- Fourth-quarter revenue of $6.22 billion increased 6%
sequentially and 13% year-on-year
- Fourth-quarter GAAP EPS of $0.42 increased 8% sequentially and
56% year-on-year
- Fourth-quarter EPS, excluding charges and credits, of $0.41
increased 14% sequentially and 86% year-on-year
- Fourth-quarter cash flow from operations was $1.93 billion and
free cash flow was $1.30 billion
- Board approved quarterly cash dividend of $0.125 per share
- 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 $4.65 billion and free
cash flow was $3.00 billion
Regulatory News:
Schlumberger Limited (NYSE: SLB) today reported results for the
fourth-quarter and full-year 2021.
Fourth-Quarter Results
(Stated in millions, except per share amounts)
Three Months
Ended Change Dec. 31, 2021 Sept. 30, 2021 Dec.
31, 2020
Sequential Year-on-year Revenue*
$6,225
$5,847
$5,532
6%
13%
Income before taxes - GAAP basis
$755
$691
$471
9%
60%
Net income - GAAP basis
$601
$550
$374
9%
61%
Diluted EPS - GAAP basis
$0.42
$0.39
$0.27
8%
56%
Adjusted EBITDA**
$1,381
$1,296
$1,112
7%
24%
Adjusted EBITDA margin**
22.2%
22.2%
20.1%
2 bps
208 bps
Pretax segment operating income**
$986
$908
$654
9%
51%
Pretax segment operating margin**
15.8%
15.5%
11.8%
31 bps
401 bps
Net income, excluding charges & credits**
$587
$514
$309
14%
90%
Diluted EPS, excluding charges & credits**
$0.41
$0.36
$0.22
14%
86%
Revenue by Geography
International
$4,898
$4,675
$4,343
5%
13%
North America*
1,281
1,129
1,167
13%
10%
Other
46
43
22
n/m
n/m
$6,225
$5,847
$5,532
6%
13%
*Schlumberger divested certain businesses in North America
during the fourth quarter of 2020. These businesses generated
revenue of $284 million during the fourth quarter of 2020.
Excluding the impact of these divestitures, global fourth-quarter
2021 revenue increased 19% year-on-year. North America
fourth-quarter 2021 revenue, excluding the impact of these
divestitures, increased 45% year-on-year. **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 Dec. 31, 2021 Sept. 30, 2021 Dec. 31, 2020
Sequential Year-on-year
Revenue by Division Digital
& Integration
$889
$812
$832
10%
7%
Reservoir Performance*
1,287
1,192
1,247
8%
3%
Well Construction
2,388
2,273
1,868
5%
28%
Production Systems**
1,765
1,674
1,649
5%
7%
Other
(104)
(104)
(64)
n/m
n/m
$6,225
$5,847
$5,532
6%
13%
Pretax Operating Income by Division
Digital & Integration
$335
$284
$269
18%
25%
Reservoir Performance
200
$190
95
5%
111%
Well Construction
368
$345
183
6%
101%
Production Systems
159
$166
155
-4%
3%
Other
(76)
$(77)
(48)
n/m
n/m
$986
$908
$654
9%
51%
Pretax Operating Margin by Division
Digital & Integration
37.7%
35.0%
32.4%
268 bps
537 bps
Reservoir Performance
15.5%
16.0%
7.6%
-43 bps
792 bps
Well Construction
15.4%
15.2%
9.8%
20 bps
559 bps
Production Systems
9.0%
9.9%
9.4%
-85 bps
-38 bps
Other
n/m
n/m
n/m
n/m
n/m
15.8%
15.5%
11.8%
31 bps
401 bps
*Schlumberger divested its OneStim® pressure pumping
business in North America during the fourth quarter of 2020. This
business generated revenue of $274 million during the fourth
quarter of 2020. Excluding the impact of this divestiture,
Reservoir Performance fourth-quarter 2021 revenue increased 32%
year-on-year. **Schlumberger divested its low-flow artificial lift
business in North America during the fourth quarter of 2020. This
business generated revenue of $11 million during the fourth quarter
of 2020. Excluding the impact of this divestiture, Production
Systems fourth-quarter 2021 revenue increased 8% year-on-year. n/m
= not meaningful
Schlumberger CEO Olivier Le Peuch commented, “Strengthening
activity, accelerating digital sales, and outstanding free cash
flow performance combined to deliver another quarter of remarkable
financial results to close the year with great momentum.
