Item 8. Financial Statements and Supplementary Data.

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME (LOSS)

	(Stated in millions, except per share amounts)
Year Ended December 31,	2021				2020				2019
Revenue
Services	$	15,602			$	16,533			$	24,358
Product sales		7,327				7,068				8,559
Total Revenue		22,929				23,601				32,917
Interest & other income		148				163				86
Gains on sales of businesses		-				104				247
Expenses
Cost of services		13,129				14,675				20,828
Cost of sales		6,142				6,325				7,892
Research & engineering		554				580				717
General & administrative		339				365				474
Impairments & other		-				12,658				13,148
Interest		539				563				609
Income (loss) before taxes		2,374				(11,298	)			(10,418	)
Tax expense (benefit)		446				(812	)			(311	)
Net income (loss)		1,928				(10,486	)			(10,107	)
Net income attributable to noncontrolling interests		47				32				30
Net income (loss) attributable to Schlumberger	$	1,881			$	(10,518	)		$	(10,137	)
Basic earnings (loss) per share of Schlumberger	$	1.34			$	(7.57	)		$	(7.32	)
Diluted earnings (loss) per share of Schlumberger	$	1.32			$	(7.57	)		$	(7.32	)
Average shares outstanding:
Basic		1,400				1,390				1,385
Assuming dilution		1,427				1,390				1,385

See the Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Stated in millions)
Year Ended December 31,	2021				2020				2019
Net income (loss)	$	1,928			$	(10,486	)		$	(10,107	)
Currency translation adjustments
Net change arising during the period		83				(239	)			67
Cash flow hedges
Net loss on cash flow hedges		(12	)			(90	)			(32	)
Reclassification to net income (loss) of net realized (income) loss		(3	)			54				10
Pension and other postretirement benefit plans
Actuarial gain (loss) arising during the period		1,075				(247	)			127
Amortization to net income (loss) of net actuarial loss		271				200				94
Amortization to net income (loss) of net prior service (credit) cost		(23	)			(17	)			(11	)
Impact of curtailment		-				(69	)			-
Income taxes on pension and other postretirement benefit plans		(74	)			(38	)			(71	)
Other		(3	)			-				-
Comprehensive income (loss)		3,242				(10,932	)			(9,923	)
Comprehensive income attributable to noncontrolling interests		47				32				30
Comprehensive income (loss) attributable to Schlumberger	$	3,195			$	(10,964	)		$	(9,953	)

See the Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Stated in millions)
December 31,		2021				2020
ASSETS
Current Assets
Cash		$	1,757			$	844
Short-term investments			1,382				2,162
Receivables less allowance for doubtful accounts (2021 - $319; 2020 - $301)			5,315				5,247
Inventories			3,272				3,354
Other current assets			928				1,312
			12,654				12,919
Investments in Affiliated Companies			2,044				2,061
Fixed Assets less accumulated depreciation			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
Deferred Taxes			94				19
Other Liabilities			2,255				2,350
			26,225				29,945
Equity
Common stock			12,608				12,970
Treasury stock			(2,233	)			(3,033	)
Retained earnings			8,199				7,018
Accumulated other comprehensive loss			(3,570	)			(4,884	)
Schlumberger stockholders' equity			15,004				12,071
Noncontrolling interests			282				418
			15,286				12,489
		$	41,511			$	42,434

See the Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Stated in millions)
Year Ended December 31,	2021				2020				2019
Cash flows from operating activities:
Net income (loss)	$	1,928			$	(10,486	)		$	(10,107	)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Impairments and other charges and credits		(65	)			12,515				12,901
Depreciation and amortization (1)		2,120				2,566				3,589
Deferred taxes		(31	)			(1,248	)			(1,011	)
Stock-based compensation expense		324				397				405
Earnings of equity method investments, less dividends received		10				(28	)			6
Change in assets and liabilities: (2)
(Increase) decrease in receivables		(36	)			2,345				142
Decrease (increase) in inventories		75				86				(314	)
Decrease (increase) in other current assets		387				267				(68	)
(Increase) decrease in other assets		(2	)			(25	)			22
Increase (decrease) in accounts payable and accrued liabilities		160				(3,330	)			(161	)
(Decrease) increase in estimated liability for taxes on income		(154	)			(201	)			6
(Decrease) increase in other liabilities		(26	)			19				(52	)
Other		(39	)			67				73
NET CASH PROVIDED BY OPERATING ACTIVITIES		4,651				2,944				5,431
Cash flows from investing activities:
Capital expenditures		(1,141	)			(1,116	)			(1,724	)
APS investments		(474	)			(303	)			(781	)
Multiclient seismic data capitalized		(39	)			(101	)			(231	)
Net proceeds from divestitures		-				434				348
Proceeds from sale of Liberty shares		109				-				-
Proceeds from formation of Sensia joint venture		-				-				238
Business acquisitions and investments, net of cash acquired		(103	)			(33	)			(23	)
Sale (purchase) of short-term investments, net		787				(1,141	)			317
Other		(58	)			(93	)			(155	)
NET CASH USED IN INVESTING ACTIVITIES		(919	)			(2,353	)			(2,011	)
Cash flows from financing activities:
Dividends paid		(699	)			(1,734	)			(2,769	)
Proceeds from employee stock purchase plan		137				146				196
Proceeds from exercise of stock options		-				-				23
Stock repurchase program		-				(26	)			(278	)
Proceeds from issuance of long-term debt		34				5,837				4,004
Repayment of long-term debt		(2,076	)			(4,975	)			(4,799	)
Net (decrease) increase in short-term borrowings		(105	)			156				(44	)
Repayment of finance lease-related obligations		-				(188	)			-
Other		(115	)			(89	)			(51	)
NET CASH USED IN FINANCING ACTIVITIES		(2,824	)			(873	)			(3,718	)
Net increase (decrease) in cash before translation effect		908				(282	)			(298	)
Translation effect on cash		5				(11	)			2
Cash, beginning of period		844				1,137				1,433
Cash, end of period	$	1,757			$	844			$	1,137

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

(2)	Net of the effect of business acquisitions and divestitures.

