Schlumberger Announces Fourth-Quarter and Full-Year 2021 Results
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Fourth-quarter revenue of
increased$6.22 billion 6% sequentially and13% year-on-year -
Fourth-quarter GAAP EPS of
increased$0.42 8% sequentially and56% year-on-year -
Fourth-quarter EPS, excluding charges and credits, of
increased$0.41 14% sequentially and86% year-on-year -
Fourth-quarter cash flow from operations was
and free cash flow was$1.93 billion $1.30 billion -
Board approved quarterly cash dividend of
per share$0.12 5
-
Full-year revenue was
$22.9 billion -
Full-year GAAP EPS was
$1.32 -
Full-year EPS, excluding charges and credits, was
$1.28 -
Full-year cash flow from operations was
and free cash flow was$4.65 billion $3.00 billion
Fourth-Quarter Results
(Stated in millions, except per share amounts) | ||||||||||
Three Months Ended | Change | |||||||||
Sequential | Year-on-year | |||||||||
Revenue* |
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Income before taxes - GAAP basis |
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Net income - GAAP basis |
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Diluted EPS - GAAP basis |
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Adjusted EBITDA** |
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Adjusted EBITDA margin** |
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2 bps |
208 bps |
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Pretax segment operating income** |
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Pretax segment operating margin** |
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31 bps |
401 bps |
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Net income, excluding charges & credits** |
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Diluted EPS, excluding charges & credits** |
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Revenue by Geography |
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International |
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1,281 |
1,129 |
1,167 |
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Other | 46 |
43 |
22 |
n/m |
n/m |
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*Schlumberger divested certain businesses in |
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**These are non-GAAP financial measures. See sections titled "Charges & Credits", "Divisions", and "Supplemental Information" for details. | ||||||||||
n/m = not meaningful |
(Stated in millions) | ||||||||||
Three Months Ended | Change | |||||||||
Sequential | Year-on-year | |||||||||
Revenue by Division | ||||||||||
Digital & Integration |
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Reservoir Performance* | 1,287 |
1,192 |
1,247 |
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2,388 |
2,273 |
1,868 |
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Production Systems** | 1,765 |
1,674 |
1,649 |
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Other | (104) |
(104) |
(64) |
n/m |
n/m |
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Pretax Operating Income by Division |
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Digital & Integration |
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Reservoir Performance | 200 |
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95 |
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368 |
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183 |
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Production Systems | 159 |
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155 |
- |
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Other | (76) |
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(48) |
n/m |
n/m |
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Pretax Operating Margin by Division |
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Digital & Integration |
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268 bps |
537 bps |
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Reservoir Performance |
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-43 bps |
792 bps |
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20 bps |
559 bps |
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Production Systems |
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-85 bps |
-38 bps |
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Other | n/m |
n/m |
n/m |
n/m |
n/m |
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|
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31 bps |
401 bps |
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*Schlumberger divested its OneStim® pressure pumping business in |
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**Schlumberger divested its low-flow artificial lift business in |
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n/m = not meaningful |
Schlumberger CEO
“In retrospect, we started 2021 with a constructive outlook and an ambition to visibly expand margins and deliver robust free cash flow, while remaining focused on capital discipline.
“In fact, we concluded the year with
“This was also a momentous year for us in terms of our commitment to sustainability. We announced our comprehensive 2050 net-zero commitment, inclusive of Scope 3 emissions, and launched our Transition Technologies* portfolio.
“I am extremely proud of the full-year results, as we operationalized our returns-focused strategy and surpassed our financial ambitions with resounding success.
“Turning to the fourth-quarter results, sequential revenue growth was broad based across all geographies and Divisions, led by Digital & Integration.
“International revenue of
“In North America, revenue of
“Among the Divisions, Digital & Integration revenue increased
“Overall, our fourth-quarter pretax segment operating income increased
“Looking ahead into 2022, the industry macro fundamentals are very favorable, due to the combination of projected steady demand recovery, an increasingly tight supply market, and supportive oil prices. We believe this will result in a material step up in industry capital spending with simultaneous double-digit growth in international and North American markets. Absent any further COVID-related disruption, oil demand is expected to exceed prepandemic levels before the end of the year and to further strengthen in 2023. These favorable market conditions are strikingly similar to those experienced during the last industry supercycle, suggesting that resurgent global demand-led capital spending will result in an exceptional multiyear growth cycle.
“Schlumberger is well prepared to fully seize this growth ahead of us. We have entered this cycle in a position of strength, having reset our operating leverage, expanded peer-leading margins across multiple quarters, and aligned our technology and business portfolio with the new industry imperatives. Throughout 2021, we continued to strengthen our core portfolio, enhanced our sustainability leadership, successfully advanced our digital journey, and expanded our new energy portfolio.
“The combination of our performance and returns-focused strategy is resulting in enduring customer success and higher earnings. As such, we have increased confidence in reaching our midcycle adjusted EBITDA margin ambition earlier than anticipated and sustaining our financial outperformance. I am truly excited about this year and the outlook for Schlumberger—rooted in capital discipline and superior returns while also continuing to lead technology, digital, and clean energy innovation—to enable performance and sustainability for the global energy industry.”
