UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
☑ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31 2020, 2023
OR
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________ to __________
Commission File Number 1-4601
Schlumberger N.V. (Schlumberger Limited)
(Schlumberger Limited)
(Exact name of registrant as specified in its charter)
Curaçao | 52-0684746 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |
42 rue Saint-Dominique | 75007 | |
5599 San Felipe, 17th Floor | 77056 | |
62 Buckingham Gate London, United Kingdom | SW1E 6AJ | |
Parkstraat 83 | 2514 JG | |
(Addresses of principal executive offices) | (Zip Codes) |
Registrant’s telephone number in the United States, including area code, is: (713) (713) 513-2000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, par value $0.01 per share | SLB | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes☑ No☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes☐No☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☑No☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) Yes☑ No☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO ☑
As of June 30, 2020,2023, the aggregate market value of the common stock of the registrant held by non-affiliates of the registrant was approximately $25.50$69.70 billion.
As of December 31, 2020,2023, the number of shares of common stock outstanding was 1,392,325,960.1,427,394,843.
DOCUMENTS INCORPORATED BY REFERENCE
Certain information required to be furnished pursuant to Part III of this Form 10-K is set forth in, and is incorporated by reference from, Schlumberger’sthe registrant’s definitive proxy statement for its 20212024 Annual General Meeting of Stockholders,Shareholders, to be filed by Schlumbergerthe registrant with the Securities and Exchange Commission (“SEC”) pursuant to Regulation 14A within 120 days after December 31, 20202023 (the “2021“2024 Proxy Statement”).
SCHLUMBERGER LIMITED
Table of Contents
Form 10-K
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PART I | ||
Item 1. | 3 | |
Item 1A. | 10 | |
Item 1B. | 14 | |
Item 1C. | 14 | |
Item 2. |
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Item 3. |
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Item 4. | 15 | |
PART II |
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Item 5. |
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Item 6. |
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Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 7A. |
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Item 8. |
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Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
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Item 9A. |
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Item 9B. | 60 | |
Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 60 |
PART III |
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Item 10. | Directors, Executive Officers and Corporate Governance |
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Item 11. |
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Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
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Item 13. | Certain Relationships and Related Transactions, and Director Independence |
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Item 14. | 61 | |
PART IV |
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Item 15. |
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Item 16. |
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Certifications |
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PART I
Item 1. Business.
All references in this report to “Registrant,” “Company,” “Schlumberger,“SLB,” “we” or “our” are to Schlumberger Limited (Schlumberger N.V.) and its consolidated subsidiaries.
Schlumberger is
We are SLB, a global technology company that partners with customers to accessdriving energy by providing leading digital solutions and deploying innovative technologies to enable performance and sustainability for the global energy industry. Schlumberger collaborates to create technology that unlocks access to energy for the benefit of all.
Organizational Structure
During 2020, Schlumberger restructured its organization in order to prepareinnovation for a changing industrybalanced planet. With a global presence in more than 100 countries and employees representing almost twice as many nationalities, we work each day on innovating energy technology, delivering digital at scale, decarbonizing industries, and developing and scaling new energy systems that accelerate the energy transition.
Today, the world faces the challenge of providing secure and affordable energy to meet growing demand, while rapidly decarbonizing for a sustainable future. With nearly a century of market and technology leadership, SLB is well positioned and committed to being a leader in providing solutions to address this trilemma.
In October 2022, we changed our brand name to SLB and unveiled a new logo that underscores our vision for a decarbonized energy future. This new structurebold change highlighted our leadership as a global technology company focused on driving energy innovation within traditional energy sources and beyond. The SLB brand builds on nearly a century of technology innovation and industrialization. Our identity symbolizes SLB's commitment to moving farther and faster in facilitating the world's energy needs today and forging the road ahead for a sustainable future.
SLB is aligned with customer workflows and is directly linked to Schlumberger’s corporate strategy, a key element of which is customer collaboration.
The new organization consists oforganized under four Divisions that combine and integrate Schlumberger’sSLB’s technologies, enhancing the portfolio of capabilities thatour ability to support the emerging long-term growth opportunities in each of these market segments.
The four Divisions are:
• Digital & Integration • Reservoir Performance • Well Construction • Production Systems
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The role of the Divisions is to support Schlumberger in executing its customer-centric performance strategy and maintaining its industry leadership role in technology development and services integration. The Divisions are collectively responsible for driving performance throughout their respective business lines; overseeing operational processes, resource allocation and personnel; and delivering superior financial results.
Digital & Integration – Combines Schlumberger’s softwareSLB’s industry-leading digital solutions and seismic businessesdata products with its integrated offering of Asset Performance Solutions (“APS”). APS helps develop or redevelop fields while increasing production, improving cash flow, and extending recoveryThis Division enables greater performance for our customers by providing fit-for-purpose solutions. Through digital solutionsreducing cycle times and technologies, supported by the future of software, digital, infrastructure, connected assets,risk, accelerating returns, increasing productivity, and data, this Division enhances efficiency to improve assetlowering costs and enterprise-wide performance for customers.carbon emissions.
The primary offerings comprising this Division are:
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APS creates alignment between Schlumberger and the asset holder and/orintegration of adjacent energy systems. Offerings are founded upon proprietary and open-source data platform technologies, industry-leading simulators and workflow tools, and include domain-specific application of innovative digital capabilities, such as artificial intelligence and machine learning. Solutions are deployable on traditional on-premise IT infrastructures, the operator by Schlumberger receiving remuneration in line with its value creation. These projects are generally focused on developingcloud, and co-managing productionthe edge, allowing for full market coverage irrespective of customer assets under long-term agreements. Schlumberger invests its ownconstraints.
portion of the services or products it provides, generally Schlumberger will not be paid at the time of providing its services or upon delivery of its products. Instead, Schlumberger is generally compensated based on cash flow generated or on a fee-per-barrel basis. This includes certain arrangements whereby Schlumberger is only compensated based on incremental production that it helps deliver above a mutually agreed baseline.
Reservoir Performance – Consists of reservoir-centric technologies and services that are critical to optimizing reservoir productivity and performance. Reservoir Performance develops and deploys innovative technologies and services to evaluate, intervene, and stimulate reservoirs that helpproviding customers understand subsurfacewith greater insights into their assets and maximizemaximizing their value.return on investment.
The primary offerings comprising this Division are:
| • Wireline: Provides the information necessary to evaluate subsurface geology and fluids to plan and monitor well construction and to monitor and evaluate well production through both openhole and cased hole services, including wireline logging and perforating. • Testing: Provides exploration and production pressure and flow-rate measurement services both at the surface and downhole supported by a network of laboratories that facilitate rock and fluid characterization. • Stimulation and Intervention: Provides services used during well completions, as well as those used to maintain optimal production throughout the life of a well, |
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On December 31, 2020, Schlumberger contributed its onshore hydraulic fracturing business in the United States and Canada (“OneStim®”), including its pressure pumping, pumpdown perforating,well stimulation, and Permian frac sand businesses, to Liberty Oilfield Services Inc. (“Liberty”), in exchangecoiled tubing equipment for a 37% equity interest in Liberty. OneStim’s historical results were reported as part of the Reservoir Performance Division through the closing of the transaction.downhole mechanical well intervention and coiled-tubing drilling, reservoir monitoring, and downhole data acquisition.
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Well Construction – Combines the full portfolio of products and services to optimize well placement and performance, maximize drilling efficiency, and improve wellbore assurance. Well Construction provides operators and drilling rig manufacturers with services and products related to designing and constructing a well.
The primary offerings comprising this Division are:
• Drilling & Measurements: Provides mud logging services for geological and drilling surveillance, directional drilling, measurement-while-drilling, and logging-while-drilling services for all well profiles as well as engineering support. • Drilling Fluids: Supplies individually engineered drilling fluid systems that improve drilling performance and maintain well control and wellbore stability throughout drilling operations. • Drill Bits: Designs, manufactures, and markets roller cone and fixed cutter drill bits for all drilling environments. • Drilling Tools: Includes a wide variety of bottomhole assembly and borehole enlargement technologies for drilling operations. • Well Cementing: Provides products and services that secure and protect well casings while isolating fluid zones and maximizing wellbore activity. • Integrated Well Construction: Provides integrated solutions to construct or change the architecture (re-entry) of wells, including well planning, well drilling, engineering, supervision, logistics, procurement and contracting of third parties, and drilling rig management. • Rigs and Equipment: Provides drilling equipment, including pressure control equipment and rotary drilling equipment, and services for shipyards, drilling contractors, operators, and rental tool companies, as well as land drilling rigs and related services. |
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Production Systems – Develops technologies and provides expertise that enhance production and recovery from subsurface reservoirs to the surface, into pipelines, and to refineries. Production Systems provides a comprehensive portfolio of equipment and services including subsurface production systems, subsea and surface equipment and services, and midstream production systems.
The primary offerings comprising this Division are:
• Artificial Lift: Provides production equipment and optimization services using electrical submersible pumps, gas lift equipment, progressing cavity pumps, and surface horizontal pumping systems. • Completions Equipment: Supplies well completion services and equipment that include packers, safety valves, and sand control technology, as well as a range of intelligent well completions technology and equipment. • Surface: Designs and manufactures onshore and offshore platform wellhead systems and processing solutions, including valves, chokes, actuators, and surface trees, and provides services to operators. • Valves: Serves portions of the upstream, midstream, and downstream markets and provides valve products that are primarily used to control and direct the flow of hydrocarbons as they are moved from wellheads through flow lines, gathering lines, and transmission systems to refineries, petrochemical plants, and industrial centers for processing. • Processing: Enables efficient monetization of subsurface assets using standard and custom-designed onshore, offshore, and downstream processing and treatment systems, as well as unique, reservoir-driven, fit-for-purpose integrated production systems for accelerating first production and maximizing project economics. • OneSubsea™: Provides integrated solutions, products, systems, and services for the subsea market, including integrated subsea production systems involving wellheads, subsea trees, manifolds and flowline connectors, control systems, connectors and services designed to maximize reservoir recovery and extend the life of each field. On October 2, 2023, SLB, Aker Solutions (“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. SLB owns 70% of the joint venture, while Aker owns 20% and Subsea7 owns 10%. As the majority owner and controlling entity, SLB is considered the acquirer and reflects OneSubsea as a consolidated subsidiary in its Consolidated Financial Statements. SLB's four Divisions operate through a geographical structure of four Basins that are aligned with critical concentrations of activity: Americas Land, Offshore Atlantic, Middle East & North Africa, and Asia. The Basins are configured around common regional characteristics that enable us to deploy fit-for-purpose technologies, operating models, and skills to meet the specific customer needs in each Basin. The Basins are further organized into GeoUnits, which can be a region, a single country, or made up of several countries. With a strong focus on customers, the Basins identify opportunities for growth, and are focused on agility, responsiveness, and competitiveness. |
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Supporting the Divisions is a global network of research and engineeringdevelopment centers. Through these centers through which Schlumberger advances itswe advance SLB’s technology programs to enhance industry efficiency, and sustainability, lower finding and producing costs, improve productivity, maximize reserve recovery, and increase asset value while accomplishing these goals safely.safely, securely, and sustainably. These centers also support SLB's New Energy investments in lower carbon energy sources and carbon capture technologies.
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Corporate Strategy
The evolving marketplace will require bold new technologies and ideas, digital transformation and a deep commitment to sustainability. With a balanced energy transition in mind, our strategy is focused on three engines of growth: Core, Digital and New Energy.
Core
Consisting of our Reservoir Performance, WeIl Construction and Production Systems Divisions, are deployed aroundCore remains SLB’s largest engine of growth. Building on decades of technology advancement, we will continue innovating new products, services and technologies that make the exploration, development and production of oil and gas assets cleaner, more resilient, and more efficient, with lower carbon emissions and less impact on the environment.
We continue to build on our fit-for-basin approach and technology access initiatives, developing bespoke and custom technology tailored to the regions and environments in which we operate. This strategy allows us to address the rapid evolution of our industry into more regional markets, each with distinct resource plays and economics.
With the continued growth of digitally enabled technologies that improve efficiency and performance, including our Transition Technologies™ portfolio and our SLB End-to-end Emissions Solutions (SEES) methane elimination business, SLB provides solutions that enable customers to increase production from their reserves at a geographical structurecompetitive cost and at a lower carbon intensity per barrel equivalent.
Digital
Digital capabilities continue to grow throughout the energy industry as a key element of five Basins: Americas Land, Offshore Atlantic, Middle Eastthe complex systems required to meet current energy demand and North Africa, Asia, and Russia and Central Asia. The Basins are a collection of GeoUnits, which consistto harness the promise of a single countrylower-carbon future. SLB is uniquely positioned to support customers on their digital journeys by managing data migration, workflow redesign, and transition to the cloud.
SLB’s customers have access to leading digital products and services that help to meet their sustainability goals by driving transparency, better measurement, more effective planning, and more impactful and reliable outcomes. To continue elevating customer offerings, we are accelerating the adoption of our proprietary cloud offering Delfi™, enabling enterprise data management, delivering autonomous operations, and innovating through domain-driven artificial intelligence.
Our cloud-based solutions allow our customers to transition from our established software applications to our Delfi digital platform, and shift from a user-based license model to software-as-a-service (SaaS) subscriptions. This enables customers to evolve from legacy infrastructure and deliver new levels of value creation, with access to key resources such as storage and computing from our cloud partners and access to our industry-leading simulators. Our evolving offering of on-premises solutions allows us to support the digital transition journey of customers that prefer or are required to maintain data solutions locally.
New Energy
New Energy offers a significant opportunity to use SLB’s experience and scale to drive innovation for a low-carbon economy spanning industries beyond oil and gas. We are building a broad, diverse portfolio across New Energy sectors, selected for their materiality and adjacency to existing SLB strengths and our ability to offer differentiated technology.
Our New Energy portfolio builds on several countries, that each have common themesfundamental SLB strengths: our unique subsurface domain expertise, applicable beyond oil and gas; our ability to design and deploy complex processing and production systems as an original equipment manufacturer; our differentiated track record for innovation and industrialization; and our ability to deploy at scale in termsany region of strategy, economicthe world with local knowledge and operational drivers,talent.
SLB will continue building businesses and technology needs. With a strongforging partnerships across various industries to focus on the customerfive key areas: carbon solutions, hydrogen, geothermal and growth, the Basins are responsible for defining a Basin strategy in line with Schlumberger’s corporate strategygeoenergy, stationary energy storage, and identifying opportunities for future growth.
Corporate Strategy
Schlumberger’scritical minerals. Our ambition is to seed technology capabilities in each of these domains, and then grow throughout the decade, ultimately scaling our New Energy offering into the Company’s fastest growing and largest division.
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Sustainability
SLB’s emissions reduction strategy is at the center of everything it doesour identity and vision, and our commitment to a sustainable future is underscored by beingbold science-backed targets aligned with the Paris Agreement. In 2021, SLB became the first company that defines performance in the energy services industry. Schlumberger’s strategyindustry to commit to a 2050 net-zero greenhouse gas (“GHG”) emissions target including all three emission scopes.
By setting targets based on SLB’s total 2019 baseline GHG footprint—inclusive of Scope 3 emissions (which accounted for approximately 95% of SLB’s baseline)—and not just its Scope 1 and 2 footprint, SLB’s comprehensive emissions reduction roadmap addresses the entire energy value chain.
SLB’s 2050 net-zero target is structured aroundsupported by the following interim milestones, using 2019 as the baseline year:
- by 2025, a 30% reduction in Scope 1 and Scope 2 emissions;
- by 2030, a 50% reduction in Scope 1 and Scope 2 emissions; and
- by 2030, a 30% reduction in Scope 3 emissions.
SLB’s Scope 1 and 2 emissions primarily come from fuel use and electricity consumption. SLB’s Scope 3 emissions are indirect, such as emissions from customers’ use of SLB technology and emissions from our use of third-party goods and services.
There are three major themes: (i) strengthenkey components to SLB achieving the core; (ii) expand2050 net-zero target: reducing operational emissions, reducing customer emissions that occur while using SLB technology, and taking carbon-negative actions of sufficient scale to offset any residual operating and technology emissions that the go-to-market; and (iii) next horizons of growth.Company may have in 2050.
Strengthen the Core
Strengthening the core is focused on developing our people, collaboratingIn tandem with our customers and enhancing our technology performance to enable Schlumberger’s vision of customer performance. Maintaining capital discipline is also2050 net-zero commitment, SLB introduced a key element of strengthening the core—such as evaluating all investment decisions through the lens of return on capital rather than growth and evolving certain businesses into innovative models that are less capital intensive.
Expand the Go-to-Market
Schlumberger believes that a key shift in the industry is the greater prominence and interplay of regional, or basin-specific, supply and demand. The industry is witnessing a decoupling of the activity characteristics of each major region, resulting in a unique set of dynamics for each oil and gas basin across the world.
There are four main regions increasingly competing against each other for market access to meet global, regional and domestic energy demand: North America Land; Middle East; Russia and Central Asia; and offshore. These regions correspond to a different set of resource plays or basins, each facing different economic and operational drivers, which translates into different activity levels and cycles. Current geopolitical uncertainties and trade conflicts will only amplify this trend, resulting in the transition from a global market toward a more localized supply and demand dynamic.
As basins around the world decouple, a key differentiator for Schlumberger will be its “fit-for-basin” approach and ability. Basins have significantly different dynamics, including technological needs, in-country value, and market or technology access. Schlumberger is developing and deploying basin-specific technology that helps its customers overcome the challenges of their respective regions. In-country value enables regional efficiency and performance, while increasing local content and aligning with the strategic priorities of our clients.
Additionally, by employing different business models, Schlumberger will evolve the way it goes to market in certain regions. Schlumberger will seek to monetize its technology advantage by deploying alternative operating models such as selling or leasing selected technologies to regional service providers with a license to operate in these specific markets. Schlumberger expects this approach to expand its total addressable market.
Next Horizons of Growth
Schlumberger’s history and culture have been based on leadership, science and innovation since its founders invented wireline logging as a technique for obtaining downhole data in oil and gas wells. Continuing this tradition, Schlumberger will focus its future growth in two areas: digital innovation and new energy.
Schlumberger seeks to define the future of digital technology in the energy industry. The application of digital technology in field operations has the potential to deliver a step-change in operational workflows to significantly elevate performance. To take the next step in performance that our customers need to deliver energy in today’s competitive environment, Schlumberger is developing and using digital solutions, focused on generating richer data and better insights, that will achieve performance not previously possible across the energy industry.
Schlumberger is leveraging its portfolio of proprietary digital technologies as well as technologiesTransition Technologies™in 2021. This portfolio includes a select group of products and services that have transformed other industriesquantifiably reduce our customers’ GHG emissions footprint, while continuing to enable our customers to make betterdrive high performance, reliability, and faster decisions. Integrating digital technology into explorationefficiency. This portfolio is supported by an industry-leading impact quantification framework and production (“E&P”) workflows requires extensive domain expertise in upstream hardware and software technologies and in the management and interpretation of vast amounts of subsurface and production data. Schlumberger will continue to leadgrow as sustainability is further embedded in the digital transformation of the energy industry by applying its unique dataCompany’s research and digital expertise to every facet of the E&P life cycle.development process.
Through its New Energy portfolio, Schlumberger is investing in low carbon and carbon-neutral energy technologies that will provide a platform for future sustainable growth. Schlumberger recognizes that its future will expand beyond oil and gas with the energy transition, and consequently the Company is positioning for significant growth opportunities for the long term. Schlumberger New Energy is taking a business venture approach that will focus on energy efficiency and energy storage as a priority, aimed at developing unique positions in adjacent markets and introducing breakthrough technologies in energy verticals beyond oil and gas. Schlumberger will utilize its domain expertise in areas adjacent to its existing activities where it can deliver at scale with its global footprint and execution platform.
Human Capital
At December 31, 2020, Schlumberger employed approximately 86,000 people representingAs a leading global technology company that operates in more than 160 nationalities.
Schlumberger believes that100 countries with a workforce of approximately 111,000 people from diverse backgrounds, cultures, and nationalities, one of SLB’s greatest strengths is the diversity of its workforce is one of its greatest strengths and aims to maintain its employee population diversity in proportion to the revenue derived from the countries in which it works.
Schlumberger recognizesour people. We believe that itsour ability to attract, develop, motivate, and retain a highly competent and diverse workforce has been keyparamount to itsour success for many decades. As a service company, Schlumberger believes it is critical for its peopleWe recognize that cultivating diversity and promoting inclusion are essential to communicate with its customers in their native languagesattracting the best talent from around the world and enabling creativity and innovation to share the values of the peopledrive business success. We believe our strong culture focused on workforce diversity, inclusivity, and learning and development results in the countries where it works. Furthermore, Schlumberger’s diverse workforce is better able to respond to, and deliver services and products that meet the unique expectations and requirements of, its stakeholders, including customers, suppliers and stockholders. Schlumberger’sbest possible working environment for all our people.
Workforce Diversity
SLB's long-standing commitment to national and cultural diversity is reflected in our workforce composition and our philosophy to recruit and develop people from the communities in which we operate. Our workforce nationality mix generally aligns with the revenue derived from the countries in which we work, as reflected in the charts below. This fosters a culture that is global in outlook, yet local in practice, which permeates every layerpractice.
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SLB also recognizes the importance of the Company.
In addition to national and cultural diversity, achieving improved gender balance has been a focus of policy and action in Schlumberger since the late 1970s, when it began recruiting women for field operations roles. Since then, Schlumberger has continued to expand opportunities for women across its field operations, technology, business and management roles. Schlumberger believes that these gender diversity initiatives help it maintain itsas a source of creativity, innovation, and competitive advantage.
Schlumberger set its first gender balance target We are committed to leading our industry in 1994, with the goalthis area and, in this regard, a number of years ago we established goals of having women comprise 15%represent 25% of itsour salaried workforce by 2015. This goal was achieved ahead2025 and 30% by 2030. As of schedule in 2011. Schlumberger’s current gender balance goal is to haveDecember 31, 2023, women compriserepresented just under 25% of our salaried workforce.
Inclusivity
We are building on our diversity to foster a strong culture of inclusion, in which each person can feel accepted, respected, and empowered to perform at their best. SLB has numerous policies and programs to support our inclusive culture, including:
Learning and Development
SLB invests significantly in the Company’s salaried employee population. Additionally, approximately 21%learning and development of management roles were held by women in 2020.
Schlumberger is proud of its meritocratic culture, its commitment to early responsibility and internal promotion, and its “borderless career” philosophy. Schlumberger strivesour people. We strive to identify top talent within the Company,early, and to provide opportunities for employees who demonstrate exceptional competency and performance with opportunities to progress to higher levels within the organization. Schlumberger seeksThis allows us to nurture its talent pool to maximize each employee’s developmental potential through a combination of training and experience. Schlumberger’s “borderless career” philosophy means it supports flexible career paths, helping employees develop their skills across different functions, businesses and geographies. These opportunities accelerate careerpersonal development while maximizing performance, fostering an agile workforce with the skills necessary to lead SLB today and into the next generationfuture.
SLB believes that through diversity, inclusivity, and learning and development, we can support our people to reach their full potential which unlocks value for all of business leaders.our stakeholders.
Competition
The principal methods of competition within the energy services industry are technological innovation, quality of service, and price differentiation. These factors vary geographically with respect toand are dependent upon the different services and products that SchlumbergerSLB offers. SchlumbergerSLB has numerous competitors, both large and small.
Intellectual Property
SchlumbergerSLB owns andor controls a varietythe industry’s leading portfolio of intellectual property, including but not limited to patents, proprietary information, trade secrets, and software tools and applications that, in the aggregate, are material to Schlumberger’sSLB’s business. While SchlumbergerSLB seeks and holds numerousa significant number of patents covering various products and processes, no particular patent or group of patents is material to Schlumberger’sSLB’s business.
Seasonality
Seasonality
Seasonal changes in weather and significant weather events can temporarily affect the delivery of Schlumberger’sSLB’s products and services. For example, the spring thaw in Canada and other Northern climates and consequent road restrictions can affect activity levels, while the winter months in the North Sea, Russia, and China can produce severe weather conditions that can temporarily reduce levels of activity. In addition, hurricanes and typhoons can disrupt coastal and offshore operations. Furthermore, customer spending patterns for multiclient exploration
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data, software, and other oilfield services and products may result in higher activity in the fourth quarter of eachthe year as clients seek to fully utilize their annual budgets. Conversely, customer budget constraints in North America may lead to lower demand for our services and products in the fourth quarter of eachthe year.
Customers
Schlumberger’sCustomers
SLB’s primary customers are national oil companies, large integrated oil companies, and independent operators. No single customer exceeded 10% of Schlumberger’sSLB’s consolidated revenue during each of 2020, 20192023, 2022 and 2018.2021.
Governmental Regulations
SchlumbergerSLB is subject to numerous environmental legal and other governmental and regulatory requirements related to its operations worldwide. For additional details, see “Item 1(a). Risk Factors—Factors – Legal and Regulatory Risks”,Risks,” which is incorporated by reference in this Item 1.
Corporate Information
SchlumbergerSLB was founded in 1926 and1926. Schlumberger Limited, the NYSE-listed parent of the SLB family of companies, is incorporated under the laws of Curaçao. Schlumbergerao and has executive offices in Paris, Houston, London, and The Hague. The Company changed its brand name to SLB in 2022 but did not change the legal name of its listed parent company, which remains Schlumberger Limited.
Available Information
The SchlumbergerSLB website is www.slb.com. SchlumbergerSLB uses its Investor Relations website, www.slb.com/irhttps://investorcenter.slb.com/, as a routine channel for distribution of important information, including news releases, analyst presentations, and financial information. SchlumbergerSLB makes available, free of charge through its Investor Relations website at www.slb.com/ir,https://investorcenter.slb.com/, access to its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and Forms 3, 4 and 5 filed on behalf of directors and executive officers, and amendments to each of those reports, as soon as reasonably practicable after such material is filed with or furnished to the SEC. Alternatively, you may access these reports at the SEC’s website at www.sec.gov. Copies are also available, without charge, from SchlumbergerSLB Investor Relations, 5599 San Felipe, 17th Floor, Houston, Texas 77056. Unless expressly noted, the information on its website or any other website is not incorporated by reference in this Form 10-K and should not be considered part of this Form 10-K or any other filing SchlumbergerSLB makes with the SEC.
Information About Our Executive Officers
The following table sets forth, as of January 27, 2021,24, 2024, the names and ages of theSLB’s executive officers, of Schlumberger, including all offices and positions held by each forexecutive officer during the past five years.
Name | Age | Current Position and Five-Year Business Experience |
Olivier Le Peuch |
| Chief Executive Officer and Director, since August 2019; Chief Operating Officer, February 2019 to July 2019; and Executive Vice President, Reservoir and Infrastructure, May 2018 to February |
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Khaled Al Mogharbel |
| Executive Vice President, Geographies, since July 2020; Executive Vice President, Operations, April 2019 to June 2020; Executive Vice President, Eastern Hemisphere, February 2019 to March 2019; and President, Eastern Hemisphere, May 2017 to January |
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| Executive Vice President |
Abdellah Merad | 50 | Executive Vice President, |
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| April 2022; Executive Vice President, Performance Management, |
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| Chief Strategy and Sustainability Officer, since May 2021; Senior Vice President, |
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| Chief Technology Officer, since February 2020; and Senior Vice President, |
Dianne Ralston |
| Chief Legal Officer, since December |
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Carmen Rando Bejar | 46 | Chief People Officer, since April 2022; Vice President, Global Business Services, September 2019 to March 2022; and Operational Planning and Resource Manager, Drilling and Measurements, April 2018 to August 2019. |
Rakesh Jaggi | 54 | President, Digital and Integration, since April 2023; Senior Vice President, |
Gavin Rennick |
| President, New Energy, since April 2022; Vice President, Human Resources, |
Kevin Fyfe | 50 | Vice President and |
Howard Guild | 52 | Chief Accounting Officer, since July 2005. |
Ugo Prechner | 46 | Vice President and Controller, since August 2022; Well Construction Controller, July 2020 to July 2022; Controller Operations, August 2019 to June 2020; and M-I SWACO Controller, October 2017 to August 2019. |
Vijay Kasibhatla | 60 | Director, Mergers and Acquisitions, since January |
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Item 1A. Risk Factors.
The following discussion of risk factors known to us contains important information for the understanding of our “forward-looking statements,” which are discussed immediately following Item 7A. of this Form 10-K and elsewhere. These risk factors should also be read in conjunction with Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the Consolidated Financial Statements and related notes included in Item 8. Financial Statements and Supplementary Data of this Form 10-K.
We urge you to
Please carefully consider carefully the risks described below, which discuss the material factors that make an investment in our securities speculative or risky, as well asother material included or incorporated by reference in this Form 10-K, and other reports and materials that we file with the SEC and the other information included or incorporated by reference in this Form 10-K.SEC. Additional risks and uncertainties not currently known to us or that we currently deem immaterial maycould also materially adversely affect our business, reputation, financial condition, results of operations, cash flows and prospects.
Business and Operational Risks
Demand for our products and services is substantially dependent on the levels of expenditures by our customers. The current significantcustomers, which can change based on many factors, including fluctuations in oil and gas prices. Oil and gas industry downturn hasdownturns have resulted in reduced demand for oilfield products and services and lower expenditures by our customers, which has in the past had, and may continue toin the future have, a material adverse effect on our financial condition, results of operations and cash flows.
Demand for our products and services depends substantially on expenditures by our customers for the exploration, development and production of oil and natural gas reserves. These expenditures are generally dependent on our customers’ views of future demand for oil and naturalgas and future oil and gas prices, as well as theirour customers’ ability to access capital. These expenditures are also sensitiveIn addition, the transition of the global energy sector from a primarily fossil fuel-based system to a diverse system which includes renewable energy sources could affect our customers’ viewslevels of future economic growthexpenditures.
Actual and the resulting impact on demand for oil and natural gas.
The continued lowanticipated declines in oil and gas prices have also caused a reduction in cash flows for our customers, which has had a significant adverse effect on the financial condition of some of our customers. This haspast resulted in, and may continue toin the future result in, lower capital expenditures, project modifications, delays or cancellations, general business disruptions, and delays in payment of, or nonpayment of, amounts that are owed to us. These effects have had, and may continue toin the future have, a material adverse effect on our financial condition, results of operations and cash flows.
Historically, oil and natural gas prices have experienced significant volatility and can be affected by a variety of factors, including:
• changes in the supply of and demand for hydrocarbons, which are affected by general economic and business conditions; • the costs of exploring for, producing, and delivering oil and gas; • the ability or willingness of the Organization of Petroleum Exporting Countries and the expanded alliance known as OPEC+ to set and maintain production levels for oil; • the level of oil and gas exploration and production activity; • the level of excess production capacity; • the level of refining and storage capacity; • the level of oil and gas inventories; • access to potential resources; • political and economic uncertainty and geopolitical unrest; • governmental laws, policies, regulations, subsidies, and other actions, including initiatives to promote the use of renewable energy sources; • speculation as to the future price of oil and the speculative trading of oil and gas futures contracts; • technological advances affecting energy consumption; and • extreme weather conditions, natural disasters, and public health or similar issues, such as pandemics and epidemics.
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The oil and gas industry has historically experienced periodic downturns, which have been extremely cyclical. However, there can be no assurance that thecharacterized by diminished demand or pricing for oil and natural gas or for our products and services will follow historic patternsand downward pressure on the prices that we are able to charge. Sustained market uncertainty can also result in lower demand and pricing for our products and services. A significant industry downturn, sustained market uncertainty, or recover meaningfullyincreased availability of economical alternative energy sources could result in the near or medium term. Continued or worsening conditionsa reduction in the oildemand for our products and gas industry generally may have a further material adverse effect onservices, which could adversely affect our business, financial condition, results of operations, cash flows and prospects.
The COVID-19 pandemic has significantly reduced demand for our services,
Disruptions in the political, regulatory, economic, and has had, and is likely to continue to have, a material adverse effect on our financial condition, results of operations and cash flows.
The effectssocial environments of the COVID-19 pandemic, including actions taken by businesses and governments to contain the spread of the virus, have resulted in a significant and swift reduction in international and US economic activity. In our industry, geopolitical events that increased the supply of low-priced oil to the global market occurred at the same time that demand weakened due to the worldwide effects of the pandemic, leading to a collapse in oil prices in March 2020. These events together adversely affected the demand for oil and natural gas, as well as for our services and products, and caused significant volatility and disruption of the global financial markets. Other effects of the pandemic have included, and may continue to include, adverse revenue and net income effects; disruptions to our operations, including suspension or deferral of drilling activities; customer shutdowns of oil and gas exploration and production; downward revisions to customer budgets; limitations on access to sources of liquidity; employee impacts from illness, school closures and other community response measures; workforce reductions in response to activity declines; and temporary closures of our facilities or the facilities of our customers and suppliers. This period of extreme economic disruption, low oil prices and reduced demand for our products and services has had, and is likely to continue to have, a material adverse effect on our financial condition, results of operations and cash flows.
The extent to which our operating and financial results will continue to be affected by the COVID-19 pandemic will depend on various factors and consequences beyond our control, such as the duration and scope of the pandemic; additional actions by businesses and governments in response to the pandemic; and the speed and effectiveness of responses to combat the virus, including vaccine development and distribution. COVID-19, and the volatile regional and global economic conditions stemming from the pandemic, could also aggravate our other risk factors described in this Form 10-K.
A significant portion of our revenue is derived from our non-US operations, which exposes us to risks inherent in doing business in the more than 120 countries in which we generate revenue.
Our non-US operations accounted for approximately 81% of our consolidated revenue in 2020, 72% in 2019 and 68% in 2018. In addition to the risks addressed elsewhere in this section, our operations in countries other than the United States are subject to various risks, including:
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Severe weather, including extreme weather conditions associated with climate change, has in the past and may in the future adversely affect our operations and financial results.
Our business has been, and in the future will be, affected by severe weather in areas where we operate which could materially affect our operations and financial results. Extreme weather conditions such as hurricanes, flooding and landslides have in the past resulted in, and may in the future result in, the evacuation of personnel, stoppage of services and activity disruptions at our facilities, in our supply chain, or at well-sites. Particularly severe weather events affecting platforms or structures may result in a suspension of activities. In addition, impacts of climate change, such as sea level rise, coastal storm surge, inland flooding from intense rainfall and hurricane-strength winds may damage our facilities. Any such extreme weather-related events may result in increased operating costs or decreases in revenue which could adversely affect our financial condition, results of operations and cash flows.
Legal and Regulatory Risks
Our operations require us to comply with numerous laws and regulations, violations of which could have a material adverse effect on our operations, financial condition or cash flows.
Our operations are subject to international, regional, national, and local laws and regulations in every place where we operate, relating to matters such as environmental protection, health and safety, labor and employment, import/export controls, currency exchange, bribery and corruption, data privacy and cybersecurity, intellectual property, immigration, and taxation. These laws and regulations are complex, frequently change, and have tended to become more stringent over time. In the event the scope of these laws and regulations expands in the future, the incremental cost of compliance could adversely affect our financial condition, results of operations, or cash flows.
Our international operations are subject to anti-corruption and anti-bribery laws and regulations, such as the FCPA, the U.K. Bribery Act and other similar laws. We are also subject to trade control regulations and trade sanctions laws that restrict the movement of certain goods to, and certain operations in, various countries or with certain persons. Our ability to transfer people, products and data among certain countries is subject to maintaining required licenses and complying with these laws and regulations.
The internal controls, policies and procedures, and employee training and compliance programs we have implemented to deter prohibited practices may not be effective in preventing employees, contractors or agents from violating or circumventing such internal policies or from material violations of applicable laws and regulations. Any determination that we have violated or are responsible for violations of anti-bribery, trade control, trade sanctions or anti-corruption laws could have a material adverse effect on our financial condition. Violations of international and US laws and regulations or the loss of any required licenses may result in fines and penalties, criminal sanctions, administrative remedies or restrictions on business conduct, and could have a material adverse effect on our business, operations and financial condition. In addition, any major violations could have a significant effect on our reputation and consequently on our ability to win future business and maintain existing customer and supplier relationships.
Demand for our products and services could be reduced by existing and future legislation, regulations and public sentiment.
Regulatory agencies and environmental advocacy groups in the European Union, the United States and other regions or countries have been focusing considerable attention on the emissions of carbon dioxide, methane and other greenhouse gases and their role in climate change. There is also increased focus, including by governments and our customers, investors and other stakeholders, on these and other sustainability and energy transition matters. Existing or future legislation and regulations related to greenhouse gas emissions and climate change, as well as initiatives by governments, non-governmental organizations, and companies to conserve energy or promote the use of alternative energy sources, and negative attitudes toward or perceptions of fossil fuel products and their relationship to the environment, may significantly curtail demand for and production of oil and gas in areas of the world where our customers operate, and thus reduce future demand for our products and services. This may, in turn, adversely affect our financial condition, results of operations and cash flows. Our business, reputation and demand for our stock could be negatively affected if we do not (or are perceived to not) act responsibly with respect to sustainability matters.
Environmental compliance costs and liabilities arising as a result of environmental laws and regulations could have a material adverse effect on our business, financial condition and results of operations.
We are subject to numerous laws and regulations relating to environmental protection, including those governing air emissions, water discharges and waste management, as well as the importation and use of hazardous materials, radioactive materials, chemicals and explosives. We incur, and expect to continue to incur, significant capital and operating costs to comply with environmental laws and regulations. The technical requirements of these laws and regulations are becoming increasingly complex, stringent and expensive to implement. These laws sometimes provide for “strict liability” for remediation costs, damages to natural resources or threats to public health and safety. Strict liability can render us liable for damages without regard to our degree of care or fault. Some environmental laws provide for joint and several strict liability for remediation of spills and releases of hazardous substances, and, as a result, we could be liable for the actions of others.
We use and generate hazardous substances and wastes in our operations. In addition, many of our current and former properties are, or have been, used for industrial purposes. Accordingly, we could become subject to material liabilities relating to the investigation
and cleanup of potentially contaminated properties, and to claims alleging personal injury or property damage as the result of exposures to, or releases of, hazardous substances. In addition, stricter enforcement or changing interpretations of existing laws and regulations, the enactment of new laws and regulations, the discovery of previously unknown contamination or the imposition of new or increased requirements could require us to incur costs or become the basis for new or increased liabilities that could have a material adverse effect on our business, operations and financial condition.
We could be subject to substantial liability claims, including well incidents, which could adversely affect our reputation, financial condition, results of operations and cash flows.
The technical complexitiesWe are a global technology company, and our non-US operations accounted for approximately 84% of our consolidated revenue in 2023 and 2022, and 85% in 2021. Geopolitical instability and unforeseen changes in any of the markets in which we operate could result in business disruptions or operational challenges that may adversely affect the demand for our products and services, or our reputation, our financial condition, and our results of operations expose usand cash flows. These factors include, but are not limited to, a wide rangethe following:
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As an example of a product (including as a result of a cyberattack), could cause personal injury, loss of life, damage to or destruction of property, equipment or the environment, or suspension of operations, which could materially adversely affect us. Any well incidents, including blowouts at a well site, may expose us to additional liabilities, which could be material. Generally, we rely on contractual indemnities, releases, and limitations on liability with our customers and insurance to protect us from potential liability related to such events. However, our insurance may not protect us against liability for certain kinds of events, including events involving pollution, or against lossesrisk resulting from business interruption. Moreover,our global operations, in March 2022 we may not be abledecided to maintain insurance at levels of risk coverage or policy limitsimmediately suspend new investment and technology deployment to our Russia operations. In July 2023, we announced that we deem adequate. Any damages causedwere halting shipments of products into Russia from all our facilities worldwide in response to the continued expansion of international sanctions. Russia represented approximately 5% of our worldwide revenue during 2023. The carrying value of our net assets in Russia was approximately $0.6 billion as of December 31, 2023. This consisted of $0.2 billion of receivables, $0.3 billion of fixed assets, $0.4 billion of other assets, and $0.3 billion of current liabilities.