“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 88% growth in EPS,
excluding charges and credits; adjusted EBITDA margin of 21.5%; and
$3.0 billion in free cash flow. The adjusted EBITDA margin—which
represents a year-on-year expansion of 320 basis points (bps)—is
the highest level since 2018. We restored our North America pretax
operating margin to double-digits and expanded our international
margin, both exceeding prepandemic 2019 levels.
“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 $4.90 billion grew 5% sequentially,
driven primarily by strengthening activity, increased digital
sales, and early benefits of pricing improvements. The sequential
revenue increase was led by growth in Europe/CIS/Africa due to
strong offshore activity in Africa and new projects in Europe. This
growth was complemented by project startups and activity gains in
the Middle East & Asia and sustained activity growth in Latin
America. The fourth-quarter international revenue performance
represents a 13% year-on-year increase, enabling us to accomplish
our double-digit revenue growth ambition for the second half of
2021 when compared to the same period in 2020.
“In North America, revenue of $1.28 billion grew 13%
sequentially, outperforming the rig count growth. The sequential
growth was driven by strong offshore and land drilling activity and
increased exploration data licensing in the US Gulf of Mexico and
the Permian.
“Among the Divisions, Digital & Integration revenue
increased 10% sequentially, driven by very strong digital sales, as
the adoption of our digital offering continues to accelerate, and
from increased exploration data licensing sales. Reservoir
Performance revenue increased 8% sequentially from higher
intervention activity in Latin America, new stimulation projects
and activity gains in the Middle East & Asia, and increased
offshore evaluation activity in North America. Well Construction
revenue increased 5% due to higher land and offshore drilling
activity both in North America and internationally. Similarly,
Production Systems revenue grew 5% sequentially from new offshore
projects and year-end sales.
“Overall, our fourth-quarter pretax segment operating income
increased 9% sequentially, attaining the highest quarterly
operating margin level since 2015. Contributing to this remarkable
performance are the accretive effect of accelerating digital sales
and early signs of pricing improvements, particularly when driven
by new technology adoption and performance differentiation.
“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 November 30, 2021, Schlumberger deposited sufficient funds
with the trustee for its $1.0 billion of 2.40% Senior Notes due May
2022 to satisfy and discharge all of its legal obligations relating
to such notes.
On January 20, 2022, Schlumberger’s Board of Directors approved
a quarterly cash dividend of $0.125 per share of outstanding common
stock, payable on April 7, 2022 to stockholders of record on
February 9, 2022.
Fourth-Quarter Revenue by Geographical Area
(Stated in millions)
Three Months Ended Change
Dec. 31, 2021 Sept. 30, 2021 Dec. 31, 2020
Sequential
Year-on-year North America*
$1,281
$1,129
$1,167
13%
10%
Latin America
1,204
1,160
969
4%
24%
Europe/CIS/Africa
1,587
1,482
1,366
7%
16%
Middle East & Asia
2,107
2,033
2,008
4%
5%
Other
46
43
22
n/m
n/m
$6,225
$5,847
$5,532
6%
13%
International
$4,898
$4,675
$4,343
5%
13%
North America*
$1,281
$1,129
$1,167
13%
10%
*Schlumberger divested certain businesses in North America
during the fourth quarter of 2020. These businesses generated
revenue of $284 million during the fourth quarter of 2020.
Excluding the impact of these divestitures, global fourth-quarter
2021 revenue increased 19% year-on-year. North America
fourth-quarter 2021 revenue, excluding the impact of these
divestitures, increased 45% year-on-year. n/m = not meaningful
North America
North America revenue of $1.28 billion increased 13%
sequentially, driven by strong offshore and land drilling activity
and increased exploration data licensing in the US Gulf of Mexico
and the Permian.
International
Revenue in Latin America of $1.20 billion increased 4%
sequentially due to double-digit revenue growth in Argentina,
Brazil, and Mexico, mainly from robust Well Construction activity.
