Published: 10/22/2021
Published: 10/22/2021
Q3 2021 Earnings Release, with Financial Tables (310 KB PDF)
Q3 2021 Earnings Conference Call Prepared Remarks (145 KB PDF)
Q3 2021 Earnings Conference Call Transcript (193 KB PDF)
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HOUSTON, October 22, 2021—Schlumberger Limited (NYSE: SLB) today reported results for the third-quarter 2021.
(Stated in millions, except per share amounts) | ||||||
Three Months Ended | Change | |||||
Sept. 30, 2021 | Jun. 30, 2021 | Sept. 30, 2020 | Sequential | Year-on-year | ||
Revenue* | $5,847 | $5,634 | $5,258 | 4% | 11% | |
Income (loss) before taxes - GAAP basis | $691 | $542 | $(54) | 28% | n/m | |
Net income (loss) - GAAP basis | $550 | $431 | $(82) | 28% | n/m | |
Diluted EPS (loss per share) - GAAP basis | $0.39 | $0.30 | $(0.06) | 30% | n/m | |
Adjusted EBITDA** | $1,296 | $1,198 | $1,018 | 8% | 27% | |
22.2% | 21.3% | 19.4% | 90 bps | 280 bps | ||
Pretax segment operating income** | $908 | $807 | $575 | 12% | 58% | |
Pretax segment operating margin** | 15.5% | 14.3% | 10.9% | 120 bps | 460 bps | |
Net income, excluding charges & credits** | $514 | $431 | $228 | 19% | 126% | |
Diluted EPS, excluding charges & credits** | $0.36 | $0.30 | $0.16 | 20% | 125% | |
Revenue by Geography | ||||||
International | $4,675 | $4,511 | $4,210 | 4% | 11% | |
North America* | 1,129 | 1,083 | 1,034 | 4% | 9% | |
43 | 40 | 14 | n/m | n/m | ||
$5,847 | $5,634 | $5,258 | 4% | 11% | ||
*Schlumberger divested certain businesses in North America during the fourth quarter of 2020. These businesses generated revenue of $245 million during the third quarter of 2020. Excluding the impact of these divestitures, global third-quarter 2021 revenue increased 17% year-on-year. North America third-quarter 2021 revenue, excluding the impact of these divestitures, increased 43% 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 | |||||
Sept. 30, 2021 | Jun. 30, 2021 | Sept. 30, 2020 | Sequential | Year-on-year | ||
Revenue by Division | ||||||
Digital & Integration | $812 | $817 | $738 | -1% | 10% | |
Reservoir Performance* | 1,192 | 1,117 | 1,215 | 7% | -2% | |
Well Construction | 2,273 | 2,110 | 1,837 | 8% | 24% | |
Production Systems** | 1,674 | 1,681 | 1,532 | 0% | 9% | |
(104) | (91) | (64) | n/m | n/m | ||
$5,847 | $5,634 | $5,258 | 4% | 11% | ||
Pretax Operating Income by Division |
||||||
Digital & Integration | $284 | $274 | $201 | 4% | 42% | |
Reservoir Performance | 190 | 156 | 103 | 22% | 85% | |
Well Construction | 345 | 272 | 173 | 27% | 99% | |
Production Systems | 166 | 171 | 132 | -3% | 26% | |
(77) | (66) | (34) | n/m | n/m | ||
$908 | $807 | $575 | 12% | 58% | ||
Pretax Operating Margin by Division |
||||||
Digital & Integration | 35.0% | 33.5% | 27.2% | 154 bps | 784 bps | |
Reservoir Performance | 16.0% | 13.9% | 8.4% | 202 bps | 751 bps | |
Well Construction | 15.2% | 12.9% | 9.4% | 230 bps | 576 bps | |
Production Systems | 9.9% | 10.2% | 8.6% | -27 bps | 129 bps | |
n/m | n/m | n/m | n/m | n/m | ||
15.5% | 14.3% | 10.9% | 120 bps | 460 bps | ||
*Schlumberger divested its OneStim® pressure pumping business in North America during the fourth quarter of 2020. This business generated revenue of $219 million during the third quarter of 2020. Excluding the impact of this divestiture, Reservoir Performance third-quarter 2021 revenue increased 20% 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 $26 million during the third quarter of 2020. Excluding the impact of this divestiture, Production Systems third-quarter 2021 revenue increased 11% year-on-year. n/m=not meaningful |
Schlumberger CEO Olivier Le Peuch commented, “We started the second half of the year with strong results, delivering another quarter of sequential revenue growth, a fifth consecutive quarter of margin expansion, and a solid free cash flow performance. Revenue growth was led by Well Construction and Reservoir Performance, our predominantly service-oriented Divisions, delivering quality revenue that more than offset the impact of transitory global supply and logistics constraints in Production Systems. International revenue grew 11% year-on-year and is on track to meet our double-digit revenue growth ambition for the second half of 2021 compared to the same period last year.