We continue to actively monitor the dynamic situation in Ukraine and applicable laws, sanctions and trade control restrictions resulting from the conflict. The extent to which our operations, financial results and cash flows may be affected by the ongoing conflict in Ukraine will depend on various factors, including the extent and duration of the conflict; the effects of the conflict on regional and global economic and geopolitical conditions; the effect of further laws, sanctions and trade control restrictions on our servicesbusiness, the global economy and global supply chains; and the impact of fluctuations in the exchange rate of the ruble. Continuation or products that are not covered by insurance or areescalation of the conflict may also exacerbate this and other risk factors identified in excess of policy limits or subjectthis Form 10-K, including cybersecurity, regulatory, and reputational risks.
Failure to substantial deductibles,effectively and timely address the energy transition could adversely affect our business, results of operations, and cash flows.
Our long-term success depends on our ability to effectively address the energy transition, which will require adapting our technology portfolio to changing customer preferences and government requirements, developing solutions to decarbonize oil and gas operations, and scaling innovative low-carbon and carbon-neutral technologies. If the energy transition landscape changes faster than anticipated or in a manner that we do not anticipate, demand for our products and services could be adversely affected. Furthermore, if we fail or are perceived to not effectively implement an energy transition strategy, or if investors or financial institutions shift funding away from companies in fossil fuel-related industries, our access to capital or the market for our securities could be negatively impacted.
Our operations are subject to cyber incidents that could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Intellectual PropertyOur success depends in part on our ability to provide effective cyber security protection in connection with our digital technologies and Technology Risksservices as well as our internal digital infrastructure. We operate information technology networks and systems for internal purposes that incorporate third-party software and technologies. We also connect to and exchange data with external networks that may be operated by our customers, suppliers, alliance partners, or other third parties. We provide digital technologies that allow us or our customers to remotely perform wellsite and field operations. We also develop software and other digital products and services that store, retrieve, manipulate, and manage our customers’ information and data, external data, personal data, and our own data.
Our digital technologies and services, as well as third-party products, services and technologies that we rely on (including emerging technologies, such as artificial intelligence programs), are subject to the risk of cyberattacks and, given the nature of such attacks, some incidents can remain undetected for a period of time despite efforts to detect and respond to them in a timely manner. Cyberattacks are expected to accelerate on a global basis in both frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques and tools (including artificial intelligence) that circumvent controls, evade detection and even remove forensic evidence of the infiltration. There can be no assurance that the systems we have designed to prevent or limit the effects of cyber incidents or attacks will be sufficient to prevent or detect material consequences arising from such incidents or attacks, or to avoid a material adverse impact on our systems after such incidents or attacks do occur. We have experienced and will continue to experience varying degrees of cyber incidents in the normal conduct of our business, including attacks resulting from social engineering such as phishing and ransomware infections. Even if we successfully defend our own digital technologies and services, we also rely on providers of third-party products, services, and networks, with whom we may share data and services, and who may be unable to effectively defend their digital technologies and services against attack.
Unauthorized access to or modification of, or actions disabling our ability to obtain authorized access to, our customers’ data, other external data, personal data, or our own data, as a result of a cyber incident, attack or exploitation of a security vulnerability, or loss of control of our clients’ operations could result in significant damage to our reputation or disruption of the services we provide to our customers or of our customers’ businesses. In addition, allegations, reports, or concerns regarding vulnerabilities affecting our digital products or services could damage our reputation. This could lead to fewer customers using our digital products and services, which
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could have a material adverse impact on our financial condition, results of operations, cash flows, and future prospects. In addition, if our systems or third-party products, services, and network systems for protecting against cybersecurity risks prove to be insufficient, we could be adversely affected by, among other things, loss of or damage to our intellectual property, proprietary or confidential information; loss of customer, supplier, or our employee data; breach of personal data; interruption of our business operations; disruption of our customers’ businesses; increased legal and regulatory exposure, including fines and remediation costs; and increased costs required to prevent, respond to, or mitigate cybersecurity attacks. These risks could harm our reputation and our relationships with our employees, our customers, our suppliers, our alliance partners and other third parties, and may result in claims against us.
We operate in a highly competitive environment. If we are unable to maintain technology leadership, this could adversely affect any competitive advantage we hold.
The oilfield servicesenergy industry is highly competitive.competitive and rapidly evolving. Our business may be adversely affected if we fail to continue to developdeveloping and produce competitiveproducing innovative technologies in response to changes in the market, including customer requirements and technology trends (including trends in favor of emissions-reducing technologies),government requirements, or if we fail to deliver such technologies to our customers in a timely and cost-competitive manner in the various markets we serve.manner. If we are unable to maintain technology leadership in our industry, our ability to maintain market share, defend, maintain, or increase prices for our products and services, and negotiate acceptable contract terms with our customers could be adversely affected. Furthermore, ifcompeting or new technologies may accelerate the obsolescence of our equipmentproducts or proprietary technologies become obsolete,services and reduce the value of our intellectual property may be reduced, which could adversely affect our financial condition, results of operations and cash flows.property.
Limitations on our ability to obtain, maintain, protect, or enforce our intellectual property rights, including our trade secrets, could cause a loss in revenue and any competitive advantage we hold.
There can be no assurance that the steps we take to obtain, maintain, protect, and enforce our intellectual property rights will be adequate. Some of our products or services, and the processes we use to produce or provide them, have been granted patent protection, have patent applications pending, or are trade secrets. Our business may be adversely affected when our patents are unenforceable, the claims allowed under our patents are not sufficient to protect our technology, our patent applications are denied, or our trade secrets are not adequately protected. Patent protection on some types of technology, such as software or machine learning processes, may not be available in certain countries in which we operate. Our competitors may also be able to develop technology independently that is similar to ours without infringing on our patents or gaining access to our trade secrets, which could adversely affect our financial condition, results of operations and cash flows.secrets.
Third parties may claim that we have infringed upon misappropriated or otherwise violated their intellectual property rights.
The tools, techniques, methodologies, programs, and components we use to provide our services and products may infringe upon misappropriate or otherwise violate the intellectual property rights of others or be challenged on that basis. Regardless of the merits, any such claims generally result in significant legal and other costs, including reputational harm, and may distract management from running our business. Resolving such claims could increase our costs, including through royalty payments to acquire licenses, if available, from third parties and through the development of replacement technologies. If a license to resolve a claim were not available, we might not be able to continue providing a particular service or product.
Legal and Regulatory Risks
Our operations require us to comply with numerous laws and regulations, violations of which could have a material adverse effect on our reputation, financial condition, results of operations or cash flows.
Our operations are subject to international, regional, national, and local laws and regulations in every place where we operate, relating to matters such as environmental protection, health and safety, labor and employment, human rights, import/export controls, currency exchange, bribery and corruption, data privacy and cybersecurity, intellectual property, immigration, and taxation. These laws and regulations are complex, frequently change, have tended to become more stringent over time, and could conflict among one another. In the event the scope of these laws and regulations expands in the future, the incremental cost of compliance could adversely affect our financial condition, results of operations, or cash flows.
Our operations are subject to anti-corruption and anti-bribery laws and regulations, such as the Foreign Corrupt Practices Act, the UK Bribery Act, and other similar laws. We are also subject to trade control regulations and trade sanctions laws that restrict the movement of certain goods to, and certain operations in, various countries or with certain persons. Our ability to transfer people, products, and data among certain countries is subject to maintaining required licenses and complying with these laws and regulations.
The internal controls, policies and procedures, and employee training and compliance programs we have implemented to deter prohibited practices may not be effective in preventing employees, contractors, or agents from violating or circumventing such internal policies or from material violations of applicable laws and regulations. Any determination that we have violated or are responsible for violations of applicable laws, including securities, environmental, trade control, trade sanctions, or anti-corruption laws, could have a material adverse effect on our financial condition. Violations of international and US laws and regulations or the loss of any required licenses may result in fines and penalties, criminal sanctions, administrative remedies, or restrictions on business conduct, and could have a material adverse effect on our business, operations, and financial condition. In addition, any major violations could have a significant effect on our reputation and consequently on our ability to win future business and maintain existing customer and supplier relationships.
Existing or future laws, regulations, court orders or other public- or private-sector initiatives to limit greenhouse gas emissions or relating to climate change may reduce demand for our products and services.
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Continuing political and social attention to the issue of climate change has resulted in both existing and proposed international agreements and national, regional, and local legislation and regulatory measures to limit GHG emissions and mitigate the effects of climate change. The implementation of these agreements, including the Paris Agreement, the Europe Climate Law, and other existing or future regulatory mandates, may adversely affect the demand for our products and services, impose taxes on us or our customers, require us or our customers to reduce GHG emissions from our technologies or operations, or accelerate the obsolescence of our products or services.
In addition, increasing attention to the risks of climate change has resulted in an increased possibility of litigation or investigations brought by public and private entities against oil and gas companies in connection with their GHG emissions. As a result, we or our customers may become subject to court orders compelling a reduction of GHG emissions or requiring mitigation of the effects of climate change.
There is also increased focus by our customers, investors and other stakeholders on climate change, sustainability, and energy transition matters. Actions to address these concerns or negative perceptions of our industry or fossil fuel products and their relationship to the environment have led to initiatives to conserve energy and promote the use of alternative energy sources, which may reduce the demand for and production of oil and gas in areas of the world where our customers operate, and thus reduce future demand for our products and services. In addition, initiatives by investors and financial institutions to limit funding to companies in fossil fuel-related industries may adversely affect our liquidity or access to capital. Any of these initiatives may, in turn, adversely affect our financial condition, results of operations, and cash flows.
Environmental compliance costs and liabilities arising as a result of environmental laws and regulations could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
We are subject to numerous laws and regulations relating to environmental protection, including those governing air and GHG emissions, water discharges and waste management, as well as the importation and use of hazardous materials, radioactive materials, chemicals, and explosives. The technical requirements of these laws and regulations are becoming increasingly complex, stringent, and expensive to implement. These laws sometimes provide for “strict liability” for remediation costs, damages to natural resources or threats to public health and safety. Strict liability can render us liable for damages without regard to our degree of care or fault. Some environmental laws provide for joint and several strict liability for remediation of spills and releases of hazardous substances, and, as a result, we could be liable for the actions of others.
We use and generate hazardous substances and wastes in our operations. In addition, many of our current and former properties are, or have been, used for industrial purposes. Accordingly, we could become subject to material liabilities relating to the investigation and cleanup of potentially contaminated properties, and to claims alleging personal injury or property damage as a result of exposures to, or releases of, hazardous substances. In addition, stricter enforcement or changing interpretations of existing laws and regulations, the enactment of new laws and regulations, the discovery of previously unknown contamination, or the imposition of new or increased requirements could require us to incur costs or become the basis for new or increased liabilities that could have a material adverse effect on our business, operations, and financial condition.
We could be subject to substantial liability claims, including as a result of well incidents, which could adversely affect our reputation, financial condition, results of operations, and cash flows.
The technical complexities of our operations expose us to a wide range of significant health, safety, and environmental risks. Our operations involve the use of radioactive materials, chemicals, explosives and other equipment and services that are deployed in challenging exploration, development, and production environments. Accidents or acts of malfeasance involving these services or equipment, or a failure of a product (including as a result of a cyberattack), could cause personal injury, loss of life, damage to or destruction of property, equipment or the environment, or suspension of operations, which could materially adversely affect us. Any well incidents, including blowouts at a well site or any loss of containment or well control, may expose us to additional liabilities, which could be material. Generally, we rely on contractual indemnities, releases, and limitations on liability with our customers and insurance to protect us from potential liability related to such events. However, our insurance may not protect us against liability for certain kinds of events, including events involving pollution, or against losses resulting from business interruption. Moreover, we may not be able to maintain insurance at levels of risk coverage or policy limits that we deem adequate. Any damages caused by our services or products that are not covered by insurance or are in excess of policy limits or subject to substantial deductibles, could adversely affect our financial condition, results of operations, and cash flows.
General Risk Factors
Our aspirations, goals, and initiatives related to sustainability and emissions reduction, and our public statements and disclosures regarding them, expose us to numerous risks.
We have developed, and will continue to develop and set, goals, targets, and other objectives related to sustainability matters, including our net-zero emissions target and our energy transition strategy. Statements related to these goals, targets, and objectives reflect our current plans and aspirations and do not constitute a guarantee that they will be achieved. Our efforts to research, establish, accomplish, and accurately report on these goals, targets, and objectives expose us to numerous operational, reputational, financial, legal, and other risks. Our ability to achieve any stated goal, target, or objective, including with respect to emissions reduction, is subject to numerous factors and conditions, some of which are outside of our control. Our targets are based on empirical data and estimates that reflect our understanding of current best practices for measuring or estimating emissions or other metrics, but we anticipate that future innovations in both measurement technologies and estimation methodologies could cause us to revise our baseline as well as re-calculate progress toward our targets.
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Our business faces increased scrutiny from certain investors and other stakeholders related to our sustainability activities, including the goals, targets, and objectives that we announce, and our methodologies and timelines for pursuing them. If our sustainability practices do not meet investor or other stakeholder expectations and standards, including any third-party ratings used by stakeholders, which continue to evolve, our reputation, our ability to attract or retain employees, our ability to access capital, and our attractiveness as an investment or business partner could be negatively affected. Similarly, our failure or perceived failure to pursue or fulfill our sustainability-focused goals, targets, and objectives, to comply with ethical, environmental, or other standards, regulations, or expectations, or to satisfy various reporting standards with respect to these matters, within the timelines we announce, or at all, could adversely affect our business or reputation, as well as expose us to government enforcement actions and private litigation.
Failure to obtainattract and retain skilled technicalqualified personnel could impede our operations.
Our future success depends on our ability to recruit, train, and retain qualified personnel. We require highly skilled personnel to operate and provide technical services and support for our business. Competition for the personnel requirednecessary for our businesses intensifies as activity increases, technology evolves and technology evolves.customer demands change. In periods of high utilization, it is often more difficult to find and retain qualified individuals. This could increase our costs or have other material adverse effects on our operations.
Severe weather events, including extreme weather conditions associated with climate change, have in the past and may in the future adversely affect our operations and financial results.
Our business has been, and in the future will be, affected by severe weather events in areas where we operate, which could materially affect our operations and financial results. Extreme weather conditions such as hurricanes, flooding, landslides, and heat waves have in the past resulted in, and may in the future result in, the evacuation of personnel, stoppage of services and activity disruptions at our facilities, in our supply chain, or at well-sites, or result in disruptions to our customers’ operations. Particularly severe weather events affecting platforms or structures may result in a suspension of activities. Climate change may impact the frequency and/or intensity of such events. In addition, acute or chronic physical impacts of climate change, such as sea level rise, coastal storm surge, inland flooding from intense rainfall, and hurricane-strength winds may damage our facilities. Any such extreme weather events may result in increased operating costs or decreases in revenue.
Public health emergencies, such as the COVID-19 pandemic, and resulting adverse economic conditions have had, and may continue to have, a material adverse effect on our financial condition, results of operations, and cash flows.
Public health emergencies, including the COVID-19 pandemic, have caused, and could again cause, a significant reduction in global economic activity, significantly weakening demand for oil and gas, and in turn, demand for our products and services. Other effects of public health emergencies have included, and may continue to include, significant volatility and disruption of the global financial markets; adverse revenue and net income effects; disruptions to our operations, including suspension or deferral of drilling activities; customer shutdowns of oil and gas exploration and production; downward revisions to customer budgets; limitations on access to sources of liquidity; supply chain disruptions; limitations on access to raw materials; employee impacts from illness; and local and regional closures or lockdowns, including temporary closures of our facilities and the facilities of our customers and suppliers. The extent to which our operating and financial results will be and may continue to be affected by public health emergencies will depend on various factors beyond our control, such as the continued severity and duration of the public health emergencies, including any sustained geographic resurgence; the emergence of new variants and strains of a contagious disease or virus; and the success of actions to contain or mitigate the effects of the public health emergency. A public health emergency, and volatile regional and global economic conditions stemming from a public health emergency, could also aggravate our other risk factors described in this Form 10-K.
Item 1B. Unresolved Staff Comments.
None.
Item 1C. Cybersecurity.
SLB maintains a cyber risk management program designed to identify, assess, manage, mitigate, and respond to cybersecurity threats. This program is integrated within the Company’s enterprise risk management system and addresses both the corporate information technology environment and customer-facing products.
The underlying controls of the cyber risk management program are based on recognized best practices and standards for cybersecurity and information technology, including the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework (“CSF”) and the International Organization Standardization (“ISO”) 27001 Information Security Management System Requirements. SLB has an annual assessment, performed by a third party, of the Company’s cyber risk management program against the NIST CSF.
SLB has a Cyber Security Operations Center operating in three locations to provide 24/7 monitoring of its global cybersecurity environment and to coordinate the investigation and remediation of alerts. A program for staging incident response drills is in place to prepare support teams in the event of a significant incident.
Cyber partners are a key part of SLB’s cybersecurity infrastructure. SLB partners with leading cybersecurity companies and organizations, leveraging third-party technology and expertise. SLB engages with these partners to monitor and maintain the performance and effectiveness of products and services that are deployed in SLB’s environment.
14
SLB’s Cyber Security Director reports to SLB’s Chief Information Officer and is the head of the Company’s cybersecurity team. The Cyber Security Director is responsible for assessing and managing SLB’s cyber risk management program, informs senior management regarding the prevention, detection, mitigation, and remediation of cybersecurity incidents and supervises such efforts. The cybersecurity team has decades of experience selecting, deploying, and operating cybersecurity technologies, initiatives, and processes around the world, and relies on threat intelligence as well as other information obtained from governmental, public or private sources, including external consultants engaged by SLB.
The Audit Committee of the Board of Directors oversees SLB’s cybersecurity risk exposures and the steps taken by management to monitor and mitigate cybersecurity risks. The cybersecurity team briefs the Audit Committee on the effectiveness of SLB’s cyber risk management program, typically on a quarterly basis. In addition, cybersecurity risks are reviewed by the SLB Board of Directors, at least annually, as part of the Company’s corporate risk mapping exercise.
SLB faces risks from cybersecurity threats that could have a material adverse effect on its business, financial condition, results of operations, cash flows or reputation. SLB has experienced, and will continue to experience, cyber incidents in the normal course of its business. However, prior cybersecurity incidents have not had a material adverse effect on SLB’s business, financial condition, results of operations, or cash flows. See “Risk Factors – Business and Operational Risks – Our operations are subject to cyber incidents that could have a material adverse effect on our business, financial condition, and results of operations.
We are increasingly dependent on digital technologiesoperations, and services to conduct our business. We use these technologies for internal purposes, including data storage, processing and transmissions, as well as in our interactions with our business associates, such as customers and suppliers. In addition, we develop software and other digital products and services that store, retrieve, manipulate and manage our customers’ information and data, external data, and our own data. Our digital technologies and services, and those of our business associates, are subject to the risk of cyberattacks and, given the nature of such attacks, some incidents can remain undetected for a period of time despite efforts to detect and respond to them in a timely manner. There can be no assurance that the systems we have designed to prevent or limit the effects of cyber incidents or attacks will be sufficient to prevent or detect material consequences arising from such incidents or attacks, or to avoid a material adverse impact on our systems after such incidents or attacks do occur. We have experienced and will continue to experience varying degrees of cyber incidents in the normal conduct of our business, including attacks resulting from phishing emails and ransomware infections. Even if we successfully defend our own digital technologies and services, we also rely on third-party business associates, with whom we may share data and services, to defend their digital technologies and services against attack.
We could suffer significant damage to our reputation if a cyber incident or attack were to allow unauthorized access to or modification of our customers’ data, other external data, or our own data, or if the services we provide to our customers were disrupted, or if our digital products or services were reported to have or were perceived as having security vulnerabilities. This could lead to fewer customers using our digital products and services, which could have a material adverse impact on our financial condition and results of operations. In addition, if our systems, or our third-party business associates’ systems, for protecting against cybersecurity risks prove to be insufficient, we could be adversely affected by, among other things, loss of or damage to intellectual property, proprietary or confidential information, or customer, supplier, or employee data; interruption of our business operations; increased legal and regulatory exposure and costs; and increased costs required to prevent, respond to, or mitigate cybersecurity attacks. These risks could harm our reputation and our relationships with our employees, business associates and other third parties, and may result in claims against us. The occurrence of any of these risks could have a material adverse effect on our business, financial condition and results of operations.
Item 1B. Unresolved Staff Comments.cash flows.”
None.
Item 2. Properties.
SchlumbergerSLB owns or leases numerous manufacturing facilities, administrative offices, service centers, research centers, data processing centers, mines, and other facilities throughout the world, none of which are individually material.
Item 3. Legal Proceedings.
The information with respect to this Item 3. Legal Proceedings is set forth in Note 15—15 – Contingencies, in the accompanying Consolidated Financial Statements.
Item 4. Mine Safety Disclosures.
Information concerning mine safety violations or other regulatory matters required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Form 10-K.
15
PART II
Item 5. Market for Schlumberger’sRegistrant’s Common Stock,Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
As of December 31, 2020,2023, there were 24,59221,444 stockholders of record. The principal US market for Schlumberger’sSLB’s common stock is the New York Stock Exchange (“NYSE”), where it is traded under the symbol “SLB.”
The following graph compares the cumulative total stockholder return on SchlumbergerSLB common stock with the cumulative total return on the Standard & Poor’s 500 Index (“S&P 500 Index”) and the cumulative total return on the Philadelphia Oil Service Index. It assumes $100 was invested on December 31, 20152018 in SchlumbergerSLB common stock, in the S&P 500 Index and in the Philadelphia Oil Service Index, as well as the reinvestment of dividends on the last day of the month of payment. The stockholder return set forth below is not necessarily indicative of future performance. The following graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that SchlumbergerSLB specifically incorporates it by reference into such filing.
Comparison of Five-Year Cumulative Total Return Among
SchlumbergerSLB Common Stock, the S&P 500 Index and the
Philadelphia Oil Service Index
Share Repurchases
On January 21, 2016, the SchlumbergerSLB Board of Directors approved a $10 billion share repurchase program for SchlumbergerSLB common stock. SchlumbergerSLB had cumulatively repurchased $1.0$1.7 billion of its common stock under this program as of December 31, 2020 but did not repurchase any of its2023.
SLB's common stock duringrepurchase program activity for the three months ended December 31, 2020. 2023 was as follows:
16
(Stated in thousands, except per share amounts) |
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Total number of shares purchased |
| Average price paid per share |
| Total number of shares purchased as part of publicly announced plans or programs |
| Maximum value of shares that may yet be purchased under the plans or programs |
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October 2023 |
| 598.9 |
| $ | 58.10 |
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| 598.9 |
| $ | 8,343,538 |
| |||
November 2023 |
| 618.2 |
| $ | 53.96 |
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| 618.2 |
| $ | 8,310,182 |
| |||
December 2023 |
| 619.9 |
| $ | 51.44 |
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| 619.9 |
| $ | 8,278,295 |
| |||
| 1,837.0 |
| $ | 54.46 |
|
| 1,837.0 |
|
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Unregistered Sales of Equity Securities
None.On October 2, 2023, SLB, Aker and Subsea7 closed their previously announced joint venture. 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 through a private placement pursuant to Rule 144A.
Item 6. Selected Financial Data.[Reserved].
The following selected consolidated financial data should be read in conjunction with both “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8. Financial Statements and Supplementary Data” of this Form 10-K in order to understand factors, such as business combinations and charges and credits, which may affect the comparability of the Selected Financial Data.
17
(Stated in millions, except per share amounts) |
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| Year Ended December 31, |
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| 2020 |
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| 2019 |
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| 2018 |
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| 2017 |
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| 2016 |
| |||||
Revenue | $ | 23,601 |
|
| $ | 32,917 |
|
| $ | 32,815 |
|
| $ | 30,440 |
|
| $ | 27,810 |
|
Net income (loss) attributable to Schlumberger | $ | (10,518 | ) |
| $ | (10,137 | ) |
| $ | 2,138 |
|
| $ | (1,505 | ) |
| $ | (1,687 | ) |
Diluted earnings (loss) per share of Schlumberger | $ | (7.57 | ) |
| $ | (7.32 | ) |
| $ | 1.53 |
|
| $ | (1.08 | ) |
| $ | (1.24 | ) |
Cash | $ | 844 |
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| $ | 1,137 |
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| $ | 1,433 |
|
| $ | 1,799 |
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| $ | 2,929 |
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Short-term investments | $ | 2,162 |
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| $ | 1,030 |
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| $ | 1,344 |
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| $ | 3,290 |
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| $ | 6,328 |
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Working capital | $ | 2,428 |
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| $ | 2,432 |
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| $ | 2,245 |
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| $ | 3,215 |
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| $ | 8,868 |
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Fixed income investments, held to maturity | $ | - |
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| $ | - |
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| $ | - |
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| $ | - |
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| $ | 238 |
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Total assets | $ | 42,434 |
|
| $ | 56,312 |
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| $ | 70,507 |
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| $ | 71,987 |
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| $ | 77,956 |
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Long-term debt | $ | 16,036 |
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| $ | 14,770 |
|
| $ | 14,644 |
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| $ | 14,875 |
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| $ | 16,463 |
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Total debt | $ | 16,886 |
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| $ | 15,294 |
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| $ | 16,051 |
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| $ | 18,199 |
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| $ | 19,616 |
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Schlumberger stockholders' equity | $ | 12,071 |
|
| $ | 23,760 |
|
| $ | 36,162 |
|
| $ | 36,842 |
|
| $ | 41,078 |
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Cash dividends declared per share | $ | 0.88 |
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| $ | 2.00 |
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| $ | 2.00 |
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| $ | 2.00 |
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| $ | 2.00 |
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During 2018, Schlumberger adopted ASU No. 2016-02, Leases, which requires lessees to recognize an operating lease asset and a lease liability on the balance sheet, with the exception of short-term leases. Prior year amounts reflected in the table above have not been adjusted and continue to be reflected in accordance with Schlumberger’s historical accounting.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis contains forward-looking statements, including, without limitation, statements relating to our plans, strategies, objectives, expectations, intentions, and resources. Such forward-looking statements should be read in conjunction with our disclosures under “Item 1A. Risk Factors” of this Form 10-K.
2020
This section of the Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022. Discussions of 2021 items and year-to-year comparison between 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of SLB’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
2023 Executive Overview
Global demand for oil dropped precipitously2023 was a remarkable year marked by widespread revenue growth, margin expansion, and exceptional cash flow. Year on year, revenue grew 18%, pretax segment operating margin increased 185 basis points (“bps”) to 20% and we delivered $6.6 billion of cash flow from Januaryoperations and $4.0 billion of free cash flow—allowing us to reduce net debt by $1.4 billion and return $2.0 billion to shareholders this year through Aprildividends and stock repurchases.
Our strong full-year performance was fueled by substantial international growth, with approximately 90% of 2020,our international GeoUnits posting year-on-year increases, complemented by sustained performance in parallel with the expansion of the COVID-19 coronavirus outbreak, as governments around the world responded with lockdowns and travel decreased significantly. Global stocks of crude and refined products increased as oil supply could not respond quickly enough to balance the market.North America.
As a result, Brent crude oil experienced its highest price of the year—$70 per barrel—in January, with a low of $9 per barrel in mid-April. Collaboration between OPEC and non-OPEC suppliers, including Russia, led to extraordinary supply intervention, resulting
International revenue grew 20% year on year by more than $4 billion. Notably, we achieved our highest-ever revenue in the removal of more than eight million barrels per day (“bbl/d”) of oil supplyMiddle East, led by impressive growth in Saudi Arabia, the United Arab Emirates, and Egypt & East Mediterranean GeoUnits.
In the offshore basins, we benefited from the markets between Aprillong-cycle developments, capacity expansions, and June. This eased pressure on oil storage capacityexploration and allowed the Brent price to stabilizeappraisal activities with remarkable growth in Brazil and Angola, and solid increases in the $40 range until gaining strength in December, where it closed at $52 per barrel.US Gulf of Mexico, Guyana, and Norway.
The OPEC-led supply alliance maintained production within an agreed quota and helped to maintain a relatively stable oil price, despite oil demand
In North America, while activity moderated as expected in the second half of 2020 beingthe year, revenue increased 12% year on year, outpacing the rig count. This outperformance was driven by our technology-leveraged portfolio in both US land and the US Gulf of Mexico.
On a divisional basis, our Core business—comprising Reservoir Performance, Well Construction, and Production Systems—accelerated, growing revenue 20% year on year and expanding pretax segment operating margin 277 bps.
Digital & Integration revenue increased 4% year on year. This was led by digital, which continued strong growth momentum, delivering more than five million bbl/d lower than same period$2 billion in revenue. Our success in digital was driven by further adoption of 2019. Demand for refined products, other than jet fuel, returnedDelfi technology and customers embracing our connected and autonomous drilling, data, and AI solutions.
We also saw continued adoption of our Transition Technologies portfolio as customers look to within two million bbl/d of pre-crisis levelsenhance efficiency and reduce emissions. The imperative to operate more sustainably is translating into tangible investments by end of 2020.
Oil price volatilityour customers, resulting in the first half of the year, compounded by uncertainty over the pace of COVID-19 recovery, caused producers to lay downportfolio generating more than 40%$1 billion of the world’s drilling rigsrevenue.
As global energy demand continues to increase, international production is expected to play a key role in just six months. This suggests that $40 oil is insufficient to stimulate meaningful drilling activity growth. However, even with massive demand reduction, the drilling activity necessary to maintainmeeting supply is still significant.
In the US, operators laid down nearly 70% of active rigs between the first and third quarters of 2020, before adding a modest number of rigs in the fourth quarter. As a result, US crude production fell by nearly two million bbl/d by the end of 2020. However, the remaining rigs continued to drill in the highest quality reservoirs, which resulted in supply remaining flat over the second half of the year.
Though global gas demand also suffered in response to the pandemic’s effect on economic activity, its use for power generation, heating, and as a chemical feedstock made it more resilient than oil demand as the pandemic spread. Gas demand for 2020 was down only approximately 5% as compared to 2019.
US Henry Hub natural gas price averaged $2.03 per million British thermal units (“mmbtu”) for the year, having also fallen in the first half of 2020. Prices recovered in the second half on decreased tight-oil associated production in line with the reduction of active rigs. International gas hub prices were more volatile.
Against this backdrop, Schlumberger’s full-year 2020 revenue of $23.6 billion declined 28% year-on-year. North American revenue fell sharply by 48% to $5.5 billion. This decrease was largely driven by weakness in the land market as operators reacted to oversupplied markets by making deep cuts to activity. North America operators dropped drilling and pressure pumping activity quickly in the first quarter due to the effects of the pandemic on demand, adding a modest volume of completion activity towardthrough the end of the year. International revenue was more resilient, declining only 19% year-on-year. This decline was most prominent in Latin America, Europe, and Africa due to downward revisions to customer budgets and COVID-19 disruptions.
Additionally, during the fourth quarter of 2020, Schlumberger completed two transactions: the contribution of its OneStim business in North America to Liberty Oilfield Services (“Liberty”) in exchange for a 37% stake in Liberty, and the divestiture of the North America low-flow rod-lift business in a cash transaction. These businesses accounted for approximately 25% of Schlumberger’s North America revenue in 2020. Consequently, the percentage of Schlumberger’s revenue that it generatesdecade. Notably, we anticipate record investment levels in the international markets will increase significantly going forward. The combinationMiddle East extending beyond 2025, with significant expansion in Saudi Arabia, the United Arab Emirates, Iraq, and Kuwait. Offshore remains another distinct attribute of Schlumberger’s fit-for-basin strategy, digital technology innovation,this durable growth cycle, serving as an important source for production growth and scale putscapacity additions, and we expect strong activity to continue in Brazil, West Africa, the company inEastern Mediterranean, the best position to leverage the anticipated shift of spending growth towardMiddle East, and Southeast Asia.
In the international markets.environment, despite elevated geopolitical tensions in various regions, we do not anticipate a significant impact on the sector's overall activity, absent any escalation. Furthermore, we expect the long-cycle investments across the Middle East, global offshore, and gas resource plays to be largely decoupled from short-term commodity price fluctuations.
From a macro perspective, oil prices have risen, buoyed
In 2024, SLB expects to experience another year of strong growth driven by recent supply-led OPEC+ policy, the ongoing COVID-19 vaccine rollout, and multinational economic stimulus actions—driving optimism for a meaningful oil demand recovery throughout 2021. We believe that this setsinternational markets. Benefiting from these market dynamics, we foresee further growth led by Production Systems, strengthened by the stage for oil demand to recover to 2019 levels no later than 2023, or earlier as per recent industry analysts’ reports, reinforcing a multiyear cycle recovery as the global economy strengthens. Absent a change to these macro assumptions, this will translate into meaningful activity increases both in North America and internationally.
In North America, spending and activityadditional subsea opportunities from our OneSubsea joint venture. Sustained momentum is expected to continuein Reservoir Performance, accompanied by increased activity in Well Construction. Additionally, we expect continued customer adoption of our Digital business, particularly in our new technology platforms.
Our performance and returns-focused strategy, combined with our differentiated market positioning and digital capabilities, will drive profitable growth and further margin expansion, setting a strong foundation for long-term outperformance.
With confidence in the first half of 2021 towards maintenance levels, albeit moderated by capital disciplinestrength and industry consolidation. Internationally, following the seasonal effectslongevity of the first quartercycle and visibility into sustained strong cash flows, in January 2024, our Board of 2021, and as OPEC+ respondsDirectors approved a 10% increase to strengthening oil demand, higher spending is expected from the second quarter onwards. Accelerated
activity is not expectedour quarterly dividend. Additionally, we plan to extend beyond the short-cycle markets and will be broad, including offshore, as witnessed during the fourth quarter.
The quality of Schlumberger’s resultsincrease share repurchases in the fourth quarter of 2020 validates the progress of our performance strategy and the reinvention of Schlumberger in this new chapter2024, visibly enhancing returns to shareholders for the industry. Building from the swift execution and scale of our cost-out program, we exited the year with quarterly margins reset to 2019 levels as the upcycle begins. Leveraging our high-graded and restructured business portfolio, we see a clear path to achieve double-digit margins in North America and visible international margin improvement in 2021. Given the depth, diversity, and executional capability of our international business, we believe we are uniquely positioned to benefit as international spending accelerates in the near- and mid-term.full year.
By leveraging our new structure, Schlumberger is fully prepared to capitalize on the growth drivers of the future of our industry, particularly as we accelerate our digital growth ambition and lead in the production and recovery market. Finally, to meet our long-term ambition to bring lower carbon and carbon-neutral energy sources and technology to market, we are visibly expanding our New Energy portfolio, to contribute to the transformation of a more resilient, sustainable, and investable energy services industry.18
Fourth Quarter 20202023 Results
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Fourth Quarter 2023 |
| Third Quarter 2023 |
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| Pretax |
| |||||
| Revenue |
|
| Income |
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| Revenue |
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| Income |
| ||||
Digital & Integration | $ | 1,049 |
|
| $ | 356 |
| $ | 982 |
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| $ | 314 |
| |
Reservoir Performance |
| 1,735 |
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|
| 371 |
|
| 1,680 |
|
|
| 344 |
| |
Well Construction |
| 3,426 |
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|
| 770 |
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| 3,430 |
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|
| 759 |
| |
Production Systems |
| 2,944 |
|
|
| 442 |
|
|
| 2,367 |
|
|
| 319 |
|
Eliminations & other |
| (164 | ) |
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| (71 | ) |
| (149 | ) |
|
| (53 | ) | |
Pretax segment operating income |
|
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| 1,868 |
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|
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| 1,683 |
| |||
Corporate & other (1) |
|
|
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| (193 | ) |
|
|
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| (182 | ) | |||
Interest income (2) |
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| 30 |
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| 20 |
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Interest expense (3) |
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| (126 | ) |
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| (126 | ) | |||
Charges & credits (4) |
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| (146 | ) |
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| - |
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$ | 8,990 |
| $ | 1,433 |
| $ | 8,310 |
| $ | 1,395 |
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| Fourth Quarter 2020 |
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| Third Quarter 2020 |
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| Income |
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| Income (Loss) |
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| Before |
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| Before |
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| Revenue |
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| Taxes |
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Digital & Integration | $ | 833 |
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| $ | 270 |
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| $ | 740 |
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| $ | 202 |
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Reservoir Performance |
| 1,247 |
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|
| 95 |
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| 1,215 |
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|
| 103 |
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Well Construction |
| 1,866 |
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|
| 183 |
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| 1,835 |
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| 172 |
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Production Systems |
| 1,649 |
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| 155 |
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| 1,532 |
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| 132 |
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Eliminations & other |
| (63 | ) |
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| (49 | ) |
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| (64 | ) |
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| (34 | ) |
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| 654 |
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| 575 |
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Corporate & other (1) |
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| (132 | ) |
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| (151 | ) |
Interest income (2) |
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| 5 |
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| 3 |
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Interest expense (3) |
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| (137 | ) |
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| (131 | ) |
Charges & credits (4) |
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| 81 |
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| (350 | ) |
| $ | 5,532 |
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| $ | 471 |
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| $ | 5,258 |
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| $ | (54 | ) |
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| (4) Charges and credits are described in detail in |
Fourth-quarter revenue grew 5% sequentially, driven by strong activity and solid execution both in North America and in the international markets. International revenue of $4.3 billion grew 3% while North America revenue of $1.2 billion increased 13%. Despite seasonality, revenue grew sequentially in all four Divisions for the first time since the third quarter of 2019.
Sequentially, international revenue growth outpaced rig count and was led by Latin America and by a global rebound of activity in most offshore deepwater markets. In the Middle East & Asia, growth was mostly in China, India, and Oman while Saudi Arabia remained resilient. In Europe/CIS/Africa, activity increased significantly in the offshore markets of Africa and several countries in Europe, offset by the seasonal winter slowdown in Russia. In North America, offshore activity in the US Gulf of Mexico grew, and on land, increased horizontal drilling and pressure pumping activity contributed to the higher revenue.
Digital & Integration
Fourth-quarter revenue of $833 million, 83% of which came from the international markets, increased 13% sequentially. International revenue increased by 14% and North America revenue increased by 6% sequentially. The Digital & Integration revenue increase was primarily driven by APS projects.
Digital & Integration pretax operating margin of 32% expanded by 507 basis points (“bps”) sequentially. The margin expansion was primarily in the international markets and was largely driven by improved profitability across APS projects.
