%
9%
Other
1
-
2
n/m
n/m
$1,012
$900
$889
12%
14%
Pretax operating income
$382
$305
$335
25%
14%
Pretax operating margin
37.7%
33.9%
37.7%
386 bps
-2 bps
n/m = not meaningful
Digital & Integration revenue of $1.0 billion increased 12%
sequentially, propelled by year-end exploration data licensing
sales in the Gulf of Mexico and Africa; increased APS project
activity in Ecuador; and higher digital sales in Europe, Africa,
and Latin America.
Year on year, revenue growth of 14% was driven primarily by
higher APS project revenue in Ecuador and increased exploration
data and digital sales both in North America and
internationally.
Digital & Integration pretax operating margin of 38%
expanded 386 bps sequentially, due to improved profitability in
exploration data licensing and digital solutions. Year on year,
pretax operating margin was essentially flat.
Reservoir Performance
(Stated in millions)
Three Months Ended Change
Dec. 31,2022 Sept. 30,2022 Dec. 31,2021
Sequential
Year-on-year Revenue International
$1,430
$1,335
$1,194
7%
20%
North America
123
119
92
3%
33%
Other
1
2
1
n/m
n/m
$1,554
$1,456
$1,287
7%
21%
Pretax operating income
$282
$244
$200
16%
41%
Pretax operating margin
18.2%
16.7%
15.5%
146 bps
265 bps
n/m = not meaningful
Reservoir Performance revenue of $1.6 billion increased 7%
sequentially from new stimulation and intervention projects and
activity gains in the Middle East, mainly in Saudi Arabia;
intervention activity in the Caspian; and higher exploration
evaluation activity as a result of new technology adoption in
Europe and Africa, primarily in offshore Scandinavia, Angola, and
Ivory Coast.
Year on year, revenue growth of 21% was broad, with double-digit
growth across all areas due to increased activity. The revenue
growth was led by the Middle East & Asia, which grew 22%.
Intervention and stimulation services experienced double-digit
growth, both on land and offshore.
Reservoir Performance pretax operating margin of 18% expanded
146 bps sequentially. Profitability was boosted by higher offshore
and exploration activity, mainly in Africa, and strong development
activity, particularly in US land, and in the Middle East &
Asia. Year on year, pretax operating margin expanded 265 bps, with
profitability improving both in evaluation and intervention, and
geographically improving in US land, Asia, Africa, and Latin
America.
Well Construction
(Stated in millions)
Three Months Ended Change
Dec. 31,2022 Sept. 30,2022 Dec. 31,2021
Sequential
Year-on-year Revenue International
$2,522
$2,406
$1,901
5%
33%
North America
652
621
441
5%
48%
Other
55
57
46
n/m
n/m
$3,229
$3,084
$2,388
5%
35%
Pretax operating income
$679
$664
$368
2%
85%
Pretax operating margin
21.0%
21.5%
15.4%
-50 bps
564 bps
n/m = not meaningful
Well Construction revenue of $3.2 billion increased 5%
sequentially, outperforming global rig count growth due to strong
activity from new projects and solid pricing improvements
internationally, particularly in the Middle East & Asia and
Latin America. Revenue growth in the Middle East was particularly
strong in Saudi Arabia and Qatar, while in Latin America, drilling
activity increased mainly in Brazil and Mexico. Europe/CIS/Africa
was flat as strong growth in Africa—mainly in Angola, Gabon,
Namibia, and South Africa—was offset by seasonal effects in the
Northern Hemisphere. In North America, sequential revenue growth
outpaced the rig count increase in US land. All business lines,
which include measurement, drilling, fluids, and equipment, posted
sequential increases, with equipment reporting double-digit growth
during the quarter.
Year on year, revenue growth of 35% was driven by strong
activity and solid pricing improvements, led by Latin America,
which grew 54%, and North America which increased 48%.
Europe/CIS/Africa revenue increased 29% while Middle East &
Asia revenue grew 24% year on year. High double-digit growth was
recorded across the Division’s business lines led by drilling
fluids and measurements—both on land and offshore.
Well Construction pretax operating margin of 21% contracted 50
bps sequentially, as improved profitability from increasing
activity in the Middle East & Asia, North America, and Latin
America was more than offset by the onset of seasonal effects in
the Northern Hemisphere. Year on year, pretax operating margin
expanded 564 bps, with profitability improving across all areas,
driven by higher activity and improved pricing.
Production Systems
(Stated in millions)
Three Months Ended Change
Dec. 31,2022 Sept. 30,2022 Dec. 31,2021
Sequential
Year-on-year Revenue International
$1,638
$1,569
$1,278
4%
28%
North America
575
578
484
-1%
19%
Other
2
3
3
n/m
n/m
$2,215
$2,150
$1,765
3%
26%
Pretax operating income
$238
$224
$159
6%
49%
Pretax operating margin
10.8%
10.4%
9.0%
32 bps
173 bps
n/m = not meaningful
Production Systems revenue of $2.2 billion increased 3%
sequentially on higher international sales of artificial lift,
completions, and midstream production systems, partially offset by
reduced sales of valves and subsea production systems.
International revenue was boosted by double-digit growth in the
Middle East & Asia, particularly in Saudi Arabia, the United
Arab Emirates, Iraq, East Asia, and Australia; and in Latin
America, mainly in Brazil, Mexico, and Guyana.
Year on year, double-digit revenue growth of 26% was driven by
new projects and increased product deliveries mainly in
Europe/CIS/Africa, North America, and Latin America.
Production Systems pretax operating margin of 11% in the quarter
expanded 32 bps sequentially due to a more favorable revenue mix.
Year on year, pretax operating margin expanded 173 bps driven by
higher sales and execution efficiency as supply chain and logistics
constraints eased.
