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Business Segments and Geographic Areas | 12 Months Ended
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Dec. 31, 2024
Segment Reporting [Abstract] |
Business Segments and Geographic Areas | 16. Business Segments and Geographic Areas The Company is comprised of 17 business units to provide products and services to the energy industry. Each of the business units is managed by a business unit president, recognizes revenue, incurs expenses, and has discrete financial information readily available. The business units are aggregated into our 2 reportable segments, Energy Products and Services, and Energy Equipment, based on the products and services provided, customer base, and operating environment. The reportable segments are led by Segment Presidents, who are responsible for oversight of the business units’ strategy and performance. The Segment Presidents report directly to the CEO and provide monthly operating and financial updates. The CEO has final authority over resource allocation decisions and performance assessment for the Company. Consequently, the CEO has been identified as the CODM. The CODM regularly receives information directly from the Segment Presidents as well as the business units. However, for decision-making purposes related to the assessment of performance and allocation of resources, the CODM uses financial information at the segment level. The CODM regularly reviews Operating Profit for each segment to assess performance and for resource allocation decisions in the annual budgeting process and in the quarterly performance review processes. Energy Products and Services The Company’s Energy Products and Services segment primarily designs, manufactures, rents, and sells products and equipment used in drilling, intervention, completion, and production activities. Products include drill bits, downhole tools, premium drill pipe, drilling fluids, managed pressure drilling, integral and weld-on connectors for conductor strings and surface casing, completion tools, and artificial lift systems. The segment also designs, manufactures, and delivers high-end composite pipe, tanks, and structures engineered to solve both corrosion and weight challenges in a wide variety of applications, including oil and gas, chemical, industrial, wastewater, fuel handling, marine and offshore, and rare earth mineral extraction. In addition to product and equipment sales, the segment provides services, software, and digital solutions to improve drilling and completion operational performance. Services include tubular inspection and coating, solids control, waste management, and managed pressure drilling. Software and digital solutions offered include drilling and completion optimization and remote monitoring (via downhole and surface instrumentation), wired drill pipe services, software controls and applications, and data management and analytics services at the edge and in the cloud. Energy Products and Services serves oil and gas companies, drilling contractors, oilfield service companies, oilfield equipment rental companies and developers of geothermal energy. Demand for the segment’s products and services primarily depends on the level of oilfield drilling activity by oil and gas companies, drilling contractors, and oilfield service companies. Demand for the segment’s composite solutions serving applications outside of oil and gas are driven by industrial activity, infrastructure spend, and population growth. Energy Equipment The Company’s Energy Equipment segment manufactures and supports the capital equipment and integrated systems needed for oil and gas exploration and production, both onshore and offshore, as well as for other marine-based, industrial and renewable energy markets. The segment designs, manufactures, and integrates technologies for drilling and producing oil and gas wells. This includes equipment and technologies needed for drilling, including land rigs, offshore drilling equipment packages, drilling rig components, and software control systems that mechanize and automate the drilling process and rig functionality; hydraulic fracture stimulation, including pressure pumping trucks, blenders, sanders, hydration units, injection units, flowline, and manifolds; well intervention, including coiled tubing units, coiled tubing, and wireline units and tools; cementing products for pumping, mixing, transport, and storage; onshore production, including fluid processing, and