Reservoir Performance and Production Systems revenue also increased
but was partially offset by a temporary production interruption in
our Asset Performance Solutions (APS) projects in Ecuador due to
pipeline disruption.
Europe/CIS/Africa revenue of $1.59 billion increased 7%
sequentially, due to higher revenue in Europe and Africa driven by
strong offshore activity, increased digital sales, and new
projects—mainly in Turkey—that benefited Production Systems. These
increases, however, were partially offset by reduced Reservoir
Performance and Well Construction activity in Russia and
Scandinavia due to the onset of seasonal effects.
Revenue in the Middle East & Asia of $2.11 billion
increased 4% sequentially due to new projects and activity gains
that benefited Reservoir Performance in Saudi Arabia, Oman,
Australia, Qatar, Indonesia, and Iraq. Similarly, Well Construction
revenue grew from new projects in Iraq and the United Arab
Emirates, and from increased drilling activity in Qatar, Kuwait,
and Indonesia. Growth was also driven by higher digital sales in
China and Malaysia. These increases, however, were partially offset
by lower sales of production systems due to delivery delays as a
result of logistics constraints.
Fourth-Quarter Results by Division
Digital & Integration
(Stated in millions)
Three Months Ended Change
Dec. 31, 2021 Sept. 30, 2021 Dec. 31, 2020
Sequential
Year-on-year Revenue International
$624
$615
$688
1%
-9%
North America
263
196
142
34%
85%
Other
2
1
2
n/m
n/m
$889
$812
$832
10%
7%
Pretax operating income
$335
$284
$269
18%
25%
Pretax operating margin
37.7%
35.0%
32.4%
268 bps
537 bps
n/m = not meaningful
Digital & Integration revenue of $889 million increased 10%
sequentially, propelled by accelerated digital sales
internationally, particularly in Europe/CIS/Africa and Middle East
& Asia, and increased exploration data licensing sales in North
America offshore and the Permian. These increases, however, were
partially offset by the effects of a temporary production
interruption in our APS projects in Ecuador due to pipeline
disruption.
Digital & Integration pretax operating margin of 38%
expanded 268 bps sequentially, due to improved profitability in
digital and exploration data licensing.
Reservoir Performance
(Stated in millions)
Three Months Ended Change
Dec. 31, 2021 Sept. 30, 2021 Dec. 31, 2020
Sequential
Year-on-year Revenue* International
$1,194
$1,112
$906
7%
32%
North America*
92
79
339
16%
-73%
Other
1
1
2
n/m
n/m
$1,287
$1,192
$1,247
8%
3%
Pretax operating income
$200
$190
$95
5%
111%
Pretax operating margin
15.5%
16.0%
7.6%
-43 bps
792 bps
*Schlumberger divested its OneStim pressure pumping business
in North America during the fourth quarter of 2020. This business
generated revenue of $274 million during the fourth quarter of
2020. Excluding the impact of this divestiture, global
fourth-quarter 2021 revenue increased 32% year-on-year. North
America fourth-quarter 2021 revenue, excluding the impact of this
divestiture, increased 42% year-on-year. n/m = not meaningful
Reservoir Performance revenue of $1.29 billion increased 8%
sequentially due to higher intervention activity across the
international offshore markets, mainly in the UK and Latin America,
and from new stimulation projects and activity gains in the Middle
East & Asia, particularly in Saudi Arabia. These increases,
however, were partially offset by the onset of seasonal effects in
Russia and Scandinavia. North America revenue grew from higher
offshore evaluation activity.
Reservoir Performance pretax operating margin of 16% was
essentially flat sequentially. Profitability improved from higher
offshore and exploration activity but was offset by technology mix
and seasonality effects in the Northern Hemisphere.