Other Events
On
On
Fourth-Quarter Revenue by Geographical Area
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(Stated in millions) | ||||||||||
Three Months Ended | Change | |||||||||
Sequential | Year-on-year | |||||||||
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1,204 |
1,160 |
969 |
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1,587 |
1,482 |
1,366 |
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2,107 |
2,033 |
2,008 |
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Other | 46 |
43 |
22 |
n/m |
n/m |
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International |
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*Schlumberger divested certain businesses in |
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n/m = not meaningful |
International
Revenue in
Revenue in the
Fourth-Quarter Results by Division
Digital & Integration
(Stated in millions) | ||||||||||
Three Months Ended | Change | |||||||||
Sequential | Year-on-year | |||||||||
Revenue | ||||||||||
International |
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- |
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263 |
196 |
142 |
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Other | 2 |
1 |
2 |
n/m |
n/m |
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Pretax operating income |
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Pretax operating margin |
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268 bps |
537 bps |
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n/m = not meaningful |
Digital & Integration revenue of
Digital & Integration pretax operating margin of
Reservoir Performance
(Stated in millions) | ||||||||||
Three Months Ended | Change | |||||||||
Sequential | Year-on-year | |||||||||
Revenue* | ||||||||||
International |
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92 |
79 |
339 |
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- |
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Other | 1 |
1 |
2 |
n/m |
n/m |
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Pretax operating income |
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Pretax operating margin |
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-43 bps |
792 bps |
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*Schlumberger divested its OneStim pressure pumping business in |
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n/m = not meaningful |
Reservoir Performance revenue of
Reservoir Performance pretax operating margin of
|
(Stated in millions) | |||||||||
Three Months Ended | Change | |||||||||
Sequential | Year-on-year | |||||||||
Revenue | ||||||||||
International |
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441 |
382 |
252 |
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Other | 46 |
52 |
47 |
n/m |
n/m |
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Pretax operating income |
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Pretax operating margin |
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20 bps |
559 bps |
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n/m = not meaningful |
Production Systems
(Stated in millions) | ||||||||||
Three Months Ended | Change | |||||||||
Sequential | Year-on-year | |||||||||
Revenue* | ||||||||||
International |
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484 |
469 |
433 |
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Other | 3 |
0 |
1 |
n/m |
n/m |
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Pretax operating income |
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- |
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Pretax operating margin |
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-85 bps |
-38 bps |
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*Schlumberger divested its low-flow artificial lift business in |
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n/m = not meaningful |
Production Systems revenue of
Production Systems pretax operating margin of
Quarterly Highlights
As activity growth accelerates, Schlumberger’s performance differentiation, technology, and integration capabilities continue to earn customer recognition and contract awards for all types of oil and gas projects, from short- and long-cycle development to exploration—including offshore and deepwater. Awards from the quarter include:
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Chevron U.S.A. Inc. awarded Schlumberger contracts for integrated well construction and wireline services for deepwater projects in theGulf of Mexico . Schlumberger was awarded the contracts for integrated services and technology for deepwater wells, in addition to subsea services previously awarded for another high-pressure, high-temperature (HPHT) deepwaterGulf of Mexico project. The integrated contract includes well construction, for which Schlumberger will bring specific technologies suited for HPHT environments as well as digital capabilities that will enhance overall project execution, efficiency, and safety, including the Performance Live* remote operation service.
-
TotalEnergies has awarded Schlumberger a three-year contract for the provision of a significant well intervention scope to improve well production and downhole testing services on new wells located offshore the
United Kingdom andDenmark . Under the contract, which has options for two single-year extensions, the project team will apply a comprehensive portfolio of downhole testing services, coiled tubing, slickline, and wireline—including the latest technologies. Work is expected to commence in Q1 2022.
-
In
Saudi Arabia , Schlumberger was awarded a five-year contract for coiled tubing drilling services to be deployed in major gas fields across the Kingdom. The contract, which has a two-year option to extend, includes a full suite of unique underbalanced coiled tubing drilling technologies and other fit-for-basin technology.
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Equinor has made a direct award to Schlumberger for four RapidXtreme* TAML 3 large-bore multilateral junctions to retrofit existing wells to multilaterals in the Statfjord Field. This award is the result of an integrated contract and the unique architecture of the Rapid* multilateral systems—part of the Transition Technologies portfolio. Conversion of existing wellbores to multilaterals will unlock additional reserves and extend the productive life in the Statfjord Field while reducing the
carbon impact of production. Installation of these multilateral completion systems is expected to commence in Q2 2022.
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Woodside, as operator for and on behalf of the Scarborough Joint Venture, for the
Scarborough project offshoreWestern Australia , awarded a contract to OneSubsea®—the subsea technologies, production, and processing systems division of Schlumberger—as part of theSubsea Integration Alliance . The contract includes a subsea production systems scope, which OneSubsea will deliver, including wellheads, single-phase flowmeters, subsea distribution units, flying leads, a connection system, subsea production control system for topsides and subsea, and postdelivery services. This project will help the Scarborough Joint Venture maximize the potential of this significant gas resource, which will be developed through new offshore facilities connected to a second liquified natural gas (LNG) train at the existingPluto LNG onshore facility.
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In
Indonesia , Premier Oil—a subsidiary of Harbour Energy—has awarded Schlumberger a three-year contract for services and technology for its deepwater offshore exploration project in theAndaman Sea . The contract scope covers a broad range of services, including drilling, drilling fluids, wireline logging, and well testing. A Schlumberger team drawn from three Divisions will deliver a broad set of services and technologies, including Muzic* wireless telemetry,Quanta Geo * photorealistic reservoir geology service, and the Sonic Scanner* acoustic scanning platform—driving performance and efficiency of exploration operations. Work is expected to commence in the second quarter of 2022.
Schlumberger technologies—which won an array of innovation awards in 2021, including an Offshore Technology Conference Spotlight on New Technology, six World Oil Awards, and two Hart Energy's E&P Meritorious Awards for Engineering Innovation—and peer-leading execution capabilities are making significant performance impacts for customers, who are increasingly adopting technologies that help them create differentiated value.
Examples of performance impact during the quarter in
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In the
Appalachian Basin , CNX implemented NeoSteer* at-bit steerable system paired withSmith Bits , a Schlumberger company, cutting structures and dual-telemetry MWD xBolt G2* accelerated drilling service to drill curves and laterals consistently in single runs in theirMarcellus Shale assets. Over the last three months, Schlumberger has drilled the top three longest single curve and laterals in CNX's history, with footages ranging between 21,836 ft and 22,565 ft, and with exceptional safety and service quality performance. These are also the top three longest single curve and lateral operations in Schlumberger US Land history to date. NeoSteer system provided enhanced steerability, overall superior performance, and reduced footprint when compared with conventional technologies, resulting in a reduction in drilling time, and savings in drilling operational costs for these three record wells.