Reservoir Performance
Fourth-quarter revenue of $1.2 billion, 73% of which came from the international markets, increased 3% sequentially. International revenue declined 3% while North America revenue increased 23% sequentially. The revenue increase was primarily driven by higher OneStim activity in North America. OneStim fourth-quarter revenue of $274 million increased 25% sequentially. This increase, however, was partially offset by seasonality in Russia and reduced activity in the Middle East & Asia.
Reservoir Performance pretax operating margin of 8% decreased 84 bps sequentially driven by seasonality in Russia, despite improved North American activity.
Well Construction
Fourth-quarter revenue of $1.9 billion, 84% of which came from the international markets, increased 2% sequentially. International and North America revenue increased 1% and 7%, respectively. The revenue increase was due to higher activity in North America, Latin America, and the Middle East & Asia, partially offset by seasonality in Russia.
Well Construction pretax operating margin of 10% improved by 42 bps sequentially. North America margin improved due to higher drilling activity on land while international margin was essentially flat.
Production Systems
Fourth-quarter revenue of $1.6 billion, 74% of which came from the international markets, increased 8% sequentially. International and North America revenue increased 7% and 11%, respectively, due to higher activity across all areas.
Production Systems pretax operating margin of 9% increased by 82 bps sequentially due to a higher contribution from the long-cycle business of subsea, and improved profitability in surface production systems due to cost reduction measures and higher activity.
Full-Year 2020 Results
|
|
|
|
| (Stated in millions) |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2020 |
|
| 2019 |
| ||||||||||
|
|
|
|
| Income (Loss) |
|
|
|
|
|
| Income (Loss) |
| ||
|
|
|
|
| Before |
|
|
|
|
|
| Before |
| ||
| Revenue |
|
| Taxes |
|
| Revenue |
|
| Taxes |
| ||||
Digital & Integration | $ | 3,076 |
|
| $ | 731 |
|
| $ | 4,145 |
|
| $ | 882 |
|
Reservoir Performance |
| 5,602 |
|
|
| 353 |
|
|
| 9,299 |
|
|
| 992 |
|
Well Construction |
| 8,605 |
|
|
| 866 |
|
|
| 11,880 |
|
|
| 1,429 |
|
Production Systems |
| 6,650 |
|
|
| 623 |
|
|
| 8,167 |
|
|
| 847 |
|
Eliminations & other |
| (332 | ) |
|
| (172 | ) |
|
| (574 | ) |
|
| (172 | ) |
|
|
|
|
|
| 2,401 |
|
|
|
|
|
|
| 3,978 |
|
Corporate & other (1) |
|
|
|
|
| (681 | ) |
|
|
|
|
|
| (957 | ) |
Interest income (2) |
|
|
|
|
| 31 |
|
|
|
|
|
|
| 33 |
|
Interest expense (3) |
|
|
|
|
| (534 | ) |
|
|
|
|
|
| (571 | ) |
Charges & credits (4) |
|
|
|
|
| (12,515 | ) |
|
|
|
|
|
| (12,901 | ) |
| $ | 23,601 |
|
| $ | (11,298 | ) |
| $ | 32,917 |
|
| $ | (10,418 | ) |
|
|
|
|
|
|
|
|
Full-year 2020 revenue of $23.6 billion decreased 28% year-on-year. North America revenue declined 48% year-on-year reflecting the continued capital discipline of North America operators, who reduced drilling and hydraulic fracturing activity due to the pandemic. International revenue decreased 19% year-on-year, due to COVID-19-related disruptions, the drop in offshore activity, and reduced customer discretionary spending.
Digital & Integration
Full-year 2020 revenue of $3.1 billion decreased 26% year-on-year primarily due to lower multiclient and software sales as customers reduced activity due to COVID-19 and cut discretionary spending.
Year-on-year pretax operating margin increased 249 bps to 24% largely due to improved APS margins as a result of reduced amortization expense following the asset impairment charges that were recorded in the second quarter of 2020 and the effects of cost cutting efforts.
Reservoir Performance
Full-year 2020 revenue of $5.6 billion decreased 40% year-on-year. A little more than half of this revenue decrease was attributable to the sharp drop in OneStim pressure pumping activity in North America land. The remaining portion of the revenue decline resulted from COVID-19 disruptions that caused international activity to be cancelled or suspended.
Year-on-year pretax operating margin decreased 435 bps to 6% due to the steep revenue decline.
Well Construction
Full-year 2020 revenue of $8.6 billion decreased 28% year-on-year primarily due to the activity decline in US land as the rig count decreased significantly, while COVID-19 disruptions caused drilling activities to be cancelled or suspended in several international markets.
Year-on-year pretax operating margin only decreased 196 bps to 10% as the effects of the revenue decline were partially mitigated by prompt cost cutting measures.
Production Systems
Full-year 2020 revenue of $6.7 billion decreased 19% year-on-year primarily driven by lower sales of valves and surface systems in North America.
Year-on-year pretax operating margin decreased 101 bps to 9% due to the revenue decline.
Full-Year 2019 Results
|
|
|
|
| (Stated in millions) |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2019 |
|
| 2018 |
| ||||||||||
|
|
|
|
| Income (Loss) |
|
|
|
|
|
| Income |
| ||
|
|
|
|
| Before |
|
|
|
|
|
| Before |
| ||
| Revenue |
|
| Taxes |
|
| Revenue |
|
| Taxes |
| ||||
Digital & Integration | $ | 4,145 |
|
| $ | 882 |
|
| $ | 3,820 |
|
| $ | 882 |
|
Reservoir Performance |
| 9,299 |
|
|
| 992 |
|
|
| 10,050 |
|
|
| 1,169 |
|
Well Construction |
| 11,880 |
|
|
| 1,429 |
|
|
| 11,310 |
|
|
| 1,465 |
|
Production Systems |
| 8,167 |
|
|
| 847 |
|
|
| 8,168 |
|
|
| 843 |
|
Eliminations & other |
| (574 | ) |
|
| (172 | ) |
|
| (533 | ) |
|
| (172 | ) |
|
|
|
|
|
| 3,978 |
|
|
|
|
|
|
| 4,187 |
|
Corporate & other (1) |
|
|
|
|
| (957 | ) |
|
|
|
|
|
| (937 | ) |
Interest income (2) |
|
|
|
|
| 33 |
|
|
|
|
|
|
| 52 |
|
Interest expense (3) |
|
|
|
|
| (571 | ) |
|
|
|
|
|
| (537 | ) |
Charges & credits (4) |
|
|
|
|
| (12,901 | ) |
|
|
|
|
|
| (141 | ) |
| $ | 32,917 |
|
| $ | (10,418 | ) |
| $ | 32,815 |
|
| $ | 2,624 |
|
|
|
|
|
|
|
|
|
Full-year 2019 revenue of $32.9 billion was essentially flat year-on-year with North America revenue decreasing 11% and international revenue increasing 7%. The international results were underpinned by increased investment levels. In contrast, the North America result reflected a slowing production growth rate on land as operators maintained capital discipline and reduced drilling and hydraulic fracturing activity.
Digital & Integration
Full-year 2019 revenue of $4.1 billion increased 9% year-on-year primarily driven by increased APS activity.
Year-on-year pretax operating margin decreased 181 bps to 21% primarily as a result of a less favorable revenue mix.
Reservoir Performance
Full-year 2019 revenue of $9.3 billion decreased 7% year-on-year primarily driven by lower OneStim activity in North America as customers reduced spending due to higher cost of capital, lower borrowing capacity and expectations of better return from their shareholders.
Year-on-year pretax operating margin decreased 97 bps to 11% primarily due to reduced profitability in OneStim in North America.
Well Construction
Full-year 2019 revenue of $11.9 billion increased 5% year-on-year primarily due to higher demand for drilling services, largely in the international markets.
Year-on-year pretax operating margin decreased 93 bps to 12% despite higher revenue as margins were affected by competitive pricing and higher costs associated with a number of integrated drilling contracts internationally.
Production Systems
Full-year 2019 revenue of $8.2 billion was essentially flat year-on-year as lower revenue for OneSubsea and valves and process systems was offset by higher surface system and completion sales.
Year-on-year pretax operating margin was essentially unchanged at 10.4%.
Interest and Other Income
Interest & other income consisted of the following:
|
|
|
|
|
|
|
|
| (Stated in millions) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| 2020 |
|
| 2019 |
|
| 2018 |
| |||
Earnings of equity method investments | $ | 91 |
|
| $ | 45 |
|
| $ | 89 |
|
Interest income |
| 33 |
|
|
| 41 |
|
|
| 60 |
|
Unrealized gain on marketable securities |
| 39 |
|
|
| - |
|
|
| - |
|
| $ | 163 |
|
| $ | 86 |
|
| $ | 149 |
|
The increase in earnings of equity method investments in 2020 as compared to 2019 is primarily related to higher income associated with Schlumberger’s equity investments in rig- and seismic-related businesses, while the decrease in 2019 as compared to 2018 was primarily related to lower income from those same businesses.
The decrease in interest income in 2019 compared to 2018 is primarily attributable to lower cash and short-term investment balances.
The unrealized gain on marketable securities in 2020 relates to an investment in a start-up company that Schlumberger previously invested in that completed an initial public offering during the fourth quarter of 2020. As a result, Schlumberger recognized an unrealized gain of $39 million to increase the carrying value of this investment to its fair value of $43 million as of December 31, 2020. See Note 3 to the Consolidated Financial Statements.
Fourth-quarter revenue of $9.0 billion increased 8% sequentially with the acquired Aker subsea business accounting for approximately 70% of the growth, while the legacy portfolio continued its growth trajectory in the international markets.
International revenue of $7.3 billion grew 10% sequentially, driven by Europe & Africa and the Middle East & Asia. Europe & Africa increased 16% sequentially driven by the acquired Aker subsea business, which accounted for most of the sequential revenue growth, primarily in Scandinavia. Revenue in the Middle East & Asia increased 11% sequentially driven by higher drilling, intervention, stimulation, and evaluation activity, both on land and offshore. North America revenue of $1.6 billion was flat sequentially as reduced drilling activity in US land and Canada was offset by higher offshore revenue in the US Gulf of Mexico.
Compared to the same quarter last year, fourth-quarter 2023 international revenue outpaced North America, growing 18%, while North America was relatively flat. Excluding the acquired Aker subsea business, international revenue grew 10% year on year, marking the 10th consecutive quarter of double-digit growth.
Fourth-quarter 2023 pretax segment operating income margin of 21% increased year on year, representing the 12th consecutive quarter of growth.
Digital & Integration
Digital & Integration revenue of $1.0 billion increased 7% sequentially due to increased digital revenue across all areas led by the Middle East & Asia and Europe & Africa.
Digital & Integration pretax operating margin of 34% expanded 197 bps sequentially due to improved profitability in digital.
Reservoir Performance
Reservoir Performance revenue of $1.7 billion grew 3% sequentially primarily due to increased activity internationally, mainly in the Middle East and Africa.
Reservoir Performance pretax operating margin of 21% expanded 88 bps sequentially and represents the Division’s highest level of pretax operating margin in this cycle. This increase was primarily driven by higher activity, pricing, and improved operating leverage.
Well Construction
Well Construction revenue of $3.4 billion was flat sequentially with international growth being offset by a decline in North America revenue. International revenue increased 2% driven primarily by strong growth in the Middle East & Asia and Africa. North America revenue decreased 7% on a lower US land rig count.
Well Construction pretax operating margin of 22% increased 35 bps sequentially primarily driven by improved profitability from the increased activity in the Middle East & Asia and Africa.
19
Production Systems
Production Systems revenue of $2.94 billion increased 24% sequentially. The acquired Aker subsea business accounted for most of the growth. Excluding the effects of this acquisition, revenue grew 4% sequentially due to strong international sales.
Production Systems pretax operating margin expanded 153 bps sequentially to 15%, its highest level in this cycle. The improvement was driven primarily by higher sales of midstream, artificial lift, and subsea production systems.
Full-Year 2023 Results
|
|
| (Stated in millions) |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
2023 |
| 2022 |
| ||||||||||||
|
|
| Pretax |
|
|
|
|
| Pretax |
| |||||
| Revenue |
|
| Income |
|
| Revenue |
|
| Income |
| ||||
Digital & Integration | $ | 3,871 |
|
| $ | 1,257 |
| $ | 3,725 |
|
| $ | 1,357 |
| |
Reservoir Performance |
| 6,561 |
|
|
| 1,263 |
|
| 5,553 |
|
|
| 881 |
| |
Well Construction |
| 13,478 |
|
|
| 2,932 |
|
| 11,397 |
|
|
| 2,202 |
| |
Production Systems |
| 9,831 |
|
|
| 1,245 |
|
|
| 7,862 |
|
|
| 748 |
|
Eliminations & other |
| (606 | ) |
|
| (174 | ) |
| (446 | ) |
|
| (177 | ) | |
Pretax segment operating income |
|
|
|
| 6,523 |
|
|
|
|
| 5,011 |
| |||
Corporate & other (1) |
|
|
|
| (729 | ) |
|
|
|
| (637 | ) | |||
Interest income (2) |
|
|
|
| 87 |
|
|
|
|
| 27 |
| |||
Interest expense (3) |
|
|
|
| (489 | ) |
|
|
|
| (477 | ) | |||
Charges & credits (4) |
|
|
|
| (110 | ) |
|
|
|
| 347 |
| |||
$ | 33,135 |
| $ | 5,282 |
| $ | 28,091 |
| $ | 4,271 |
|
Full-year 2023 revenue of $33.1 billion increased 18% year on year led by Well Construction and Production Systems. On a geographic basis, year-on-year revenue growth was broad-based with North America revenue increasing 12% due to strong land and offshore drilling and higher sales of production systems, while international revenue grew 20%. International growth was widespread across all areas, led by the Middle East & Asia, which grew 21% due to higher drilling and intervention activity. Europe & Africa grew 18% primarily from higher sales of production systems in Europe and increased activity in offshore Africa, while Latin America revenue increased 17% due to robust drilling activity and higher sales of production systems.
Full-year 2023 pretax segment operating margin of 20% expanded by 185 bps as compared to 2022 driven by higher activity, improved pricing, and a more favorable activity mix.
Digital & Integration
Digital & Integration revenue of $3.9 billion increased 4% year on year, as strong growth in digital sales was largely offset by lower APS revenue and decreased exploration data licensing sales. The APS revenue decline resulted primarily from a temporary production interruption in the projects in Ecuador during the first quarter of 2023 due to a pipeline disruption and lower commodity prices that impacted the project in Canada. The lower exploration data licensing sales were driven by the absence of the $95 million of transfer fees recorded in the second quarter of 2022.
Digital & Integration pretax operating margin contracted 397 bps to 32% primarily due to the absence of the $95 million of exploration data transfer fees and reduced profitability from APS projects.
Reservoir Performance
Reservoir Performance revenue of $6.6 billion increased 18% year on year due primarily to increased activity internationally.
Reservoir Performance pretax operating margin expanded 338 bps to 19% primarily due to higher activity levels and improved pricing.
Well Construction
Well Construction revenue of $13.5 billion increased 18% year on year with double-digit growth across all areas. North America grew 17% while international revenue increased 19%. This growth was driven by drilling fluids and measurements—both on higher land and offshore activity—along with improved pricing.
20
Well Construction pretax operating margin expanded 243 bps to 22% with profitability improving across all geographic areas driven by the higher activity and improved pricing.
Production Systems
Production Systems revenue of $9.8 billion increased 25% driven by strong growth across all areas led by Latin America and the Middle East & Asia, as well as the impact of the Aker subsea business, which was acquired on October 2, 2023.
Production Systems pretax operating margin expanded 315 bps to 13% mainly driven by higher subsea production system, artificial lift, and surface production system sales, as well as improved pricing, and the easing of supply chain constraints.
Interest & Other Income, Net
Interest & other income, net consisted of the following:
|
|
|
| (Stated in millions) |
| ||
|
|
|
|
|
| ||
| 2023 |
|
| 2022 |
| ||
Earnings of equity method investments | $ | 206 |
|
| $ | 164 |
|
Interest income |
| 100 |
|
|
| 99 |
|
Gain on sale of Liberty shares |
| 36 |
|
|
| 325 |
|
Gain on ADC equity investment |
| - |
|
|
| 107 |
|
Gain on sale of real estate |
| - |
|
|
| 43 |
|
Gain on repurchase of bonds |
| - |
|
|
| 11 |
|
Loss on Blue Chip Swap transactions |
| - |
|
|
| (139 | ) |
$ | 342 |
|
| $ | 610 |
|
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 2023, SLB sold all of its remaining approximately 9 million shares of Liberty and recognized a gain of $36 million. During 2022, SLB sold 47.8 million of its shares of Liberty and recognized a gain of $325 million.
Although SLB's functional currency in Argentina is the US dollar, a portion of its transactions are denominated in pesos. SLB uses Argentina’s official exchange rate to remeasure its Argentine peso-denominated net assets into US dollars. 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 Argentine operations. 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. This parallel rate, which cannot be used as the basis to remeasure SLB’s net monetary assets in US dollars under US GAAP, was approximately 20% higher than Argentina’s official exchange rate at December 31, 2023 and 93% higher at December 31, 2022.
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, of which $61 million is classified in Cost of services in the Consolidated Statement of Income, with the remaining $29 million classified in Cost of sales. SLB’s peso-denominated net assets in Argentina were approximately $75 million at December 31, 2023 ($40 million at December 31, 2022 and $270 million at September 30, 2022), primarily consisting of cash. Argentina represented less than 5% of SLB’s consolidated revenue in each of 2023 and 2022.
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.
During 2022, SLB sold certain real estate and recognized a gain of $43 million.
During 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.
Interest Expense
Interest expense of $563$503 million in 2020 decreased $462023 increased $13 million compared to 2019. This decrease was primarily due to certain debt being refinanced with lower interest rate debt. Interest expense of $609 million in 2019 increased $34 million compared to 2018. This increase is primarily due to an increase in the weighted average debt balance during 2019 as compared to 2018.2022.
21
Other
Research & engineering and General & administrative expenses, as a percentage of Revenue, were as follows:
| 2020 |
|
| 2019 |
|
| 2018 |
| 2023 |
|
| 2022 |
| |||||
Research & engineering |
| 2.5 | % |
|
| 2.2 | % |
|
| 2.1 | % |
| 2.1 | % |
|
| 2.3 | % |
General & administrative |
| 1.5 | % |
|
| 1.4 | % |
|
| 1.4 | % |
| 1.1 | % |
|
| 1.3 | % |
Income Taxes
The SchlumbergerSLB effective tax rate is sensitive to the geographic mix of earnings. When the percentage of pretax earnings generated outside of North America increases, the SchlumbergerSLB effective tax rate generally decreases. Conversely, when the percentage of pretax earnings generated outside of North America decreases, the SchlumbergerSLB effective tax rate generally increases.
The Schlumberger effective tax rate was 7%19% in 20202023 as compared to 3%18% in 2019.2022. The increase in the effective tax rate was primarily due to the charges and credits described in Note 3 to the Consolidated Financial Statements,. These charges and credits reduced the effective tax rate in 2022 by approximately 12 and 13 points in 2020 and 2019, respectively, as a significant portion of these charges were not tax effective. Changes in the geographic mix of pretax earnings accounted for the remaining increase in the effective tax rate in 2020 as compared to 2019.one percentage point.
The Schlumberger effective tax rate was 3% in 2019 as compared to 17% in 2018. The lower effective tax rate was almost entirely due to the 2019 charges and credits described in Note 3 to the Consolidated Financial Statements, which primarily related to non-deductible goodwill.
Charges and Credits
SchlumbergerSLB recorded significant charges and credits during 2020, 20192023 and 2018.2022. These charges and credits, which are summarized below, are more fully described in Note 3 to the Consolidated Financial Statements.
The following is a summary of the 2020 charges and credits.
| (Stated in millions) |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pretax |
|
| Tax |
|
| Net |
| |||
First quarter: |
|
|
|
|
|
|
|
|
|
|
|
Goodwill | $ | 3,070 |
|
| $ | - |
|
| $ | 3,070 |
|
Intangible assets impairments |
| 3,321 |
|
|
| 815 |
|
|
| 2,506 |
|
Asset Performance Solutions investments |
| 1,264 |
|
|
| (4 | ) |
|
| 1,268 |
|
North America pressure pumping impairment |
| 587 |
|
|
| 133 |
|
|
| 454 |
|
Workforce reductions |
| 202 |
|
|
| 7 |
|
|
| 195 |
|
Other |
| 79 |
|
|
| 9 |
|
|
| 70 |
|
Valuation allowance |
| - |
|
|
| (164 | ) |
|
| 164 |
|
Second quarter: |
|
|
|
|
|
|
|
|
|
|
|
Workforce reductions |
| 1,021 |
|
|
| 71 |
|
|
| 950 |
|
Asset Performance Solutions investments |
| 730 |
|
|
| 15 |
|
|
| 715 |
|
Fixed asset impairments |
| 666 |
|
|
| 52 |
|
|
| 614 |
|
Inventory write-downs |
| 603 |
|
|
| 49 |
|
|
| 554 |
|
Right-of-use asset impairments |
| 311 |
|
|
| 67 |
|
|
| 244 |
|
Costs associated with exiting certain activities |
| 205 |
|
|
| (25 | ) |
|
| 230 |
|
Multiclient seismic data impairment |
| 156 |
|
|
| 2 |
|
|
| 154 |
|
Repurchase of bonds |
| 40 |
|
|
| 2 |
|
|
| 38 |
|
Postretirement benefits curtailment gain |
| (69 | ) |
|
| (16 | ) |
|
| (53 | ) |
Other |
| 60 |
|
|
| 4 |
|
|
| 56 |
|
Third quarter: |
|
|
|
|
|
|
|
|
|
|
|
Facility exit charges |
| 254 |
|
|
| 39 |
|
|
| 215 |
|
Workforce reductions |
| 63 |
|
|
| - |
|
|
| 63 |
|
Other |
| 33 |
|
|
| 1 |
|
|
| 32 |
|
Fourth quarter: |
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of OneStim |
| (104 | ) |
|
| (11 | ) |
|
| (93 | ) |
Unrealized gain on marketable securities |
| (39 | ) |
|
| (9 | ) |
|
| (30 | ) |
Other |
| 62 |
|
|
| 4 |
|
|
| 58 |
|
| $ | 12,515 |
|
| $ | 1,041 |
|
| $ | 11,474 |
|
As a result of the first quarter 2020 impairment charges, commencing with the second quarter of 2020, depreciation and amortization expense was reduced by approximately $95 million on a quarterly basis. Approximately $33 million of this quarterly reduction is reflected in the Digital & Integration Division and $12 million is reflected in the Reservoir Performance Division. The remaining $50 million is reflected in the “Corporate & other” line item.
As a result of the second quarter 2020 restructuring and impairment charges, commencing with the third quarter of 2020, depreciation and amortization expense was reduced by approximately $80 million and lease expense was reduced by $25 million on a quarterly basis. Approximately $51 million of this quarterly reduction is reflected in the Digital & Integration Division and $31 million is reflected in the Reservoir Performance Division, with the remaining $23 million reflected among the Well Construction Division and Production Systems Division.
As a result of the third quarter 2020 restructuring charges, commencing with the fourth quarter of 2020, depreciation and lease expense was reduced by $15 million on a quarterly basis. This quarterly reduction is reflected among all of the Divisions.
The following is a summary of the 20192023 charges and credits.credits:
| (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 |
|
| (Stated in millions) |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Pretax |
|
| Tax |
|
| Net |
| |||
Third quarter: |
|
|
|
|
|
|
|
|
|
|
|
Goodwill impairment | $ | 8,828 |
|
| $ | 43 |
|
| $ | 8,785 |
|
Intangible assets impairment |
| 1,085 |
|
|
| 248 |
|
|
| 837 |
|
North America pressure pumping |
| 1,575 |
|
|
| 344 |
|
|
| 1,231 |
|
Other North America-related |
| 310 |
|
|
| 53 |
|
|
| 257 |
|
Argentina |
| 127 |
|
|
| - |
|
|
| 127 |
|
Equity-method investments |
| 231 |
|
|
| 12 |
|
|
| 219 |
|
Asset Performance Solutions investments |
| 294 |
|
|
| - |
|
|
| 294 |
|
Other |
| 242 |
|
|
| 13 |
|
|
| 229 |
|
Fourth quarter: |
|
|
|
|
|
|
|
|
|
|
|
North America restructuring |
| 225 |
|
|
| 51 |
|
|
| 174 |
|
Other restructuring |
| 104 |
|
|
| (33 | ) |
|
| 137 |
|
Workforce reductions |
| 68 |
|
|
| 8 |
|
|
| 60 |
|
Pension settlement accounting |
| 37 |
|
|
| 8 |
|
|
| 29 |
|
Repurchase of bonds |
| 22 |
|
|
| 5 |
|
|
| 17 |
|
Gain on formation of Sensia joint venture |
| (247 | ) |
|
| (42 | ) |
|
| (205 | ) |
| $ | 12,901 |
|
| $ | 710 |
|
| $ | 12,191 |
|
A significant portion of the third-quarter impairment charges were recorded effective August 31, 2019. Accordingly, the 2019 results reflect a $108 million reduction in depreciation and amortization expense for the last four months of 2019. Approximately $64 million of this amount is reflected in the Reservoir Performance Division and $20 million is reflected in the Production Systems Division. The remaining $24 million is reflected in the “Corporate & other” line item.
The following is a summary of the 20182022 charges and credits. The $215 million gain on the sale of the marine seismic acquisition business is classified in Gains on sale of businessescredits: in the Consolidated Statement of Income (Loss), while the $356 million of charges are classified in Impairments & other.
| (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 | ) |
22
| (Stated in millions) |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Pretax |
|
| Tax |
|
| Net |
| |||
Gain on sale of marine seismic acquisition business | $ | (215 | ) |
| $ | (19 | ) |
| $ | (196 | ) |
Workforce reductions |
| 184 |
|
|
| 20 |
|
|
| 164 |
|
Asset impairments |
| 172 |
|
|
| 16 |
|
|
| 156 |
|
| $ | 141 |
|
| $ | 17 |
|
| $ | 124 |
|
Liquidity and Capital Resources
The effects of the COVID-19 pandemic have resulted in a significant and swift reduction in international and US economic activity. These effects have adversely affected the demand for oil and natural gas, as well as for Schlumberger’s products and services, and caused significant volatility and disruption of the financial markets. This period of extreme economic disruption, low oil prices and reduced demand for Schlumberger’s products and services has had, and is likely to continue to have, a material adverse impact on Schlumberger’s business, results of operations, financial condition and, at times, access to sources of liquidity.
In view of the uncertainty of the depth and extent of the contraction in oil demand due to the COVID-19 pandemic combined with the weaker commodity price environment, Schlumberger turned its strategic focus to cash conservation and protecting its balance sheet. As a result, in April 2020 Schlumberger announced a 75% reduction to its quarterly cash dividend. The revised dividend supports Schlumberger’s value proposition through a balanced approach of shareholder distributions and organic investment, while providing flexibility to address the uncertain environment. This decision reflects the Company’s focus on its capital stewardship program as well as its commitment to maintain both a strong liquidity position and a strong investment grade credit rating that provides privileged access to the financial markets.
Details of the components of liquidity as well as changes in liquidity follow:
|
|
| (Stated in millions) |
| |||
|
|
|
|
|
| ||
Dec. 31, |
| Dec. 31, |
| ||||
Components of Liquidity: | 2023 |
| 2022 |
| |||
Cash | $ | 2,900 |
| $ | 1,655 |
| |
Short-term investments |
| 1,089 |
|
| 1,239 |
| |
Short-term borrowings and current portion of long-term debt |
| (1,123 | ) |
|
| (1,632 | ) |
Long-term debt |
| (10,842 | ) |
| (10,594 | ) | |
Net debt (1) | $ | (7,976 | ) | $ | (9,332 | ) |
Changes in Liquidity: | 2023 |
|
| 2022 |
| ||
Net income | $ | 4,275 |
|
| $ | 3,492 |
|
Charges and credits |
| 110 |
|
|
| (347 | ) |
Depreciation and amortization (2) |
| 2,312 |
|
|
| 2,147 |
|
Stock-based compensation expense |
| 293 |
|
|
| 313 |
|
Deferred taxes |
| 28 |
|
|
| (39 | ) |
Earnings of equity method investments, less dividends received |
| (132 | ) |
|
| (96 | ) |
Increase in working capital |
| (215 | ) |
|
| (1,709 | ) |
US federal tax refund |
| 85 |
|
|
| - |
|
Other |
| (119 | ) |
|
| (41 | ) |
Cash flow from operations |
| 6,637 |
|
|
| 3,720 |
|
Capital expenditures |
| (1,939 | ) |
|
| (1,618 | ) |
APS investments |
| (507 | ) |
|
| (587 | ) |
Exploration data capitalized |
| (153 | ) |
|
| (97 | ) |
Free cash flow (3) |
| 4,038 |
|
|
| 1,418 |
|
Dividends paid |
| (1,317 | ) |
|
| (848 | ) |
Stock repurchase program |
| (694 | ) |
|
| - |
|
Proceeds from employee stock purchase plan |
| 191 |
|
|
| 141 |
|
Proceeds from exercise of stock options |
| 90 |
|
|
| 81 |
|
Taxes paid on net-settled stock-based compensation awards |
| (169 | ) |
|
| (93 | ) |
Business acquisitions and investments, net of cash acquired plus debt assumed |
| (330 | ) |
|
| (58 | ) |
Proceeds from sale of Liberty shares |
| 137 |
|
|
| 732 |
|
Proceeds from sale of ADC shares |
| - |
|
|
| 223 |
|
Proceeds from sale of real estate |
| - |
|
|
| 120 |
|
Purchases of Blue Chip Swap securities |
| (185 | ) |
|
| (259 | ) |
Proceeds from sales of Blue Chip Swap securities |
| 97 |
|
|
| 111 |
|
Other |
| (195 | ) |
|
| (105 | ) |
Change in net debt before impact of changes in foreign exchange rates on net debt |
| 1,663 |
|
|
| 1,463 |
|
Impact of changes in foreign exchange rates on net debt |
| (307 | ) |
|
| 261 |
|
Decrease in Net Debt |
| 1,356 |
|
|
| 1,724 |
|
Net Debt, Beginning of period |
| (9,332 | ) |
|
| (11,056 | ) |
Net Debt, End of period | $ | (7,976 | ) |
| $ | (9,332 | ) |
|
|
|
|
|
|
|
|
| (Stated in millions) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Dec. 31, |
|
| Dec. 31, |
|
| Dec. 31, |
| |||
Components of Liquidity: | 2020 |
|
| 2019 |
|
| 2018 |
| |||
Cash | $ | 844 |
|
| $ | 1,137 |
|
| $ | 1,433 |
|
Short-term investments |
| 2,162 |
|
|
| 1,030 |
|
|
| 1,344 |
|
Short-term borrowings and current portion of long-term debt |
| (850 | ) |
|
| (524 | ) |
|
| (1,407 | ) |
Long-term debt |
| (16,036 | ) |
|
| (14,770 | ) |
|
| (14,644 | ) |
Net debt (1) | $ | (13,880 | ) |
| $ | (13,127 | ) |
| $ | (13,274 | ) |
Changes in Liquidity: | 2020 |
|
| 2019 |
|
| 2018 |
| |||
Net income (loss) | $ | (10,486 | ) |
| $ | (10,107 | ) |
| $ | 2,177 |
|
Impairments and other charges and credits |
| 12,515 |
|
|
| 12,901 |
|
|
| 141 |
|
Depreciation and amortization (2) |
| 2,566 |
|
|
| 3,589 |
|
|
| 3,556 |
|
Deferred taxes |
| (1,248 | ) |
|
| (1,011 | ) |
|
| (245 | ) |
Earnings of equity method investments, less dividends received |
| (28 | ) |
|
| 6 |
|
|
| (48 | ) |
Stock-based compensation expense |
| 397 |
|
|
| 405 |
|
|
| 345 |
|
Pension and other postretirement benefits funding |
| (16 | ) |
|
| (25 | ) |
|
| (83 | ) |
Increase in working capital and other (3) |
| (756 | ) |
|
| (327 | ) |
|
| (130 | ) |
Cash flow from operations |
| 2,944 |
|
|
| 5,431 |
|
|
| 5,713 |
|
Capital expenditures |
| (1,116 | ) |
|
| (1,724 | ) |
|
| (2,160 | ) |
APS investments |
| (303 | ) |
|
| (781 | ) |
|
| (981 | ) |
Multiclient seismic data capitalized |
| (101 | ) |
|
| (231 | ) |
|
| (100 | ) |
Free cash flow (4) |
| 1,424 |
|
|
| 2,695 |
|
|
| 2,472 |
|
Dividends paid |
| (1,734 | ) |
|
| (2,769 | ) |
|
| (2,770 | ) |
Stock repurchase program |
| (26 | ) |
|
| (278 | ) |
|
| (400 | ) |
Proceeds from employee stock plans |
| 146 |
|
|
| 219 |
|
|
| 261 |
|
Net proceeds from divestitures |
| 434 |
|
|
| 348 |
|
|
| - |
|
Proceeds from formation of Sensia joint venture |
| - |
|
|
| 238 |
|
|
| - |
|
Proceeds from sale of WesternGeco marine seismic business, net of cash divested |
| - |
|
|
| - |
|
|
| 579 |
|
Business acquisitions and investments, net of cash acquired plus debt assumed |
| (33 | ) |
|
| (23 | ) |
|
| (292 | ) |
Repayment of finance lease obligations |
| (188 | ) |
|
| - |
|
|
| - |
|
Other |
| (181 | ) |
|
| (204 | ) |
|
| (93 | ) |
Change in net debt before impact of changes in foreign exchange rates on net debt |
| (158 | ) |
|
| 226 |
|
|
| (243 | ) |
Impact of changes in foreign exchange rates on net debt |
| (595 | ) |
|
| (79 | ) |
|
| 79 |
|
(Increase) decrease in Net Debt |
| (753 | ) |
|
| 147 |
|
|
| (164 | ) |
Net Debt, Beginning of period |
| (13,127 | ) |
|
| (13,274 | ) |
|
| (13,110 | ) |
Net Debt, End of period | $ | (13,880 | ) |
| $ | (13,127 | ) |
| $ | (13,274 | ) |
|
|
|
|
|
|
|
|
Key liquidity events during 2020, 20192023 and 20182022 included:
|
|
|
|
The following table summarizes the23
(Stated in thousands, except per share amounts) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Total Cost |
|
| Total Number |
|
| Average Price |
| |||
| of Shares |
|
| of Shares |
|
| Paid per |
| |||
| Purchased |
|
| Purchased |
|
| Share |
| |||
2020 | $ | 26,244 |
|
|
| 776.2 |
|
| $ | 33.81 |
|
2019 | $ | 278,162 |
|
|
| 6,968.3 |
|
| $ | 39.92 |
|
2018 | $ | 399,786 |
|
|
| 6,495.1 |
|
| $ | 61.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schlumberger expects to receive an incomegrowth that SLB was expecting in 2023. Additionally, SLB received a US federal tax refund of approximately $0.5 billion in 2021. This receivable is included in Other current assets in$85 million during the Consolidated Balance Sheet asfourth quarter of December 31, 2020.
Schlumberger has a provision of $0.5 billion2023 relating to severance recordedprior years.
In January 2024, SLB announced a 10% increase to its quarterly cash dividend from $0.25 per share of outstanding common stock to $0.275 per share, beginning with the first half of 2021.dividend payable in April 2024.
As of December 31, 2023, SLB had $3.99 billion of cash and short-term investments on hand. Schlumberger hadand committed credit facility agreements with commercial banks aggregating $6.3$5.0 billion, that support commercial paper programs,all of which $5.9 billion was available and unused as of December 31, 2020. Schlumberger also has a €1.54 billion committed revolving credit facility that expires in the second quarter of 2021 but can be extended at Schlumberger’s option for up to an additional year. At December 31, 2020, no amounts have been drawn under this facility. Schlumbergerunused. SLB believes these amounts, arealong with cash generated by ongoing operations, will be sufficient to meet future business requirements for at least the next 12 months.months and beyond.
24
The total outstanding commercial paper borrowings were $0.4 billion asfollowing table reflects the carrying amounts of SLB’s debt at December 31, 2020 and $2.2 billion2023 by year of maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Stated in millions) | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| After |
|
|
| 2024 |
| 2025 |
| 2026 |
| 2027 |
| 2028 |
| 2029 |
| 2030 |
| 2031 |
| 2032 |
| Total |
Fixed rate debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
0.00% Notes | $553 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 553 |
3.75% Senior Notes | 355 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 355 |
3.70% Notes | 54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 54 |
4.00% Senior Notes |
|
| $523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 523 |
1.40% Senior Notes |
|
| 499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 499 |
1.375% Guaranteed Notes |
|
|
|
| $1,104 |
|
|
|
|
|
|
|
|
|
|
|
|
| 1,104 |
1.00% Guaranteed Notes |
|
|
|
| 662 |
|
|
|
|
|
|
|
|
|
|
|
|
| 662 |
0.25% Notes |
|
|
|
|
|
| $994 |
|
|
|
|
|
|
|
|
|
|
| 994 |
4.50% Senior Notes |
|
|
|
|
|
|
|
| $497 |
|
|
|
|
|
|
|
|
| 497 |
3.90% Senior Notes |
|
|
|
|
|
|
|
| 1,471 |
|
|
|
|
|
|
|
|
| 1,471 |
4.30% Senior Notes |
|
|
|
|
|
|
|
|
|
| $847 |
|
|
|
|
|
|
| 847 |
2.65% Senior Notes |
|
|
|
|
|
|
|
|
|
|
|
| $1,250 |
|
|
|
|
| 1,250 |
0.50% Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
| $992 |
|
|
| 992 |
2.00% Guaranteed Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $1,098 |
| 1,098 |
4.85% Senior Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 496 |
| 496 |
7.00% Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 199 |
| 199 |
5.95% Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 112 |
| 112 |
5.13% Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 98 | 98 | |
Total fixed rate debt | $962 |
| $1,022 |
| $1,766 |
| $994 |
| $1,968 |
| $847 |
| $1,250 |
| $992 |
| $2,003 | $11,804 | |
Variable rate debt | 161 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| - | 161 | |
Total | $1,123 |
| $1,022 |
| $1,766 |
| $994 |
| $1,968 |
| $847 |
| $1,250 |
| $992 |
| $2,003 | $11,965 |
Interest payments on fixed rate debt obligations by year are as of December 31, 2019. follows:
Summary of Contractual Obligations
(Stated in millions) |
| ||
|
|
| |
2024 | $ | 367 |
|
2025 |
| 348 |
|
2026 |
| 312 |
|
2027 |
| 282 |
|
2028 |
| 212 |
|
Thereafter |
| 631 |
|
| $ | 2,152 |
|
| (Stated in millions) |
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Payment Period |
| |||||||||||||
| Total |
|
| 2021 |
|
| 2022-2023 |
|
| 2024-2025 |
|
| After 2025 |
| |||||
Debt (1) | $ | 16,886 |
|
| $ | 850 |
|
| $ | 3,761 |
|
| $ | 2,940 |
|
| $ | 9,335 |
|
Interest on fixed rate debt obligations (2) |
| 3,202 |
|
|
| 486 |
|
|
| 874 |
|
|
| 655 |
|
|
| 1,187 |
|
Operating leases |
| 1,154 |
|
|
| 256 |
|
|
| 360 |
|
|
| 220 |
|
|
| 318 |
|
Purchase obligations (3) |
| 3,014 |
|
|
| 2,693 |
|
|
| 199 |
|
|
| 75 |
|
|
| 47 |
|
| $ | 24,256 |
|
| $ | 4,285 |
|
| $ | 5,194 |
|
| $ | 3,890 |
|
| $ | 10,887 |
|
|
|
|
|
|
|
Refer toSee Note 17, Pension and Other Benefit Plans, of the Consolidated Financial Statements for details regarding Schlumberger’s pension and other postretirement benefit obligations.
