Item 8. Financial Statements and Supplementary Data.

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEME****NT OF INCOME

	(Stated in millions, except per share amounts)
Year Ended December 31,	2024				2023				2022
Revenue
Services	$	23,297			$	22,439			$	19,552
Product sales		12,992				10,696				8,539
Total Revenue		36,289				33,135				28,091
Interest & other income, net		380				342				610
Expenses
Cost of services		17,847				17,231				15,233
Cost of sales		10,982				9,341				7,697
Research & engineering		749				711				634
General & administrative		385				364				376
Restructuring & other		399				-				-
Merger & integration		123				45				-
Interest		512				503				490
Income before taxes		5,672				5,282				4,271
Tax expense		1,093				1,007				779
Net income		4,579				4,275				3,492
Net income attributable to noncontrolling interests		118				72				51
Net income attributable to SLB	$	4,461			$	4,203			$	3,441
Basic earnings per share of SLB	$	3.14			$	2.95			$	2.43
Diluted earnings per share of SLB	$	3.11			$	2.91			$	2.39
Average shares outstanding:
Basic		1,421				1,425				1,416
Assuming dilution		1,436				1,443				1,437

See the Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF C****OMPREHENSIVE INCOME

(Stated in millions)
Year Ended December 31,	2024				2023				2022
Net income	$	4,579			$	4,275			$	3,492
Currency translation adjustments:
Net change arising during the period		**(**138	)			(113	)			(26	)
Cash flow hedges:
Net gain (loss) on cash flow hedges		8				177				(148	)
Reclassification to net income of net realized (gain) loss		**(**4	)			(19	)			117
Pension and other postretirement benefit plans:
Actuarial loss arising during the period		**(**582	)			(437	)			(305	)
Amortization to net income of net actuarial losses		**(**3	)			(12	)			75
Amortization to net income of net prior service credit		**(**23	)			(23	)			(23	)
Income taxes on pension and other postretirement benefit plans		42				58				24
Other		4				(30	)			1
Comprehensive income		3,883				3,876				3,207
Comprehensive income attributable to noncontrolling interests		118				72				51
Comprehensive income attributable to SLB	$	3,765			$	3,804			$	3,156

See the Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED B****ALANCE SHEET

(Stated in millions)
December 31,		2024				2023
ASSETS
Current Assets
Cash		$	3,544			$	2,900
Short-term investments			1,125				1,089
Receivables less allowance for doubtful accounts (2024 - $325; 2023 - $337)			8,011				7,812
Inventories			4,375				4,387
Other current assets			1,515				1,530
			18,570				17,718
Investments in Affiliated Companies			1,635				1,624
Fixed Assets less accumulated depreciation			7,359				7,240
Goodwill			14,593				14,084
Intangible Assets			3,012				3,239
Other Assets			3,766				4,052
		$	48,935			$	47,957
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued liabilities			10,375				10,904
Estimated liability for taxes on income			982				994
Short-term borrowings and current portion of long-term debt			1,051				1,123
Dividends payable			403				374
			12,811				13,395
Long-term Debt			11,023				10,842
Postretirement Benefits			512				175
Deferred Taxes			67				140
Other Liabilities			2,172				2,046
			26,585				26,598
Equity
Common stock			11,458				11,624
Treasury stock			**(**1,773	)			(678	)
Retained earnings			16,395				13,497
Accumulated other comprehensive loss			**(**4,950	)			(4,254	)
SLB stockholders' equity			21,130				20,189
Noncontrolling interests			1,220				1,170
			22,350				21,359
		$	48,935			$	47,957

See the Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEM****ENT OF CASH FLOWS

(Stated in millions)
Year Ended December 31,	2024				2023				2022
Cash flows from operating activities:
Net income	$	4,579			$	4,275			$	3,492
Adjustments to reconcile net income to cash provided by operating activities:
Charges and credits		541				110				(347	)
Depreciation and amortization (1)		2,519				2,312				2,147
Deferred taxes		**(**41	)			28				(39	)
Stock-based compensation expense		316				293				313
Earnings of equity method investments, less dividends received		**(**18	)			(132	)			(96	)
Change in assets and liabilities: (2)
Increase in receivables		**(**236	)			(659	)			(1,728	)
Increase in inventories		**(**101	)			(254	)			(737	)
Decrease (increase) in other current assets		3				121				(44	)
Decrease (increase) in other assets		13				(10	)			(45	)
(Decrease) increase in accounts payable and accrued liabilities		**(**994	)			724				704
(Decrease) increase in estimated liability for taxes on income		**(**51	)			(62	)			96
Increase (decrease) in other liabilities		32				(76	)			23
Other		40				(33	)			(19	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		6,602				6,637				3,720
Cash flows from investing activities:
Capital expenditures		**(**1,931	)			(1,939	)			(1,618	)
APS investments		**(**483	)			(507	)			(587	)
Exploration data capitalized		**(**198	)			(153	)			(97	)
Business acquisitions and investments, net of cash acquired		**(**553	)			(242	)			(58	)
(Purchase) sale of short-term investments, net		**(**32	)			117				138
Purchases of Blue Chip Swap securities		**(**207	)			(185	)			(259	)
Proceeds from sales of Blue Chip Swap securities		152				97				111
Proceeds from sale of Liberty shares		-				137				732
Proceeds from sale of ADC shares		-				-				223
Proceeds from sale of real estate		-				-				120
Other		107				(108	)			(93	)
NET CASH USED IN INVESTING ACTIVITIES		**(**3,145	)			(2,783	)			(1,388	)
Cash flows from financing activities:
Dividends paid		**(**1,533	)			(1,317	)			(848	)
Stock repurchase program		**(**1,737	)			(694	)			-
Proceeds from employee stock purchase plan		219				191				142
Proceeds from exercise of stock options		29				90				81
Taxes paid on net-settled stock-based compensation awards		**(**90	)			(169	)			(93	)
Proceeds from issuance of long-term debt		1,475				994				-
Repayment of long-term debt		**(**955	)			(1,578	)			(1,650	)
Net (decrease) increase in short-term borrowings		**(**115	)			2				37
Other		**(**65	)			(31	)			(51	)
NET CASH USED IN FINANCING ACTIVITIES		**(**2,772	)			(2,512	)			(2,382	)
Net increase (decrease) in cash before translation effect		685				1,342				(50	)
Impact of changes in exchange rates on cash		**(**41	)			(97	)			(52	)
Cash, beginning of period		2,900				1,655				1,757
Cash, end of period	$	3,544			$	2,900			$	1,655

(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 and divestitures.

See the Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT O****F STOCKHOLDERS’ EQUITY

		(Stated in millions)
														Accumulated
														Other
		Common Stock								Retained				Comprehensive				Noncontrolling
		Issued				In Treasury				Earnings				Loss				Interests				Total
Balance, January 1, 2022		$	12,608			$	(2,233	)		$	8,199			$	(3,570	)		$	282			$	15,286
Net income											3,441								51				3,492
Currency translation adjustments															(26	)							(26	)
Changes in fair value of cash flow hedges															(31	)							(31	)
Pension and other postretirement benefit plans															(229	)							(229	)
Vesting of restricted stock, net of taxes withheld			(795	)			702																(93	)
Employee stock purchase plan			(222	)			364																142
Stock-based compensation expense			313																				313
Shares sold to optionees, less shares exchanged			(67	)			148																81
Dividends declared ($0.65 per share)											(921	)											(921	)
Other							3								1				(29	)			(25	)
Balance, December 31, 2022			11,837				(1,016	)			10,719				(3,855	)			304				17,989
Net income											4,203								72				4,275
Currency translation adjustments															(113	)							(113	)
Changes in fair value of cash flow hedges															158								158
Pension and other postretirement benefit plans															(414	)							(414	)
Vesting of restricted stock, net of taxes withheld			(702	)			533																(169	)
Employee stock purchase plan			(162	)			353																191
Stock repurchase program							(694	)															(694	)
Stock-based compensation expense			293																				293
Shares sold to optionees, less shares exchanged			(53	)			143																90
Dividends declared ($1.00 per share)											(1,425	)											(1,425	)
Acquisition of Aker Subsea			413																841				1,254
Other			(2	)			3								(30	)			(47	)			(76	)
Balance, December 31, 2023			11,624				(678	)			13,497				(4,254	)			1,170				21,359
Net income											4,461								118				4,579
Currency translation adjustments															(138	)							(138	)
Changes in fair value of cash flow hedges															4								4
Pension and other postretirement benefit plans															(566	)							(566	)
Vesting of restricted stock, net of taxes withheld			(407	)			317																(90	)
Employee stock purchase plan			(65	)			284																219
Stock repurchase program							(1,737	)															(1,737	)
Stock-based compensation expense			316																				316
Shares sold to optionees, less shares exchanged			(10	)			39																29
Dividends declared ($1.10 per share)											(1,563	)											(1,563	)
Other							2								4				(68	)			(62	)
Balance, December 31, 2024		$	11,458			$	(1,773	)		$	16,395			$	(4,950	)		$	1,220			$	22,350

