Schlumberger Announces Third-Quarter 2021 Results
-
Global revenue of
increased$5.85 billion 4% sequentially and11% year-on-year -
International revenue was
and$4.68 billion North America revenue was$1.13 billion -
GAAP EPS, including charges and credits, was
and increased$0.39 30% sequentially -
EPS, excluding charges and credits, was
and increased$0.36 20% sequentially -
Cash flow from operations was
and free cash flow was$1.07 billion $671 million -
Board approved quarterly cash dividend of
per share$0.12 5
Third-Quarter Results | (Stated in millions, except per share amounts) | |||||||||
Three Months Ended | Change | |||||||||
Sequential | Year-on-year | |||||||||
Revenue* |
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Income (loss) before taxes - GAAP basis |
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n/m |
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Net income (loss) - GAAP basis |
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n/m |
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Diluted EPS (loss per share) - GAAP basis |
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n/m |
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Adjusted EBITDA** |
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Adjusted EBITDA margin** |
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90 bps |
280 bps |
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Pretax segment operating income** |
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Pretax segment operating margin** |
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120 bps |
460 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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1,129 |
1,083 |
1,034 |
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Other | 43 |
40 |
14 |
n/m |
n/m |
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*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 |
(Stated in millions) |
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Three Months Ended | Change | ||||||||
Sequential | Year-on-year | ||||||||
Revenue by Division | |||||||||
Digital & Integration |
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- |
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Reservoir Performance* | 1,192 |
1,117 |
1,215 |
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- |
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2,273 |
2,110 |
1,837 |
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Production Systems** | 1,674 |
1,681 |
1,532 |
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Other | (104) |
(91) |
(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 | 190 |
156 |
103 |
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345 |
272 |
173 |
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Production Systems | 166 |
171 |
132 |
- |
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Other | (77) |
(66) |
(34) |
n/m |
n/m |
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Pretax Operating Margin by Division |
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Digital & Integration |
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154 bps |
784 bps |
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Reservoir Performance |
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202 bps |
751 bps |
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230 bps |
576 bps |
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Production Systems |
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-27 bps |
129 bps |
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Other | n/m |
n/m |
n/m |
n/m |
n/m |
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120 bps |
460 bps |
*Schlumberger divested its OneStim® pressure pumping business in |
**Schlumberger divested its low-flow artificial lift business in |
n/m = not meaningful |
Schlumberger CEO
“Our returns-focused strategy continues to deliver exceptional results at this early point of the growth cycle. Our third-quarter pretax segment operating margin reached its highest level since 2015 and cash flow from operations was
“Geographically, international revenue of
“Among the Divisions,
“Sequentially, third-quarter pretax segment operating income increased
“Third-quarter cash flow from operations was
“Looking ahead, we anticipate another quarter of growth, and expect to close 2021 with strong momentum that will set the foundation for an exceptional growth cycle.
“The industry macro fundamentals have visibly strengthened this year, particularly in recent weeks—with demand recovery, oil and gas commodity prices at recent highs, low inventory levels, and encouraging trends in pandemic containment efforts. Absent a recession or pandemic-related setback, these favorable conditions are expected to materially drive investment over the next few years—particularly internationally—and result in exceptional multiyear capital spending growth globally, both on land and offshore. As the market leader, we have an advantaged position from which to capture this growth given our technology, integration capability, and international strength, with our core poised for activity and earnings outperformance.