Quarterly Highlights
CORE
Contract Awards
As the strong growth cycle in oil and gas advances, SLB
continues to secure new contracts in North America and
internationally, particularly in offshore basins and the Middle
East. During the quarter, SLB secured the following notable
projects:
- Abu Dhabi National Oil Company (ADNOC) awarded SLB a $1.4
billion framework agreement for integrated drilling fluids services
to support onshore and offshore production over the next five
years. The services include drilling fluids, liquid mud plants,
personnel, and waste management. The agreement builds on existing
SLB contributions to ADNOC’s vision to expand lower-cost,
lower-carbon production and supports the acceleration of its
production capacity target of five million barrels of oil per day
by 2027.
- In Malaysia, Sarawak Shell Berhad awarded SLB a long-term
integrated drilling services (LTIDS) contract for exploration and
development of offshore wells. The LTIDS will deliver solutions via
technology, synergy, and simplification of processes across
multiple business lines with a contract scope that encompasses
drilling services and products inclusive of drilling and
measurement, electrical wireline, drilling fluids, solids control,
cementing, casing drilling, bits, mud logging, and management of
third-party subcontractors. SLB will leverage its sustainability
portfolio to help Shell deliver cleaner well operations in complex
environments.
- Offshore Angola, Azule Energy awarded SLB a contract for
integrated completions in Block 15/06, including Agogo Field wells.
This full-field development plan uses a completion design for these
producing and injection wells that includes fit-for-purpose
technologies suited for the deepwater environment, such as
Alternate Path®† sand screens, FORTRESS* premium isolation valves,
BluePack* production packers, Metris Extreme* high-pressure and
high-temperature permanent pressure testing gauges, and a deep-set
TRC-II* tubing-retrievable charged safety valve.
- In the UK, Equinor awarded SLB a four-year contract extension
to continue support for Mariner Field development in the North Sea.
The integrated drilling and well services contract includes
drilling, measurement, electric wireline logging, drilling and
completions fluids, solids control, cementing, completions, and
electrical submersible pump systems, together with engineering and
project management. Including delivery of more than 20 wells over
the four years, the contract extension builds on the collaboration
between Equinor and SLB and the implementation of well construction
technologies and digital solutions that have enabled highest
achievements in safety, performance, and sustainability in Mariner
Field.
- Offshore Trinidad and Tobago, bp awarded to Subsea Integration
Alliance a large contract for its Cypre project, a two-phase liquid
natural gas tieback. The contract scope covers the engineering,
procurement, construction, and installation (EPCI) of the subsea
production systems and subsea pipelines. The award represents
Subsea Integration Alliance’s first fully integrated EPCI single
contract with bp and the alliance’s first development in the
Caribbean nation.
- In India, Cairn Oil & Gas, Vedanta Limited awarded SLB a
$400 million contract to provide integrated services on its
Rajasthan block over a five-year period. The scope of work
encompasses 14 services from across all four of SLB’s Divisions,
with the objective of improving efficiency in the intervention and
workover space, thereby boosting production from the block.
Oil & Gas Decarbonization, New Technology, and
Performance
SLB continues to develop and deploy innovative technologies that
lower operational emissions and environmental impact in reservoir
evaluation, well construction, production, and integrated
operations for customers globally. Customer adoption of SLB
technology is accelerating and continues to significantly impact
performance leading to more efficient operations, lower carbon
emissions, and higher returns for our customers. Notable highlights
include:
- In the US’ Midland Basin, Pioneer Natural Resources
successfully deployed novel SLB cement-free slurry technology on an
18-well field testing campaign. This pilot in North America
resulted in the complete elimination of Portland cement from slurry
designs, offering a unique opportunity for the oilfield industry to
substantially decrease CO2 emissions related to well construction.
In addition to aligning with Pioneer’s objective to lead in
environmental stewardship through proactive measures, the field
trials validated the ability of the technology to fit within
standard oilfield cementing workflows without major changes to the
design process, onsite execution, or post-job evaluation. This
innovative SLB solution will be available to customers later this
year to help lower oilfield operations emissions and achieve
net-zero objectives.
- The SLB fit-for-basin frac plug portfolio achieved significant
global market adoption milestones. The FracXion Micro* fully
composite frac plugs eclipsed 100,000 installations. The full
portfolio of ReacXion* fully dissolvable frac plugs, an SLB
footprint-reducing technology, achieved 50,000 installations and
lowered operators’ CO2e emissions by reducing diesel consumption by
an estimated 5.7 million liters. These technologies represent how
SLB creates new opportunities by understanding customer needs to
amplify our sustainability impact and reduce our customers' cost to
operate.
- In Saudi Arabia, during November 2022 and working in
collaboration with Saudi Aramco Unconventional Resources, SLB’s
integrated fracturing services team exceeded previous SLB records
for stages and pumping hours per month by 19%. This was achieved
through applying latest technologies, best field practices, and
close collaboration between Saudi Aramco and SLB. This level of
efficiency rivals that of the most efficient fracturing crews in
North America. Additionally, real-time job visibility and
digitalization of SLB maintenance operations increased asset
efficiency and reliability while reducing carbon footprint.
- Offshore Norway, the Well Intervention and Stimulation Alliance
comprising Aker BP, StimWell Services, and SLB conducted the
world's first successful wireline and slickline autonomous
operations. These are examples of the SLB Neuro* autonomous
solutions, which offer enhanced technologies for improved well
economics with repeatability, reliability, and reduced carbon. The
automatic conveyance and spooling technology functions without user
intervention and matches the performance achieved by experienced
operators for safe and efficient execution. The system is now
successfully integrated into routine wireline and slickline
operations for the Well Intervention and Stimulation Alliance.
DIGITAL
Customers are increasingly choosing to leverage SLB’s portfolio
of digital products and services to drive transformation, improve
efficiency, and elevate productivity.
- In Brazil, Petrobras has awarded SLB a five-year contract to
deploy digital solutions for E&P integrated workflows across
the board with AI and machine-learning capabilities for more than
500 users. Enabled by the DELFI* cognitive E&P environment, the
digital deployment will drive efficiency increases, innovation, and
faster decision making to support Petrobras’ aggressive production
development plans while helping to lower greenhouse gas emissions
with proven reductions in processing time.