See the Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

SHARES OF CO****MMON STOCK

					(Stated in millions)
									Shares
	Issued				In Treasury				Outstanding
Balance, January 1, 2022		1,434				(31	)			1,403
Employee stock purchase plan		-				5				5
Vesting of restricted stock, net of taxes withheld		-				10				10
Shares sold to optionees, less shares exchanged		-				2				2
Balance, December 31, 2022		1,434				(14	)			1,420
Employee stock purchase plan		-				5				5
Vesting of restricted stock, net of taxes withheld		-				8				8
Shares sold to optionees, less shares exchanged		-				2				2
Stock repurchase program		-				(13	)			(13	)
Acquisition of Aker Subsea		5				-				5
Balance, December 31, 2023		1,439				(12	)			1,427
Employee stock purchase plan		-				5				5
Vesting of restricted stock, net of taxes withheld		-				6				6
Shares sold to optionees, less shares exchanged		-				1				1
Stock repurchase program		-				(38	)			(38	)
Balance, December 31, 2024		1,439				(38	)			1,401

See the Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements

1. Business Description

Schlumberger Limited (Schlumberger N.V., incorporated in Curaçao) and its consolidated subsidiaries (collectively, “SLB”) form a global technology company that drives energy innovation for a balanced planet. With a global footprint in more than 100 countries and employees representing almost twice as many nationalities, SLB works each day on innovating energy technology, delivering digital at scale, decarbonizing industries, and developing and scaling new energy systems that accelerate the energy transition.

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 $2.7 billion for the nine months ended September 30, 2024. The transaction, which is subject to regulatory approvals and other customary closing conditions, received the approval of the ChampionX stockholders at a special meeting held on June 18, 2024. It is anticipated that the transaction will close in the first quarter of 2025.

2. Summary of Accounting Policies

The Consolidated Financial Statements of SLB have been prepared in accordance with accounting principles generally accepted in the United States of America.

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, SLB evaluates its estimates, including those related to collectibility of accounts receivable; revenue recognized for certain long-term construction-type contracts over time; recoverability of fixed assets, goodwill, intangible assets, Asset Performance Solutions investments, and investments in affiliates; income taxes; exploration data; contingencies and actuarial assumptions for employee benefit plans. SLB bases its estimates on historical experience and other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Revenue Recognition

SLB recognizes revenue upon the transfer of control of promised products or services to customers at an amount that reflects the consideration it expects to receive in exchange for these products or services. The vast majority of SLB’s services and product offerings are short-term in nature. The time between invoicing and when payment is due under these arrangements is generally between 30 to 60 days.

Revenue is recognized for certain long-term construction-type contracts over time. These contracts involve significant design and engineering efforts in order to satisfy custom designs for customer-specific applications. Revenue is recognized as work progresses on each contract. Progress is measured by the ratio of actual costs incurred to date on the project in relation to total estimated project costs. The estimate of total project costs has a significant impact on both the amount of revenue recognized as well as the related profit on a project. Revenue and profits on contracts can also be significantly affected by change orders and claims. Due to the nature of these projects, adjustments to estimates of contract revenue and total contract costs may be required as work progresses. Progress billings are generally issued upon completion of certain phases of work as stipulated in the contract. Any expected losses on a project are recorded in full in the period in which they become probable.

Total backlog was $5.4 billion at December 31, 2024, of which approximately 55% is expected to be recognized as revenue during 2025.

Short-term Investments

Short-term investments are comprised primarily of money market funds, time deposits, certificates of deposit, commercial paper, bonds, and notes, substantially all of which are denominated in US dollars and are stated at cost plus accrued interest, which approximates fair value.

For purposes of the Consolidated Statement of Cash Flows, SLB does not consider Short-term investments to be cash equivalents.

Investments in Affiliated Companies

Investments in companies in which SLB does not have a controlling financial interest, but over which it has significant influence, are accounted for using the equity method. SLB’s share of the after-tax earnings of equity method investees is included in Interest & other income. Investments in privately held companies in which SLB does not have the ability to exercise significant influence are accounted for using the cost method. Investments in publicly traded companies in which SLB does not have the ability to exercise significant influence are reported at fair value, with unrealized gains and losses reported as a component of Interest & other income.

Exploration Data

SLB’s exploration data library consists of completed and in-process seismic surveys that are licensed on a nonexclusive basis. SLB capitalizes costs directly incurred in acquiring and processing the exploration data. Such costs are charged to Cost of services based on the percentage of the total costs to the estimated total revenue that SLB expects to receive from the sales of such data. However, an individual survey generally will not carry a net book value greater than a 4-year, straight-line amortized value.

The carrying value of the exploration data library is reviewed for impairment annually as well as when an event or change in circumstance indicating impairment may have occurred. Adjustments to the carrying value are recorded when it is determined that estimated future cash flows, which involve significant judgment on the part of SLB, would not be sufficient to recover the carrying value of the surveys. Significant adverse changes in SLB’s estimated future cash flows could result in impairment charges in a future period.

Asset Performance Solutions

Asset Performance Solutions (“APS”) projects are generally focused on developing and co-managing production of customers’ assets under long-term agreements. SLB invests its own services and products into the field development activities and operations and is compensated on a fee-per-barrel basis or based on cash flow generated. This includes certain arrangements whereby SLB is only compensated based on incremental production that it helps deliver above a mutually agreed baseline.

SLB capitalizes its investments in a project including the direct costs associated with providing its services or products. These capitalized investments are amortized to the Consolidated Statement of Income as the related production is achieved based on the units of production method, whereby each unit produced is assigned a pro-rata portion of the unamortized costs based on estimated total production, resulting in a matching of revenue with the applicable costs.

Concentration of Credit Risk

SLB is exposed to concentrations of credit risk primarily relating to cash, short-term investments, receivables from clients, and derivative financial instruments. SLB places its cash and short-term investments with financial institutions and corporations and limits the amount of credit exposure with any one of them. SLB regularly evaluates the creditworthiness of the issuers in which it invests. By using derivative financial instruments to hedge certain exposures, SLB exposes itself to some credit risk. SLB minimizes this credit risk by entering into transactions with high-quality counterparties, limiting the exposure to each counterparty and monitoring the financial condition of its counterparties.

As a large multinational company, SLB’s accounts receivable are spread over many countries and customers. The United States represented 11% of SLB’s net accounts receivable balance at December 31, 2024. No other country accounted for greater than 10% of SLB’s accounts receivable balance. SLB maintains an allowance for uncollectible accounts receivable based on expected collectibility and performs ongoing credit evaluations of its customers’ financial condition. If the financial condition of SLB’s customers were to deteriorate resulting in an impairment of their ability to make payments, adjustments to the allowance may be required.

See Note 10 - Derivative Instruments and Hedging Activities for details regarding outstanding credit default swaps that SLB has issued to certain financial institutions.