“In this context and given our financial outperformance at this point in the cycle, we are increasingly confident in achieving our mid-cycle adjusted EBITDA margin ambition of
Other Events
On
Revenue by Geographical Area
(Stated in millions) | |||||||||
Three Months Ended | Change | ||||||||
Sequential | Year-on-year | ||||||||
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1,160 |
1,057 |
828 |
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1,481 |
1,453 |
1,397 |
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2,034 |
2,001 |
1,986 |
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Other | 43 |
40 |
13 |
n/m |
n/m |
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International |
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*Schlumberger divested certain businesses in |
n/m = not meaningful |
International
International revenue of
Revenue in
Revenue in the
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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196 |
191 |
134 |
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Other | 1 |
1 |
1 |
n/m |
n/m |
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- |
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Pretax operating income |
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Pretax operating margin |
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154 bps |
784 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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79 |
79 |
275 |
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- |
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Other | 1 |
- |
3 |
n/m |
n/m |
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- |
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Pretax operating income |
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Pretax operating margin |
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202 bps |
751 bps |
*Schlumberger divested its OneStim pressure pumping business in |
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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382 |
352 |
235 |
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Other | 52 |
50 |
40 |
n/m |
n/m |
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Pretax operating income |
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Pretax operating margin |
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230 bps |
576 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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- |
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469 |
458 |
389 |
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Other | - |
3 |
5 |
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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-27 bps |
129 bps |
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*Schlumberger divested its low-flow artificial lift business in |
n/m = not meaningful |
Production Systems revenue of
Production Systems pretax operating margin of
Quarterly Highlights
Schlumberger continues to win a growing number of contract awards based on technology differentiation, integration, and our ability to execute globally. This is resulting in a robust pipeline of work, particularly in the
- Schlumberger was awarded a multibillion dollar (USD) integrated stimulation technology and services contract by Saudi Aramco for its unconventional gas resources. Fit-for-basin technologies will enable operational performance and efficiency, in a work scope that includes the full suite of products and services for hydraulic fracturing, coiled tubing intervention, wireline services, Cameron hydraulic fracturing trees with MonoFlex* dual-connection fracturing fluid delivery technology, and flow back. Mobilization is expected to start in the fourth quarter of 2021.
-
Petroleum Development Oman LLC (PDO) awarded Schlumberger a major services contract for the provision of high-pressure hydraulic fracturing and stimulation services for up to 350 wells inOman . The five-year contract has two independent two-year options and comprises 105 oil and gas exploration wells and between 171 to 245 gas development wells. The work program is scheduled to commence in the fourth quarter of 2021.
-
Kuwait Oil Company awarded Schlumberger a five-year supply agreement for wellheads, production trees, and services for 230 new wells and 250 workover wells in the country's deep Jurassic formations. The scope of the agreement includes the supply and installation services of 15,000-psi high-pressure, high-temperature (HPHT) wellheads, production trees, chokes, and control panels.Kuwait's Jurassic reservoirs hold significant gas reserves and are a key element in the country's long-term strategy.
In the offshore markets, Schlumberger continues to win significant awards as a result of its technology and integration capabilities driving performance, either by reducing time to first production, or by improving recovery from existing assets. This offshore activity growth is being driven by increased final investment decisions (FIDs) and awards of both short- and long-cycle projects. Examples from the quarter include:
- Schlumberger was awarded a significant contract by Turkish Petroleum (TP) for end-to-end production solutions for the greenfield Phase 1 development of the Sakarya Field, Turkey’s largest gas reserve. The integrated project scope will cover subsurface solutions to onshore production, including well completions, subsea production systems (SPS), and an early production facility capable of handling up to 350 MMscf/d of gas. Through this integration, from subsurface to processing facility, pipeline-ready gas will be delivered on an accelerated timeline.
-
In the Ormen Lange Field, where
A/S Norske Shell and theOrmen Lange Partnership have recently made the FID for Phase 3, OneSubsea® will deploy a subsea multiphase compression system, comprising two 16-MW subsea compression stations tied into existing manifolds and pipelines—an industry leading innovation that will unlock an additional 30 to 50 billion m3 of natural gas and increase the field recovery rate from75% to85% . The OneSubsea multiphase compression system will facilitate a significant reduction in energy consumption, and thus CO2 emissions, when compared to topside compression.