- In Norway, Equinor awarded SLB a contract to deploy digital
leak detection and virtual flow metering solutions for the
multiphase production network during phase two of the Johan
Sverdrup field. The SLB solution is based on the OLGA Online*
production management system, which was selected by Equinor for its
technical capabilities. The system will support early pipeline leak
detection workflows and deliver accurate virtual flow metering
solutions in a challenging technical and regulatory environment.
The Johan Sverdrup field is an offshore oil discovery located in
the Norwegian Continental Shelf and at plateau the field will
produce 720,000 barrels of oil per day.
- Kuwait Oil Company (KOC) Innovation & Technology Group,
Information Management Team, collaborated with SLB to build an
integrated digital workflow using the DELFI cognitive E&P
environment to continuously monitor water production in a producing
oil field, enabling KOC to avoid potential oil losses of 465,000
barrels. Conventional approaches were unable to detect changes in
water cut quickly, preventing KOC engineers from taking timely
action to avoid oil losses. A solution was implemented using DELFI
Data Science, a package of AI and analytics solutions for energy
workflows that includes embedded technology from Dataiku, the
platform for everyday AI. The solution provides automated water cut
estimation and prediction that is 5,400 times faster than the
conventional method. This enables data-driven decision making to
minimize oil loss with a few simple clicks that yield results in
seconds. Based on the success of this project, KOC recommended full
implementation of this solution.
NEW ENERGY
SLB’s domain expertise and experience in technology
industrialization is helping to lead the energy transition. We
continue to work with partners across various industries to
innovate clean energy solutions for a balanced planet.
- SLB and Linde entered into a strategic collaboration on carbon
capture, utilization, and sequestration (CCUS) projects to
accelerate decarbonization solutions across industrial and energy
sectors. The collaboration will combine decades of experience in
CO2 capture and sequestration; innovative technology portfolios;
project development and execution expertise; and engineering,
procurement, and construction (EPC) capabilities. CO2 is found or
produced in many industrial and energy applications. This
collaboration will focus on hydrogen and ammonia production, where
CO2 is a by-product, and on natural gas processing. CCUS abates the
emissions from these energy-intensive industries, creating new
low-carbon energy sources and products. Using SLB and Linde’s
global footprint across multiple sectors and industries, the
collaboration will expand customer reach and will focus on
designing business and operating models that maximize value for all
stakeholders.
- Genvia, the clean hydrogen technology venture of SLB, France’s
CEA, and partners, was selected by the European Commission as part
of the Important Project of Common European Interest in the
hydrogen technology program (IPCEI-Hy2Tech). Genvia will receive up
to 200 million euros from the French Government’s France 2030 fund
as part of the program. The grant will be used to accelerate the
time to market of Genvia high-performance electrolyzer
technology.
- SLB is collaborating with Oman’s Ministry of Energy and
Minerals and the Oman Investment Authority in building a national
strategy to develop the potential of Oman’s geothermal resources.
This follows the completion of an extensive project to evaluate
data from more than 7,000 oil, gas, and water wells, with the
objective of mapping sweet spots for geothermal prospects in the
country. The next phase will include assessment of the economic
feasibility of the development of potential geothermal resources.
This collaboration between the Ministry of Energy and Minerals,
Oman Investment Authority, and SLB is in line with Oman’s efforts
to decarbonize the energy sector, achieve its net zero goal, and
implement Oman Vision 2040.
- Celsius Energy, a venture of SLB’s New Energy business focused
on heating and cooling solutions for buildings, was awarded a
contract for one of the 10 largest geoenergy projects in Europe,
where demand for low-carbon and locally sourced energy is rising.
This project, based in the eastern region of France, will provide
heating and cooling to dozens of buildings by combining geoenergy
and waste heat from the world’s largest particle accelerator.
Celsius Energy’s proprietary technology will enable the project to
be completed with a limited drilling footprint of 174 bores and
will leverage patented digital modeling and control capability for
smart grid performance optimization.
FINANCIAL TABLES
Full-Year Results (Stated in millions, except per share
amounts)
Twelve Months Ended Dec. 31, 2022 Dec. 31,
2021
Change Revenue
$28,091
$22,929
23%
Income before taxes - GAAP basis
$4,271
$2,374
80%
Income before taxes margin - GAAP basis
15.2%
10.4%
485 bps
Net income attributable to SLB - GAAP basis
$3,441
$1,881
83%
Diluted EPS - GAAP basis
$2.39
$1.32
81%
Adjusted EBITDA*
$6,462
$4,925
31%
Adjusted EBITDA margin*
23.0%
21.5%
152 bps
Pretax segment operating income*
$5,011
$3,365
49%
Pretax segment operating margin*
17.8%
14.7%
316 bps
Net income attributable to SLB, excluding charges & credits*
$3,138
$1,831
71%
Diluted EPS, excluding charges & credits*
$2.18
$1.28
70%
Revenue by Geography
International
$21,895
$18,295
20%
North America
5,995
4,466
34%
Other
201
168
n/m
$28,091
$22,929
23%
*These are non-GAAP financial measures. See sections titled
"Charges & Credits", "Divisions", and "Supplemental
Information" for details. n/m = not meaningful
Condensed
Consolidated Statement of Income
(Stated in millions, except per
share amounts)
Fourth Quarter Twelve Months Periods Ended December 31,
2022
2021
2022
2021
Revenue
$7,879
$6,225
$28,091
$22,929
Interest & other income, net (1)
174
57
610
148
Expenses Cost of revenue
6,308
5,136
22,930
19,271
Research & engineering
178
145
634
554
General & administrative
99
109
376
339
Interest
121
137
490
539
Income before taxes (1)
$1,347
$755
$4,271
$2,374
Tax expense (1)
264
144
779
446
Net income (1)
$1,083
$611
$3,492
$1,928
Net income attributable to noncontrolling interest
18
10
51
47
Net income attributable to SLB (1)
$1,065
$601
$3,441
$1,881
Diluted earnings per share of SLB (1)
$0.74
$0.42
$2.39
$1.32
Average shares outstanding
1,420
1,403
1,416
1,400
Average shares outstanding assuming dilution
1,442
1,430
1,437
1,427
Depreciation & amortization included in expenses (2)
$549
$532
$2,147
$2,120
(1)
See section entitled “Charges &
Credits” for details.