Earnings per Share

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

(Stated in millions, except per share amounts)
		Net Income Attributable to SLB				Average Shares Outstanding				Earnings per Share
2024:
Basic		$	4,461				1,421			$	3.14
Dilutive impact of stock options and restricted stock			-				15
Diluted		$	4,461				1,436			$	3.11
2023:
Basic		$	4,203				1,425			$	2.95
Dilutive impact of stock options and restricted stock			-				18
Diluted		$	4,203				1,443			$	2.91
2022:
Basic		$	3,441				1,416			$	2.43
Dilutive impact of stock options and restricted stock			-				21
Diluted		$	3,441				1,437			$	2.39

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

(Stated in millions)
	2024				2023				2022
Employee stock options		16				21				25

3. Charges and Credits

2024

SLB recorded the following charges and credits during 2024:

	(Stated in millions)
	Pretax Charge (Credit)				Tax Benefit (Expense)				Noncontrolling Interest				Net
First quarter:
Merger & integration	$	25			$	6			$	5			$	14
Second quarter:
Workforce reductions		111				17				-				94
Merger & integration		31				5				8				18
Third quarter														-
Workforce reductions		65				10				-				55
Merger & integration		47				10				7				30
Fourth quarter														-
Asset impairments		162				23				-				139
Merger & integration		63				6				7				50
Workforce reductions		61				10				-				51
Gain on sale of investment		(24	)			-				-				(24	)
	$	541			$	87			$	27			$	427

During the second quarter of 2024, SLB commenced a program to realign and optimize its support and service delivery structure in certain parts of its organization. As a result, SLB recorded severance charges of $111 million during the second quarter, $65 million during the third quarter, and $61 million during the fourth quarter which are classified in Restructuring & other in the Consolidated Statement of Income. SLB may record additional charges relating to workforce reductions in 2025 as it continues to realign and optimize its structure.

In connection with the October 2023 acquisition of the Aker Solutions ("Aker") subsea business (see Note 6 - Acquisition) and the pending ChampionX transaction, SLB recorded $165 million of charges during 2024, consisting of: $43 million relating to the amortization of

purchase accounting adjustments associated with the write-up of acquired inventories to its estimated fair value (classified in Cost of sales in the Consolidated Statement of Income), and $122 million of other merger and integration-related costs which are classified in Merger & integration.

During the fourth quarter of 2024, SLB recorded other restructuring charges consisting of $93 million of impairments relating to equity investments and $69 million of fixed asset impairments. These charges are classified in Restructuring & other in the Consolidated Statement of Income.

During the fourth quarter of 2024, SLB sold an investment accounted for under the equity method. SLB received proceeds of $51 million and recognized a gain of $24 million, which is classified in Interest & other, net in the Consolidated Statement of Income.

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, net in the Consolidated Statement of Income.

Fourth quarter 2023:

In connection with SLB’s acquisition of the Aker subsea business, 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.

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.

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, 2024, the fair value of SLB’s investment in ADC, based on the quoted market price of ADC’s shares, was approximately $0.9 billion and the carrying value of its investment was $0.6 billion. 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.

4. Inventories

Inventories, which are stated at the lower of average cost or net realizable value, consist of the following:

(Stated in millions)
	2024				2023
Raw materials & field materials	$	2,387			$	2,296
Work in progress		786				762
Finished goods		1,202				1,329
	$	4,375			$	4,387

5. Fixed Assets

Fixed assets consist of the following:

(Stated in millions)
	2024				2023
Land	$	315			$	323
Buildings & improvements		4,510				4,569
Machinery & equipment		24,748				25,073
		29,573				29,965
Less: Accumulated depreciation		22,214				22,725
	$	7,359			$	7,240

The estimated useful lives of Buildings & improvements are primarily 25 to 30 years. The estimated useful lives of Machinery & equipment are primarily 5 to 10 years.

Depreciation expense, which is recorded on a straight-line basis, was $1.6 billion in 2024 and $1.4 billion in each of 2023 and 2022.

6. Acquisition

On October 2, 2023, SLB, Aker, and Subsea7 closed their previously announced joint venture. The new business, OneSubsea, will drive innovation and efficiency in subsea production by helping customers unlock reserves and reduce cycle time. OneSubsea now comprises SLB’s and Aker’s subsea businesses, which include an extensive complementary subsea production and processing technology portfolio, world-class manufacturing scale and capacity, access to industry-leading reservoir and digital domain expertise, unique pore-to-process integration capabilities, and strengthened research and development capabilities.

In addition to contributing its subsea business to the joint venture, at closing SLB issued 5.1 million shares of its common stock valued at $306.5 million to Aker. Concurrently, Subsea7 purchased a 10% interest in exchange for $306.5 million in cash to Aker. The joint venture also issued a promissory note valued at $87.5 million to Aker. SLB owns 70% of the joint venture, while Aker owns 20% and Subsea7 owns 10%.

The formation of the joint venture was accounted for as a business combination. As the majority owner and controlling entity, SLB is considered the acquirer and reflects OneSubsea as a consolidated subsidiary in its Consolidated Financial Statements. The transfer of the SLB subsea business to the joint venture was accounted for at historical cost, while the Aker subsea business was recorded based on the fair value of the assets acquired and liabilities assumed of approximately $1.3 billion.

The combination of the historical cost and fair value, discussed above, resulted in net assets of the joint venture of approximately $2.8 billion upon formation. Aker and Subsea7’s combined 30% interest in the initial net assets of OneSubsea of $0.8 billion was recognized in Noncontrolling interests in the Consolidated Balance Sheet. The $0.1 billion difference between the noncontrolling interest recognized and the fair value of Aker’s net assets acquired less the fair value of the SLB shares of common stock issued to Aker was recorded as an increase to Common stock in the Consolidated Balance Sheet.

The following amounts represent the estimated fair value of assets acquired and liabilities assumed in connection with the formation of the joint venture.

(Stated in millions)
Cash	$	48
Accounts receivable		355
Inventories (1)		192
Other current assets		237
Fixed assets		168
Intangible assets (weighted average life of 18 years)		390
Accounts payable and accrued liabilities		(915	)
Deferred taxes		(127	)
Other liabilities		(1	)
Total identifiable net assets	$	347
Goodwill (2)		966
Total consideration transferred	$	1,313

(1)

SLB recorded an adjustment of $54 million to write-up the acquired inventory to its estimated fair value. SLB’s Cost of sales reflected this increased valuation as the acquired inventory was sold. $11 million of this adjustment was expensed as of December 31, 2023 and the remaining $43 million was expensed in 2024. See Note 3 – Charges and Credits.

(2)

The goodwill recognized is primarily attributable to intangible assets that do not qualify for separate recognition as well as expected synergies from combining the subsea operations of SLB and Aker. None of the goodwill is deductible for income tax purposes.

For the period from October 2, 2023 to December 31, 2023, the subsea business acquired from Aker contributed revenue of approximately $0.5 billion. The acquired Aker subsea business’ contribution to Net income attributable to SLB for the same period was not material.

Aker reported revenue for its subsea business of approximately $1.5 billion for the year ended December 31, 2022 and $1.4 billion for the nine months ended September 30, 2023. Assuming SLB had acquired Aker’s subsea business as of January 1, 2022, Net income attributable to SLB and diluted earnings per share on a pro forma basis would not be materially different from SLB’s reported results for the years ended December 31, 2023 and 2022, respectively.

7. Goodwill

The changes in the carrying amount of goodwill by segment were as follows:

	(Stated in millions)
	Digital &				Reservoir				Well				Production
	Integration				Performance				Construction				Systems				Other				Total
Balance, December 31, 2022	$	2,044			$	3,804			$	6,281			$	853			$	-			$	12,982
Acquisitions		-				-				136				966				-				1,102
Balance, December 31, 2023		2,044				3,804				6,417				1,819				-				14,084
Acquisitions		-				-				5				22				482				509
Balance, December 31, 2024	$	2,044			$	3,804			$	6,422			$	1,841			$	482			$	14,593

8. Intangible Assets

Intangible assets consist of the following:

	(Stated in millions)
	2024												2023
	Gross				Accumulated				Net Book				Gross				Accumulated				Net Book
	Book Value				Amortization				Value				Book Value				Amortization				Value
Customer relationships	$	1,887			$	799			$	1,088			$	1,887			$	709			$	1,178
Technology/technical know-how		1,588				872				716				1,516				770				746
Trade names		795				299				496				795				265				530
Other		1,604				892				712				1,582				797				785
	$	5,874			$	2,862			$	3,012			$	5,780			$	2,541			$	3,239

Customer relationships are generally amortized over periods ranging from 18 to 28 years, technology/technical know-how are generally amortized over periods ranging from 10 to 18 years, and trade names are generally amortized over periods ranging from 15 to 30 years.

