XML 25 R15.htm IDEA: XBRL DOCUMENT v3.24.3
Revenue
 9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Revenue

7. Revenue

Disaggregation of Revenue

The following table disaggregates the Company’s revenue by major geographic and market segment destination. In the table, North America includes the U.S. and Canada (in millions):

 

 

Three Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

 

Energy

 

 

 

 

 

 

 

 

 

 

 

Energy

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

 

Energy

 

 

 

 

 

 

 

 

Products

 

 

Energy

 

 

 

 

 

 

 

 

 

and Services

 

 

Equipment

 

 

Elims.

 

 

Total

 

 

and Services

 

 

Equipment

 

 

Elims.

 

 

Total

 

North America

 

$

502

 

 

$

319

 

 

$

—

 

 

$

821

 

 

$

495

 

 

$

302

 

 

$

—

 

 

$

797

 

International

 

 

483

 

 

 

887

 

 

 

—

 

 

 

1,370

 

 

 

511

 

 

 

877

 

 

 

—

 

 

 

1,388

 

Eliminations

 

 

18

 

 

 

13

 

 

 

(31

)

 

 

—

 

 

 

28

 

 

 

16

 

 

 

(44

)

 

 

—

 

 

$

1,003

 

 

$

1,219

 

 

$

(31

)

 

$

2,191

 

 

$

1,034

 

 

$

1,195

 

 

$

(44

)

 

$

2,185

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Land

 

$

761

 

 

$

436

 

 

$

—

 

 

$

1,197

 

 

$

739

 

 

$

435

 

 

$

—

 

 

$

1,174

 

Offshore

 

 

224

 

 

 

770

 

 

 

—

 

 

 

994

 

 

 

267

 

 

 

744

 

 

 

—

 

 

 

1,011

 

Eliminations

 

 

18

 

 

 

13

 

 

 

(31

)

 

 

—

 

 

 

28

 

 

 

16

 

 

 

(44

)

 

 

—

 

 

$

1,003

 

 

$

1,219

 

 

$

(31

)

 

$

2,191

 

 

$

1,034

 

 

$

1,195

 

 

$

(44

)

 

$

2,185

 

 

 

 

Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

 

Energy

 

 

 

 

 

 

 

 

 

 

 

Energy

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

 

Energy

 

 

 

 

 

 

 

 

Products

 

 

Energy

 

 

 

 

 

 

 

 

 

and Services

 

 

Equipment

 

 

Elims.

 

 

Total

 

 

and Services

 

 

Equipment

 

 

Elims.

 

 

Total

 

North America

 

$

1,573

 

 

$

916

 

 

$

—

 

 

$

2,489

 

 

$

1,516

 

 

$

940

 

 

$

—

 

 

$

2,456

 

International

 

 

1,432

 

 

 

2,641

 

 

 

—

 

 

 

4,073

 

 

 

1,403

 

 

 

2,381

 

 

 

—

 

 

 

3,784

 

Eliminations

 

 

65

 

 

 

44

 

 

 

(109

)

 

 

—

 

 

 

85

 

 

 

43

 

 

 

(128

)

 

 

—

 

 

$

3,070

 

 

$

3,601

 

 

$

(109

)

 

$

6,562

 

 

$

3,004

 

 

$

3,364

 

 

$

(128

)

 

$

6,240

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Land

 

$

2,310

 

 

$

1,323

 

 

$

—

 

 

$

3,633

 

 

$

2,165

 

 

$

1,363

 

 

$

—

 

 

$

3,528

 

Offshore

 

 

695

 

 

 

2,234

 

 

 

—

 

 

 

2,929

 

 

 

754

 

 

 

1,958

 

 

 

—

 

 

 

2,712

 

Eliminations

 

 

65

 

 

 

44

 

 

 

(109

)

 

 

—

 

 

 

85

 

 

 

43

 

 

 

(128

)

 

 

—

 

 

$

3,070

 

 

$

3,601

 

 

$

(109

)

 

$

6,562

 

 

$

3,004

 

 

$

3,364

 

 

$

(128

)

 

$

6,240

 

Performance Obligations

Net revenue recognized from performance obligations satisfied in previous periods was immaterial for the three months ended September 30, 2024 primarily due to change orders.

Remaining performance obligations represent the transaction price of firm orders for all revenue streams for which work has not been performed on contracts with original expected duration of one year or more. We do not disclose the remaining performance obligations of royalty contracts, service contracts for which there is a right to invoice, and short-term contracts that are expected to have a duration of one year or less. As of September 30, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $4,836 million. Although numerous factors can affect timing of revenue recognized on performance obligations, such as customer change orders and supplier accelerations or delays, the Company expects to recognize approximately $431 million in revenue for the remaining performance obligations in the remainder of 2024, $1,538 million in 2025, $1,082 million in 2026, and $1,785 million thereafter.

Contract Assets and Liabilities

Contract assets include unbilled amounts when revenue recognized exceeds the amount billed to the customer under contracts where revenue is recognized over time. Contract liabilities consist of customer billings in excess of revenue recognized under over-time contracts, customer advance payments and deferred revenue.

The changes in the carrying amount of contract assets and contract liabilities are as follows (in millions):

 

 

Contract
Assets

 

 

Contract
Liabilities

 

Balance at December 31, 2023

 

$

739

 

 

$

532

 

Billings

 

 

(1,148

)

 

 

890

 

Revenue recognized

 

 

1,137

 

 

 

(906

)

Currency translation adjustments and other

 

 

(44

)

 

 

(21

)

Balance at September 30, 2024

 

$

684

 

 

$

495

 

 

Royalty Revenue

The Company recognizes royalty revenue due under various licenses for the Company's intellectual property, including for technology related to drill bits. The Company recognized revenue for drill bit licenses of approximately $17 million and $50 million for the three and nine months ended September 30, 2024, and $21 million and $62 million for the three and nine months ended September 30, 2023. The Company is currently pursuing litigation against certain non-paying licensees, which will impact our ability to collect the receivables timely. As such, revenue and the related receivables are recorded at a discount to reflect the delayed timing of future cash collections. As of September 30, 2024, the receivables of $109 million, net of allowances of $21 million for credit losses and $16 million for the remaining timing related discount, are included in Other assets on the Consolidated Balance Sheets. These allowances do not impact the amount the Company is entitled to recover on its claims from the licensees in litigation. While we continue to believe it is probable the Company will collect all or substantially all of the consideration to which it is entitled pursuant to the terms of the licensing agreements, the Company will also continue to evaluate the credit quality of the receivables. See Note 15 for discussion of the ongoing litigation.

Allowance for Credit Losses

The Company estimates its allowance for credit losses using information about past events, current conditions and risk characteristics of each customer, and reasonable and supportable forecasts relevant to assessing risk associated with the collectability of receivables and contract assets. The Company’s customer base, mostly in the oil and gas industry, have generally similar collectability risk characteristics, although larger and state-owned customers may have lower risk than smaller independent customers. As of September 30, 2024, the allowance for credit losses totaled $69 million.

The changes in the carrying amount of the allowance for credit losses are as follows (in millions):

Balance at December 31, 2023

 

$

72

 

Provision for expected credit losses

 

 

34

 

Recoveries collected

 

 

(11

)

Reclass for long-term receivables

 

 

(12

)

Writeoffs

 

 

(13

)

Other

 

 

(1

)

Balance at September 30, 2024

 

$

69