Well Construction
(Stated in millions)
Three Months Ended Change
Dec. 31, 2021 Sept. 30, 2021 Dec. 31, 2020
Sequential
Year-on-year Revenue International
$1,901
$1,839
$1,569
3%
21%
North America
441
382
252
15%
75%
Other
46
52
47
n/m
n/m
$2,388
$2,273
$1,868
5%
28%
Pretax operating income
$368
$345
$183
6%
101%
Pretax operating margin
15.4%
15.2%
9.8%
20 bps
559 bps
n/m = not meaningful
Well Construction revenue of $2.39 billion increased 5%
sequentially, driven by higher measurements and drilling fluids
activity and increased drilling equipment sales. North America
revenue increased due to higher rig count on land and increased
well construction activity in the US Gulf of Mexico. International
revenue growth was driven by the double-digit growth in Latin
America, mainly in Mexico and Argentina, in Sub-Sahara Africa, and
in the Middle East in Kuwait, Qatar, Iraq, and UAE. These increases
were partially offset by seasonal effects in Russia and
Scandinavia.
Well Construction pretax operating margin of 15% was essentially
flat sequentially as the favorable mix of increased activity and
new technology was offset by seasonal effects in the Northern
Hemisphere.
Production Systems
(Stated in millions)
Three Months Ended Change
Dec. 31, 2021 Sept. 30, 2021 Dec. 31, 2020
Sequential
Year-on-year Revenue* International
$1,278
$1,205
$1,215
6%
5%
North America*
484
469
433
3%
12%
Other
3
0
1
n/m
n/m
$1,765
$1,674
$1,649
5%
7%
Pretax operating income
$159
$166
$155
-4%
3%
Pretax operating margin
9.0%
9.9%
9.4%
-85 bps
-38 bps
*Schlumberger divested its low-flow artificial lift business
in North America during the fourth quarter of 2020. This business
generated revenue of $11 million during the fourth quarter of 2020.
Excluding the impact of this divestiture, global fourth-quarter
2021 revenue increased 8% year-on-year. North America
fourth-quarter revenue, excluding the impact of this divestiture,
increased 15% year-on-year. n/m = not meaningful
Production Systems revenue of $1.76 billion increased 5%
sequentially. Revenue increases in subsea, well production, and
midstream production systems were offset by a revenue decline in
surface production systems. International activity was driven by
double-digit growth in Europe/CIS/Africa—mainly from strong project
progress in Angola, Gabon, and Mozambique, new projects in Turkey,
and increased activity in Scandinavia and Russia & Central
Asia—and by growth in Latin America, mainly in Brazil and Ecuador.
This revenue growth was partially offset by delivery delays in the
Middle East & Asia as a result of global supply and logistics
constraints.
Production Systems pretax operating margin of 9% declined 85 bps
sequentially due to an unfavorable mix and the impact of delayed
deliveries due to global supply and logistics constraints.
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:
- Chevron U.S.A. Inc. awarded Schlumberger contracts for
integrated well construction and wireline services for deepwater
projects in the Gulf 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) deepwater Gulf 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 and Denmark. 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.
- 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.
- Woodside, as operator for and on behalf of the Scarborough
Joint Venture, for the Scarborough project offshore Western
Australia, awarded a contract to OneSubsea®—the subsea
technologies, production, and processing systems division of
Schlumberger—as part of the Subsea 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
existing Pluto LNG onshore facility.
- 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 the
Andaman 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 North
America include:
- In the Appalachian Basin, CNX implemented NeoSteer* at-bit
steerable system paired with Smith 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 their Marcellus 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 by 34%
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 the ExxonMobil Remote Operations Center in
Houston—enabled ExxonMobil to drill its first Delaware 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:
- 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
between Aramco and Schlumberger resulted in more than 35%
improvement in stages per month. This new performance benchmark
matches that of top-quartile stimulation fleets in United States
unconventional assets during 2021—a key ambition set between
Schlumberger and Aramco on the path to deliver the full potential
of the Jafurah project.
- In Kuwait, Schlumberger has begun to deploy technology with
Kuwait 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. and Chevron 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:
- 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-scale carbon 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 a 10.6% 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-carbon energy:
- 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 the North 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 than 50% 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 later Europe. 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-carbon and carbon-neutral energy technologies
across industries, contributing to a more sustainable future energy
mix.
- 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 of Swiss 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 of EDF Group. Genvia aims to deliver the highest
green-hydrogen creation efficiency, resulting in significantly less
electricity use per kilogram of hydrogen produced.