Amortization expense was $334 million in 2024, $314 million in 2023, and $301 million in 2022.

Based on the carrying value of intangible assets at December 31, 2024, amortization expense for the subsequent five years is estimated to be as follows: 2025: $322 million, 2026: $312 million, 2027: $308 million, 2028: $298 million and 2029: $285 million.

9. Long-term Debt and Debt Facility Agreements

Long-term Debt consists of the following:

(Stated in millions)
	2024				2023
3.90% Senior Notes due 2028	$	1,478			$	1,469
2.65% Senior Notes due 2030		1,250				1,250
1.375% Guaranteed Notes due 2026		1,040				1,104
2.00% Guaranteed Notes due 2032		1,034				1,098
0.25% Notes due 2027		936				994
0.50% Notes due 2031		935				992
4.30% Senior Notes due 2029		848				847
1.00% Guaranteed Notes due 2026		624				662
4.85% Senior Notes due 2033		498				497
4.50% Senior Notes due 2028		497				497
5.00% Senior Notes due 2027		495				-
5.00% Senior Notes due 2029		493				-
5.00% Senior Notes due 2034		489				-
7.00% Notes due 2038		197				200
5.95% Notes due 2041		111				112
5.13% Notes due 2043		98				98
4.00% Senior Notes due 2025		-				523
1.40% Senior Notes due 2025		-				499
Other		-				-
	$	11,023			$	10,842

Long-term Debt as of December 31, 2024 is due as follows: $1.7 billion in 2026, $1.4 billion in 2027, $2.0 billion in 2028, $1.3 billion in 2029, $1.3 billion in 2030 and $3.3 billion thereafter.

The estimated fair value of SLB’s Long-term Debt at December 31, 2024 and December 31, 2023 was $10.4 billion and $10.2 billion, respectively, and was estimated based on quoted market prices.

At December 31, 2024, SLB had committed credit facility agreements with commercial banks aggregating $5.0 billion, of which $2.0 billion matures in February 2028 and $3.0 billion matures in December 2029. These committed facilities support commercial paper programs in the United States and Europe. There were no borrowings under these facilities at December 31, 2024 and 2023.

Commercial paper borrowings are classified as long-term debt to the extent they are backed up by available and unused committed credit facilities maturing in more than one year and to the extent it is SLB’s intent to maintain these obligations for longer than one year. There were no borrowings under the commercial paper programs at December 31, 2024 and 2023.

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

10. Derivative Instruments and Hedging Activities

SLB’s functional currency is primarily the US dollar. Approximately 70% of SLB’s revenues in 2024 were denominated in US dollars. 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 December 31, 2024, were as follows:

During 2019, SLB entered into cross-currency interest rate swaps in order to hedge changes in the fair value of its €0.5 billion 0.25% Notes due 2027 and €0.5 billion 0.50% Notes due 2031 that were issued by a US-dollar functional currency subsidiary. These cross-currency interest rate swaps effectively convert the Euro-denominated notes to US-dollar denominated debt with fixed annual interest rates of 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 fair 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 fair 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.

During 2020, a Canadian dollar functional currency subsidiary of SLB issued $0.5 billion of US dollar denominated debt. SLB entered into cross-currency interest rate swaps to hedge changes in the fair value of its $0.5 billion 1.40% Senior Notes due 2025. These cross-currency interest rate swaps effectively convert the US dollar notes to Canadian dollar denominated debt with a fixed annual interest rate of 1.73%.

A summary of the amounts included in the Consolidated Balance Sheet relating to cross currency interest rate swaps follows:

	(Stated in millions)
	Dec. 31, 2024				Dec. 31, 2023
Other current assets	$	37			$	-
Other Assets	$	2			$	36
Other Liabilities	$	183			$	67

The fair values were determined using a model with inputs that are observable in the market or can be derived or corroborated by observable data.

SLB is exposed to risks on future cash flows to the extent that the local currency is not the functional currency and expenses denominated in local currency are not equal to revenues denominated in local currency. SLB uses foreign currency forward contracts to provide a hedge against a portion of these cash flow risks. These contracts are accounted for as cash flow hedges.

SLB is also exposed to changes in the fair value of assets and liabilities denominated in currencies other than the functional currency. While SLB uses foreign currency forward contracts to economically hedge this exposure as it relates to certain currencies, these contracts are not designated as hedges for accounting purposes. Instead, the fair value of the derivative is recorded on the Consolidated Balance Sheet and changes in the fair value are recognized in the Consolidated Statement of Income, as are changes in the fair value of the hedged item. Transaction losses of $139 million in 2024, $154 million (including $90 million related to the Argentina devaluation; see Note 3 – Charges and credits for further details) in 2023, and $96 million in 2022 were recognized in the Consolidated Statement of Income net of related hedging activities.

Foreign currency forward contracts were outstanding for the US dollar equivalent of $5.5 billion and $5.4 billion in various foreign currencies as of December 31, 2024 and 2023, respectively.

Other than the previously mentioned cross-currency interest rate swaps, the fair value of the other outstanding derivatives was not material as of December 31, 2024 and 2023.

The effect of derivative instruments designated as hedges and those not designated as hedges on the Consolidated Statement of Income was as follows:

					(Stated in millions)
	Gain (Loss) Recognized in Income												Consolidated Statement
	2024				2023				2022				of Income Classification
Derivatives designated as cash flow hedges:
Cross-currency interest rate swaps	$	**(**199	)		$	173			$	(254	)		Cost of services/sales
Cross-currency interest rate swaps		**(**85	)			(88	)			(88	)		Interest expense
Commodity contracts		**(**7	)			3				(87	)		Revenue
Foreign currency forward contracts		23				15				(30	)		Cost of services/sales
Foreign exchange contract		**(**12	)			-				-			Revenue
	$	**(**280	)		$	103			$	(459	)
Derivatives not designated as hedges:
Foreign currency forward contracts	$	5			$	(9	)		$	42			Cost of services/sales

SLB has issued credit default swaps (“CDSs”) to certain financial institutions that have an aggregate notional amount outstanding of approximately $1.15 billion as of December 31, 2024. The CDSs relate to borrowings provided by the financial institutions to SLB’s primary customer in Mexico. The borrowings were used by this customer to pay certain of SLB’s outstanding receivables. Approximately $350 million of the outstanding CDSs reduces on a monthly basis over its remaining 14-month term while the remaining $800 million reduces on a monthly basis over its remaining 18-month term. The fair value of these derivative liabilities was not material at December 31, 2024.

11. Stockholders’ Equity

SLB is authorized to issue 4,500,000,000 shares of common stock, par value $0.01 per share, of which 1,400,850,420 and 1,427,394,843 shares were outstanding on December 31, 2024 and 2023, respectively. Holders of common stock are entitled to one vote for each share of stock held. SLB is also authorized to issue 200,000,000 shares of preferred stock, par value $0.01 per share, which may be issued in series with terms and conditions determined by the SLB Board of Directors. No shares of preferred stock have been issued.

Accumulated Other Comprehensive Loss consists of the following:

									(Stated in millions)
	2024				2023				2022
Currency translation adjustments	$	**(**2,697	)		$	(2,557	)		$	(2,444	)
Pension and other postretirement benefit plans		**(**2,275	)			(1,709	)			(1,295	)
Cash flow hedges		46				42				(116	)
Other		**(**24	)			(30	)			-
	$	**(**4,950	)		$	(4,254	)		$	(3,855	)

12. Stock-based Compensation Plans

SLB has three types of stock-based compensation programs: (i) a restricted stock unit and performance share unit program (collectively referred to as “restricted stock”), (ii) a discounted stock purchase plan (“DSPP”), and (iii) stock options.