-
In
Brazil , Petrobras awarded Schlumberger a contract for integrated completions on 21 wells in presalt concessions. The intelligent completion design chosen for these wells includes a selective open hole lower completion, integrating a premium isolation valve and downhole interval flow control valves and a Metris* permanent monitoring system. Intelligent completions will enable Petrobras to enhance ultimate recovery in these higher-pressure reservoirs by more accurately monitoring and controlling production. Installation is expected to commence in the third quarter of 2022.
-
OneSubsea was awarded a significant contract by Aker BP for the delivery, installation, and commissioning of a subsea production system with a reduced carbon impact for the
Hanz project on the Norwegian Continental Shelf. The contract—which comprises three horizontal subsea trees, controls, and additional associated equipment—includes the use of refurbished subsea production equipment repurposed from previous projects. This unique approach will enable Aker BP to develop this field with reduced cost and carbon footprint as a tieback to the Ivar Aasen platform. This approach is estimated to remove more than 200 metric tons of CO2e emissions from the project when compared to a conventional method.
The increase in customer activity is broad based as the growth cycle widens, not only geographically, but also across operating environments including onshore and midstream. Examples include:
-
Cairn Oil & Gas , Vedanta Limited has awarded Schlumberger an integrated well construction and completion contract for 27 deep gas wells in the Raageshwari Field located inRajasthan, India . Under the contract scope, Schlumberger will create reliability and efficiency improvement opportunities using a combination of unique, fit-for-basin technologies that has proven effective in the recently concluded 42-well deep gas campaign in this field. The integrated well construction and completion approach will drive value and efficiency for Cairn, which is one of the largest oil and gas exploration and production companies inIndia , as it executes its natural gas development plan.
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In
India , Reliance Industries Limited has awarded Schlumberger a contract for the engineering and supply of two 25 m3/h rich monoethylene glycol (MEG) reclamation and regeneration plants, and a pretreatment unit to support increased gas production from the existing Kakinada onshore terminal. MEG is injected in production pipelines, captured, and reused to reduce hydrate formation and maximize gas system throughput. The MEG reclamation trains will use the PUREMEG* monoethylene glycol reclamation and regeneration system, which has lower operating cost compared with conventional systems.
Digital transformation is a key part of the industry’s future. Through our digital platform, which we continue to enhance, we are delivering performance impact for customers. Highlights from the quarter include:
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Schlumberger made a strategic investment in
DeepIQ, Inc. to accelerate self-service analytics for enterprises’ industrial data. This will help maintain Schlumberger’s leading position in transformational digital solutions for the energy industry, leveraging DeepIQ technologies in combination with Schlumberger’s artificial intelligence (AI) solutions.
- Schlumberger has expanded its digital drilling planning and operations portfolio by acquiring Independent Data Services (IDS), the industry’s only automated reporting software for drilling operations. Augmenting the DrillPlan* coherent well construction planning solution and DrillOps* on-target well delivery solution via the cloud or as a stand-alone solution, IDS enables automated analysis and reporting of operational activities, giving E&P operators and drilling contractors actionable insights to improve operational performance.
-
Offshore
Canada , Schlumberger andExxonMobil Canada are jointly working on the deployment of digital drilling solutions, which recently enabledExxonMobil Canada to complete the first fully automated section drilled at theHebron platform. This was achieved with a combination of DrillOps on-target well delivery solution, including the DrillOps Automate drilling solution, and the Cameron DrillPilot* equipment sequencing software for pipe handling automation.ExxonMobil Canada and its co-venturers onHebron have agreed to a commercial implementation of the DrillOps Automate solution in its offshore operations. These digital solutions are expected to create a step change in procedural adherence, consistency, standardization, and operational efficiency across rig crews and enable close integration of well construction planning and execution phases in the future.
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In Deepwater Gulf of
Mexico , Performance Live* digitally connected service helpedShell Exploration and Production Company improve drilling performance while meeting reduced crew size objectives. The use of Performance Live service was increased to deploy both directional drilling and advanced logging-while-drilling services, such as StethoScope* formation pressure-while-drilling service. The result was delivery of a19% shoe-to-shoe drilling improvement and a72% reduction in normalized nonproductive time (NPT), while average wellsite crew size was reduced by46% since the start of implementation.
