UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2022~~March 31, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file No.: 1-4601

~~SCHLUMBERGER~~

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
Paris, France		75007

5599 San Felipe
Houston, Texas, United States of America		77056

62 Buckingham Gate
London, United Kingdom		SW1E 6AJ

Parkstraat 83 ~~The Hague,~~
The Hague, The Netherlands		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

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, 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class

Outstanding at ~~September 30, 2022~~March 31, 2023

COMMON STOCK, $0.01 PAR VALUE PER SHARE

~~1,417,993,775~~ 1,425,330,904

SCHLUMBERGER LIMITED

~~Third~~First Quarter ~~2022~~2023 Form 10-Q

Table of Contents


		Page
PART I	Financial Information

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1614

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2219

Item 4.	Controls and Procedures	19

PART II	22Other Information

~~PART II~~Item 1.	~~Other Information~~

~~Item 1.~~	Legal Proceedings	2320

Item 1A.	Risk Factors	2320

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2320

Item 3.	Defaults Upon Senior Securities	2320

Item 4.	Mine Safety Disclosures	2320

Item 5.	Other Information	2320

Item 6.	Exhibits	2421

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements.

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

(Unaudited)


(Stated in millions, except per share amounts)	(Stated in millions, except per share amounts)								(Stated in millions, except per share amounts)

	Third Quarter				Nine Months				Three Months Ended March 31,
	2022		2021		2022		2021		2023		2022
Revenue
Services	$	5,153	$	4,020	$	14,109	$	11,291	$	5,334	$	4,222
Product sales		2,324		1,827		6,104		5,413		2,402		1,740
Total Revenue		7,477		5,847		20,213		16,704		7,736		5,962
Interest & other income		75		56		436		91		92		50
Expenses
Cost of services		3,975		3,334		11,082		9,588		4,129		3,387
Cost of sales		2,067		1,528		5,541		4,547		2,156		1,626
Research & engineering		160		140		456		409		174		141
General & administrative		94		80		277		231		91		97
Interest		122		130		369		402		117		123
Income before taxes		1,134		691		2,924		1,618		1,161		638
Tax expense		215		129		514		301		217		118
Net income		919		562		2,410		1,317		944		520
Net income attributable to noncontrolling interests		12		12		33		37		10		10
Net income attributable to Schlumberger	$	907	$	550	$	2,377	$	1,280
Net income attributable to SLB									$	934	$	510

Basic income per share of Schlumberger	$	0.64	$	0.39	$	1.68	$	0.92
Basic income per share of SLB									$	0.65	$	0.36

Diluted income per share of Schlumberger	$	0.63	$	0.39	$	1.65	$	0.90
Diluted income per share of SLB									$	0.65	$	0.36

Average shares outstanding:
Basic		1,418		1,402		1,414		1,399		1,426		1,412
Assuming dilution		1,439		1,424		1,436		1,422		1,446		1,434

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Unaudited)


(Stated in millions)	(Stated in millions)												(Stated in millions)

	Third Quarter						Nine Months						Three Months Ended March 31,
	2022			2021			2022			2021			2023			2022
Net income	$	919		$	562		$	2,410		$	1,317		$	944		$	520
Currency translation adjustments
Unrealized net change arising during the period		(18	)		30			92			6			(34	)		(106	)
Cash flow hedges
Net gain (loss) on cash flow hedges		45			(9	)		(53	)		13			(33	)		9
Reclassification to net income of net realized (gain) loss		30			(2	)		103			(7	)		(5	)		17
Pension and other postretirement benefit plans
Amortization to net income of net actuarial loss		16			69			46			202			(2	)		16
Amortization to net income of net prior service credit		(6	)		(6	)		(17	)		(17	)		(6	)		(5	)
Income taxes on pension and other postretirement benefit plans		1			(3	)		3			(6	)		2			-
Other		-			-			-			(4	)
Comprehensive income		987			641			2,584			1,504			866			451
Comprehensive income attributable to noncontrolling interests		12			12			33			37			10			10
Comprehensive income attributable to Schlumberger	$	975		$	629		$	2,551		$	1,467
Comprehensive income attributable to SLB													$	856		$	441

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET


(Stated in millions)	(Stated in millions)						(Stated in millions)

	Sept. 30,						Mar. 31,
	2022			Dec. 31,			2023			Dec. 31,
	(Unaudited)			2021			(Unaudited)			2022
ASSETS
Current Assets
Cash	$	2,180		$	1,757		$	1,501		$	1,655
Short-term investments		1,429			1,382			1,003			1,239
Receivables less allowance for doubtful accounts (2022 - $335; 2021 - $320)		6,650			5,315
Receivables less allowance for doubtful accounts (2023 - $339; 2022 - $340)								7,578			7,032
Inventories		4,143			3,272			4,286			3,999
Other current assets		1,209			928			1,032			1,078
		15,611			12,654			15,400			15,003
Investments in Affiliated Companies		1,762			2,044			1,554			1,581
Fixed Assets less accumulated depreciation		6,407			6,429			6,691			6,607
Goodwill		12,990			12,990			13,113			12,982
Intangible Assets		3,043			3,211			3,021			2,992
Other Assets		4,280			4,183			4,076			3,970
	$	44,093		$	41,511		$	43,855		$	43,135
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued liabilities	$	9,034		$	8,382		$	8,700		$	9,121
Estimated liability for taxes on income		938			879			1,038			1,002
Short-term borrowings and current portion of long-term debt		899			909			2,140			1,632
Dividends payable		263			189			374			263
		11,134			10,359			12,252			12,018
Long-term Debt		12,452			13,286			10,698			10,594
Postretirement Benefits		233			231			168			165
Deferred Taxes		86			94			194			61
Other Liabilities		2,677			2,255			2,163			2,308
		26,582			26,225			25,475			25,146
Equity
Common stock		11,867			12,608			11,264			11,837
Treasury stock		(1,176	)		(2,233	)		(559	)		(1,016	)
Retained earnings		9,904			8,199			11,296			10,719
Accumulated other comprehensive loss		(3,396	)		(3,570	)		(3,933	)		(3,855	)
Schlumberger stockholders’ equity		17,199			15,004
SLB stockholders’ equity								18,068			17,685
Noncontrolling interests		312			282			312			304
		17,511			15,286			18,380			17,989
	$	44,093		$	41,511		$	43,855		$	43,135

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)


(Stated in millions)

	Three Months Ended March 31,
	2023			2022
Cash flows from operating activities:
Net income	$	944		$	520
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (1)		563			533
Deferred taxes		112			(14	)
Stock-based compensation expense		81			89
Earnings of equity method investments, less dividends received		(32	)		6
Change in assets and liabilities: (2)
Increase in receivables		(509	)		(404	)
Increase in inventories		(288	)		(464	)
Decrease (increase) in other current assets		54			(177	)
Increase in other assets		(10	)		(25	)
(Decrease) increase in accounts payable and accrued liabilities		(473	)		89
(Decrease) increase in estimated liability for taxes on income		(84	)		8
Increase (decrease) in other liabilities		2			(5	)
Other		(30	)		(25	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		330			131
Cash flows from investing activities:
Capital expenditures		(410	)		(304	)
APS investments		(133	)		(168	)
Exploration data costs capitalized		(52	)		(40	)
Business acquisitions and investments, net of cash acquired		(244	)		-
Proceeds from sale of Liberty shares		137			84
Sale of short-term investments, net		236			336
Other		(81	)		(23	)
NET CASH USED IN INVESTING ACTIVITIES		(547	)		(115	)
Cash flows from financing activities:
Dividends paid		(249	)		(175	)
Proceeds from employee stock purchase plan		86			64
Proceeds from exercise of stock options		35			7
Stock repurchase program		(230	)		-
Proceeds from issuance of long-term debt		559			-
Net (decrease) increase in short-term borrowings		(50	)		16
Taxes paid on net settled stock-based compensation awards		(88	)		(81	)
Other		(1	)		(1	)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		62			(170	)
Net decrease in cash before translation effect		(155	)		(154	)
Translation effect on cash		1			(3	)
Cash, beginning of period		1,655			1,757
Cash, end of period	$	1,501		$	1,600

(Stated in millions)

Nine Months Ended September 30,

2022

2021

Cash flows from operating activities:

Net income
$
2,410

$
1,317

Adjustments to reconcile net income to cash provided by operating activities:

Gain on sale of Liberty shares

(242
)

-

Gain on sale of real estate

(43
)

-

Gain on marketable securities

-

(47
)
Depreciation and amortization ⁽¹⁾

1,598

1,588

Deferred taxes

3

(33
)
Stock-based compensation expense

236

229

Earnings of equity method investments, less dividends received

(52
)

6

Change in assets and liabilities: ⁽²⁾

Increase in receivables

(1,302
)

(97
)
(Increase) decrease in inventories

(849
)

54

(Increase) decrease in other current assets

(144
)

506

Increase in other assets

(40
)

(9
)
Increase (decrease) in accounts payable and accrued liabilities

475

(660
)
Increase (decrease) in estimated liability for taxes on income

6

(124
)
Other

50

(11
)
NET CASH PROVIDED BY OPERATING ACTIVITIES

2,106

2,719

Cash flows from investing activities:

Capital expenditures

(1,046
)

(694
)
APS investments

(420
)

(305
)
Exploration data costs capitalized

(77
)

(21
)
Business acquisitions and investments, net of cash acquired

(45
)

(134
)
Proceeds from sale of Liberty shares

513

-

Proceeds from sale of real estate

120

-

(Purchase) sale of short-term investments, net

(55
)

790

Other

(106
)

(29
)
NET CASH USED IN INVESTING ACTIVITIES

(1,116
)

(393
)
Cash flows from financing activities:

Dividends paid

(600
)

(524
)
Proceeds from employee stock purchase plan

142

137

Proceeds from exercise of stock options

29

-

Proceeds from issuance of long-term debt

-

34

Repayment of long-term debt

-

(1,076
)
Net decrease in short-term borrowings

(13
)

(94
)
Taxes paid on net settled stock-based compensation awards

(92
)

(21
)
Other

(4
)

(60
)
NET CASH USED IN FINANCING ACTIVITIES

(538
)

(1,604
)
Net increase in cash before translation effect

452

722

Translation effect on cash

(29
)

3

Cash, beginning of period

1,757

844

Cash, end of period
$
2,180

$
1,569

(1)

Includes depreciation of fixed assets and amortization of intangible assets, exploration data costs, and APS investments.

(2)

Net of the effect of business acquisitions.