-
In the
Permian Basin , an ExxonMobil and Schlumberger partnership enabled the reduction of drilling rig days by34% across five wells, performance that will enable ExxonMobil to drill more wells per year with the same number of rigs. An integrated fit-for-basin technology package, including the PowerDrive Orbit G2* rotary steerable system and XBolt G2 accelerated drilling service—controlled from theExxonMobil Remote Operations Center in Houston—enabled ExxonMobil to drill its firstDelaware Basin well in less than nine days and achieve similar performance with five total record-setting wells. Compared to prior target performance benchmarks, a total reduction of more than 26 drilling days was realized for these five wells.
Examples of performance impact during the quarter internationally include:
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In the fourth quarter of 2021, Schlumberger commenced integrated stimulation operations at Jafurah, the largest unconventional nonassociated gas field in the
Kingdom of Saudi Arabia . The combination of cutting-edge technology, fully integrated supply chain, and close project management collaboration betweenAramco and Schlumberger resulted in more than35% improvement in stages per month. This new performance benchmark matches that of top-quartile stimulation fleets inUnited States unconventional assets during 2021—a key ambition set between Schlumberger andAramco on the path to deliver the full potential of the Jafurah project.
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In
Kuwait , Schlumberger has begun to deploy technology withKuwait Oil Company (KOC) to increase productivity of its Jurassic gas fields with rigless perforation, made possible by the newest generation of StreamLINE iX* extreme-performance polymer-locked wireline cable. A combination of technologies enabled by StreamLINE iX cable has reduced per-run operating time by half. The increased strength of this generation cable made it possible to run a 70-ft perforation gun in a single run—a first in the history of KOC rigless operations on wireline. The capabilities of the new StreamLINE iX cable have enabled use of technology that has reduced operating time per run and CO2 impact while saving deferred production.
-
Offshore
Australia in the North West Shelf, Santos Ltd. recently achieved a record production rate from the first Van Gogh Phase 2 infill well, which exceeded expectations and produced at a peak rate of 23,200 bbl/d. The extended-reach, dual-lateral well was drilled with a total horizontal section of 5,430 m—490 m more than originally planned. The PowerDrive Archer* high build rate rotary steerable system and GeoSphere HD* high-definition reservoir mapping-while-drilling service enabled Santos to overcome numerous geological challenges and unlock the full production potential of this asset by executing an optimized well completion design.
-
In
Argentina , Schlumberger deployed technology that reduced drilling time by 10 days and avoided 120 metric tons of CO2 emissions for a joint venture between YPF S.A. andChevron in the unconventional Vaca Muerta Formation. Drilling the pilot extended-reach well on the project, Schlumberger used the NeoSteer* at-bit steerable system and new features of the autonomous downhole control system to minimize tortuosity and unplanned deviation, constructing a wellbore optimized to increase production. A PowerDrive vorteX* powered rotary steerable system equipped with DynaPower XP* extreme-power motor elastomer managed the high-temperature conditions, improved the rate of penetration (ROP), and enabled delivering 4,155 m of lateral section breaking the 1,000 m drilled-per-day barrier and it became the longest well lateral drilled in the field.
The adoption of Schlumberger’s comprehensive digital platform continues to accelerate as customers advance their digital transformation and apply digital solutions to improve productivity and efficiency. Furthermore, the use cases for Schlumberger digital solutions also continue to expand into adjacent sectors, increasing the total addressable market and enabling decarbonization in and beyond the oil and gas industry.
Digital awards and implementations from the quarter include:
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Schlumberger will deploy the DELFI* cognitive E&P environment on the Norwegian CO2 project by the Northern Lights Joint Venture (NL), to streamline subsurface workflows and longer-term modeling and surveillance of CO2 sequestration.
NL was established to develop the world’s first open-source CO2 transport and storage infrastructure, providing accelerated decarbonization opportunities for European industries, with an ambition to store up to 5 million metric tons of CO2 per year based on market demand. Northern Lights is part of Longship—Norway’s largest climate initiative—which comprises a full-scalecarbon capture and storage (CCS) project, covering capture, transport, and storage of CO2.
- Angola’s oil and gas regulator—Agência Nacional do Petróleo, Gás e Biocombustíveis (ANPG)—has signed an agreement with Schlumberger to fast-track its digital transformation, with the rollout of DELFI environment. The project follows a detailed consultation and review by a Schlumberger-led consulting team in collaboration with an ANPG team. The team evaluated ANPG’s technology landscape and digital readiness, resulting in a compressed digitalization roadmap. The accelerated deployment of the DELFI environment will enable efficient remote teamwork across ANPG, expanded data analytics capabilities, and increased exploration and field development efficiency—driving sizeable production gains.
-
In
Ecuador , DrillOps Automate, part of the DrillOps* on-target well delivery solution, and DrillPilot* equipment sequencing software have been deployed on two Schlumberger rigs operating on its APS assets. These digital solutions are orchestrating multiple workflows and driving a step change in operational performance. Since deployment, more than 77,000 ft have been drilled with multiple levels of automation made possible using these advanced digital solutions. Automated rig control has increased on-bottom ROP and reduced connections time, resulting in a10.6% average efficiency improvement at the end of 2021. Schlumberger continues to expand the use of digital solutions to improve integrated performance, increase safety, and reduce CO2 footprint—resulting in the creation and capture of higher value across these assets.
Decarbonization is a priority, and in 2021, Schlumberger made a bold commitment to achieve net-zero greenhouse gas emissions by 2050, with our net-zero target inclusive of Scope 3 emissions.
Schlumberger is uniquely positioned to help customers decarbonize oil and gas operations through our Transition Technologies portfolio and the novel application of our technologies in low-
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Equinor recently completed the installation of a OneSubsea subsea multiphase boosting system, a solution that will reduce the cost and
carbon impact of producing an additional 16 million barrels of oil from the Vigdis Field in theNorth Sea . In production for more than 20 years, the Vigdis Field is producing into the existing Snorre A facility, a cost advantage over building new infrastructure. Leveraging an all-electric control system, the multiphase boosting system requires less than50% of the energy to produce the same volume of oil as compared to gas lift, avoiding 200,000 tons of CO2 equivalent over 10 years of operation at Vigdis and paving the way for future subsea electrification around the world.
