10-Q

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 June 30, 2023


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

Commission file No.: 1-4601

Schlumberger N.V. (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 Netherlands		2514 JG
(Addresses of principal executive offices)		(Zip Codes)

Registrant’s telephone number in the United States, including area code, is: (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 June 30, 2023

COMMON STOCK, $0.01 PAR VALUE PER SHARE

1,421,186,016
 

SCHLUMBERGER LIMITED

Second Quarter 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	16

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21

Item 4.	Controls and Procedures	21

PART II	Other Information

Item 1.	Legal Proceedings	22

Item 1A.	Risk Factors	22

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22

Item 3.	Defaults Upon Senior Securities	22

Item 4.	Mine Safety Disclosures	22

Item 5.	Other Information	22

Item 6.	Exhibits	23

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

(Unaudited)


(Stated in millions, except per share amounts)

	Second Quarter				Six Months
	2023		2022		2023		2022
Revenue
Services	$	5,563	$	4,732	$	10,897	$	8,954
Product sales		2,536		2,041		4,938		3,781
Total Revenue		8,099		6,773		15,835		12,735
Interest & other income		82		311		174		361
Expenses
Cost of services		4,288		3,720		8,417		7,107
Cost of sales		2,214		1,848		4,370		3,474
Research & engineering		163		154		337		295
General & administrative		96		86		187		183
Interest		127		124		244		247
Income before taxes		1,293		1,152		2,454		1,790
Tax expense		246		182		464		300
Net income		1,047		970		1,990		1,490
Net income attributable to noncontrolling interests		14		11		23		21
Net income attributable to SLB	$	1,033	$	959	$	1,967	$	1,469

Basic income per share of SLB	$	0.73	$	0.68	$	1.38	$	1.04

Diluted income per share of SLB	$	0.72	$	0.67	$	1.36	$	1.02

Average shares outstanding:
Basic		1,423		1,414		1,425		1,413
Assuming dilution		1,442		1,436		1,444		1,435

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Unaudited)


(Stated in millions)

	Second Quarter						Six Months
	2023			2022			2023			2022
Net income	$	1,047		$	970		$	1,990		$	1,490
Currency translation adjustments
Unrealized net change arising during the period		(43	)		216			(77	)		110
Cash flow hedges
Net gain (loss) on cash flow hedges		105			(106	)		72			(97	)
Reclassification to net income of net realized (gain) loss		(9	)		55			(14	)		72
Pension and other postretirement benefit plans
Amortization to net income of net actuarial loss		(2	)		14			(4	)		30
Amortization to net income of net prior service credit		(6	)		(6	)		(11	)		(11	)
Income taxes on pension and other postretirement benefit plans		2			2			3			2
Comprehensive income		1,094			1,145			1,959			1,596
Comprehensive income attributable to noncontrolling interests		14			11			23			21
Comprehensive income attributable to SLB	$	1,080		$	1,134		$	1,936		$	1,575

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET


(Stated in millions)

	Jun. 30,
	2023			Dec. 31,
	(Unaudited)			2022
ASSETS
Current Assets
Cash	$	1,930		$	1,655
Short-term investments		1,264			1,239
Receivables less allowance for doubtful accounts (2023 - $339; 2022 - $340)		7,675			7,032
Inventories		4,360			3,999
Other current assets		925			1,078
		16,154			15,003
Investments in Affiliated Companies		1,601			1,581
Fixed Assets less accumulated depreciation		6,804			6,607
Goodwill		13,117			12,982
Intangible Assets		2,968			2,992
Other Assets		4,182			3,970
	$	44,826		$	43,135
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued liabilities	$	8,938		$	9,121
Estimated liability for taxes on income		859			1,002
Short-term borrowings and current portion of long-term debt		1,993			1,632
Dividends payable		373			263
		12,163			12,018
Long-term Debt		11,342			10,594
Postretirement Benefits		167			165
Deferred Taxes		183			61
Other Liabilities		2,037			2,308
		25,892			25,146
Equity
Common stock		11,270			11,837
Treasury stock		(750	)		(1,016	)
Retained earnings		11,974			10,719
Accumulated other comprehensive loss		(3,886	)		(3,855	)
SLB stockholders’ equity		18,608			17,685
Noncontrolling interests		326			304
		18,934			17,989
	$	44,826		$	43,135

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)


(Stated in millions)

	Six Months Ended June 30,
	2023			2022
Cash flows from operating activities:
Net income	$	1,990		$	1,490
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of Liberty shares		(36	)		(242	)
Gain on sale of real estate		-			(43	)
Depreciation and amortization (1)		1,124			1,065
Deferred taxes		118			11
Stock-based compensation expense		160			160
Earnings of equity method investments, less dividends received		(79	)		(22	)
Change in assets and liabilities: (2)
Increase in receivables		(614	)		(887	)
Increase in inventories		(368	)		(652	)
Decrease (increase) in other current assets		157			(240	)
Increase in other assets		(18	)		(26	)
Decrease in accounts payable and accrued liabilities		(270	)		(57	)
Decrease in estimated liability for taxes on income		(191	)		(48	)
(Decrease) increase in other liabilities		(63	)		4
Other		28			26
NET CASH PROVIDED BY OPERATING ACTIVITIES		1,938			539
Cash flows from investing activities:
Capital expenditures		(881	)		(664	)
APS investments		(253	)		(311	)
Exploration data costs capitalized		(83	)		(64	)
Business acquisitions and investments, net of cash acquired		(262	)		(8	)
Proceeds from sale of Liberty shares		137			513
Proceeds from sale of real estate		-			120
(Purchase) sale of short-term investments, net		(24	)		457
Other		(164	)		(76	)
NET CASH USED IN INVESTING ACTIVITIES		(1,530	)		(33	)
Cash flows from financing activities:
Dividends paid		(605	)		(352	)
Proceeds from employee stock purchase plan		86			64
Proceeds from exercise of stock options		38			29
Stock repurchase program		(443	)		-
Proceeds from issuance of long-term debt		992			-
Net decrease in short-term borrowings		(48	)		(11	)
Taxes paid on net settled stock-based compensation awards		(144	)		(85	)
Other		3			(3	)
NET CASH USED IN FINANCING ACTIVITIES		(121	)		(358	)
Net increase in cash before translation effect		287			148
Translation effect on cash		(12	)		(12	)
Cash, beginning of period		1,655			1,757
Cash, end of period	$	1,930		$	1,893

(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.

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(Unaudited)


	(Stated in millions, except per share amounts)

								Accumulated
								Other
	Common Stock					Retained		Comprehensive			Noncontrolling
January 1, 2023 – June 30, 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							1,967					23		1,990
Currency translation adjustments									(77	)				(77	)
Changes in fair value of cash flow hedges									58					58
Pension and other postretirement benefit plans