Restricted Stock

SLB grants performance share units to certain key employees. The number of shares earned is determined at the end of each performance period based on SLB’s achievement of certain predefined targets as described in the underlying performance share unit agreement. In the event SLB exceeds the predefined target, shares for up to a maximum of 250% of the target award may be awarded. In the event SLB falls below the predefined target, a reduced number of shares may be awarded. If SLB falls below the threshold award performance level, no shares will be awarded. As of December 31, 2024, 2.4 million performance share units were outstanding assuming the achievement of 100% of target.

Restricted stock awards do not pay dividends or have voting rights prior to vesting and generally vest at the end of three years or ratably in equal tranches over a three-year period. The fair value of a restricted stock award is generally the quoted market price of SLB’s stock on the date of grant less the present value of the expected dividends not received prior to vesting.

The following table summarizes information related to restricted stock activity:

	(Shares stated in millions)
	2024								2023								2022
					Weighted-								Weighted-								Weighted-
					Average								Average								Average
	Restricted				Grant Date				Restricted				Grant Date				Restricted				Grant Date
	Stock				Fair Value				Stock				Fair Value				Stock				Fair Value
Unvested at beginning of year		14			$	39.88				18			$	30.24				22			$	29.03
Granted		6			$	45.44				5			$	56.24				7			$	36.16
Adjustments for performance achieved		1			$	22.85				2			$	32.47				2			$	35.55
Vested		**(**8	)		$	32.50				(11	)		$	29.82				(13	)		$	32.42
Unvested at year-end		13			$	46.12				14			$	39.88				18			$	30.24

Discounted Stock Purchase Plan

Under the terms of the DSPP, employees can choose to have a portion of their earnings withheld, subject to certain restrictions, to purchase SLB common stock. Until July 1, 2022, the purchase price of the stock was 92.5% of the lower of the stock price at the beginning

or end of the plan period at six-month intervals. Effective July 1, 2022, the purchase price of the stock was changed to 85% of the lower of the stock price at the beginning or end of the plan period at six-month intervals.

The fair value of the employees’ purchase rights under the DSPP was estimated using the Black-Scholes model with the following assumptions and resulting weighted-average fair value per share:

	2024				2023				2022
Dividend yield		2.1	%			1.7	%			1.8	%
Expected volatility		31	%			50	%			47	%
Risk-free interest rate		5.31	%			5.13	%			1.32	%
Weighted-average fair value per share	$	12.02			$	14.93			$	8.05

Stock Options

Key employees may be granted stock options under SLB stock option plans. The exercise price equals the average of the high and low sales prices of SLB stock on the date of grant. The maximum term is 10 years, and the options generally vest in increments over five years.

The following table summarizes stock option activity:

	(Shares stated in millions)
	2024								2023								2022
					Weighted-								Weighted-								Weighted-
					Average								Average								Average
					Exercise								Exercise								Exercise
	Shares				Price				Shares				Price				Shares				Price
Outstanding at beginning of year		28			$	72.33				35			$	70.31				42			$	68.95
Exercised		**(**1	)		$	39.91				(2	)		$	40.02				(2	)		$	40.04
Forfeited / expired		**(**5	)		$	91.55				(5	)		$	73.18				(5	)		$	71.45
Outstanding at year-end		22			$	69.20				28			$	72.33				35			$	70.31

The following table summarizes information related to options outstanding and options exercisable as of December 31, 2024:

	(Shares stated in millions)
	Options Outstanding												Options Exercisable
					Weighted-
					Average				Weighted-								Weighted-
	Options				Remaining Life				Average				Options				Average
Exercise prices range	Outstanding				(in years)				Exercise Price				Exercisable				Exercise Price
$38.75 - $41.47		6				4.7			$	39.75				5			$	40.00
$47.55 - $77.10		5				1.8			$	70.54				5			$	70.54
$77.80 - $84.22		5				1.0			$	80.09				5			$	80.09
$87.38 - $91.74		6				1.2			$	89.44				6			$	89.44
		22				2.3			$	69.20				21			$	71.08

The weighted-average remaining contractual life of stock options exercisable as of December 31, 2024 was 2.1 years.

Stock options outstanding as of December 31, 2024 had no intrinsic value.

Total Stock-based Compensation Expense

The following summarizes stock-based compensation expense recognized in income:

(Stated in millions)
	2024				2023				2022
Restricted stock	$	250			$	225			$	255
DSPP		59				56				41
Stock options		7				12				17
	$	316			$	293			$	313

At December 31, 2024, there was $292 million of total unrecognized compensation cost related to nonvested stock-based compensation arrangements, of which $172 million is expected to be recognized in 2025, $100 million in 2026, $17 million in 2027, and $3 million in 2028.

As of December 31, 2024, approximately 18 million shares of SLB common stock were available for future grants under SLB’s stock-based compensation programs.

13. Income Taxes

Income before taxes subject to United States and non-United States income taxes was as follows:

(Stated in millions)
	2024				2023				2022
United States	$	641			$	355			$	600
Outside United States		5,031				4,927				3,671
	$	5,672			$	5,282			$	4,271

SLB recorded net pretax charges of $540 million in 2024 ($188 million of charges in the US and $352 million of net charges outside the US); $110 million in 2023 ($2 million of net credits in the US and $112 million of charges outside the US); and $347 million in 2022 ($379 million of net credits in the US and $32 million of net charges outside the US). These charges and credits are included in the table above and are more fully described in Note 3 – Charges and Credits.

The components of net deferred tax liabilities were as follows:

(Stated in millions)
	2024				2023
Intangible assets	$	**(**788	)		$	(844	)
Net operating losses		123				214
Fixed assets, net		173				190
Research and development credits		158				162
Capitalized research and development costs		216				155
Pension and other postretirement benefits		**(**62	)			(94	)
Other, net		113				77
	$	**(**67	)		$	(140	)

Approximately $97 million of the $123 million deferred tax asset relating to net operating losses at December 31, 2024 can be carried forward indefinitely. The majority of the remaining balance expires at various dates between 2037 and 2042.

The deferred tax balance at December 31, 2024 and 2023 was net of valuation allowances relating to the following:

(Stated in millions)
	2024				2023
US foreign tax credits	$	162			$	188
Net operating losses	$	62			$	106

The vast majority of the $162 million of US foreign tax credits will expire by 2026.

The components of Tax expense were as follows:

(Stated in millions)
	2024				2023				2022
Current:
United States-Federal	$	10			$	(23	)		$	2
United States-State		7				5				3
Outside United States		1,117				997				813
		1,134				979				818
Deferred:
United States-Federal	$	88			$	(77	)		$	98
United States-State		2				6				13
Outside United States		**(**61	)			104				(70	)
Valuation allowance		**(**70	)			(5	)			(80	)
		**(**41	)			28				(39	)
	$	1,093			$	1,007			$	779

A reconciliation of the United States statutory federal tax rate to the consolidated effective tax rate follows:

	2024				2023				2022
US federal statutory rate		21	%			21	%			21	%
Charges and credits (See Note 3)		-				-				(1	)
Change in valuation allowance		**(**1	)			-				(2	)
Other		**(**1	)			(2	)			-
		19	%			19	%			18	%

A number of the jurisdictions in which SLB operates have tax laws that are not fully defined and are evolving. SLB’s tax filings are subject to regular audit by the tax authorities. These audits may result in assessments for additional taxes that are resolved with the tax authorities or, potentially, through the courts. Tax liabilities are recorded based on estimates of additional taxes that will be due upon the conclusion of these audits. Due to the uncertain and complex application of tax regulations, the ultimate resolution of audits may result in liabilities which could be materially different from these estimates.

A reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions is as follows:

(Stated in millions)
	2024				2023				2022
Balance at beginning of year	$	783			$	893			$	1,001
Additions based on tax positions related to the current year		79				66				41
Additions for tax positions of prior years		150				91				64
Impact of changes in exchange rates		**(**23	)			(25	)			(38	)
Settlements with tax authorities		**(**75	)			(36	)			(37	)
Reductions for tax positions of prior years		**(**104	)			(176	)			(94	)
Reductions due to the lapse of statute of limitations		**(**95	)			(30	)			(44	)
	$	715			$	783			$	893

The amounts above exclude accrued interest and penalties of $116 million at December 31, 2024 and $155 million at December 31, 2023. SLB classifies interest and penalties relating to uncertain tax positions within Tax expense in the Consolidated Statement of Income.

The following table summarizes the tax years that are either currently under audit or remain open and subject to examination by the tax authorities in the most significant jurisdictions in which SLB operates:

Ecuador	2020 - 2024
Mexico	2019 - 2024
Norway	2019 - 2024
Russia	2022 - 2024
Saudi Arabia	2019 - 2024
United Kingdom	2020 - 2024
United States	2021 - 2024

14. Leases

SLB’s leasing activities primarily consist of operating leases for administrative offices, manufacturing facilities, research centers, service centers, sales offices, and certain equipment. Total operating lease expense, which approximates cash paid and includes short-term leases, was $1.4 billion in each of 2024 and 2023 and $1.2 billion in 2022.

Maturities of operating lease liabilities as of December 31, 2024 were as follows:

(Stated in millions)
2025	$	193
2026		142
2027		118
2028		96
2029		72
Thereafter		249
Total lease payments	$	870
Less: Interest		(128	)
	$	742
Amounts recognized in balance sheet:
Accounts payable and accrued liabilities	$	186
Other Liabilities		556
	$	742

The weighted-average remaining lease term as of December 31, 2024 was 8 years. The weighted-average discount rate used to determine the operating lease liability as of December 31, 2024 was 3.8%.

15. Contingencies

SLB is party to various legal proceedings from time to time. A liability is accrued when a loss is both probable and can be reasonably estimated. Management believes that the probability of a material loss with respect to any currently pending legal proceeding is remote. However, litigation is inherently uncertain, and it is not possible to predict the ultimate disposition of any of these proceedings.

16. Segment Information

SLB is organized under four Divisions that combine and integrate SLB’s technologies, enhancing the Company’s ability to support the emerging long-term growth opportunities in each of these market segments.

The four Divisions, representing SLB’s segments, are:

Digital & Integration – Combines SLB’s industry-leading digital solutions and data products with its integrated offering of Asset Performance Solutions.

Reservoir Performance – Consists of reservoir-centric technologies and services that are critical to optimizing reservoir productivity and performance.

Well Construction – Combines the full portfolio of products and services to optimize well placement and performance, maximize drilling efficiency, and improve wellbore assurance.

Production Systems – Develops technologies and provides expertise that enhance production and recovery from subsurface reservoirs to the surface, into pipelines, and to refineries.

Financial information by segment is as follows:

					(Stated in millions)
	2024
													Depreciation
					Pretax								and				Capital
	Revenue				Income				Assets				Amortization				Investments
Digital & Integration	$	4,247			$	1,408			$	3,117			$	654			$	682
Reservoir Performance		7,177				1,452				3,802				403				624
Well Construction		13,357				2,826				6,741				649				745
Production Systems		12,143				1,898				7,116				348				418
Eliminations & other		**(**635	)			**(**263	)			1,247				287				143
Goodwill and intangible assets										17,605
Cash and short-term investments										4,669
All other assets										4,638
Corporate & other (1)						**(**744	)							178
Interest income (2)						134
Interest expense (3)						**(**498	)
Charges & credits (4)						**(**541	)
	$	36,289			$	5,672			$	48,935			$	2,519			$	2,612

					(Stated in millions)
	2023
													Depreciation
					Pretax								and				Capital
	Revenue				Income				Assets				Amortization				Investments
Digital & Integration	$	3,871			$	1,257			$	3,089			$	578			$	660
Reservoir Performance		6,561				1,263				3,491				387				514
Well Construction		13,478				2,932				7,129				587				908
Production Systems		9,831				1,245				6,640				325				384
Eliminations & other		(606	)			(174	)			1,352				277				133
Goodwill and intangible assets										17,323
Cash and short-term investments										3,989
All other assets										4,944
Corporate & other (1)						(729	)							158
Interest income (2)						87
Interest expense (3)						(489	)
Charges & credits (4)						(110	)
	$	33,135			$	5,282			$	47,957			$	2,312			$	2,599

					(Stated in millions)
	2022
													Depreciation
					Pretax								and				Capital
	Revenue				Income				Assets				Amortization				Investments
Digital & Integration	$	3,725			$	1,357			$	3,132			$	504			$	689
Reservoir Performance		5,553				881				3,159				386				478
Well Construction		11,397				2,202				6,481				524				687
Production Systems		7,862				748				5,603				311				346
Eliminations & other		(446	)			(177	)			1,426				271				102
Goodwill and intangible assets										15,974
Cash and short-term investments										2,897
All other assets										4,463
Corporate & other (1)						(637	)							151
Interest income (2)						27
Interest expense (3)						(477	)
Charges & credits (4)						347
	$	28,091			$	4,271			$	43,135			$	2,147			$	2,302

(1)

Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs, amortization expense associated with certain intangible assets, certain centrally managed initiatives and other nonoperating items.

(2)

Interest income excludes amounts which are included in the segments’ income (2024: $39 million; 2023: $12 million; 2022: $72 million).

(3)

Interest expense excludes amounts which are included in the segments’ income (2024: $14 million; 2023: $14 million; 2022: $13 million).

(4)

See Note 3 – Charges and Credits.

Segment assets consist of receivables, inventories, fixed assets, exploration data, and APS investments.

Capital investments includes capital expenditures, APS investments, and exploration data cost capitalized.

Depreciation and amortization includes depreciation of fixed assets and amortization of intangible assets, exploration data costs, and APS investments.

Revenue by geographic area for the years ended December 31, 2024, 2023, and 2022 was as follows:

(Stated in millions)
	2024				2023				2022
North America	$	6,680			$	6,727			$	5,995
Latin America		6,719				6,645				5,661
Europe & Africa *		9,671				8,524				7,201
Middle East & Asia		13,026				11,019				9,033
Eliminations & other		193				220				201
	$	36,289			$	33,135			$	28,091

• Includes Russia and the Caspian region

Revenue is based on the location where services are provided and products are sold.

SLB did not have revenue from third-party customers in its country of domicile during the last three years. Revenue in the United States in 2024, 2023, and 2022 was $5.3 billion, $5.4 billion, and $4.6 billion, respectively.

North America and International revenue disaggregated by segment was as follows:

(Stated in millions)
	2024
	North America				International				Other				Total
Digital & Integration	$	1,115			$	3,127			$	5			$	4,247
Reservoir Performance		548				6,622				7				7,177
Well Construction		2,359				10,776				222				13,357
Production Systems		2,725				9,386				32				12,143
Eliminations & other		**(**67	)			**(**496	)			**(**72	)			**(**635	)
	$	6,680			$	29,415			$	194			$	36,289

(Stated in millions)
	2023
	North America				International				Other				Total
Digital & Integration	$	984			$	2,881			$	6			$	3,871
Reservoir Performance		498				6,057				6				6,561
Well Construction		2,709				10,530				239				13,478
Production Systems		2,598				7,219				14				9,831
Eliminations & other		(62	)			(499	)			(45	)			(606	)
	$	6,727			$	26,188			$	220			$	33,135

(Stated in millions)
	2022
	North America				International				Other				Total
Digital & Integration	$	1,069			$	2,651			$	5			$	3,725
Reservoir Performance		455				5,091				7				5,553
Well Construction		2,311				8,875				211				11,397
Production Systems		2,176				5,675				11				7,862
Eliminations & other		(16	)			(397	)			(33	)			(446	)
	$	5,995			$	21,895			$	201			$	28,091

Fixed Assets less accumulated depreciation by geographic area was as follows:

(Stated in millions)
	2024				2023
North America	$	1,805			$	1,728
Latin America		1,044				1,079
Europe & Africa		1,721				1,804
Middle East & Asia		2,789				2,629
	$	7,359			$	7,240

Significant segment expenses, which represents the difference between segment revenue and pretax segment income, consist of the following:

(Stated in millions)
	2024
	Digital &				Reservoir				Well				Production
	Integration				Performance				Construction				Systems
Compensation	$	811			$	1,638			$	2,587			$	1,043
Cost of products, materials, and supplies		-				1,232				3,579				7,610
Depreciation and amortization		654				403				649				348
Allocations		426				668				1,011				529
Other		948				1,784				2,705				715
	$	2,839			$	5,725			$	10,531			$	10,245

(Stated in millions)
	2023
	Digital &				Reservoir				Well				Production
	Integration				Performance				Construction				Systems
Compensation	$	806			$	1,501			$	2,526			$	1,104
Cost of products, materials, and supplies		-				1,157				3,673				5,946
Depreciation and amortization		578				387				587				325
Allocations		424				605				943				492
Other		806				1,648				2,817				719
	$	2,614			$	5,298			$	10,546			$	8,586

(Stated in millions)
	2022
	Digital &				Reservoir				Well				Production
	Integration				Performance				Construction				Systems
Compensation	$	751			$	1,366			$	2,247			$	976
Cost of products, materials, and supplies		-				977				3,273				4,732
Depreciation and amortization		504				386				524				311
Allocations		406				571				828				470
Other		707				1,372				2,323				625
	$	2,368			$	4,672			$	9,195			$	7,114

Other segment expenses include transportation, mobilization, lease, occupancy, professional, and other costs.

SLB's chief operating decision maker is its Chief Executive Officer who uses pretax segment income to assess the performance of each segment.

17. Pension and Other Postretirement Benefit Plans

Pension Plans

SLB sponsors several defined benefit pension plans that cover substantially all US employees hired prior to October 1, 2004. The benefits are based on years of service and compensation, on a career-average pay basis.

In addition to the US defined benefit pension plans, SLB sponsors several other international defined benefit pension plans. The most significant of these international plans are the International Staff Pension Plan and the UK pension plan (collectively, the “International plans”). The International Staff Pension Plan covers certain international employees hired prior to July 1, 2014 and is based on years of service and compensation on a career-average pay basis. The UK plan covers employees hired prior to April 1, 1999, and is based on years of service and compensation, on a final salary basis.

The weighted-average assumed discount rate, compensation increases and expected long-term rate of return on plan assets used to determine the net pension cost for the US and International plans were as follows:

	US												International
	2024				2023				2022				2024				2023				2022
Discount rate		5.25	%			5.50	%			3.00	%			5.14	%			5.41	%			2.83	%
Compensation increases		4.00	%			4.00	%			4.00	%			4.84	%			4.84	%			4.83	%
Return on plan assets		6.00	%			6.00	%			4.40	%			5.91	%			6.00	%			5.05	%

Net pension cost (credit) included the following components:

(Stated in millions)
	US												International
	2024				2023				2022				2024				2023				2022
Service cost	$	23			$	23			$	37			$	56			$	54			$	101
Interest cost		173				178				137				413				407				298
Expected return on plan assets		**(**200	)			(198	)			(202	)			**(**553	)			(607	)			(530	)
Amortization of net loss		-				-				5				10				-				80
	$	**(**4	)		$	3			$	(23	)		$	**(**74	)		$	(146	)		$	(51	)

The weighted-average assumed discount rate and compensation increases used to determine the projected benefit obligations for the US and International plans were as follows:

	US								International
	2024				2023				2024				2023
Discount rate		5.70	%			5.25	%			5.67	%			5.14	%
Compensation increases		4.00	%			4.00	%			4.85	%			4.84	%

The changes in the projected benefit obligation, plan assets and funded status of the plans were as follows:

(Stated in millions)
	US								International
	2024				2023				2024				2023
Change in Projected Benefit Obligations:
Projected benefit obligation at beginning of year	$	3,413			$	3,315			$	8,109			$	7,598
Service cost		23				23				56				54
Interest cost		173				178				413				407
Contribution by plan participants		-				-				61				52
Actuarial losses (gains)		**(**160	)			117				**(**457	)			302
Currency effect		-				-				**(**2	)			56
Benefits paid		**(**224	)			(220	)			**(**384	)			(360	)
Projected benefit obligation at end of year	$	3,225			$	3,413			$	7,796			$	8,109
Change in Plan Assets:
Plan assets at fair value at beginning of year	$	3,427			$	3,396			$	8,390			$	8,126
Actual return on plan assets		**(**38	)			242				**(**408	)			494
Currency effect		-				-				**(**2	)			71
Company contributions		10				9				17				7
Contributions by plan participants		-				-				61				52
Benefits paid		**(**224	)			(220	)			**(**384	)			(360	)
Plan assets at fair value at end of year	$	3,175			$	3,427			$	7,674			$	8,390
Asset / (Unfunded Liability)	$	**(**50	)		$	14			$	**(**122	)		$	281
Amounts Recognized in Balance Sheet:
Postretirement Benefits	$	**(**154	)		$	(159	)		$	**(**358	)		$	(16	)
Other Assets		104				173				236				297
	$	**(**50	)		$	14			$	**(**122	)		$	281
Amounts Recognized in Accumulated Other Comprehensive Loss:
Actuarial losses	$	405			$	328			$	2,296			$	1,804
Accumulated benefit obligation	$	3,137			$	3,313			$	7,634			$	7,942

The asset represents the difference between the plan assets and the projected benefit obligation (“PBO”). The PBO represents the actuarial present value of benefits based on employee service and compensation and includes an assumption about future compensation levels. The accumulated benefit obligation represents the actuarial present value of benefits based on employee service and compensation but does not include an assumption about future compensation levels.

Actuarial gains and losses arising during 2024 and 2023 were primarily attributable to changes in the discount rate used to determine the PBO.

The weighted-average allocation of plan assets as of December 31, 2024 and 2023 and the target allocations by asset category as of December 31, 2024 were as follows:

	US															International
	Target					2024					2023					Target					2024					2023
Cash and cash equivalents	0 - 3			%			1		%			1		%		0 - 5			%			1		%			3		%
Equity securities	0 - 5						2					-				0 - 5						3					1
Debt securities	80 - 90						82					84				60 - 70						69					69
Private equity and real estate	5 - 12						9					10				15 - 20						17					17
Private debt	2 - 8						6					5				9 - 15						10					10
		100		%			100		%			100		%			100		%			100		%			100		%

The expected rate of return on assets assumptions reflect the long-term average rate of return expected to be earned on plan assets. The assumptions have been determined based on expectations regarding future rates of return for the portfolio considering the asset allocation and related historical rates of return. The appropriateness of the assumptions is reviewed annually.

The fair value of SLB’s pension plan assets at December 31, 2024 and 2023, by asset category, is presented below and was determined based on valuation techniques categorized as follows:

Level One: The use of quoted prices in active markets for identical instruments.

Level Two: The use of quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or other inputs that are observable in the market or can be corroborated by observable market data.

Level Three: The use of significant unobservable inputs that typically require the use of management’s estimates of assumptions that market participants would use in pricing.

