Why is SLB changing its reporting segments?

SLB is changing its reporting segments primarily due to the recent acquisitions of Smith International and Geoservices. The new structure is designed to better reflect the integrated operations of the combined entities and provide a more cohesive view of the business.

What is the purpose of the unaudited pro forma financial information?

The unaudited pro forma financial information is provided to offer investors an additional perspective on the company's results under the new reporting structure. It presents historical data as if the Smith and Geoservices acquisitions had occurred on January 1, 2008, allowing investors to see how these segments might have performed historically under the new alignment.

Does the pro forma information include the expected benefits of the acquisitions, like synergies?

No, the pro forma information is based on historical financials adjusted for transactions and does not reflect any cost savings, operating synergies, revenue enhancements, or integration costs that may result from the acquisitions. It is a historical presentation of the new structure, not a projection of future benefits.

SLB 8-K: Regulation FD

Q: What are the new reporting segments for SLB?

Effective Q1 2011, SLB will report based on three product groups: Reservoir Characterization Group, Drilling Group, and Reservoir Production Group. Additionally, the distribution business acquired from Smith will be reported as a separate segment. The company will continue to report on a geographical basis as well.

Summary

SLB Limited/NV (SLB) announced a significant change in its primary reporting segments, effective Q1 2011. This strategic shift, driven by recent acquisitions of Smith International and Geoservices, will move from its current Oilfield Services and WesternGeco segments to a new structure based on product groups. These new groups are the Reservoir Characterization Group, Drilling Group, and Reservoir Production Group. Additionally, the distribution business acquired from Smith will be reported as a separate segment. This change aims to provide a more integrated view of the company's operations post-acquisitions. To aid investors in understanding the impact of this segment realignment, SLB is furnishing unaudited pro forma historical consolidated financial information. This pro forma data presents financial results as if the Smith and Geoservices acquisitions had occurred on January 1, 2008, applying the new reporting structure. Investors should note that this pro forma information is presented for informational purposes and does not include any potential cost savings, synergies, integration costs, or future operating projections. The actual segment reporting will commence with the Q1 2011 Form 10-Q filing.

Key Highlights

1SLB is changing its primary reporting segments effective Q1 2011 due to recent acquisitions.
2The new reporting structure will be based on three main product groups: Reservoir Characterization, Drilling, and Reservoir Production.
3The distribution business acquired from Smith International will be reported as a separate segment.
4The company is providing unaudited pro forma historical financial information reflecting the new segment structure and the impact of acquisitions from January 1, 2008.
5This pro forma information is for informational purposes and does not include cost savings, synergies, or integration costs.
6The pro forma data is not indicative of future results or what the combined company's performance would have been had acquisitions occurred earlier.
7Actual segment reporting under the new structure will begin with the Q1 2011 Form 10-Q filing.

SLB LIMITED/NV 8-K Report, Regulation FD Disclosure (Dec 9, 2010)

Summary

Key Highlights

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