“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 $1.07 billion. I am excited about our improving earnings and cash flow potential as the macro outlook for energy strengthens significantly through 2022 and beyond.
“Geographically, international revenue of $4.68 billion grew 4% sequentially and 11% year-on-year. The sequential revenue increase was led by double-digit growth in Latin America complemented by sustained activity in the Europe/CIS/Africa and Middle East & Asia areas. In North America, revenue of $1.13 billion grew 4% sequentially and 9% year-on-year. The sequential growth was driven mainly by a strong seasonal rebound in land drilling, higher Asset Performance Solutions (APS) revenue in Canada, and an increase in drilling revenue in North America offshore.
“Among the Divisions, Well Construction continued its growth momentum, with revenue increasing 8% sequentially due to higher international and North America drilling activity both on land and offshore. Similarly, Reservoir Performance revenue increased 7% sequentially from higher exploration and appraisal activity across the international markets. Revenue from Digital & Integration and Production Systems was essentially flat.
“Sequentially, third-quarter pretax segment operating income increased 12% with pretax segment operating margin expanding by 120 basis points (bps) to 15.5%, while adjusted EBITDA margin grew 90 bps to 22.2%. This was driven by our Well Construction and Reservoir Performance Divisions. We are starting to see signs of improved service rates in both of these Divisions driven by our technology, which is creating visibly higher value for our customers and resulting in stronger technology adoption and activity share gains—particularly in the international markets.
“Third-quarter cash flow from operations was $1.07 billion and free cash flow was $671 million. On a year-to-date basis, we have generated free cash flow of $1.70 billion, which has allowed us to reduce our net debt by $1.43 billion since the beginning of the year.
“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 25% or higher and sustaining a double-digit free cash flow margin throughout the cycle.”
On October 21, 2021, Schlumberger’s Board of Directors approved a quarterly cash dividend of $0.125 per share of outstanding common stock, payable on January 13, 2022 to stockholders of record on December 1, 2021.
(Stated in millions) | |||||||
Three Months Ended | Change | ||||||
Sept. 30, 2021 | Jun. 30, 2021 | Sept. 30, 2020 | Sequential | Year-on-year | |||
North America* | $1,129 | $1,083 | $1,034 | 4% | 9% | ||
Latin America | 1,160 | 1,057 | 828 | 10% | 40% | ||
Europe/CIS/Africa | 1,481 | 1,453 | 1,397 | 2% | 6% | ||
Middle East & Asia | 2,034 | 2,001 | 1,986 | 2% | 2% | ||
Other | 43 | 40 | 13 | n/m | n/m | ||
$5,847 | $5,634 | $5,258 | 4% | 11% | |||
International | $4,675 | $4,511 | $4,210 | 4% | 11% | ||
North America* | $1,129 | $1,083 | $1,034 | 4% | 9% | ||
*Schlumberger divested certain businesses in North America during the fourth quarter of 2020. These businesses generated revenue of $245 million during the third quarter of 2020. Excluding the impact of these divestitures, global third-quarter 2021 revenue increased 17% year-on-year. North America third-quarter 2021 revenue, excluding the impact of these divestitures, increased 43% year-on-year. n/m = not meaningful |
North America revenue of $1.13 billion increased 4% sequentially, with both land and offshore revenue increasing, driven primarily by Well Construction activity. The sequential growth was due to a strong seasonal rebound in land drilling, higher APS revenue in Canada, and higher drilling revenue in North America offshore that was partially offset by hurricane-related disruption.
International revenue of $4.68 billion increased 4% sequentially led by double-digit growth in Latin America that was complemented by sustained activity in the Europe/CIS/Africa and Middle East & Asia areas.
Revenue in Latin America of $1.16 billion increased 10% sequentially due to double-digit revenue growth in Mexico, Argentina, and Brazil from robust activity in Well Construction, Reservoir Performance, and Production Systems, respectively. Revenue in Guyana, Ecuador, and Colombia also increased, driven by higher wireline and intervention activity in Reservoir Performance.
Europe/CIS/Africa revenue of $1.48 billion increased 2% sequentially, with growth reported in Scandinavia, Russia, Angola, and Nigeria. Peak summer drilling drove higher Well Construction activity in Scandinavia and Russia. Sustained exploration activity in Africa drove higher wireline and stimulation activity in Reservoir Performance, while Production Systems sales increased in Angola.