-
In
France , Schlumberger was awarded the downhole completions scope for a proof-of-concept green hydrogen storage pilot project called HyPSTER for Storengy, a company of ENGIE—the first project of its kind. HyPSTER aims to support the development of a green hydrogen ecosystem across France—and laterEurope . Schlumberger is a key technical partner in this flagship development of renewable hydrogen underground storage using repurposed natural gas storage salt caverns. Schlumberger will provide equipment, engineering, project management, and develop fit-for-purpose economical solutions to enable future development at scale.
In Schlumberger New Energy, we are forging partnerships to apply a portfolio of low-
-
Schlumberger New Energy, the
French Alternative Energies and Atomic Energy Commission (CEA), and partners have announced the signature of pilot project agreements with leading steel and cement companies on the pathway to net zero in those industries. In the steel industry, Genvia has agreed pilot projects with ArcelorMittal Méditerranée, a subsidiary of ArcelorMittal, a world leader in the steel industry; and Ugitech—part ofSwiss Steel Group , a world leader in long stainless-steel products. In the cement industry, Genvia has agreed pilot projects with Vicat, a cement production group; and Hynamics—a low-carbon and renewable-hydrogen solutions subsidiary ofEDF Group . Genvia aims to deliver the highest green-hydrogen creation efficiency, resulting in significantly less electricity use per kilogram of hydrogen produced.
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Celsius Energy, a Schlumberger New Energy venture that provides geoenergy technology for zero-
carbon heating and cooling of buildings, has expanded its commercial operations inEurope andNorth America . InFrance , a leading healthcare company has selected the Celsius Energy solution in two new developments, and feasibility studies for implementation at additional facilities is ongoing. In the US, Celsius Energy completed its first operation during the fourth quarter of 2021 at a prestigiousEast Coast university campus, opening new market opportunities for the expansion of Celsius Energy solutions. DuringCOP26 , more than 1,000 cities committed to the UN-backed “Cities Race to Zero” campaign, while companies and municipalities globally have advanced net-zero targets and commitments to address global greenhouse gas emissions. Celsius Energy is uniquely positioned to support these commitments, contributing to global decarbonization.
FINANCIAL TABLES
Full-Year Results | (Stated in millions, except per share amounts) | ||||||
Twelve Months Ended | |||||||
Change | |||||||
Revenue* |
|
|
- |
||||
Income (loss) before taxes - GAAP basis |
|
( |
n/m |
||||
Net income (loss) - GAAP basis |
|
|
n/m |
||||
Diluted EPS (loss per share) - GAAP basis |
|
|
n/m |
||||
|
|||||||
Adjusted EBITDA** |
|
|
|
||||
Adjusted EBITDA margin** |
|
|
320 bps |
||||
Pretax segment operating income** |
|
|
|
||||
Pretax segment operating margin** |
|
|
450 bps |
||||
Net income, excluding charges & credits** |
|
|
|
||||
Diluted EPS, excluding charges & credits** |
|
|
|
||||
|
|||||||
Revenue by Geography |
|
||||||
International |
|
|
|
||||
4,466 |
5,478 |
- |
|||||
Other | 168 |
121 |
n/m |
||||
|
|
- |
|||||
*Schlumberger divested certain businesses in |
|||||||
**These are non-GAAP financial measures. See sections titled "Charges & Credits", "Divisions", and "Supplemental Information" for details. | |||||||
n/m = not meaningful |
Condensed Consolidated Statement of Income (Loss) | ||||||||
(Stated in millions, except per share amounts) |
||||||||
Fourth Quarter | Twelve Months | |||||||
Periods Ended |
2021 |
2020 |
2021 |
2020 |
||||
Revenue |
|
|
|
|
||||
Interest and other income (1) | 57 |
69 |
148 |
163 |
||||
Gain on sales of businesses (1) | - |
104 |
- |
104 |
||||
Expenses | ||||||||
Cost of revenue | 5,136 |
4,828 |
19,271 |
21,000 |
||||
Research & engineering | 145 |
129 |
554 |
580 |
||||
General & administrative | 109 |
71 |
339 |
365 |
||||
Impairments & other (1) | - |
62 |
- |
12,658 |
||||
Interest (1) | 137 |
144 |
539 |
563 |
||||
Income (loss) before taxes (1) |
|
|
|
( |
||||
Tax expense (benefit) (1) | 144 |
89 |
446 |
(812) |
||||
Net income (loss) (1) |
|
|
|
( |
||||
Net income attributable to noncontrolling interest | 10 |
8 |
47 |
32 |
||||
Net income (loss) attributable to Schlumberger (1) |
|
|
|
( |
||||
Diluted earnings (loss) per share of Schlumberger (1) |
|
|
|
( |
||||
Average shares outstanding | 1,403 |
1,392 |
1,400 |
1,390 |
||||
Average shares outstanding assuming dilution | 1,430 |
1,411 |
1,427 |
1,390 |
||||
Depreciation & amortization included in expenses (2) |
|
|
|
|
(1) |
See section entitled “Charges & Credits” for details. |
(2) |
Includes depreciation of property, plant and equipment and amortization of intangible assets, multiclient seismic data costs, and APS investments. |
Condensed Consolidated Balance Sheet | ||||
(Stated in millions) |
||||
Assets | 2021 |
2020 |
||
Current Assets | ||||
Cash and short-term investments |
|
|
||
Receivables | 5,315 |
5,247 |
||
Inventories | 3,272 |
3,354 |
||
Other current assets | 928 |
1,312 |
||
12,654 |
12,919 |
|||
Investment in affiliated companies | 2,044 |
2,061 |
||
Fixed assets | 6,429 |
6,826 |
||
12,990 |
12,980 |
|||
Intangible assets | 3,211 |
3,455 |
||
Other assets | 4,183 |
4,193 |
||
|
|
|||
Liabilities and Equity | ||||