⁽¹⁾	~~Includes depreciation of property, plant and equipment and amortization of intangible assets, exploration data costs, and APS investments.~~

⁽²⁾	~~Net of the effect of business acquisitions and divestitures.~~

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(Unaudited)

	(Stated in millions, except per share amounts)
																				(Stated in millions, except per share amounts)
											Accumulated
											Other																		Accumulated
	Common Stock							Retained			Comprehensive			Noncontrolling															Other
January 1, 2022 – September 30, 2022	Issued			In Treasury				Earnings			Loss			Interests			Total
Balance, January 1, 2022	$	12,608		$	(2,233	)		$	8,199		$	(3,570	)	$	282		$	15,286
																				Common Stock						Retained			Comprehensive			Noncontrolling
January 1, 2023 – March 31, 2023																				Issued			In Treasury			Earnings			Loss			Interests			Total
Balance, January 1, 2023																				$	11,837		$	(1,016	)	$	10,719		$	(3,855	)	$	304		$	17,989
Net income									2,377						33			2,410									934						10			944
Currency translation adjustments							��					92						92												(34	)					(34	)
Changes in fair value of cash flow hedges												50						50												(38	)					(38	)
Pension and other postretirement benefit plans												32						32												(6	)					(6	)
Shares sold to optionees, less shares exchanged		(24	)		53													29			(28	)		63												35
Vesting of restricted stock, net of taxes withheld		(730	)		638													(92	)		(503	)		415												(88	)
Employee stock purchase plan		(222	)		364													142			(123	)		209												86
Stock repurchase program																								(230	)											(230	)
Stock-based compensation expense		236																236			81															81
Dividends declared ($0.475 per share)									(672	)								(672	)
Dividends declared ($0.25 per share)																											(357	)								(357	)
Dividends paid to noncontrolling interests															(4	)		(4	)														(2	)		(2	)
Other		(1	)		2										1			2
Balance, September 30, 2022	$	11,867		$	(1,176	)		$	9,904		$	(3,396	)	$	312		$	17,511
Balance, March 31, 2023																				$	11,264		$	(559	)	$	11,296		$	(3,933	)	$	312		$	18,380


										Accumulated
										Other																		Accumulated
	Common Stock						Retained			Comprehensive			Noncontrolling															Other
January 1, 2021 – September 30, 2021	Issued			In Treasury			Earnings			Loss			Interests			Total
Balance, January 1, 2021	$	12,970		$	(3,033	)	$	7,018		$	(4,884	)	$	418		$	12,489
																			Common Stock						Retained			Comprehensive			Noncontrolling
January 1, 2022 – March 31, 2022																			Issued			In Treasury			Earnings			Loss			Interests		Total
Balance, January 1, 2022																			$	12,608		$	(2,233	)	$	8,199		$	(3,570	)	$	282	$	15,286
Net income								1,280						37			1,317									510						10		520
Currency translation adjustments											6			(2	)		4												(106	)				(106	)
Changes in fair value of cash flow hedges											6						6												26					26
Pension and other postretirement benefit plans											179						179												11					11
Shares sold to optionees, less shares exchanged																				(5	)		12											7
Vesting of restricted stock, net of taxes withheld		(248	)		227												(21	)		(631	)		550											(81	)
Employee stock purchase plan		(377	)		514												137			(104	)		168											64
Stock-based compensation expense		229															229			89														89
Dividends declared ($0.375 per share)								(523	)								(523	)
Deconsolidation of subsidiary														(123	)		(123	)
Other		(3	)		5						(4	)		(27	)		(29	)
Balance, September 30, 2021	$	12,571		$	(2,287	)	$	7,775		$	(4,697	)	$	303		$	13,665
Dividends declared ($0.125 per share)																										(177	)							(177	)
Balance, March 31, 2022																			$	11,957		$	(1,503	)	$	8,532		$	(3,639	)	$	292	$	15,639

Accumulated

Other

Common Stock

Retained

Comprehensive

Noncontrolling

July 1, 2022 – September 30, 2022

Issued

In Treasury

Earnings

Loss

Interests

Total

Balance, July 1, 2022

$
11,981

$
(1,436
)

$
9,244

$
(3,464
)

$
300

$
16,625

Net income

907

12

919

Currency translation adjustments

(18
)

(18
)
Changes in fair value of cash flow hedges

75

75

Pension and other postretirement benefit plans

11

11

Vesting of restricted stock, net of taxes withheld

(72
)

65

(7
)
Employee stock purchase plan

(118
)

196

78

Stock-based compensation expense

76

76

Dividends declared ($0.175 per share)

(248
)

(248
)
Other

(1
)

1

-

Balance, September 30, 2022

$
11,867

$
(1,176
)

$
9,904

$
(3,396
)

$
312

$
17,511

(Stated in millions, except per share amounts)

Accumulated

Other

Common Stock

Retained

Comprehensive

Noncontrolling

July 1, 2021 – September 30, 2021

Issued

In Treasury

Earnings

Loss

Interests

Total

Balance, July 1, 2021

$
12,730

$
(2,591
)

$
7,399

$
(4,776
)

$
297

$
13,059

Net income

550

12

562

Currency translation adjustments

30

30

Changes in fair value of cash flow hedges

(11
)

(11
)
Pension and other postretirement benefit plans

60

60

Vesting of restricted stock, net of taxes withheld

(56
)

53

(3
)
Employee stock purchase plan

(175
)

250

75

Stock-based compensation expense

73

73

Dividends declared ($0.125 per share)

(174
)

(174
)
Other

(1
)

1

(6
)

(6
)
Balance, September 30, 2021

$
12,571

$
(2,287
)

$
7,775

$
(4,697
)

$
303

$
13,665

SHARES OF COMMON STOCK

(Unaudited)

			(Stated in millions)
										(Stated in millions)
						Shares
	Issued		In Treasury			Outstanding							Shares
Balance, January 1, 2022		1,434		(31	)		1,403
								Issued		In Treasury			Outstanding
Balance, January 1, 2023									1,434		(14	)		1,420
Shares sold to optionees, less shares exchanged		-		1			1		-		1			1
Vesting of restricted stock		-		9			9		-		5			5
Shares issued under employee stock purchase plan		-		5			5		-		3			3
Balance, September 30, 2022		1,434		(16	)		1,418
Stock repurchase program									-		(4	)		(4	)
Balance, March 31, 2023									1,434		(9	)		1,425

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

The accompanying unaudited consolidated financial statements of Schlumberger Limited and its subsidiaries (“~~Schlumberger”~~SLB”) have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of ~~Schlumberger~~SLB management, all adjustments considered necessary for a fair statement have been included in the accompanying unaudited financial statements. All intercompany transactions and balances have been eliminated in consolidation. Operating results for the ~~nine-month~~three-month period ended ~~September 30, 2022~~March 31, 2023 are not necessarily indicative of the results that may be expected for the full year ending December 31, ~~2022.~~2023. The December 31, ~~2021~~2022 balance sheet information has been derived from the ~~Schlumberger 2021~~SLB 2022 audited financial statements. For further information, refer to the Consolidated Financial Statements and notes thereto included in the ~~Schlumberger~~SLB Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, filed with the Securities and Exchange Commission on January ~~26, 2022.~~25, 2023.

2. Charges and Credits

~~2022~~2023

~~Schlumberger recorded the following credits during the first nine months of 2022, all of which are classified in~~ ~~Interest & other income~~ ~~in the~~ ~~Consolidated Statement of Income~~:

(Stated in millions)

Pretax Credit

Tax Expense

Net

First quarter:

Gain on sale of Liberty shares
$
26

$
4

$
22

Second quarter:

Gain on sale of Liberty shares

216

13

203

Gain on sale of real estate

43

2

41

$
285

$
19

$
266

On December 31, 2020, ~~Schlumberger~~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 the first quarter of 2023, SLB sold all of its remaining approximately 9 million shares of Liberty and received net proceeds of $137 million. As a result, SLB recognized a gain of $36 million which is classified in Interest & other income in the Consolidated Statement of Income.

2022

During the first quarter of 2022, ~~Schlumberger~~SLB sold 7.2 million of its shares of Liberty and received proceeds of ~~$84 million. During the second quarter of 2022, Schlumberger sold an additional 26.5 million of its shares in Liberty and received proceeds of $429~~$84 million. As a result, ~~of these transactions Schlumberger~~SLB recognized a gain of ~~$26~~$26 million ~~during the first quarter of 2022 and a gain of $216 million during the second quarter of 2022. As of September 30, 2022, Schlumberger had a 12% equity interest~~which is classified in ~~Liberty.~~

~~During the second quarter of 2022, Schlumberger sold certain real estate and received proceeds of $120 million. As a result of this transaction, Schlumberger recognized a gain of $43 million.~~

~~2021~~

During the third quarter of 2021, a start-up company that Schlumberger previously invested in was acquired. As a result of this transaction, Schlumberger’s ownership interest was converted into shares of a publicly traded company. Schlumberger recognized an unrealized pretax gain of $47 million ($36 million after-tax) to increase the carrying value of this investment to its estimated fair value of approximately $55 million. This unrealized gain is reflected in Interest & other incomein the Consolidated Statement of ~~Income~~Income..

3. Earnings per Share

The following is a reconciliation from basic ~~income~~earnings per share of ~~Schlumberger~~SLB to diluted ~~income~~earnings per share of ~~Schlumberger:~~SLB:


	(Stated in millions, except per share amounts)

	2023						2022
	Net Income Attributable to SLB		Average Shares Outstanding		Earnings per Share		Net Income Attributable to SLB		Average Shares Outstanding		Earnings per Share
First Quarter
Basic	$	934		1,426	$	0.65	$	510		1,412	$	0.36
Assumed exercise of stock options		-		2				-		-
Unvested restricted stock		-		18				-		22
Diluted	$	934		1,446	$	0.65	$	510		1,434	$	0.36

(Stated in millions, except per share amounts)

2022

2021

Net Income Attributable to Schlumberger

Average
Shares
Outstanding

Earnings per
Share

Net Income Attributable to Schlumberger

Average
Shares
Outstanding

Earnings per
Share

Third Quarter

Basic
$
907

1,418

$
0.64

$
550

1,402

$
0.39

Unvested restricted stock

-

21

-

22

Diluted
$
907

1,439

$
0.63

$
550

1,424

$
0.39

2022

2021

Net Income Attributable to Schlumberger

Average
Shares
Outstanding

Earnings per
Share

Net Income Attributable to Schlumberger

Average
Shares
Outstanding

Earnings per
Share

Nine Months

Basic
$
2,377

1,414

$
1.68

$
1,280

$
1,399

$
0.92

Unvested restricted stock

-

22

-

23

Diluted
$
2,377

1,436

$
1.65

$
1,280

$
1,422

$
0.90

The number of outstanding options to purchase shares of ~~Schlumberger~~SLB common stock that were not included in the computation of diluted income per share, because to do so would have had an antidilutive effect, was as follows:


(Stated in millions)

	Three Months Ended March 31,
	2023		2022
Employee stock options		24		31

(Stated in millions)

Third Quarter

Nine Months

2022

2021

2022

2021

Employee stock options

37

43

31

43

4. Inventories

A summary of inventories, which are stated at the lower of average cost or net realizable value, is as follows:


(Stated in millions)

	Mar. 31,		Dec. 31,
	2023		2022
Raw materials & field materials	$	2,219	$	2,085
Work in progress		650		547
Finished goods		1,417		1,367
	$	4,286	$	3,999

(Stated in millions)

Sept. 30,

Dec. 31,

2022

2021

Raw materials & field materials
$
2,123

$
1,594

Work in progress

604

425

Finished goods

1,416

1,253

$
4,143

$
3,272

5. Fixed Assets

Fixed assets consist of the following:

~~A summary of fixed assets follows:~~


(Stated in millions)

	Mar. 31,		Dec. 31,
	2023		2022
Property, plant & equipment	$	28,568	$	28,386
Less: Accumulated depreciation		21,877		21,779
	$	6,691	$	6,607

(Stated in millions)

Sept. 30,

Dec. 31,

2022

2021

Property, plant & equipment
$
28,260

$
29,077

Less: Accumulated depreciation

21,853

22,648

$
6,407

$
6,429

Depreciation expense relating to fixed assets was ~~as follows:~~$347 million and $338 million in the first quarter of 2023 and 2022, respectively.