As discussed in Note 13,14, Income Taxes,Leases of the Consolidated Financial Statements, included in the Schlumberger Consolidated Balance Sheet at December 31, 2020 is approximately $1.3 billion of liabilities associated with uncertain tax positions in the over 100 tax jurisdictions in which Schlumberger conducts business. Due to the uncertain and complex application of tax regulations, combined with the difficulty in predicting when tax audits throughout the world may be concluded, Schlumberger cannot make reliable estimates of the timing of cash outflows relating to these liabilities. for details regarding SLB’s lease obligations.
Schlumberger
SLB has outstanding letters of credit/guarantees that relate to business performance bonds, custom/customs/excise tax commitments, facility lease/rental obligations, etc. These were entered into in the ordinary course of business and are customary practices in the various countries where SchlumbergerSLB operates.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires SchlumbergerSLB to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities and the reported amounts of revenue and expenses. The following accounting policies involve “critical accounting estimates” because they are particularly dependent on estimates and assumptions made by SchlumbergerSLB about matters that are inherently uncertain.
Schlumberger
SLB bases its estimates on historical experience and on various 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.
Allowance for Doubtful Accounts
SchlumbergerSLB maintains an allowance for doubtful accounts in order to record accounts receivable at their net realizable value. Judgment is involved in recording and making adjustments to this reserve. Allowances have been recorded for receivables believed to be uncollectible, including amounts for the resolution of potential credit and other collection issues such as disputed invoices. Adjustments to the allowance
25
may be required in future periods depending on how such potential issues are resolved, or if the financial condition of Schlumberger’sSLB’s customers were to deteriorate resulting in an impairment of their ability to make payments.
As a large multinational company with a long history of operating in a cyclical industry, SchlumbergerSLB has extensive experience in working with its customers during difficult times to manage its accounts receivable. During weak economic environments or when there is an extended period of weakness in oil and gas prices, SchlumbergerSLB typically experiences delays in the payment of its receivables. However, except for a $469 million accounts receivable write-off during the fourth quarter of 2017 as a result of the political and economic conditionconditions in Venezuela, SchlumbergerSLB has not historically had material write-offs due to uncollectible accounts receivable over the recent industry downturn. Schlumberger generates revenuereceivable. SLB has a global footprint in more than 120100 countries. As of December 31, 2020, only five2023, three of those countries individually accounted for greater than 5% of Schlumberger’sSLB’s net accounts receivable balance, of which only one (Mexico)two (the United States and Mexico) accounted for greater than 10% of such receivables.
As of December 31, 2023, Mexico and the United States represented 13% and 11% respectively, of SLB’s net accounts receivable balance. SLB’s receivables from its primary customer in Mexico are not in dispute and SLB has not historically had any material write-offs due to uncollectible accounts receivable relating to this customer.
Goodwill, Intangible Assets and Long-Lived Assets
SchlumbergerSLB records the excess of purchase price over the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed as goodwill. The goodwill relating to each of Schlumberger’sSLB’s reporting units is tested for impairment annually as well as when an event, or change in circumstances, indicates an impairment may have occurred.
Under generally accepted accounting principles, SchlumbergerSLB has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of one or more of its reporting units is greater than its carrying amount. If, after assessing the totality of events or circumstances, SchlumbergerSLB determines it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, there is no need to perform any further testing. However, if SchlumbergerSLB concludes otherwise, then it is required to perform a quantitative impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded based on that difference.
Schlumberger
SLB has the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test.
During 2020 and 2019, Schlumberger recorded
SLB elected to perform the qualitative assessment described above for purposes of its annual goodwill impairment charges of $3.1 billion and $8.8 billion, respectively. Refer to Note 3 to the Consolidated Financial Statements for details regarding the facts and circumstancestest in 2023. Based on this assessment, SLB concluded it was more likely than not that led to this impairment and how the fair value of each of its reporting unitunits was estimated, including the significant assumptions used and other details.significantly greater than its carrying amount. Accordingly, no further testing was required.
Long-lived assets, including fixed assets, intangible assets, and investments in APS projects, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In reviewing for impairment, the carrying value of such assets is compared to the estimated undiscounted future cash flows expected from the use of the assets and their eventual
disposition. If such cash flows are not sufficient to support the asset’s recorded value, an impairment charge is recognized to reduce the carrying value of the long-lived asset to its estimated fair value. The determination of future cash flows as well as the estimated fair value of long-lived assets involves significant estimates on the part of management. If there is a material change in economic conditions or other circumstances influencing the estimate of future cash flows or fair value, SchlumbergerSLB could be required to recognize impairment charges in the future.
Income Taxes
SchlumbergerSLB conducts business in more than 100 tax jurisdictions, a number of which have tax laws that are not fully defined and are evolving. Schlumberger’sSLB’s tax filings are subject to regular audits by the tax authorities. These audits may result in assessments for additional taxes that are resolved with the authorities or, potentially, through the courts. SchlumbergerSLB recognizes the impact of a tax position in its financial statements if that position is more likely than not of being sustained on audit, based on the technical merits of the position. Tax liabilities are recorded based on estimates of additional taxes that will be due upon the conclusion of these audits. Estimates of these tax liabilities are judgmental and are made based upon prior experience, and are updated in light of changes in facts and circumstances. However, due to the uncertain and complex application of tax regulations, the ultimate resolution of audits may result in liabilities that could be materially different from these estimates. In such an event, SchlumbergerSLB will record additional tax expense or tax benefit in the period in which such resolution occurs.
Revenue Recognition for Certain Long-term Construction-type Contracts
SchlumbergerSLB recognizes revenue 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. Under this method, 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. Approximately 5%6% of Schlumberger’sSLB’s revenue in each of 2020, 20192023, 5% in 2022 and 2018, respectively,6% in 2021, was recognized under this method.
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. Profits are recognized based on the estimated project profit multiplied by the percentage complete. Due to the nature of these projects, adjustments to estimates of contract revenue and total contract costs are often required as work progresses. Any expected losses on a project are recorded in full in the period in which they become probable.
Multiclient Seismic Data
Schlumberger capitalizes the costs associated with obtaining multiclient seismic data. The carrying value of the multiclient seismic data library at December 31, 2020 and 2019 was $317 million and $568 million, respectively. Such costs are charged to Cost of services26 based on the percentage of the total costs to the estimated total revenue that Schlumberger 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 surveys is reviewed for impairment annually as well as when an event or change in circumstance indicates an impairment may have occurred. Adjustments to the carrying value are recorded when it is determined that estimated future revenues, which involve significant judgment on the part of Schlumberger, would not be sufficient to recover the carrying value of the surveys. Significant adverse changes in Schlumberger’s estimated future cash flows could result in impairment charges in a future period. For purposes of performing the annual impairment test of the multiclient library, surveys are primarily analyzed for impairment on a survey-by-survey basis.
Pension and Postretirement Benefits
Schlumberger’sSLB’s pension and postretirement benefit obligations are described in detail in Note 17 to the Consolidated Financial Statements. The obligations and related costs are calculated using actuarial concepts, which include critical assumptions related to the discount rate and the expected rate of return on plan assets and medical cost trend rates.assets. These assumptions are important elements of expense and/or liability measurement and are updated on an annual basis, or upon the occurrence of significant events.
The discount rate that SchlumbergerSLB uses reflects the prevailing market rate of a portfolio of high-quality debt instruments with maturities matching the expected timing of payment of the related benefit obligations. The following summarizes the discount rates utilized by SchlumbergerSLB for its various pension and postretirement benefit plans:
• The discount rate utilized to determine the liability for SLB’s United States pension plans and postretirement medical plan was 5.25% at December 31, 2023 and 5.50% at December 31, 2022. • The weighted-average discount rate utilized to determine the liability for SLB’s international pension plans was 5.14% at December 31, 2023 and 5.41% at December 31, 2022. • The discount rate utilized to determine expense for SLB’s United States pension plans and postretirement medical plan was 5.50% in 2023 and 3.00% in 2022. • The weighted-average discount rate utilized to determine expense for SLB’s international pension plans was 5.41% in 2023 and 2.83% in 2022. |
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The expected rate of return for Schlumberger’sSLB’s retirement benefit plans represents the long-term average rate of return expected to be earned on plan assets over the period that benefits included in the benefit obligation are expected to be paid, with consideration given to the distribution of investments by asset class and historicalbased on expectations regarding future rates of return for each individualthe portfolio considering the asset class.allocation and related historical rate of return. The weighted average expected rate of return on plan assets for the United States pension plans was 6.60%6.00% in both 20202023 and 2019.4.40% in 2022. The weighted average expected rate of return on plan assets for the international pension plans was 6.71%6.00% in 20202023 and 7.22%5.05% in 2019.2022. A lowerhigher expected rate of return would increasedecreases pension expense.
Schlumberger’s medical cost trend rate assumptions are developed based on historical cost data, the near-term outlook and an assessment of likely long-term trends. The overall medical cost trend rate assumption utilized to determine the 2020 postretirement medical expense and the postretirement medical liability at December 31, 2020 was 7.25%, graded to 4.5% over the next eleven years.
The following illustrates the sensitivity to changes in certain assumptions, holding all other assumptions constant, for Schlumberger’sSLB’s United States and international pension plans:
(Stated in millions) |
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| Effect on |
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| Effect on 2020 |
| Dec. 31, 2020 |
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Change in Assumption | Pretax Expense |
| Liability |
| |
25 basis point decrease in discount rate | +$42 |
| +$664 |
| |
25 basis point increase in discount rate | -$40 |
| -$625 |
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25 basis point decrease in expected return on plan assets | +$31 |
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| - |
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25 basis point increase in expected return on plan assets | -$31 |
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| - |
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(Stated in millions) | |||||
Effect on | |||||
Effect on 2023 | Dec. 31, 2023 | ||||
Change in Assumption | Pretax Expense | Obligation | |||
25 basis point decrease in discount rate | -$3 | +$356 | |||
25 basis point increase in discount rate | +$15 | -$338 | |||
25 basis point decrease in expected return on plan assets | +$35 | - | |||
25 basis point increase in expected return on plan assets | -$35 | - |
The following illustrates the sensitivity to changes in certain assumptions, holding all other assumptions constant, for Schlumberger’sSLB’s United States postretirement medical plans:
(Stated in millions) | |||
| |||
Effect on | |||
Effect on | Dec. 31, | ||
Change in Assumption | Pretax Expense |
| |
25 basis point decrease in discount rate | -$2 | +$ | |
25 basis point increase in discount rate |
| -$ |
27
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
SchlumbergerSLB is subject to market risks primarily associated with changes in foreign currency exchange rates and interest rates.
As a multinational company, Schlumberger generates revenue in more than 120 countries. Schlumberger’s
SLB’s functional currency is primarily the US dollar. Approximately 73%72% of Schlumberger’sSLB’s revenue in 20202023 was denominated in US dollars. However, outside the United States, a significant portion of Schlumberger’sSLB’s expenses is incurred in foreign currencies. Therefore, when the US dollar weakens in relation to the foreign currencies of the countries in which SchlumbergerSLB conducts business, the US dollar-reported expenses will increase.
Schlumberger
SLB is exposed 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 cash flow risks and effectively convert the debt to US-dollar denominated fixed rate debt.
SLB maintains a foreign-currencyforeign currency risk management strategy that uses derivative instruments to manage the impact of changes in foreign exchange rates on its earnings. SchlumbergerSLB enters into foreign currency forward contracts to provide a hedge against currency fluctuations on certain monetary assets and liabilities, and certain expenses denominated in currencies other than the functional currency.
A 10% appreciation in the US dollar from the December 31, 20202023 market rates would increasedecrease the unrealized value of Schlumberger’sSLB’s forward contracts by $2$103 million. Conversely, a 10% depreciation in the US dollar from the December 31, 20202023 market rates would decreaseincrease the unrealized value of Schlumberger’sSLB’s forward contracts by $5$113 million. In either scenario, the gain or loss on the forward contract would be offset by the gain or loss on the underlying transaction, and therefore, would have no impact on future earnings.
At December 31, 2020,2023, contracts were outstanding for the US dollar equivalent of $8.6$10.6 billion in various foreign currencies, of which $6.4$5.3 billion related to hedges of debt balances denominated in currencies other than the functional currency.
Schlumberger is subject to interest rate risk on its debt and its investment portfolio. Schlumberger maintains an interest rate risk management strategy that uses a mix of variable and fixed rate debt combined with its investment portfolio and occasionally interest rate swaps to mitigate the exposure to changes in interest rates. At December 31, 2020, Schlumberger had fixed rate debt aggregating approximately $16.3 billion and variable rate debt aggregating approximately $0.6 billion.
Schlumberger’s exposure to interest rate risk associated with its debt is also partially mitigated by its investment portfolio. Short-term investments, which totaled approximately $2.2 billion at December 31, 2020, 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. The average return on investments was 1.5% in 2020.
The following table reflects the carrying amounts of Schlumberger’s debt at December 31, 2020 by year of maturity:
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| 2021 |
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| 2022 |
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| 2023 |
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| 2024 |
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| 2025 |
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| 2026 |
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| 2027 |
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| 2028 |
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| Thereafter |
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| Total |
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Fixed rate debt |
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3.30% Senior Notes | $ | 664 |
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| $ | 664 |
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2.65% Senior Notes |
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| $ | 598 |
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| 598 |
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3.63% Senior Notes |
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| 295 |
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| 295 |
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2.40% Senior Notes |
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| 999 |
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| 999 |
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3.65% Senior Notes |
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| $ | 1,496 |
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| 1,496 |
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4.00% Notes |
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| 80 |
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| 80 |
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3.70% Notes |
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| $ | 55 |
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| 55 |
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3.75% Senior Notes |
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| 746 |
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| 746 |
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0.00% Notes |
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| 611 |
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| 611 |
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1.40% Senior Notes |
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| $ | 498 |
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| 498 |
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4.00% Senior Notes |
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| 930 |
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| 930 |
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1.375% Guaranteed Notes |
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| $ | 1,221 |
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| 1,221 |
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1.00% Guaranteed Notes |
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| 736 |
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| 736 |
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0.25% Notes |
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| $ | 1,100 |
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| 1,100 |
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3.90% Senior Notes |
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| $ | 1,450 |
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| 1,450 |
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4.30% Senior Notes |
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| $ | 846 |
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| 846 |
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2.65% Senior Notes |
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| 1,250 |
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| 1,250 |
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0.50% Notes |
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| 1,099 |
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| 1,099 |
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2.00% Guaranteed Notes |
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| 1,214 |
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| 1,214 |
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7.00% Notes |
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| 206 |
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| 206 |
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5.95% Notes |
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| 114 |
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| 114 |
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5.13% Notes |
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| 99 |
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| 99 |
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Total fixed rate debt | $ | 664 |
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| $ | 1,892 |
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| $ | 1,576 |
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| $ | 1,412 |
|
| $ | 1,428 |
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| $ | 1,957 |
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| $ | 1,100 |
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| $ | 1,450 |
|
| $ | 4,828 |
|
| $ | 16,307 |
|
Variable rate debt |
| 186 |
|
|
| - |
|
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| 293 |
|
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| - |
|
|
| 100 |
|
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| - |
|
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| - |
|
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| - |
|
|
| - |
|
|
| 579 |
|
Total | $ | 850 |
|
| $ | 1,892 |
|
| $ | 1,869 |
|
| $ | 1,412 |
|
| $ | 1,528 |
|
| $ | 1,957 |
|
| $ | 1,100 |
|
| $ | 1,450 |
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| $ | 4,828 |
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| $ | 16,886 |
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The fair value of the outstanding fixed rate debt was approximately $17.6 billion as of December 31, 2020. The weighted average interest rate on the variable rate debt as of December 31, 2020 was 1.0%.
Schlumberger does not enter into derivatives for speculative purposes.
Forward-lookingForward-Looking Statements
This Form 10-K, as well as other statements we make, contains “forward-looking statements” within the meaning of the federal securities laws, which include any statements that are not historical facts,facts. Such statements often contain words such as our“expect,” “may,” “can,” “believe,” “predict,” “plan,” “potential,” “projected,” “projections,” “precursor,” “forecast,” “outlook,” “expectations,” “estimate,” “intend,” “anticipate,” “ambition,” “goal,” “target,” “scheduled,” “think,” “should,” “could,” “would,” “will,” “see,” “likely,” and other similar words. Forward-looking statements address matters that are, to varying degrees, uncertain, such as statements about SLB’s financial and performance targets and other forecasts or expectations regarding, or dependent on, its business outlook; growth for SchlumbergerSLB as a whole and for each of its Divisions (and for specified business lines, or geographic areas or technologies within each Division); oil and natural gas demand and production growth; oil and natural gas prices; pricing; Schlumberger’s response to,forecasts or expectations regarding energy transition and preparedness for, the COVID-19 pandemic and other widespread health emergencies;global climate change; improvements in operating procedures and technology; capital expenditures by SchlumbergerSLB and the oil and gas industry; the business strategies of Schlumberger,SLB, including digital and “fit for basin,” as well as the strategies of Schlumberger’sSLB’s customers; Schlumberger’s restructuring effortsSLB’s capital allocation plans, including dividend plans and charges recorded as a result of such efforts; access to raw materials; Schlumberger’s effective tax rate; Schlumberger’sshare repurchase programs; SLB’s APS projects, joint ventures, and other alliances; the impact of the ongoing conflict in Ukraine on global energy supply; access to raw materials; future global economic and geopolitical conditions; future liquidity;liquidity, including free cash flow; and future results of operations, such as margin levels. These statements are subject to risks and uncertainties, including, but not limited to, changing global economic and geopolitical conditions; changes in exploration and production spending by Schlumberger’sSLB’s customers and changes in the level of oil and natural gas exploration and development; the results of operations and financial condition of Schlumberger’sSLB’s customers and suppliers, particularly during extended periods of low prices for crude oil and natural gas; Schlumberger’ssuppliers; SLB’s inability to achieve its financial and performance targets and other forecasts and expectations; Schlumberger’sSLB’s inability to sufficiently monetize assets; the extent of future charges;achieve net-zero carbon emissions goals or interim emissions reduction goals; general economic, geopolitical and business conditions in key regions of the world; the ongoing conflict in Ukraine; foreign currency risk; inflation; changes in monetary policy by governments; pricing pressure; weather and seasonal factors; unfavorable effects of health pandemics; availability and cost of raw materials; operational modifications, delays or cancellations; challenges in Schlumberger’sSLB’s supply chain; production declines; Schlumberger’sthe extent of future charges; SLB’s inability to recognize efficiencies and other intended benefits from its business strategies and initiatives, such as digital or Schlumberger New Energy,new energy, as well as its restructuring and structural cost reduction plans;strategies; changes in government regulations and regulatory requirements, including those related to offshore oil and gas exploration, radioactive sources, explosives, chemicals hydraulic fracturing services and climate-related initiatives; the inability of technology to meet new challenges in exploration; the competitiveness of alternative energy sources or product substitutes; and other risks and uncertainties detailed in this Form 10-K and other filings that we make with the SEC. If one or more of these or other risks or uncertainties materialize (or the consequences of any such development changes), or should our underlying assumptions prove incorrect, actual results or outcomes may vary materially from those reflected in our forward-looking statements. Forward-looking and other statements in this Form 10-K regarding our environmental, social, and other sustainability plans and goals are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the SEC. In addition, historical, current, and forward-looking environmental, social, and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. Statements in this Form 10-K are made as of January 27, 2021,24, 2024, and SchlumbergerSLB disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.
28
Item 8. Financial Statements and Supplementary Data.
SCHLUMBERGER LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (LOSS)
| (Stated in millions, except per share amounts) |
| ||||||||||||||||||||
| (Stated in millions, except per share amounts) |
|
|
|
|
|
|
| ||||||||||||||
Year Ended December 31, | 2020 |
|
| 2019 |
|
| 2018 |
| 2023 |
| 2022 |
| 2021 |
| ||||||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Services | $ | 16,533 |
|
| $ | 24,358 |
|
| $ | 24,296 |
| $ | 22,439 |
|
| $ | 19,552 |
|
| $ | 15,602 |
|
Product sales |
| 7,068 |
|
|
| 8,559 |
|
|
| 8,519 |
|
| 10,696 |
|
|
| 8,539 |
|
|
| 7,327 |
|
Total Revenue |
| 23,601 |
|
|
| 32,917 |
|
|
| 32,815 |
|
| 33,135 |
|
|
| 28,091 |
|
|
| 22,929 |
|
Interest & other income |
| 163 |
|
|
| 86 |
|
|
| 149 |
| |||||||||||
Gains on sales of businesses |
| 104 |
|
|
| 247 |
|
|
| 215 |
| |||||||||||
Interest & other income, net |
| 342 |
|
|
| 610 |
|
|
| 148 |
| |||||||||||
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Cost of services |
| 14,675 |
|
|
| 20,828 |
|
|
| 20,618 |
|
| 17,231 |
|
|
| 15,233 |
|
|
| 13,129 |
|
Cost of sales |
| 6,325 |
|
|
| 7,892 |
|
|
| 7,860 |
|
| 9,341 |
|
|
| 7,697 |
|
|
| 6,142 |
|
Research & engineering |
| 580 |
|
|
| 717 |
|
|
| 702 |
|
| 711 |
|
|
| 634 |
|
|
| 554 |
|
General & administrative |
| 365 |
|
|
| 474 |
|
|
| 444 |
|
| 364 |
|
|
| 376 |
|
|
| 339 |
|
Impairments & other |
| 12,658 |
|
|
| 13,148 |
|
|
| 356 |
| |||||||||||
Merger & integration |
| 45 |
|
|
| - |
|
|
| - |
| |||||||||||
Interest |
| 563 |
|
|
| 609 |
|
|
| 575 |
|
| 503 |
|
|
| 490 |
|
|
| 539 |
|
Income (loss) before taxes |
| (11,298 | ) |
|
| (10,418 | ) |
|
| 2,624 |
| |||||||||||
Tax expense (benefit) |
| (812 | ) |
|
| (311 | ) |
|
| 447 |
| |||||||||||
Net income (loss) |
| (10,486 | ) |
|
| (10,107 | ) |
|
| 2,177 |
| |||||||||||
Income before taxes |
| 5,282 |
|
|
| 4,271 |
|
|
| 2,374 |
| |||||||||||
Tax expense |
| 1,007 |
|
|
| 779 |
|
|
| 446 |
| |||||||||||
Net income |
| 4,275 |
|
|
| 3,492 |
|
|
| 1,928 |
| |||||||||||
Net income attributable to noncontrolling interests |
| 32 |
|
|
| 30 |
|
|
| 39 |
|
| 72 |
|
|
| 51 |
|
|
| 47 |
|
Net income (loss) attributable to Schlumberger | $ | (10,518 | ) |
| $ | (10,137 | ) |
| $ | 2,138 |
| |||||||||||
Net income attributable to SLB | $ | 4,203 |
|
| $ | 3,441 |
|
| $ | 1,881 |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Basic earnings (loss) per share of Schlumberger | $ | (7.57 | ) |
| $ | (7.32 | ) |
| $ | 1.54 |
| |||||||||||
Basic earnings per share of SLB | $ | 2.95 |
|
| $ | 2.43 |
|
| $ | 1.34 |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Diluted earnings (loss) per share of Schlumberger | $ | (7.57 | ) |
| $ | (7.32 | ) |
| $ | 1.53 |
| |||||||||||
Diluted earnings per share of SLB | $ | 2.91 |
|
| $ | 2.39 |
|
| $ | 1.32 |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Basic |
| 1,390 |
|
|
| 1,385 |
|
|
| 1,385 |
|
| 1,425 |
|
|
| 1,416 |
|
|
| 1,400 |
|
Assuming dilution |
| 1,390 |
|
|
| 1,385 |
|
|
| 1,393 |
|
| 1,443 |
|
|
| 1,437 |
|
|
| 1,427 |
|
See the Notes to Consolidated Financial Statements
29
SCHLUMBERGER LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
(Stated in millions) |
| ||||||||||
Year Ended December 31, | 2020 |
|
| 2019 |
|
| 2018 |
| |||
Net income (loss) | $ | (10,486 | ) |
| $ | (10,107 | ) |
| $ | 2,177 |
|
Currency translation adjustments |
|
|
|
|
|
|
|
|
|
|
|
Net change arising during the period |
| (239 | ) |
|
| 67 |
|
|
| (191 | ) |
Marketable securities |
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss arising during the period |
| - |
|
|
| - |
|
|
| (11 | ) |
Cash flow hedges |
|
|
|
|
|
|
|
|
|
|
|
Net loss on cash flow hedges |
| (90 | ) |
|
| (32 | ) |
|
| (16 | ) |
Reclassification to net income (loss) of net realized loss |
| 54 |
|
|
| 10 |
|
|
| 1 |
|
Pension and other postretirement benefit plans |
|
|
|
|
|
|
|
|
|
|
|
Actuarial gain (loss) arising during the period |
| (247 | ) |
|
| 127 |
|
|
| (186 | ) |
Amortization to net income (loss) of net actuarial loss |
| 200 |
|
|
| 94 |
|
|
| 187 |
|
Amortization to net income (loss) of net prior service (credit) cost |
| (17 | ) |
|
| (11 | ) |
|
| (5 | ) |
Impact of curtailment |
| (69 | ) |
|
| - |
|
|
| - |
|
Income taxes on pension and other postretirement benefit plans |
| (38 | ) |
|
| (71 | ) |
|
| (18 | ) |
Comprehensive income (loss) |
| (10,932 | ) |
|
| (9,923 | ) |
|
| 1,938 |
|
Comprehensive income attributable to noncontrolling interests |
| 32 |
|
|
| 30 |
|
|
| 39 |
|
Comprehensive income (loss) attributable to Schlumberger | $ | (10,964 | ) |
| $ | (9,953 | ) |
| $ | 1,899 |
|
(Stated in millions) |
| ||||||||||
|
|
|
|
|
|
|
|
| |||
Year Ended December 31, | 2023 |
| 2022 |
| 2021 |
| |||||
Net income | $ | 4,275 |
| $ | 3,492 |
| $ | 1,928 |
| ||
Currency translation adjustments |
|
|
| ||||||||
Net change arising during the period |
| (113 | ) |
| (26 | ) |
| 83 |
| ||
Cash flow hedges |
|
|
| ||||||||
Net gain (loss) on cash flow hedges |
| 177 |
|
| (148 | ) |
| (12 | ) | ||
Reclassification to net income of net realized (gain) loss |
| (19 | ) |
| 117 |
|
| (3 | ) | ||
Pension and other postretirement benefit plans |
|
|
| ||||||||
Actuarial gain (loss) arising during the period |
| (437 | ) |
|
| (305 | ) |
|
| 1,075 |
|
Amortization to net income of net actuarial loss |
| (12 | ) |
| 75 |
|
| 271 |
| ||
Amortization to net income of net prior service credit |
| (23 | ) |
| (23 | ) |
| (23 | ) | ||
Income taxes on pension and other postretirement benefit plans |
| 58 |
|
| 24 |
|
| (74 | ) | ||
Other |
| (30 | ) |
| 1 |
|
| (3 | ) | ||
Comprehensive income |
| 3,876 |
|
| 3,207 |
|
| 3,242 |
| ||
Comprehensive income attributable to noncontrolling interests |
| 72 |
|
| 51 |
|
| 47 |
| ||
Comprehensive income attributable to SLB | $ | 3,804 |
| $ | 3,156 |
| $ | 3,195 |
|
See the Notes to Consolidated Financial Statements
30
SCHLUMBERGER LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Stated in millions) | (Stated in millions) |
| (Stated in millions) |
| ||||||||||||
|
|
|
|
|
| |||||||||||
December 31, |
| 2020 |
|
| 2019 |
|
| 2023 |
|
| 2022 |
| ||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Cash |
| $ | 844 |
|
| $ | 1,137 |
|
| $ | 2,900 |
|
| $ | 1,655 |
|
Short-term investments |
|
| 2,162 |
|
|
| 1,030 |
|
|
| 1,089 |
|
|
| 1,239 |
|
Receivables less allowance for doubtful accounts (2020 - $301; 2019 - $255) |
|
| 5,247 |
|
|
| 7,747 |
| ||||||||
Receivables less allowance for doubtful accounts (2023 - $337; 2022 - $340) |
|
| 7,812 |
|
|
| 6,766 |
| ||||||||
Inventories |
|
| 3,354 |
|
|
| 4,130 |
|
|
| 4,387 |
|
|
| 3,999 |
|
Other current assets |
|
| 1,312 |
|
|
| 1,486 |
|
|
| 1,530 |
|
|
| 1,344 |
|
|
|
| 12,919 |
|
|
| 15,530 |
|
|
| 17,718 |
|
|
| 15,003 |
|
Investments in Affiliated Companies |
|
| 2,061 |
|
|
| 1,565 |
|
|
| 1,624 |
|
|
| 1,581 |
|
Fixed Assets less accumulated depreciation |
|
| 6,826 |
|
|
| 9,270 |
|
|
| 7,240 |
|
|
| 6,607 |
|
Multiclient Seismic Data |
|
| 317 |
|
|
| 568 |
| ||||||||
Goodwill |
|
| 12,980 |
|
|
| 16,042 |
|
|
| 14,084 |
|
|
| 12,982 |
|
Intangible Assets |
|
| 3,455 |
|
|
| 7,089 |
|
|
| 3,239 |
|
|
| 2,992 |
|
Other Assets |
|
| 3,876 |
|
|
| 6,248 |
|
|
| 4,052 |
|
|
| 3,970 |
|
|
| $ | 42,434 |
|
| $ | 56,312 |
|
| $ | 47,957 |
|
| $ | 43,135 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Accounts payable and accrued liabilities |
|
| 8,442 |
|
|
| 10,663 |
|
|
| 10,904 |
|
|
| 9,121 |
|
Estimated liability for taxes on income |
|
| 1,015 |
|
|
| 1,209 |
|
|
| 994 |
|
|
| 1,002 |
|
Short-term borrowings and current portion of long-term debt |
|
| 850 |
|
|
| 524 |
|
|
| 1,123 |
|
|
| 1,632 |
|
Dividends payable |
|
| 184 |
|
|
| 702 |
|
|
| 374 |
|
|
| 263 |
|
|
|
| 10,491 |
|
|
| 13,098 |
|
|
| 13,395 |
|
|
| 12,018 |
|
Long-term Debt |
|
| 16,036 |
|
|
| 14,770 |
|
|
| 10,842 |
|
|
| 10,594 |
|
Postretirement Benefits |
|
| 1,049 |
|
|
| 967 |
|
|
| 175 |
|
|
| 165 |
|
Deferred Taxes |
|
| 19 |
|
|
| 491 |
|
|
| 140 |
|
|
| 61 |
|
Other Liabilities |
|
| 2,350 |
|
|
| 2,810 |
|
|
| 2,046 |
|
|
| 2,308 |
|
|
|
| 29,945 |
|
|
| 32,136 |
|
|
| 26,598 |
|
|
| 25,146 |
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Common stock |
|
| 12,970 |
|
|
| 13,078 |
|
|
| 11,624 |
|
|
| 11,837 |
|
Treasury stock |
|
| (3,033 | ) |
|
| (3,631 | ) |
|
| (678 | ) |
|
| (1,016 | ) |
Retained earnings |
|
| 7,018 |
|
|
| 18,751 |
|
|
| 13,497 |
|
|
| 10,719 |
|
Accumulated other comprehensive loss |
|
| (4,884 | ) |
|
| (4,438 | ) |
|
| (4,254 | ) |
|
| (3,855 | ) |
Schlumberger stockholders' equity |
|
| 12,071 |
|
|
| 23,760 |
| ||||||||
SLB stockholders' equity |
|
| 20,189 |
|
|
| 17,685 |
| ||||||||
Noncontrolling interests |
|
| 418 |
|
|
| 416 |
|
|
| 1,170 |
|
|
| 304 |
|
|
|
| 12,489 |
|
|
| 24,176 |
|
|
| 21,359 |
|
|
| 17,989 |
|
|
| $ | 42,434 |
|
| $ | 56,312 |
|
| $ | 47,957 |
|
| $ | 43,135 |
|
See the Notes to Consolidated Financial Statements
31
SCHLUMBERGER LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Stated in millions) |
| ||||||||||
|
|
|
|
|
|
|
|
| |||
Year Ended December 31, | 2023 |
|
| 2022 |
|
| 2021 |
| |||
Cash flows from operating activities: |
|
|
|
|
| ||||||
Net income | $ | 4,275 |
|
| $ | 3,492 |
|
| $ | 1,928 |
|
Adjustments to reconcile net income to cash provided by operating activities: |
|
|
|
|
|
|
| ||||
Charges and credits |
| 110 |
|
|
| (347 | ) |
|
| (65 | ) |
Depreciation and amortization (1) |
| 2,312 |
|
|
| 2,147 |
|
|
| 2,120 |
|
Deferred taxes |
| 28 |
|
|
| (39 | ) |
|
| (31 | ) |
Stock-based compensation expense |
| 293 |
|
|
| 313 |
|
|
| 324 |
|
Earnings of equity method investments, less dividends received |
| (132 | ) |
|
| (96 | ) |
|
| 10 |
|
Change in assets and liabilities: (2) |
|
|
|
|
|
|
| ||||
Increase in receivables |
| (659 | ) |
|
| (1,728 | ) |
|
| (36 | ) |
(Increase) decrease in inventories |
| (254 | ) |
|
| (737 | ) |
|
| 75 |
|
Decrease (increase) in other current assets |
| 121 |
|
|
| (44 | ) |
|
| 387 |
|
Increase in other assets |
| (10 | ) |
|
| (45 | ) |
|
| (2 | ) |
Increase in accounts payable and accrued liabilities |
| 724 |
|
|
| 704 |
|
|
| 160 |
|
(Decrease) increase in estimated liability for taxes on income |
| (62 | ) |
|
| 96 |
|
|
| (154 | ) |
(Decrease) increase in other liabilities |
| (76 | ) |
|
| 23 |
|
|
| (26 | ) |
Other |
| (33 | ) |
|
| (19 | ) |
|
| (39 | ) |
NET CASH PROVIDED BY OPERATING ACTIVITIES |
| 6,637 |
|
|
| 3,720 |
|
|
| 4,651 |
|
Cash flows from investing activities: |
|
|
|
|
| ||||||
Capital expenditures |
| (1,939 | ) |
|
| (1,618 | ) |
|
| (1,141 | ) |
APS investments |
| (507 | ) |
|
| (587 | ) |
|
| (474 | ) |
Exploration data capitalized |
| (153 | ) |
|
| (97 | ) |
|
| (39 | ) |
Proceeds from sale of Liberty shares |
| 137 |
|
|
| 732 |
|
|
| 109 |
|
Proceeds from sale of ADC shares |
| - |
|
|
| 223 |
|
|
| - |
|
Proceeds from sale of real estate |
| - |
|
|
| 120 |
|
|
| - |
|
Business acquisitions and investments, net of cash acquired |
| (242 | ) |
|
| (58 | ) |
|
| (103 | ) |
Sale of short-term investments, net |
| 117 |
|
|
| 138 |
|
|
| 787 |
|
Purchases of Blue Chip Swap securities |
| (185 | ) |
|
| (259 | ) |
|
| - |
|
Proceeds from sales of Blue Chip Swap securities |
| 97 |
|
|
| 111 |
|
|
| - |
|
Other |
| (108 | ) |
|
| (93 | ) |
|
| (58 | ) |
NET CASH USED IN INVESTING ACTIVITIES |