surface transfer as well as progressive cavity pumps; offshore production, including integrated production systems and subsea production technologies; and aftermarket support of these technologies, providing spare parts, service, and repair. Energy Equipment primarily serves contract drillers, oilfield service companies, and oil and gas companies. Demand for the segment’s products primarily depends on capital spending plans by drilling contractors, service companies, and oil and gas companies, and secondarily on the overall level of oilfield drilling, completions, and workover activity which drives demand for equipment, spare parts, service, and repair for the segment’s large installed base of equipment. The segment also serves marine and offshore markets, where it designs and builds equipment for wind turbine installation and cable lay vessels, and offers heavy lift cranes and jacking systems; industrial markets, where the segment provides pumps and mixers for a wide breadth of industrial end markets; and other energy transition markets, where it is applying its gas processing expertise to provide solutions that aid in wind power development, hydrogen production and carbon sequestration. The following table presents financial data by business segment (in millions):
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | Energy Products and Services |  |  | Energy Equipment |  |  | Eliminations and corporate costs (1) |  |  | Total |  |  | Energy Products and Services |  |  | Energy Equipment |  |  | Eliminations and corporate costs (1) |  |  | Total |  |  | Energy Products and Services |  |  | Energy Equipment |  |  | Eliminations and corporate costs (1) |  |  | Total |
Revenue from external customers |  | $ | 4,040 |  |  | $ | 4,830 |  |  | $ | - |  |  | $ | 8,870 |  |  | $ | 3,973 |  |  | $ | 4,610 |  |  | $ | - |  |  | $ | 8,583 |  |  | $ | 3,474 |  |  | $ | 3,763 |  |  | $ | - |  |  | $ | 7,237 |
Intersegment revenue |  |  | 90 |  |  |  | 58 |  |  |  | (148 | ) |  |  | - |  |  |  | 104 |  |  |  | 59 |  |  |  | (163 | ) |  |  | - |  |  |  | 63 |  |  |  | 56 |  |  |  | (119 | ) |  |  | - |
Total revenue |  |  | 4,130 |  |  |  | 4,888 |  |  |  | (148 | ) |  |  | 8,870 |  |  |  | 4,077 |  |  |  | 4,669 |  |  |  | (163 | ) |  |  | 8,583 |  |  |  | 3,537 |  |  |  | 3,819 |  |  |  | (119 | ) |  |  | 7,237 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of revenue (2) |  |  | 2,934 |  |  |  | 3,671 |  |  |  | (62 | ) |  |  | 6,543 |  |  |  | 2,870 |  |  |  | 3,670 |  |  |  | (67 | ) |  |  | 6,473 |  |  |  | 2,537 |  |  |  | 3,085 |  |  |  | (48 | ) |  |  | 5,574 |
Selling, general, and administrative (2) |  |  | 500 |  |  |  | 494 |  |  |  | 114 |  |  |  | 1,108 |  |  |  | 518 |  |  |  | 521 |  |  |  | 121 |  |  |  | 1,160 |  |  |  | 488 |  |  |  | 482 |  |  |  | 128 |  |  |  | 1,098 |
Depreciation and amortization |  |  | 221 |  |  |  | 115 |  |  |  | 7 |  |  |  | 343 |  |  |  | 183 |  |  |  | 111 |  |  |  | 8 |  |  |  | 302 |  |  |  | 179 |  |  |  | 115 |  |  |  | 7 |  |  |  | 301 |
(Gain)/loss on sales of fixed assets |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1 | ) |  |  | (4 | ) |  |  | 2 |  |  |  | (3 | ) |  |  | 2 |  |  |  | - |  |  |  | (2 | ) |  |  | - |
Operating profit |  | $ | 475 |  |  | $ | 608 |  |  | $ | (207 | ) |  | $ | 876 |  |  | $ | 507 |  |  | $ | 371 |  |  | $ | (227 | ) |  | $ | 651 |  |  | $ | 331 |  |  | $ | 137 |  |  | $ | (204 | ) |  | $ | 264 |
Reconciliation to income before income taxes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest and financial costs |  |  | - |  |  |  | - |  |  |  | (91 | ) |  |  | (91 | ) |  |  | - |  |  |  | - |  |  |  | (88 | ) |  |  | (88 | ) |  |  | - |  |  |  | - |  |  |  | (78 | ) |  |  | (78 | )
Interest income |  |  | - |  |  |  | - |  |  |  | 38 |  |  |  | 38 |  |  |  | - |  |  |  | - |  |  |  | 28 |  |  |  | 28 |  |  |  | - |  |  |  | - |  |  |  | 19 |  |  |  | 19 |
Equity income (loss) in unconsolidated affiliates |  |  | 33 |  |  |  | 3 |  |  |  | - |  |  |  | 36 |  |  |  | 111 |  |  |  | 8 |  |  |  | - |  |  |  | 119 |  |  |  | 71 |  |  |  | (3 | ) |  |  | - |  |  |  | 68 |
Other expenses, net |  |  | - |  |  |  | - |  |  |  | (28 | ) |  |  | (28 | ) |  |  | - |  |  |  | - |  |  |  | (98 | ) |  |  | (98 | ) |  |  | - |  |  |  | - |  |  |  | (35 | ) |  |  | (35 | )
Income before income taxes |  | $ | 508 |  |  | $ | 611 |  |  | $ | (288 | ) |  | $ | 831 |  |  | $ | 618 |  |  | $ | 379 |  |  | $ | (385 | ) |  | $ | 612 |  |  | $ | 402 |  |  | $ | 134 |  |  | $ | (298 | ) |  | $ | 238 |