See the Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

		(Stated in millions)
														Accumulated
														Other
		Common Stock								Retained				Comprehensive				Noncontrolling
		Issued				In Treasury				Earnings				Loss				Interests				Total
Balance, January 1, 2019		$	13,132			$	(4,006	)		$	31,658			$	(4,622	)		$	424			$	36,586
Net loss											(10,137	)							30				(10,107	)
Currency translation adjustments															67				(1	)			66
Changes in fair value of cash flow hedges															(22	)							(22	)
Pension and other postretirement benefit plans															139								139
Shares sold to optionees, less shares exchanged			(26	)			49																23
Vesting of restricted stock			(155	)			155																-
Shares issued under employee stock purchase plan			(249	)			445																196
Stock repurchase program							(278	)															(278	)
Stock-based compensation expense			405																				405
Dividends declared ($2.00 per share)											(2,770	)											(2,770	)
Other			(29	)			4												(37	)			(62	)
Balance, December 31, 2019			13,078				(3,631	)			18,751				(4,438	)			416				24,176
Net loss											(10,518	)							32				(10,486	)
Currency translation adjustments															(239	)			7				(232	)
Changes in fair value of cash flow hedges															(36	)							(36	)
Pension and other postretirement benefit plans															(171	)							(171	)
Vesting of restricted stock			(173	)			173																-
Shares issued under employee stock purchase plan			(298	)			444																146
Stock repurchase program							(26	)															(26	)
Stock-based compensation expense			397																				397
Dividends declared ($0.875 per share)											(1,215	)											(1,215	)
Other			(34	)			7												(37	)			(64	)
Balance, December 31, 2020			12,970				(3,033	)			7,018				(4,884	)			418				12,489
Net income											1,881								47				1,928
Currency translation adjustments															83				(2	)			81
Changes in fair value of cash flow hedges															(15	)							(15	)
Pension and other postretirement benefit plans															1,249								1,249
Vesting of restricted stock			(281	)			281																-
Shares issued under employee stock purchase plan			(377	)			514																137
Stock-based compensation expense			324																				324
Dividends declared ($0.50 per share)											(700	)											(700	)
Deconsolidation of subsidiary																			(123	)			(123	)
Other			(28	)			5								(3	)			(58	)			(84	)
Balance, December 31, 2021		$	12,608			$	(2,233	)		$	8,199			$	(3,570	)		$	282			$	15,286

See the Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

SHARES OF COMMON STOCK

					(Stated in millions)
									Shares
	Issued				In Treasury				Outstanding
Balance, January 1, 2019		1,434				(51	)			1,383
Shares sold to optionees, less shares exchanged		-				1				1
Vesting of restricted stock		-				2				2
Shares issued under employee stock purchase plan		-				6				6
Stock repurchase program		-				(7	)			(7	)
Balance, December 31, 2019		1,434				(49	)			1,385
Shares issued under employee stock purchase plan		-				6				6
Vesting of restricted stock		-				2				2
Stock repurchase program		-				(1	)			(1	)
Balance, December 31, 2020		1,434				(42	)			1,392
Shares issued under employee stock purchase plan		-				7				7
Vesting of restricted stock		-				4				4
Balance, December 31, 2021		1,434				(31	)			1,403

See the Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements

1. Business Description

Schlumberger Limited (Schlumberger N.V., incorporated in Curaçao) and its consolidated subsidiaries (collectively, “Schlumberger”) form a technology company that partners with customers to access energy. Schlumberger provides leading digital solutions and deploys innovative technologies to enable performance and sustainability for the global energy industry. Schlumberger collaborates to create technology that unlocks access to energy for the benefit of all.

2. Summary of Accounting Policies

The Consolidated Financial Statements of Schlumberger have been prepared in accordance with accounting principles generally accepted in the United States of America.

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, Schlumberger evaluates its estimates, including those related to collectibility of accounts receivable; revenue recognized for certain long-term construction-type contracts over time; recoverability of fixed assets, goodwill, intangible assets, Asset Performance Solutions investments and investments in affiliates; income taxes; multiclient seismic data; contingencies and actuarial assumptions for employee benefit plans. Schlumberger bases its estimates on historical experience and other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Revenue Recognition

Schlumberger recognizes revenue upon the transfer of control of promised products or services to customers at an amount that reflects the consideration it expects to receive in exchange for these products or services. The vast majority of Schlumberger’s services and product offerings are short-term in nature. The time between invoicing and when payment is due under these arrangements is generally between 30 to 60 days.

Revenue is occasionally generated from contractual arrangements that include multiple performance obligations. Revenue from these arrangements is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are generally determined based on the prices charged to customers or using expected costs plus margin.

Revenue is recognized for certain long-term construction-type contracts over time. These contracts involve significant design and engineering efforts in order to satisfy custom designs for customer-specific applications. Revenue is recognized as work progresses on each contract. Progress is measured by the ratio of actual costs incurred to date on the project in relation to total estimated project costs. The estimate of total project costs has a significant impact on both the amount of revenue recognized as well as the related profit on a project. Revenue and profits on contracts can also be significantly affected by change orders and claims. Due to the nature of these projects, adjustments to estimates of contract revenue and total contract costs may be required as work progresses. Progress billings are generally issued upon completion of certain phases of work as stipulated in the contract. Any expected losses on a project are recorded in full in the period in which they become probable.

Due to the nature of its businesses, Schlumberger does not have significant backlog. Total backlog was $2.8 billion at December 31, 2021, of which approximately 50% is expected to be recognized as revenue during 2022.

Short-term Investments

Short-term investments are comprised primarily of money market funds, time deposits, certificates of deposit, commercial paper, bonds and notes, substantially all of which are denominated in US dollars and are stated at cost plus accrued interest, which approximates fair value.

For purposes of the Consolidated Statement of Cash Flows, Schlumberger does not consider Short-term investments to be cash equivalents.

Investments in Affiliated Companies

Investments in companies in which Schlumberger does not have a controlling financial interest, but over which it has significant influence, are accounted for using the equity method. Schlumberger’s share of the after-tax earnings of equity method investees is included in Interest & other income. Investments in privately held companies in which Schlumberger does not have the ability to exercise significant influence are accounted for using the cost method. Investments in publicly traded companies in which Schlumberger does not have the ability to exercise significant influence are reported at fair value, with unrealized gains and losses reported as a component of Interest & other income.

Multiclient Seismic Data

Schlumberger’s multiclient library consists of completed and in-process seismic surveys that are licensed on a nonexclusive basis. Schlumberger capitalizes costs directly incurred in acquiring and processing the multiclient seismic data. Such costs are charged to Cost of services based on the percentage of the total costs to the estimated total revenue that Schlumberger expects to receive from the sales of such data. However, an individual survey generally will not carry a net book value greater than a 4-year, straight-line amortized value.