(Stated in millions)

2022

2021

Third Quarter
$
343

$
350

Nine Months
$
1,021

$
1,057

6. Intangible Assets

~~The gross book value, accumulated amortization and net book value~~Intangible assets consist of ~~intangible assets were as follows:~~the following:


	(Stated in millions)

	Mar. 31, 2023						Dec. 31, 2022
	Gross		Accumulated		Net Book		Gross		Accumulated		Net Book
	Book Value		Amortization		Value		Book Value		Amortization		Value
Customer relationships	$	1,707	$	644	$	1,063	$	1,680	$	631	$	1,049
Technology/technical know-how		1,307		699		608		1,280		676		604
Tradenames		795		239		556		767		222		545
Other		1,680		886		794		1,657		863		794
	$	5,489	$	2,468	$	3,021	$	5,384	$	2,392	$	2,992

(Stated in millions)

Sept. 30, 2022

Dec. 31, 2021

Gross

Accumulated

Net Book

Gross

Accumulated

Net Book

Book Value

Amortization

Value

Book Value

Amortization

Value

Customer relationships
$
1,694

$
617

$
1,077

$
1,681

$
551

$
1,130

Technology/technical know-how

1,285

658

627

1,264

562

702

Tradenames

759

215

544

766

191

575

Other

1,635

840

795

1,578

774

804

$
5,373

$
2,330

$
3,043

$
5,289

$
2,078

$
3,211

Amortization expense charged to income was ~~as follows:~~$76 million during the first quarter of 2023 and $75 million during the first quarter of 2022.

(Stated in millions)

2022

2021

Third Quarter
$
76

$
75

Nine Months
$
226

$
226

Based on the ~~net book~~carrying value of intangible assets at ~~September 30, 2022,~~March 31, 2023, amortization expense for the subsequent five years is estimated to be: ~~fourth quarter~~remaining three quarters of ~~2022—$72 million;~~ 2023—$~~288~~223 million; 2024—$~~278~~290 million; 2025—$~~263~~275 million; 2026—$~~254~~270 million; 2027—$263 million; and ~~2027—~~2028—$~~252~~263 million.

7. Long-term Debt

~~A summary of~~ Long-term Debt ~~follows:~~ consist of the following:


(Stated in millions)	(Stated in millions)				(Stated in millions)

	Sept. 30,		Dec. 31,		Mar. 31,		Dec. 31,
	2022		2021		2023		2022
3.65% Senior Notes due 2023	$	1,498	$	1,497
3.90% Senior Notes due 2028		1,462		1,457
2.65% Senior Notes due 2030		1,250		1,250
1.375% Guaranteed Notes due 2026		955		1,125
2.00% Guaranteed Notes due 2032		948		1,118
4.00% Senior Notes due 2025		931		930
0.25% Notes due 2027		860		1,013
0.50% Notes due 2031		858		1,012
4.30% Senior Notes due 2029		846		846
3.75% Senior Notes due 2024		749		748
1.00% Guaranteed Notes due 2026		572		679
1.40% Senior Notes due 2025		499		498
0.00% Notes due 2024		478		563
7.00% Notes due 2038		202		204
5.95% Notes due 2041		113		113
5.13% Notes due 2043		98		98
4.00% Notes due 2023		79		80
3.70% Notes due 2024		54		55
3.90% Senior Notes due 2028					$	1,464	$	1,464
2.65% Senior Notes due 2030						1,250		1,250
1.375% Guaranteed Notes due 2026						1,082		1,061
2.00% Guaranteed Notes due 2032						1,076		1,055
0.25% Notes due 2027						974		955
0.50% Notes due 2031						973		954
4.30% Senior Notes due 2029						847		847
1.00% Guaranteed Notes due 2026						648		635
0.00% Notes due 2024						542		531
4.00% Senior Notes due 2025						523		522
1.40% Senior Notes due 2025						499		499
3.75% Senior Notes due 2024						355		355
7.00% Notes due 2038						201		202
5.95% Notes due 2041						112		112
5.13% Notes due 2043						98		98
3.70% Notes due 2024						54		54
	$	12,452	$	13,286	$	10,698	$	10,594

The estimated fair value of ~~Schlumberger’s~~ SLB’s Long-term Debt, based on quoted market prices at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, was ~~$11.2~~$9.8 billion and ~~$13.9~~$9.4 billion, respectively.

~~Schlumberger has a €750 million~~ ~~three-year~~ ~~committed revolving credit facility maturing in~~

~~June 2024~~. At ~~September 30, 2022 no amounts had been drawn under this facility.~~

~~In addition to the revolving credit facility described above, at September 30, 2022, Schlumberger~~March 31, 2023, SLB had committed credit facility agreements aggregating ~~$5.75~~$5.75 billion with commercial banks, ~~all~~ of which $5.19 billion was available and unused. These committed facilities support commercial paper programs in the United States and Europe, of which ~~$0.75~~$0.75 billion matures in February 2024, ~~$2.0~~$2.0 billion matures in February 2025, ~~$1.0~~$1.0 billion matures in July 2026 and ~~$2.0~~$2.0 billion matures in February 2027. SLB also has a €750 million three-year committed revolving credit facility maturing in June 2024. At March 31, 2023 no amounts had been drawn under this facility. Interest rates and other terms of borrowing under these lines of credit vary by facility.

Borrowings under the commercial paper programs at March 31, 2023 were $559 million, all of which was classified in Short-term borrowings and current portion of long-term debt in the Consolidated Balance Sheet. There were no borrowings under the commercial paper programs at ~~September 30, 2022 and~~ December 31, ~~2021.~~ 2022.

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.~~Schlumberger Limited.

8. Derivative Instruments and Hedging Activities

~~As a multinational company, Schlumberger conducts its business in over 120 countries. Schlumberger’s~~SLB’s functional currency is primarily the US dollar. However, outside the United States, a significant portion of SLB’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 SLB conducts business, the US dollar-reported expenses will increase (decrease).

~~Schlumberger~~Changes in foreign currency exchange rates exposes SLB to risks on future cash flows relating to certain of 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 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 March 31, 2023, were as follows:

•

During 2019, a US-dollar functional currency subsidiary of SLB issued €1.5 billion of Euro-denominated debt. SLB entered into cross-currency interest rate swaps in order to hedge changes in the US dollar 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 interest rate 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 2020, a US-dollar functional currency subsidiary of SLB issued €0.8 billion of Euro-denominated debt. SLB entered into cross-currency interest rate swaps to hedge changes in the US dollar 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 interest rate 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 2020, a US-dollar functional currency subsidiary of SLB issued €2.0 billion of Euro-denominated debt. SLB entered into cross-currency interest rate swaps to hedge changes in the US dollar 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 interest rate swaps effectively convert the Euro-denominated notes to US-dollar denominated debt with fixed annual interest rates of 2.77% and 3.49%, respectively.

•

During 2020, a Canadian dollar functional currency subsidiary of SLB issued $0.5 billion of US dollar denominated debt. SLB entered into cross-currency interest rate swaps to hedge changes in the US dollar value of its $0.5 billion 1.40% Senior Notes due 2025. These cross-currency interest rate swaps effectively convert the US dollar notes to Canadian dollar denominated debt with a fixed annual interest rate of 1.73%.

A summary of the amounts included in the Consolidated Balance Sheet relating to cross currency interest rate swaps was as follows:


	(Stated in millions)

	Mar. 31, 2023		Dec. 31, 2022
Other Assets	$	7	$	1
Other Liabilities	$	283	$	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 has entered into derivative contracts that hedge the price of oil related to approximately 70% of the projected oil production for the remaining nine months of 2023 for one of its Asset Performance Solutions ("APS") projects. 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. At March 31, 2023, included inOther current assets was $10 million and included in Accounts payable and accrued liabilities was $3 millionrelating to the fair value of the outstanding commodity contracts.

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. ~~Schlumberger~~SLB 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~~ hedges.

~~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~~SLB is ~~recognized in earnings.~~

Schlumberger is 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. A summary of the fair value of the outstanding cross-currency swap derivatives, which was determined using a model with inputs that are observable in the market or can be derived or corroborated by observable data, included in the ~~Consolidated Balance Sheet~~ ~~follows:~~

(Stated in millions)

Sept. 30, 2022

Dec. 31, 2021

Other current assets
$
45

$
-

Other assets
$
10

$
66

Other Liabilities
$
666

$
78

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 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 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 Euro-denominated notes to US-dollar denominated debt with fixed annual interest rates of 2.77% and 3.49%, respectively.

During 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 has entered into derivative contracts that hedge the price of oil related to approximately 75% of the projected oil production for all of 2022 and approximately 30% of the projected oil production for the first six months of 2023 for one of its Asset Performance Solutions ("APS") projects. These contracts are accounted for as cash flow hedges, with the 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. At September 30, 2022, included~~

in ~~Other current assets~~ ~~was $8 million and included in~~ ~~Accounts payable and accrued liabilities~~ ~~was $6 millionrelating to the fair value of the outstanding commodity contracts.~~

~~Schlumberger is~~also exposed to changes in the fair value of assets and liabilities denominated in currencies other than the functional currency. While ~~Schlumberger~~SLB 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 ~~contracts~~derivative is recorded on the Consolidated Balance Sheet and changes in the fair value are recognized in the Consolidated Statement of Income, as are changes in the fair value of the hedged item.

~~At September 30, 2022,~~Foreign currency forward contracts were outstanding for the US dollar equivalent of ~~$7.2~~$2.5 billion and $2.1 billion in various foreign currencies as of ~~which $5.2 billion relates to hedges of debt denominated in currencies other than the functional currency.~~March 31, 2023 and December 31, 2022, respectively.

