SLB N.V. (NYSE:SLB)

Over the five-year period, the value of property, plant, and equipment exhibited a generally increasing trend, although fluctuations were present within individual asset categories. Land holdings initially decreased before showing a recovery in the final year. Buildings & improvements and Machinery & equipment, representing the bulk of fixed assets, both demonstrated growth, albeit with some interim declines. Accumulated depreciation consistently increased, offsetting a portion of the gross fixed asset increases, resulting in a net increase in the value of fixed assets less accumulated depreciation.

Land

The value of land decreased from US$372 million in 2021 to US$326 million in 2022, and continued to decline slightly to US$323 million in 2023. A further decrease to US$315 million was observed in 2024, before a notable increase to US$368 million in 2025. This suggests potential land sales in the earlier part of the period followed by acquisitions or revaluation in the final year.

Buildings & Improvements

Buildings & improvements experienced a slight decrease from US$4,371 million in 2021 to US$4,328 million in 2022. Subsequently, the value increased to US$4,569 million in 2023, dipped slightly to US$4,510 million in 2024, and then rose significantly to US$5,289 million in 2025. This indicates ongoing investment in building infrastructure, with a substantial increase in the most recent year.

Machinery & Equipment

Machinery & equipment, the largest component of fixed assets, decreased from US$24,334 million in 2021 to US$23,732 million in 2022. The value then increased to US$25,073 million in 2023, decreased slightly to US$24,748 million in 2024, and continued to increase to US$26,388 million in 2025. This pattern suggests a cycle of asset replacement and expansion, with a clear upward trend over the period.

Fixed Assets (Gross)

Total fixed assets followed the trends of its components, decreasing from US$29,077 million in 2021 to US$28,386 million in 2022, then increasing to US$29,965 million in 2023, US$29,573 million in 2024, and finally reaching US$32,045 million in 2025. The overall trend is positive, indicating net investment in fixed assets.

Accumulated Depreciation

Accumulated depreciation consistently increased throughout the period, from -US$22,648 million in 2021 to -US$24,151 million in 2025. This is expected as assets age and are utilized, and reflects the ongoing consumption of the economic benefits embedded within the fixed asset base.

Fixed Assets Less Accumulated Depreciation (Net Book Value)

The net book value of fixed assets increased from US$6,429 million in 2021 to US$6,607 million in 2022, then to US$7,240 million in 2023, US$7,359 million in 2024, and finally to US$7,894 million in 2025. This growth indicates that investment in new assets and improvements outweighed the impact of depreciation, resulting in a growing net asset base.

The analysis of property, plant, and equipment reveals a consistent pattern regarding asset age and useful life over the five-year period. The average age ratio demonstrates a generally decreasing trend, while the estimated total useful life and elapsed time since purchase exhibit stability before experiencing a decline towards the end of the period.

Average Age Ratio

The average age ratio decreased from 78.90% in 2021 to 76.24% in 2025. This indicates a relative slowing in the aging of the asset base as a percentage of total useful life. The most significant decrease occurred between 2021 and 2022 (1.28%), followed by a smaller decrease between 2022 and 2023 (0.96%). The rate of decline slowed considerably in subsequent years, with only minor changes observed between 2023 and 2024, and between 2024 and 2025.

Useful Life and Age

The estimated total useful life remained stable at 20 and 21 years between 2021 and 2023. A decrease to 19 years was observed in 2024, followed by a further reduction to 18 years in 2025. Simultaneously, the estimated age, representing the time elapsed since purchase, remained constant at 16 years through 2023, then decreased to 14 years in 2024 and remained at 14 years in 2025. This suggests a potential shift in the composition of the asset base, with newer assets being added or a reassessment of the useful lives of existing assets.