The carrying value of the multiclient library is reviewed for impairment annually as well as when an event or change in circumstance indicating impairment may have occurred. Adjustments to the carrying value are recorded when it is determined that estimated future cash flows, which involve significant judgment on the part of Schlumberger, would not be sufficient to recover the carrying value of the surveys. Significant adverse changes in Schlumberger’s estimated future cash flows could result in impairment charges in a future period.

Asset Performance Solutions

Asset Performance Solutions (“APS”) projects are generally focused on developing and co-managing production of customers’ assets under long-term agreements. Schlumberger invests its own services and products into the field development activities and operations and is compensated on a fee-per-barrel basis or based on cash flow generated. This includes certain arrangements whereby Schlumberger is only compensated based on incremental production that it helps deliver above a mutually agreed baseline.

Schlumberger capitalizes its investments in a project including the direct costs associated with providing its services or products. These capitalized investments are amortized to the Consolidated Statement of Income (Loss) as the related production is achieved based on the units of production method, whereby each unit produced is assigned a pro-rata portion of the unamortized costs based on estimated total production, resulting in a matching of revenue with the applicable costs.

Concentration of Credit Risk

Schlumberger’s assets that are exposed to concentrations of credit risk consist primarily of cash, short-term investments, receivables from clients and derivative financial instruments. Schlumberger places its cash and short-term investments with financial institutions and corporations and limits the amount of credit exposure with any one of them. Schlumberger regularly evaluates the creditworthiness of the issuers in which it invests. By using derivative financial instruments to hedge certain exposures, Schlumberger exposes itself to some credit risk. Schlumberger minimizes this credit risk by entering into transactions with high-quality counterparties, limiting the exposure to each counterparty and monitoring the financial condition of its counterparties.

Schlumberger generates revenue in more than 120 countries and as such, its accounts receivable are spread over many countries and customers. The United States represented 12% of Schlumberger’s net accounts receivable balance at December 31, 2021. No other country accounted for greater than 10% of Schlumberger’s accounts receivable balance. Schlumberger maintains an allowance for uncollectible accounts receivable based on expected collectability and performs ongoing credit evaluations of its customers’ financial condition. If the financial condition of Schlumberger’s customers were to deteriorate resulting in an impairment of their ability to make payments, adjustments to the allowance may be required.

Earnings per Share

The following is a reconciliation from basic to diluted earnings (loss) per share of Schlumberger for each of the last three years:

(Stated in millions, except per share amounts)
		Net Income (Loss) Attributable to Schlumberger				Average Shares Outstanding				Earnings (Loss) per Share
2021:
Basic		$	1,881				1,400			$	1.34
Assumed exercise of stock options			-				-
Unvested restricted stock			-				27
Diluted		$	1,881				1,427			$	1.32
2020:
Basic		$	(10,518	)			1,390			$	(7.57	)
Assumed exercise of stock options			-				-
Unvested restricted stock			-				-
Diluted		$	(10,518	)			1,390			$	(7.57	)
2019:
Basic		$	(10,137	)			1,385			$	(7.32	)
Assumed exercise of stock options			-				-
Unvested restricted stock			-				-
Diluted		$	(10,137	)			1,385			$	(7.32	)

The number of outstanding employee stock options to purchase shares of Schlumberger common stock and unvested restricted stock units that were not included in the computation of diluted earnings/loss per share, because to do so would have had an anti-dilutive effect, were as follows:

(Stated in millions)
	2021				2020				2019
Employee stock options		42				48				46
Unvested restricted stock		-				19				12

3. Charges and Credits

2021

Schlumberger recorded the following charges and credits during 2021:

	(Stated in millions)
	Pretax				Tax				Net
Third quarter:
Unrealized gain on marketable securities	$	(47	)		$	(11	)		$	(36	)
Fourth quarter:
Gain on sale of Liberty shares		(28	)			(4	)			(24	)
Early repayment of bonds		10				-				10
	$	(65	)		$	(15	)		$	(50	)

Third quarter 2021:

	•	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 pretax gain of $47 million to increase the carrying value of this investment to its estimated fair

		value of approximately $55 million. This unrealized gain is reflected in Interest & other income in the Consolidated Statement of Income (Loss).

Fourth quarter 2021:

	•	On December 31, 2020, Schlumberger contributed its onshore hydraulic fracturing business in the United States and Canada (“OneStim”), including its pressure pumping, pumpdown perforating and Permian frac sand business to Liberty Oilfield Services Inc. (“Liberty”) in exchange for a 37% equity interest in Liberty. During the fourth quarter of 2021, Schlumberger sold 9.5 million of its shares of Liberty and received proceeds of $109 million. As a result of this transaction Schlumberger recognized a gain of $28 million. This gain is classified in Interest & other income in the Consolidated Statement of Income (Loss).

As of December 31, 2021, Schlumberger had a 31% equity interest in Liberty. Based on the quoted market prices of Liberty’s shares, the fair value of Schlumberger’s investment in Liberty was approximately $550 million as of December 31, 2021. Schlumberger accounts for its investment in Liberty under the equity method of accounting and records its share of Liberty’s net income or loss on a one-quarter lag.

	•	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 Consolidated Statement of Income (Loss).

2020

Schlumberger recorded the following charges and credits during 2020, all of which, unless otherwise noted, are classified in Impairments & other in the Consolidated Statement of Income (Loss):

	(Stated in millions)
	Pretax				Tax				Net
First quarter:
Goodwill	$	3,070			$	-			$	3,070
Intangible assets impairments		3,321				815				2,506
Asset Performance Solutions investments		1,264				(4	)			1,268
North America pressure pumping impairment		587				133				454
Workforce reductions		202				7				195
Other		79				9				70
Valuation allowance		-				(164	)			164
Second quarter:
Workforce reductions		1,021				71				950
Asset Performance Solutions investments		730				15				715
Fixed asset impairments		666				52				614
Inventory write-downs		603				49				554
Right-of-use asset impairments		311				67				244
Costs associated with exiting certain activities		205				(25	)			230
Multiclient seismic data impairment		156				2				154
Repurchase of bonds		40				2				38
Postretirement benefits curtailment gain		(69	)			(16	)			(53	)
Other		60				4				56
Third quarter:
Facility exit charges		254				39				215
Workforce reductions		63				-				63
Other		33				1				32
Fourth quarter:
Gain on sale of OneStim		(104	)			(11	)			(93	)
Unrealized gain on marketable securities		(39	)			(9	)			(30	)
Other		62				4				58
	$	12,515			$	1,041			$	11,474