Other than the previously mentioned cross-currency interest rate swaps, ~~and commodity hedges,~~ the fair value of the other outstanding derivatives was ~~not~~not material ~~at September 30, 2022~~as of March 31, 2023 and December 31, ~~2021.~~2022.

The effect of derivative instruments designated as cash flow hedges, and those not designated as hedges, on the Consolidated Statement of Income was as follows:


							(Stated in millions)							(Stated in millions)

	Gain (Loss) Recognized in Income													Gain (Loss) Recognized in Income
	Third Quarter						Nine Months							First Quarter			First Quarter
	2022			2021			2022			2021			Consolidated Statement of Income Classification	2023			2022			Consolidated Statement of Income Classification
Derivatives designated as cash flow hedges:
Cross currency swaps	$	(362	)	$	(89	)	$	(653	)	$	(267	)	Cost of services/sales
Cross-currency interest rate swaps														$	95		$	(131	)	Cost of services/sales
Cross-currency interest rate swaps															(22	)		(21	)	Interest expense
Commodity contracts		(20	)		-			(85	)		-		Revenue		2			(15	)	Revenue
Foreign exchange contracts		(10	)		2			(17	)		7		Cost of services/sales		3			(2	)	Cost of services/sales
	$	(392	)	$	(87	)	$	(755	)	$	(260	)		$	78		$	(169	)
Derivatives not designated as hedges:
Foreign exchange contracts	$	8		$	(45	)	$	(30	)	$	(19	)	Cost of services/sales	$	1		$	(11	)	Cost of services/sales

9. Contingencies

~~Schlumberger~~SLB 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.

10. Segment Information


				(Stated in millions)												(Stated in millions)

	Third Quarter 2022						Third Quarter 2021						First Quarter 2023						First Quarter 2022
				Income						Income						Income						Income
	Revenue			Before Taxes			Revenue			Before Taxes			Revenue			Before Taxes			Revenue			Before Taxes
Digital & Integration	$	900		$	305		$	812		$	284		$	894		$	265		$	857		$	292
Reservoir Performance		1,456			244			1,192			190			1,503			242			1,210			160
Well Construction		3,084			664			2,273			345			3,261			672			2,398			388
Production Systems		2,150			224			1,674			166			2,207			205			1,604			114
Eliminations & other		(113	)		(37	)		(104	)		(77	)		(129	)		7			(107	)		(60	)
Pretax segment operating income					1,400						908						1,391						894
Corporate & other ⁽¹⁾					(155	)					(145	)					(169	)					(164	)
Interest income ⁽²⁾					8						8						17						2
Interest expense ⁽³⁾					(119	)					(127	)					(114	)					(120	)
Charges and credits ⁽⁴⁾					-						47						36						26
	$	7,477		$	1,134		$	5,847		$	691		$	7,736		$	1,161		$	5,962		$	638

(1)

Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs, amortization expense associated with certain intangible assets, certain centrally managed initiatives and other nonoperating items.

(2)

Interest income excludes amounts that are included in the segments’ income ($- million in 2023; $12 million in 2022).

(3)

Interest expense excludes amounts that are included in the segments’ income ($3 million in 2023; $3 million in 2022).

(4)

See Note 2 – Charges and Credits.

⁽¹⁾

⁽²⁾	~~Interest income excludes amounts which are included in the segments’ income ($25 million in 2022; $- million in 2021).~~

⁽³⁾	~~Interest expense excludes amounts which are included in the segments’ income ($3 million in 2022; $3 million in 2021).~~

⁽⁴⁾	~~See Note 2 –~~ ~~Charges and Credits~~.

(Stated in millions)

Nine Months 2022

Nine Months 2021

Income

Income

Revenue

Before Taxes

Revenue

Before Taxes

Digital & Integration
$
2,713

$
976

$
2,401

$
805

Reservoir Performance

3,999

598

3,312

448

Well Construction

8,168

1,522

6,319

827

Production Systems

5,647

509

4,946

475

Eliminations & other

(314
)

(151
)

(274
)

(176
)
Pretax segment operating income

3,454

2,379

Corporate & other ⁽¹⁾

(468
)

(434
)
Interest income ⁽²⁾

13

17

Interest expense ⁽³⁾

(360
)

(391
)
Charges and credits ⁽⁴⁾

285

47

$
20,213

$
2,924

$
16,704

$
1,618

⁽¹⁾	Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs, amortization expense associated with certain intangible assets, certain centrally managed initiatives and other nonoperating items.

⁽²⁾	~~Interest income excludes amounts which are included in the segments’ income ($53 million in 2022; $1 million in 2021).~~

⁽³⁾	~~Interest expense excludes amounts which are included in the segments’ income ($9 million in 2022; $11 million in 2021).~~

⁽⁴⁾	~~See Note 2 –~~ ~~Charges and Credits~~.

Revenue by geographic area was as follows:


	(Stated in millions)

	First Quarter
	2023		2022
North America	$	1,698	$	1,282
Latin America		1,618		1,204
Europe & Africa (1)		1,974		1,404
Middle East & Asia		2,393		2,024
Other		53		48
	$	7,736	$	5,962

(Stated in millions)

Third Quarter

Nine Months

2022

2021

2022

2021

North America
$
1,543

$
1,129

$
4,362

$
3,185

Latin America

1,508

1,160

4,042

3,255

Europe/CIS/Africa

2,039

1,481

5,134

4,190

Middle East & Asia

2,334

2,034

6,525

5,952

Other

53

43

150

122

$
7,477

$
5,847

$
20,213

$
16,704

(1)

Includes Russia and the Caspian region.

North America and International revenue disaggregated by segment was as follows:


							(Stated in millions)												(Stated in millions)

	Third Quarter 2022												First Quarter 2023
	North												North
	America			International			Other			Total			America			International			Other			Total
Digital & Integration	$	229		$	671		$	-		$	900		$	251		$	642		$	1		$	894
Reservoir Performance		119			1,335			2			1,456			120			1,380			3			1,503
Well Construction		621			2,406			57			3,084			711			2,493			57			3,261
Production Systems		578			1,569			3			2,150			626			1,574			7			2,207
Eliminations & other		(4	)		(100	)		(9	)		(113	)		(10	)		(104	)		(15	)		(129	)
	$	1,543		$	5,881		$	53		$	7,477		$	1,698		$	5,985		$	53		$	7,736


	Third Quarter 2021												First Quarter 2022
	North												North
	America			International			Other			Total			America			International			Other			Total
Digital & Integration	$	196		$	615		$	1		$	812		$	225		$	631		$	1		$	857
Reservoir Performance		79			1,112			1			1,192			103			1,105			2			1,210
Well Construction		382			1,839			52			2,273			485			1,865			48			2,398
Production Systems		469			1,205			-			1,674			473			1,127			4			1,604
Eliminations & other		3			(96	)		(11	)		(104	)		(4	)		(96	)		(7	)		(107	)
	$	1,129		$	4,675		$	43		$	5,847		$	1,282		$	4,632		$	48		$	5,962

Nine Months 2022

North

America

International

Other

Total

Digital & Integration
$
781

$
1,928

$
4

$
2,713

Reservoir Performance

333

3,661

5

3,999

Well Construction

1,659

6,354

155

8,168

Production Systems

1,601

4,037

9

5,647

Eliminations & other

(12
)

(279
)

(23
)

(314
)

$
4,362

$
15,701

$
150

$
20,213

Nine Months 2021

North

America

International

Other

Total

Digital & Integration
$
549

$
1,850

$
2

$
2,401

Reservoir Performance

237

3,072

3

3,312

Well Construction

1,045

5,124

150

6,319

Production Systems

1,347

3,587

12

4,946

Eliminations & other

7

(236
)

(45
)

(274
)

$
3,185

$
13,397

$
122

$
16,704

Revenue in excess of billings related to contracts where revenue is recognized over time was ~~$0.2~~$0.3 billion at both ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022. Such amounts are included within Receivables less allowance for doubtful accounts in the Consolidated Balance Sheet.

Due to the nature of its business, ~~Schlumberger~~SLB does not have significant backlog. Total backlog was ~~$2.9~~$3.0 billion at ~~September 30, 2022,~~March 31, 2023, of which approximately ~~60%~~60% is expected to be recognized as revenue over the next 12 months.

Billings and cash collections in excess of revenue was ~~$1.2~~$1.2 billion at ~~September 30, 2022~~both March 31, 2023 and ~~$1.1 billion at~~ December 31, ~~2021.~~2022. Such amounts are included within Accounts payable and accrued liabilities in the Consolidated Balance Sheet.

1513

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This section of the Form 10-Q discusses third-quarter 2022 results of operations and comparisons to second-quarter 2022, as well as the first nine months of 2022 results of operations and comparisons to the first nine months of 2021. Detailed financial information with respect to second-quarter 2022 can be found in Part I, Item 1, “Financial Statements” of Schlumberger’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2022.

~~Third~~First Quarter ~~2022~~2023 Compared to ~~Second~~Fourth Quarter 2022


				(Stated in millions)

	First Quarter 2023						Fourth Quarter 2022
				Income Before						Income Before
	Revenue			Taxes			Revenue			Taxes
Digital & Integration	$	894		$	265		$	1,012		$	382
Reservoir Performance		1,503			242			1,554			282
Well Construction		3,261			672			3,229			679
Production Systems		2,207			205			2,215			238
Eliminations & other		(129	)		7			(131	)		(24	)
Pretax segment operating income					1,391						1,557
Corporate & other (1)					(169	)					(169	)
Interest income (2)					17						14
Interest expense (3)					(114	)					(118	)
Charges and credits (4)					36						63
	$	7,736		$	1,161		$	7,879		$	1,347

(Stated in millions)

Third Quarter 2022

Second Quarter 2022

Income Before

Income Before

Revenue

Taxes

Revenue

Taxes

Digital & Integration
$
900

$
305

$
955

$
379

Reservoir Performance

1,456

244

1,333

195

Well Construction

3,084

664

2,686

470

Production Systems

2,150

224

1,893

171

Eliminations & other

(113
)

(37
)

(94
)

(56
)
Pretax segment operating income

1,400

1,159

Corporate & other ⁽¹⁾

(155
)

(148
)
Interest income ⁽²⁾

8

3

Interest expense ⁽³⁾

(119
)

(121
)
Charges and credits⁽⁴⁾

-

259

$
7,477

$
1,134

$
6,773

$
1,152

(1)

(2)

Interest income excludes amounts that are included in the segments’ income ($- million in Q1 2023; $19 million in Q4 2022).

(3)

Interest expense excludes amounts that are included in the segments’ income ($3 million in Q1 2023; $3 million in Q4 2022).

(4)

Charges and credits are described in detail in Note 2 to the Consolidated Financial Statements.