| (2,783 | ) |
|
| (1,388 | ) |
|
| (919 | ) |
Cash flows from financing activities: |
|
|
|
|
| ||||||
Dividends paid |
| (1,317 | ) |
|
| (848 | ) |
|
| (699 | ) |
Proceeds from employee stock purchase plan |
| 191 |
|
|
| 142 |
|
|
| 137 |
|
Proceeds from exercise of stock options |
| 90 |
|
|
| 81 |
|
|
| - |
|
Taxes paid on net-settled stock-based compensation awards |
| (169 | ) |
|
| (93 | ) |
|
| (24 | ) |
Stock repurchase program |
| (694 | ) |
|
| - |
|
|
| - |
|
Proceeds from issuance of long-term debt |
| 994 |
|
|
| - |
|
|
| 34 |
|
Repayment of long-term debt |
| (1,578 | ) |
|
| (1,650 | ) |
|
| (2,076 | ) |
Net increase (decrease) in short-term borrowings |
| 2 |
|
|
| 37 |
|
|
| (105 | ) |
Other |
| (31 | ) |
|
| (51 | ) |
|
| (91 | ) |
NET CASH USED IN FINANCING ACTIVITIES |
| (2,512 | ) |
|
| (2,382 | ) |
|
| (2,824 | ) |
Net increase (decrease) in cash before translation effect |
| 1,342 |
|
|
| (50 | ) |
|
| 908 |
|
Impact of changes in exchange rates on cash |
| (97 | ) |
|
| (52 | ) |
|
| 5 |
|
Cash, beginning of period |
| 1,655 |
|
|
| 1,757 |
|
|
| 844 |
|
Cash, end of period | $ | 2,900 |
|
| $ | 1,655 |
|
| $ | 1,757 |
|
(Stated in millions) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, | 2020 |
|
| 2019 |
|
| 2018 |
| |||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) | $ | (10,486 | ) |
| $ | (10,107 | ) |
| $ | 2,177 |
|
Adjustments to reconcile net income (loss) to cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Impairments and other charges and credits |
| 12,515 |
|
|
| 12,901 |
|
|
| 141 |
|
Depreciation and amortization (1) |
| 2,566 |
|
|
| 3,589 |
|
|
| 3,556 |
|
Deferred taxes |
| (1,248 | ) |
|
| (1,011 | ) |
|
| (245 | ) |
Stock-based compensation expense |
| 397 |
|
|
| 405 |
|
|
| 345 |
|
Pension and other postretirement benefits funding |
| (16 | ) |
|
| (25 | ) |
|
| (83 | ) |
Earnings of equity method investments, less dividends received |
| (28 | ) |
|
| 6 |
|
|
| (48 | ) |
Change in assets and liabilities: (2) |
|
|
|
|
|
|
|
|
|
|
|
Decrease in receivables |
| 2,345 |
|
|
| 142 |
|
|
| 430 |
|
Decrease (increase) in inventories |
| 86 |
|
|
| (314 | ) |
|
| (10 | ) |
Decrease (increase) in other current assets |
| 267 |
|
|
| (68 | ) |
|
| 121 |
|
(Increase) decrease in other assets |
| (25 | ) |
|
| 22 |
|
|
| (58 | ) |
Decrease in accounts payable and accrued liabilities |
| (3,330 | ) |
|
| (161 | ) |
|
| (824 | ) |
(Decrease) increase in estimated liability for taxes on income |
| (201 | ) |
|
| 6 |
|
|
| (103 | ) |
Increase (decrease) in other liabilities |
| 19 |
|
|
| (52 | ) |
|
| 69 |
|
Other |
| 83 |
|
|
| 98 |
|
|
| 245 |
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
| 2,944 |
|
|
| 5,431 |
|
|
| 5,713 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
| (1,116 | ) |
|
| (1,724 | ) |
|
| (2,160 | ) |
APS investments |
| (303 | ) |
|
| (781 | ) |
|
| (981 | ) |
Multiclient seismic data capitalized |
| (101 | ) |
|
| (231 | ) |
|
| (100 | ) |
Net proceeds from divestitures |
| 434 |
|
|
| 348 |
|
|
| - |
|
Proceeds from formation of Sensia joint venture |
| - |
|
|
| 238 |
|
|
| - |
|
Proceeds from sale of WesternGeco marine seismic business, net of cash divested |
| - |
|
|
| - |
|
|
| 579 |
|
Business acquisitions and investments, net of cash acquired |
| (33 | ) |
|
| (23 | ) |
|
| (292 | ) |
(Purchase) sale of investments, net |
| (1,141 | ) |
|
| 317 |
|
|
| 1,943 |
|
Other |
| (93 | ) |
|
| (155 | ) |
|
| (29 | ) |
NET CASH USED IN INVESTING ACTIVITIES |
| (2,353 | ) |
|
| (2,011 | ) |
|
| (1,040 | ) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
Dividends paid |
| (1,734 | ) |
|
| (2,769 | ) |
|
| (2,770 | ) |
Proceeds from employee stock purchase plan |
| 146 |
|
|
| 196 |
|
|
| 227 |
|
Proceeds from exercise of stock options |
| - |
|
|
| 23 |
|
|
| 34 |
|
Stock repurchase program |
| (26 | ) |
|
| (278 | ) |
|
| (400 | ) |
Proceeds from issuance of long-term debt |
| 5,837 |
|
|
| 4,004 |
|
|
| 898 |
|
Repayment of long-term debt |
| (4,975 | ) |
|
| (4,799 | ) |
|
| (2,861 | ) |
Net increase (decrease) in short-term borrowings |
| 156 |
|
|
| (44 | ) |
|
| (85 | ) |
Repayment of finance lease-related obligations |
| (188 | ) |
|
| - |
|
|
| - |
|
Other |
| (89 | ) |
|
| (51 | ) |
|
| (63 | ) |
NET CASH USED IN FINANCING ACTIVITIES |
| (873 | ) |
|
| (3,718 | ) |
|
| (5,020 | ) |
Net decrease in cash before translation effect |
| (282 | ) |
|
| (298 | ) |
|
| (347 | ) |
Translation effect on cash |
| (11 | ) |
|
| 2 |
|
|
| (19 | ) |
Cash, beginning of period |
| 1,137 |
|
|
| 1,433 |
|
|
| 1,799 |
|
Cash, end of period | $ | 844 |
|
| $ | 1,137 |
|
| $ | 1,433 |
|
|
|
|
|
See the Notes to Consolidated Financial Statements
32
SCHLUMBERGER LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
|
| (Stated in millions) |
| |||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accumulated |
|
|
|
|
|
|
|
|
|
| (Stated in millions) |
| ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other |
|
|
|
|
|
|
|
|
|
|
|
|
| Accumulated |
|
|
| |||||||||||||||||
|
| Common Stock |
|
| Retained |
|
| Comprehensive |
|
| Noncontrolling |
|
|
|
|
|
|
|
|
| Other |
|
|
| ||||||||||||||||||||||||
|
| Issued |
|
| In Treasury |
|
| Earnings |
|
| Loss |
|
| Interests |
|
| Total |
|
| Common Stock |
| Retained |
| Comprehensive |
| Noncontrolling |
|
| ||||||||||||||||||||
Balance, January 1, 2018 |
| $ | 12,975 |
|
| $ | (4,049 | ) |
| $ | 32,190 |
|
| $ | (4,274 | ) |
| $ | 419 |
|
| $ | 37,261 |
| ||||||||||||||||||||||||
|
| Issued |
|
| In Treasury |
| Earnings |
| Loss |
| Interests |
| Total |
| ||||||||||||||||||||||||||||||||||
Balance, January 1, 2021 |
| $ | 12,970 |
|
| $ | (3,033 | ) |
| $ | 7,018 |
|
| $ | (4,884 | ) |
| $ | 418 |
|
| $ | 12,489 |
| ||||||||||||||||||||||||
Net income |
|
|
|
|
|
|
|
|
|
| 2,138 |
|
|
|
|
|
|
| 39 |
|
|
| 2,177 |
|
|
|
|
| 1,881 |
|
|
| 47 |
|
|
| 1,928 |
| ||||||||||
Currency translation adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (191 | ) |
|
| (5 | ) |
|
| (196 | ) | ||||||||||||||||||||||||
Changes in unrealized gain on marketable securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (11 | ) |
|
|
|
|
|
| (11 | ) | ||||||||||||||||||||||||
Changes in fair value of cash flow hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (15 | ) |
|
|
|
|
|
| (15 | ) | ||||||||||||||||||||||||
Pension and other postretirement benefit plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (22 | ) |
|
|
|
|
|
| (22 | ) | ||||||||||||||||||||||||
Shares sold to optionees, less shares exchanged |
|
| (41 | ) |
|
| 75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 34 |
| ||||||||||||||||||||||||
Vesting of restricted stock |
|
| (72 | ) |
|
| 72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
| ||||||||||||||||||||||||
Shares issued under employee stock purchase plan |
|
| (67 | ) |
|
| 294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 227 |
| ||||||||||||||||||||||||
Stock repurchase program |
|
|
|
|
|
| (400 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (400 | ) | ||||||||||||||||||||||||
Stock-based compensation expense |
|
| 345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 345 |
| ||||||||||||||||||||||||
Dividends declared ($2.00 per share) |
|
|
|
|
|
|
|
|
|
| (2,770 | ) |
|
|
|
|
|
|
|
|
|
| (2,770 | ) | ||||||||||||||||||||||||
Stranded tax related to US pension |
|
|
|
|
|
|
|
|
|
| 109 |
|
|
| (109 | ) |
|
|
|
|
|
| - |
| ||||||||||||||||||||||||
Other |
|
| (8 | ) |
|
| 2 |
|
|
| (9 | ) |
|
|
|
|
|
| (29 | ) |
|
| (44 | ) | ||||||||||||||||||||||||
Balance, December 31, 2018 |
|
| 13,132 |
|
|
| (4,006 | ) |
|
| 31,658 |
|
|
| (4,622 | ) |
|
| 424 |
|
|
| 36,586 |
| ||||||||||||||||||||||||
Net loss |
|
|
|
|
|
|
|
|
|
| (10,137 | ) |
|
|
|
|
|
| 30 |
|
|
| (10,107 | ) | ||||||||||||||||||||||||
Currency translation adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 67 |
|
|
| (1 | ) |
|
| 66 |
|
|
|
|
|
| 83 |
|
| (2 | ) |
|
| 81 |
| ||||||||||
Changes in fair value of cash flow hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (22 | ) |
|
|
|
|
|
| (22 | ) |
|
|
|
|
| (15 | ) |
|
|
| (15 | ) | ||||||||||||
Pension and other postretirement benefit plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 139 |
|
|
|
|
|
|
| 139 |
|
|
|
|
|
| 1,249 |
|
|
|
| 1,249 |
| ||||||||||||
Shares sold to optionees, less shares exchanged |
|
| (26 | ) |
|
| 49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 23 |
| ||||||||||||||||||||||||
Vesting of restricted stock |
|
| (155 | ) |
|
| 155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
| ||||||||||||||||||||||||
Shares issued under employee stock purchase plan |
|
| (249 | ) |
|
| 445 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 196 |
| ||||||||||||||||||||||||
Stock repurchase program |
|
|
|
|
|
| (278 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (278 | ) | ||||||||||||||||||||||||
Vesting of restricted stock, net of taxes withheld |
|
| (305 | ) |
| 281 |
|
|
|
|
|
| (24 | ) | ||||||||||||||||||||||||||||||||||
Employee stock purchase plan |
|
| (377 | ) |
| 514 |
|
|
|
|
|
| 137 |
| ||||||||||||||||||||||||||||||||||
Stock-based compensation expense |
|
| 405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 405 |
|
|
| 324 |
|
|
|
|
|
|
| 324 |
| ||||||||||||
Dividends declared ($2.00 per share) |
|
|
|
|
|
|
|
|
|
| (2,770 | ) |
|
|
|
|
|
|
|
|
|
| (2,770 | ) | ||||||||||||||||||||||||
Dividends declared ($0.50 per share) |
|
|
|
| (700 | ) |
|
|
|
| (700 | ) | ||||||||||||||||||||||||||||||||||||
Deconsolidation of subsidiary |
|
|
|
|
|
|
|
|
|
| (123 | ) |
|
| (123 | ) | ||||||||||||||||||||||||||||||||
Other |
|
| (29 | ) |
|
| 4 |
|
|
|
|
|
|
|
|
|
|
| (37 | ) |
|
| (62 | ) |
|
| (4 | ) |
| 5 |
|
|
|
| (3 | ) |
| (58 | ) |
|
| (60 | ) | |||||
Balance, December 31, 2019 |
|
| 13,078 |
|
|
| (3,631 | ) |
|
| 18,751 |
|
|
| (4,438 | ) |
|
| 416 |
|
|
| 24,176 |
| ||||||||||||||||||||||||
Net loss |
|
|
|
|
|
|
|
|
|
| (10,518 | ) |
|
|
|
|
|
| 32 |
|
|
| (10,486 | ) | ||||||||||||||||||||||||
Balance, December 31, 2021 |
|
| 12,608 |
|
|
| (2,233 | ) |
|
| 8,199 |
|
|
| (3,570 | ) |
|
| 282 |
|
|
| 15,286 |
| ||||||||||||||||||||||||
Net income |
|
|
|
| 3,441 |
|
|
| 51 |
|
|
| 3,492 |
| ||||||||||||||||||||||||||||||||||
Currency translation adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (239 | ) |
|
| 7 |
|
|
| (232 | ) |
|
|
|
|
| (26 | ) |
|
|
|
| (26 | ) | |||||||||||
Changes in fair value of cash flow hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (36 | ) |
|
|
|
|
|
| (36 | ) |
|
|
|
|
| (31 | ) |
|
|
| (31 | ) | ||||||||||||
Pension and other postretirement benefit plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (171 | ) |
|
|
|
|
|
| (171 | ) |
|
|
|
|
| (229 | ) |
|
|
| (229 | ) | ||||||||||||
Vesting of restricted stock |
|
| (173 | ) |
|
| 173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
| ||||||||||||||||||||||||
Shares issued under employee stock purchase plan |
|
| (298 | ) |
|
| 444 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 146 |
| ||||||||||||||||||||||||
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 |
|
|
|
|
|
| (26 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (26 | ) |
|
|
| (694 | ) |
|
|
|
| (694 | ) | |||||||||||||
Stock-based compensation expense |
|
| 397 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 397 |
|
|
| 293 |
|
|
|
|
|
| 293 |
| |||||||||||||
Dividends declared ($0.875 per share) |
|
|
|
|
|
|
|
|
|
| (1,215 | ) |
|
|
|
|
|
|
|
|
|
| (1,215 | ) | ||||||||||||||||||||||||
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 |
|
| (34 | ) |
|
| 7 |
|
|
|
|
|
|
|
|
|
|
| (37 | ) |
|
| (64 | ) |
|
| (2 | ) |
| 3 |
|
|
|
| (30 | ) |
| (47 | ) |
| (76 | ) | ||||||
Balance, December 31, 2020 |
| $ | 12,970 |
|
| $ | (3,033 | ) |
| $ | 7,018 |
|
| $ | (4,884 | ) |
| $ | 418 |
|
| $ | 12,489 |
| ||||||||||||||||||||||||
Balance, December 31, 2023 |
| $ | 11,624 |
| $ | (678 | ) | $ | 13,497 |
| $ | (4,254 | ) | $ | 1,170 |
| $ | 21,359 |
|
See the Notes to Consolidated Financial Statements
33
SCHLUMBERGER LIMITED AND SUBSIDIARIES
|
|
|
|
|
| (Stated in millions) |
| |||||
|
|
|
|
|
|
|
|
|
| Shares |
| |
|
| Issued |
|
| In Treasury |
|
| Outstanding |
| |||
Balance, January 1, 2018 |
|
| 1,434 |
|
|
| (50 | ) |
|
| 1,384 |
|
Shares sold to optionees, less shares exchanged |
|
| - |
|
|
| 1 |
|
|
| 1 |
|
Vesting of restricted stock |
|
| - |
|
|
| 1 |
|
|
| 1 |
|
Shares issued under employee stock purchase plan |
|
| - |
|
|
| 3 |
|
|
| 3 |
|
Stock repurchase program |
|
| - |
|
|
| (6 | ) |
|
| (6 | ) |
Balance, December 31, 2018 |
|
| 1,434 |
|
|
| (51 | ) |
|
| 1,383 |
|
Shares sold to optionees, less shares exchanged |
|
| - |
|
|
| 1 |
|
|
| 1 |
|
Vesting of restricted stock |
|
| - |
|
|
| 2 |
|
|
| 2 |
|
Shares issued under employee stock purchase plan |
|
| - |
|
|
| 6 |
|
|
| 6 |
|
Stock repurchase program |
|
| - |
|
|
| (7 | ) |
|
| (7 | ) |
Balance, December 31, 2019 |
|
| 1,434 |
|
|
| (49 | ) |
|
| 1,385 |
|
Shares sold to optionees, less shares exchanged |
|
| - |
|
|
| 6 |
|
|
| 6 |
|
Vesting of restricted stock |
|
| - |
|
|
| 2 |
|
|
| 2 |
|
Stock repurchase program |
|
| - |
|
|
| (1 | ) |
|
| (1 | ) |
Balance, December 31, 2020 |
|
| 1,434 |
|
|
| (42 | ) |
|
| 1,392 |
|
| (Stated in millions) |
| |||||||||
|
|
|
|
|
|
|
|
| |||
|
| Shares |
| ||||||||
Issued |
| In Treasury |
| Outstanding |
| ||||||
Balance, January 1, 2021 |
| 1,434 |
|
|
| (42 | ) |
| 1,392 |
| |
Employee stock purchase plan |
| - |
|
| 7 |
|
|
| 7 |
| |
Vesting of restricted stock, net of taxes withheld |
| - |
|
| 4 |
|
|
| 4 |
| |
Balance, December 31, 2021 |
| 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 |
|
See the Notes to Consolidated Financial Statements
34
Notes to Consolidated Financial Statements
1. Business Description
Schlumberger Limited (Schlumberger N.V., incorporated in Curaçao) and its consolidated subsidiaries (collectively, “Schlumberger”“SLB”) form a global technology company that partners with customers to access energy. Schlumberger provides leadingdrives 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 solutionsat scale, decarbonizing industries, and deploys innovative technologies to enable performancedeveloping and sustainability forscaling new energy systems that accelerate the global energy industry. Schlumberger collaborates to create technology that unlocks access to energy for the benefit of all.transition.
2. Summary of Accounting Policies
The Consolidated Financial Statements of SchlumbergerSLB 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, SchlumbergerSLB 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; multiclient seismicexploration data; contingencies and actuarial assumptions for employee benefit plans. SchlumbergerSLB 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
Schlumberger adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers on January 1, 2018. This ASU amended the existing accounting standards for revenue recognition and requires companies to recognize revenue when control of the promised goods or services is transferred to a customer at an amount that reflects the considerationa company expects to receive in exchange for those goods or services. Under the transition method selected by Schlumberger, this ASU was applied only to those contracts which were not completed as of January 1, 2018. Prior period amounts were not adjusted and were reflected in accordance with Schlumberger’s historical accounting. The adoption of this ASU did not have a material impact on Schlumberger’s Consolidated Financial Statements.
SchlumbergerSLB 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 Schlumberger’sSLB’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.days.
Revenue is occasionally generated from contractual arrangements that include multiple performance obligations. Revenue from these arrangements is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are generally determined based on the prices charged to customers or using expected costs plus margin.
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.
Due to the nature of its businesses, SchlumbergerSLB does not have significant backlog. Total backlog was $2.6$5.9 billion at December 31, 2020,2023, of which approximately 60%60% is expected to be recognized as revenue during 2021.2024.
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, SchlumbergerSLB does not consider Short-term investments to be cash equivalents.
Investments in Affiliated Companies
Investments in companies in which SchlumbergerSLB does not have a controlling financial interest, but over which it has significant influence, are accounted for using the equity method. Schlumberger’sSLB’s share of the after-tax earnings of equity method investees is included in Interest and& other income. Investments in privately held companies in which SchlumbergerSLB does not have the ability to exercise significant influence are accounted for using the cost method. Investments in publicly traded companies in which SchlumbergerSLB 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 and& other income.
Exploration Data
Multiclient Seismic Data
Schlumberger’s multiclientSLB’s exploration data library consists of completed and in-process seismic surveys that are licensed on a nonexclusive basis. SchlumbergerSLB capitalizes costs directly incurred in acquiring and processing the multiclient seismicexploration data. Such costs are charged to Cost of services based on the percentage of the total costs to the estimated total revenue that SchlumbergerSLB 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.
35
The carrying value of the multiclientexploration 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 Schlumberger,SLB, would not be sufficient to recover the carrying value of the surveys. Significant adverse changes in Schlumberger’sSLB’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. SchlumbergerSLB invests its own services and products and in certain historical cases, cash into the field development activities and operations. Although in certain arrangements Schlumbergeroperations and is paid forcompensated on a portion of the servicesfee-per-barrel basis or products it provides, generally Schlumberger will not be paid at the time of providing its services or upon delivery of its products. Instead, Schlumberger is generally compensated based on cash flow generated or on a fee-per-barrel basis.generated. This includes certain arrangements whereby SchlumbergerSLB is only compensated based on incremental production that it helps deliver above a mutually agreed baseline.
Schlumberger
SLB capitalizes its cash investments in a project as well asincluding the direct costs associated with providing its services or products for which Schlumberger will be compensated when the related production is achieved.products. These capitalized investments are amortized to the Consolidated Statement of Income (Loss)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. Amortization expense relating to these capitalized investments was $396 million, $731 million and $568 million in 2020, 2019 and 2018, respectively.
The unamortized portion of Schlumberger’s investments in APS projects was $1.713 billion and $3.724 billion at December 31, 2020 and 2019, respectively. These amounts are included within Other Assets in Schlumberger’s Consolidated Balance Sheet.
Concentration of Credit Risk
Schlumberger’sSLB’s assets that are exposed to concentrations of credit risk consist primarily of cash, short-term investments, receivables from clients, and derivative financial instruments. SchlumbergerSLB places its cash and short-term investments with financial institutions and corporations and limits the amount of credit exposure with any one of them. SchlumbergerSLB regularly evaluates the creditworthiness of the issuers in which it invests. By using derivative financial instruments to hedge certain exposures, SchlumbergerSLB exposes itself to some credit risk. SchlumbergerSLB 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.
Schlumberger generates revenue in more than 120 countries and as such, its
As a large multinational company, SLB’s accounts receivable are spread over many countries and customers. The United States and Mexico represented approximately 14%11% and 13%, respectively, of Schlumberger’sSLB’s net accounts receivable balance at December 31, 2020. NaN2023. No other countrycountries accounted for greater than 10% of Schlumberger’sSLB’s accounts receivable balance. SchlumbergerSLB maintains an allowance for uncollectible accounts receivable based on expected collectabilitycollectibility and performs ongoing credit evaluations of its customers’ financial condition. If the financial condition of Schlumberger’sSLB’s customers were to deteriorate resulting in an impairment of their ability to make payments, adjustments to the allowance may be required.
Earnings per Share
The following is a reconciliation from basic to diluted earnings (loss) per share of Schlumberger for each of the last three years:SLB:
(Stated in millions, except per share amounts) |
| |||||||||||
|
|
|
|
|
|
|
|
|
| |||
|
| Net Income Attributable to SLB |
|
| Average |
|
| Earnings per Share |
| |||
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 |
| |||
2021: |
|
|
| |||||||||
Basic | $ | 1,881 |
|
| 1,400 |
| $ | 1.34 |
| |||
Dilutive impact of stock options and restricted stock |
| - |
|
| 27 |
|
| |||||
Diluted | $ | 1,881 |
|
| 1,427 |
| $ | 1.32 |
|
(Stated in millions, except per share amounts) |
| |||||||||||
|
| Net Income (Loss) Attributable to Schlumberger |
|
| Average Shares Outstanding |
|
| Earnings (Loss) per Share |
| |||
2020: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| $ | (10,518 | ) |
|
| 1,390 |
|
| $ | (7.57 | ) |
Assumed exercise of stock options |
|
| - |
|
|
| - |
|
|
|
|
|
Unvested restricted stock |
|
| - |
|
|
| - |
|
|
|
|
|
Diluted |
| $ | (10,518 | ) |
|
| 1,390 |
|
| $ | (7.57 | ) |
2019: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| $ | (10,137 | ) |
|
| 1,385 |
|
| $ | (7.32 | ) |
Assumed exercise of stock options |
|
| - |
|
|
| - |
|
|
|
|
|
Unvested restricted stock |
|
| - |
|
|
| - |
|
|
|
|
|
Diluted |
| $ | (10,137 | ) |
|
| 1,385 |
|
| $ | (7.32 | ) |
2018: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| $ | 2,138 |
|
|
| 1,385 |
|
| $ | 1.54 |
|
Assumed exercise of stock options |
|
| - |
|
|
| - |
|
|
|
|
|
Unvested restricted stock |
|
| - |
|
|
| 8 |
|
|
|
|
|
Diluted |
| $ | 2,138 |
|
|
| 1,393 |
|
| $ | 1.53 |
|
The number of outstanding employee stock options to purchase shares of SchlumbergerSLB common stock and unvested restricted stock units that were not included in the computation of diluted earnings/lossearnings per share, because to do so would have had an anti-dilutive effect, were as follows:
(Stated in millions) |
| ||||||||||
|
|
|
|
|
|
|
| ||||
| 2023 |
|
| 2022 |
|
| 2021 |
| |||
Employee stock options |
| 21 |
|
|
| 25 |
|
|
| 42 |
|
36
(Stated in millions) |
| ||||||||||
| 2020 |
|
| 2019 |
|
| 2018 |
| |||
Employee stock options |
| 48 |
|
|
| 46 |
|
|
| 40 |
|
Unvested restricted stock |
| 19 |
|
|
| 12 |
|
|
| - |
|
Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation.
3. Charges and Credits
20202023
SchlumbergerSLB 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:
Fourth quarter 2023:
| (Stated in millions) |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pretax |
|
| Tax |
|
| Net |
| |||
First quarter: |
|
|
|
|
|
|
|
|
|
|
|
Goodwill | $ | 3,070 |
|
| $ | - |
|
| $ | 3,070 |
|
Intangible assets impairments |
| 3,321 |
|
|
| 815 |
|
|
| 2,506 |
|
Asset Performance Solutions investments |
| 1,264 |
|
|
| (4 | ) |
|
| 1,268 |
|
North America pressure pumping impairment |
| 587 |
|
|
| 133 |
|
|
| 454 |
|
Workforce reductions |
| 202 |
|
|
| 7 |
|
|
| 195 |
|
Other |
| 79 |
|
|
| 9 |
|
|
| 70 |
|
Valuation allowance |
| - |
|
|
| (164 | ) |
|
| 164 |
|
Second quarter: |
|
|
|
|
|
|
|
|
|
|
|
Workforce reductions |
| 1,021 |
|
|
| 71 |
|
|
| 950 |
|
Asset Performance Solutions investments |
| 730 |
|
|
| 15 |
|
|
| 715 |
|
Fixed asset impairments |
| 666 |
|
|
| 52 |
|
|
| 614 |
|
Inventory write-downs |
| 603 |
|
|
| 49 |
|
|
| 554 |
|
Right-of-use asset impairments |
| 311 |
|
|
| 67 |
|
|
| 244 |
|
Costs associated with exiting certain activities |
| 205 |
|
|
| (25 | ) |
|
| 230 |
|
Multiclient seismic data impairment |
| 156 |
|
|
| 2 |
|
|
| 154 |
|
Repurchase of bonds |
| 40 |
|
|
| 2 |
|
|
| 38 |
|
Postretirement benefits curtailment gain |
| (69 | ) |
|
| (16 | ) |
|
| (53 | ) |
Other |
| 60 |
|
|
| 4 |
|
|
| 56 |
|
Third quarter: |
|
|
|
|
|
|
|
|
|
|
|
Facility exit charges |
| 254 |
|
|
| 39 |
|
|
| 215 |
|
Workforce reductions |
| 63 |
|
|
| - |
|
|
| 63 |
|
Other |
| 33 |
|
|
| 1 |
|
|
| 32 |
|
Fourth quarter: |
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of OneStim |
| (104 | ) |
|
| (11 | ) |
|
| (93 | ) |
Unrealized gain on marketable securities |
| (39 | ) |
|
| (9 | ) |
|
| (30 | ) |
Other |
| 62 |
|
|
| 4 |
|
|
| 58 |
|
| $ | 12,515 |
|
| $ | 1,041 |
|
| $ | 11,474 |
|
First quarter 2020:
|
|
Schlumberger had 11 reporting units with goodwill balances aggregating $16.0 billion. Schlumberger determined that the fair valueremaining $11 million classified in Cost of 4sales.
Following the $3.1 billion goodwill impairment charge relating to these seven reporting units,6 of these reporting units had a remaining goodwill balance. These goodwill balances ranged between $0.2 billion and $5.0 billion and aggregated to $8.4 billion as of March 31, 2020.
Schlumberger used the income approach to estimate the fair value of its reporting units, but also considered the market approach to validate the results. The income approach estimates the fair value by discounting each reporting unit’s estimated future cash flows using Schlumberger’s estimate of the discount rate, or expected return, that a marketplace participant would have required as of the valuation date. The market approach includes the use of comparative multiples to corroborate the discounted cash flow results. The market approach involves significant judgement involvedservices
Someremaining $
The discount rates utilized to value Schlumberger’s reporting unitsArgentina were between 12.0% and 13.5%, depending on the risks and uncertainty inherent in the respective reporting unit as well as the size of the reporting unit. Assuming all other assumptions and inputs used in each of the respective discounted cash flow analysis were held constant, a 50-basis point increase or decrease in the discount rate assumptions would have changed the fair value of the 7 reporting units, on average, by less than 5%.
approximately $75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Second quarter 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The fair value of the impaired intangible assets, fixed assets, APS investments, right-of-use assets and multiclient seismic data was estimated based on the present value of projected future cash flows that the underlying assets are expected to generate. Such estimates included unobservable inputs that required significant judgement.
Third quarter 2020:
|
|
|
|
|
|
|
|
Fourth quarter 2020:
|
|
Schlumberger will account for its investment in Liberty under the equity method of accounting and will record its share of Liberty’s net income on a one-quarter lag. Based on the quoted market price of Liberty’s shares as of December 31, 2020, the value2023, primarily consisting of Schlumberger’s investment is approximately $0.7 billion.
|
|
|
|
As market conditions evolve and Schlumberger continues to develop its strategy to deal with such conditions, it may result in further restructuring and/or impairment charges in future periods.
20192022
SchlumbergerSLB recorded the following charges and credits during 2019,2022, all of which are classified as in ImpairmentsInterest & other income, net in the Consolidated Statement of Income (Loss):
| (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 | ) |
37
| (Stated in millions) |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Pretax |
|
| Tax |
|
| Net |
| |||
Third quarter: |
|
|
|
|
|
|
|
|
|
|
|
Goodwill impairment | $ | 8,828 |
|
| $ | 43 |
|
| $ | 8,785 |
|
Intangible assets impairment |
| 1,085 |
|
|
| 248 |
|
|
| 837 |
|
North America pressure pumping |
| 1,575 |
|
|
| 344 |
|
|
| 1,231 |
|
Other North America-related |
| 310 |
|
|
| 53 |
|
|
| 257 |
|
Argentina |
| 127 |
|
|
| - |
|
|
| 127 |
|
Equity-method investments |
| 231 |
|
|
| 12 |
|
|
| 219 |
|
Asset Performance Solutions investments |
| 294 |
|
|
| - |
|
|
| 294 |
|
Other |
| 242 |
|
|
| 13 |
|
|
| 229 |
|
Fourth quarter: |
|
|
|
|
|
|
|
|
|
|
|
North America restructuring |
| 225 |
|
|
| 51 |
|
|
| 174 |
|
Other restructuring |
| 104 |
|
|
| (33 | ) |
|
| 137 |
|
Workforce reductions |
| 68 |
|
|
| 8 |
|
|
| 60 |
|
Pension settlement accounting |
| 37 |
|
|
| 8 |
|
|
| 29 |
|
Repurchase of bonds |
| 22 |
|
|
| 5 |
|
|
| 17 |
|
Gain on formation of Sensia joint venture |
| (247 | ) |
|
| (42 | ) |
|
| (205 | ) |
| $ | 12,901 |
|
| $ | 710 |
|
| $ | 12,191 |
|
Third•
|
|
223 million. As a result of these facts, Schlumberger determined that it was more likely than not thattransactions, 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, 2023, the fair value of certainSLB’s investment in ADC, based on the quoted market price of ADC’s shares, was approximately $1.4 billion and the carrying value of its reporting unitsinvestment was less than their carrying value. Therefore, Schlumberger performed an interim goodwill impairment test as$602 million. SLB accounts for its share of August 31, 2019.ADC’s net income on a one-quarter lag.
As
Schlumberger primarily used the income approach to estimate the fair value of its reporting units, but also considered the market approach to validate the results. The income approach estimates the fair value by discounting each reporting unit’s estimated future cash flows using Schlumberger’s estimate of the discount rate, or expected return, that a marketplace participant would have required as of the valuation date. The market approach includes the use of comparative multiples to corroborate the discounted cash flow results. The market approach involves significant judgement involved in the selection of the appropriate peer group companies and valuation multiples.
Some of the more significant assumptions inherent in the income approach include the estimated future net annual cash flows for each reporting unit and the discount rate. Schlumberger selected the assumptions used in the discounted cash flow projections using historical data supplemented by current and anticipated market conditions and estimated growth rates. Schlumberger’s estimates are based upon assumptions believed to be reasonable. 2021
The discount rates utilized to value Schlumberger’s reporting units were between 12.5% and 14.0%, depending on the risks and uncertainty inherent in the respective reporting unit. Assuming all other assumptions and inputs used in each of the respective discounted cash flow analysis were held constant, a 50 basis point increase in the discount rate assumption would have increased the goodwill impairment charge by approximately $0.3 billion. Conversely, assuming all other assumptions and inputs used in each of the respective discounted cash flow analysis were held constant, a 50 basis point decrease in the discount rate assumption would have decreased the goodwill impairment charge by approximately $0.4 billion.
|
|
Recoverability testing, which was performed as of August 31, 2019, indicated that long-lived assets associated with certain asset groups were impaired. The estimated fair value of these asset groups was determined to be below their carrying value. As a result, Schlumberger recorded the following impairment and related charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The fair value of certain of the assets impaired during the fourth quarter of 2019 was estimated based on the present value of projected future cash flows that the underlying assets are expected to generate. Such estimates included unobservable inputs that required significant judgment.
Fourth quarter of 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
During 2018, SchlumbergerSLB recorded the following charges and credits:credits during 2021, 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 |
| |||
Third quarter: |
|
|
|
|
|
|
|
| |||
Unrealized gain on marketable securities | $ | (47 | ) |
| $ | (11 | ) |
| $ | (36 | ) |
Fourth quarter: |
|
|
|
|
|
|
|
| |||
Gain on sale of Liberty shares |
| (28 | ) |
|
| (4 | ) |
|
| (24 | ) |
Early repayment of bonds |
| 10 |
|
|
| - |
|
| 10 |
| |
| $ | (65 | ) |
| $ | (15 | ) | $ | (50 | ) |
Third quarter 2021:
| (Stated in millions) |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Pretax |
|
| Tax |
|
| Net |
| |||
Gain on sale of marine seismic acquisition business | $ | (215 | ) |
| $ | (19 | ) |
| $ | (196 | ) |
Workforce reductions |
| 184 |
|
|
| 20 |
|
|
| 164 |
|
Asset impairments |
| 172 |
|
|
| 16 |
|
|
| 156 |
|
| $ | 141 |
|
| $ | 17 |
|
| $ | 124 |
|
Fourth quarter 2021:
|
|
|
|
|
|
4. Inventories
Inventories, which are stated at the lower of average cost or net realizable value, consist of the following:
(Stated in millions) |
| ||||||
|
|
|
|
|
| ||
| 2023 |
|
| 2022 |
| ||
Raw materials & field materials | $ | 2,296 |
| $ | 2,085 |
| |
Work in progress |
| 762 |
|
|
| 547 |
|
Finished goods |
| 1,329 |
|
| 1,367 |
| |
$ | 4,387 |
| $ | 3,999 |
|
38
(Stated in millions) |
| ||||||
|
|
|
|
|
|
|
|
| 2020 |
|
| 2019 |
| ||
Raw materials & field materials | $ | 1,573 |
|
| $ | 1,857 |
|
Work in progress |
| 464 |
|
|
| 515 |
|
Finished goods |
| 1,317 |
|
|
| 1,758 |
|
| $ | 3,354 |
|
| $ | 4,130 |
|
5. Fixed Assets
Fixed assets consist of the following:
(Stated in millions) | (Stated in millions) |
| (Stated in millions) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||
| 2020 |
|
| 2019 |
| 2023 |
|
| 2022 |
| ||||
Land | $ | 362 |
|
| $ | 483 |
| $ | 323 |
| $ | 326 |
| |
Buildings & improvements |
| 3,757 |
|
|
| 5,156 |
|
| 4,569 |
|
|
| 4,328 |
|
Machinery & equipment |
| 25,625 |
|
|
| 29,370 |
|
| 25,073 |
|
|
| 23,732 |
|
|
| 29,744 |
|
|
| 35,009 |
|
| 29,965 |
|
|
| 28,386 |
|
Less: Accumulated depreciation |
| 22,918 |
|
|
| 25,739 |
|
| 22,725 |
|
| 21,779 |
| |
| $ | 6,826 |
|
| $ | 9,270 |
| $ | 7,240 |
| $ | 6,607 |
|
The estimated useful lives of Buildings & improvements are primarily 25 to 30 years.years. The estimated useful lives of Machinery & equipment are primarily 5 to 10 years.years.
Depreciation expense, which is recorded on a straight-line basis, was $1.6 billion, $2.0 billion and $2.1$1.4 billion in 2020, 20192023, 2022, and 2018, respectively.2021.
6. Multiclient Seismic DataAcquisition
On October 2, 2023, SLB, Aker, and Subsea7 closed their previously announced joint venture. The changenew 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 carrying amountinitial net assets of multiclient seismic dataOneSubsea 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 preliminary estimates of the fair value of assets acquired and liabilities assumed in connection with the formation of the joint venture. The final determination of fair value for certain assets and liabilities will be completed as soon as the information necessary to complete the analysis is obtained. These amounts, which may differ materially from these preliminary estimates, will be finalized as follows:soon as possible, but no later than one year from the acquisition date.
(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 |
|
(Stated in millions) |
| ||||||
|
|
|
|
|
|
|
|
| 2020 |
|
| 2019 |
| ||
Balance at beginning of year | $ | 568 |
|
| $ | 601 |
|
Capitalized in period |
| 101 |
|
|
| 231 |
|
Charged to expense |
| (174 | ) |
|
| (264 | ) |
Impairment charge (see Note 3) |
| (156 | ) |
|
| - |
|
Other |
| (22 | ) |
|
| - |
|
| $ | 317 |
|
| $ | 568 |
|
39
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 |
| Total |
| ||||||||||
Balance, December 31, 2021 | $ | 2,052 |
|
| $ | 3,804 |
|
| $ | 6,281 |
|
| $ | 853 |
|
| $ | 12,990 |
|
Other |
| (8 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (8 | ) |
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 |
|
| (Stated in millions) |
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reservoir |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Characterization |
|
| Drilling |
|
| Production |
|
| Cameron |
|
| Total |
| |||||
Balance, January 1, 2019 | $ | 4,703 |
|
| $ | 10,111 |
|
| $ | 4,678 |
|
| $ | 5,439 |
|
| $ | 24,931 |
|
Impairment (see Note 3) |
| (97 | ) |
|
| (3,025 | ) |
|
| (705 | ) |
|
| (5,001 | ) |
|
| (8,828 | ) |
Impact of changes in exchange rates and other |
| (46 | ) |
|
| 6 |
|
|
| (24 | ) |
|
| 3 |
|
|
| (61 | ) |
Balance, December 31, 2019 |
| 4,560 |
|
|
| 7,092 |
|
|
| 3,949 |
|
|
| 441 |
|
|
| 16,042 |
|
Impairment (see Note 3) |
| - |
|
|
| (1,659 | ) |
|
| (1,228 | ) |
|
| (183 | ) |
|
| (3,070 | ) |
Impact of changes in exchange rates and other |
| - |
|
|
| 10 |
|
|
| (17 | ) |
|
| 3 |
|
|
| (4 | ) |
Balance, September 30, 2020 | $ | 4,560 |
|
| $ | 5,443 |
|
| $ | 2,704 |
|
| $ | 261 |
|
| $ | 12,968 |
|
In connection with the change in reportable segments discussed in Note 16 – Segment Information, Schlumberger reallocated goodwill that existed as of September 30, 2020 to the new reporting units on a relative fair value basis as follows:
| (Stated in millions) |
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Digital & |
|
| Reservoir |
|
| Well |
|
| Production |
|
|
|
|
| ||||
| Integration |
|
| Performance |
|
| Construction |
|
| Systems |
|
| Total |
| |||||
Balance, October 1, 2020 | $ | 2,041 |
|
| $ | 3,806 |
|
| $ | 6,267 |
|
| $ | 854 |
|
| $ | 12,968 |
|
Impact of changes in exchange rates and other |
| 6 |
|
|
| (4 | ) |
|
| 11 |
|
|
| (1 | ) |
|
| 12 |
|
Balance, December 31, 2020 | $ | 2,047 |
|
| $ | 3,802 |
|
| $ | 6,278 |
|
| $ | 853 |
|
| $ | 12,980 |
|
8. Intangible Assets
Intangible assets consist of the following:
| (Stated in millions) |
| (Stated in millions) |
| ||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||
| 2020 |
|
| 2019 |
| 2023 |
| 2022 |
| |||||||||||||||||||||||||||||||||||||
| Gross |
|
| Accumulated |
|
| Net Book |
|
| Gross |
|
| Accumulated |
|
| Net Book |
| Gross |
| Accumulated |
| Net Book |
| Gross |
| Accumulated |
| Net Book |
| |||||||||||||||||
| Book Value |
|
| Amortization |
|
| Value |
|
| Book Value |
|
| Amortization |
|
| Value |
| Book Value |
| Amortization |
|
| Value |
| Book Value |
| Amortization |
|
| Value |
| |||||||||||||||
Customer Relationships | $ | 1,744 |
|
| $ | 485 |
|
| $ | 1,259 |
|
| $ | 3,779 |
|
| $ | 868 |
|
| $ | 2,911 |
| $ | 1,887 |
| $ | 709 |
| $ | 1,178 |
| $ | 1,680 |
| $ | 631 |
| $ | 1,049 |
| |||||
Technology/Technical Know-How |
| 1,284 |
|
|
| 488 |
|
|
| 796 |
|
|
| 2,498 |
|
|
| 779 |
|
|
| 1,719 |
|
| 1,516 |
|
|
| 770 |
|
| 746 |
|
| 1,280 |
|
|
| 676 |
|
| 604 |
| |||
Tradenames |
| 767 |
|
|
| 166 |
|
|
| 601 |
|
|
| 1,885 |
|
|
| 264 |
|
|
| 1,621 |
|
| 795 |
|
| 265 |
|
| 530 |
|
| 767 |
|
| 222 |
|
| 545 |
| |||||
Other |
| 1,488 |
|
|
| 689 |
|
|
| 799 |
|
|
| 1,514 |
|
|
| 676 |
|
|
| 838 |
|
| 1,582 |
|
| 797 |
|
| 785 |
|
| 1,657 |
|
| 863 |
|
| 794 |
| |||||
| $ | 5,283 |
|
| $ | 1,828 |
|
| $ | 3,455 |
|
| $ | 9,676 |
|
| $ | 2,587 |
|
| $ | 7,089 |
| $ | 5,780 |
| $ | 2,541 |
| $ | 3,239 |
| $ | 5,384 |
| $ | 2,392 |
| $ | 2,992 |
|
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 tradenames are generally amortized over periods ranging from 15 to 30 years.years.