- Celsius Energy, a Schlumberger New Energy venture that provides
geoenergy technology for zero-carbon heating and cooling of
buildings, has expanded its commercial operations in Europe and
North America. In France, 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 prestigious East Coast
university campus, opening new market opportunities for the
expansion of Celsius Energy solutions. During COP26, 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 Dec. 31, 2021 Dec. 31,
2020
Change Revenue*
$22,929
$23,601
-3%
Income (loss) before taxes - GAAP basis
$2,374
($11,298)
n/m
Net income (loss) - GAAP basis
$1,881
$(10,518)
n/m
Diluted EPS (loss per share) - GAAP basis
$1.32
$(7.57)
n/m
Adjusted EBITDA**
$4,925
$4,313
14%
Adjusted EBITDA margin**
21.5%
18.3%
320 bps
Pretax segment operating income**
$3,365
$2,401
40%
Pretax segment operating margin**
14.7%
10.2%
450 bps
Net income, excluding charges & credits**
$1,831
$956
92%
Diluted EPS, excluding charges & credits**
$1.28
$0.68
88%
Revenue by Geography
International
$18,295
$18,002
2%
North America*
4,466
5,478
-18%
Other
168
121
n/m
$22,929
$23,601
-3%
*Schlumberger divested certain businesses in North America
during the fourth quarter of 2020. These businesses generated
revenue of $1.347 billion during 2020. Excluding the impact of
these divestitures, global 2021 revenue increased 3% year-on-year.
North America 2021 revenue, excluding the impact of these
divestitures, increased 8% year-on-year. **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 December 31,
2021
2020
2021
2020
Revenue
$6,225
$5,532
$22,929
$23,601
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)
$755
$471
$2,374
($11,298)
Tax expense (benefit) (1)
144
89
446
(812)
Net income (loss) (1)
$611
$382
$1,928
($10,486)
Net income attributable to noncontrolling interest
10
8
47
32
Net income (loss) attributable to Schlumberger (1)
$601
$374
$1,881
($10,518)
Diluted earnings (loss) per share of Schlumberger (1)
$0.42
$0.27
$1.32
($7.57)
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)
$532
$583
$2,120
$2,566
(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)
Dec. 31, Dec. 31, Assets
2021
2020
Current Assets Cash and short-term investments
$3,139
$3,006
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
Goodwill
12,990
12,980
Intangible assets
3,211
3,455
Other assets
4,183
4,193
$41,511
$42,434
Liabilities and Equity Current Liabilities Accounts payable
and accrued liabilities
$8,382
$8,442
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
$41,511
$42,434
Liquidity
(Stated in millions)
Components of Liquidity
Dec. 31, 2021
Sept. 30, 2021
Dec. 31, 2020
Cash and short-term investments
$3,139
$2,942
$3,006
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)
$(11,056)
$(12,453)
$(13,880)
Details of changes in liquidity follow:
Twelve
Fourth Twelve
Months Quarter Months Periods
Ended December 31,
2021
2021
2020
Net income (loss)
$1,928
$611
$(10,486)
Charges and credits, net of tax (2)
(50)
(14)
11,474
1,878
597
$988
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
$(11,056)
$(11,056)
$(13,880)
(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 $248
million and $22 million during the twelve months and fourth quarter
ended December 31, 2021, respectively; and $843 million and $144
million during the twelve months and fourth quarter ended December
31, 2020, respectively.