First-quarter 2023 revenue of $7.7 billion decreased 2% sequentially. Revenue grew 4% in North America, the eighth consecutive quarter of growth, as SLB benefited from its exposure to the most resilient basins and market segments. Internationally, the sequential revenue decline of 3% was less pronounced than historical trends as seasonal effects were partially offset by robust activity gains.

From a macro perspective, SLB maintains its very constructive multiyear outlook as the upcycle attributes and key activity drivers continue to evolve very positively. The international and offshore markets continue to experience a strong resurgence of activity driven by resilient long-cycle development and capacity expansion projects. In contrast, the North American land market, which led the early part of this upcycle, could potentially result in an activity plateau in 2023 due to lower gas prices and capital restraint by private E&P operators.

On balance, SLB believes the global activity outlook for the full year remains very solid. Through the first quarter, the resilience, breadth, and durability of this upcycle have become more evident, particularly in the international markets. These attributes are highlighted by the following factors:

⁽¹⁾	Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs, amortization expense associated with certain intangible assets, certain centrally managed initiatives and other nonoperating items.

•

There is broader recognition of the positive long-term demand outlook for oil and gas and the potential for a stronger demand rebound in the second half of the year. In addition, recent OPEC+ decisions continue to keep commodity prices at supportive levels, providing operators increased confidence to execute their projects.

⁽²⁾	~~Interest income excludes amounts which are included in the segments’ income ($25 million in Q3 2022; $16 million in Q2 2022).~~

•

Broad-based investments to expand oil capacity and diversify gas supply have been reinforced by the capex plans recently announced by major IOCs and NOCs. Most of the announced budgets highlight a significant increase in spending that supports multiyear activity growth in key resource basins all over the world. In fact, we expect investments will become even more extensive internationally as the pursuit of supply diversity remains a global priority and gathers greater urgency.

⁽³⁾	~~Interest expense excludes amounts which are included in the segments’ income ($3 million in Q3 2022; $3 million in Q2 2022).~~

•

The durability of the current cycle is underscored by the nature of the ongoing investments with the emergence of gas as a long-term energy transition fuel and enabler of energy security, the prominence of long-cycle projects, and the pivot to the Middle East and offshore basins as the anchors of supply growth.

⁽⁴⁾	~~Charges and credits are described in detail in Note 2 to the~~ ~~Consolidated Financial Statements~~.

•

The return of global exploration and appraisal will likely extend this cycle of investment for a number of years.

~~The~~Looking to the second quarter of 2023, SLB expects strong ~~third-quarter 2022 results reflected~~growth with seasonal recovery in the ~~acceleration~~Northern Hemisphere, capacity expansion projects in the Middle East that are in various stages of ~~international momentum~~ramp-up, and ~~solid execution~~robust activity in Asia and Sub-Sahara Africa. This growth scenario provides support for broad sequential margin expansion across the Divisions and geographic areas. Sequentially, Schlumberger delivered another quarter of double-digit revenue growth and margin expansion, as the pace of growth in the international business stepped up significantly, complementing already robust levels of activity in North America.geographies.

Third-quarter revenue grew 10% sequentially as global activity strengthened—particularly in the offshore and international markets. International revenue increased 13% sequentially, exceeding third-quarter 2019 levels, on a rig count that is still approximately 25% lower than in 2019. Sequentially, revenue growth was prevalent across all international areas led by Europe/CIS/Africa and Latin America, which increased 21% and 14%, respectively.

While concerns remain over the broader economic climate, Schlumberger believes the energy industry fundamentals continue to be very constructive. Against the backdrop of the energy crisis and limited spare global capacity, the world faces an urgent need for increased investment to rebalance markets, create supply redundancies, and rebuild spare capacity. All of these are exacerbated by geopolitics and increasing instances of supply disruptions.

These dynamics and the urgency to restore balance are resulting in a supply-led upcycle, characterized by the decoupling of upstream investment from near-term demand volatility. Furthermore, the need for sustained investments is reinforced by the long-term demand trajectory through the end of the decade and by OPEC+ decisions that are keeping commodity prices at supportive levels.

Digital & Integration

Digital & Integration revenue of ~~$900~~$894 million declined 6%12% sequentially ~~as growth in~~due to lower revenue from APS projects and seasonally lower sales of digital ~~solutions was more than offset by the non-repeat of $95 million of~~and exploration data ~~transfer fees recorded last quarter.~~licenses following strong year-end sales. The APS revenue decline resulted primarily from a temporary production interruption in the projects in Ecuador due to a pipeline disruption and lower commodity prices that impacted the project in Canada.

Digital & Integration pretax operating margin of ~~34% contracted 586 bps sequentially~~30% decreased eight percentage points due to ~~the less favorable~~seasonally lower sales of digital and exploration data licenses and lower APS revenue. Digital & Integration pretax operating margin is expected to expand next quarter on higher digital sales and increased revenue ~~mix.~~from APS projects.

Reservoir Performance

Reservoir Performance revenue of $1.5 billion ~~increased 9%~~decreased 3% sequentially primarily due to ~~higher intervention~~seasonal activity reductions in Europe and Asia and lower revenue in Russia.

Reservoir Performance pretax operating margin of 16% decreased 207 basis points (“bps”) largely due to reduced profitability from the seasonal decline in stimulation activity ~~both~~internationally, primarily in the Northern Hemisphere.

Well Construction

Well Construction revenue of $3.3 billion increased 1% sequentially driven by increased drilling, measurements, and integrated well construction activity, mainly on land and offshore ~~particularly~~North America that was largely offset by lower revenue in Russia.

Well Construction pretax operating margin of 21% was essentially flat sequentially.

Production Systems

Production Systems revenue of $2.2 billion was flat sequentially as strong sales of subsea production systems in offshore North America and Trinidad were offset by lower revenue in the Middle East & Asia and ~~Europe/CIS/Africa areas. North America grew 7% due to higher intervention activity in~~Russia following the ~~US Gulf~~strong year-end sales of ~~Mexico.~~the previous quarter.

~~Reservoir Performance pretax operating margin of 17% expanded 209 bps sequentially. Profitability was boosted by higher offshore and development activity.~~

~~Well Construction~~

Well Construction revenue of $3.1 billion increased 15% sequentially, outperforming global rig count growth primarily due to strong activity from new projects and solid pricing improvements internationally, particularly in the Europe/CIS/Africa and Latin America areas.

Well Construction pretax operating margin of 22% expanded 403 bps sequentially, due to improved profitability across all areas, most prominently in Latin America. Margin expansion was driven by higher offshore and exploration activity, favorable technology mix, and solid pricing improvements.

~~Production Systems~~

Production Systems revenue of $2.2 billion increased 14% sequentially on higher product deliveries and backlog conversion—mostly offshore internationally as supply chain and logistics constraints continue to ease.

Production Systems pretax operating margin of ~~10% expanded 142~~9% contracted 148 bps sequentially ~~due to~~as improved ~~operating leverage~~profitability from ~~higher volume of sales.~~

~~Nine Months 2022 Compared to Nine Months 2021~~

(Stated in millions)

Nine Months 2022

Nine Months 2021

Income

Income

Before

Before

Revenue

Taxes

Revenue

Taxes

Digital & Integration

$
2,713

$
976

$
2,401

$
805

Reservoir Performance

3,999

598

3,312

448

Well Construction

8,168

1,522

6,319

827

Production Systems

5,647

509

4,946

475

Eliminations & other

(314
)

(151
)

(274
)

(176
)
Pretax segment operating income

3,454

2,379

Corporate & other ⁽¹⁾

(468
)

(434
)
Interest income ⁽²⁾

13

17

Interest expense ⁽³⁾

(360
)

(391
)
Charges and credits ⁽⁴⁾

285

47

$
20,213

$
2,924

$
16,704

$
1,618

⁽¹⁾	Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs, amortization expense associated with certain intangible assets, certain centrally managed initiatives and other nonoperating items.

⁽²⁾	~~Interest income excludes amounts which are included in the segments’ income ($53 million in 2022; $1 million in 2021).~~

⁽³⁾	~~Interest expense excludes amounts which are included in the segments’ income ($9 million in 2022; $11 million in 2021).~~

⁽⁴⁾	~~Charges and credits are described in detail in Note 2 to the~~ ~~Consolidated Financial Statements.~~

~~Nine-month 2022 revenue of $20.2 billion increased 21% year on year, driven by an increase in~~increasing activity, ~~internationally,~~coupled with execution efficiency in North America, was more than offset by reduced margins internationally due to seasonality and ~~across all Divisions. International~~activity mix.

First Quarter 2023 Compared to First Quarter 2022


				(Stated in millions)

	First Quarter 2023						First Quarter 2022
				Income						Income
				Before						Before
	Revenue			Taxes			Revenue			Taxes
Digital & Integration	$	894		$	265		$	857		$	292
Reservoir Performance		1,503			242			1,210			160
Well Construction		3,261			672			2,398			388
Production Systems		2,207			205			1,604			114
Eliminations & other		(129	)		7			(107	)		(60	)
Pretax segment operating income					1,391						894
Corporate & other (1)					(169	)					(164	)
Interest income (2)					17						2
Interest expense (3)					(114	)					(120	)
Charges and credits (4)					36						26
	$	7,736		$	1,161		$	5,962		$	638

(1)

(2)

Interest income excludes amounts that are included in the segments’ income ($- million in 2023; $12 million in 2022).

(3)

Interest expense excludes amounts that are included in the segments’ income ($3 million in 2023; $3 million in 2022).

(4)

Charges and credits are described in detail in Note 2 to the Consolidated Financial Statements.

First-quarter 2023 revenue of $7.7 billion increased ~~17% while~~30% year on year. SLB’s Core Divisions, consisting of Reservoir Performance, Well Construction and Production Systems, collectively grew 34% and expanded pretax operating margins by more than 300 bps. Each of these three Core Divisions delivered very strong growth and expanded margins—driven by increased activity, pricing, and technology adoption.

On a geographical basis, year-on-year revenue growth was broad based with North America revenue increasing 32% due to strong land and offshore drilling and higher sales of production systems, while international revenue grew ~~37%~~29%. International growth was widespread across all areas, led by Europe & Africa, which grew 41% primarily from higher sales of production systems in Europe and Scandinavia and increased exploration and production activity offshore Africa. Latin America revenue increased 34% due to robust drilling activity

and ~~Europe/CIS/Africa with revenue growth~~higher sales of ~~24% and 23%, respectively,~~production systems, while revenue in the Middle East & Asia increased ~~10%. In North America, the~~18% primarily due to higher drilling, intervention, and evaluation activity.

Digital & Integration

Digital & Integration revenue of $894 million increased 4% year on year as a result of continued growth ~~was driven by robust onshore drilling activity and higher~~in digital sales ~~of production systems, coupled with a strong contribution from the Asset Performance Solutions (“APS”) project in Canada~~ and increased exploration data ~~licensing~~license sales in the US Gulf of ~~Mexico.~~Mexico, which were partially offset by lower revenue from APS projects.