Revenue in the Middle East & Asia of $2.03 billion increased 2% sequentially with growth in Australia, East Asia, Indonesia, Saudi Arabia, and Qatar. Revenue in Australia and Indonesia increased from higher offshore drilling, benefiting Well Construction. East Asia revenue increased with growth across all four Divisions. In the Middle East, revenue in Saudi Arabia and Qatar grew from higher Reservoir Performance activity.
(Stated in millions) | ||||||
Three Months Ended | Change | |||||
Sept. 30, 2021 | Jun. 30, 2021 | Sept. 30, 2020 | Sequential | Year-on-year | ||
Revenue | ||||||
International | $615 | $625 | $603 | -2% | 2% | |
North America | 196 | 191 | 134 | 3% | 46% | |
Other | 1 | 1 | 1 | n/m | n/m | |
$812 | $817 | $738 | -1% | 10% | ||
Pretax operating income | $284 | $274 | $201 | 4% | 42% | |
Pretax operating margin | 35.0% | 33.5% | 27.2% | 154 bps | 784 bps | |
n/m = not meaningful |
Digital & Integration revenue of $812 million declined 1% sequentially as higher APS project revenue was offset by lower digital solutions revenue following strong software sales in the second quarter. Revenue grew in North America, Latin America, and Middle East & Asia, offset by lower revenue in Europe/CIS/Africa.
Digital & Integration pretax operating margin of 35% expanded 154 bps sequentially, primarily due to increased profitability from APS projects.
(Stated in millions) | ||||||
Three Months Ended | Change | |||||
Sept. 30, 2021 | Jun. 30, 2021 | Sept. 30, 2020 | Sequential | Year-on-year | ||
Revenue* | ||||||
International | $1,112 | $1,038 | $937 | 7% | 19% | |
North America* | 79 | 79 | 275 | 1% | -71% | |
Other | 1 | - | 3 | n/m | n/m | |
$1,192 | $1,117 | $1,215 | 7% | -2% | ||
Pretax operating income | $190 | $156 | $103 | 22% | 85% | |
Pretax operating margin | 16.0% | 13.9% | 8.4% | 202 bps | 751 bps | |
*Schlumberger divested its OneStim pressure pumping business in North America during the fourth quarter of 2020. This business generated revenue of $219 million during the third quarter of 2020. Excluding the impact of this divestiture, global third-quarter 2021 revenue increased 20% year-on-year. North America third-quarter 2021 revenue, excluding the impact of this divestiture, increased 41% year-on-year. n/m = not meaningful |
Reservoir Performance revenue of $1.19 billion increased 7% sequentially due to higher exploration and appraisal programs across the international markets. Double-digit growth in Latin America was driven by higher wireline evaluation activity in Guyana and Mexico, higher intervention activity in Brazil and Ecuador, and increased stimulation activity in Argentina. Revenue also grew in Europe and Africa primarily due to higher wireline evaluation activity. In addition, Saudi Arabia and Qatar revenue increased due to higher stimulation and intervention activity.
Reservoir Performance pretax operating margin of 16% expanded 202 bps sequentially. Profitability was boosted by higher offshore and exploration activity and a favorable technology mix, particularly in Latin America and Africa.
(Stated in millions) | ||||||
Three Months Ended | Change | |||||
Sept. 30, 2021 | Jun. 30, 2021 | Sept. 30, 2020 | Sequential | Year-on-year | ||
Revenue | ||||||
International | $1,839 | $1,708 | $1,562 | 8% | 18% | |
North America | 382 | 352 | 235 | 9% | 62% | |
Other | 52 | 50 | 40 | n/m | n/m | |
$2,273 | $2,110 | $1,837 | 8% | 24% | ||
Pretax operating income | $345 | $272 | $173 | 27% | 99% | |
Pretax operating margin | 15.2% | 12.9% | 9.4% | 230 bps | 576 bps | |
n/m = not meaningful |
Well Construction revenue of $2.27 billion increased 8% sequentially due to higher land and offshore drilling across the international markets and increased rig activity in North America. North America revenue growth was driven by strong seasonal rebound on land drilling in Canada and higher offshore drilling in the Gulf of Mexico, notwithstanding the hurricane effects during the quarter. International revenue was driven by double-digit growth in Latin America, Africa, and Russia & Central Asia from the combination of increased offshore exploration activity and the peak of summer land drilling campaigns.
Well Construction pretax operating margin of 15% improved sequentially by 230 bps due to higher drilling revenue, boosted by the favorable mix of activity and new technology.