First quarter 2020:

	•	Geopolitical events that increased the supply of low-priced oil to the global market occurred at the same time that demand weakened due to the worldwide effects of the COVID-19 pandemic, leading to a collapse in oil prices during March 2020. As a result, Schlumberger’s market capitalization deteriorated significantly compared to the end of 2019. Schlumberger’s stock price reached a low during the first quarter of 2020 not seen since 1995. Additionally, the Philadelphia Oil Services Sector index (“OSX”), which is comprised of companies involved in the oil services sector, reached an all-time low. As a result of these facts, Schlumberger determined that it was more likely than not that the fair value of certain of its reporting units was less than their carrying value. Therefore, Schlumberger performed an interim goodwill impairment test.

Schlumberger had 11 reporting units with goodwill balances aggregating $16.0 billion. Schlumberger determined that the fair value of four of its reporting units, representing $4.5 billion of goodwill, was substantially in excess of their carrying value. Schlumberger performed a detailed quantitative impairment assessment of the remaining seven reporting units, which represented $11.5 billion of goodwill. As a result of this assessment, Schlumberger concluded that the goodwill associated with each of these seven reporting units was impaired, resulting in a $3.1 billion goodwill impairment charge.

Following the $3.1 billion goodwill impairment charge relating to these seven reporting units, six of these reporting units had a remaining goodwill balance. These goodwill balances ranged between $0.2 billion and $5.0 billion and aggregated to $8.4 billion as of March 31, 2020.

Schlumberger used the income approach to estimate the fair value of its reporting units, but also considered the market approach to validate the results. The income approach estimates the fair value by discounting each reporting unit’s estimated future cash flows using Schlumberger’s estimate of the discount rate, or expected return, that a marketplace participant would have required as of the valuation date. The market approach includes the use of comparative multiples to corroborate the discounted cash flow results. The market approach involves significant judgement involved in the selection of the appropriate peer group companies and valuation multiples.

Some of the more significant assumptions inherent in the income approach include the estimated future net annual cash flows for each reporting unit and the discount rate. Schlumberger selected the assumptions used in the discounted cash flow projections using historical data supplemented by current and anticipated market conditions and estimated growth rates. Schlumberger’s estimates are based upon assumptions believed to be reasonable. However, given the inherent uncertainty in determining the assumptions underlying a discounted cash flow analysis, particularly in a volatile market, actual results may differ from those used in Schlumberger’s valuations which could result in additional impairment charges in the future.

The discount rates utilized to value Schlumberger’s reporting units were between 12.0% and 13.5%, depending on the risks and uncertainty inherent in the respective reporting unit as well as the size of the reporting unit. Assuming all other assumptions and inputs used in each of the respective discounted cash flow analysis were held constant, a 50-basis point increase or decrease in the discount rate assumptions would have changed the fair value of the seven reporting units, on average, by less than 5%.

	•	The negative market indicators described above were triggering events that indicated that certain of Schlumberger’s long-lived intangible and tangible assets may have been impaired. Recoverability testing indicated that certain long-lived assets were impaired. The estimated fair value of these assets was determined to be below their carrying value. As a result, Schlumberger recorded the following impairment charges:

	-	$3.3 billion relating to intangible assets, of which $2.2 billion relates to Schlumberger’s 2016 acquisition of Cameron International Corporation and $1.1 billion relates to Schlumberger’s 2010 acquisition of Smith International, Inc. Following this impairment charge, the carrying value of the impaired intangible assets was approximately $0.9 billion.

	-	$1.3 billion relating to the carrying value of certain APS projects in North America.

	-	$0.6 billion of fixed assets associated with the pressure pumping business in North America.

	•	$202 million of severance.

	•	$79 million of other restructuring charges, primarily consisting of the impairment of an equity method investment that was determined to be other-than-temporarily impaired.

	•	$164 million relating to a valuation allowance against certain deferred tax assets.

Second quarter 2020:

	•	As previously noted, late in the first quarter of 2020 geopolitical events that increased the supply of low-priced oil to the global market occurred at the same time as demand weakened due to the worldwide effects of the COVID-19 pandemic, which led to a collapse in oil prices. As a result, the second quarter of 2020 was the most challenging quarter in decades. Schlumberger responded to these market conditions by taking actions to restructure its business and rationalize its asset base during the second quarter of 2020. These actions included reducing headcount, closing facilities and exiting business lines in certain countries. Additionally, due to the resulting activity decline, Schlumberger had assets that would no longer be utilized. As a consequence of these circumstances and decisions, Schlumberger recorded the following restructuring and asset impairment charges:

	-	$1.021 billion of severance associated with reducing its workforce by more than 21,000 employees.

	-	$730 million relating to the carrying value of certain APS projects in Latin America.

	-	$666 million of fixed asset impairments primarily relating to equipment that would no longer be utilized and facilities it exited.

	-	$603 million write-down of the carrying value of inventory to its net realizable value.

	-	$311 million write-down of right-of-use assets under operating leases associated with leased facilities Schlumberger exited and excess equipment.

	-	$205 million of costs associated with exiting certain activities.

	-	$156 million impairment of certain multiclient seismic data.

	-	$60 million of other costs, including a $42 million increase in the allowance for the doubtful accounts.

	•	Schlumberger repurchased all $600 million of its 4.20% Senior Notes due 2021 and $935 million of its 3.30% Senior Notes due 2021. Schlumberger paid a premium of $40 million in connection with these repurchases.

	•	As a consequence of the workforce reductions described above, Schlumberger recorded a curtailment gain of $69 million relating to its US postretirement medical plan. See Note 16 – Pension and Other Postretirement Benefit Plans for further details.

Third quarter 2020:

	•	Schlumberger recorded the following restructuring charges:

	-	$254 million of facility exit charges as Schlumberger continued to rationalize its real estate footprint relating to both leased and owned facilities.

	-	$63 million of severance.

	-	$33 million of other charges.