(2)
Includes depreciation of property, plant
and equipment and amortization of intangible assets, exploration
data costs and APS investments.
Condensed Consolidated Balance Sheet
(Stated in millions)
Dec. 31, Dec. 31, Assets
2022
2021
Current Assets Cash and short-term investments
$2,894
$3,139
Receivables
7,032
5,315
Inventories
3,999
3,272
Other current assets
1,078
928
15,003
12,654
Investment in affiliated companies
1,581
2,044
Fixed assets
6,607
6,429
Goodwill
12,982
12,990
Intangible assets
2,992
3,211
Other assets
3,970
4,183
$43,135
$41,511
Liabilities and Equity Current Liabilities Accounts payable
and accrued liabilities
$9,121
$8,382
Estimated liability for taxes on income
1,002
879
Short-term borrowings and current portion of long-term debt
1,632
909
Dividends payable
263
189
12,018
10,359
Long-term debt
10,594
13,286
Postretirement benefits
165
231
Other liabilities
2,369
2,349
25,146
26,225
Equity
17,989
15,286
$43,135
$41,511
Liquidity
(Stated in millions)
Components of Liquidity
Dec. 31,2022 Sept. 30,2022 Dec.
31,2021 Cash and short-term investments
$2,894
$3,609
$3,139
Short-term borrowings and current portion of long-term debt
(1,632)
(899)
(909)
Long-term debt
(10,594)
(12,452)
(13,286)
Net Debt (1)
$(9,332)
$(9,742)
$(11,056)
Details of changes in liquidity follow:
Twelve
Fourth Twelve
Months Quarter Months Periods
Ended December 31,
2022
2022
2021
Net income
$3,492
$1,083
$1,928
Charges and credits, net of tax (2)
(303)
(39)
(50)
3,189
1,044
1,878
Depreciation and amortization (3)
2,147
549
2,120
Stock-based compensation expense
313
77
324
Change in working capital
(1,709)
105
(45)
US federal tax refund
-
-
477
Other
(220)
(161)
(103)
Cash flow from operations
3,720
1,614
4,651
Capital expenditures
(1,618)
(572)
(1,141)
APS investments
(587)
(167)
(474)
Exploration data capitalized
(97)
(20)
(39)
Free cash flow (4)
1,418
855
2,997
Dividends paid
(848)
(248)
(699)
Proceeds from employee stock plans
222
51
137
Business acquisitions and investments, net of cash acquired plus
debt assumed
(58)
(13)
(103)
Proceeds from sale of Liberty shares
732
218
109
Proceeds from sale of ADC shares
223
223
-
Proceeds from sale of real estate
120
-
-
Purchases of Blue Chip Swap securities
(259)
(259)
-
Proceeds from sales of Blue Chip Swap securities
111
111
-
Taxes paid on net settled stock-based compensation awards
(93)
(1)
(24)
Other
(105)
14
(81)
Decrease in net debt before impact of changes in foreign
exchange rates
1,463
951
2,336
Impact of changes in foreign exchange rates on net debt
261
(541)
488
Decrease in Net Debt
1,724
410
2,824
Net Debt, beginning of period
(11,056)
(9,742)
(13,880)
Net Debt, end of period
$(9,332)
$(9,332)
$(11,056)
(1)
“Net Debt” represents gross debt less cash
and short-term investments. Management believes that Net Debt
provides useful information regarding the level of SLB’s
indebtedness by reflecting cash and investments that could be used
to repay debt. Net Debt is a non-GAAP financial measure that should
be considered in addition to, not as a substitute for or superior
to, total debt.
(2)
See section entitled “Charges &
Credits” for details.
(3)
Includes depreciation of property, plant
and equipment and amortization of intangible assets, exploration
data costs, and APS investments.
(4)
“Free cash flow” represents cash flow from
operations less capital expenditures, APS investments, and
exploration data costs capitalized. Management believes that free
cash flow is an important liquidity measure for the company and
that it is useful to investors and management as a measure of SLB’s
ability to generate cash. Once business needs and obligations are
met, this cash can be used to reinvest in the company for future
growth or to return to shareholders through dividend payments or
share repurchases. Free cash flow does not represent the residual
cash flow available for discretionary expenditures. Free cash flow
is a non-GAAP financial measure that should be considered in
addition to, not as a substitute for or superior to, cash flow from
operations.
Charges & Credits
In addition to financial results determined in accordance with
US generally accepted accounting principles (GAAP), this
fourth-quarter and full-year 2022 earnings release also includes
non-GAAP financial measures (as defined under the SEC’s Regulation
G). In addition to the non-GAAP financial measures discussed under
“Liquidity”, net income, excluding charges & credits, as well
as measures derived from it (including diluted EPS, excluding
charges & credits; SLB Net income attributable to SLB,
excluding charges & credits; effective tax rate, excluding
charges & credits; and adjusted EBITDA) are non-GAAP financial
measures. Management believes that the exclusion of charges &
credits from these financial measures enables it to evaluate more
effectively SLB’s operations period over period and to identify
operating trends that could otherwise be masked by the excluded
items. These measures are also used by management as performance
measures in determining certain incentive compensation. The
foregoing non-GAAP financial measures should be considered in
addition to, not as a substitute for or superior to, other measures
of financial performance prepared in accordance with GAAP. The
following is a reconciliation of certain of these non-GAAP measures
to the comparable GAAP measures. For a reconciliation of adjusted
EBITDA to the comparable GAAP measure, please refer to the section
titled “Supplementary Information” (Question 10).