Current Liabilities | ||||
Accounts payable and accrued liabilities |
|
|
||
Estimated liability for taxes on income | 879 |
1,015 |
||
Short-term borrowings and current portion of long-term debt | 909 |
850 |
||
Dividends payable | 189 |
184 |
||
10,359 |
10,491 |
|||
Long-term debt | 13,286 |
16,036 |
||
Postretirement benefits | 231 |
1,049 |
||
Other liabilities | 2,349 |
2,369 |
||
26,225 |
29,945 |
|||
Equity | 15,286 |
12,489 |
||
|
|
Liquidity
(Stated in millions) |
||||||
Components of Liquidity |
|
|
|
|||
Cash and short-term investments |
|
|
|
|||
Short-term borrowings and current portion of long-term debt | (909) |
(1,025) |
(850) |
|||
Long-term debt | (13,286) |
(14,370) |
(16,036) |
|||
Net Debt (1) |
|
|
|
|||
Details of changes in liquidity follow: | ||||||
Twelve | Fourth | Twelve | ||||
Months | Quarter | Months | ||||
Periods Ended |
2021 |
2021 |
2020 |
|||
Net income (loss) |
|
|
|
|||
Charges and credits, net of tax (2) | (50) |
(14) |
11,474 |
|||
1,878 |
597 |
|
||||
Depreciation and amortization (3) | 2,120 |
532 |
2,566 |
|||
Stock-based compensation expense | 324 |
95 |
397 |
|||
Change in working capital | (45) |
753 |
(833) |
|||
US federal tax refund | 477 |
- |
- |
|||
Other | (103) |
(45) |
(174) |
|||
Cash flow from operations (4) | 4,651 |
1,932 |
2,944 |
|||
Capital expenditures | (1,141) |
(447) |
(1,116) |
|||
APS investments | (474) |
(169) |
(303) |
|||
Multiclient seismic data capitalized | (39) |
(18) |
(101) |
|||
Free cash flow (5) | 2,997 |
1,298 |
1,424 |
|||
Dividends paid | (699) |
(175) |
(1,734) |
|||
Proceeds from employee stock plans | 137 |
- |
146 |
|||
Stock repurchase program | - |
- |
(26) |
|||
Business acquisitions and investments, net of cash acquired plus debt assumed | (103) |
(5) |
(33) |
|||
Proceeds from sale of Liberty shares | 109 |
109 |
- |
|||
Proceeds from divestitures | - |
- |
434 |
|||
Repayment of finance lease obligations | - |
- |
(188) |
|||
Other | (105) |
(26) |
(181) |
|||
Change in net debt before impact of changes in foreign exchange rates | 2,336 |
1,201 |
(158) |
|||
Impact of changes in foreign exchange rates on net debt | 488 |
196 |
(595) |
|||
Decrease (increase) in Net Debt | 2,824 |
1,397 |
(753) |
|||
Net Debt, beginning of period | (13,880) |
(12,453) |
(13,127) |
|||
Net Debt, end of period |
|
|
|
(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) |
See section entitled “Charges & Credits” for details. |
(3) |
Includes depreciation of property, plant and equipment and amortization of intangible assets, multiclient seismic data costs, and APS investments. |
(4) |
Includes severance payments of |
(5) |
“Free cash flow” represents cash flow from operations less capital expenditures, APS investments, and multiclient seismic 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 Schlumberger’s 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. |
Charges & Credits
In addition to financial results determined in accordance with US generally accepted accounting principles (GAAP), this fourth-quarter and full-year 2021 earnings release also includes non-GAAP financial measures (as defined under the SEC’s Regulation G). In addition to the non-GAAP financial measures discussed under “Liquidity”, net income (loss), excluding charges & credits, as well as measures derived from it (including diluted EPS, excluding charges & credits; Schlumberger net income (loss), excluding charges & credits; effective tax rate, excluding charges & credits; and adjusted EBITDA) are non-GAAP financial measures. Management believes that the exclusion of charges & credits from these financial measures enables it to evaluate more effectively Schlumberger’s operations period over period and to identify operating trends that could otherwise be masked by the excluded items. These measures are also used by management as performance measures in determining certain incentive compensation. The foregoing non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. The following is a reconciliation of certain of these non-GAAP measures to the comparable GAAP measures. For a reconciliation of adjusted EBITDA to the comparable GAAP measure, please refer to the section titled “Supplemental Information” (Question 9).
(Stated in millions, except per share amounts) |
||||||||||
Fourth Quarter 2021 | ||||||||||
Pretax | Tax | Noncont. Interests |
Net | Diluted EPS |
||||||
Schlumberger net income (GAAP basis) |
|
|
|
|
|
|||||
Gain on sale of Liberty shares (1) |
|
|
|
|
|
|||||
Early repayment of bonds (2) | 10 |
- |
- |
10 |
0.01 |
|||||
Schlumberger net income, excluding charges & credits |
|
|
|
|
|
|||||
Third Quarter 2021 | ||||||||||
Pretax | Tax | Noncont. Interests |
Net | Diluted EPS |
||||||
Schlumberger net income (GAAP basis) |
|
|
|
|
|
|||||
Unrealized gain on marketable securities (1) | (47) |
(11) |
- |
(36) |
(0.03) |
|||||
Schlumberger net income, excluding charges & credits |
|
|
|
|
|
|||||
Fourth Quarter 2020 | ||||||||||
Pretax | Tax | Noncont. Interests |
Net | Diluted EPS |
||||||
Schlumberger net income (GAAP basis) |
|
|
|
|
|
|||||
Gain on sale of OneStim (3) | (104) |
(11) |
- |
(93) |
(0.07) |
|||||
Unrealized gain on marketable securities (1) | (39) |
(9) |
- |
(30) |
(0.02) |
|||||
Other | 62 |
4 |
- |
58 |
0.04 |
|||||
Schlumberger net income, excluding charges & credits |
|
|
|
|
|
(Stated in millions, except per share amounts) |
||||||||||
Twelve Months 2021 | ||||||||||
