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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: September 30, 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 September 30, 2020

COMMON STOCK, $0.01 PAR VALUE PER SHARE

1,392,030,009

SCHLUMBERGER LIMITED

Third 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	24

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33

Item 4.	Controls and Procedures	33

PART II	Other Information

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 3.	Defaults Upon Senior Securities	34

Item 4.	Mine Safety Disclosures	34

Item 5.	Other Information	34

Item 6.	Exhibits	35

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF LOSS

(Unaudited)

	(Stated in millions, except per share amounts)

	Third Quarter						Nine Months
	2020			2019			2020			2019
Revenue
Services	$	3,666		$	6,332		$	12,812		$	18,390
Product sales		1,592			2,209			5,257			6,299
Total Revenue		5,258			8,541			18,069			24,689
Interest & other income		22			21			94			61
Expenses
Cost of services		3,127			5,371			11,236			15,794
Cost of sales		1,497			2,014			4,936			5,800
Research & engineering		137			176			452			527
General & administrative		85			120			293			345
Impairments & other		350			12,692			12,596			12,692
Interest		138			160			419			462
Loss before taxes		(54	)		(11,971	)		(11,769	)		(10,870	)
Tax expense (benefit)		19			(598	)		(901	)		(420	)
Net loss		(73	)		(11,373	)		(10,868	)		(10,450	)
Net income attributable to noncontrolling interests		9			10			24			20
Net loss attributable to Schlumberger	$	(82	)	$	(11,383	)	$	(10,892	)	$	(10,470	)

Basic loss per share of Schlumberger	$	(0.06	)	$	(8.22	)	$	(7.84	)	$	(7.56	)

Diluted loss per share of Schlumberger	$	(0.06	)	$	(8.22	)	$	(7.84	)	$	(7.56	)

Average shares outstanding:
Basic		1,391			1,385			1,389			1,385
Assuming dilution		1,391			1,385			1,389			1,385

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS

(Unaudited)

(Stated in millions)

	Third Quarter						Nine Months
	2020			2019			2020			2019
Net loss	$	(73	)	$	(11,373	)	$	(10,868	)	$	(10,450	)
Currency translation adjustments
Unrealized net change arising during the period		(94	)		(21	)		(200	)		18
Cash flow hedges
Net gain (loss) on cash flow hedges		36			(27	)		(195	)		(31	)
Reclassification to net income of net realized loss		7			3			12			7
Pension and other postretirement benefit plans
Amortization to net loss of net actuarial loss		48			23			150			70
Amortization to net loss of net prior service credit		(2	)		(2	)		(13	)		(8	)
Impact of curtailment		-			-			(69	)		-
Income taxes on pension and other postretirement benefit plans		-			(1	)		10			(3	)
Comprehensive loss		(78	)		(11,398	)		(11,173	)		(10,397	)
Comprehensive income attributable to noncontrolling interests		9			10			24			20
Comprehensive loss attributable to Schlumberger	$	(87	)	$	(11,408	)	$	(11,197	)	$	(10,417	)

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Stated in millions)

	Sept. 30,
	2020			Dec. 31,
	(Unaudited)			2019
ASSETS
Current Assets
Cash	$	1,219		$	1,137
Short-term investments		2,618			1,030
Receivables less allowance for doubtful accounts (2020 - $299; 2019 - $255)		5,552			7,747
Inventories		3,542			4,130
Other current assets		1,284			1,486
		14,215			15,530
Investments in Affiliated Companies		1,436			1,565
Fixed Assets less accumulated depreciation		7,396			9,270
Multiclient Seismic Data		344			568
Goodwill		12,968			16,042
Intangible Assets		3,573			7,089
Deferred Taxes		33			-
Other Assets		4,101			6,248
	$	44,066		$	56,312
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued liabilities	$	9,201		$	10,663
Estimated liability for taxes on income		974			1,209
Short-term borrowings and current portion of long-term debt		1,292			524
Dividends payable		184			702
		11,651			13,098
Long-term Debt		16,471			14,770
Postretirement Benefits		854			967
Deferred Taxes		-			491
Other Liabilities		2,721			2,810
		31,697			32,136
Equity
Common stock		12,921			13,078
Treasury stock		(3,055	)		(3,631	)
Retained earnings		6,818			18,751
Accumulated other comprehensive loss		(4,743	)		(4,438	)
Schlumberger stockholders’ equity		11,941			23,760
Noncontrolling interests		428			416
		12,369			24,176
	$	44,066		$	56,312

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

(Stated in millions)

	Nine Months Ended September 30,
	2020			2019
Cash flows from operating activities:
Net loss	$	(10,868	)	$	(10,450	)
Adjustments to reconcile net loss to cash provided by operating activities:
Impairments and other charges		12,596			12,692
Depreciation and amortization ⁽¹⁾		1,983			2,741
Deferred taxes		(1,147	)		(833	)
Stock-based compensation expense		318			329
Earnings of equity method investments, less dividends received		(18	)		2
Change in assets and liabilities: ⁽²⁾
Decrease (increase) in receivables		2,159			(429	)
Increase in inventories		(24	)		(400	)
Decrease (increase) in other current assets		202			(127	)
Decrease (increase) in other assets		25			(12	)
Decrease in accounts payable and accrued liabilities		(2,898	)		(266	)
Decrease in estimated liability for taxes on income		(261	)		(118	)
Decrease in other liabilities		(14	)		(19	)
Other		13			69
NET CASH PROVIDED BY OPERATING ACTIVITIES		2,066			3,179
Cash flows from investing activities:
Capital expenditures		(858	)		(1,230	)
APS investments		(252	)		(526	)
Multiclient seismic data costs capitalized		(86	)		(181	)
Business acquisitions and investments, net of cash acquired		(33	)		(21	)
(Purchase) sale of investments, net		(1,597	)		238
Net proceeds from divestitures		325			-
Other		(98	)		(88	)
NET CASH USED IN INVESTING ACTIVITIES		(2,599	)		(1,808	)
Cash flows from financing activities:
Dividends paid		(1,560	)		(2,077	)
Proceeds from employee stock purchase plan		146			196
Proceeds from exercise of stock options		-			23
Stock repurchase program		(26	)		(278	)
Proceeds from issuance of long-term debt		5,837			3,973
Repayment of long-term debt		(3,811	)		(3,396	)
Net increase (decrease) in short-term borrowings		96			(44	)
Other		(51	)		(18	)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		631			(1,621	)
Net increase in cash before translation effect		98			(250	)
Translation effect on cash		(16	)		-
Cash, beginning of period		1,137			1,433
Cash, end of period	$	1,219		$	1,183

⁽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 and divestitures.

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(Unaudited)

(Stated in millions, except per share amounts)

Accumulated