Fourth quarter 2020:

	•	On December 31, 2020, Schlumberger contributed its OneStim business to Liberty in exchange for a 37% equity interest in Liberty. As a result of this transaction, Schlumberger recognized a gain of $104 million. This gain is classified in Gains on sales of businesses in the Consolidated Statement of Income (Loss).

	•	During the fourth quarter of 2020, a start-up company that Schlumberger previously invested in completed an initial public offering. As a result, Schlumberger recognized an unrealized gain of $39 million to increase the carrying value of this investment to its fair value of approximately $43 million. This unrealized gain is reflected in Interest & other income in the Consolidated Statement of Income (Loss). Schlumberger sold its interest in this company during 2021.

	•	During the fourth quarter of 2020, Schlumberger entered into an agreement to purchase new software licenses. This transaction rendered certain previously purchased licenses obsolete. As a result, Schlumberger wrote off the remaining $62 million of net book value associated with the obsolete software licenses.

2019

Schlumberger recorded the following charges and credits during 2019, all of which are classified as Impairments & other in the Consolidated Statement of Income (Loss), except for the gain on the formation of the Sensia joint venture:

	(Stated in millions)
	Pretax				Tax				Net
Third quarter:
Goodwill impairment	$	8,828			$	43			$	8,785
Intangible assets impairment		1,085				248				837
North America pressure pumping		1,575				344				1,231
Other North America-related		310				53				257
Argentina		127				-				127
Equity-method investments		231				12				219
Asset Performance Solutions investments		294				-				294
Other		242				13				229
Fourth quarter:
North America restructuring		225				51				174
Other restructuring		104				(33	)			137
Workforce reductions		68				8				60
Pension settlement accounting		37				8				29
Repurchase of bonds		22				5				17
Gain on formation of Sensia joint venture		(247	)			(42	)			(205	)
	$	12,901			$	710			$	12,191

Third quarter of 2019:

	•	During August 2019, Schlumberger’s market capitalization deteriorated significantly compared to the end of the second quarter of 2019. Schlumberger’s stock price reached a low not seen since 2005. Additionally, the OSX reached an 18-year low.

As a result of these facts, Schlumberger determined that it was more likely than not that the fair value of certain of its reporting units was less than their carrying value. Therefore, Schlumberger performed an interim goodwill impairment test as of August 31, 2019.

As of August 31, 2019, Schlumberger had 17 reporting units with goodwill balances aggregating $25.0 billion. Schlumberger determined that the fair value of seven of its reporting units, representing approximately $13.8 billion of the goodwill, was substantially in excess of their carrying value. Schlumberger performed a detailed quantitative impairment assessment of the remaining 10 reporting units, which represented $11.2 billion of goodwill. As a result of this assessment, Schlumberger concluded that the goodwill associated with nine of the 10 reporting units was impaired, resulting in an $8.8 billion goodwill impairment charge.

Schlumberger primarily used the income approach to estimate the fair value of its reporting units, but also considered the market approach to validate the results. The income approach estimates the fair value by discounting each reporting unit’s estimated future cash flows using Schlumberger’s estimate of the discount rate, or expected return, that a marketplace participant would have required as of the valuation date. The market approach includes the use of comparative multiples to corroborate the discounted cash flow results. The market approach involves significant judgement involved in the selection of the appropriate peer group companies and valuation multiples.

Some of the more significant assumptions inherent in the income approach include the estimated future net annual cash flows for each reporting unit and the discount rate. Schlumberger selected the assumptions used in the discounted cash flow projections using historical data supplemented by current and anticipated market conditions and estimated growth rates. Schlumberger’s estimates are based upon assumptions believed to be reasonable.

The discount rates utilized to value Schlumberger’s reporting units were between 12.5% and 14.0%, depending on the risks and uncertainty inherent in the respective reporting unit. Assuming all other assumptions and inputs used in each of the respective discounted cash flow analysis were held constant, a 50 basis point increase in the discount rate assumption would have increased the goodwill impairment charge by approximately $0.3 billion. Conversely, assuming all other assumptions and inputs used in each of the respective discounted cash flow analysis were held constant, a 50 basis point decrease in the discount rate assumption would have decreased the goodwill impairment charge by approximately $0.4 billion.

	•	The negative market indicators described above combined with deteriorating market conditions in North America, as well as the results of the previously mentioned fair value determinations of certain of Schlumberger’s reporting units and the appointment of a new Chief Executive Officer, were all triggering events that indicated that certain of Schlumberger’s long-lived tangible and intangible assets may be impaired.

Recoverability testing, which was performed as of August 31, 2019, indicated that long-lived assets associated with certain asset groups were impaired. The estimated fair value of these asset groups was determined to be below their carrying value. As a result, Schlumberger recorded the following impairment and related charges:

	-	$1.085 billion of intangible assets, of which $842 million relates to Schlumberger’s 2010 acquisition of Smith International, Inc. The remaining $243 million primarily relates to other acquisitions in North America.

	-	$1.575 billion of charges relating to Schlumberger’s pressure pumping business in North America. This amount consists of $1.324 billion of pressure pumping equipment and related assets; $98 million of right-of-use assets under operating leases; $121 million relating to a supply contract; $19 million of inventory; and $13 million of severance.

	-	$310 million of charges primarily relating to other businesses in North America, consisting of $230 million of fixed asset impairments, $70 million of inventory write-downs and $10 million of severance.

	•	As a result of the economic challenges in Argentina, Schlumberger recorded $127 million of charges consisting of $72 million of asset impairments, a $26 million devaluation charge and $29 million of severance.

	•	Schlumberger recorded the following impairment and restructuring charges:

	-	$231 million relating to certain equity method investments that were determined to be other-than-temporarily impaired.

	-	$294 million impairment relating to the carrying value of certain smaller APS projects.

	-	$242 million of restructuring charges consisting of: $62 million of severance; $57 million relating to the acceleration of stock-based compensation expense associated with certain individuals; $49 million of business divestiture costs; $29 million relating to the repurchase of certain Senior Notes; and $45 million of other provisions.

Fourth quarter of 2019:

	•	Schlumberger recorded the following restructuring charges:

	-	$225 million associated with facility closures and costs to exit certain activities in North America. These charges included $123 million relating to fixed assets; $55 million of right-of-use assets under operating leases; and $47 million of other exit costs.

	-	$104 million primarily relating to restructuring certain activities outside of North America, which included $68 million associated with assets to be divested and $36 million of facility closure costs.

	-	$68 million of severance associated with streamlining its operations and exiting certain activities.