(Stated in millions, except per
share amounts)
Fourth Quarter 2022 Pretax Tax Noncont.Interests Net
DilutedEPS Net income attributable to SLB (GAAP basis)
$1,347
$264
$18
$1,065
$0.74
Gain on ADC equity investment
(107)
(3)
-
(104)
(0.07)
Gain on sale of Liberty shares
(84)
(19)
-
(65)
(0.05)
Gain on repurchase of bonds
(11)
(2)
-
(9)
(0.01)
Loss on Blue Chip Swap transactions
139
-
-
139
0.10
Net income attributable to SLB, excluding charges & credits
$1,284
$240
$18
$1,026
$0.71
Fourth Quarter 2021 Pretax Tax Noncont.Interests Net
DilutedEPS Net income attributable to SLB (GAAP basis)
$755
$144
$10
$601
$0.42
Gain on sale of Liberty shares
(28)
(4)
-
(24)
(0.02)
Early repayment of bonds (1)
10
-
-
10
0.01
Net income attributable to SLB, excluding charges & credits
$737
$140
$10
$587
$0.41
(Stated in millions, except per
share amounts)
Twelve Months 2022
Pretax
Tax
Noncont. Interests
Net
Diluted EPS *
Net income attributable to SLB (GAAP basis)
$4,271
$779
$51
$3,441
$2.39
Fourth Quarter Gain on ADC equity investment
(107)
(3)
-
(104)
(0.07)
Gain on sale of Liberty shares
(84)
(19)
-
(65)
(0.05)
Gain on repurchase of bonds
(11)
(2)
-
(9)
(0.01)
Loss on Blue Chip Swap transactions
139
-
-
139
0.10
Second Quarter Gain on sale of Liberty shares
(215)
(14)
-
(201)
(0.14)
Gain on sale of certain real estate
(43)
(2)
-
(41)
(0.03)
First Quarter Gain on sale of Liberty shares
(26)
(4)
-
(22)
(0.02)
Net income attributable to SLB, excluding charges & credits
$3,924
$735
$51
$3,138
$2.18
Twelve Months 2021
Pretax
Tax
Noncont. Interests
Net
Diluted EPS
Net income attributable to SLB (GAAP basis)
$2,374
$446
$47
$1,881
$1.32
Fourth Quarter Gain on sale of Liberty shares
(28)
(4)
-
(24)
(0.02)
Early repayment of bonds (1)
10
-
-
10
0.01
Third Quarter Unrealized gain on marketable securities
(47)
(11)
-
(36)
(0.03)
Net income attributable to SLB, excluding charges & credits
$2,309
$431
$47
$1,831
$1.28
* Does not add due to rounding.
Unless otherwise noted, all Charges &
Credits are classified in Interest & other income, net in the
Condensed Consolidated Statement of Income.
(1) Classified in Interest in the
Condensed Consolidated Statement of Income.
Divisions
(Stated in millions)
Three Months Ended Dec. 31, 2022
Sept. 30, 2022 Dec. 31, 2021
Revenue
IncomeBeforeTaxes Revenue IncomeBeforeTaxes Revenue
IncomeBeforeTaxes Digital & Integration
$1,012
$382
$900
$305
$889
$335
Reservoir Performance
1,554
282
1,456
244
1,287
200
Well Construction
3,229
679
3,084
664
2,388
368
Production Systems
2,215
238
2,150
224
1,765
159
Eliminations & other
(131)
(24)
(113)
(37)
(104)
(76)
Pretax segment operating income
1,557
1,400
986
Corporate & other
(169)
(155)
(140)
Interest income(1)
14
8
14
Interest expense(1)
(118)
(119)
(123)
Charges & credits(2)
63
-
18
$7,879
$1,347
$7,477
$1,134
$6,225
$755
(Stated in millions)
Full Year 2022 Revenue IncomeBeforeTaxes
DepreciationandAmortization (3) NetInterestIncome (4)
AdjustedEBITDA (5) CapitalInvestments (6) Digital
& Integration
$3,725
$1,357
$504
$11
$1,872
$689
Reservoir Performance
5,553
881
386
(34)
1,233
478
Well Construction
11,397
2,202
524
(25)
2,701
687
Production Systems
7,862
748
311
(11)
1,047
346
Eliminations & other
(446)
(177)
271
(1)
95
102
5,011
1,996
(60)
6,948
2,302
Corporate & other
(637)
151
(486)
Interest income (1)
27
Interest expense (1)
(477)
Charges & credits (2)
347
$28,091
$4,271
$2,147
$(60)
$6,462
$2,302
(Stated in millions)
Full Year 2021 Revenue IncomeBeforeTaxes
DepreciationandAmortization (3) NetInterestExpense (4)
AdjustedEBITDA (5) CapitalInvestments (6) Digital & Integration
$3,290
$1,141
$446
$13
$1,600
$516
Reservoir Performance
4,599
648
415
-
1,063
348
Well Construction
8,706
1,195
537
1
1,733
424
Production Systems
6,710
634
302
-
936
267
Eliminations & other
(376)
(253)
269
(1)
15
99
3,365
1,969
13
5,347
1,654
Corporate & other
(573)
151
(422)
Interest income (1)
31
Interest expense (1)
(514)
Charges & credits (2)
65
$22,929
$2,374
$2,120
$13
$4,925
$1,654
(1)
Excludes amounts which are included in the
segments’ results.
(2)
See section entitled “Charges &
Credits” for details.
(3)
Includes depreciation of property, plant
and equipment and amortization of intangible assets, APS, and
exploration data costs.
(4)
Excludes interest income and interest
expense recorded at the corporate level.
(5)
Adjusted EBITDA represents income before
taxes excluding depreciation and amortization, interest income,
interest expense and charges & credits.
(6)
Capital investments includes capital
expenditures, APS investments, and exploration data costs
capitalized.