Remaining Useful Life

The estimated remaining useful life initially increased from 4 years in 2021 to 5 years in 2023, aligning with the stable useful life estimates. However, it then stabilized at 5 years in 2024 before decreasing to 4 years in 2025, mirroring the decline in the estimated total useful life. This indicates that, despite the initial extension, the overall remaining life of the asset base is contracting.

In summary, the asset base appears to be aging at a slower rate relative to its useful life, but the overall estimated useful life is decreasing, which could impact future depreciation expenses and potential capital expenditure requirements.

An examination of the financial information reveals trends in accumulated depreciation, fixed assets, land holdings, and the average age ratio over a five-year period. Overall, fixed assets have experienced moderate fluctuations while accumulated depreciation has generally increased, impacting the average age ratio which demonstrates a relatively stable, albeit slightly decreasing, pattern.

Accumulated Depreciation

Accumulated depreciation decreased from US$22,648 million in 2021 to US$21,779 million in 2022. A subsequent increase was observed in 2023, reaching US$22,725 million, followed by a slight decrease to US$22,214 million in 2024. The most significant increase occurred in 2025, with accumulated depreciation rising to US$24,151 million. This suggests an acceleration in the rate of asset depreciation in the latest year.

Fixed Assets

Fixed assets decreased from US$29,077 million in 2021 to US$28,386 million in 2022. An increase to US$29,965 million was noted in 2023, followed by a minor decrease to US$29,573 million in 2024. A more substantial increase occurred in 2025, with fixed assets reaching US$32,045 million. This indicates a net investment in fixed assets, particularly in the final year of the period.

Land

Land holdings decreased steadily from US$372 million in 2021 to US$315 million in 2024. A slight increase was observed in 2025, with land holdings rising to US$368 million. The overall trend suggests a minor reduction in land assets, with a partial recovery in the most recent year.

Average Age Ratio

The average age ratio exhibited a gradual downward trend, decreasing from 78.90% in 2021 to 75.92% in 2024. A slight increase to 76.24% was observed in 2025. This suggests that, on average, the fixed asset base is becoming relatively newer over time, although the rate of decrease has slowed in the latest year. The ratio remains consistently high, indicating a significant portion of the fixed asset base is comprised of depreciated assets.

The combined effect of increasing fixed assets and increasing accumulated depreciation suggests ongoing asset replacement or additions. The slight increase in the average age ratio in 2025 warrants further investigation to determine if this represents a temporary fluctuation or a shift in the asset renewal strategy.

Over the five-year period, the value of fixed assets experienced fluctuations, beginning at US$29,077 million in 2021, decreasing to US$28,386 million in 2022, and then increasing to US$29,965 million in 2023. This upward trend continued into 2024 with a value of US$29,573 million, culminating in US$32,045 million in 2025. Land holdings decreased from US$372 million in 2021 to US$315 million in 2024 before increasing to US$368 million in 2025.

Depreciation expense exhibited a consistent upward trend throughout the period. Starting at US$1,402 million in 2021, it rose to US$1,445 million in 2023, and further increased to US$1,733 million in 2025. This suggests a potential increase in the asset base subject to depreciation or a change in depreciation methods.

Estimated Total Useful Life

The estimated total useful life of the fixed assets demonstrated a declining trend. It began at 20 years in 2021, increased to 21 years in both 2022 and 2023, then decreased to 19 years in 2024, and finally to 18 years in 2025. This reduction in estimated useful life could indicate an acceleration in the rate at which assets are becoming obsolete, increased utilization leading to faster wear and tear, or a deliberate change in accounting estimates. The decrease in estimated useful life, coupled with the increasing depreciation expense, suggests a potentially more aggressive depreciation policy or a shift towards assets with shorter lifespans.

The combination of fluctuating fixed asset values and a decreasing estimated useful life warrants further investigation. The increase in depreciation expense should be analyzed in conjunction with the changes in the asset base to determine the underlying drivers. The increase in fixed assets in 2025, alongside the continued decline in estimated useful life, may indicate significant capital investments in assets with shorter expected lifecycles.