Pretax | Tax | Noncont. Interests |
Net | Diluted EPS |
||||||
Schlumberger net income (GAAP basis) |
|
|
|
|
|
|||||
Fourth quarter | ||||||||||
Gain on sale of |
(28) |
(4) |
- |
(24) |
(0.02) |
|||||
Early repayment of bonds (2) | 10 |
- |
- |
10 |
0.01 |
|||||
Third quarter | ||||||||||
Unrealized gain on marketable securities (1) | (47) |
(11) |
- |
(36) |
(0.03) |
|||||
Schlumberger net income, excluding charges & credits |
|
|
|
|
|
|||||
Twelve Months 2020 | ||||||||||
Pretax | Tax | Noncont. Interests |
Net | Diluted EPS |
||||||
Schlumberger net loss (GAAP basis) |
|
|
|
|
|
|||||
Fourth quarter | ||||||||||
Gain on sale of OneStim (3) | (104) |
(11) |
- |
(93) |
(0.07) |
|||||
Unrealized gain on marketable securities (1) | (39) |
(9) |
- |
(30) |
(0.02) |
|||||
Other | 62 |
4 |
- |
58 |
0.04 |
|||||
Third quarter | ||||||||||
Facility exit charges | 254 |
39 |
- |
215 |
0.15 |
|||||
Workforce reductions | 63 |
- |
- |
63 |
0.05 |
|||||
Other | 33 |
1 |
- |
32 |
0.02 |
|||||
Second quarter | ||||||||||
Workforce reductions | 1,021 |
71 |
- |
950 |
0.68 |
|||||
Asset Performance Solutions investments | 730 |
15 |
- |
715 |
0.51 |
|||||
Fixed asset impairments | 666 |
52 |
- |
614 |
0.44 |
|||||
Inventory write-downs | 603 |
49 |
554 |
0.40 |
||||||
Right-of-use asset impairments | 311 |
67 |
- |
244 |
0.18 |
|||||
Costs associated with exiting certain activities | 205 |
(25) |
- |
230 |
0.17 |
|||||
Multiclient seismic data impairment | 156 |
2 |
- |
154 |
0.11 |
|||||
Repurchase of bonds | 40 |
2 |
- |
38 |
0.03 |
|||||
Postretirement benefits curtailment gain | (69) |
(16) |
- |
(53) |
(0.04) |
|||||
Other | 60 |
4 |
- |
56 |
0.04 |
|||||
First quarter | ||||||||||
3,070 |
- |
- |
3,070 |
2.21 |
||||||
Intangible assets impairments | 3,321 |
815 |
- |
2,506 |
1.80 |
|||||
Asset Performance Solutions investments | 1,264 |
(4) |
- |
1,268 |
0.91 |
|||||
587 |
133 |
- |
454 |
0.33 |
||||||
Workforce reductions | 202 |
7 |
- |
195 |
0.14 |
|||||
Other | 79 |
9 |
- |
70 |
0.05 |
|||||
Valuation allowance | - |
(164) |
- |
164 |
0.12 |
|||||
Schlumberger net income, excluding charges & credits |
|
|
|
|
|
(1) |
Classified in Interest & other income in the Condensed Consolidated Statement of Income (Loss) |
(2) |
Classified in Interest in the Condensed Consolidated Statement of Income (Loss) |
(3) |
Classified in Gain on sales of businesses in the Condensed Consolidated Statement of Income (Loss) |
Unless otherwise noted, all Charges & Credits are classified in Impairments & other in the Condensed Consolidated Statement of Income (Loss). |
DIVISIONS
(Stated in millions) |
||||||||||||
Three Months Ended | ||||||||||||
Revenue | Income Before Taxes |
Revenue | Income Before Taxes |
Revenue | Income Before Taxes |
|||||||
Digital & Integration |
|
|
|
|
|
|
||||||
Reservoir Performance | 1,287 |
200 |
1,192 |
190 |
1,247 |
95 |
||||||
2,388 |
368 |
2,273 |
345 |
1,868 |
183 |
|||||||
Production Systems | 1,765 |
159 |
1,674 |
166 |
1,649 |
155 |
||||||
Eliminations & other | (104) |
(76) |
(104) |
(77) |
(64) |
(48) |
||||||
Pretax segment operating income | 986 |
908 |
654 |
|||||||||
Corporate & other | (140) |
(145) |
(132) |
|||||||||
Interest income(1) | 14 |
8 |
5 |
|||||||||
Interest expense(1) | (123) |
(127) |
(137) |
|||||||||
Charges & credits(2) | 18 |
47 |
81 |
|||||||||
|
|
|
|
|
|
(Stated in millions) |
||||||||||||
Full Year 2021 | ||||||||||||
Revenue | Income Before Taxes |
Depreciation and Amortization (3) |
Net Interest Expense (4) |
Adjusted EBITDA (5) |
Capital Investments (6) |
|||||||
Digital & Integration |
|
|
|
|
|
|
||||||
Reservoir Performance | 4,599 |
648 |
415 |
- |
1,063 |
348 |
||||||
8,706 |
1,195 |
537 |
1 |
1,733 |
424 |
|||||||
Production Systems | 6,710 |
634 |
302 |
- |
936 |
267 |
||||||
Eliminations & other | (376) |
(253) |
269 |
(1) |
15 |
99 |
||||||
3,365 |
1,969 |
13 |
5,347 |
1,654 |
||||||||
Corporate & Other | (573) |
151 |
(422) |
|||||||||
Interest income (1) | 31 |
|||||||||||
Interest expense (1) | (514) |
|||||||||||
Charges & credits (2) | 65 |
|||||||||||
|
|
|
|
|
|
(Stated in millions) |
||||||||||||
Full Year 2020 | ||||||||||||
Revenue | Income (Loss) Before Taxes |
Depreciation and Amortization (3) |
Net Interest Expense (4) |
Adjusted EBITDA (5) |
Capital Investments (6) |
|||||||
Digital & Integration |
|
|
|
|
|
|
||||||
Reservoir Performance | 5,602 |
353 |
549 |
11 |
913 |
384 |
||||||
8,614 |
870 |
580 |
1 |
1,451 |
420 |
|||||||
Production Systems | 6,650 |
623 |
338 |
- |
961 |
240 |
||||||
Eliminations & other | (332) |
(172) |
276 |
2 |
106 |
63 |
||||||
2,401 |
2,358 |
27 |
4,786 |
1,520 |
||||||||
Corporate & Other | (681) |
208 |
(473) |
|||||||||
Interest income (1) | 31 |
|||||||||||
Interest expense (1) | (534) |
|||||||||||
Charges & credits (2) | (12,515) |
|||||||||||
|
|
|
|
|
|
(1) |
Excludes amounts which are included in the segments’ results. |
(2) |
See section entitled “Charges & Credits” for details. |
(3) |
Includes depreciation of property, plant and equipment and amortization of intangible assets, APS investments, and multiclient data seismic costs. |
(4) |
Excludes interest income and expense recorded at the corporate level. |
(5) |
Adjusted EBITDA represents income (loss) before taxes excluding depreciation and amortization, interest income, interest expense and charges & credits. |
(6) |
Capital investments includes capital expenditures, APS investments, and multiclient seismic data costs capitalized. |