Amortization expense was $371$314 million in 2020, $6182023, $301 million in 20192022, and $673$302 million in 2018.2021.
Based on the carrying value of intangible assets at December 31, 2020,2023, amortization expense for the subsequent five years is estimated to be as follows: 2021: $3072024: $308 million, 2022: $3042025: $304 million, 2023: $2932026: $296 million, 2024: $2692027: $292 million and 2025: $2592028: $283 million.
40
9.
9. Long-term Debt and Debt Facility Agreements
Long-term Debt consists of the following:
(Stated in millions) | (Stated in millions) |
| (Stated in millions) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||
| 2020 |
|
| 2019 |
| 2023 |
|
| 2022 |
| ||||
3.65% Senior Notes due 2023 | $ | 1,496 |
|
| $ | 1,495 |
| |||||||
3.90% Senior Notes due 2028 |
| 1,450 |
|
|
| 1,444 |
| |||||||
2.65% Senior Notes due 2030 |
| 1,250 |
|
|
| - |
| |||||||
1.375% Guaranteed Notes due 2026 |
| 1,221 |
|
|
| - |
| |||||||
2.00% Guaranteed Notes due 2032 |
| 1,214 |
|
|
| - |
| |||||||
0.25% Notes due 2027 |
| 1,100 |
|
|
| 550 |
| |||||||
0.50% Notes due 2031 |
| 1,099 |
|
|
| 544 |
| |||||||
2.40% Senior Notes due 2022 |
| 999 |
|
|
| 998 |
| |||||||
4.00% Senior Notes due 2025 |
| 930 |
|
|
| 929 |
| |||||||
4.30% Senior Notes due 2029 |
| 846 |
|
|
| 845 |
| |||||||
3.75% Senior Notes due 2024 |
| 746 |
|
|
| 746 |
| |||||||
1.00% Guaranteed Notes due 2026 |
| 736 |
|
|
| 665 |
| |||||||
0.00% Notes due 2024 |
| 611 |
|
|
| 551 |
| |||||||
2.65% Senior Notes due 2022 |
| 598 |
|
|
| 598 |
| |||||||
1.40% Senior Notes due 2025 |
| 498 |
|
|
| - |
| |||||||
3.63% Senior Notes due 2022 |
| 295 |
|
|
| 294 |
| |||||||
7.00% Notes due 2038 |
| 206 |
|
|
| 208 |
| |||||||
5.95% Notes due 2041 |
| 114 |
|
|
| 114 |
| |||||||
5.13% Notes due 2043 |
| 99 |
|
|
| 99 |
| |||||||
4.00% Notes due 2023 |
| 80 |
|
|
| 81 |
| |||||||
3.70% Notes due 2024 |
| 55 |
|
|
| 55 |
| |||||||
3.30% Senior Notes due 2021 |
| - |
|
|
| 1,597 |
| |||||||
4.20% Senior Notes due 2021 |
| - |
|
|
| 600 |
| |||||||
Commercial paper borrowings |
| 393 |
|
|
| 2,222 |
| |||||||
Other |
| - |
|
|
| 135 |
| |||||||
3.90% Senior Notes due 2028 | $ | 1,469 |
| $ | 1,464 |
| ||||||||
2.65% Senior Notes due 2030 |
| 1,250 |
|
|
| 1,250 |
| |||||||
1.375% Guaranteed Notes due 2026 |
| 1,104 |
|
|
| 1,061 |
| |||||||
2.00% Guaranteed Notes due 2032 |
| 1,098 |
|
|
| 1,055 |
| |||||||
0.25% Notes due 2027 |
| 994 |
|
|
| 955 |
| |||||||
0.50% Notes due 2031 |
| 992 |
|
|
| 954 |
| |||||||
4.30% Senior Notes due 2029 |
| 847 |
|
| 847 |
| ||||||||
1.00% Guaranteed Notes due 2026 |
| 662 |
|
| 635 |
| ||||||||
4.00% Senior Notes due 2025 |
| 523 |
|
| 522 |
| ||||||||
1.40% Senior Notes due 2025 |
| 499 |
|
|
| 499 |
| |||||||
4.50% Senior Notes due 2028 |
| 497 |
|
|
| - |
| |||||||
4.85% Senior Notes due 2033 |
| 497 |
|
|
| - |
| |||||||
7.00% Notes due 2038 |
| 200 |
|
| 202 |
| ||||||||
5.95% Notes due 2041 |
| 112 |
|
| 112 |
| ||||||||
5.13% Notes due 2043 |
| 98 |
|
|
| 98 |
| |||||||
0.00% Notes due 2024 |
| - |
|
|
| 531 |
| |||||||
3.75% Senior Notes due 2024 |
| - |
|
| 355 |
| ||||||||
3.70% Notes due 2024 |
| - |
|
|
| 54 |
| |||||||
| $ | 16,036 |
|
| $ | 14,770 |
| $ | 10,842 |
| $ | 10,594 |
|
During the third quarter of 2020, Schlumberger issued $500 million of 1.40% Senior Notes due 2025 and $350 million of 2.65% Senior Notes due 2030.
During the second quarter of 2020, Schlumberger issued €1.0 billion of 1.375% Guaranteed Notes due 2026, $900 million of 2.65% Senior Notes due 2030 and €1.0 billion of 2.00% Guaranteed Notes due 2032.
During the second quarter of 2020, Schlumberger repurchased all $600 million of its 4.20% Senior Notes due 2021 and $935 million of its 3.30% Senior Notes due 2021. Schlumberger paid a premium of approximately $40 million in connection with these repurchases. This premium was classified in Impairments & other in the Consolidated Statement of Income (Loss). (See Note 3 – Charges and Credits.)
During the second quarter of 2020, Schlumberger established a €5.0 billion Guaranteed Euro Medium Term Note program that provides for the issuance of various types of debt instruments such as fixed or floating rate notes in euro, US dollar or other currencies. At December 31, 2020, Schlumberger had not issued any debt under this program.
During the first quarter of 2020, Schlumberger issued €400 million of 0.25% Notes due 2027 and €400 million of 0.50% Notes due 2031.
During the fourth quarter of 2019, Schlumberger repurchased the remaining $416 million of its 3.00% Senior Notes due 2020; $126 million of its 4.50% Senior Notes due 2021; $500 million of its 4.20% Senior Notes due 2021; and $106 million of its 3.60% Senior Notes due 2022.Schlumberger paid a premium of $28 million in connection with these repurchases. This premium, net of related credits, was classified as Impairments & other in the Consolidated Statement of Income (Loss). (See Note 3 - Charges and Credits.)
During the third quarter of 2019, Schlumberger issued €500 million of 0.00% Notes due 2024, €500 million of 0.25% Notes due 2027 and €500 million of 0.50% Notes due 2031.
During the third quarter of 2019, Schlumberger repurchased $783 million of its 3.00% Senior Notes due 2020 and $321 million of its 3.625% Senior Notes due 2022. Schlumberger paid a premium of $29 million in connection with these repurchases. This premium was classified as Impairments & other in the Consolidated Statement of Income (Loss). (See Note 3 - Charges and Credits.)
During the second quarter of 2019, Schlumberger completed a debt exchange offer, pursuant to which it issued $1.500 billion in principal of 3.90% Senior Notes due 2028 (the “New Notes”) in exchange for $401 million of 3.00% Senior Notes due 2020, $234 million of 3.63% Senior Notes due 2022 and $817 million of 4.00% Senior Notes due 2025. In connection with the exchange of principal, Schlumberger paid a premium of $48 million, substantially all of which was in the form of New Notes. This premium is being amortized as additional interest expense over the term of the New Notes.
During the first quarter of 2019 Schlumberger issued $750 million of 3.75% Senior Notes due 2024 and $850 million of 4.30% Senior Notes due 2029.
At December 31, 2020, Schlumberger2023, SLB had committed credit facility agreements with commercial banks aggregating $6.25$5.0 billion, all of which $5.86 billion was available and unused. These committed facilities support commercial paper programs in the United States and Europe, of which $2.0$2.75 billion matures in February 2023, $2.02027 and $3.0 billion matures in February 2025 and $1.5 billion matures in July 2025. Schlumberger also has a €1.54 billion committed revolving credit facility that expires in the second quarter of 2021 but can be extended at Schlumberger’s option for up to an additional year. At December 31, 2020, no amounts had been drawn under this facility. Interest rates and other terms of borrowing under these lines of credit vary by facility.2028.
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 Schlumberger’sSLB’s intent to maintain these obligations for longer than one year. BorrowingsThere were no borrowings under the commercial paper programs at December 31, 2020 were $0.4 billion, all of which was classified in Long-term debt in the Consolidated Balance Sheet. At2023 and December 31, 2019, borrowings under the commercial paper programs were $2.2 billion, all of which was classified in 2022, respectively.
Long-term debt Debtin the Consolidated Balance Sheet.
The weighted average interest rate on variable rate debt as of December 31, 2020 was 1.0%.
Long-term Debt as of December 31, 20202023 is due as follows: $1.0$1.9 billion in 2022, $1.9 billion in 2023, $1.4 billion in 2024, $1.5 billion in 2025, $2.0$1.8 billion in 2026, $1.1$1.0 billion in 2027, $2.0 billion in 2028, $0.8 billion in 2029 and $6.3$4.2 billion thereafter.
The fair value of Schlumberger’s SLB’s Long-term Debt at December 31, 20202023 and December 31, 20192022 was $17.3$10.2 billion and $15.3$9.4 billion, respectively, and was estimated based on quoted market prices.
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
As a multinational company, Schlumberger conducts its business in over 120 countries. Schlumberger’sSLB’s functional currency is primarily the US dollar. Approximately 73%72% of Schlumberger’sSLB’s revenues in 20202023 were denominated in US dollars. However, outside the United States, a significant portion of Schlumberger’sSLB’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 SchlumbergerSLB conducts business, the US dollar–reporteddollar-reported expenses will increase (decrease).
Schlumberger
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, 2023, were as follows:
41
A summary of the amounts included in the Consolidated Balance Sheet relating to cross currency interest rate swaps follows:
(Stated in millions) |
| ||||||
|
|
|
|
|
| ||
| Dec. 31, 2023 |
|
| Dec. 31, 2022 |
| ||
Other Assets | $ | 36 |
|
| $ | 1 |
|
Other Liabilities | $ | 67 |
| $ | 326 |
|
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 had derivative contracts in place that hedged the price of oil related to approximately 75% of the projected oil production for each of 2023 and 2022 for one of its APS projects. During 2023, SLB entered into derivative contracts that hedge the price of oil relating to approximately 75% of the projected oil production for the first six months of 2024; approximately 65% for the third quarter of 2024; and approximately 30% of the projected oil production for the fourth quarter 2024 for the same project. These contracts are accounted for as cash flow hedges, with changes in the fair value of the hedge recorded in Accumulated other comprehensive loss. Amounts recorded in Accumulated other comprehensive loss are reclassified to earnings in the same period or periods that the hedged item is recognized in earnings.
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. SchlumbergerSLB 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, with the changes in the fair value of the hedge recorded on the Consolidated Balance Sheet hedges.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.
SchlumbergerSLB is also exposed to risks on future cash flows relating to certain of its fixed rate debt denominated in currencies other than the functional currency. Schlumberger uses cross-currency swaps to provide a hedge against these cash flow risks. Included in Other Assets was $427 million at December 31, 2020 ($41 million at December 31, 2019) and included in Other Liabilities was $13 million at December 31, 2020 ($38 million at December 31, 2019) relating to the fair value of outstanding cross-currency swap derivatives. The fair value was determined using a model with inputs that are observable in the market or can be derived or collaborated by observable data.
During 2019, a US-dollar functional currency subsidiary of Schlumberger issued €1.5 billion of Euro-denominated debt. Schlumberger entered into cross-currency swaps for an aggregate notional amount of €1.5 billion in order to hedge changes in the fair value of its €0.5 billion 0.00% Notes due 2024, €0.5 billion 0.25% Notes due 2027 and €0.5 billion 0.50% Notes due 2031. These cross-currency swaps effectively convert the Euro-denominated notes to US-dollar denominated debt with fixed annual interest rates of 2.29%, 2.51% and 2.76%, respectively.
During the first quarter of 2020, a US-dollar functional currency subsidiary of Schlumberger issued €0.8 billion of Euro-denominated debt. Schlumberger entered into cross-currency swaps for an aggregate notional amount of €0.8 billion in order 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 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 the second quarter of 2020, a US-dollar functional currency subsidiary of Schlumberger issued €2.0 billion of Euro-denominated debt. Schlumberger entered into cross-currency swaps for an aggregate notional amount of €2.0 billion in order 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 swaps effectively convert the swapped portion of the Euro-denominated notes to US-dollar denominated debt with fixed annual interest rates of 2.77% and 3.49%, respectively.
During the third quarter of 2020, a Canadian dollar functional currency subsidiary of Schlumberger issued $0.5 billion of US dollar denominated debt. Schlumberger entered into cross-currency swaps for an aggregate notional amount of $0.5 billion in order to hedge changes in the fair value of its $0.5 billion 1.40% Senior Notes due 2025. These cross-currency swaps effectively convert the US dollar notes to Canadian dollar denominated debt with a fixed annual interest rate of 1.73%.
Schlumberger is exposed to changes in the fair value of assets and liabilities denominated in currencies other than the functional currency. While SchlumbergerSLB 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 contractsderivative is recorded on the Consolidated Balance Sheet and changes in the fair value are recognized in the Consolidated Statement of Income, (Loss), as are changes in the fair value of the hedged item. Transaction losses of $21$154 million in 20202023 (including $90 million related to the Argentina devaluation in 2023; see Note 3 – Charges and transaction gains of $2credits for further details), $96 million in 20192022, and $1$23 million in 20182021 were recognized in the Consolidated Statement of Income (Loss)net of related hedging activities.
At December 31, 2020,
Foreign currency forward contracts were outstanding for the US dollar equivalent of $8.6$5.4 billion and $2.1 billion in various foreign currencies as of which $6.4 billion relates to hedges of debt denominated in currencies other than the functional currency.December 31, 2023 and 2022, respectively.
Other than the previously mentioned cross-currency interest rate swaps, the fair value of the other outstanding derivatives was 0tnot material atas of December 31, 20202023 and 2019.2022.
42
The effect of derivative instruments designated as hedges and those not designated as hedges on the Consolidated Statement of Income (Loss)was as follows:
|
|
| (Stated in millions) |
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
| |||
| Gain (Loss) Recognized in Income |
|
| Consolidated Statement | |||||||||
2023 |
| 2022 |
| 2021 |
|
| of Income Classification | ||||||
Derivatives designated as cash flow hedges: |
|
|
|
|
|
|
|
|
|
| |||
Cross-currency interest rate swaps | $ | 173 |
|
| $ | (254 | ) |
| $ | (422 | ) |
| Cost of services/sales |
Cross-currency interest rate swaps |
| (88 | ) |
|
| (88 | ) |
|
| (83 | ) |
| Interest expense |
Commodity contracts |
| 3 |
|
|
| (87 | ) |
|
| - |
|
| Revenue |
Foreign exchange contracts |
| 15 |
|
|
| (30 | ) |
|
| 5 |
|
| Cost of services/sales |
$ | 103 |
|
| $ | (459 | ) |
| $ | (500 | ) |
|
| |
Derivatives not designated as hedges: |
|
|
|
| |||||||||
Foreign exchange contracts | $ | (9 | ) |
| $ | 42 |
|
| $ | (11 | ) |
| Cost of services/sales |
|
|
|
|
|
|
|
|
|
|
|
During the fourth quarter of 2023, SLB issued a credit default swap (“CDS”) for a notional amount of $275 million to a third-party financial institution. The CDS relates to a secured borrowing provided by the financial institution to SLB’s primary customer in Mexico. The secured borrowing was utilized by this customer to pay certain of SLB’s outstanding receivables. The notional amount of the CDS, which was increased to $560 million in January 2024, will reduce on a monthly basis over its 26-month term. The fair value of this derivative liability was not material at December 31, 2023.
|
|
|
|
| (Stated in millions) |
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gain (Loss) Recognized in Income (Loss) |
|
| Consolidated Statement | |||||||||
| 2020 |
|
| 2019 |
|
| 2018 |
|
| of Income (Loss) Classification | |||
Derivatives designated as cash flow hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross currency swap | $ | 493 |
|
| $ | (35 | ) |
| $ | 55 |
|
| Cost of services/sales |
Foreign exchange contracts |
| (5 | ) |
|
| (10 | ) |
|
| (1 | ) |
| Cost of services/sales |
| $ | 488 |
|
| $ | (45 | ) |
| $ | 54 |
|
|
|
Derivatives not designated as hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts | $ | (29 | ) |
| $ | (5 | ) |
| $ | 40 |
|
| Cost of services/sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schlumberger does not enter into derivative transactions for speculative purposes.
11. Stockholders’ Equity
SchlumbergerSLB is authorized to issue 4,500,000,000 shares of common stock, par value $0.01$0.01 per share, of which 1,392,325,9601,427,394,843 and 1,384,515,3451,420,188,492 shares were outstanding on December 31, 20202023 and 2019,2022, respectively. Holders of common stock are entitled to one vote for each share of stock held. SchlumbergerSLB is also authorized to issue 200,000,000 shares of preferred stock, par value $0.01$0.01 per share, which may be issued in series with terms and conditions determined by the SchlumbergerSLB Board of Directors. NaNNo shares of preferred stock have been issued.
Accumulated Other Comprehensive Loss consists of the following:
|
|
|
|
|
| (Stated in millions) |
| ||||
|
|
|
|
|
|
|
|
| |||
2023 |
|
| 2022 |
|
| 2021 |
| ||||
Currency translation adjustments | $ | (2,557 | ) |
| $ | (2,444 | ) |
| $ | (2,419 | ) |
Pension and other postretirement benefit plans |
| (1,709 | ) |
| (1,295 | ) |
| (1,066 | ) | ||
Cash flow hedges |
| 42 |
|
| (116 | ) |
| (85 | ) | ||
Other |
| (30 | ) |
| - |
|
| - |
| ||
| $ | (4,254 | ) | $ | (3,855 | ) | $ | (3,570 | ) |
| (Stated in millions) |
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pension and |
|
|
|
|
| |
| Currency |
|
|
|
|
|
|
|
|
|
| Other |
|
|
|
|
| ||
| Translation |
|
| Marketable |
|
| Cash Flow |
|
| Postretirement |
|
|
|
|
| ||||
| Adjustments |
|
| Securities |
|
| Hedges |
|
| Benefit Plans |
|
| Total |
| |||||
Balance, January 1, 2018 | $ | (2,139 | ) |
| $ | 13 |
|
| $ | 3 |
|
| $ | (2,151 | ) |
| $ | (4,274 | ) |
Reclassification to Retained Earnings of stranded tax effects resulting from US tax reform |
| - |
|
|
| - |
|
|
| - |
|
|
| (109 | ) |
|
| (109 | ) |
Other comprehensive loss before reclassifications |
| (191 | ) |
|
| (11 | ) |
|
| (16 | ) |
|
| (186 | ) |
|
| (404 | ) |
Amounts reclassified from accumulated other comprehensive loss |
| - |
|
|
| - |
|
|
| 1 |
|
|
| 182 |
|
|
| 183 |
|
Income taxes |
| - |
|
|
| - |
|
|
| - |
|
|
| (18 | ) |
|
| (18 | ) |
Balance, December 31, 2018 |
| (2,330 | ) |
|
| 2 |
|
|
| (12 | ) |
|
| (2,282 | ) |
|
| (4,622 | ) |
Other comprehensive loss before reclassifications |
| 67 |
|
|
| - |
|
|
| (32 | ) |
|
| 127 |
|
|
| 162 |
|
Amounts reclassified from accumulated other comprehensive loss |
| - |
|
|
| - |
|
|
| 10 |
|
|
| 83 |
|
|
| 93 |
|
Income taxes |
| - |
|
|
| - |
|
|
| - |
|
|
| (71 | ) |
|
| (71 | ) |
Balance, December 31, 2019 |
| (2,263 | ) |
|
| 2 |
|
|
| (34 | ) |
|
| (2,143 | ) |
|
| (4,438 | ) |
Other comprehensive loss before reclassifications |
| (239 | ) |
|
| - |
|
|
| (90 | ) |
|
| (247 | ) |
|
| (576 | ) |
Amounts reclassified from accumulated other comprehensive loss |
| - |
|
|
| - |
|
|
| 54 |
|
|
| 114 |
|
|
| 168 |
|
Income taxes |
| - |
|
|
| - |
|
|
| - |
|
|
| (38 | ) |
|
| (38 | ) |
Balance, December 31, 2020 | $ | (2,502 | ) |
| $ | 2 |
|
| $ | (70 | ) |
| $ | (2,314 | ) |
| $ | (4,884 | ) |
Other comprehensive loss was $447 million in 2020 and $239 million in 2018. Other comprehensive income was $184 million in 2019.
12. Stock-based Compensation Plans
SchlumbergerSLB has three types of stock-based compensation programs: (i) stock options, (ii) a restricted stock, restricted stock unit and performance share unit program (collectively referred to as “restricted stock”), and (iii)(ii) a discounted stock purchase plan (“DSPP”)., and (iii) stock options.
Stock Options
Key employees may be granted stock options under Schlumberger stock option plans. The exercise price equals the average of the high and low sales prices of Schlumberger stock on the date of grant. The maximum term is 10 years, and the options generally vest in increments over five years.
The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions and resulting weighted-average fair value per share:
| 2020 |
|
| 2019 |
|
| 2018 |
| |||
Dividend yield |
| 5.2 | % |
|
| 4.8 | % |
|
| 2.6 | % |
Expected volatility |
| 26 | % |
|
| 25 | % |
|
| 26 | % |
Risk-free interest rate |
| 1.7 | % |
|
| 2.7 | % |
|
| 2.6 | % |
Expected option life in years |
| 7.0 |
|
|
| 7.0 |
|
|
| 7.0 |
|
Weighted-average fair value per share | $ | 5.07 |
|
| $ | 6.21 |
|
| $ | 17.37 |
|
The following table summarizes information related to options outstanding and options exercisable as of December 31, 2020:
| (Shares stated in thousands) |
| |||||||||||||||||
|
|
| |||||||||||||||||
| Options Outstanding |
|
| Options Exercisable |
| ||||||||||||||
|
|
|
|
| Weighted- |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| Average |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| Remaining |
|
| Weighted- |
|
|
|
|
|
| Weighted- |
| |||
| Options |
|
| Contractual Life |
|
| Average |
|
| Options |
|
| Average |
| |||||
Exercise prices range | Outstanding |
|
| (in years) |
|
| Exercise Price |
|
| Exercisable |
|
| Exercise Price |
| |||||
$38.75 - $69.98 |
| 15,562 |
|
|
| 7.7 |
|
| $ | 44.48 |
|
|
| 3,846 |
|
| $ | 56.69 |
|
$70.31 - $76.74 |
| 9,462 |
|
|
| 2.1 |
|
| $ | 72.10 |
|
|
| 9,399 |
|
| $ | 72.06 |
|
$77.10 - $83.15 |
| 7,303 |
|
|
| 5.4 |
|
| $ | 79.29 |
|
|
| 5,425 |
|
| $ | 79.52 |
|
$83.89 - $88.77 |
| 8,549 |
|
|
| 3.0 |
|
| $ | 85.96 |
|
|
| 7,097 |
|
| $ | 85.66 |
|
$90.00 - $114.83 |
| 7,396 |
|
|
| 3.4 |
|
| $ | 95.79 |
|
|
| 7,396 |
|
| $ | 95.79 |
|
|
| 48,272 |
|
|
| 4.8 |
|
| $ | 70.37 |
|
|
| 33,163 |
|
| $ | 79.70 |
|
The weighted-average remaining contractual life of stock options exercisable as of December 31, 2020 was 3.3 years.
The following table summarizes stock option activity during the years ended December 31, 2020, 2019 and 2018:
| (Shares stated in thousands) |
| ||||||||||||||||||||||
|
|
| ||||||||||||||||||||||
| 2020 |
|
| 2019 |
|
| 2018 |
| ||||||||||||||||
|
|
|
|
| Weighted- |
|
|
|
|
|
| Weighted- |
|
|
|
|
|
| Weighted- |
| ||||
|
|
|
|
| Average |
|
|
|
|
|
| Average |
|
|
|
|
|
| Average |
| ||||
|
|
|
|
| Exercise |
|
|
|
|
|
| Exercise |
|
|
|
|
|
| Exercise |
| ||||
| Shares |
|
| Price |
|
| Shares |
|
| Price |
|
| Shares |
|
| Price |
| |||||||
Outstanding at beginning of year |
| 46,269 |
|
| $ | 75.65 |
|
|
| 43,529 |
|
| $ | 79.36 |
|
|
| 47,210 |
|
| $ | 79.13 |
| |
Granted |
| 7,468 |
|
| $ | 38.75 |
|
|
| 5,604 |
|
| $ | 41.50 |
|
|
| 2,121 |
|
| $ | 76.95 |
| |
Exercised |
| - |
|
| $ | - |
|
|
| (1,045 | ) |
| $ | 38.50 |
|
|
| (936 | ) |
| $ | 54.20 |
| |
Forfeited |
| (5,465 | ) |
| $ | 71.86 |
|
|
| (1,819 | ) |
| $ | 74.69 |
|
|
| (4,866 | ) |
| $ | 84.19 |
| |
Outstanding at year-end |
| 48,272 |
|
| $ | 70.37 |
|
|
| 46,269 |
|
| $ | 75.65 |
|
|
| 43,529 |
|
| $ | 79.36 |
|
Stock options outstanding and stock options exercisable as of December 31, 2020 had 0 intrinsic value.
The total intrinsic value of options exercised during the years ended December 31, 2019 and 2018 was $4 million and $15 million, respectively. There were 0 stock options exercised during the year ended December 31, 2020.
Restricted Stock
SchlumbergerSLB grants performance share units to its executive officers.certain key employees. The number of shares earned is determined at the end of each performance period based on Schlumberger’sSLB’s achievement of certain predefined targets as defineddescribed in the underlying performance share unit agreement. In the event SchlumbergerSLB exceeds the predefined target, shares for up to thea maximum of 250%250% of the target award may be awarded. In the event SchlumbergerSLB falls below the predefined target, a reduced number of shares may be awarded. If
Schlumberger SLB falls below the threshold award performance level, 0no shares will be awarded. As of December 31, 2020, 3.82023, 3.2 million performance share units were outstanding assuming the achievement of 100% of target.
All other restricted stock awards generally vest at the end of three years or vest ratably in equal tranches over a three-year period.
Restricted stock awards do not pay dividends or have voting rights prior to vesting. Accordingly, the fair value of a restricted stock award is generally the quoted market price of Schlumberger’sSLB’s stock on the date of grant less the present value of the expected dividends not received prior to vesting.
43
The following table summarizes information related to restricted stock transactions:activity:
| (Shares stated in thousands) |
| (Shares stated in millions) |
| ||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||
| 2020 |
|
| 2019 |
|
| 2018 |
| 2023 |
|
| 2022 |
|
| 2021 |
| ||||||||||||||||||||||||||||||
|
|
|
|
| Weighted- |
|
|
|
|
|
| Weighted- |
|
|
|
|
|
| Weighted- |
|
|
| Weighted- |
|
|
| Weighted- |
|
|
| Weighted- |
| ||||||||||||||
|
|
|
|
| Average |
|
|
|
|
|
| Average |
|
|
|
|
|
| Average |
|
|
| Average |
|
|
| Average |
|
|
| Average |
| ||||||||||||||
| Restricted |
|
| Grant Date |
|
| Restricted |
|
| Grant Date |
|
| Restricted |
|
| Grant Date |
| Restricted |
| Grant Date |
| Restricted |
| Grant Date |
| Restricted |
| Grant Date |
| |||||||||||||||||
| Stock |
|
| Fair Value |
|
| Stock |
|
| Fair Value |
|
| Stock |
|
| Fair Value |
| Stock |
| Fair Value |
|
| Stock |
| Fair Value |
|
| Stock |
| Fair Value |
| |||||||||||||||
Unvested at beginning of year |
| 11,822 |
|
| $ | 49.86 |
|
|
| 6,951 |
|
| $ | 70.13 |
|
|
| 5,428 |
|
| $ | 72.33 |
|
| 18 |
|
| $ | 30.24 |
|
| 22 |
|
| $ | 29.03 |
|
| 19 |
| $ | 35.24 |
| |||
Granted |
| 10,637 |
|
| $ | 26.53 |
|
|
| 7,888 |
|
| $ | 35.56 |
|
|
| 3,204 |
|
| $ | 70.54 |
|
| 5 |
|
| $ | 56.24 |
|
| 7 |
|
| $ | 36.16 |
|
| 8 |
| $ | 25.16 |
| |||
Adjustments for performance achieved |
| 2 |
|
| $ | 32.47 |
|
|
| 2 |
|
| $ | 35.55 |
|
|
| - |
|
| $ | - |
| |||||||||||||||||||||||
Vested |
| (3,059 | ) |
| $ | 71.56 |
|
|
| (2,722 | ) |
| $ | 72.09 |
|
|
| (982 | ) |
| $ | 77.62 |
|
| (11 | ) |
| $ | 29.82 |
|
|
| (13 | ) |
| $ | 32.42 |
|
|
| (5 | ) |
| $ | 48.44 |
|
Forfeited |
| (637 | ) |
| $ | 45.95 |
|
|
| (295 | ) |
| $ | 57.41 |
|
|
| (699 | ) |
| $ | 70.67 |
| |||||||||||||||||||||||
Unvested at year-end |
| 18,763 |
|
| $ | 35.24 |
|
|
| 11,822 |
|
| $ | 49.86 |
|
|
| 6,951 |
|
| $ | 70.13 |
|
| 14 |
| $ | 39.88 |
|
| 18 |
| $ | 30.24 |
|
| 22 |
| $ | 29.03 |
|
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 SchlumbergerSLB common stock. TheUntil July 1, 2022, the purchase price of the stock is 92.5%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:
| 2023 |
|
| 2022 |
|
| 2021 |
| |||
Dividend yield |
| 1.7 | % |
|
| 1.8 | % |
|
| 2.0 | % |
Expected volatility |
| 50 | % |
|
| 47 | % |
|
| 67 | % |
Risk-free interest rate |
| 5.13 | % |
|
| 1.32 | % |
|
| 0.07 | % |
Weighted-average fair value per share | $ | 14.93 |
|
| $ | 8.05 |
|
| $ | 6.72 |
|
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.
| 2020 |
|
| 2019 |
|
| 2018 |
| |||
Dividend yield |
| 4.0 | % |
|
| 5.3 | % |
|
| 2.9 | % |
Expected volatility |
| 43 | % |
|
| 30 | % |
|
| 22 | % |
Risk-free interest rate |
| 0.88 | % |
|
| 2.3 | % |
|
| 1.6 | % |
Weighted-average fair value per share | $ | 5.38 |
|
| $ | 5.81 |
|
| $ | 9.01 |
|
The following table summarizes stock option activity:
| (Shares stated in millions) |
| |||||||||||||||||||||
|
| ||||||||||||||||||||||
2023 |
|
| 2022 |
|
| 2021 |
| ||||||||||||||||
|
| Weighted- |
|
|
|
| Weighted- |
|
|
|
| Weighted- |
| ||||||||||
|
|
|
| Average |
|
|
|
|
| Average |
|
|
|
|
| Average |
| ||||||
|
|
|
| Exercise |
|
|
|
|
| Exercise |
|
|
|
|
| Exercise |
| ||||||
| Shares |
| Price |
|
| Shares |
| Price |
|
| Shares |
| Price |
| |||||||||
Outstanding at beginning of year |
| 35 |
|
| $ | 70.31 |
|
| 42 |
|
| $ | 68.95 |
|
| 48 |
|
| $ | 70.37 |
| ||
Exercised |
| (2 | ) |
| $ | 40.02 |
|
|
| (2 | ) |
| $ | 40.04 |
|
|
| - |
|
| $ | - |
|
Forfeited / Expired |
| (5 | ) |
| $ | 73.18 |
|
| (5 | ) |
| $ | 71.45 |
|
| (6 | ) |
| $ | 80.46 |
| ||
Outstanding at year-end |
| 28 |
| $ | 72.33 |
|
| 35 |
| $ | 70.31 |
|
| 42 |
| $ | 68.95 |
|
44
The following table summarizes information related to options outstanding and options exercisable as of December 31, 2023:
| (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 | 7 | 5.6 | $39.76 | 4 | $40.08 | ||||
$47.55 - $79.85 | 7 | 2.3 | $71.46 | 6 | $71.49 | ||||
$80.53 - $88.77 | 8 |
| 2.3 |
| $84.44 |
| 8 |
| $84.44 |
$91.28 - $114.83 | 6 | 0.8 | $96.31 | 6 | $96.31 | ||||
28 | 2.9 | $72.33 | 24 | $77.21 |
The weighted-average remaining contractual life of stock options exercisable as of December 31, 2023 was 2.4 years.
The aggregate intrinsic value of stock options outstanding and stock options exercisable as of December 31, 2023 was $90 million and $44 million, respectively.
Total Stock-based Compensation Expense
The following summarizes stock-based compensation expense recognized in income:
(Stated in millions) | (Stated in millions) |
| (Stated in millions) |
| ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 2020 |
|
| 2019 |
|
| 2018 |
| 2023 |
|
| 2022 |
|
| 2021 |
| ||||||
Stock options | $ | 75 |
|
| $ | 99 |
|
| $ | 134 |
| |||||||||||
Restricted stock |
| 293 |
|
|
| 274 |
|
|
| 179 |
| $ | 225 |
|
| $ | 255 |
|
| $ | 254 |
|
DSPP |
| 29 |
|
|
| 32 |
|
|
| 32 |
|
| 56 |
|
|
| 41 |
|
|
| 34 |
|
Stock options |
| 12 |
|
|
| 17 |
|
|
| 36 |
| |||||||||||
| $ | 397 |
|
| $ | 405 |
|
| $ | 345 |
| $ | 293 |
|
| $ | 313 |
|
| $ | 324 |
|
At December 31, 2020,2023, there was $335$278 million of total unrecognized compensation cost related to nonvested stock-based compensation arrangements, of which $198$164 million is expected to be recognized in 2021, $1022024, $89 million in 2022, $262025, $21 million in 2023,2026, and $9$4 million in 2024.2027.
As of December 31, 2020,2023, approximately 1624 million shares of SchlumbergerSLB common stock were available for future grants under Schlumberger’sSLB’s stock-based compensation programs.
13. Income Taxes
Schlumberger operates in more than 100 tax jurisdictions, where statutory tax rates generally vary from 0% to 35%.
Income (loss) before taxes subject to United States and non-United States income taxes was as follows:
(Stated in millions) | (Stated in millions) |
| (Stated in millions) |
| ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 2020 |
|
| 2019 |
|
| 2018 |
| 2023 |
|
| 2022 |
|
| 2021 |
| ||||||
United States | $ | (4,394 | ) |
| $ | (8,991 | ) |
| $ | (55 | ) | $ | 355 |
|
| $ | 600 |
|
| $ | 30 |
|
Outside United States |
| (6,904 | ) |
|
| (1,427 | ) |
|
| 2,679 |
|
| 4,927 |
|
|
| 3,671 |
|
|
| 2,344 |
|
| $ | (11,298 | ) |
| $ | (10,418 | ) |
| $ | 2,624 |
| $ | 5,282 |
|
| $ | 4,271 |
| $ | 2,374 |
|
SchlumbergerSLB recorded net pretax charges of $12.515 billion$110 million in 20202023 ($3.961 billion2 million of net credits in the US and $8.554 billion$112 million of charges outside the US); $12.901 billion$347 million in 20192022 ($8.769 billion379 million of net credits in the US and $4.132 billion$32 million of net charges outside the US); and $141net pretax credits of $65 million in 20182021 ($10275 million of credits in the US and $39$10 million of 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.
45
The components of net deferred tax assets (liabilities)liabilities were as follows:
(Stated in millions) | (Stated in millions) |
| (Stated in millions) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||
| 2020 |
|
| 2019 |
| 2023 |
|
| 2022 |
| ||||
Intangible assets | $ | (881 | ) |
| $ | (1,790 | ) | $ | (844 | ) |
| $ | (780 | ) |
Net operating losses |
| 421 |
|
|
| 144 |
|
| 214 |
|
|
| 326 |
|
Fixed assets, net |
| 151 |
|
|
| 434 |
|
| 190 |
|
|
| 101 |
|
Inventories |
| 59 |
|
|
| 155 |
| |||||||
Investments in non-US subsidiaries |
| (171 | ) |
|
| (220 | ) | |||||||
Foreign tax credits |
| - |
|
|
| 312 |
| |||||||
Research and development credits |
| 162 |
|
|
| 129 |
| |||||||
Capitalized research and development costs |
| 155 |
|
|
| 72 |
| |||||||
Pension and other postretirement benefits |
| (94 | ) |
|
| (114 | ) | |||||||
Other, net |
| 402 |
|
|
| 474 |
|
| 77 |
|
|
| 205 |
|
| $ | (19 | ) |
| $ | (491 | ) | $ | (140 | ) |
| $ | (61 | ) |
The deferred tax balances at December 31, 2020 and 2019 were net of valuation allowances relating to net operating losses in certain countries of $127 million and $82 million, respectively. Additionally, the deferred tax balances at December 31, 2020 were net of valuation allowances relating to foreign tax credits and capital losses of $106 million and $54 million, respectively.