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Aramco and Schlumberger signed an agreement for the Omega* geophysical data processing platform, one of the industry’s most advanced geophysical processing solutions. The Omega platform enhances the geophysics data imaging by integrating comprehensive workflows and advanced algorithms with leading science, scalable processing, and unparalleled flexibility.
Schlumberger Transition Technologies* are being increasingly adopted by customers as they address their Scope 1 and Scope 2 emissions, a commitment we share with our own Scope 3 reduction targets. These technologies accelerate both our customers’ and Schlumberger’s journey to net zero, by reducing flaring and fugitive emissions, reducing the CO2 footprint in drilling operations, offering development solutions that minimize full-field carbon footprint, or increasing electrification of infrastructure. Specific examples of new technology deployments include:
-
In
Kazakhstan , Schlumberger has deployed a zero-flaring well test and cleanup solution with Karachaganak Petroleum Operating B.V.—jointly operated by Shell and Eni—that has avoided the equivalent of more than 240,000 metric tons of CO2e emissions to date. Incorporating unique Schlumberger technologies such as Vx Spectra* surface multiphase flowmeter, high pressure separators, and REDA Multiphase HPS* horizontal multistage surface pumps, this project is first-of-a-kind in the world and is aligned with the long-term net-zero goals of both JV partners and Schlumberger, as well as the country's environmental goals.
-
Offshore
Trinidad and Tobago , Schlumberger helped bp achieve first gas seven months ahead of schedule in the Matapal Field. In collaboration with bp, OneSubsea leveraged its experience to deploy its first all-electric manifold and three 10,000-psi subsea trees with integral Vx Omni* subsea multiphase flowmeters. Agile subsea production systems (SPS) also enabled bp to capitalize on standardized hardware and reduce project-specific engineering. This contributed to reaching first gas in just three years from contract award, as compared to the four years for similar previous developments.
-
Offshore
Norway , Equinor made its first deployment of the Manara* production and reservoir management system to enhance oil production while reducing project CO2 emissions in an extended-reach well in the Heidrun Field. Equinor will use insight into which zones are contributing to production and the ability to tailor flow from each using six all-electric monitoring and control stations to optimize oil output and minimize water production. Controlling water production with the Manara system will decrease the energy needed to pump treated water back into the reservoir, reducing the CO2 emissions per barrel of oil produced.
In addition to reducing CO2 emissions and consumption in oil and gas operations, Schlumberger domain expertise and experience are contributing to winning project awards to enable other industries to reduce carbon emissions.
-
FS Bioenergia has awarded Schlumberger Brazil’s first carbon capture and storage project, which will support the production of carbon-negative biofuels. Under the agreement, Schlumberger will conduct reservoir studies, design, and manage drilling of injection wells, perform injectivity tests, and monitor storage once injection commences. The project, to be built at the site of the FS Bioenergia processing plant in
Lucas doRio Verde , is anticipated to process and store 430,000 tons of CO2 per year upon completion, scheduled for 2024.