	•	Certain of Schlumberger’s defined benefit pension plans offered former Schlumberger employees, who had not yet commenced receiving their pension benefits, an opportunity to receive a lump sum payout of their vested pension benefit which resulted in Schlumberger recording a pension settlement charge of $37 million. See Note 16 – Pension and Other Postretirement Benefit Plans for further details.

	•	Schlumberger repurchased the remaining $416 million of its 3.00% Senior Notes due 2020; $126 million of its 4.50% Senior Notes due 2021; $500 million of its 4.20% Senior Notes due 2021; and $106 million of its 3.60% Senior Notes due 2022. These transactions resulted in a $22 million charge.

	•	On October 1, 2019, Schlumberger and Rockwell completed the formation of Sensia, a joint venture that is the oil and gas industry’s first digitally enabled integrated automation solutions provider. Rockwell Automation owns 53% of the joint venture and Schlumberger owns 47%. In connection with this transaction, Schlumberger received a cash payment of $238 million. Schlumberger will account for its investment under the equity method of accounting. Schlumberger recorded a $247 million gain as a result of the deconsolidation of certain of its businesses in connection with the formation of the joint venture. This gain, which is equal to the sum of the $238 million of cash proceeds received and the fair value of Schlumberger’s retained noncontrolling investment in the businesses it contributed less the carrying amount of the assets and liabilities of such businesses at the time of the closing, is classified as Gains on sale of businesses in the Consolidated Statement of Income (Loss).

The fair value of certain of the assets impaired during 2020 and 2019 was estimated based on the present value of projected future cash flows that the underlying assets are expected to generate. Such estimates included unobservable inputs that required significant judgment.

4. Inventories

Inventories, which are stated at the lower of average cost or net realizable value, consist of the following:

(Stated in millions)
	2021				2020
Raw materials & field materials	$	1,594			$	1,573
Work in progress		425				464
Finished goods		1,253				1,317
	$	3,272			$	3,354

5. Fixed Assets

Fixed assets consist of the following:

(Stated in millions)
	2021				2020
Land	$	372			$	362
Buildings & improvements		4,371				3,757
Machinery & equipment		24,334				25,625
		29,077				29,744
Less: Accumulated depreciation		22,648				22,918
	$	6,429			$	6,826

The estimated useful lives of Buildings & improvements are primarily 25 to 30 years. The estimated useful lives of Machinery & equipment are primarily 5 to 10 years.

Depreciation expense, which is recorded on a straight-line basis, was $1.4 billion, $1.6 billion and $2.0 billion in 2021, 2020 and 2019, respectively.

6. Goodwill

The changes in the carrying amount of goodwill by segment were as follows:

	(Stated in millions)
	Reservoir
	Characterization				Drilling				Production				Cameron				Total
Balance, December 31, 2019	$	4,560			$	7,092			$	3,949			$	441			$	16,042
Impairment (see Note 3)		-				(1,659	)			(1,228	)			(183	)			(3,070	)
Impact of changes in exchange rates and other		-				10				(17	)			3				(4	)
Balance, September 30, 2020	$	4,560			$	5,443			$	2,704			$	261			$	12,968

In connection with a change in reportable segments, Schlumberger reallocated its goodwill as of September 30, 2020 to its new segments on a relative fair value basis:

	(Stated in millions)
	Digital &				Reservoir				Well				Production
	Integration				Performance				Construction				Systems				Total
Balance, October 1, 2020	$	2,041			$	3,806			$	6,267			$	854			$	12,968
Impact of changes in exchange rates and other		6				(4	)			11				(1	)			12
Balance, December 31, 2020		2,047				3,802				6,278				853				12,980
Acquisitions		18				-				-				-				18
Impact of changes in exchange rates and other		(13	)			2				3				-				(8	)
Balance, December 31, 2021	$	2,052			$	3,804			$	6,281			$	853			$	12,990

7. Intangible Assets

Intangible assets consist of the following:

	(Stated in millions)
	2021												2020
	Gross				Accumulated				Net Book				Gross				Accumulated				Net Book
	Book Value				Amortization				Value				Book Value				Amortization				Value
Customer Relationships	$	1,681			$	551			$	1,130			$	1,744			$	485			$	1,259
Technology/Technical Know-How		1,264				562				702				1,284				488				796
Tradenames		766				191				575				767				166				601
Other		1,529				725				804				1,488				689				799
	$	5,240			$	2,029			$	3,211			$	5,283			$	1,828			$	3,455

Customer relationships are generally amortized over periods ranging from 18 to 28 years, technology/technical know-how are generally amortized over periods ranging from 10 to 18 years, and tradenames are generally amortized over periods ranging from 15 to 30 years.

Amortization expense was $302 million in 2021, $371 million in 2020 and $618 million in 2019.

Based on the carrying value of intangible assets at December 31, 2021, amortization expense for the subsequent five years is estimated to be as follows: 2022: $291 million, 2023: $281 million, 2024: $264 million, 2025: $249 million and 2026: $245 million.

8. Long-term Debt and Debt Facility Agreements

Long-term Debt consists of the following:

(Stated in millions)
	2021				2020
3.65% Senior Notes due 2023	$	1,497			$	1,496
3.90% Senior Notes due 2028		1,457				1,450
2.65% Senior Notes due 2030		1,250				1,250
1.375% Guaranteed Notes due 2026		1,125				1,221
2.00% Guaranteed Notes due 2032		1,118				1,214
0.25% Notes due 2027		1,013				1,100
0.50% Notes due 2031		1,012				1,099
4.00% Senior Notes due 2025		930				930
4.30% Senior Notes due 2029		846				846
3.75% Senior Notes due 2024		748				746
1.00% Guaranteed Notes due 2026		679				736
0.00% Notes due 2024		563				611
1.40% Senior Notes due 2025		498				498
7.00% Notes due 2038		204				206
5.95% Notes due 2041		113				114
5.13% Notes due 2043		98				99
4.00% Notes due 2023		80				80
3.70% Notes due 2024		55				55
3.63% Senior Notes due 2022		-				295
2.65% Senior Notes due 2022		-				598
2.40% Senior Notes due 2022		-				999
Commercial paper borrowings		-				393
	$	13,286			$	16,036

At December 31, 2021, Schlumberger had committed credit facility agreements with commercial banks aggregating $5.75 billion, all of which was available and unused. These committed facilities support commercial paper programs in the United States and Europe,

of which $2.75 billion matures in February 2023, $2.0 billion matures in February 2025 and $1.0 billion matures in July 2026. Schlumberger also has a €750 million three-year committed revolving credit facility that matures in June 2024. At December 31, 2021, no amounts had been drawn under this facility. Interest rates and other terms of borrowing under these lines of credit vary by facility.