(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
DilutedEPS Schlumberger net income (GAAP basis)
$755
$144
$10
$601
$0.42
Gain on sale of Liberty shares (1)
$(28)
$(4)
$0
$(24)
$(0.02)
Early repayment of bonds (2)
10
-
-
10
0.01
Schlumberger net income, excluding charges & credits
$737
$140
$10
$587
$0.41
Third Quarter 2021 Pretax Tax Noncont.Interests Net
DilutedEPS Schlumberger net income (GAAP basis)
$691
$129
$12
$550
$0.39
Unrealized gain on marketable securities (1)
(47)
(11)
-
(36)
(0.03)
Schlumberger net income, excluding charges & credits
$644
$118
$12
$514
$0.36
Fourth Quarter 2020 Pretax Tax Noncont.Interests Net
DilutedEPS Schlumberger net income (GAAP basis)
$471
$89
$8
$374
$0.27
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
$390
$73
$8
$309
$0.22
(Stated in millions, except per
share amounts)
Twelve Months 2021 Pretax Tax Noncont.Interests Net
DilutedEPS Schlumberger net income (GAAP basis)
$2,374
$446
$47
$1,881
$1.32
Fourth quarter Gain on sale of Liberty Shares (1)
(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
$2,309
$431
$47
$1,831
$1.28
Twelve Months 2020 Pretax Tax
Noncont.Interests Net DilutedEPS Schlumberger net loss (GAAP basis)
$(11,298)
$(812)
$32
$(10,518)
$(7.57)
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 Goodwill
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
North America pressure pumping impairment
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
$1,217
$229
$32
$956
$0.68
(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 Dec. 31, 2021 Sept. 30,
2021 Dec. 31, 2020
Revenue IncomeBeforeTaxes Revenue
IncomeBeforeTaxes Revenue IncomeBeforeTaxes Digital &
Integration
$889
$335
$812
$284
$832
$269
Reservoir Performance
1,287
200
1,192
190
1,247
95
Well Construction
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
$6,225
$755
$5,847
$691
$5,532
$471
(Stated in millions)
Full Year 2021 Revenue IncomeBeforeTaxes
DepreciationandAmortization (3) NetInterestExpense
(4) AdjustedEBITDA (5) CapitalInvestments (6)
Digital & Integration
$3,290
$1,141
$446
$13
$1,600
$516
Reservoir Performance
4,599
648
415
-
1,063
348
Well Construction
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
$22,929
$2,374
$2,120
$13
$4,925
$1,654
(Stated in millions)
Full Year 2020 Revenue Income
(Loss)BeforeTaxes DepreciationandAmortization (3)
NetInterestExpense (4) AdjustedEBITDA (5)
CapitalInvestments (6) Digital & Integration
$3,067
$727
$615
$13
$1,355
$413
Reservoir Performance
5,602
353
549
11
913
384
Well Construction
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)
$23,601
$(11,298)
$2,566
$27
$4,313
$1,520
(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 Dec. 31, 2021 Dec. 31, 2020
Change Revenue Digital & Integration
$3,290
3,067
7%
Reservoir Performance*
4,599
5,602
-18%
Well Construction
8,706
8,614
1%
Production Systems**
6,710
6,650
1%
Other
(376)
(332)
n/m
$22,929
$23,601
-3%
Pretax Segment Operating Income
Digital & Integration
$1,141
727
57%
Reservoir Performance
648
353
83%
Well Construction
1,195
870
37%
Production Systems
634
623
2%
Other
(253)
(172)
n/m
$3,365
$2,401
40%
Pretax Segment Operating Margin
Digital & Integration
34.7%
23.7%
1,096 bps
Reservoir Performance
14.1%
6.3%
779 bps
Well Construction
13.7%
10.1%
363 bps
Production Systems
9.5%
9.4%
9 bps
Other
n/m
n/m
n/m
14.7%
10.2%
450 bps
Adjusted Segment Operating EBITDA
Digital & Integration
$1,600
1,355
18%
Reservoir Performance
$1,063
913
16%
Well Construction
$1,733
1,451
19%
Production Systems
$936
961
-3%
Other
$15
106
n/m
$5,347
$4,786
12%
Adjusted Segment Operating EBITDA Margin
Digital & Integration
48.6%
44.2%
440 bps
Reservoir Performance
23.1%
16.3%
683 bps
Well Construction
19.9%
16.8%
307 bps
Production Systems
13.9%
14.5%
-60 bps
Other
n/m
n/m
n/m
23.3%
20.3%
304 bps
*Schlumberger divested its OneStim pressure pumping business
in North America during the fourth quarter of 2020. This business