~~Nine-month 2022~~Digital & Integration pretax operating margin of ~~17%~~30% decreased 440 bps year on year as the continued growth in digital sales was ~~285 bps higher compared to the same period last~~more than offset by lower APS revenue.

Reservoir Performance

Reservoir Performance revenue of $1.5 billion grew 24% year on year due to ~~improved operating leverage~~increased activity across all areas on land and offshore and from both exploration and production activity. More than 30% revenue growth was recorded both in Latin America, mainly from higher intervention activity, ~~a favorable activity mix,~~ and ~~an improving pricing environment.~~in Europe & Africa, largely from new evaluation and stimulation projects.

~~Digital & Integration~~

~~Nine-month 2022 revenue~~Reservoir Performance pretax operating margin of ~~$2.7 billion increased 13%~~16% expanded 291 bps year on year ~~primarily in North America,~~with profitability improving across the international market driven by higher ~~exploration data license sales and increased revenue from APS projects due to higher production~~activity and improved ~~oil prices, particularly in Canada.~~pricing.

Well Construction

~~Year on year, pretax operating margin expanded 243 bps to 36% primarily due to higher revenue from exploration data licenses and improved profitability from APS projects.~~

~~Reservoir Performance~~

~~Nine-month 2022~~Well Construction revenue of ~~$4.0~~$3.3 billion increased ~~21%~~36% year on year driven by strong international activity led by Latin America and Middle East & Asia. Double-digit growth was posted in intervention, stimulation, and evaluation services both on land and offshore, with higher exploration-related activity and ~~with improved pricing.~~

~~Year on year, pretax operating margin increased by 142 bps to 15% due to improved profitability in intervention activity.~~

~~Well Construction~~

~~Nine-month 2022 revenue of $8.2 billion grew 29% year on year with growth across all areas~~solid pricing improvements led by North America and Latin America, both of which grew ~~59% and 53%, respectively. Double-digit growth was recorded in drilling fluids, measurements, and integrated drilling—both~~more than 45%. Europe & Africa revenue increased 38% while Middle East & Asia revenue grew 24% year on ~~higher land and offshore activity—along with improved pricing.~~year.

~~Year on year,~~Well Construction pretax operating margin ~~increased 555~~of 21% expanded 444 bps ~~to 19%,~~year on year with profitability improving across most areas driven by higher activity and improved pricing.

Production Systems

~~Nine-month 2022~~Production Systems revenue of ~~$5.6~~$2.2 billion increased ~~14%~~38% year on year driven by ~~new projects and increased sales~~strong activity ~~mainly in Europe/CIS/~~across all areas led by Europe & Africa and Latin America, which grew 63% and 50%, respectively. North ~~America. Double-digit growth was posted in midstream, well, and subsea production systems.~~America revenue increased 32% while Middle East & Asia revenue grew 11%.

~~Year on year,~~Production Systems pretax operating margin ~~decreased 58~~of 9% expanded 217 bps year on year mainly driven by higher artificial lift, surface, and subsea sales and execution efficiency as supply chain and logistics constraints continued to ~~9% primarily as a result of higher logistics costs and a less favorable revenue mix.~~ease.

Interest and Other Income

Interest & other income consisted of the following:


(Stated in millions)	(Stated in millions)								(Stated in millions)

	Third Quarter		Second Quarter		Nine Months				First Quarter
	2022		2022		2022		2021		2023		2022
Gain on sale of Liberty shares	$	-	$	216	$	242	$	-	$	36	$	26
Gain on sale of real estate		-		43		43		-
Unrealized gain on marketable securities		-		-		-		47
Earnings of equity method investments		42		33		85		26		39		10
Interest income		33		19		66		18		17		14
	$	75	$	311	$	436	$	91	$	92	$	50

The increases in interest income were primarily driven by higher cash and short-term investment balances combined with higher interest rates in Argentina. These increases were more than offset by foreign exchange losses recorded on the remeasurement of Argentine peso-denominated net monetary assets as the official Argentine peso exchange rate continued to devalue compared to the US dollar. Schlumberger’s functional currency in Argentina is the US dollar and it uses Argentina’s official market exchange rate to remeasure its net Argentine peso-denominated assets into US dollars. Such net assets were approximately $270 million at September 30, 2022, primarily consisting of cash and short-term investments.

The Central Bank of Argentina maintains certain currency controls that limit Schlumberger’s ability to access US dollars in Argentina and remit earnings from its Argentine operations. A legal indirect foreign exchange mechanism exists that effectively results in a parallel US dollar exchange rate. This parallel rate, which cannot be used as the basis to remeasure Schlumberger’s net monetary assets into US dollars under US GAAP, was approximately 110% higher than Argentina’s official exchange rate at September 30, 2022. If Argentina’s official exchange rate converges with the parallel rate, Schlumberger would incur a loss on its net peso-denominated assets in Argentina. Argentina represented less than 5% of Schlumberger’s consolidated revenue for the nine months ended September 30, 2022.

Earnings of equity method investments for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 increased ~~$59~~$29 million as compared to the same period of ~~2021~~2022 primarily due to ~~Schlumberger’s~~SLB’s share of net income associated with its investment in ~~Liberty. Schlumberger records~~Liberty Energy Inc. ("Liberty"). SLB recorded its share of Liberty’s net income or loss on a one-quarter lag. During the first quarter of 2023, SLB sold all of its remaining approximately 9 million shares of Liberty.

Other

Research & engineering and General & administrative expenses, as a percentage of Revenue, for the ~~third~~first quarter ended March 31, 2023 and ~~second quarter of~~ 2022 ~~and nine months ended September 30, 2022 and 2021~~ were as follows:


	Third			Second
	Quarter			Quarter			Nine Months						First Quarter
	2022			2022			2022			2021			2023			2022
Research & engineering		2.1	%		2.3	%		2.3	%		2.4	%		2.3	%		2.4	%
General & administrative		1.3	%		1.3	%		1.4	%		1.4	%		1.2	%		1.6	%

The effective tax rate for the ~~third~~first quarter of ~~2022~~2023 was ~~18.9%~~18.7%, as compared to ~~15.8% for the second quarter of 2022. The increase in the effective tax rate was primarily due to the absence of the credits described in Note 2 to the~~ ~~Consolidated Financial Statements. These credits reduced the effective tax rate during the second quarter by three percentage points.~~

~~The effective tax rate for the nine months of 2022 was 17.6%, as compared to 18.6%~~18.4% for the same period of ~~2021. The decrease in the effective tax rate was primarily due to the absence of the credits described in Note 2 to the~~ 2022.~~Consolidated Financial Statements. These credits reduced the effective tax rate during the first nine months of 2022 by one percentage point.~~

Charges and Credits

~~Schlumberger recorded~~On December 31, 2020, SLB contributed its onshore hydraulic fracturing business in the ~~following credits during~~United States and Canada, including its pressure pumping, pumpdown perforating and Permian frac sand business to Liberty in exchange for an equity interest in Liberty. During the first ~~nine months~~quarter of ~~2022,~~2023, SLB sold all of its remaining approximately 9 million shares of Liberty and received net proceeds of $137 million. As a result, SLB recognized a gain of $36 million, which ~~are~~is classified in Interest & other incomein the Consolidated Statement of ~~Income~~Income..

During the ~~third~~first quarter of ~~2021, a start-up company that Schlumberger previously invested in was acquired.~~2022, SLB sold 7.2 million of its shares of Liberty and received proceeds of $84 million. As a result, ~~of this transaction, Schlumberger’s ownership interest was converted into shares of~~SLB recognized a ~~publicly traded company. Schlumberger recognized an unrealized pretax~~ gain of ~~$47~~$26 million, ~~($36 million after-tax) to increase the carrying value of this investment to its estimated fair value of approximately $55 million. This unrealized gain was reflected~~which is classified in Interest & other incomein the Consolidated Statement of ~~Income~~Income..

Liquidity and Capital Resources

Details of the components of liquidity as well as changes in liquidity ~~follow:~~ are as follows:


	(Stated in millions)

	Mar. 31,			Mar. 31,			Dec. 31,
Components of Liquidity:	2023			2022			2022
Cash	$	1,501		$	1,600		$	1,655
Short-term investments		1,003			1,049			1,239
Short-term borrowings and current portion of long-term debt		(2,140	)		(923	)		(1,632	)
Long-term debt		(10,698	)		(13,163	)		(10,594	)
Net debt (1)	$	(10,334	)	$	(11,437	)	$	(9,332	)


	Three Months Ended Mar. 31,
Changes in Liquidity:	2023			2022
Net income	$	944		$	520
Depreciation and amortization (2)		563			533
Earnings of equity method investments, less dividends received		(32	)		6
Deferred taxes		112			(14	)
Stock-based compensation expense		81			89
Increase in working capital		(1,300	)		(948	)
Other		(38	)		(55	)
Cash flow from operations		330			131
Capital expenditures		(410	)		(304	)
APS investments		(133	)		(168	)
Exploration data costs capitalized		(52	)		(40	)
Free cash flow (3)		(265	)		(381	)
Dividends paid		(249	)		(175	)
Stock repurchase program		(230	)		-
Proceeds from employee stock plans		121			71
Taxes paid on net settled stock-based compensation awards		(88	)		(81	)
Business acquisitions and investments, net of cash acquired plus debt assumed		(244	)		-
Proceeds from sale of Liberty shares		137			84
Other		(84	)		(24	)
Change in net debt before impact of changes in foreign exchange rates		(902	)		(506	)
Impact of changes in foreign exchange rates on net debt		(100	)		125
Increase in net debt		(1,002	)		(381	)
Net debt, beginning of period (1)		(9,332	)		(11,056	)
Net debt, end of period (1)	$	(10,334	)	$	(11,437	)

(Stated in millions)

Sept. 30,

Sept. 30,

Dec. 31,

Components of Liquidity:
2022

2021

2021

Cash
$
2,180

$
1,569

$
1,757

Short-term investments

1,429

1,373

1,382

Short-term borrowings and current portion of long-term debt

(899
)

(1,025
)

(909
)
Long-term debt

(12,452
)

(14,370
)

(13,286
)
Net debt ⁽¹⁾
$
(9,742
)

$
(12,453
)

$
(11,056
)
(1)

“Net debt” represents gross debt less cash and short-term investments. Management believes that Net debt provides useful information regarding the level of SLB’s indebtedness by reflecting cash and investments that could be used to repay debt. Net debt is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, total debt.

(2)

Includes depreciation of fixed assets and amortization of intangible assets, exploration data costs, and APS investments.

(3)

“Free cash flow” represents cash flow from operations less capital expenditures, APS investments and exploration data costs capitalized. Management believes that free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of our ability to generate cash. Once business needs and obligations are met, this cash can be used to reinvest in the company for future growth or to return to shareholders through dividend payments or share repurchases. Free cash flow does not represent the residual cash flow available for discretionary expenditures. Free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations.