Approximately $353$194 million of the $421$214 million deferred tax asset relating to net operating losses at December 31, 20202023 can be carried forward indefinitely. The vast majority of the remaining balance expires at various dates between 20302032 and 2040.2041.
Schlumberger generally does not provide for taxes related
The deferred tax balance at December 31, 2023 and 2022 was net of valuation allowances relating to the undistributed earnings of its subsidiaries because such earnings either would not be taxable when remitted or they are considered to be indefinitely reinvested. following:
(Stated in millions) |
| ||||||
|
|
|
|
|
| ||
| 2023 |
|
| 2022 |
| ||
Foreign tax credits | $ | 188 |
|
| $ | 181 |
|
Net operating losses | $ | 106 |
|
| $ | 111 |
|
The components of Tax expense (benefit)were as follows:
(Stated in millions) |
| ||||||||||
|
|
|
|
|
|
|
|
| |||
| 2023 |
|
| 2022 |
|
| 2021 |
| |||
Current: |
|
|
|
|
|
|
|
| |||
United States-Federal | $ | (23 | ) |
| $ | 2 |
|
| $ | (32 | ) |
United States-State |
| 5 |
|
|
| 3 |
|
|
| - |
|
Outside United States |
| 997 |
|
|
| 813 |
|
|
| 509 |
|
| 979 |
|
|
| 818 |
|
|
| 477 |
| |
Deferred: |
|
|
|
|
| ||||||
United States-Federal | $ | (77 | ) |
| $ | 98 |
|
| $ | (132 | ) |
United States-State |
| 6 |
|
|
| 13 |
|
|
| 12 |
|
Outside United States |
| 104 |
|
|
| (70 | ) |
|
| (15 | ) |
Valuation allowance |
| (5 | ) |
|
| (80 | ) |
|
| 104 |
|
| 28 |
|
|
| (39 | ) |
|
| (31 | ) | |
$ | 1,007 |
|
| $ | 779 |
|
| $ | 446 |
|
(Stated in millions) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| 2020 |
|
| 2019 |
|
| 2018 |
| |||
Current: |
|
|
|
|
|
|
|
|
|
|
|
United States-Federal | $ | 21 |
|
| $ | (81 | ) |
| $ | 124 |
|
United States-State |
| 5 |
|
|
| 11 |
|
|
| (50 | ) |
Outside United States |
| 410 |
|
|
| 770 |
|
|
| 618 |
|
|
| 436 |
|
|
| 700 |
|
|
| 692 |
|
Deferred: |
|
|
|
|
|
|
|
|
|
|
|
United States-Federal | $ | (824 | ) |
| $ | (660 | ) |
| $ | (143 | ) |
United States-State |
| (67 | ) |
|
| (93 | ) |
|
| (4 | ) |
Outside United States |
| (563 | ) |
|
| (257 | ) |
|
| (69 | ) |
Valuation allowance |
| 206 |
|
|
| (1 | ) |
|
| (29 | ) |
|
| (1,248 | ) |
|
| (1,011 | ) |
|
| (245 | ) |
| $ | (812 | ) |
| $ | (311 | ) |
| $ | 447 |
|
A reconciliation of the United States statutory federal tax rate to the consolidated effective tax rate follows:
| 2020 |
|
| 2019 |
|
| 2018 |
| 2023 |
|
| 2022 |
|
| 2021 |
| ||||||
US federal statutory rate |
| 21 | % |
|
| 21 | % |
|
| 21 | % |
| 21 | % |
|
| 21 | % |
|
| 21 | % |
State tax |
| - |
|
|
| - |
|
|
| (2 | ) | |||||||||||
Non-US income taxed at different rates |
| - |
|
|
| - |
|
|
| (2 | ) | |||||||||||
Charges and credits (See Note 3) |
| (14 | ) |
|
| (19 | ) |
|
| - |
|
| - |
|
|
| (1 | ) |
|
| - |
|
Other |
| - |
|
|
| 1 |
|
|
| - |
|
| (2 | ) |
|
| (2 | ) |
|
| (2 | ) |
|
| 7 | % |
|
| 3 | % |
|
| 17 | % |
| 19 | % |
|
| 18 | % |
|
| 19 | % |
A number of the jurisdictions in which SchlumbergerSLB operates have tax laws that are not fully defined and are evolving. Schlumberger’sSLB’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.
46
A reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions for the years ended December 31, 2020, 2019 and 2018 is as follows:
(Stated in millions) | (Stated in millions) |
| (Stated in millions) |
| ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 2020 |
|
| 2019 |
|
| 2018 |
| 2023 |
|
| 2022 |
|
| 2021 |
| ||||||
Balance at beginning of year | $ | 1,301 |
|
| $ | 1,433 |
|
| $ | 1,393 |
| $ | 893 |
|
| $ | 1,001 |
|
| $ | 1,271 |
|
Additions based on tax positions related to the current year |
| 76 |
|
|
| 86 |
|
|
| 88 |
|
| 66 |
|
|
| 41 |
|
|
| 38 |
|
Additions for tax positions of prior years |
| 78 |
|
|
| 65 |
|
|
| 145 |
|
| 91 |
|
|
| 64 |
|
|
| 19 |
|
Impact of changes in exchange rates |
| (3 | ) |
|
| 2 |
|
|
| (41 | ) |
| (25 | ) |
|
| (38 | ) |
|
| (24 | ) |
Settlements with tax authorities |
| (15 | ) |
|
| (50 | ) |
|
| (22 | ) |
| (36 | ) |
|
| (37 | ) |
|
| (49 | ) |
Reductions for tax positions of prior years |
| (87 | ) |
|
| (176 | ) |
|
| (57 | ) |
| (176 | ) |
|
| (94 | ) |
|
| (228 | ) |
Reductions due to the lapse of the applicable statute of limitations |
| (79 | ) |
|
| (59 | ) |
|
| (73 | ) | |||||||||||
Reductions due to the lapse of statute of limitations |
| (30 | ) |
|
| (44 | ) |
|
| (26 | ) | |||||||||||
| $ | 1,271 |
|
| $ | 1,301 |
|
| $ | 1,433 |
| $ | 783 |
|
| $ | 893 |
|
| $ | 1,001 |
|
The amounts above exclude accrued interest and penalties of $184$155 million $188 millionat both December 31, 2023 and $2052022, and $164 million at December 31, 2020, 2019 and 2018,2021, respectively. SchlumbergerSLB classifies interest and penalties relating to uncertain tax positions within Tax expense (benefit) in the Consolidated Statement of Income (Loss).
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 SchlumbergerSLB operates:
Canada |
|
Ecuador |
|
Mexico |
|
Norway |
|
Russia |
|
Saudi Arabia |
|
United Kingdom | 2017 - |
United States |
|
In certain of the jurisdictions noted above, Schlumberger operates through more than one legal entity, each of which may have different open years subject to examination. The table above presents the open years subject to examination for the most material of the legal entities in each jurisdiction. Additionally, it is important to note that tax years are technically not closed until the statute of limitations in each jurisdiction expires. In the jurisdictions noted above, the statute of limitations can extend beyond the open years subject to examination.
14. Leases and Lease Commitments
Schlumberger’sSLB’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$1.4 billion in 20202023 and $1.7$1.2 billion in each of 2019both 2022 and 2018. 2021.
Maturities of operating lease liabilities as of December 31, 20202023 were as follows:
(Stated in millions) |
| ||
|
|
|
|
2021 | $ | 256 |
|
2022 |
| 200 |
|
2023 |
| 160 |
|
2024 |
| 128 |
|
2025 |
| 92 |
|
Thereafter |
| 318 |
|
Total lease payments | $ | 1,154 |
|
Less: Interest |
| (143 | ) |
| $ | 1,011 |
|
Amounts recognized in balance sheet |
|
|
|
Accounts payable and accrued liabilities | $ | 248 |
|
Other Liabilities |
| 763 |
|
| $ | 1,011 |
|
Operating lease assets of $0.8 billion and $1.3 billion as of December 31, 2020 and 2019, respectively, were included in Other Assets in the Consolidated Balance Sheet. Operating lease liabilities as of December 31, 2019 were $1.0 billion, of which $0.2 billion was classified in Accounts payable and accrued liabilities and $0.8 billion was classified in Other Liabilities in the Consolidated Balance Sheet.
(Stated in millions) |
| ||
|
|
| |
2024 | $ | 208 |
|
2025 |
| 170 |
|
2026 |
| 117 |
|
2027 |
| 98 |
|
2028 |
| 80 |
|
Thereafter |
| 271 |
|
Total lease payments | $ | 944 |
|
Less: Interest |
| (134 | ) |
$ | 810 |
| |
Amounts recognized in balance sheet: |
|
| |
Accounts payable and accrued liabilities | $ | 201 |
|
Other Liabilities |
| 609 |
|
| $ | 810 |
|
The weighted-average remaining lease term as of December 31, 20202023 was 8 years.9 years. The weighted-average discount rate used to determine the operating lease liability as of December 31, 20202023 was 3.2%3.6%.
15. Contingencies
SchlumbergerSLB 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.
47
16. Segment Information
During 2020, Schlumberger restructured its organization in order to prepare for a changing industry future. This new structureSLB is aligned with customer workflows and is directly linked to Schlumberger’s corporate strategy, a key element of which is customer collaboration.
The new organization consists oforganized under four Divisions that combine and integrate Schlumberger’sSLB’s technologies, enhancing the portfolio of capabilities thatCompany’s ability to support the emerging long-term growth opportunities in each of these market segments.
The four Divisions, representing Schlumberger’sSLB’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 for the years ended December 31, 2020, 2019 and 2018, by segment is as follows:
|
|
| (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 |
| ||
Pretax segment operating income |
|
|
|
| 6,523 |
|
|
|
|
|
|
|
| ||||||
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 |
| ||
Pretax segment operating income |
|
|
|
| 5,011 |
|
|
|
|
|
|
|
| ||||||
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 |
|
48
|
|
|
|
| (Stated in millions) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2020 |
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation |
|
|
|
|
| |
|
|
|
|
| Income (Loss) |
|
|
|
|
|
| and |
|
| Capital |
| |||
| Revenue |
|
| Before Taxes |
|
| Assets |
|
| Amortization |
|
| Investments |
| |||||
Digital & Integration | $ | 3,076 |
|
| $ | 731 |
|
| $ | 3,595 |
|
| $ | 615 |
|
| $ | 413 |
|
Reservoir Performance |
| 5,602 |
|
|
| 353 |
|
|
| 3,489 |
|
|
| 549 |
|
|
| 384 |
|
Well Construction |
| 8,605 |
|
|
| 866 |
|
|
| 4,768 |
|
|
| 580 |
|
|
| 420 |
|
Production Systems |
| 6,650 |
|
|
| 623 |
|
|
| 4,665 |
|
|
| 338 |
|
|
| 240 |
|
Eliminations & other |
| (332 | ) |
|
| (172 | ) |
|
| 940 |
|
|
| 276 |
|
|
| 63 |
|
|
|
|
|
|
| 2,401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and intangible assets |
|
|
|
|
|
|
|
|
| 16,436 |
|
|
|
|
|
|
|
|
|
Cash and short-term investments |
|
|
|
|
|
|
|
|
| 3,006 |
|
|
|
|
|
|
|
|
|
All other assets |
|
|
|
|
|
|
|
|
| 5,535 |
|
|
|
|
|
|
|
|
|
Corporate & other (1) |
|
|
|
|
| (681 | ) |
|
|
|
|
|
| 208 |
|
|
|
|
|
Interest income (2) |
|
|
|
|
| 31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense (3) |
|
|
|
|
| (534 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Charges & credits (4) |
|
|
|
|
| (12,515 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 23,601 |
|
| $ | (11,298 | ) |
| $ | 42,434 |
|
| $ | 2,566 |
|
| $ | 1,520 |
|
|
|
| (Stated in millions) |
| |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
2021 |
| ||||||||||||||||||
|
|
|
|
|
|
| Depreciation |
|
|
| |||||||||
|
|
|
| Pretax |
|
|
|
|
| and |
|
| Capital |
| |||||
| Revenue |
|
| Income |
|
| Assets |
|
| Amortization |
|
| Investments |
| |||||
Digital & Integration | $ | 3,290 |
|
| $ | 1,141 |
| $ | 3,134 |
|
| $ | 446 |
| $ | 516 |
| ||
Reservoir Performance |
| 4,599 |
|
|
| 648 |
|
| 2,923 |
|
|
| 415 |
|
| 348 |
| ||
Well Construction |
| 8,706 |
|
|
| 1,195 |
|
| 4,714 |
|
|
| 537 |
|
| 424 |
| ||
Production Systems |
| 6,710 |
|
|
| 634 |
|
|
| 4,684 |
|
|
| 302 |
|
|
| 267 |
|
Eliminations & other |
| (376 | ) |
|
| (253 | ) |
| 1,501 |
|
|
| 269 |
|
| 99 |
| ||
Pretax segment operating income |
|
|
|
| 3,365 |
|
|
|
|
|
|
|
| ||||||
Goodwill and intangible assets |
|
|
|
|
|
|
| 16,201 |
|
|
|
|
|
|
| ||||
Cash and short-term investments |
|
|
|
|
|
|
| 3,139 |
|
|
|
|
|
|
| ||||
All other assets |
|
|
|
|
|
|
| 5,215 |
|
|
|
|
|
|
| ||||
Corporate & other (1) |
|
|
|
| (573 | ) |
|
|
|
| 151 |
|
|
| |||||
Interest income (2) |
|
|
|
| 31 |
|
|
|
|
|
|
|
| ||||||
Interest expense (3) |
|
|
|
| (514 | ) |
|
|
|
|
|
|
|
|
| ||||
Charges & credits (4) |
|
|
|
| 65 |
|
|
|
|
|
|
|
| ||||||
$ | 22,929 |
| $ | 2,374 |
| $ | 41,511 |
|
| $ | 2,120 |
| $ | 1,654 |
|
|
|
|
|
| (Stated in millions) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2019 |
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation |
|
|
|
|
| |
|
|
|
|
| Income (Loss) |
|
|
|
|
|
| and |
|
| Capital |
| |||
| Revenue |
|
| Before Taxes |
|
| Assets |
|
| Amortization |
|
| Investments |
| |||||
Digital & Integration | $ | 4,145 |
|
| $ | 882 |
|
| $ | 6,388 |
|
| $ | 1,069 |
|
| $ | 1,020 |
|
Reservoir Performance |
| 9,299 |
|
|
| 992 |
|
|
| 5,198 |
|
|
| 807 |
|
|
| 569 |
|
Well Construction |
| 11,880 |
|
|
| 1,429 |
|
|
| 6,913 |
|
|
| 656 |
|
|
| 650 |
|
Production Systems |
| 8,167 |
|
|
| 847 |
|
|
| 5,625 |
|
|
| 390 |
|
|
| 384 |
|
Eliminations & other |
| (574 | ) |
|
| (172 | ) |
|
| 1,314 |
|
|
| 250 |
|
|
| 113 |
|
|
|
|
|
|
| 3,978 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and intangible assets |
|
|
|
|
|
|
|
|
| 23,130 |
|
|
|
|
|
|
|
|
|
Cash and short-term investments |
|
|
|
|
|
|
|
|
| 2,167 |
|
|
|
|
|
|
|
|
|
All other assets |
|
|
|
|
|
|
|
|
| 5,577 |
|
|
|
|
|
|
|
|
|
Corporate & other (1) |
|
|
|
|
| (957 | ) |
|
|
|
|
|
| 417 |
|
|
|
|
|
Interest income (2) |
|
|
|
|
| 33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense (3) |
|
|
|
|
| (571 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Charges & credits (4) |
|
|
|
|
| (12,901 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 32,917 |
|
| $ | (10,418 | ) |
| $ | 56,312 |
|
| $ | 3,589 |
|
| $ | 2,736 |
|
|
|
|
|
| (Stated in millions) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2018 |
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation |
|
|
|
|
| |
|
|
|
|
| Income |
|
|
|
|
|
| and |
|
| Capital |
| |||
| Revenue |
|
| Before Taxes |
|
| Assets |
|
| Amortization |
|
| Investments |
| |||||
Digital & Integration | $ | 3,820 |
|
| $ | 882 |
|
| $ | 6,784 |
|
| $ | 894 |
|
| $ | 1,091 |
|
Reservoir Performance |
| 10,050 |
|
|
| 1,169 |
|
|
| 7,396 |
|
|
| 850 |
|
|
| 899 |
|
Well Construction |
| 11,310 |
|
|
| 1,465 |
|
|
| 7,112 |
|
|
| 713 |
|
|
| 769 |
|
Production Systems |
| 8,168 |
|
|
| 843 |
|
|
| 5,632 |
|
|
| 423 |
|
|
| 343 |
|
Eliminations & other |
| (533 | ) |
|
| (172 | ) |
|
| 1,448 |
|
|
| 237 |
|
|
| 139 |
|
|
|
|
|
|
| 4,187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and intangible assets |
|
|
|
|
|
|
|
|
| 33,658 |
|
|
|
|
|
|
|
|
|
Cash and short-term investments |
|
|
|
|
|
|
|
|
| 2,777 |
|
|
|
|
|
|
|
|
|
All other assets |
|
|
|
|
|
|
|
|
| 5,700 |
|
|
|
|
|
|
|
|
|
Corporate & other (1) |
|
|
|
|
| (937 | ) |
|
|
|
|
|
| 439 |
|
|
|
|
|
Interest income (2) |
|
|
|
|
| 52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense (3) |
|
|
|
|
| (537 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Charges & credits (4) |
|
|
|
|
| (141 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 32,815 |
|
| $ | 2,624 |
|
| $ | 70,507 |
|
| $ | 3,556 |
|
| $ | 3,241 |
|
|
|
|
|
|
|
|
|
Segment assets consist of receivables, inventories, fixed assets, multiclient seismicexploration data, and APS investments.
Capital investments includes capital expenditures, APS investments, and multiclient seismicexploration data cost capitalized.
Depreciation and amortization includes depreciation of property, plant and equipmentfixed assets and amortization of intangible assets, multiclient seismicexploration data costs, and APS investments.
Revenue by geographic areafor the years ended December 31, 2020, 20192023, 2022, and 2018 is2021 was as follows:
(Stated in millions) | (Stated in millions) |
| (Stated in millions) |
| ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 2020 |
|
| 2019 |
|
| 2018 |
| 2023 |
|
| 2022 |
|
| 2021 |
| ||||||
North America | $ | 5,478 |
|
| $ | 10,446 |
|
| $ | 11,730 |
| $ | 6,727 |
|
| $ | 5,995 |
|
| $ | 4,466 |
|
Latin America |
| 3,472 |
|
|
| 4,544 |
|
|
| 4,013 |
|
| 6,645 |
|
|
| 5,661 |
|
|
| 4,459 |
|
Europe/CIS/Africa |
| 5,963 |
|
|
| 7,682 |
|
|
| 7,113 |
| |||||||||||
Europe & Africa * |
| 8,524 |
|
|
| 7,201 |
|
|
| 5,778 |
| |||||||||||
Middle East & Asia |
| 8,567 |
|
|
| 10,016 |
|
|
| 9,582 |
|
| 11,019 |
|
|
| 9,033 |
|
|
| 8,059 |
|
Eliminations & other |
| 121 |
|
|
| 229 |
|
|
| 377 |
|
| 220 |
|
|
| 201 |
|
|
| 167 |
|
| $ | 23,601 |
|
| $ | 32,917 |
|
| $ | 32,815 |
| $ | 33,135 |
|
| $ | 28,091 |
|
| $ | 22,929 |
|
* Includes Russia and the Caspian region
Revenue is based on the location where services are provided and products are sold.
During each of the three years ended December 31, 2020, 20192023, 2022, and 2018,2021, no single customer exceeded 10% of consolidated revenue.
Schlumberger
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 2020, 20192023, 2022, and 20182021 was $4.5$5.4 billion, $9.3$4.6 billion, and $10.1$3.4 billion, respectively.
49
North America and International revenue disaggregated by segment was as follows:
(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 |
|
(Stated in millions) |
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
| 2021 |
| |||||||||||||
| North America |
|
| International |
|
| Other |
|
| Total |
| ||||
Digital & Integration | $ | 812 |
|
| $ | 2,474 |
|
| $ | 4 |
|
| $ | 3,290 |
|
Reservoir Performance |
| 329 |
|
|
| 4,266 |
|
|
| 4 |
|
|
| 4,599 |
|
Well Construction |
| 1,485 |
|
|
| 7,025 |
|
|
| 196 |
|
|
| 8,706 |
|
Production Systems |
| 1,832 |
|
|
| 4,865 |
|
|
| 13 |
|
|
| 6,710 |
|
Eliminations & other |
| 8 |
|
|
| (334 | ) |
|
| (50 | ) |
|
| (376 | ) |
| $ | 4,466 |
|
| $ | 18,296 |
|
| $ | 167 |
|
| $ | 22,929 |
|
(Stated in millions) |
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2020 |
| |||||||||||||
| North America |
|
| International |
|
| Eliminations & other |
|
| Total |
| ||||
Digital & Integration | $ | 573 |
|
| $ | 2,496 |
|
| $ | 7 |
|
| $ | 3,076 |
|
Reservoir Performance |
| 1,547 |
|
|
| 4,043 |
|
|
| 12 |
|
|
| 5,602 |
|
Well Construction |
| 1,453 |
|
|
| 6,956 |
|
|
| 196 |
|
|
| 8,605 |
|
Production Systems |
| 1,921 |
|
|
| 4,702 |
|
|
| 27 |
|
|
| 6,650 |
|
Eliminations & other |
| (16 | ) |
|
| (195 | ) |
|
| (121 | ) |
|
| (332 | ) |
| $ | 5,478 |
|
| $ | 18,002 |
|
| $ | 121 |
|
| $ | 23,601 |
|
(Stated in millions) |
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2019 |
| |||||||||||||
| North America |
|
| International |
|
| Eliminations & other |
|
| Total |
| ||||
Digital & Integration | $ | 865 |
|
| $ | 3,272 |
|
| $ | 8 |
|
| $ | 4,145 |
|
Reservoir Performance |
| 3,779 |
|
|
| 5,509 |
|
|
| 11 |
|
|
| 9,299 |
|
Well Construction |
| 2,814 |
|
|
| 8,809 |
|
|
| 257 |
|
|
| 11,880 |
|
Production Systems |
| 3,053 |
|
|
| 5,059 |
|
|
| 55 |
|
|
| 8,167 |
|
Eliminations & other |
| (65 | ) |
|
| (407 | ) |
|
| (102 | ) |
|
| (574 | ) |
| $ | 10,446 |
|
| $ | 22,242 |
|
| $ | 229 |
|
| $ | 32,917 |
|
(Stated in millions) |
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2018 |
| |||||||||||||
| North America |
|
| International |
|
| Eliminations & other |
|
| Total |
| ||||
Digital & Integration | $ | 786 |
|
| $ | 2,894 |
|
| $ | 140 |
|
| $ | 3,820 |
|
Reservoir Performance |
| 4,975 |
|
|
| 5,066 |
|
|
| 9 |
|
|
| 10,050 |
|
Well Construction |
| 2,911 |
|
|
| 8,083 |
|
|
| 316 |
|
|
| 11,310 |
|
Production Systems |
| 3,139 |
|
|
| 4,966 |
|
|
| 63 |
|
|
| 8,168 |
|
Eliminations & other |
| (81 | ) |
|
| (301 | ) |
|
| (151 | ) |
|
| (533 | ) |
| $ | 11,730 |
|
| $ | 20,708 |
|
| $ | 377 |
|
| $ | 32,815 |
|
Fixed Assets less accumulated depreciation by geographic area arewas as follows:
(Stated in millions) |
| ||||||
|
|
|
|
|
| ||
| 2023 |
|
| 2022 |
| ||
North America | $ | 1,469 |
|
| $ | 1,459 |
|
Latin America |
| 1,071 |
|
|
| 913 |
|
Europe & Africa |
| 1,724 |
|
|
| 1,668 |
|
Middle East & Asia |
| 2,468 |
|
|
| 2,099 |
|
Unallocated |
| 508 |
|
|
| 468 |
|
| $ | 7,240 |
|
| $ | 6,607 |
|
50
(Stated in millions) |
| ||||||
|
|
|
|
|
|
|
|
| 2020 |
|
| 2019 |
| ||
North America | $ | 1,588 |
|
| $ | 3,326 |
|
Latin America |
| 841 |
|
|
| 912 |
|
Europe/CIS/Africa |
| 1,840 |
|
|
| 2,309 |
|
Middle East & Asia |
| 2,353 |
|
|
| 2,502 |
|
Unallocated |
| 204 |
|
|
| 221 |
|
| $ | 6,826 |
|
| $ | 9,270 |
|
17. Pension and Other Postretirement Benefit Plans
Pension Plans
SchlumbergerSLB 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, SchlumbergerSLB 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 |
| ||||||||||||||||||
| 2020 |
|
| 2019 |
|
| 2018 |
|
| 2020 |
|
| 2019 |
|
| 2018 |
| ||||||
Discount rate |
| 3.30 | % |
|
| 4.30 | % |
|
| 3.70 | % |
|
| 3.27 | % |
|
| 4.00 | % |
|
| 3.55 | % |
Compensation increases |
| 4.00 | % |
|
| 4.00 | % |
|
| 4.00 | % |
|
| 4.82 | % |
|
| 4.83 | % |
|
| 4.81 | % |
Return on plan assets |
| 6.60 | % |
|
| 6.60 | % |
|
| 7.25 | % |
|
| 6.71 | % |
|
| 7.22 | % |
|
| 7.40 | % |
|
| ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| US |
|
| International |
| ||||||||||||||||||
| 2023 |
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
|
| 2021 |
| ||||||
Discount rate |
| 5.50 | % |
|
| 3.00 | % |
|
| 2.60 | % |
| 5.41 | % |
|
| 2.83 | % |
|
| 2.38 | % | |
Compensation increases |
| 4.00 | % |
|
| 4.00 | % |
|
| 4.00 | % |
| 4.84 | % |
|
| 4.83 | % |
|
| 4.82 | % | |
Return on plan assets |
| 6.00 | % |
|
| 4.40 | % |
|
| 6.60 | % |
| 6.00 | % |
|
| 5.05 | % |
|
| 6.73 | % |
Net pension cost (credit) for 2020, 2019 and 2018 included the following components:
(Stated in millions) |
| ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| US |
|
| International |
| ||||||||||||||||||
| 2023 |
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
|
| 2021 |
| ||||||
Service cost | $ | 23 |
|
| $ | 37 |
|
| $ | 44 |
| $ | 54 |
|
| $ | 101 |
|
| $ | 117 |
| |
Interest cost |
| 178 |
|
|
| 137 |
|
|
| 127 |
|
| 407 |
|
|
| 298 |
|
|
| 267 |
| |
Expected return on plan assets |
| (198 | ) |
|
| (202 | ) |
|
| (254 | ) |
| (607 | ) |
|
| (530 | ) |
|
| (640 | ) | |
Amortization of net loss |
| - |
|
|
| 5 |
|
|
| 44 |
|
| - |
|
|
| 80 |
|
|
| 227 |
| |
$ | 3 |
|
| $ | (23 | ) |
| $ | (39 | ) | $ | (146 | ) |
| $ | (51 | ) | $ | (29 | ) |
(Stated in millions) |
| ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| US |
|
| International |
| ||||||||||||||||||
| 2020 |
|
| 2019 |
|
| 2018 |
|
| 2020 |
|
| 2019 |
|
| 2018 |
| ||||||
Service cost - benefits earned during the period | $ | 55 |
|
| $ | 49 |
|
| $ | 59 |
|
| $ | 140 |
|
| $ | 112 |
|
| $ | 138 |
|
Interest cost on projected benefit obligation |
| 148 |
|
|
| 180 |
|
|
| 167 |
|
|
| 301 |
|
|
| 333 |
|
|
| 304 |
|
Expected return on plan assets |
| (233 | ) |
|
| (232 | ) |
|
| (248 | ) |
|
| (591 | ) |
|
| (592 | ) |
|
| (584 | ) |
Amortization of prior service cost |
| 8 |
|
|
| 10 |
|
|
| 13 |
|
|
| - |
|
|
| 7 |
|
|
| 10 |
|
Amortization of net loss |
| 41 |
|
|
| 29 |
|
|
| 47 |
|
|
| 159 |
|
|
| 70 |
|
|
| 140 |
|
Settlement charge |
| - |
|
|
| 37 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
| $ | 19 |
|
| $ | 73 |
|
| $ | 38 |
|
| $ | 9 |
|
| $ | (70 | ) |
| $ | 8 |
|
Certain of Schlumberger’s deferred benefit pension plans offered former Schlumberger employees, who had not yet commenced receiving their pension benefits, an opportunity to receive a lump sum payout of their vested pension benefit. Schlumberger’s pension plans paid $257 million from pension plan assets to those who accepted this offer, thereby reducing its pension benefit obligations. These transactions resulted in a non-cash pension settlement charge of $37 million, representing the immediate recognition of the related deferred actuarial losses in Accumulated Other Comprehensive Loss, in the fourth quarter of 2019. See Note 3 – Charges and Credits.
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 |
| ||||||||||
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Discount rate |
| 5.25 | % |
|
| 5.50 | % |
| 5.14 | % |
|
| 5.41 | % | |
Compensation increases |
| 4.00 | % |
|
| 4.00 | % |
| 4.84 | % |
|
| 4.84 | % |
51
|
| ||||||||||||||
| US |
|
| International |
| ||||||||||
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
| ||||
Discount rate |
| 2.60 | % |
|
| 3.30 | % |
|
| 2.38 | % |
|
| 3.27 | % |
Compensation increases |
| 4.00 | % |
|
| 4.00 | % |
|
| 4.82 | % |
|
| 4.83 | % |
The changes in the projected benefit obligation, plan assets and funded status of the plans were as follows:
(Stated in millions) | (Stated in millions) |
| (Stated in millions) |
| ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| US |
|
| International |
| US |
|
| International |
| ||||||||||||||||||||
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
| 2023 |
|
| 2022 |
| 2023 |
|
| 2022 |
| |||||||||
Change in Projected Benefit Obligations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Change in Projected Benefit Obligations: |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Projected benefit obligation at beginning of year | $ | 4,593 |
|
| $ | 4,278 |
|
| $ | 9,647 |
|
| $ | 8,111 |
| $ | 3,315 |
|
| $ | 4,668 |
| $ | 7,598 |
|
| $ | 10,618 |
| |
Service cost |
| 55 |
|
|
| 49 |
|
|
| 140 |
|
|
| 112 |
|
| 23 |
|
|
| 37 |
|
|
| 54 |
|
|
| 101 |
|
Interest cost |
| 148 |
|
|
| 180 |
|
|
| 301 |
|
|
| 333 |
|
| 178 |
|
|
| 137 |
|
|
| 407 |
|
|
| 298 |
|
Contribution by plan participants |
| - |
|
|
| - |
|
|
| 94 |
|
|
| 63 |
|
| - |
|
|
| - |
|
|
| 52 |
|
|
| 47 |
|
Actuarial losses |
| 370 |
|
|
| 535 |
|
|
| 1,233 |
|
|
| 1,304 |
| |||||||||||||||
Actuarial losses (gains) |
| 117 |
|
|
| (1,152 | ) |
|
| 302 |
|
|
| (3,140 | ) | |||||||||||||||
Currency effect |
| - |
|
|
| - |
|
|
| 68 |
|
|
| 50 |
|
| - |
|
|
| - |
|
|
| 56 |
|
|
| (148 | ) |
Settlement |
| - |
|
|
| (240 | ) |
|
| (5 | ) |
|
| (17 | ) | |||||||||||||||
Benefits paid |
| (226 | ) |
|
| (209 | ) |
|
| (338 | ) |
|
| (309 | ) |
| (220 | ) |
|
| (375 | ) |
|
| (360 | ) |
|
| (363 | ) |
Other |
| - |
|
|
| - |
|
|
| - |
|
|
| 185 |
| |||||||||||||||
Projected benefit obligation at end of year | $ | 4,940 |
|
| $ | 4,593 |
|
| $ | 11,140 |
|
| $ | 9,647 |
| $ | 3,413 |
|
| $ | 3,315 |
|
| $ | 8,109 |
|
| $ | 7,598 |
|
Change in Plan Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Change in Plan Assets: |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Plan assets at fair value at beginning of year | $ | 4,236 |
|
| $ | 3,748 |
|
| $ | 9,363 |
|
| $ | 7,872 |
| $ | 3,396 |
|
| $ | 4,696 |
|
| $ | 8,126 |
|
| $ | 11,221 |
|
Actual return on plan assets |
| 760 |
|
|
| 931 |
|
|
| 1,282 |
|
|
| 1,676 |
|
| 242 |
|
|
| (933 | ) |
|
| 494 |
|
|
| (2,834 | ) |
Currency effect |
| - |
|
|
| - |
|
|
| 72 |
|
|
| 59 |
|
| - |
|
|
| - |
|
|
| 71 |
|
|
| (188 | ) |
Company contributions |
| 6 |
|
|
| 6 |
|
|
| 20 |
|
|
| 19 |
|
| 9 |
|
|
| 8 |
|
|
| 7 |
|
|
| 18 |
|
Contributions by plan participants |
| - |
|
|
| - |
|
|
| 94 |
|
|
| 63 |
|
| - |
|
|
| - |
|
|
| 52 |
|
|
| 47 |
|
Settlement |
| - |
|
|
| (240 | ) |
|
| - |
|
|
| (17 | ) | |||||||||||||||
Benefits paid |
| (226 | ) |
|
| (209 | ) |
|
| (338 | ) |
|
| (309 | ) |
| (220 | ) |
|
| (375 | ) |
|
| (360 | ) |
|
| (363 | ) |
Other |
| - |
|
|
| - |
|
|
| - |
|
|
| 225 |
| |||||||||||||||
Plan assets at fair value at end of year | $ | 4,776 |
|
| $ | 4,236 |
|
| $ | 10,493 |
|
| $ | 9,363 |
| $ | 3,427 |
|
| $ | 3,396 |
|
| $ | 8,390 |
|
| $ | 8,126 |
|
Unfunded Liability | $ | (164 | ) |
| $ | (357 | ) |
| $ | (647 | ) |
| $ | (284 | ) | |||||||||||||||
Amounts Recognized in Balance Sheet |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Asset | $ | 14 |
|
| $ | 81 |
|
| $ | 281 |
|
| $ | 528 |
| |||||||||||||||
Amounts Recognized in Balance Sheet: |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Postretirement Benefits | $ | (199 | ) |
| $ | (357 | ) |
| $ | (849 | ) |
| $ | (602 | ) | $ | (159 | ) |
| $ | (151 | ) |
| $ | (16 | ) |
| $ | (14 | ) |
Other Assets |
| 35 |
|
|
| - |
|
|
| 202 |
|
|
| 318 |
|
| 173 |
|
|
| 232 |
|
|
| 297 |
|
|
| 542 |
|
| $ | (164 | ) |
| $ | (357 | ) |
| $ | (647 | ) |
| $ | (284 | ) | $ | 14 |
|
| $ | 81 |
|
| $ | 281 |
|
| $ | 528 |
|
Amounts Recognized in Accumulated Other Comprehensive Loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Amounts Recognized in Accumulated Other Comprehensive Loss: |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Actuarial losses | $ | 423 |
|
| $ | 622 |
|
| $ | 1,981 |
|
| $ | 1,638 |
| $ | 328 |
|
| $ | 255 |
|
| $ | 1,804 |
|
| $ | 1,366 |
|
Prior service cost |
| 1 |
|
|
| 9 |
|
|
| - |
|
|
| - |
| |||||||||||||||
| $ | 424 |
|
| $ | 631 |
|
| $ | 1,981 |
|
| $ | 1,638 |
| |||||||||||||||
Accumulated benefit obligation | $ | 4,739 |
|
| $ | 4,345 |
|
| $ | 10,844 |
|
| $ | 9,376 |
| $ | 3,313 |
|
| $ | 3,221 |
| $ | 7,942 |
|
| $ | 7,454 |
|
The unfunded liabilityasset 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 (“ABO”) 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 20202023 and 20192022 were primarily attributable to decreaseschanges in the discount rate used to determine the PBO. As of December 31, 2020, the PBO and fair value of plan assets for plans with PBOs in excess of plan assets were $9.4 billion and $8.3 billion, respectively. The related ABO for these plans was $9.1 billion at December 31, 2020.
The weighted-average allocation of plan assets as of December 31, 2023 and 2022 and the target allocations by asset category areas of December 31, 2023 were as follows:
|
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
| ||||||||||||||||||||||||||
| US |
|
|
| International |
|
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|
|
|
|
|
|
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|
|
|
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| |||||||||||||||||||||||||||||||||
| Target |
|
|
| 2020 |
|
|
| 2019 |
|
|
| Target |
|
|
| 2020 |
|
|
| 2019 |
| US |
|
| International |
|
| |||||||||||||||||||||||||||||
| Target |
|
| 2023 |
|
| 2022 |
|
| Target |
|
| 2023 |
|
| 2022 |
|
| |||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | 0 - 3 |
| % |
|
| 1 |
| % |
|
| 2 |
| % |
| 0 - 5 |
| % |
|
| 3 |
| % |
|
| 2 |
| % | ||||||||||||||||||||||||||||||
Equity securities | 11 - 20 |
| % |
|
| 15 |
| % |
|
| 22 |
| % |
| 40 - 54 |
| % |
|
| 43 |
| % |
|
| 50 |
| 0 - 5 |
|
|
| - |
|
|
| - |
|
| 0 - 5 |
|
|
| 1 |
|
|
| 10 |
|
| |||||||||
Debt securities | 70 - 83 |
|
|
|
| 76 |
|
|
|
| 70 |
|
|
| 28 - 43 |
|
|
|
| 36 |
|
|
|
| 31 |
| 80 - 90 |
|
|
| 84 |
|
|
| 83 |
|
| 60 - 70 |
|
|
| 69 |
|
|
| 56 |
|
| |||||||||
Cash and cash equivalents | 0 - 3 |
|
|
|
| 3 |
|
|
|
| 2 |
|
|
| 0 - 5 |
|
|
|
| 4 |
|
|
|
| 4 |
| |||||||||||||||||||||||||||||||
Alternative investments | 5 - 10 |
|
|
|
| 6 |
|
|
|
| 6 |
|
|
| 15 - 22 |
|
|
|
| 17 |
|
|
|
| 15 |
| |||||||||||||||||||||||||||||||
Private equity and real estate | 5 - 12 |
|
|
| 10 |
|
|
| 11 |
|
| 15 - 20 |
|
|
| 17 |
|
|
| 19 |
|
| |||||||||||||||||||||||||||||||||||
Private debt | 2 - 8 |
|
|
| 5 |
|
|
| 4 |
|
| 9 - 15 |
|
|
| 10 |
|
|
| 13 |
|
| |||||||||||||||||||||||||||||||||||
|
| 100 |
| % |
|
| 100 |
| % |
|
| 100 |
| % |
|
| 100 |
| % |
|
| 100 |
| % |
|
| 100 |
|
| 100 |
| % |
|
| 100 |
| % |
|
| 100 |
| % |
|
| 100 |
| % |
|
| 100 |
| % |
|
| 100 |
| % |
Asset performance is monitored frequently with an overall expectation that plan assets will meet or exceed the weighted index of its target asset allocation and component benchmark over rolling five-year periods.