(Stated in millions) |
|||||||
Twelve Months Ended | |||||||
Change | |||||||
Revenue | |||||||
Digital & Integration |
|
3,067 |
|
||||
Reservoir Performance* | 4,599 |
5,602 |
- |
||||
8,706 |
8,614 |
|
|||||
Production Systems** | 6,710 |
6,650 |
|
||||
Other | (376) |
(332) |
n/m |
||||
|
|
- |
|||||
|
|||||||
Pretax Segment Operating Income |
|
||||||
Digital & Integration |
|
727 |
|
||||
Reservoir Performance | 648 |
353 |
|
||||
1,195 |
870 |
|
|||||
Production Systems | 634 |
623 |
|
||||
Other | (253) |
(172) |
n/m |
||||
|
|
|
|||||
|
|||||||
Pretax Segment Operating Margin |
|
||||||
Digital & Integration |
|
|
1,096 bps |
||||
Reservoir Performance |
|
|
779 bps |
||||
|
|
363 bps |
|||||
Production Systems |
|
|
9 bps |
||||
Other | n/m |
n/m |
n/m |
||||
|
|
450 bps |
|||||
|
|||||||
Adjusted Segment Operating EBITDA |
|
||||||
Digital & Integration |
|
1,355 |
|
||||
Reservoir Performance |
|
913 |
|
||||
|
1,451 |
|
|||||
Production Systems |
|
961 |
- |
||||
Other |
|
106 |
n/m |
||||
|
|
|
|||||
|
|||||||
Adjusted Segment Operating EBITDA Margin |
|
||||||
Digital & Integration |
|
|
440 bps |
||||
Reservoir Performance |
|
|
683 bps |
||||
|
|
307 bps |
|||||
Production Systems |
|
|
-60 bps |
||||
Other | n/m |
n/m |
n/m |
||||
|
|
304 bps |
|||||
*Schlumberger divested its OneStim pressure pumping business in |
|||||||
**Schlumberger divested its low-flow artificial lift business in |
|||||||
n/m = not meaningful |
GEOGRAPHICAL
(Stated in millions) |
||||||||||
Full Year 2021 | ||||||||||
Revenue | Income Before Taxes |
Depreciation and Amortization (3) |
Net Interest Expense (4) |
Adjusted EBITDA (5) |
||||||
International |
|
|
|
|
|
|||||
4,466 |
561 |
343 |
12 |
916 |
||||||
Eliminations & other | 168 |
(286) |
273 |
(1) |
(14) |
|||||
3,365 |
1,969 |
13 |
5,347 |
|||||||
Corporate & Other | (573) |
151 |
(422) |
|||||||
Interest income (1) | 31 |
|||||||||
Interest expense (1) | (514) |
|||||||||
Charges & credits (2) | 65 |
|||||||||
|
|
|
|
|
(Stated in millions) |
||||||||||
Full Year 2020 | ||||||||||
Revenue | Income (Loss) Before Taxes |
Depreciation and Amortization (3) |
Net Interest Expense (4) |
Adjusted EBITDA (5) |
||||||
International |
|
|
|
|
|
|||||
5,478 |
103 |
499 |
21 |
623 |
||||||
Eliminations & other | 121 |
(360) |
246 |
2 |
(112) |
|||||
2,401 |
2,358 |
27 |
4,786 |
|||||||
Corporate & Other | (681) |
208 |
(473) |
|||||||
Interest income (1) | 31 |
|||||||||
Interest expense (1) | (534) |
|||||||||
Charges & credits (2) | (12,515) |
|||||||||
|
|
|
|
|
(1) |
Excludes amounts which are included in the segments’ results. |
(2) |
See section entitled “Charges & Credits” for details. |
(3) |
Includes depreciation of property, plant and equipment and amortization of intangible assets, APS investments, and multiclient data seismic costs. |
(4) |
Excludes interest income and expense recorded at the corporate level. |
(5) |
Adjusted EBITDA represents income (loss) before taxes excluding depreciation and amortization, interest income, interest expense, and charges & credits. |
(Stated in millions) | |||||||
Twelve Months Ended | |||||||
Change | |||||||
Revenue | |||||||
|
|
- |
|||||
4,459 |
3,472 |
|
|||||
5,778 |
5,963 |
- |
|||||
8,058 |
8,567 |
- |
|||||
Other | 168 |
121 |
n/m |
||||
|
|
- |
|||||
|
|||||||
International |
|
|
|
||||
4,466 |
5,478 |
- |
|||||
Other | 168 |
121 |
n/m |
||||
|
|
- |
|||||
|
|||||||
Pretax Segment Operating Income |
|
||||||
International |
|
|
|
||||
561 |
103 |
|
|||||
Other | (286) |
(360) |
n/m |
||||
|
|
|
|||||
|
|||||||
Pretax Segment Operating Income Margin |
|
||||||
International |
|
|
212 bps |
||||
|
|
1,067 bps |
|||||
Other | n/m |
n/m |
n/m |
||||
|
|
450 bps |
|||||
|
|||||||
Adjusted Segment Operating EBITDA |
|
||||||
International |
|
|
|
||||
916 |
623 |
|
|||||
Other | (14) |
(112) |
n/m |
||||
|
|
|
|||||
|
|||||||
Adjusted Segment Operating EBITDA Margin |
|
||||||
International |
|
|
54 bps |
||||
|
|
914 bps |
|||||
Other | n/m |
n/m |
n/m |
||||
|
|
304 bps |
|||||
*Schlumberger divested certain businesses in |
|||||||
n/m = not meaningful |
Supplementary Information
Frequently Asked Questions
1) |
What is the capital investment guidance for the full-year 2022? |
Capital investment (comprised of capex, multiclient, and APS investments) for the full-year 2022 is expected to be between |
|
|
|
2) |
What were cash flow from operations and free cash flow for the fourth quarter of 2021? |
Cash flow from operations for the fourth quarter of 2021 was |
|
|
|
3) |
What were cash flow from operations and free cash flow for the full year of 2021? |
Cash flow from operations for the full year of 2021 was |
|
|
|
4) |
What was included in “Interest and other income” for the fourth quarter of 2021? |
“Interest and other income” for the fourth quarter of 2021 was |
|
|
|
5) |
How did interest income and interest expense change during the fourth quarter of 2021? |
Interest income of |
|
|
|
6) |
What is the difference between Schlumberger’s consolidated income (loss) before taxes and pretax segment operating income? |
The difference consists of corporate items, charges and credits, and interest income and interest expense not allocated to the segments as well as stock-based compensation expense, amortization expense associated with certain intangible assets, certain centrally managed initiatives, and other nonoperating items. |
|
|
|
7) |