Commercial paper borrowings are classified as long-term debt to the extent they are backed up by available and unused committed credit facilities maturing in more than one year and to the extent it is Schlumberger’s intent to maintain these obligations for longer than one year. There were no borrowings under the commercial paper programs at December 31, 2021. At December 31, 2020, borrowings under the commercial paper programs were $0.4 billion, all of which was classified in Long-term Debt in the Consolidated Balance Sheet.

Long-term Debt as of December 31, 2021 is due as follows: $1.6 billion in 2023, $1.4 billion in 2024, $1.4 billion in 2025, $1.8 billion in 2026, $1.0 billion in 2027, $1.5 billion in 2028 and $4.6 billion thereafter.

The fair value of Schlumberger’s Long-term Debt at December 31, 2021 and December 31, 2020 was $13.9 billion and $17.3 billion, respectively, and was estimated based on quoted market prices.

Schlumberger Limited fully and unconditionally guarantees the securities issued by certain of its subsidiaries, including securities issued by Schlumberger Investment SA and Schlumberger Finance Canada Ltd., both wholly-owned subsidiaries of Schlumberger Limited.

9. Derivative Instruments and Hedging Activities

As a multinational company, Schlumberger conducts its business in over 120 countries. Schlumberger’s functional currency is primarily the US dollar. Approximately 70% of Schlumberger’s revenues in 2021 were denominated in US dollars. However, outside the United States, a significant portion of Schlumberger’s expenses is incurred in foreign currencies. Therefore, when the US dollar weakens (strengthens) in relation to the foreign currencies of the countries in which Schlumberger conducts business, the US dollar-reported expenses will increase (decrease).

Schlumberger is exposed to risks on future cash flows to the extent that the local currency is not the functional currency and expenses denominated in local currency are not equal to revenues denominated in local currency. Schlumberger uses foreign currency forward contracts to provide a hedge against a portion of these cash flow risks. These contracts are accounted for as cash flow hedges, with the changes in the fair value of the hedge recorded on the Consolidated Balance Sheet and in Accumulated Other Comprehensive Loss. Amounts recorded in Accumulated Other Comprehensive Loss are reclassified into earnings in the same period or periods that the hedged item is recognized in earnings.

Schlumberger is also exposed to risks on future cash flows relating to certain of its fixed rate debt denominated in currencies other than the functional currency. Schlumberger uses cross-currency swaps to provide a hedge against these cash flow risks. Included in Other Assets was $66 million at December 31, 2021 ($427 million at December 31, 2020) and included in Other Liabilities was $78 million at December 31, 2021 ($13 million at December 31, 2020) relating to the fair value of outstanding cross-currency swap derivatives. The fair value was determined using a model with inputs that are observable in the market or can be derived or collaborated by observable data.

During 2019, a US-dollar functional currency subsidiary of Schlumberger issued €1.5 billion of Euro-denominated debt. Schlumberger entered into cross-currency swaps for an aggregate notional amount of €1.5 billion in order to hedge changes in the fair value of its €0.5 billion 0.00% Notes due 2024, €0.5 billion 0.25% Notes due 2027 and €0.5 billion 0.50% Notes due 2031. These cross-currency swaps effectively convert the Euro-denominated notes to US-dollar denominated debt with fixed annual interest rates of 2.29%, 2.51% and 2.76%, respectively.

During 2020, a US-dollar functional currency subsidiary of Schlumberger issued €0.8 billion of Euro-denominated debt. Schlumberger entered into cross-currency swaps for an aggregate notional amount of €0.8 billion in order to hedge changes in the fair value of its €0.4 billion of 0.25% Notes due 2027 and €0.4 billion of 0.50% Notes due 2031. These cross-currency swaps effectively convert the Euro-denominated notes to US-dollar denominated debt with fixed annual interest rates of 1.87% and 2.20%, respectively.

During 2020, a US-dollar functional currency subsidiary of Schlumberger issued €2.0 billion of Euro-denominated debt. Schlumberger entered into cross-currency swaps for an aggregate notional amount of €2.0 billion in order to hedge changes in the fair value of its €1.0 billion of 1.375% Guaranteed Notes due 2026 and €1.0 billion of 2.00% Guaranteed Notes due 2032. These cross-currency swaps effectively convert the swapped portion of the Euro-denominated notes to US-dollar denominated debt with fixed annual interest rates of 2.77% and 3.49%, respectively.

During 2020, a Canadian dollar functional currency subsidiary of Schlumberger issued $0.5 billion of US dollar denominated debt. Schlumberger entered into cross-currency swaps for an aggregate notional amount of $0.5 billion in order to hedge changes in the fair value of its $0.5 billion 1.40% Senior Notes due 2025. These cross-currency swaps effectively convert the US dollar notes to Canadian dollar denominated debt with a fixed annual interest rate of 1.73%.

Schlumberger is exposed to changes in the fair value of assets and liabilities denominated in currencies other than the functional currency. While Schlumberger uses foreign currency forward contracts to economically hedge this exposure as it relates to certain currencies, these contracts are not designated as hedges for accounting purposes. Instead, the fair value of the contracts is recorded on the Consolidated Balance Sheet and changes in the fair value are recognized in the Consolidated Statement of Income (Loss), as are changes in the fair value of the hedged item. Transaction losses of $23 million in 2021 and $21 million in 2020 and transaction gains of $2 million in 2019 were recognized in the Consolidated Statement of Income (Loss) net of related hedging activities.

During the fourth quarter of 2021, Schlumberger entered into derivative contracts that hedge the price of oil relating to approximately 75% of the projected 2022 oil production of one of its APS projects. These contracts are accounted for as cash flow hedges, with the changes in the fair value of the hedge recorded on the Consolidated Balance Sheet and in Accumulated Other Comprehensive Loss. Amounts recorded in Accumulated Other Comprehensive Loss will be reclassified to earnings in the same period or periods that the hedged item is recognized in earnings. No amounts were recognized in the Consolidated Statement of Income (Loss) relating to these hedging activities during 2021.