generated revenue of $1.233 billion during 2020. Excluding the
impact of this divestiture, Reservoir Performance 2021 revenue
increased 5% year-on-year. **Schlumberger divested its low-flow
artificial lift business in North America during the fourth quarter
of 2020. This business generated revenue of $114 million during
2020. Excluding the impact of this divestiture, Production Systems
2021 revenue increased 3% year-on-year. n/m = not meaningful
GEOGRAPHICAL
(Stated in millions)
Full Year 2021 Revenue IncomeBeforeTaxes
DepreciationandAmortization (3) NetInterestExpense
(4) AdjustedEBITDA (5) International
$18,295
$3,090
$1,353
$2
$4,445
North America
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
$22,929
$2,374
$2,120
$13
$4,925
(Stated in millions)
Full Year 2020 Revenue Income
(Loss)BeforeTaxes DepreciationandAmortization (3)
NetInterestExpense (4) AdjustedEBITDA (5)
International
$18,002
$2,658
$1,613
$4
$4,275
North America
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)
$23,601
$(11,298)
$2,566
$27
$4,313
(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 Dec. 31,
2021 Dec. 31, 2020
Change Revenue North America*
$4,466
$5,478
-18%
Latin America
4,459
3,472
28%
Europe/CIS/Africa
5,778
5,963
-3%
Middle East & Asia
8,058
8,567
-6%
Other
168
121
n/m
$22,929
$23,601
-3%
International
$18,295
$18,002
2%
North America*
4,466
5,478
-18%
Other
168
121
n/m
$22,929
$23,601
-3%
Pretax Segment Operating Income
International
$3,090
$2,658
16%
North America
561
103
444%
Other
(286)
(360)
n/m
$3,365
$2,401
40%
Pretax Segment Operating Income Margin
International
16.9%
14.8%
212 bps
North America
12.6%
1.9%
1,067 bps
Other
n/m
n/m
n/m
14.7%
10.2%
450 bps
Adjusted Segment Operating EBITDA
International
$4,445
$4,275
4%
North America
916
623
47%
Other
(14)
(112)
n/m
$5,347
$4,786
12%
Adjusted Segment Operating EBITDA Margin
International
24.3%
23.7%
54 bps
North America
20.5%
11.4%
914 bps
Other
n/m
n/m
n/m
23.3%
20.3%
304 bps
*Schlumberger divested certain businesses in North America
during the fourth quarter of 2020. These businesses generated
revenue of $1.347 billion during 2020. Excluding the impact of
these divestitures, global 2021 revenue increased 3% year-on-year.
North America 2021 revenue, excluding the impact of these
divestitures, increased 8% year-on-year. 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 $1.9 and $2.0 billion. Capital investment
for the full-year 2021 was $1.7 billion.
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 $1.93 billion and free cash flow was $1.30
billion, despite making $22 million of severance payments during
the quarter.
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 $4.65 billion and free cash flow was $3.00
billion, despite making $248 million of severance payments during
the year.
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 $57 million. This consisted of a gain on the
sale of 9.5 million shares of Liberty Oilfield Services (Liberty)
of $28 million (refer to Question 12), interest income of $15
million, and earnings of equity method investments of $14
million.
5)
How did interest income and interest
expense change during the fourth quarter of 2021?
Interest income of $15 million for the
fourth quarter of 2021 increased $7 million sequentially. Interest
expense of $137 million increased $7 million sequentially (refer to
Question 12).
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 19.1% as compared to 18.6%
for the third quarter of 2021. Excluding charges and credits, the
ETR for the fourth quarter of 2021 was 19.0% as compared to 18.3%
for the third quarter of 2021.
8)
How many shares of common stock were
outstanding as of December 31, 2021 and how did this change from
the end of the previous quarter?
There were 1.403 billion shares of common
stock outstanding as of both December 31, 2021 and September 30,
2021.