Nine Months Ended Sept. 30,

Changes in Liquidity:
2022

2021

Net income
$
2,410

$
1,317

Gain on sale of Liberty shares

(242
)

-

Gain on sale of real estate

(43
)

-

Gain on marketable securities

-

(47
)
Depreciation and amortization ⁽²⁾

1,598

1,588

Earnings of equity method investments, less dividends received

(52
)

6

Deferred taxes

3

(33
)
Stock-based compensation expense

236

229

Increase in working capital ⁽³⁾

(1,814
)

(798
)
US Federal tax refund

-

477

Other

10

(20
)
Cash flow from operations

2,106

2,719

Capital expenditures

(1,046
)

(694
)
APS investments

(420
)

(305
)
Exploration data costs capitalized

(77
)

(21
)
Free cash flow ⁽⁴⁾

563

1,699

Dividends paid

(600
)

(524
)
Proceeds from employee stock plans

142

137

Proceeds from issuance of stock options

29

-

Taxes paid on net settled stock-based compensation awards

(92
)

(21
)
Business acquisitions and investments, net of cash acquired plus debt assumed

(45
)

(98
)
Proceeds from sale of Liberty shares

513

-

Proceeds from sale of real estate

120

-

Other

(118
)

(58
)
Change in net debt before impact of changes in foreign exchange rates on net debt

512

1,135

Impact of changes in foreign exchange rates on net debt

802

292

Decrease in net debt

1,314

1,427

Net debt, beginning of period⁽¹⁾

(11,056
)

(13,880
)
Net debt, end of period ⁽¹⁾
$
(9,742
)

$
(12,453
)

⁽¹⁾

^“Net debt” represents gross debt less cash and short-term investments. Management believes that Net debt provides useful information regarding the level of Schlumberger’s indebtedness by reflecting cash and investments that could be used to repay debt. Net debt is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, total debt.

⁽²⁾	~~Includes depreciation of property, plant and equipment and amortization of intangible assets, exploration data costs, and APS investments.~~

⁽³⁾	~~Includes severance payments of $60 million and $226 million during the nine months ended September 30, 2022 and 2021, respectively.~~

⁽⁴⁾

Key liquidity events during the first ~~nine~~three months of 2023 and 2022 included:

•

Capital investments (consisting of capital expenditures, APS investments and ~~2021 included:~~exploration data capitalized) were $0.6 billion during the first three months of 2023 compared to $0.5 billion during the first three months of 2022. Capital investments for the full year

•

Capital investments (consisting of capital expenditures, APS investments and exploration data capitalized) were $1.5 billion during the first nine months of 2022 compared to $1.0 billion during the first nine months of 2021. Capital investments for the full year 2022 are expected to be approximately $2.2 billion as compared to $1.7 billion for the full year 2021 as Schlumberger continues to support the strong revenue growth that is expected to continue in 2023.

2023 are expected to be approximately $2.5 to $2.6 billion as compared to $2.3 billion for the full year 2022 as SLB continues to support the strong revenue growth that is expected to continue in 2023.

•

During the first nine months of 2022 working capital consumed $1.8 billion of liquidity as compared to $0.8 billion during the same period of 2021. The year-on-year increase in working capital consumption was primarily driven by an increase in receivables due to the significant revenue growth. Inventory also increased as lead times were managed in anticipation of continued growth.

•

During the first three months of 2023, SLB sold all of its remaining approximately 9 million shares in Liberty and received proceeds of $137 million.

•	~~During the first nine months of 2022, Schlumberger sold 33.8 million of its shares in Liberty and received proceeds of $513 million.~~

•	~~During the second quarter of 2022, Schlumberger sold certain real estate and received proceeds of $120 million.~~

•	~~In April 2022, Schlumberger announced a 40% increase to its quarterly cash dividend from $0.125 per share of outstanding common stock to $0.175 per share.~~

•

On January 21, 2016, the Board approved a $10 billion share repurchase program for Schlumberger common stock. Schlumberger had repurchased $1.0 billion of Schlumberger common stock under this program as of September 30, 2022. Schlumberger did not repurchase any of its common stock during the first nine months of 2022.

As of ~~September 30, 2022, Schlumberger~~March 31, 2023, SLB had ~~$3.61~~repurchased $1.3 billion of SLB common stock under its $10 billion share repurchase program. SLB repurchased approximately 4.4 million shares of its common stock under this program during the first quarter of 2023 for a total purchase price of $230 million. SLB did not repurchase any of its common stock during the first quarter of 2022.

As of March 31, 2023, SLB had $2.50 billion of cash and short-term investments on ~~hand. Schlumberger had~~hand and committed debt facility agreements with commercial banks aggregating ~~$6.47~~$6.56 billion, ~~all~~ of which $6.00 billion was available and unused. ~~Schlumberger~~SLB believes these amounts are sufficient to meet future business requirements for at least the next 12 ~~months.~~months and beyond.

~~There were no borrowings~~Borrowings under ~~the~~SLB's commercial paper programs at ~~September 30, 2022.~~March 31, 2023 were $559 million.

Schlumberger 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 may be required in future periods depending on how such potential issues are resolved, or if the financial condition of Schlumberger’s customers were to deteriorate resulting in an impairment of their ability to make payments. AsSLB has a large multinational company with a long history of operating in a cyclical industry, Schlumberger has extensive experience in working with its customers during difficult times to manage its accounts receivable.

~~Schlumberger generates revenue~~global footprint in more than ~~120~~100 countries. As of ~~September 30, 2022,~~March 31, 2023, only ~~four~~three of those countries individually accounted for greater than 5% of ~~Schlumberger’s~~SLB’s net receivable ~~balance,~~balance. Two of ~~which two (the~~these countries, the United States and ~~Mexico) accounted for~~Mexico, each represented greater than 10% of such receivables.

Included in Receivables, less allowance for doubtful accounts in the Consolidated Balance Sheet as of ~~September 30, 2022 is~~March 31, 2023 was approximately ~~$0.9~~$1.2 billion of receivables relating to Mexico. ~~Schlumberger’s~~SLB’s receivables from its primary customer in Mexico are not in dispute and ~~Schlumberger~~SLB has not historically had any material write-offs due to uncollectible accounts receivable relating to this customer.

During the third quarter of 2022, Schlumberger, Aker Solutions and Subsea 7 announced an agreement to form a joint venture to drive innovation and efficiency in subsea production by helping customers unlock reserves and reduce cycle time. The agreement will bring together a portfolio of innovative technologies such as subsea gas compression, all-electric subsea production systems and other electrification capabilities that help customers meet their decarbonization goals. The proposed joint venture will combine Schlumberger’s and Aker Solutions’ subsea businesses. Subsea 7 will be an equity partner in the new joint venture.

In addition to contributing its subsea business to the joint venture, at closing Schlumberger will issue to Aker Solutions shares of Schlumberger common stock valued at $306.5 million. Concurrently, Subsea 7 will purchase its 10% interest in exchange for $306.5 million in cash to Aker Solutions. The joint venture also will issue a promissory note to Aker Solutions for $87.5 million. At closing of the joint venture, Schlumberger will own 70%, with Aker Solutions owning 20% and Subsea 7 owning 10%. The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in the second half of 2023.

Additional Information

In March 2022, ~~Schlumberger~~SLB decided to immediately suspend new investment and technology deployment to its Russia operations. Russia represented approximately 6%5% of ~~Schlumberger’s~~SLB’s worldwide revenue during the first ~~nine months~~quarter of ~~2022.~~2023. The carrying value of ~~Schlumberger’s~~SLB’s net assets in Russia was approximately ~~$0.9~~$0.7 billion as of ~~September 30, 2022.~~March 31, 2023. This consisted of ~~$0.4~~$0.3 billion of receivables, ~~$0.5~~$0.4 billion of other current assets, ~~$0.4~~$0.3 billion of fixed assets and ~~$0.4~~$0.3 billion of current liabilities.

~~Schlumberger~~SLB continues to actively monitor the dynamic situation in Ukraine and ~~comply with~~ applicable ~~international~~ laws, sanctions, and ~~sanctions.~~trade control restrictions resulting from the conflict. The extent to which ~~Schlumberger’s~~SLB’s operations and financial results 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 ~~international~~laws, sanctions, and trade control restrictions on ~~Schlumberger’s~~SLB’s business, the global economy and global supply chains; and the impact of fluctuations in the exchange rate of the ruble. Continuation or escalation of the conflict may also aggravate the risk factors that ~~Schlumberger~~SLB identified in its Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, including cybersecurity, regulatory, and reputational risks.

FORWARD-LOOKING STATEMENTS

This ~~third-quarter 2022~~first-quarter 2023 Form 10-Q, 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. Such statements often contain words such as “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 ~~Schlumberger’s~~SLB’s financial and performance targets and other forecasts or expectations regarding, or dependent on, its business outlook; growth for ~~Schlumberger~~SLB as a whole and for each of its Divisions (and for specified business lines, geographic areas or technologies within each Division); oil and natural gas demand and production growth; oil and natural gas prices; forecasts or expectations regarding energy transition and global climate change; improvements in operating procedures and technology; capital expenditures by ~~Schlumberger~~SLB 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’s~~SLB’s customers; ~~Schlumberger’s effective tax rate; Schlumberger’s~~SLB’s APS projects, joint ventures, and other alliances; ~~Schlumberger’s~~SLB’s response to the COVID-19 pandemic and its preparedness for other widespread health emergencies; 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’s~~SLB’s customers and changes in the level of oil and natural gas exploration and development; the results of operations and financial condition of ~~Schlumberger’s~~SLB’s customers and suppliers; ~~Schlumberger’s~~SLB’s inability to achieve its financial and performance targets and other forecasts and expectations; ~~Schlumberger’s~~SLB’s inability to 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’s~~SLB’s supply chain; production declines; the extent of future charges; ~~Schlumberger’s~~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 cost reduction strategies; changes in government regulations and regulatory requirements, including those related to offshore oil and gas exploration, radioactive sources, explosives, chemicals 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-Q and our most recent Form 10-K and Forms 8-K filed with or furnished to 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-Q 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 ~~third-quarter 2022~~ Form 10-Q are made as of ~~October~~April 26, ~~2022,~~2023, and ~~Schlumberger~~SLB disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

For quantitative and qualitative disclosures about market risk affecting ~~Schlumberger,~~SLB, see Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” of the ~~Schlumberger~~SLB Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021. Schlumberger’s~~2022. SLB’s exposure to market risk has not changed materially since December 31, ~~2021.~~ 2022.

Item 4. Controls and Procedures.