Financial Tables
Condensed Consolidated Statement of Income (Loss)
(Stated in millions, except per share amounts) |
||||
Third Quarter | Nine Months | |||
Periods Ended |
2021 |
2020 |
2021 |
2020 |
Revenue |
|
|
|
|
Interest and other income (1) | 56 |
22 |
91 |
94 |
Expenses | ||||
Cost of revenue | 4,862 |
4,624 |
14,135 |
16,172 |
Research & engineering | 140 |
137 |
409 |
452 |
General & administrative | 80 |
85 |
231 |
293 |
Impairments & other (1) | - |
350 |
- |
12,596 |
Interest | 130 |
138 |
402 |
419 |
Income (loss) before taxes (1) |
|
( |
|
( |
Tax expense (benefit) (1) | 129 |
19 |
301 |
(901) |
Net income (loss) (1) |
|
( |
|
( |
Net income attributable to noncontrolling interest | 12 |
9 |
37 |
24 |
Net income (loss) attributable to Schlumberger (1) |
|
( |
|
( |
Diluted earnings (loss) per share of Schlumberger (1) |
|
( |
|
( |
Average shares outstanding | 1,402 |
1,391 |
1,399 |
1,389 |
Average shares outstanding assuming dilution | 1,424 |
1,391 |
1,422 |
1,389 |
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 | 5,349 |
5,247 |
Inventories | 3,296 |
3,354 |
Other current assets | 800 |
1,312 |
12,387 |
12,919 |
|
Investment in affiliated companies | 2,110 |
2,061 |
Fixed assets | 6,375 |
6,826 |
12,990 |
12,980 |
|
Intangible assets | 3,265 |
3,455 |
Other assets | 3,911 |
4,193 |
|
|
|
Liabilities and Equity | ||
Current Liabilities | ||
Accounts payable and accrued liabilities |
|
|
Estimated liability for taxes on income | 907 |
1,015 |
Short-term borrowings and current portion of long-term debt | 1,025 |
850 |
Dividends payable | 188 |
184 |
9,735 |
10,491 |
|
Long-term debt | 14,370 |
16,036 |
Postretirement benefits | 905 |
1,049 |
Other liabilities | 2,363 |
2,369 |
27,373 |
29,945 |
|
Equity | 13,665 |
12,489 |
|
|
Liquidity
(Stated in millions) |
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Components of Liquidity | 2021 |
2021 |
2020 |
2020 |
Cash and short-term investments |
|
|
|
|
Short-term borrowings and current portion of long-term debt | (1,025) |
(36) |
(850) |
(1,292) |
Long-term debt | (14,370) |
(15,687) |
(16,036) |
(16,471) |
Net Debt (1) |
|
|
|
|
Details of changes in liquidity follow: | ||||
Nine |
Third |
Nine |
||
Months |
Quarter |
Months |
||
Periods Ended |
2021 |
2021 |
2020 |
|
Net income (loss) |
|
|
|
|
Charges and credits, net of tax (2) | (36) |
(36) |
11,539 |
|
1,281 |
526 |
|
||
Depreciation and amortization (3) | 1,588 |
530 |
1,983 |
|
Stock-based compensation expense | 229 |
73 |
318 |
|
Change in working capital | (798) |
(40) |
(822) |
|
US federal tax refund | 477 |
- |
- |
|
Other | (58) |
(19) |
(84) |
|
Cash flow from operations (4) | 2,719 |
1,070 |
2,066 |
|
Capital expenditures | (694) |
(273) |
(858) |
|
APS investments | (305) |
(117) |
(252) |
|
Multiclient seismic data capitalized | (21) |
(9) |
(86) |
|
Free cash flow (5) | 1,699 |
671 |
870 |
|
Dividends paid | (524) |
(175) |
(1,560) |
|
Proceeds from employee stock plans | 137 |
75 |
146 |
|
Stock repurchase program | - |
- |
(26) |
|
Business acquisitions and investments, net of cash acquired plus debt assumed | (98) |
(63) |
(33) |
|
Proceeds from divestitures | - |
- |
325 |
|
Other | (79) |
(49) |
(149) |
|
Change in net debt before impact of changes in foreign exchange rates | 1,135 |
459 |
(427) |
|
Impact of changes in foreign exchange rates on net debt | 292 |
129 |
(372) |
|
Decrease (increase) in Net Debt | 1,427 |
588 |
(799) |
|
Net Debt, beginning of period | (13,880) |
(13,041) |
(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 third-quarter 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 and pretax segment operating income, as well as measures derived from them (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 these financial measures enable 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. Certain of 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 are reconciliations 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) |