Other segment information: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  | $ | 255 |  |  | $ | 86 |  |  | $ | 10 |  |  | $ | 351 |  |  | $ | 198 |  |  | $ | 68 |  |  | $ | 17 |  |  | $ | 283 |  |  | $ | 131 |  |  | $ | 71 |  |  | $ | 12 |  |  | $ | 214 |
Investment in unconsolidated affiliates |  | $ | 158 |  |  | $ | 5 |  |  | $ | - |  |  | $ | 163 |  |  | $ | 211 |  |  | $ | - |  |  | $ | - |  |  | $ | 211 |  |  | $ | 87 |  |  | $ | 30 |  |  | $ | - |  |  | $ | 117 |
Total assets |  | $ | 5,054 |  |  | $ | 4,895 |  |  | $ | 1,412 |  |  | $ | 11,361 |  |  | $ | 4,777 |  |  | $ | 5,509 |  |  | $ | 1,008 |  |  | $ | 11,294 |  |  | $ | 4,126 |  |  | $ | 4,745 |  |  | $ | 1,264 |  |  | $ | 10,135 |
(1) Sales from one segment to another generally are priced at estimated equivalent commercial selling prices; however, segments originating an external sale are credited with the full profit to the Company. Eliminations and corporate costs include intercompany transactions conducted between the three reporting segments that are eliminated in consolidation, as well as corporate costs not allocated to the segments. Intercompany transactions within each reporting segment are eliminated within each reporting segment. Also included in the eliminations and corporate costs column are capital expenditures and total assets related to corporate. Corporate assets consist primarily of cash and fixed assets. (2) Included in cost of revenue and selling, general, and administrative expenses are pre-tax charges (credits) within Other Items of $(109) million, $51 million, and $114 million, for the years ended December 31, 2024, 2023, and 2022, respectively. Other Items included in cost of revenue for 2024 includes a credit related to a gain on business divestiture (Energy Equipment $130 million); credits related to gains on sales of previously reserved inventory (Energy Equipment $3 million); charges related to severance and other restructuring costs (Energy Products and Services $8 million and Energy Equipment $15 million), and a credit related to Russia impairment (Energy Products and Services $1 million). Other Items included in selling, general, and administrative expenses for 2023 includes charges related to voluntary early retirement program (VERP) (Energy Products and Services $29 million and Energy Equipment $19 million); credit related to release of an earnout accrual (Energy Equipment $25 million); charges related to severance and other restructure costs (Energy Equipment $10 million). Other items included in cost of revenue for 2023 include a non-cash discount charge on royalty receivables (Energy Products and Services $25 million); credits related to gains on sales of previously reserved inventory (Energy Products and Services $1 million and Energy Equipment $19 million); charges related to severance and other restructuring costs (Energy Equipment $1 million). Other Items included in selling, general, and administrative expenses for 2022 include Russia impairment and other charges (Energy Products and Services $11 million and Energy Equipment $40 million). Other items included in cost of revenue for 2022 include Russia impairment and other charges (Energy Products and Services $60 million and Energy Equipment $12 million); charges related to severance and other restructuring costs (Energy Products and Services $2 million and Energy Equipment $6 million); and credits related to gains on sales of previously reserved inventory (Energy Products and Services $1 million and Energy Equipment $34 million). Geographic Areas: The following table presents consolidated revenues by country based on sales destination of the products or service (in millions):
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
United States |  | $ | 2,984 |  |  | $ | 2,933 |  |  | $ | 2,603 |
Other Countries |  |  | 5,886 |  |  |  | 5,650 |  |  |  | 4,634 |
Total |  | $ | 8,870 |  |  | $ | 8,583 |  |  | $ | 7,237 |
The following table presents net property, plant and equipment by country based on the location (in millions):
|  | December 31, |
|  | 2024 |  |  | 2023 |
United States |  | $ | 928 |  |  | $ | 906 |
Saudi Arabia |  |  | 303 |  |  |  | 258 |
Other Countries |  |  | 691 |  |  |  | 701 |
Total |  | $ | 1,922 |  |  | $ | 1,865 |

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- Definition The entire disclosure for reporting segments including data and tables. 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