What was the effective tax rate (ETR) for the fourth quarter of 2021? |
The ETR for the fourth quarter of 2021, calculated in accordance with GAAP, was |
|
|
|
8) |
How many shares of common stock were outstanding as of |
There were 1.403 billion shares of common stock outstanding as of both |
|
|
|
9) |
What was the weighted average number of shares outstanding during the fourth quarter of 2021 and third quarter of 2021? How does this reconcile to the average number of shares outstanding, assuming dilution, used in the calculation of diluted earnings per share? |
The weighted average number of shares outstanding was 1.403 billion during the fourth quarter of 2021 and 1.402 billion during the third quarter of 2021. The following is a reconciliation of the weighted average shares outstanding to the average number of shares outstanding, assuming dilution, used in the calculation of diluted earnings per share. |
(Stated in millions) |
||||
Fourth Quarter 2021 |
Third Quarter 2021 |
|||
Weighted average shares outstanding | 1,403 |
1,402 |
||
Unvested restricted stock | 27 |
22 |
||
Average shares outstanding, assuming dilution | 1,430 |
1,424 |
10) |
What was Schlumberger’s adjusted EBITDA in the fourth quarter of 2021, the third quarter of 2021, and the fourth quarter of 2020, full-year 2021, and full-year 2020? |
Schlumberger’s adjusted EBITDA was |
(Stated in millions) |
||||||
Fourth Quarter 2021 |
Third Quarter 2021 |
Fourth Quarter 2020 |
||||
Net income attributable to Schlumberger |
|
|
|
|||
Net income attributable to noncontrolling interests | 10 |
12 |
8 |
|||
Tax expense | 144 |
129 |
89 |
|||
Income before taxes |
|
|
|
|||
Charges & credits | (18) |
(47) |
(81) |
|||
Depreciation and amortization | 532 |
530 |
583 |
|||
Interest expense | 127 |
130 |
144 |
|||
Interest income | (15) |
(8) |
(5) |
|||
Adjusted EBITDA |
|
|
|
Schlumberger’s adjusted EBITDA was |
(Stated in millions) |
||||
2021 |
2020 |
|||
Net income (loss) attributable to Schlumberger |
|
|
||
Net income attributable to noncontrolling interests | 47 |
32 |
||
Tax expense (benefit) | 446 |
(812) |
||
Income (loss) before taxes |
|
|
||
Charges & credits | (65) |
12,515 |
||
Depreciation and amortization | 2,120 |
2,566 |
||
Interest expense | 529 |
563 |
||
Interest income | (33) |
(33) |
||
Adjusted EBITDA |
|
|
Adjusted EBITDA represents income before taxes excluding charges & credits, depreciation and amortization, interest expense, and interest income. Management believes that adjusted EBITDA is an important profitability measure for Schlumberger and that it allows investors and management to more efficiently evaluate Schlumberger’s operations period over period and to identify operating trends that could otherwise be masked. Adjusted EBITDA is also used by management as a performance measure in determining certain incentive compensation. Adjusted EBITDA should be considered in addition to, not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. |
11) |
What were the components of depreciation and amortization expense for the fourth quarter of 2021, the third quarter of 2021, and the fourth quarter of 2020? |
The components of depreciation and amortization expense for the fourth quarter of 2021, the third quarter of 2021, and the fourth quarter of 2020 were as follows: |
(Stated in millions) |
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Fourth Quarter 2021 |
Third Quarter 2021 |
Fourth Quarter 2020 |
||||
Depreciation of fixed assets |
|
|
|
|||
Amortization of intangible assets | 76 |
75 |
79 |
|||
Amortization of APS investments | 71 |
82 |
88 |
|||
Amortization of multiclient seismic data costs capitalized | 40 |
23 |
42 |
|||
|
|
|
12) |
What were the components of the net pretax credit of |
During the fourth quarter of 2021, Schlumberger sold 9.5 million of its shares in Liberty and received proceeds of |
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On |
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Notes
Schlumberger will hold a conference call to discuss the earnings press release and business outlook on
This fourth-quarter and full-year 2021 earnings press release, as well as other statements we make, contain “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,” “forecast,” “estimate,” “intend,” “anticipate,” “ambition,” “goal,” “target,” “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 our financial and performance targets and other forecasts or expectations regarding, or dependent on, our business outlook; growth for Schlumberger 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 and the oil and gas industry; our business strategies, including digital and “fit for basin,” as well as the strategies of our customers; our effective tax rate; our APS projects, joint ventures, and other alliances; our response to the COVID-19 pandemic and our preparedness for other widespread health emergencies; access to raw materials; future global economic and geopolitical conditions; future liquidity; 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 conditions; changes in exploration and production spending by our customers, and changes in the level of oil and natural gas exploration and development; the results of operations and financial condition of our customers and suppliers; the inability to achieve its financial and performance targets and other forecasts and expectations; the inability to achieve Schlumberger’s net-zero
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