|||||
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 |
|
|
|
|
|
Third Quarter 2020 | |||||
Pretax | Tax | Noncont. Interests |
Net | Diluted EPS |
|
Schlumberger net loss (GAAP basis) |
|
|
|
|
|
Facility exit charges | 254 |
39 |
- |
215 |
0.15 |
Workforce reductions | 63 |
- |
- |
63 |
0.05 |
Other | 33 |
1 |
- |
32 |
0.02 |
Schlumberger net income, excluding charges & credits |
|
|
|
|
|
Nine Months 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 |
|
|
|
|
|
(Stated in millions, except per share amounts) |
|||||
Nine Months 2020 | |||||
Pretax | Tax | Noncont. Interests |
Net | Diluted EPS * |
|
Schlumberger net loss (GAAP basis) |
|
|
|
|
|
3,070 |
- |
- |
3,070 |
2.21 |
|
Intangible assets impairments | 3,321 |
815 |
- |
2,506 |
1.80 |
Asset Performance Solutions investments | 1,994 |
11 |
- |
1,983 |
1.43 |
Workforce reductions | 1,286 |
78 |
- |
1,208 |
0.87 |
Fixed asset impairments | 666 |
52 |
- |
614 |
0.44 |
Inventory write-downs | 603 |
49 |
- |
554 |
0.40 |
587 |
133 |
- |
454 |
0.33 |
|
Right-of-use asset impairments | 311 |
67 |
- |
244 |
0.18 |
Facility exit charges | 254 |
39 |
- |
215 |
0.15 |
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 | 172 |
14 |
- |
158 |
0.11 |
Valuation allowance | - |
(164) |
- |
164 |
0.12 |
Schlumberger net income, excluding charges & credits |
|
|
|
|
|
* Does not add due to rounding. |
|
(1) |
Classified in Interest & other income 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 (Loss) Before Taxes |
||||||
Digital & Integration |
|
|
|
|
|
|
|||||
Reservoir Performance | 1,192 |
190 |
1,117 |
156 |
1,215 |
103 |
|||||
2,273 |
345 |
2,110 |
272 |
1,837 |
173 |
||||||
Production Systems | 1,674 |
166 |
1,681 |
171 |
1,532 |
132 |
|||||
Eliminations & other | (104) |
(77) |
(91) |
(66) |
(64) |
(34) |
|||||
Pretax segment operating income | 908 |
807 |
575 |
||||||||
Corporate & other | (145) |
(138) |
(151) |
||||||||
Interest income (1) | 8 |
5 |
3 |
||||||||
Interest expense (1) | (127) |
(132) |
(131) |
||||||||
Charges & credits (2) | 47 |
- |
(350) |
||||||||
|
|
|
|
|
|
(Stated in millions) | |||||||
Nine Months Ended | |||||||
Revenue | Income Before Taxes |
Revenue | Income (Loss) Before Taxes |
||||
Digital & Integration |
|
|
|
|
|||
Reservoir Performance | 3,312 |
448 |
4,354 |
259 |
|||
6,319 |
827 |
6,747 |
687 |
||||
Production Systems | 4,946 |
475 |
5,001 |
467 |
|||
Eliminations & other | (274) |
(176) |
(268) |
(124) |
|||
Pretax segment operating income | 2,379 |
1,747 |
|||||
Corporate & other | (434) |
(548) |
|||||
Interest income (1) | 17 |
25 |
|||||
Interest expense (1) | (391) |
(397) |
|||||
Charges & credits (2) | 47 |
(12,596) |
|||||
|
|
|
|
(1) |
Excludes amounts which are included in the segments’ results |
(2) |
See section entitled “Charges & Credits” for details. |
Supplementary Information
Frequently Asked Questions (FAQs)
1) |
What is the capital investment guidance for the full-year 2021? |
Capital investment (comprised of capex, multiclient, and APS investments) for the full-year 2021 is now expected to be approximately |
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2) |
What were cash flow from operations and free cash flow for the third quarter of 2021? |
Cash flow from operations for the third quarter of 2021 was |
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3) |
What was included in “Interest and other income” for the third quarter of 2021? |
“Interest and other income” for the third quarter of 2021 was |
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4) |
How did interest income and interest expense change during the third quarter of 2021? |
Interest income of |
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5) |
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. |
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6) |
What was the effective tax rate (ETR) for the third quarter of 2021? |