(Stated in millions) | ||||||
Three Months Ended | Change | |||||
Sept. 30, 2021 | Jun. 30, 2021 | Sept. 30, 2020 | Sequential | Year-on-year | ||
Revenue* | ||||||
International | $1,205 | $1,220 | $1,138 | -1% | 6% | |
North America* | 469 | 458 | 389 | 3% | 21% | |
Other | - | 3 | 5 | n/m | n/m | |
$1,674 | $1,681 | $1,532 | 0% | 9% | ||
Pretax operating income | $166 | $171 | $132 | -3% | 26% | |
Pretax operating margin | 9.9% | 10.2% | 8.6% | -27 bps | 129 bps | |
*Schlumberger divested its low-flow artificial lift business in North America during the fourth quarter of 2020. This business generated revenue of $26 million during the third quarter of 2020. Excluding the impact of this divestiture, global third-quarter 2021 revenue increased 11% year-on-year. North America third-quarter revenue, excluding the impact of this divestiture, increased 29% year-on-year. n/m = not meaningful |
Production Systems revenue of $1.67 billion was essentially flat sequentially. Revenue increases in subsea and well production systems were offset by a revenue decline in midstream production systems. International activity was driven by double-digit growth in Latin America due to subsea production systems, particularly in Brazil and Mexico. US land revenue also increased due to higher sales of well and surface production systems, which outpaced the drilling and completed well count growth. These increases were offset by revenue declines in Europe/CIS/Africa and the Middle East & Asia, despite double-digit growth in Angola, Nigeria, East Asia, Indonesia, China, and Iraq. Revenue was partially impacted by transitory global supply and logistics constraints.
Production Systems pretax operating margin of 10% was essentially flat sequentially.
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 Middle East, offshore, and natural gas projects as the growth cycle expands. During the quarter, the following notable projects were secured:
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:
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:
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:
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 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.
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 $1.6 billion. Capital investment for the full-year 2020 was $1.5 billion.
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 $1.07 billion and free cash flow was $671 million, despite making $42 million of severance payments during the quarter.
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 $56 million. This amount consisted of an unrealized gain on marketable securities of $47 million (refer to Question 11), interest income of $8 million, and
earnings of equity method investments of $1 million.
4) How did interest income and interest expense change during the third quarter of 2021?
Interest income of $8 million for the third quarter of 2021 increased $2 million sequentially. Interest expense of $130 million decreased $6 million sequentially.
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.
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 18.6% as compared to 18.2% for the second quarter of 2021. Excluding charges and credits, the ETR for the third quarter of 2021 was 18.3%. There were no charges and credits in the second quarter of 2021.
7) How many shares of common stock were outstanding as of September 30, 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 September 30, 2021 and 1.398 billion as of June 30, 2021.
(Stated in millions) | ||
Shares outstanding at June 30, 2021 | 1,398 | |
Shares issued under employee stock purchase plan | 3 | |
Vesting of restricted stock | 2 | |
Shares outstanding at September 30, 2021 | 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 $1.296 billion in the third quarter of 2021, $1.198 billion in the second quarter of 2021, and $1.018 billion in the third quarter of 2020, and was calculated as follows:
(Stated in millions) | ||||
Third Quarter 2021 |
Second Quarter 2021 |
Third Quarter 2020 |
||
Net income (loss) attributable to Schlumberger | $550 | $431 | $(82) | |
Net income attributable to noncontrolling interests | 12 | 12 | 9 | |
Tax (benefit) expense | 129 | 99 | 19 | |
Income (loss) before taxes | $691 | $542 | $(54) | |
Charges & credits | (47) | - | 350 | |
Depreciation and amortization | 530 | 526 | 587 | |
Interest expense | 130 | 136 | 138 | |
Interest income | (8) | (6) | (3) | |
Adjusted EBITDA | $1,296 | $1,198 | $1,018 |
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 | $350 | $352 | $385 | |
Amortization of APS investments | 82 | 77 | 87 | |
Amortization of intangible assets | 75 | 75 | 79 | |
Amortization of multiclient seismic data costs capitalized | 23 | 22 | 36 | |
$530 | $526 | $587 |
11) What does the pretax credit of $47 million recorded during the third quarter of 2021 relate to?
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 $47 million to increase the carrying value of this investment to its fair value. This unrealized gain is reflected in Interest and other income in the Consolidated Statement of Income (Loss).
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.
Schlumberger will hold a conference call to discuss the earnings press release and business outlook on Friday, October 22, 2021. 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 November 22, 2021 by dialing +1 (866) 207-1041 within North America, or +1 (402) 970-0847 outside North America, and providing the access code 6702282. 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 November 22, 2021.
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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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 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. Statements in this third-quarter earnings 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.
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