(Stated in millions)
	US Plan Assets
	2024																2023
					Level				Level				Level								Level				Level				Level
	Total				One				Two				Three				Total				One				Two				Three
Asset Category:
Cash and Cash Equivalents	$	33			$	33			$	-			$	-			$	33			$	33			$	-			$	-
Equity Securities		70				58				12				-				6				-				6				-
Debt Securities:
Corporate bonds		1,713				-				1,713				-				1,540				-				1,540				-
Government and related debt securities		861				13				848				-				1,334				163				1,171				-
Other		13				-				13				-				12				-				12				-
Alternative Investments:
Private equity		234				-				-				234				287				-				-				287
Private debt		186				-				-				186				148				-				-				148
Real estate		65				-				-				65				67				-				-				67
Total	$	3,175			$	104			$	2,586			$	485			$	3,427			$	196			$	2,729			$	502

(Stated in millions)
	International Plan Assets
	2024																2023
					Level				Level				Level								Level				Level				Level
	Total				One				Two				Three				Total				One				Two				Three
Asset Category:
Cash and Cash Equivalents	$	90			$	89			$	1			$	-			$	267			$	260			$	7			$	-
Equity Securities		264				264												122				122
Debt Securities:
Corporate bonds		2,948				-				2,948				-				3,001				-				3,001				-
Government and related debt securities		1,969				448				1,521				-				2,466				563				1,903				-
Other		390				-				390				-				292				-				292				-
Alternative Investments:
Private equity		1,136				-				-				1,136				1,269				-				-				1,269
Private debt		738				-				-				738				805				-				-				805
Real estate		139				-				-				139				168				-				-				168
Total	$	7,674			$	801			$	4,860			$	2,013			$	8,390			$	945			$	5,203			$	2,242

SLB’s funding policy is to contribute amounts that are based upon a number of factors including the funded status of the plans, amounts that are deductible for income tax purposes, legal funding requirements, and available cash flow. SLB does not expect to make any material contributions to its postretirement benefit plans in 2025.

Postretirement Benefits Other Than Pensions

SLB provides healthcare benefits to certain former US employees who have retired.

The actuarial assumptions used to determine the accumulated postretirement benefit obligation and net periodic benefit cost for the US postretirement medical plan were as follows:

	Benefit Obligation								Net Periodic Benefit
	At December 31,								Cost for the Year
	2024				2023				2024				2023				2022
Discount rate		5.25	%			5.25	%			5.25	%			5.50	%			3.00	%
Return on plan assets	-				-					4.43	%			4.41	%			2.94	%
Current medical cost trend rate		7.25	%			7.50	%			7.25	%			7.50	%			6.75	%
Ultimate medical cost trend rate		4.50	%			4.50	%			4.50	%			4.50	%			4.50	%
Year that the rate reaches the ultimate trend rate		2035				2035				2035				2035				2031

The net credit for the US postretirement medical plan included the following components:

(Stated in millions)
	2024				2023				2022
Service cost	$	19			$	16			$	23
Interest cost		41				42				33
Expected return on plan assets		**(**42	)			(41	)			(38	)
Amortization of prior service credit		**(**23	)			(23	)			(23	)
Amortization of net gain		**(**13	)			(12	)			(10	)
	$	**(**18	)		$	(18	)		$	(15	)

The changes in the accumulated postretirement benefit obligation, plan assets and funded status were as follows:

(Stated in millions)
	2024				2023
Change in Accumulated Postretirement Benefit Obligation:
Benefit obligation at beginning of year	$	805			$	808
Service cost		19				16
Interest cost		41				42
Contribution by plan participants		6				7
Actuarial gains		**(**37	)			(7	)
Benefits paid		**(**53	)			(61	)
Benefit obligation at end of year	$	781			$	805
Change in Plan Assets:
Plan assets at fair value at beginning of year	$	964			$	938
Actual return on plan assets		1				87
Contributions by plan participants		6				7
Benefits paid		**(**58	)			(68	)
Plan assets at fair value at end of year	$	913			$	964
Asset	$	132			$	159
Amounts Recognized in Accumulated Other Comprehensive Loss:
Actuarial gains	$	224			$	239
Prior service credit		13				36
	$	237			$	275

The asset balance relating to this plan was included in Other Assets in the Consolidated Balance Sheet.

The assets of the US postretirement medical plan are invested 85% in debt securities and 15% in equity securities at December 31, 2024. The fair value of these assets was primarily determined based on Level Two valuation techniques.

Other Information

The expected benefits to be paid under the US and International pension plans as well as the postretirement medical plan are as follows:

(Stated in millions)
	Pension Plans								Postretirement
	US				International				Medical Plan
2025	$	230			$	423			$	49
2026	$	233			$	437			$	50
2027	$	232			$	454			$	51
2028	$	233			$	469			$	53
2029	$	234			$	475			$	55
2030-2034	$	1,180			$	2,591			$	310

18. Supplementary Information

Cash paid for interest and income taxes was as follows:

(Stated in millions)
	2024				2023				2022
Interest	$	510			$	503			$	562
Income taxes	$	1,140			$	1,064			$	716

Interest and other income, net includes the following:

(Stated in millions)
	2024				2023				2022
Earnings of equity method investments	$	182			$	206			$	164
Interest income		174				100				99
Gain on sale of investment *		24				-				-
Gain on sale of Liberty shares *		-				36				325
Loss on Blue Chip Swap transactions *		-				-				(139	)
Gain on ADC equity investment *		-				-				107
Gain on sale of real estate *		-				-				43
Gain on repurchase of bonds *		-				-				11
	$	380			$	342			$	610

• See Note 3 – Charges and Credits

The components of depreciation and amortization expense were as follows:

(Stated in millions)
	2024		2023		2022
Depreciation of fixed assets	**$**1,551		$1,445		$1,368
Amortization of APS investments	481		410		368
Amortization of intangible assets	334		314		301
Amortization of exploration data costs	153		143		110
	**$**2,519		$2,312		$2,147

The change in Allowance for doubtful accounts was as follows:

(Stated in millions)
	2024				2023				2022
Balance at beginning of year	$	337			$	340			$	319
Additions		6				18				54
Amounts written off		**(**18	)			(21	)			(33	)
Balance at end of year	$	325			$	337			$	340

Revenue in excess of billings related to contracts where revenue is recognized over time was $0.5 billion at December 31, 2024 and $0.4 billion at December 31, 2023. Such amounts are included within Receivables less allowance for doubtful accounts in the Consolidated Balance Sheet.

Other Assets consist of the following:

(Stated in millions)
	2024				2023
Investments in APS projects	$	2,083			$	2,111
Pension and other postretirement plan assets		472				629
Operating lease assets		702				718
Exploration data costs capitalized		196				151
Fair value of hedge contracts		14				65
Other		299				378
	$	3,766			$	4,052

Accounts payable and accrued liabilities consist of the following:

(Stated in millions)
	2024				2023
Trade	$	4,230			$	4,613
Payroll, vacation, and employee benefits		1,475				1,625
Billings and cash collections in excess of revenue		2,007				1,996
Other		2,663				2,670
	$	10,375			$	10,904

Management’s Report on Internal Control Over Financial Reporting

SLB management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a–15(f) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). SLB’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

SLB management assessed the effectiveness of its internal control over financial reporting as of December 31, 2024. In making this assessment, it used the criteria set forth in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework. Based on this assessment SLB’s management has concluded that, as of December 31, 2024, its internal control over financial reporting is effective based on those criteria.

The effectiveness of SLB’s internal control over financial reporting as of December 31, 2024 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

Report of Independent Regist****ered Public Accounting Firm

To the Board of Directors and Stockholders

of Schlumberger Limited

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheet of Schlumberger Limited and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts, and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Uncertain Tax Positions

As described in Note 13 to the consolidated financial statements, the Company’s tax filings are subject to regular audit by the tax authorities, and those audits may result in assessments for additional taxes that are resolved with the tax authorities or, potentially, through the courts. Tax liabilities are recorded based on estimates of additional taxes that will be due upon the conclusion of these audits.

The principal considerations for our determination that performing procedures relating to uncertain tax positions is a critical audit matter are the significant judgment applied by management in determining these liabilities including a high degree of estimation uncertainty due to the uncertain and complex application of tax regulations, which in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate management’s estimates.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the identification and recognition of uncertain tax positions. These procedures also included, among others (i) evaluating management’s process for determining the estimated liabilities for uncertain tax positions, (ii) testing the completeness and reasonableness of uncertain tax positions recorded in the consolidated financial statements, and (iii) evaluating assessments received from the relevant tax authorities. Professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of assumptions used by management, including management's assessment of whether tax positions are more likely than not of being sustained.

/s/ PricewaterhouseCoopers LLP
Houston, Texas
January 22, 2025

We have served as the Company’s auditor since 1952.