The ETR for the third quarter of 2021, calculated in accordance with GAAP, was |
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7) |
How many shares of common stock were outstanding as of |
There were 1.403 billion shares of common stock outstanding as of |
(Stated in millions) |
||
Shares outstanding at |
1,398 |
|
Shares issued under employee stock purchase plan | 3 |
|
Vesting of restricted stock | 2 |
|
Shares outstanding at |
1,403 |
8) |
What was the weighted average number of shares outstanding during the third quarter of 2021 and second 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 1.402 billion during the third quarter of 2021 and 1.398 billion during the second 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) |
||||
Third Quarter 2021 |
Second Quarter 2021 |
|||
Weighted average shares outstanding | 1,402 |
1,398 |
||
Unvested restricted stock | 22 |
23 |
||
Average shares outstanding, assuming dilution | 1,424 |
1,421 |
9) |
What was Schlumberger’s adjusted EBITDA in the third quarter of 2021, the second quarter of 2021, and the third quarter of 2020? |
|
Schlumberger’s adjusted EBITDA was |
(Stated in millions) |
||||||
Third Quarter 2021 |
Second Quarter 2021 |
Third Quarter 2020 |
||||
Net income (loss) attributable to Schlumberger |
|
|
|
|||
Net income attributable to noncontrolling interests | 12 |
12 |
9 |
|||
Tax (benefit) expense | 129 |
99 |
19 |
|||
Income (loss) before taxes |
|
|
|
|||
Charges & credits | (47) |
- |
350 |
|||
Depreciation and amortization | 530 |
526 |
587 |
|||
Interest expense | 130 |
136 |
138 |
|||
Interest income | (8) |
(6) |
(3) |
|||
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. |
|
10) |
What were the components of depreciation and amortization expense for the third quarter of 2021, the second quarter of 2021, and the third quarter of 2020? |
The components of depreciation and amortization expense for the third quarter of 2021, the second quarter of 2021, and the third quarter of 2020 were as follows: |
(Stated in millions) |
||||||
Third Quarter 2021 |
Second Quarter 2021 |
Third Quarter 2020 |
||||
Depreciation of fixed assets |
|
|
|
|||
Amortization of APS investments | 82 |
77 |
87 |
|||
Amortization of intangible assets | 75 |
75 |
79 |
|||
Amortization of multiclient seismic data costs capitalized | 23 |
22 |
36 |
|||
|
|
|
11) |
What does the pretax credit of |
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 gain of |
About Schlumberger
Find out more at www.slb.com
*Mark of Schlumberger or a Schlumberger company. Other company, product, and service names are the properties of their respective owners.
Notes
Schlumberger will hold a conference call to discuss the earnings press release and business outlook on
This third-quarter 2021 earnings 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 the 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 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 Schlumberger’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 customers and suppliers; Schlumberger’s inability to achieve its financial and performance targets and other forecasts and expectations; Schlumberger’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; foreign currency risk; pricing pressure; inflation; weather and seasonal factors; unfavorable effects of health pandemics; availability and cost of raw materials; operational modifications, delays, or cancellations; challenges in Schlumberger’s supply chain; production declines; Schlumberger’s inability to recognize efficiencies and other intended benefits from its business strategies and initiatives, such as digital or Schlumberger New Energy; as well as its restructuring and structural cost reduction plans; 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 third-quarter 2021 earnings release and our most recent Forms 10-K, 10-Q, and 8-K filed with or furnished to the
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