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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: March 31, 2020

Commission file No.: 1-4601

SCHLUMBERGER N.V.

(SCHLUMBERGER LIMITED)

(Exact name of registrant as specified in its charter)

Curaçao		52-0684746
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

42 RUE SAINT-DOMINIQUE
PARIS, FRANCE		75007

5599 SAN FELIPE
HOUSTON, Texas, U.S.A.		77056

62 BUCKINGHAM GATE
LONDON, UNITED KINGDOM		SW1E 6AJ

PARKSTRAAT 83 THE HAGUE,
THE NETHERLANDS		2514 JG
(Addresses of principal executive offices)		(Zip Codes)

Registrant’s telephone number in the United States, including area code, is: (713) 513-2000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
common stock, par value $0.01 per share	SLB	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

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

Class	Outstanding at March 31, 2020
COMMON STOCK, $0.01 PAR VALUE PER SHARE	1,387,812,907

SCHLUMBERGER LIMITED

First Quarter 2020 Form 10-Q

Table of Contents

		Page
PART I	Financial Information

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	24

Item 4.	Controls and Procedures	24

PART II	Other Information

Item 1.	Legal Proceedings	25

Item 1A.	Risk Factors	25

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25

Item 3.	Defaults Upon Senior Securities	25

Item 4.	Mine Safety Disclosures	25

Item 5.	Other Information	25

Item 6.	Exhibits	26

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME (LOSS)

(Unaudited)

	(Stated in millions, except per share amounts)

	Three Months Ended March 31,
	2020			2019
Revenue
Services	$	5,426		$	5,906
Product sales		2,029			1,973
Total Revenue		7,455			7,879
Interest & other income		39			14
Expenses
Cost of services		4,727			5,111
Cost of sales		1,897			1,841
Research & engineering		173			173
General & administrative		127			112
Impairments & other		8,523			-
Interest		136			147
Income (loss) before taxes		(8,089	)		509
Tax expense (benefit)		(721	)		79
Net income (loss)		(7,368	)		430
Net income attributable to noncontrolling interests		8			9
Net income (loss) attributable to Schlumberger	$	(7,376	)	$	421

Basic earnings (loss) per share of Schlumberger	$	(5.32	)	$	0.30

Diluted earnings (loss) per share of Schlumberger	$	(5.32	)	$	0.30

Average shares outstanding:
Basic		1,387			1,385
Assuming dilution		1,387			1,397

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(Stated in millions)

	Three Months Ended March 31,
	2020			2019
Net income (loss)	$	(7,368	)	$	430
Currency translation adjustments
Unrealized net change arising during the period		(125	)		77
Cash flow hedges
Net loss on cash flow hedges		(203	)		(5	)
Reclassification to net income (loss) of net realized loss		1			2
Pension and other postretirement benefit plans
Amortization to net income (loss) of net actuarial loss		51			24
Amortization to net income (loss) of net prior service credit		(5	)		(3	)
Income taxes on pension and other postretirement benefit plans		(4	)		-
Comprehensive income (loss)		(7,653	)		525
Comprehensive income attributable to noncontrolling interests		8			9
Comprehensive income (loss) attributable to Schlumberger	$	(7,661	)	$	516

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Stated in millions)

	Mar. 31,
	2020			Dec. 31,
	(Unaudited)			2019
ASSETS
Current Assets
Cash	$	1,375		$	1,137
Short-term investments		1,969			1,030
Receivables less allowance for doubtful accounts (2020 - $249; 2019 - $255)		7,486			7,747
Inventories		4,148			4,130
Other current assets		1,288			1,486
		16,266			15,530
Investments in Affiliated Companies		1,515			1,565
Fixed Assets less accumulated depreciation		8,550			9,270
Multiclient Seismic Data		556			568
Goodwill		12,924			16,042
Intangible Assets		3,673			7,089
Deferred Taxes		155			-
Other Assets		4,955			6,248
	$	48,594		$	56,312
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued liabilities	$	10,168		$	10,663
Estimated liability for taxes on income		1,157			1,209
Short-term borrowings and current portion of long-term debt		1,233			524
Dividends payable		704			702
		13,262			13,098
Long-term Debt		15,409			14,770
Postretirement Benefits		936			967
Deferred Taxes		-			491
Other Liabilities		3,004			2,810
		32,611			32,136
Equity
Common stock		12,963			13,078
Treasury stock		(3,360	)		(3,631	)
Retained earnings		10,681			18,751
Accumulated other comprehensive loss		(4,723	)		(4,438	)
Schlumberger stockholders' equity		15,561			23,760
Noncontrolling interests		422			416
		15,983			24,176
	$	48,594		$	56,312