~~Schlumberger~~SLB has carried out an evaluation under the supervision and with the participation of ~~Schlumberger’s~~SLB’s management, including the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), of the effectiveness of ~~Schlumberger’s~~SLB’s “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (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’s~~SLB’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that ~~Schlumberger~~SLB 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’s~~SLB’s disclosure controls and procedures include controls and procedures designed to ensure 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 was no change in ~~Schlumberger’s~~SLB’s internal control over financial reporting during the quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, ~~Schlumberger’s~~SLB’s internal control over financial reporting.

2219

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

The information with respect to this Item 1 is set forth under Note 9—Contingencies, in the accompanying Consolidated Financial Statements.

Item 1A. Risk Factors.

As of the date of this filing, there have been no material changes from the risk factors disclosed in Part 1, Item 1A, of ~~Schlumberger’s~~SLB’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered Sales of Equity Securities

None.

Issuer Repurchases of Equity Securities

AsOn January 21, 2016, the SLB Board of ~~September 30, 2022, Schlumberger had repurchased $1.0 billion of Schlumberger common stock under its~~Directors approved a $10 billion share repurchase ~~program. Schlumberger did not repurchase any~~program for SLB common stock. As of ~~its~~March 31, 2023, SLB had repurchased $1.3 billion of SLB common stock ~~during~~under this program.

SLB's common stock repurchase activity for the ~~first nine~~three months ~~of 2022.~~ended March 31, 2023 was as follows:


	(Stated in thousands, except per share amounts)

	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced programs		Maximum value of shares that may yet be purchased under the programs
January 2023		1,089.1	$	55.63		1,089.1	$	8,911,590
February 2023		1,406.0	$	54.29		1,406.0	$	8,835,261
March 2023		1,873.7	$	49.63		1,873.7	$	8,742,171
		4,368.8	$	52.65		4,368.8

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Our mining operations are subject to regulation by the federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977. 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 report.

Item 5. Other Information.

In 2013, ~~Schlumberger~~SLB 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 during the ~~third~~first quarter of ~~2022~~2023 consisted of payments of taxes and other typical governmental charges. Certain non-US subsidiaries of ~~Schlumberger~~SLB maintain 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 ~~Schlumberger~~SLB for prior services rendered in Iran 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. ~~Schlumberger~~SLB anticipates that it will discontinue dealings with Saderat and Tejarat following the receipt of all amounts owed to ~~Schlumberger~~SLB for prior services rendered in Iran.

At SLB’s 2023 Annual General Meeting of Shareholders, SLB’s shareholders voted on, among other matters, a proposal regarding the frequency of future advisory votes on executive compensation. As previously reported, the Board views an annual advisory vote on executive compensation as the most appropriate option, and a majority of the votes cast on the frequency proposal supported the Board’s recommendation to hold an advisory vote to approve executive compensation on an annual basis. Accordingly, SLB will hold an annual advisory vote to approve executive compensation.

Item 6. Exhibits.

Exhibit 3.1—Articles of Incorporation of Schlumberger Limited (Schlumberger N.V.) (incorporated by reference to Exhibit 3.1 to Schlumberger’s Current Report on Form 8-K filed on April 6, 2016)

Exhibit 3.2—Amended and Restated ~~By-laws~~By-Laws of Schlumberger Limited (Schlumberger N.V.) (incorporated by reference to Exhibit 3 to Schlumberger’s Current Report on Form 8-K filed on ~~July 22, 2019)~~April 21, 2023)

* Exhibit 22—Issuers of Registered Guaranteed Debt Securities

* Exhibit 31.1—Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

* Exhibit 31.2—Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

** Exhibit 32.1—Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

** Exhibit 32.2—Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Exhibit 95—Mine Safety Disclosures

* Exhibit 101.INS—Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document

* Exhibit 101.SCH—Inline XBRL Taxonomy Extension Schema Document

* Exhibit 101.CAL—Inline XBRL Taxonomy Extension Calculation Linkbase Document

* Exhibit 101.DEF—Inline XBRL Taxonomy Extension Definition Linkbase Document

* Exhibit 101.LAB—Inline XBRL Taxonomy Extension Label Linkbase Document

* Exhibit 101.PRE—Inline XBRL Taxonomy Extension Presentation Linkbase Document

Exhibit 104—Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed with this Form 10-Q.

** Furnished with this Form 10-Q.

~~Filed with this Form 10-Q.~~

**	~~Furnished with this Form 10-Q.~~

(+) Management contracts or compensatory plans or arrangements.

~~SIGNATURE~~

SIGNATURE

Pursuant to the requirements 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 and in his capacity as Chief Accounting Officer.~~authorized.


		~~Schlumberger Limited~~ ~~(Registrant)~~SCHLUMBERGER LIMITED
Date:	~~October~~April 26, ~~2022~~2023	/s/ Howard Guild
		Howard Guild
		Chief Accounting Officer and Duly Authorized Signatory

(Stated in millions)

	Nine Months Ended September 30,
	2022			2021
Cash flows from operating activities:
Net income	$	2,410		$	1,317
Adjustments to reconcile net income to cash provided by operating activities:
Gain on sale of Liberty shares		(242	)		-
Gain on sale of real estate		(43	)		-
Gain on marketable securities		-			(47	)
Depreciation and amortization ⁽¹⁾		1,598			1,588
Deferred taxes		3			(33	)
Stock-based compensation expense		236			229
Earnings of equity method investments, less dividends received		(52	)		6
Change in assets and liabilities: ⁽²⁾
Increase in receivables		(1,302	)		(97	)
(Increase) decrease in inventories		(849	)		54
(Increase) decrease in other current assets		(144	)		506
Increase in other assets		(40	)		(9	)
Increase (decrease) in accounts payable and accrued liabilities		475			(660	)
Increase (decrease) in estimated liability for taxes on income		6			(124	)
Other		50			(11	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		2,106			2,719
Cash flows from investing activities:
Capital expenditures		(1,046	)		(694	)
APS investments		(420	)		(305	)
Exploration data costs capitalized		(77	)		(21	)
Business acquisitions and investments, net of cash acquired		(45	)		(134	)
Proceeds from sale of Liberty shares		513			-
Proceeds from sale of real estate		120			-
(Purchase) sale of short-term investments, net		(55	)		790
Other		(106	)		(29	)
NET CASH USED IN INVESTING ACTIVITIES		(1,116	)		(393	)
Cash flows from financing activities:
Dividends paid		(600	)		(524	)
Proceeds from employee stock purchase plan		142			137
Proceeds from exercise of stock options		29			-
Proceeds from issuance of long-term debt		-			34
Repayment of long-term debt		-			(1,076	)
Net decrease in short-term borrowings		(13	)		(94	)
Taxes paid on net settled stock-based compensation awards		(92	)		(21	)
Other		(4	)		(60	)
NET CASH USED IN FINANCING ACTIVITIES		(538	)		(1,604	)
Net increase in cash before translation effect		452			722
Translation effect on cash		(29	)		3
Cash, beginning of period		1,757			844
Cash, end of period	$	2,180		$	1,569

	(Stated in millions)

	Pretax Credit		Tax Expense		Net
First quarter:
Gain on sale of Liberty shares	$	26	$	4	$	22
Second quarter:
Gain on sale of Liberty shares		216		13		203
Gain on sale of real estate		43		2		41
	$	285	$	19	$	266

	(Stated in millions)

	Sept. 30, 2022						Dec. 31, 2021
	Gross		Accumulated		Net Book		Gross		Accumulated		Net Book
	Book Value		Amortization		Value		Book Value		Amortization		Value
Customer relationships	$	1,694	$	617	$	1,077	$	1,681	$	551	$	1,130
Technology/technical know-how		1,285		658		627		1,264		562		702
Tradenames		759		215		544		766		191		575
Other		1,635		840		795		1,578		774		804
	$	5,373	$	2,330	$	3,043	$	5,289	$	2,078	$	3,211

				(Stated in millions)

	Nine Months 2022						Nine Months 2021
				Income						Income
	Revenue			Before Taxes			Revenue			Before Taxes
Digital & Integration	$	2,713		$	976		$	2,401		$	805
Reservoir Performance		3,999			598			3,312			448
Well Construction		8,168			1,522			6,319			827
Production Systems		5,647			509			4,946			475
Eliminations & other		(314	)		(151	)		(274	)		(176	)
Pretax segment operating income					3,454						2,379
Corporate & other ⁽¹⁾					(468	)					(434	)
Interest income ⁽²⁾					13						17
Interest expense ⁽³⁾					(360	)					(391	)
Charges and credits ⁽⁴⁾					285						47
	$	20,213		$	2,924		$	16,704		$	1,618

				(Stated in millions)

	Third Quarter 2022						Second Quarter 2022
				Income Before						Income Before
	Revenue			Taxes			Revenue			Taxes
Digital & Integration	$	900		$	305		$	955		$	379
Reservoir Performance		1,456			244			1,333			195
Well Construction		3,084			664			2,686			470
Production Systems		2,150			224			1,893			171
Eliminations & other		(113	)		(37	)		(94	)		(56	)
Pretax segment operating income					1,400						1,159
Corporate & other ⁽¹⁾					(155	)					(148	)
Interest income ⁽²⁾					8						3
Interest expense ⁽³⁾					(119	)					(121	)
Charges and credits⁽⁴⁾					-						259
	$	7,477		$	1,134		$	6,773		$	1,152

	Nine Months Ended Sept. 30,
Changes in Liquidity:	2022			2021
Net income	$	2,410		$	1,317
Gain on sale of Liberty shares		(242	)		-
Gain on sale of real estate		(43	)		-
Gain on marketable securities		-			(47	)
Depreciation and amortization ⁽²⁾		1,598			1,588
Earnings of equity method investments, less dividends received		(52	)		6
Deferred taxes		3			(33	)
Stock-based compensation expense		236			229
Increase in working capital ⁽³⁾		(1,814	)		(798	)
US Federal tax refund		-			477
Other		10			(20	)
Cash flow from operations		2,106			2,719
Capital expenditures		(1,046	)		(694	)
APS investments		(420	)		(305	)
Exploration data costs capitalized		(77	)		(21	)
Free cash flow ⁽⁴⁾		563			1,699
Dividends paid		(600	)		(524	)
Proceeds from employee stock plans		142			137
Proceeds from issuance of stock options		29			-
Taxes paid on net settled stock-based compensation awards		(92	)		(21	)
Business acquisitions and investments, net of cash acquired plus debt assumed		(45	)		(98	)
Proceeds from sale of Liberty shares		513			-
Proceeds from sale of real estate		120			-
Other		(118	)		(58	)
Change in net debt before impact of changes in foreign exchange rates on net debt		512			1,135
Impact of changes in foreign exchange rates on net debt		802			292
Decrease in net debt		1,314			1,427
Net debt, beginning of period⁽¹⁾		(11,056	)		(13,880	)
Net debt, end of period ⁽¹⁾	$	(9,742	)	$	(12,453	)