The expected rate of return on assets assumptions reflect the long-term average rate of earningsreturn expected on funds invested or to be invested.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.
52
The fair value of Schlumberger’sSLB’s pension plan assets at December 31, 20202023 and 2019,2022, by asset category, is presented below and was determined based on valuation techniques categorized as follows:
|
|
|
|
| • 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 |
| |||||||||||||||||||||||||||||
| 2023 |
|
| 2022 |
| ||||||||||||||||||||||||||
|
|
|
| Level |
|
| Level |
|
| Level |
|
|
|
|
| Level |
|
| Level |
|
| Level |
| ||||||||
| Total |
|
| One |
|
| Two |
|
| Three |
|
| Total |
|
| One |
|
| Two |
|
| Three |
| ||||||||
Asset Category: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Cash and Cash Equivalents | $ | 33 |
|
| $ | 33 |
|
| $ | - |
|
| $ | - |
|
| $ | 81 |
|
| $ | 77 |
|
| $ | 4 |
|
| $ | - |
|
Equity Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
US |
| 6 |
|
|
| - |
|
|
| 6 |
|
|
| - |
|
|
| 3 |
|
|
| - |
|
|
| 3 |
|
|
| - |
|
International |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Debt Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Corporate bonds |
| 1,540 |
|
|
| - |
|
|
| 1,540 |
|
|
| - |
|
|
| 1,775 |
|
|
| - |
|
|
| 1,775 |
|
|
| - |
|
Government and related debt securities |
| 1,334 |
|
|
| 163 |
|
|
| 1,171 |
|
|
| - |
|
|
| 1,014 |
|
|
| 157 |
|
|
| 857 |
|
|
| - |
|
Other |
| 12 |
|
|
| - |
|
|
| 12 |
|
|
| - |
|
|
| 29 |
|
|
| - |
|
|
| 29 |
|
|
| - |
|
Alternative Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Private equity |
| 287 |
|
|
| - |
|
|
| - |
|
|
| 287 |
|
|
| 291 |
|
|
| - |
|
|
| - |
|
|
| 291 |
|
Private debt |
| 148 |
|
|
| - |
|
|
| - |
|
|
| 148 |
|
|
| 124 |
|
|
| - |
|
|
| - |
|
|
| 124 |
|
Real estate |
| 67 |
|
|
| - |
|
|
| - |
|
|
| 67 |
|
|
| 79 |
|
|
| - |
|
|
| - |
|
|
| 79 |
|
Total | $ | 3,427 |
|
| $ | 196 |
|
| $ | 2,729 |
|
| $ | 502 |
| $ | 3,396 |
|
| $ | 234 |
|
| $ | 2,668 |
|
| $ | 494 |
|
(Stated in millions) |
| ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| US Plan Assets |
| |||||||||||||||||||||||||||||
| 2020 |
|
| 2019 |
| ||||||||||||||||||||||||||
|
|
|
|
| Level |
|
| Level |
|
| Level |
|
|
|
|
|
| Level |
|
| Level |
|
| Level |
| ||||||
| Total |
|
| One |
|
| Two |
|
| Three |
|
| Total |
|
| One |
|
| Two |
|
| Three |
| ||||||||
Asset Category: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents | $ | 140 |
|
| $ | 127 |
|
| $ | 13 |
|
| $ | - |
|
| $ | 73 |
|
| $ | 59 |
|
| $ | 14 |
|
| $ | - |
|
Equity Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US (a) |
| 527 |
|
|
| 441 |
|
|
| 86 |
|
|
| - |
|
|
| 605 |
|
|
| 500 |
|
|
| 105 |
|
|
| - |
|
International (b) |
| 186 |
|
|
| 182 |
|
|
| 4 |
|
|
| - |
|
|
| 320 |
|
|
| 315 |
|
|
| 5 |
|
|
| - |
|
Debt Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds (c) |
| 1,945 |
|
|
| - |
|
|
| 1,945 |
|
|
| - |
|
|
| 1,687 |
|
|
| - |
|
|
| 1,687 |
|
|
| - |
|
Government and government-related debt securities (d) |
| 1,658 |
|
|
| 180 |
|
|
| 1,478 |
|
|
| - |
|
|
| 1,256 |
|
|
| 74 |
|
|
| 1,182 |
|
|
| - |
|
Collateralized mortgage obligations and mortgage backed securities (e) |
| 21 |
|
|
| - |
|
|
| 21 |
|
|
| - |
|
|
| 21 |
|
|
| - |
|
|
| 21 |
|
|
| - |
|
Alternative Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private equity (f) |
| 204 |
|
|
| - |
|
|
| - |
|
|
| 204 |
|
|
| 181 |
|
|
| - |
|
|
| - |
|
|
| 181 |
|
Real estate (g) |
| 95 |
|
|
| - |
|
|
| - |
|
|
| 95 |
|
|
| 93 |
|
|
| - |
|
|
| - |
|
|
| 93 |
|
Total | $ | 4,776 |
|
| $ | 930 |
|
| $ | 3,547 |
|
| $ | 299 |
|
| $ | 4,236 |
|
| $ | 948 |
|
| $ | 3,014 |
|
| $ | 274 |
|
(Stated in millions) |
| ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| International Plan Assets |
| |||||||||||||||||||||||||||||
| 2023 |
|
| 2022 |
| ||||||||||||||||||||||||||
|
|
|
| Level |
|
| Level |
|
| Level |
|
|
|
|
| Level |
|
| Level |
|
| Level |
| ||||||||
| Total |
|
| One |
|
| Two |
|
| Three |
|
| Total |
|
| One |
|
| Two |
|
| Three |
| ||||||||
Asset Category: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Cash and Cash Equivalents | $ | 267 |
|
| $ | 260 |
|
| $ | 7 |
|
| $ | - |
|
| $ | 170 |
|
| $ | 163 |
|
| $ | 7 |
|
| $ | - |
|
Equity Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
US |
| 84 |
|
|
| 84 |
|
|
| - |
|
|
| - |
|
|
| 580 |
|
|
| 497 |
|
|
| 83 |
|
|
| - |
|
International |
| 38 |
|
|
| 38 |
|
|
| - |
|
|
| - |
|
|
| 273 |
|
|
| 273 |
|
|
| - |
|
|
| - |
|
Debt Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Corporate bonds |
| 3,001 |
|
|
| - |
|
|
| 3,001 |
|
|
| - |
|
|
| 2,224 |
|
|
| - |
|
|
| 2,224 |
|
|
| - |
|
Government and related debt securities |
| 2,466 |
|
|
| 563 |
|
|
| 1,903 |
|
|
| - |
|
|
| 2,283 |
|
|
| 336 |
|
|
| 1,947 |
|
|
| - |
|
Other |
| 292 |
|
|
| - |
|
|
| 292 |
|
|
| - |
|
|
| 13 |
|
|
| - |
|
|
| 13 |
|
|
| - |
|
Alternative Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Private equity |
| 1,269 |
|
|
| - |
|
|
| - |
|
|
| 1,269 |
|
|
| 1,362 |
|
|
| - |
|
|
| - |
|
|
| 1,362 |
|
Private debt |
| 805 |
|
|
| - |
|
|
| - |
|
|
| 805 |
|
|
| 1,041 |
|
|
| - |
|
|
| - |
|
|
| 1,041 |
|
Real estate |
| 168 |
|
|
| - |
|
|
| - |
|
|
| 168 |
|
|
| 180 |
|
|
| - |
|
|
| - |
|
|
| 180 |
|
Total | $ | 8,390 |
|
| $ | 945 |
|
| $ | 5,203 |
|
| $ | 2,242 |
| $ | 8,126 |
|
| $ | 1,269 |
|
| $ | 4,274 |
|
| $ | 2,583 |
|
(Stated in millions) |
| ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
| International Plan Assets |
| |||||||||||||||||||||||||||||||
| 2020 |
|
| 2019 |
| ||||||||||||||||||||||||||||
|
|
|
|
| Level |
|
| Level |
|
| Level |
|
|
|
|
|
| Level |
|
| Level |
|
| Level |
| ||||||||
| Total |
|
| One |
|
| Two |
|
| Three |
|
| Total |
|
| One |
|
| Two |
|
| Three |
| ||||||||||
Asset Category: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Cash and Cash Equivalents | $ | 457 |
|
| $ | 215 |
|
| $ | 242 |
|
| $ | - |
|
| $ | 351 |
|
| $ | 166 |
|
| $ | 185 |
|
| $ | - |
| ||
Equity Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
US (a) |
| 2,797 |
|
|
| 2,393 |
|
|
| 404 |
|
|
| - |
|
|
| 2,834 |
|
|
| 2,347 |
|
|
| 487 |
|
|
| - |
| ||
International (b) |
| 1,711 |
|
|
| 1,615 |
|
|
| 96 |
|
|
| - |
|
|
| 1,871 |
|
|
| 1,723 |
|
|
| 148 |
|
|
| - |
| ||
Debt Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Corporate bonds (c) |
| 1,260 |
|
|
| - |
|
|
| 1,260 |
|
|
| - |
|
|
| 1,105 |
|
|
| - |
|
|
| 1,105 |
|
|
| - |
| ||
Government and government-related debt securities (d) |
| 2,405 |
|
|
| 213 |
|
|
| 2,192 |
|
|
| - |
|
|
| 1,602 |
|
|
| 5 |
|
|
| 1,597 |
|
|
| - |
| ||
Collateralized mortgage obligations and mortgage backed securities (e) |
| 122 |
|
|
| - |
|
|
| 122 |
|
|
| - |
|
|
| 161 |
|
|
| - |
|
|
| 161 |
|
|
| - |
| ||
Alternative Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Private equity (f) |
| 851 |
|
|
| - |
|
|
| - |
|
|
| 851 |
|
|
| 623 |
|
|
| - |
|
|
| - |
|
|
| 623 |
| ||
Real estate (g) |
| 200 |
|
|
| - |
|
|
| - |
|
|
| 200 |
|
|
| 183 |
|
|
| - |
|
|
| - |
|
|
| 183 |
| ||
Other |
| 690 |
|
|
| - |
|
|
| - |
|
|
| 690 |
|
|
| 633 |
|
|
| - |
|
|
| - |
|
|
| 633 |
| ||
Total | $ | 10,493 |
|
| $ | 4,436 |
|
| $ | 4,316 |
|
| $ | 1,741 |
|
| $ | 9,363 |
|
| $ | 4,241 |
|
| $ | 3,683 |
|
| $ | 1,439 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schlumberger’sSLB’s funding policy is to annually contribute amounts that are based upon a number of factors including the actuarial accrued liability,funded status of the plans, amounts that are deductible for income tax purposes, legal funding requirements, and available cash flow. Schlumberger expectsSLB does not expect to contribute approximately $20 millionmake any material contributions to its postretirement benefit plans in 2021, subject to market and business conditions.2024.
Postretirement Benefits Other Than Pensions
SchlumbergerSLB provides certain healthcare benefits to certain former US employees who have retired. Effective April 1, 2015, Schlumberger changed the way it provides healthcare coverage to certain retirees who are age 65 and over. Under the amended plan, these retirees transferred to individual coverage under the Medicare Exchange. Schlumberger subsidizes the cost of the program by providing these retirees with a Health Reimbursement Account. The annual subsidy may be increased based on medical cost inflation, but it will not be increased by more than 5% in any given year.
53
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 |
| ||||||||||||||
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2021 |
| |||||
Discount rate |
| 5.25 | % |
|
| 5.50 | % |
|
| 5.50 | % |
|
| 3.00 | % |
|
| 2.60 | % |
Return on plan assets | - |
|
| - |
|
|
| 4.41 | % |
|
| 2.94 | % |
|
| 6.21 | % | ||
Current medical cost trend rate |
| 7.50 | % |
|
| 7.50 | % |
|
| 7.50 | % |
|
| 6.75 | % |
|
| 7.00 | % |
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 |
|
|
| 2031 |
|
|
| 2031 |
|
|
| ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Benefit Obligations |
|
| Net Periodic Benefit |
| ||||||||||||||
| At December 31, |
|
| Cost for the Year |
| ||||||||||||||
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
|
| 2018 |
| |||||
Discount rate |
| 2.60 | % |
|
| 3.30 | % |
|
| 3.30 | % |
|
| 4.30 | % |
|
| 3.70 | % |
Return on plan assets | - |
|
| - |
|
|
| 7.00 | % |
|
| 7.00 | % |
|
| 7.00 | % | ||
Current medical cost trend rate |
| 7.25 | % |
|
| 7.50 | % |
|
| 7.25 | % |
|
| 7.50 | % |
|
| 7.00 | % |
Ultimate medical cost trend rate |
| 4.50 | % |
|
| 4.50 | % |
|
| 4.50 | % |
|
| 4.50 | % |
|
| 5.00 | % |
Year that the rate reaches the ultimate trend rate | 2031 |
|
| 2031 |
|
| 2031 |
|
| 2031 |
|
| 2026 |
|
The net periodic benefit credit for the US postretirement medical plan included the following components:
(Stated in millions) |
| ||||||||||
|
|
|
|
|
|
|
|
| |||
2023 |
|
| 2022 |
|
| 2021 |
| ||||
Service cost | $ | 16 |
|
| $ | 23 |
|
| $ | 28 |
|
Interest cost |
| 42 |
|
|
| 33 |
|
|
| 32 |
|
Expected return on plan assets |
| (41 | ) |
|
| (38 | ) |
|
| (73 | ) |
Amortization of prior service credit |
| (23 | ) |
|
| (23 | ) |
|
| (23 | ) |
Amortization of net gain |
| (12 | ) |
|
| (10 | ) |
|
| - |
|
$ | (18 | ) |
| $ | (15 | ) |
| $ | (36 | ) |
(Stated in millions) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| 2020 |
|
| 2019 |
|
| 2018 |
| |||
Service cost | $ | 31 |
|
| $ | 29 |
|
| $ | 32 |
|
Interest cost |
| 36 |
|
|
| 45 |
|
|
| 43 |
|
Expected return on plan assets |
| (70 | ) |
|
| (64 | ) |
|
| (63 | ) |
Amortization of prior service credit |
| (25 | ) |
|
| (28 | ) |
|
| (28 | ) |
Curtailment gain |
| (69 | ) |
|
| - |
|
|
| - |
|
| $ | (97 | ) |
| $ | (18 | ) |
| $ | (16 | ) |
Due to the actions taken by Schlumberger to reduce its global workforce during 2020, Schlumberger experienced a significant reduction in the expected aggregate years of future service of its employees in its US postretirement medical plan. Accordingly, Schlumberger recorded a curtailment gain of $69 million during the second quarter of 2020 relating to this plan. The curtailment gain includes recognition of the decrease in the benefit obligation as well as a portion of the previously unrecognized prior service credit, reflecting the reduction in expected years of future service. As a result of the curtailment, Schlumberger performed a remeasurement of the plan, which had an immaterial impact. This gain was classified in Impairments & other in the Consolidated Statement of Loss. See Note 3 – Charges and Credits.
The changes in the accumulated postretirement benefit obligation, plan assets and funded status were as follows:
(Stated in millions) | (Stated in millions) |
| (Stated in millions) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||
| 2020 |
|
| 2019 |
| 2023 |
|
| 2022 |
| ||||
Change in Projected Benefit Obligations |
|
|
|
|
|
|
| |||||||
Change in Accumulated Postretirement Benefit Obligation: |
|
|
|
| ||||||||||
Benefit obligation at beginning of year | $ | 1,193 |
|
| $ | 1,106 |
| $ | 808 |
|
| $ | 1,146 |
|
Service cost |
| 31 |
|
|
| 29 |
|
| 16 |
|
|
| 23 |
|
Interest cost |
| 36 |
|
|
| 45 |
|
| 42 |
|
|
| 33 |
|
Contribution by plan participants |
| 8 |
|
|
| 8 |
|
| 7 |
|
|
| 9 |
|
Actuarial (gains) losses |
| 64 |
|
|
| 65 |
| |||||||
Actuarial gains |
| (7 | ) |
|
| (338 | ) | |||||||
Benefits paid |
| (58 | ) |
|
| (60 | ) |
| (61 | ) |
|
| (65 | ) |
Curtailment |
| (40 | ) |
|
| - |
| |||||||
Benefit obligation at end of year | $ | 1,234 |
|
| $ | 1,193 |
| $ | 805 |
|
| $ | 808 |
|
Change in Plan Assets |
|
|
|
|
|
|
| |||||||
Change in Plan Assets: |
|
|
|
|
| |||||||||
Plan assets at fair value at beginning of year | $ | 1,185 |
|
| $ | 997 |
| $ | 938 |
|
| $ | 1,318 |
|
Actual return on plan assets |
| 221 |
|
|
| 240 |
|
| 87 |
|
|
| (323 | ) |
Contributions by plan participants |
| 8 |
|
|
| 8 |
|
| 7 |
|
|
| 8 |
|
Benefits paid |
| (58 | ) |
|
| (60 | ) |
| (68 | ) |
|
| (65 | ) |
Plan assets at fair value at end of year | $ | 1,356 |
|
| $ | 1,185 |
| $ | 964 |
|
| $ | 938 |
|
Asset (Unfunded Liability) | $ | 122 |
|
| $ | (8 | ) | |||||||
Amounts Recognized in Accumulated Other Comprehensive Loss |
|
|
|
|
|
|
| |||||||
Actuarial (gains) losses | $ | (186 | ) |
| $ | (98 | ) | |||||||
Asset | $ | 159 |
|
| $ | 130 |
| |||||||
Amounts Recognized in Accumulated Other Comprehensive Loss: |
|
|
|
|
| |||||||||
Actuarial gains | $ | 239 |
|
| $ | 199 |
| |||||||
Prior service credit |
| (104 | ) |
|
| (158 | ) |
| 36 |
|
|
| 59 |
|
| $ | (290 | ) |
| $ | (256 | ) | $ | 275 |
|
| $ | 258 |
|
The $122 million asset balance relating to this plan at December 31, 2020 was included in Other Assets while the $8 million unfunded liability at December 31, 2019 was included in Postretirement Benefits in the Consolidated Balance Sheet.
The assets of the US postretirement medical plan are invested 61%87% in equitydebt securities and 39%13% in debtequity securities at December 31, 2020.2023. The fair value of these assets was primarily determined based on Level Two valuation techniques.
54
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 |
| ||||
2024 | $ | 229 |
|
| $ | 405 |
|
| $ | 47 |
|
2025 | $ | 230 |
|
| $ | 419 |
|
| $ | 48 |
|
2026 | $ | 231 |
|
| $ | 432 |
|
| $ | 49 |
|
2027 | $ | 232 |
|
| $ | 449 |
|
| $ | 50 |
|
2028 | $ | 234 |
|
| $ | 454 |
|
| $ | 52 |
|
2029-2033 | $ | 1,178 |
|
| $ | 2,494 |
|
| $ | 291 |
|
(Stated in millions) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Pension Benefits |
|
| Postretirement |
| ||||||
| US |
|
| International |
|
| Medical Plan |
| |||
2021 | $ | 235 |
|
| $ | 349 |
|
| $ | 56 |
|
2022 | $ | 235 |
|
| $ | 359 |
|
| $ | 56 |
|
2023 | $ | 236 |
|
| $ | 370 |
|
| $ | 56 |
|
2024 | $ | 237 |
|
| $ | 381 |
|
| $ | 56 |
|
2025 | $ | 237 |
|
| $ | 385 |
|
| $ | 57 |
|
2026-2030 | $ | 1,193 |
|
| $ | 2,146 |
|
| $ | 297 |
|
18. Supplementary Information
Cash paid for interest and income taxes was as follows:
(Stated in millions) | (Stated in millions) |
| (Stated in millions) |
| ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 2020 |
|
| 2019 |
|
| 2018 |
| 2023 |
|
| 2022 |
|
| 2021 |
| ||||||
Interest | $ | 598 |
|
| $ | 558 |
|
| $ | 592 |
| $ | 503 |
|
| $ | 562 |
|
| $ | 560 |
|
Income tax | $ | 582 |
|
| $ | 739 |
|
| $ | 628 |
| |||||||||||
Income taxes | $ | 1,064 |
|
| $ | 716 |
|
| $ | 591 |
|
Interest and other income, net includes the following:
(Stated in millions) | (Stated in millions) |
| (Stated in millions) |
| ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 2020 |
|
| 2019 |
|
| 2018 |
| 2023 |
|
| 2022 |
|
| 2021 |
| ||||||
Earnings of equity method investments | $ | 91 |
|
| $ | 45 |
|
| $ | 89 |
| $ | 206 |
|
| $ | 164 |
|
| $ | 40 |
|
Interest income |
| 33 |
|
|
| 41 |
|
|
| 60 |
|
| 100 |
|
|
| 99 |
|
|
| 33 |
|
Unrealized gain on marketable securities (see Note 3) |
| 39 |
|
|
| - |
|
|
| - |
| |||||||||||
Gain on sale of Liberty shares * |
| 36 |
|
|
| 325 |
|
|
| 28 |
| |||||||||||
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 |
|
|
| - |
| |||||||||||
Unrealized gain on marketable securities * |
| - |
|
|
| - |
|
|
| 47 |
| |||||||||||
| $ | 163 |
|
| $ | 86 |
|
| $ | 149 |
| $ | 342 |
|
| $ | 610 |
|
| $ | 148 |
|
* See Note 3 – Charges and Credits
The components of depreciation and amortization expense were as follows:
(Stated in millions) |
| ||||||||||
|
|
|
|
|
|
|
|
| |||
2023 |
|
| 2022 |
|
| 2021 |
| ||||
Depreciation of fixed assets | $ | 1,445 |
|
| $ | 1,368 |
|
| $ | 1,402 |
|
Amortization of APS investments |
| 410 |
|
|
| 368 |
|
|
| 305 |
|
Amortization of intangible assets |
| 314 |
|
|
| 301 |
|
|
| 302 |
|
Amortization of exploration data costs |
| 143 |
|
|
| 110 |
|
|
| 111 |
|
| $ | 2,312 |
|
| $ | 2,147 |
|
| $ | 2,120 |
|
The change in Allowance for doubtful accounts is was as follows:
(Stated in millions) |
| ||||||||||
|
|
|
|
|
|
|
|
| |||
2023 |
|
| 2022 |
|
| 2021 |
| ||||
Balance at beginning of year | $ | 340 |
|
| $ | 319 |
|
| $ | 301 |
|
Additions |
| 18 |
|
|
| 54 |
|
|
| 47 |
|
Amounts written off |
| (21 | ) |
|
| (33 | ) |
|
| (29 | ) |
Balance at end of year | $ | 337 |
|
| $ | 340 |
|
| $ | 319 |
|
55
(Stated in millions) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| 2020 |
|
| 2019 |
|
| 2018 |
| |||
Balance at beginning of year | $ | 255 |
|
| $ | 249 |
|
| $ | 241 |
|
Additions |
| 58 |
|
|
| 5 |
|
|
| 15 |
|
Amounts written off |
| (12 | ) |
|
| 1 |
|
|
| (7 | ) |
Balance at end of year | $ | 301 |
|
| $ | 255 |
|
| $ | 249 |
|
Revenue in excess of billings related to contracts where revenue is recognized over time was $0.2$0.4 billion at both December 31, 20202023 and 2019.$0.3 billion at December 31, 2022. 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) |
| ||||||
|
|
|
|
|
| ||
2023 |
|
| 2022 |
| |||
Investments in APS projects | $ | 2,111 |
|
| $ | 2,023 |
|
Pension and other postretirement plan assets |
| 629 |
|
|
| 904 |
|
Operating lease assets |
| 718 |
|
|
| 538 |
|
Exploration data costs capitalized |
| 151 |
|
|
| 141 |
|
Fair value of hedge contracts |
| 65 |
|
|
| 1 |
|
Other |
| 378 |
|
|
| 363 |
|
| $ | 4,052 |
|
| $ | 3,970 |
|
Accounts payable and accrued liabilities consist of the following:
(Stated in millions) |
| ||||||
|
|
|
|
|
| ||
2023 |
|
| 2022 |
| |||
Trade | $ | 4,613 |
|
| $ | 3,921 |
|
Payroll, vacation and employee benefits |
| 1,625 |
|
|
| 1,493 |
|
Billings and cash collections in excess of revenue |
| 1,996 |
|
|
| 1,157 |
|
Other |
| 2,670 |
|
|
| 2,550 |
|
| $ | 10,904 |
|
| $ | 9,121 |
|
56
(Stated in millions) |
| ||||||
|
|
|
|
|
|
|
|
| 2020 |
|
| 2019 |
| ||
Trade | $ | 2,937 |
|
| $ | 4,790 |
|
Payroll, vacation and employee benefits |
| 1,524 |
|
|
| 1,445 |
|
Billings and cash collections in excess of revenue |
| 941 |
|
|
| 910 |
|
Other |
| 3,040 |
|
|
| 3,518 |
|
| $ | 8,442 |
|
| $ | 10,663 |
|
Management’s Report on Internal Control Over Financial Reporting
SchlumbergerSLB 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”). Schlumberger’sSLB’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.
Schlumberger
SLB management assessed the effectiveness of its internal control over financial reporting as of December 31, 2020.2023. 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 Schlumberger’sSLB’s management has concluded that, as of December 31, 2020,2023, its internal control over financial reporting is effective based on those criteria.
The effectiveness of Schlumberger’sSLB’s internal control over financial reporting as of December 31, 20202023 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.
57
Report of Independent Registered 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, 20202023 and 2019,2022, and the related consolidated statements of income, (loss), comprehensive income, (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2020,2023, 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, 2020,2023, 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, 20202023 and 20192022 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 20202023 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, 2020,2023, 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.
58
Critical Audit Matters
The critical audit mattersmatter communicated below are mattersis a matter arising from the current period audit of the consolidated financial statements that werewas communicated or required to be communicated to the audit committee and that (i) relaterelates 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 mattersmatter below, providing a separate opinionsopinion on the critical audit mattersmatter or on the accounts or disclosures to which they relate.it relates.
Goodwill & Intangible Asset Impairment
As described in Note 3 to the consolidated financial statements, the Company recorded charges to goodwill associated with certain reporting units and certain intangible assets during the first quarter of 2020. As described by management, the goodwill relating to each of the Company’s reporting units is tested for impairment annually as well as when an event, or change in circumstances, indicates an impairment may have occurred. Intangible assets are assessed for impairment whenever events or changes in circumstances indicate their carrying values may not be recoverable. Management determined that it was more likely than not that the fair value of certain of its reporting units and asset groups were less than their carrying value. Therefore, management performed interim impairment tests as of March 31, 2020. Management primarily used the income approach to estimate the fair value of its reporting units and asset groups, but also considered the market approach to validate the results. The market approach involves significant judgment in the selection of the appropriate peer group companies and valuation multiples. Some of the more significant assumptions inherent in the income approach include the estimated future net annual cash flows and the discount rate.
The principal considerations for our determination that performing procedures related to goodwill and intangible asset impairment is a critical audit matter are the significant judgment by management in determining the fair value of the reporting units and asset groups, which in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating significant assumptions related to cash flows to be derived from each reporting unit and asset group, the discount rate and valuation multiples.
Addressing the matter involved performing subjective 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 management’s goodwill and intangible asset impairment tests. These procedures also included, among others, testing management’s process for developing fair value estimates; which included (i) evaluating the appropriateness of the income and market approaches; (ii) testing the completeness, accuracy, and relevance of underlying data used in the approaches; and (iii) evaluating the significant assumptions used by management to develop the cash flows to be derived from each reporting unit and asset group. Evaluating management’s assumptions related to the cash flows to be derived from each reporting unit and asset group involved evaluating the reasonableness of the assumptions used considering the Company’s past and anticipated performance, external market and industry data, and evidence obtained through other areas of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of the appropriateness of the Company’s valuation approaches and reasonableness of the discount rate and valuation multiples assumptions.
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 relatedrelating 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 related to these liabilities due to the uncertain and complex application of tax regulations, and management applied significant judgment in determining these liabilities, 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 subjective 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 developingdetermining 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 material 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 themanagement’s assessment of whether tax positions are more-likely-than-not of being sustained.reasonableness of management’s more-likely-than-not determination under relevant tax laws and regulations in applicable jurisdictions.
|
Houston, Texas |
January |
We have served as the Company’s auditor since 1952.
59
Quarterly Results
(Unaudited)
The following table summarizes Schlumberger’s results by quarter for the years ended December 31, 2020 and 2019.
(Stated in millions, except per share amounts) |
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| Net Income (Loss) |
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| Earnings (Loss) per Share of |
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| Revenue (2) |
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| Margin (1), (2) |
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| Schlumberger (2) |
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| Diluted |
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Quarters 2020 |
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First (3) | $ | 7,455 |
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| $ | 831 |
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| $ | (7,376 | ) |
| $ | (5.32 | ) |
| $ | (5.32 | ) |
Second (4) |
| 5,356 |
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| 431 |
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| (3,434 | ) |
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| (2.47 | ) |
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| (2.47 | ) |
Third (5) |
| 5,258 |
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| 634 |
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| (82 | ) |
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| (0.06 | ) |
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| (0.06 | ) |
Fourth (6) |
| 5,532 |
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| 704 |
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| 374 |
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| 0.27 |
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| 0.27 |
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| $ | 23,601 |
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| $ | 2,601 |
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| $ | (10,518 | ) |
| $ | (7.57 | ) |
| $ | (7.57 | ) |
Quarters 2019 |
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First | $ | 7,879 |
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| $ | 925 |
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| $ | 421 |
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| $ | 0.30 |
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| $ | 0.30 |
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Second |
| 8,269 |
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| 1,016 |
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| 492 |
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| 0.36 |
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| 0.35 |
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Third (7) |
| 8,541 |
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| 1,155 |
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| (11,383 | ) |
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| (8.22 | ) |
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| (8.22 | ) |
Fourth (8) |
| 8,228 |
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| 1,101 |
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| 333 |
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| 0.24 |
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| 0.24 |
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| $ | 32,917 |
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| $ | 4,197 |
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| $ | (10,137 | ) |
| $ | (7.32 | ) |
| $ | (7.32 | ) |
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
SchlumbergerSLB has carried out an evaluation under the supervision and with the participation of Schlumberger’sSLB’s management, including the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), of the effectiveness of Schlumberger’sSLB’s “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, the CEO and the CFO have concluded that, as of the end of the period covered by this report, Schlumberger’sSLB’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that SchlumbergerSLB files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Schlumberger’sSLB’s disclosure controls and procedures include controls and procedures designed so that information required to be disclosed in reports filed or submitted under the Exchange Act is accumulated and communicated to its management, including the CEO and the CFO, as appropriate, to allow timely decisions regarding required disclosure. There has been no change in Schlumberger’sSLB’s internal control over financial reporting that occurred during the fourth quarter of 20202023 that has materially affected, or is reasonably likely to materially affect, Schlumberger’sSLB’s internal control over financial reporting.
Item 9B. Other Information.
In 2013, SchlumbergerSLB completed the wind-down of its service operations in Iran. Prior to this, certain non-US subsidiaries provided oilfield services to the National Iranian Oil Company and certain of its affiliates (“NIOC”).
Schlumberger’s
SLB’s residual transactions or dealings with the government of Iran in 20202023 consisted of payments of taxes and other typical governmental charges. Certain non-US subsidiaries of SchlumbergerSLB maintained depository accounts at the Dubai branch of Bank Saderat Iran (“Saderat”), and at Bank Tejarat (“Tejarat”) in Tehran and in Kish for the deposit by NIOC of amounts owed to non-US subsidiaries of SchlumbergerSLB for services rendered in Iran prior to the wind-down and for the maintenance of such amounts previously received. One non-US subsidiary also maintained an account at Tejarat for payment of local expenses such as taxes. SchlumbergerSLB anticipates that it will discontinue dealings with Saderat and Tejarat following the receipt of all amounts owed to SchlumbergerSLB for prior services rendered in Iran.
On December 27, 2023, Olivier Le Peuch, CEO and a member of the SLB Board of Directors, adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 240,000 shares of SLB’s common stock between April 29, 2024 and March 27, 2025, for a duration of 332 days.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
None.
60
PART III
Item 10. Directors, Executive Officers and Corporate Governance of Schlumberger.Governance.
See “Item 1. Business—Information About Our Executive Officers” of this Report for Item 10 information regarding SLB’s executive officers of Schlumberger.officers. The information set forth under the captions “Election of Directors,” “Stock Ownership Information—Delinquent Section 16(a) Reports,” “Corporate Governance—Identifying CandidatesProcess for Director Nominations”Selecting New Directors,” and “Corporate Governance—Board Responsibilities, Committees and Attendance—Committees—Audit Committee”Committees” in Schlumberger’s 2021SLB’s 2024 Proxy Statement is incorporated herein by reference. The information set forth under the caption “Stock Ownership Information—Delinquent Section 16(a) Reports” in SLB’s 2024 Proxy Statement is incorporated herein by reference to the extent any disclosure is required.
Schlumberger
SLB has a Code of Conduct that applies to all of its directors, officers and employees, including its principal executive, financial and accounting officers, or persons performing similar functions. Schlumberger’sSLB’s Code of Conduct is posted on its website at https://www.slb.com/about/who-we-are/guiding-principles/our-code-of-conduct. SchlumbergerSLB will provide, without charge, upon request, copies of our Code of Conduct. Requests for copies of our Code of Conduct should be sent in writing to SLB, Chief Legal Officer and Secretary, 5599 San Felipe, Houston, Texas 77056.SLB intends to disclose future amendments to the Code of Conduct and any grant of a waiver from a provision of the Code of Conduct requiring disclosure under applicable SEC rules at https://www.slb.com/about/who-we-are/guiding-principles/our-code-of-conduct.
The table below sets forth information regarding SLB’s directors:
Name | |
Peter Coleman | Former Chief Executive Officer and Managing Director, Woodside Petroleum Ltd. |
Patrick de La Chevardière | Former Chief Financial Officer, Total S.A. |
Miguel M. Galuccio | Chairman and Chief Executive Officer, Vista |
James Hackett | Former Chief Executive Officer, Anadarko Petroleum Corporation |
Olivier Le Peuch | Chief Executive Officer, SLB |
Samuel Leupold | Former Chief Executive Officer, Ørsted Wind Power A/S |
Tatiana A. Mitrova | Research Fellow, Center on Global Energy Policy, School of International and Public Affairs at Columbia University |
Maria Moræus Hanssen | Former Deputy Chief Executive Officer & Chief Operating Officer, Wintershall Dea GmbH |
Vanitha Narayanan | Former Chairman and Managing Director, IBM India |
Jeff W. Sheets | Former Chief Financial Officer, ConocoPhillips Company |
Ulrich Spiesshofer | Former President and Chief Executive Officer, ABB Ltd. |
Item 11. Executive Compensation.
The information set forth under the captions “Compensation Committee Report,” “Compensation Discussion and Analysis,” “Executive Compensation Tables, and Accompanying Narrative,” “Compensation Discussion and Analysis—Compensation Committee Report”“Pay vs. Performance Comparison,” and “Director CompensationCompensation” in Fiscal Year 2020” in Schlumberger’s 2021SLB’s 2024 Proxy Statement is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information under the captions “Stock Ownership Information—Security Ownership by Certain Beneficial Owners,Management and Our Board,” “Stock Ownership Information—Security Ownership by Management”Certain Beneficial Owners,” and “Equity“Executive Compensation Tables—Equity Compensation Plan Information” in Schlumberger’s 2021SLB’s 2024 Proxy Statement is incorporated herein by reference.
The information under the captions “Corporate Governance—Director Independence” and “Corporate Governance—Other Key Governance PoliciesCertain Relationships and Practices—Policies and Procedures for Approval of Related Person Transactions” in Schlumberger’s 2021SLB’s 2024 Proxy Statement is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services.
The information under the caption “Ratification of Appointment of Independent Auditors for 2021”2024” in Schlumberger’s 2021SLB’s 2024 Proxy Statement is incorporated herein by reference.
61
PART IV
Item 15. Exhibits and Financial Statement Schedules.
(a) The following documents are filed as part of this Report:
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Financial statements of companies accounted for under the equity method and unconsolidated subsidiaries have been omitted because they do not meet the materiality tests for assets or income.
(2) | Financial Statement Schedules not | |
(3) | Exhibits: See exhibits listed under Part (b) below. |
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(b) Exhibits
62
INDEX TO EXHIBITS
Exhibit | ||
3.1 | ||
3.2 | ||
4.1 | ||
4.2 | ||
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4.4 | ||
4.5 | ||
4.6 | ||
4.7 | ||
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10.1 | ||
10.2 | ||
10.3 |
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10.6 | ||
63
Exhibit | ||
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10.16 | ||
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10.18 | ||
10.19 | ||
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21 | ||
22 | ||
Consent of Independent Registered Public Accounting Firm (*) | 23 | |
24 | ||
31.1 | ||
31.2 | ||
64
Exhibit | ||
32.1 | ||
32.2 | ||
95 | ||
Policy for Recovery of Performance-Based Incentive Compensation from Executive Officers (*) | 97 | |
Inline XBRL Instance Document (*) |
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Inline XBRL Taxonomy Extension Schema Document (*) | 101.SCH | ||||
Inline XBRL Taxonomy Extension Calculation Linkbase Document (*) | 101.CAL | ||||
Inline XBRL Taxonomy Extension Definition Linkbase Document (*) | 101.DEF | ||||
Inline XBRL Taxonomy Extension Label Linkbase Document (*) | 101.LAB | ||||
Inline XBRL Taxonomy Extension Presentation Linkbase Document (*) | 101.PRE | ||||
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | 104 | ||||
(*) Filed with this Form | |||||
(**) Furnished with this Form 10-K | |||||
(+) Management contracts or compensatory plans or | |||||
The Exhibits filed herewith do not include certain instruments with respect to long-term debt of Schlumberger Limited and its subsidiaries, inasmuch as the total amount of debt authorized under any such instrument does not exceed 10 percent of the total assets of Schlumberger Limited and its subsidiaries on a consolidated basis. |
Item 16. Form 10-K Summary.
None.
65
SIGNATURES
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: | January |
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By: | /s/ Howard Guild | ||||
Howard Guild | |||||
Chief Accounting Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Name | Title | |
* | Chief Executive Officer and Director (Principal Executive Officer) | |
Olivier Le Peuch | ||
/ | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |
Stephane Biguet | ||
/s/ | Chief Accounting Officer (Principal Accounting Officer) | |
Howard Guild | ||
* | Director | |
Peter Coleman | ||
* | Director | |
Patrick de La Chevardière | ||
* | Director | |
Miguel M. Galuccio | ||
* |
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| Chairman of the Board | |
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* | Director | |
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* | Director | |
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* | Director | |
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* | Director | |
Vanitha Narayanan | ||
* | Director | |
Jeff W. Sheets | ||
* | Director | |
Ulrich Spiesshofer | ||
/s/ Dianne B. Ralston | January | |
*By Dianne B. Ralston, Attorney-in-Fact |
83
66