(Stated in millions)
Twelve Months Ended Dec. 31,
2022 Dec. 31, 2021
Change Revenue Digital &
Integration
$3,725
$3,290
13%
Reservoir Performance
5,553
4,599
21%
Well Construction
11,397
8,706
31%
Production Systems
7,862
6,710
17%
Other
(446)
(376)
n/m
$28,091
$22,929
23%
Pretax Segment Operating Income
Digital & Integration
$1,357
$1,141
19%
Reservoir Performance
881
648
36%
Well Construction
2,202
1,195
84%
Production Systems
748
634
18%
Other
(177)
(253)
n/m
$5,011
$3,365
49%
Pretax Segment Operating Margin
Digital & Integration
36.4%
34.7%
177 bps
Reservoir Performance
15.9%
14.1%
177 bps
Well Construction
19.3%
13.7%
560 bps
Production Systems
9.5%
9.5%
6 bps
Other
n/m
n/m
n/m
17.8%
14.7%
316 bps
Adjusted EBITDA
Digital & Integration
$1,872
$1,600
17%
Reservoir Performance
1,233
1,063
16%
Well Construction
2,701
1,733
56%
Production Systems
1,047
936
12%
Other
95
15
n/m
$6,948
$5,347
30%
Corporate & other
(486)
(422)
n/m
$6,462
$4,925
31%
Adjusted EBITDA Margin
Digital & Integration
50.3%
48.6%
165 bps
Reservoir Performance
22.2%
23.1%
-91 bps
Well Construction
23.7%
19.9%
380 bps
Production Systems
13.3%
14.0%
-63 bps
Other
n/m
n/m
n/m
24.7%
23.3%
141 bps
Corporate & other
n/m
n/m
n/m
23.0%
21.5%
152 bps
n/m = not meaningful
Geographical
(Stated in millions)
Full Year 2022 Revenue IncomeBeforeTaxes
DepreciationandAmortization (3) NetInterestIncome (4)
AdjustedEBITDA (5) International
$21,895
$4,063
$1,433
$(71)
$5,425
North America
5,995
1,106
353
12
1,470
Eliminations & other
201
(158)
210
(1)
53
5,011
1,996
(60)
6,948
Corporate & other
(637)
151
(486)
Interest income (1)
27
Interest expense (1)
(477)
Charges & credits (2)
347
$28,091
$4,271
$2,147
$(60)
$6,462
(Stated in millions)
Full Year 2021 Revenue IncomeBeforeTaxes
DepreciationandAmortization (3) NetInterestExpense (4)
AdjustedEBITDA (5) International
$18,295
$3,090
$1,353
$2
$4,445
North America
4,466
561
343
12
916
Eliminations & other
168
(286)
273
(1)
(14)
3,365
1,969
13
5,347
Corporate & other
(573)
151
(422)
Interest income (1)
31
Interest expense (1)
(514)
Charges & credits (2)
65
$22,929
$2,374
$2,120
$13
$4,925
(1)
Excludes amounts that are included in the
segments’ results.
(2)
See section entitled “Charges &
Credits” for details.
(3)
Includes depreciation of property, plant
and equipment and amortization of intangible assets, APS, and
exploration data costs.
(4)
Excludes interest income and interest
expense recorded at the corporate level.
(5)
Adjusted EBITDA represents income before
taxes excluding depreciation and amortization, interest income,
interest expense and charges & credits.
(Stated in millions)
Twelve Months Ended Dec. 31,
2022 Dec. 31, 2021
Change Revenue North America
$5,995
$4,466
34%
Latin America
5,661
4,459
27%
Europe/CIS/Africa
7,201
5,778
25%
Middle East & Asia
9,033
8,058
12%
Other
201
168
n/m
$28,091
$22,929
23%
International
21,895
$18,295
20%
North America
5,995
4,466
34%
Other
201
168
n/m
$28,091
$22,929
23%
Pretax Segment Operating Income
International
$4,063
$3,090
31%
North America
1,106
561
97%
Other
(158)
(286)
n/m
$5,011
$3,366
49%
Pretax Segment Operating Income Margin
International
18.6%
16.9%
167 bps
North America
18.4%
12.6%
589 bps
Other
n/m
n/m
n/m
17.8%
14.7%
316 bps
Adjusted EBITDA
International
$5,425
$4,445
22%
North America
1,470
916
61%
Other
53
(14)
n/m
$6,948
$5,347
30%
Corporate & other
(486)
(423)
n/m
$6,462
$4,925
31%
Adjusted EBITDA Margin
International
24.8%
24.3%
47 bps
North America
24.5%
20.5%
404 bps
Other
n/m
n/m
n/m
24.7%
23.3%
142 bps
Corporate & other
n/m
n/m
n/m
23.0%
21.5%
152 bps
n/m = not meaningful
Supplementary Information Frequently Asked
Questions
1)
What is the capital investment guidance
for the full-year 2023?
Capital investment (composed of capex,
exploration data costs, and APS investments) for the full-year 2023
is expected to be approximately $2.5 to $2.6 billion. Capital
investment for the full-year 2022 was $2.3 billion.
2)
What were cash flow from operations and
free cash flow for the fourth quarter of 2022?
Cash flow from operations for the fourth
quarter of 2022 was $1.6 billion, and free cash flow was $0.9
billion.
3)
What were cash flow from operations and
free cash flow for the full year 2022?
Cash flow from operations for the full
year 2022 was $3.7 billion, and free cash flow was $1.4
billion.
4)
What was included in “Interest &
other income, net” for the fourth quarter of 2022?
“Interest & other income, net” for the
fourth quarter of 2022 was $174 million. This consisted as follows
(in millions):
Gain on ADC equity investment*
$107
Gain on sale of Liberty shares*
84
Gain on repurchase of bonds*
11
Interest income
33
Earnings of equity method investments
78
Loss on Blue Chip Swap transactions*
(139)
$174
*Refer to Question 12
5)
How did interest income and interest
expense change during the fourth quarter of 2022?