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

(Stated in millions)

	Three Months Ended March 31,
	2020			2019
Cash flows from operating activities:
Net income (loss)	$	(7,368	)	$	430
Adjustments to reconcile net income (loss) income to cash provided by operating activities:
Impairments and other charges		8,523			-
Depreciation and amortization ⁽¹⁾		792			903
Deferred taxes		(781	)		(72	)
Stock-based compensation expense		108			108
Earnings of equity method investments, less dividends received		(10	)		3
Change in assets and liabilities: ⁽²⁾
Decrease (increase) in receivables		233			(280	)
Increase in inventories		(42	)		(197	)
Decrease (increase) in other current assets		15			(93	)
(Increase) decrease in other assets		(7	)		2
Decrease in accounts payable and accrued liabilities		(640	)		(483	)
(Decrease) increase in estimated liability for taxes on income		(48	)		5
Decrease in other liabilities		(37	)		(42	)
Other		46			42
NET CASH PROVIDED BY OPERATING ACTIVITIES		784			326
Cash flows from investing activities:
Capital expenditures		(407	)		(413	)
APS investments		(163	)		(151	)
Multiclient seismic data costs capitalized		(35	)		(45	)
(Purchase) sale of investments, net		(941	)		420
Net proceeds from asset divestitures		298			-
Other		(64	)		(41	)
NET CASH USED IN INVESTING ACTIVITIES		(1,312	)		(230	)
Cash flows from financing activities:
Dividends paid		(692	)		(692	)
Proceeds from employee stock purchase plan		85			85
Proceeds from exercise of stock options		-			22
Stock repurchase program		(26	)		(98	)
Proceeds from issuance of long-term debt		1,475			1,812
Repayment of long-term debt		(90	)		(1,368	)
Net increase (decrease) in short-term borrowings		34			(38	)
Other		(9	)		(20	)
NET CASH PROVIDED (USED) IN FINANCING ACTIVITIES		777			(297	)
Net increase (decrease) in cash before translation effect		249			(201	)
Translation effect on cash		(11	)		(2	)
Cash, beginning of period		1,137			1,433
Cash, end of period	$	1,375		$	1,230

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

⁽²⁾	Net of the effect of business acquisitions.

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(Unaudited)

	(Stated in millions, except per share amounts)

										Accumulated
										Other
	Common Stock						Retained			Comprehensive			Noncontrolling
January 1, 2020 – March 31, 2020	Issued			In Treasury			Earnings			Loss			Interests			Total
Balance, January 1, 2020	$	13,078		$	(3,631	)	$	18,751		$	(4,438	)	$	416		$	24,176
Net loss								(7,376	)					8			(7,368	)
Currency translation adjustments											(125	)		(3	)		(128	)
Changes in fair value of cash flow hedges											(202	)					(202	)
Pension and other postretirement benefit plans											42						42
Vesting of restricted stock		(117	)		117												-
Shares issued under employee stock purchase plan		(95	)		180												85
Stock repurchase program					(26	)											(26	)
Stock-based compensation expense		108															108
Dividends declared ($0.50 per share)								(694	)								(694	)
Other		(11	)											1			(10	)
Balance, March 31, 2020	$	12,963		$	(3,360	)	$	10,681		$	(4,723	)	$	422		$	15,983

	(Stated in millions, except per share amounts)

										Accumulated
										Other
	Common Stock						Retained			Comprehensive			Noncontrolling
January 1, 2019 –March 31, 2019	Issued			In Treasury			Earnings			Loss			Interests		Total
Balance, January 1, 2019	$	13,132		$	(4,006	)	$	31,658		$	(4,622	)	$	424	$	36,586
Net income								421						9		430
Currency translation adjustments											77					77
Changes in fair value of cash flow hedges											(3	)				(3	)
Pension and other postretirement benefit plans											21					21
Shares sold to optionees, less shares exchanged		(25	)		47											22
Vesting of restricted stock		(100	)		100											-
Shares issued under employee stock purchase plan		(115	)		200											85
Stock repurchase program					(98	)										(98	)
Stock-based compensation expense		108														108
Dividends declared ($0.50 per share)								(693	)							(693	)
Other					1