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 Quarter2021 Third Quarter2021 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 $1.381
billion in the fourth quarter of 2021, $1.296 billion in the third
quarter of 2021, and $1.112 billion in the fourth quarter of 2020,
and was calculated as follows:
(Stated in millions)
Fourth Quarter2021 Third Quarter2021 Fourth Quarter2020 Net
income attributable to Schlumberger
$601
$550
$374
Net income attributable to noncontrolling interests
10
12
8
Tax expense
144
129
89
Income before taxes
$755
$691
$471
Charges & credits
(18)
(47)
(81)
Depreciation and amortization
532
530
583
Interest expense
127
130
144
Interest income
(15)
(8)
(5)
Adjusted EBITDA
$1,381
$1,296
$1,112
Schlumberger’s adjusted EBITDA was $4.925
billion in full-year 2021 and $4.313 billion in full-year 2020, and
was calculated as follows:
(Stated in millions)
2021
2020
Net income (loss) attributable to Schlumberger
$1,881
$(10,518)
Net income attributable to noncontrolling interests
47
32
Tax expense (benefit)
446
(812)
Income (loss) before taxes
$2,374
$(11,298)
Charges & credits
(65)
12,515
Depreciation and amortization
2,120
2,566
Interest expense
529
563
Interest income
(33)
(33)
Adjusted EBITDA
$4,925
$4,313
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)
Fourth Quarter2021 Third Quarter2021 Fourth Quarter2020
Depreciation of fixed assets
$345
$350
$374
Amortization of intangible assets
76
75
79
Amortization of APS investments
71
82
88
Amortization of multiclient seismic data costs capitalized
40
23
42
$532
$530
$583
12)
What were the components of the net
pretax credit of $18 million recorded during the fourth quarter of
2021 related to?
During the fourth quarter of 2021,
Schlumberger sold 9.5 million of its shares in Liberty and received
proceeds of $109 million. As a result of the transaction,
Schlumberger recognized a gain of $28 million. This gain is
reflected in Interest and other income in the Condensed
Consolidated Statement of Income (Loss). As of December 31, 2021,
Schlumberger had a 31% equity interest in Liberty.
On November 30, 2021, Schlumberger
deposited sufficient funds with the trustee for its $1.0 billion of
2.40% Senior Notes due 2022 (including payment of the February 1,
2022 interest payment) to satisfy and discharge all of its
obligations relating to such notes. As a result of this
transaction, Schlumberger recorded a charge of $10 million. This
charge is reflected in Interest in the Condensed Consolidated
Statement of Income (Loss).
About Schlumberger
Schlumberger (SLB: NYSE) is a technology company that partners
with customers to access energy. Our people, representing over 160
nationalities, are providing leading digital solutions and
deploying innovative technologies to enable performance and
sustainability for the global energy industry. With expertise in
more than 120 countries, we collaborate to create technology that
unlocks access to energy for the benefit of all.
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 Friday, January 21, 2022. The
call is scheduled to begin at 9:30 a.m. US Eastern Time. To access
the call, which is open to the public, please contact the
conference call operator at +1 (844) 721-7241 within North America,
or +1 (409) 207-6955 outside North America, approximately 10
minutes prior to the call’s scheduled start time, and provide the
access code 8858313. At the conclusion of the conference call, an
audio replay will be available until February 21, 2022 by dialing
+1 (866) 207-1041 within North America, or +1 (402) 970-0847
outside North America, and providing the access code 3953842. The
conference call will be webcast simultaneously at
www.slb.com/irwebcast on a listen-only basis. A replay of the
webcast will also be available at the same website until February
21, 2022.
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 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 our supply chain; production declines; the inability
to recognize efficiencies and other intended benefits from our
business strategies and initiatives, such as digital or
Schlumberger New Energy; as well as our cost reduction strategies;
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 press release and our most recent Forms 10-K, 10-Q, and 8-K
filed with or furnished to the Securities and Exchange Commission.
If one or more of these or other risks or uncertainties materialize
(or the consequences of any such development changes), or should
our underlying assumptions prove incorrect, actual outcomes may
vary materially from those reflected in our forward-looking
statements. Forward-looking and other statements in this press
release regarding our environmental, social, and other
sustainability plans and goals are not an indication that these
statements are necessarily material to investors or required to be
disclosed in our filings with the SEC. In addition, historical,
current, and forward-looking environmental, social, and
sustainability-related statements may be based on standards for
measuring progress that are still developing, internal controls and
processes that continue to evolve, and assumptions that are subject
to change in the future. Statements in this press release are made
as of the date of this release, and Schlumberger disclaims any
intention or obligation to update publicly or revise such
statements, whether as a result of new information, future events,
or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220119005958/en/
Ndubuisi Maduemezia – Vice President of Investor Relations,
Schlumberger Limited Joy V. Domingo – Director of Investor
Relations, Schlumberger Limited Office +1 (713) 375-3535
investor-relations@slb.com
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