Analysis reveals a complex relationship between accumulated depreciation, annual depreciation expense, and the reported time elapsed since the most recent major property, plant, and equipment (PP&E) purchases. While the time elapsed since purchase decreased in later periods, accumulated depreciation and depreciation expense exhibited fluctuating trends.

Accumulated Depreciation

Accumulated depreciation decreased from US$22,648 million in 2021 to US$21,779 million in 2022, representing a reduction of approximately 3.8%. However, it subsequently increased to US$22,725 million in 2023 and further to US$24,151 million in 2025. This suggests a potential shift in depreciation patterns or the acquisition of new depreciable assets, offsetting the ongoing depreciation of existing assets. The increase between 2023 and 2025 is particularly notable.

Depreciation of Fixed Assets

Depreciation expense experienced a slight decrease from US$1,402 million in 2021 to US$1,368 million in 2022. A subsequent increase was observed in 2023 (US$1,445 million) and 2024 (US$1,551 million), culminating in US$1,733 million in 2025. This upward trend in depreciation expense aligns with the increasing accumulated depreciation, indicating a growing depreciation base. The rate of increase in depreciation expense accelerated in the later periods.

Time Elapsed Since Purchase

The reported time elapsed since purchase remained constant at 16 years from 2021 to 2023. A significant decrease to 14 years was then recorded in both 2024 and 2025. This reduction suggests substantial new PP&E acquisitions occurred between 2023 and 2024, resetting the average age of the asset base. The consistency at 14 years in the final two periods implies a sustained level of recent investment.

Relationship Between Metrics

The decrease in time elapsed since purchase in 2024 and 2025, coupled with the increasing depreciation expense, suggests a pattern of reinvestment in PP&E. While accumulated depreciation initially decreased, it ultimately increased, likely due to the addition of new assets and the continued depreciation of the existing asset base. The increasing depreciation expense confirms the growing depreciation base resulting from these investments.

Further investigation into the nature of these PP&E acquisitions and the depreciation methods employed would provide a more comprehensive understanding of these trends.

The value of fixed assets less accumulated depreciation has generally increased over the observed period, rising from US$6,429 million in 2021 to US$7,894 million in 2025. This indicates continued investment in property, plant, and equipment. Land holdings experienced a decrease from 2021 to 2024, followed by an increase in 2025. Depreciation expense has consistently increased each year, from US$1,402 million in 2021 to US$1,733 million in 2025, which is consistent with a growing asset base.

Estimated Remaining Life

The estimated remaining life of the fixed assets initially increased from four years in 2021 to five years from 2022 to 2024, potentially reflecting revisions to asset utilization or depreciation methodologies. A decrease to four years is then observed in 2025. This shift could indicate an anticipated acceleration in the obsolescence or replacement of assets, or a change in the company’s assessment of asset longevity.

The increasing depreciation expense, coupled with the fluctuating estimated remaining life, warrants further investigation. While the increase in depreciation aligns with the growth in fixed assets, the reduction in estimated remaining life in the most recent year suggests a potential need to reassess the long-term carrying value of these assets. The decrease in land value from 2021-2024, followed by a rebound in 2025, may be attributable to land sales, revaluations, or acquisitions.

Relationship between Fixed Assets and Depreciation

The ratio of depreciation to fixed assets less accumulated depreciation provides insight into the rate at which assets are being expensed. This ratio was approximately 21.8% in 2021, 20.7% in 2022, 19.9% in 2023, 21.1% in 2024, and 21.9% in 2025. The relative stability of this ratio, despite the increasing depreciation expense, suggests that the company is consistently applying its depreciation methods to the growing asset base. The slight increase in 2025 may be linked to the reduced estimated remaining life.

Continued monitoring of these trends, particularly the estimated remaining life and depreciation expense, is recommended to ensure accurate financial reporting and to assess the potential impact on future profitability and cash flows.