Interest income of $33 million for the
fourth quarter of 2022 increased $1 million sequentially. Interest
expense of $121 million decreased $1 million sequentially.
6)
What is the difference between SLB’s
consolidated income before taxes and pretax segment operating
income?
The difference consists of corporate
items, charges and credits, and interest income and interest
expense not allocated to the segments as well as stock-based
compensation expense, amortization expense associated with certain
intangible assets, certain centrally managed initiatives, and other
nonoperating items.
7)
What was the effective tax rate (ETR)
for the fourth quarter of 2022?
The ETR for the fourth quarter of 2022,
calculated in accordance with GAAP, was 19.6% as compared to 18.9%
for the third quarter of 2022. Excluding charges and credits, the
ETR for the fourth quarter of 2022 was 18.7%. There were no charges
and credits in the third quarter of 2022.
8)
How many shares of common stock were
outstanding as of December 31, 2022, and how did this change from
the end of the previous quarter?
There were 1.420 billion shares of common
stock outstanding as of December 31, 2022, and 1.418 billion shares
outstanding as of September 30, 2022.
(Stated in millions)
Shares outstanding at September 30, 2022
1,418
Shares issued under employee stock purchase plan
-
Shares issued to optionees, less shares exchanged
1
Vesting of restricted stock
1
Shares outstanding at December 31, 2022
1,420
9)
What was the weighted average number of
shares outstanding during the fourth quarter of 2022 and third
quarter of 2022? How does this reconcile to the average number of
shares outstanding, assuming dilution, used in the calculation of
diluted earnings per share?
The weighted average number of shares
outstanding was 1.420 billion during the fourth quarter of 2022 and
1.418 billion during the third quarter of 2022. The following is a
reconciliation of the weighted average shares outstanding to the
average number of shares outstanding, assuming dilution, used in
the calculation of diluted earnings per share.
(Stated in millions)
Fourth Quarter2022 Third Quarter2022 Weighted average shares
outstanding
1,420
1,418
Unvested restricted stock
20
21
Assumed exercise of stock options
2
-
Average shares outstanding, assuming dilution
1,442
1,439
10)
What was SLB’s adjusted EBITDA in the
fourth quarter of 2022, the third quarter of 2022, the fourth
quarter of 2021, the full-year 2022, and the full-year
2021?
SLB’s adjusted EBITDA was $1.921 billion
in the fourth quarter of 2022, $1.756 billion in the third quarter
of 2022, and $1.381 billion in the fourth quarter of 2021, and was
calculated as follows:
(Stated in millions)
Fourth Quarter2022 Third Quarter2022 Fourth Quarter2021 Net
income attributable to SLB
$1,065
$907
$601
Net income attributable to noncontrolling interests
18
12
10
Tax expense
264
215
144
Income before taxes
$1,347
$1,134
$755
Charges & credits
(63)
0
(18)
Depreciation and amortization
549
533
532
Interest expense
121
122
127
Interest income
(33)
(33)
(15)
Adjusted EBITDA
$1,921
$1,756
$1,381
SLB’s adjusted EBITDA was $6.462 billion in full-year 2022 and
$4.925 billion in full-year 2021, and was calculated as follows:
(Stated in millions)
2022
2021
Net income (loss) attributable to SLB
$3,441
$1,881
Net income attributable to noncontrolling interests
51
47
Tax expense
779
446
Income before taxes
$4,271
$2,374
Charges & credits
(347)
(65)
Depreciation and amortization
2,147
2,120
Interest expense
490
529
Interest income
(99)
(33)
Adjusted EBITDA
$6,462
$4,925
Adjusted EBITDA represents income before taxes, excluding charges
& credits, depreciation and amortization, interest expense, and
interest income. Management believes that adjusted EBITDA is an
important profitability measure for SLB and that it allows
investors and management to more efficiently evaluate SLB’s
operations period over period and to identify operating trends that
could otherwise be masked. Adjusted EBITDA is also used by
management as a performance measure in determining certain
incentive compensation. Adjusted EBITDA should be considered in
addition to, not as a substitute for or superior to, other measures
of financial performance prepared in accordance with GAAP.
11)
What were the components of
depreciation and amortization expense for the fourth quarter of
2022, the third quarter of 2022, and the fourth quarter of
2021?
The components of depreciation and
amortization expense for the fourth quarter of 2022, the third
quarter of 2022, and the fourth quarter of 2021 were as
follows:
(Stated in millions)
Fourth Quarter2022 Third Quarter2022
Fourth Quarter2021 Depreciation of fixed assets
$347
$343
$345
Amortization of intangible assets
75
76
76
Amortization of APS investments
102
96
71
Amortization of exploration data costs capitalized
25
18
40
$549
$533
$532
12)
What were the components of the pretax
net credit of $63 million recorded during the fourth quarter of
2022 related to?
The components of the pretax net credits
were as follows (in millions):
Gain on ADC equity investment(a)
$107
Gain on sale of Liberty shares(b)
84
Gain on repurchase of bonds(c)
11
Loss on Blue Chip Swap transactions(d)
(139)
$63
(a)
SLB has an investment in the Arabian
Drilling Company (“ADC”), an onshore and offshore gas and oil rig
drilling company in Saudi Arabia, that it accounts for 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. This gain is classified in
Interest & other income, net in the Consolidated Statement of
Income.
(b)
During the fourth quarter of 2022, SLB
sold 14.1 million of its shares in Liberty and received net
proceeds of $218 million. This gain is classified in Interest &
other income, net in the Consolidated Statement of Income. As of
December 31, 2022, SLB had a 5% equity interest in Liberty.
(c)
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. This gain
is classified in Interest & other income, net in the
Consolidated Statement of Income.
(d)
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 Argentine operations.
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. This
parallel rate, which cannot be used as the basis to remeasure SLB’s
Argentine peso-denominated net monetary assets in US dollars under
US GAAP, was approximately 93% higher than Argentina’s official
exchange rate at December 31, 2022. During the fourth quarter of
2022, SLB entered into Blue Chip Swap transactions that resulted in
a loss of $139 million. This loss is classified in Interest &
other income, net in the Consolidated Statement of Income.
13)
How does SLB calculate ROCE (return on
capital employed)?
SLB calculates ROCE as a ratio, the
numerator of which is (a) net income, excluding charges and credits
plus (b) after tax net interest expense, and the denominator of
which is (x) stockholders’ equity, including non-controlling
interests (average of beginning and end of each quarter in the
year), plus (y) net debt (average of beginning and end of each
quarter in the year). ROCE is a measure of the efficiency of our
capital employed, and is a comprehensive indicator of long-term
company and management performance.
About SLB
SLB (NYSE: SLB) is a global technology company driving energy
innovation for a balanced planet. With a global presence in more
than 100 countries and employees representing almost twice as many
nationalities, we work each day on innovating oil and gas,
delivering digital at scale, decarbonizing industries, and
developing and scaling new energy systems that accelerate the
energy transition. Find out more at slb.com.
*Mark of SLB or an SLB company. Other company, product, and
service names are the properties of their respective owners.
†Alternate Path is a registered trademark of ExxonMobil Corp;
technology licensed to SLB.
Conference Call Information
SLB will hold a conference call to discuss the earnings press
release and business outlook on Friday, January 20, 2023. The call
is scheduled to begin at 9:30 a.m. US Eastern Time. To access the
call, which is open to the public, please contact the conference
call operator at +1 (844) 721-7241 within North America, or +1
(409) 207-6955 outside North America, approximately 10 minutes
prior to the call’s scheduled start time, and provide the access
code 8858313. At the conclusion of the conference call, an audio
replay will be available until February 20, 2023, by dialing +1
(866) 207-1041 within North America, or +1 (402) 970-0847 outside
North America, and providing the access code 5784911. The
conference call will be webcast simultaneously at
www.slb.com/irwebcast on a listen-only basis. A replay of the
webcast will also be available at the same website until February
20, 2023.
This fourth-quarter and full-year 2022 earnings press release,
as well as other statements we make, contain “forward-looking
statements” within the meaning of the federal securities laws,
which include any statements that are not historical facts. Such
statements often contain words such as “expect,” “may,” “can,”
“believe,” “predict,” “plan,” “potential,” “projected,”
“projections,” “precursor,” “forecast,” “outlook,” “expectations,”
“estimate,” “intend,” “anticipate,” “ambition,” “goal,” “target,”
“scheduled,” “think,” “should,” “could,” “would,” “will,” “see,”
“likely,” and other similar words. Forward-looking statements
address matters that are, to varying degrees, uncertain, such as
statements about our financial and performance targets and other
forecasts or expectations regarding, or dependent on, our business
outlook; growth for SLB as a whole and for each of its Divisions
(and for specified business lines, geographic areas, or
technologies within each Division); oil and natural gas demand and
production growth; oil and natural gas prices; forecasts or
expectations regarding energy transition and global climate change;
improvements in operating procedures and technology; capital
expenditures by SLB and the oil and gas industry; our business
strategies, including digital and “fit for basin,” as well as the
strategies of our customers; our effective tax rate; our APS
projects, joint ventures, and other alliances; our response to the
COVID-19 pandemic and our preparedness for other widespread health
emergencies; the impact of the ongoing conflict in Ukraine on
global energy supply; access to raw materials; future global
economic and geopolitical conditions; future liquidity; and future
results of operations, such as margin levels. These statements are
subject to risks and uncertainties, including, but not limited to,
changing global economic and geopolitical conditions; changes in
exploration and production spending by our customers, and changes
in the level of oil and natural gas exploration and development;
the results of operations and financial condition of our customers
and suppliers; the inability to achieve its financial and
performance targets and other forecasts and expectations; the
inability to achieve our net-zero carbon emissions goals or interim
emissions reduction goals; general economic, geopolitical, and
business conditions in key regions of the world; the ongoing
conflict in Ukraine; foreign currency risk; inflation; pricing
pressure; weather and seasonal factors; unfavorable effects of
health pandemics; availability and cost of raw materials;
operational modifications, delays, or cancellations; challenges in
our supply chain; production declines; the extent of future
charges; the inability to recognize efficiencies and other intended
benefits from our business strategies and initiatives, such as
digital or SLB New Energy; as well as our cost reduction
strategies; changes in government regulations and regulatory
requirements, including those related to offshore oil and gas
exploration, radioactive sources, explosives, chemicals, and
climate-related initiatives; the inability of technology to meet
new challenges in exploration; the competitiveness of alternative
energy sources or product substitutes; and other risks and
uncertainties detailed in this press release and our most recent
Forms 10-K, 10-Q, and 8-K filed with or furnished to the Securities
and Exchange Commission. If one or more of these or other risks or
uncertainties materialize (or the consequences of any such
development changes), or should our underlying assumptions prove
incorrect, actual results or outcomes may vary materially from
those reflected in our forward-looking statements. Forward-looking
and other statements in this press release regarding our
environmental, social, and other sustainability plans and goals are
not an indication that these statements are necessarily material to
investors or required to be disclosed in our filings with the SEC.
In addition, historical, current, and forward-looking
environmental, social, and sustainability-related statements may be
based on standards for measuring progress that are still
developing, internal controls and processes that continue to
evolve, and assumptions that are subject to change in the future.
Statements in this press release are made as of the date of this
release, and SLB disclaims any intention or obligation to update
publicly or revise such statements, whether as a result of new
information, future events, or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230118006018/en/
Investor Relations Contacts: Ndubuisi Maduemezia – Vice
President of Investor Relations Joy V. Domingo – Director of
Investor Relations Office +1 (713) 375-3535
investor-relations@slb.com
Media Contacts: Josh Byerly – Vice President of
Communications Moira Duff – Director of External Communications
Office +1 (713) 375-3407 media@slb.com
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