At December 31, 2021, contracts were outstanding for the US dollar equivalent of $7.7 billion in various foreign currencies, of which $6.0 billion relates to hedges of debt denominated in currencies other than the functional currency.

Other than the previously mentioned cross-currency swaps, the fair value of the other outstanding derivatives was not material at December 31, 2021 and 2020.

The effect of derivative instruments designated as hedges and those not designated as hedges on the Consolidated Statement of Income (Loss) was as follows:

					(Stated in millions)
	Gain (Loss) Recognized in Income (Loss)												Consolidated Statement
	2021				2020				2019				of Income (Loss) Classification
Derivatives designated as cash flow hedges:
Cross currency swap	$	(422	)		$	493			$	(35	)		Cost of services/sales
Foreign exchange contracts		5				(5	)			(10	)		Cost of services/sales
	$	(417	)		$	488			$	(45	)
Derivatives not designated as hedges:
Foreign exchange contracts	$	(11	)		$	(29	)		$	(5	)		Cost of services/sales

Schlumberger does not enter into derivative transactions for speculative purposes.

10. Stockholders’ Equity

Schlumberger is authorized to issue 4,500,000,000 shares of common stock, par value $0.01 per share, of which 1,403,381,685 and 1,392,325,960 shares were outstanding on December 31, 2021 and 2020, respectively. Holders of common stock are entitled to one vote for each share of stock held. Schlumberger is also authorized to issue 200,000,000 shares of preferred stock, par value $0.01 per share, which may be issued in series with terms and conditions determined by the Schlumberger Board of Directors. No shares of preferred stock have been issued.

Accumulated Other Comprehensive Loss consists of the following:

									(Stated in millions)
	2021				2020				2019
Currency translation adjustments	$	(2,419	)		$	(2,502	)		$	(2,263	)
Pension and other postretirement benefit plans		(1,066	)			(2,314	)			(2,143	)
Cash flow hedges		(85	)			(70	)			(34	)
Other		-				2				2
	$	(3,570	)		$	(4,884	)		$	(4,438	)

11. Stock-based Compensation Plans

Schlumberger has three types of stock-based compensation programs: (i) stock options, (ii) a restricted stock, restricted stock unit and performance share unit program (collectively referred to as “restricted stock”), and (iii) a discounted stock purchase plan (“DSPP”).

Stock Options

Key employees may be granted stock options under Schlumberger stock option plans. The exercise price equals the average of the high and low sales prices of Schlumberger stock on the date of grant. The maximum term is 10 years, and the options generally vest in increments over five years.

The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions and resulting weighted-average fair value per share:

	2020				2019
Dividend yield		5.2	%			4.8	%
Expected volatility		26	%			25	%
Risk-free interest rate		1.7	%			2.7	%
Expected option life in years		7.0				7.0
Weighted-average fair value per share	$	5.07			$	6.21

There were no stock option grants during 2021.

The following table summarizes information related to options outstanding and options exercisable as of December 31, 2021:

	(Shares stated in thousands)
	Options Outstanding												Options Exercisable
					Weighted-
					Average
					Remaining				Weighted-								Weighted-
	Options				Contractual Life				Average				Options				Average
Exercise prices range	Outstanding				(in years)				Exercise Price				Exercisable				Exercise Price
$38.75 - $41.47		12,040				7.6			$	39.86				3,417			$	40.33
$47.55 - $69.98		2,882				3.3			$	62.42				2,838			$	62.47
$70.31 - $79.85		12,276				2.1			$	73.58				11,564			$	73.36
$80.53 - $88.77		8,583				4.3			$	84.46				7,879			$	84.19
$91.28 - $114.83		6,566				2.7			$	96.25				6,566			$	96.25
		42,347				4.3			$	68.95				32,264			$	76.21

The weighted-average remaining contractual life of stock options exercisable as of December 31, 2021 was 3.3 years.

The following table summarizes stock option activity during the years ended December 31, 2021, 2020 and 2019:

	(Shares stated in thousands)
	2021								2020								2019
					Weighted-								Weighted-								Weighted-
					Average								Average								Average
					Exercise								Exercise								Exercise
	Shares				Price				Shares				Price				Shares				Price
Outstanding at beginning of year		48,272			$	70.37				46,269			$	75.65				43,529			$	79.36
Granted		-			$	-				7,468			$	38.75				5,604			$	41.50
Exercised		-			$	-				-			$	-				(1,045	)		$	38.50
Forfeited / Expired		(5,925	)		$	80.46				(5,465	)		$	71.86				(1,819	)		$	74.69
Outstanding at year-end		42,347			$	68.95				48,272			$	70.37				46,269			$	75.65

Stock options outstanding and stock options exercisable as of December 31, 2021 had no intrinsic value.

Restricted Stock

Schlumberger grants performance share units to certain key employees. The number of shares earned is determined at the end of each performance period based on Schlumberger’s achievement of certain predefined targets as described in the underlying performance share unit agreement. In the event Schlumberger exceeds the predefined target, shares for up to a maximum of 250% of the target award may be awarded. In the event Schlumberger falls below the predefined target, a reduced number of shares may be awarded. If Schlumberger falls below the threshold award performance level, no shares will be awarded. As of December 31, 2021, 4.9 million performance share units were outstanding assuming the achievement of 100% of target.

All other restricted stock awards generally vest at the end of three years or vest ratably in equal tranches over a three-year period.

Restricted stock awards do not pay dividends or have voting rights prior to vesting. Accordingly, the fair value of a restricted stock award is generally the quoted market price of Schlumberger’s stock on the date of grant less the present value of the expected dividends not received prior to vesting.

The following table summarizes information related to restricted stock transactions:

	(Shares stated in thousands)
	2021								2020								2019
					Weighted-								Weighted-								Weighted-
					Average								Average								Average
	Restricted				Grant Date				Restricted				Grant Date				Restricted				Grant Date
	Stock				Fair Value				Stock				Fair Value				Stock				Fair Value
Unvested at beginning of year		18,763			$	35.24				11,822			$	49.86				6,951			$	70.13
Granted		8,287			$	25.16				10,637			$	26.53				7,888			$	35.56
Vested		(4,927	)		$	48.44				(3,059	)		$	71.56				(2,722	)		$	72.09
Forfeited		(499	)		$	29.64				(637	)		$	45.95				(295	)		$	57.41
Unvested at year-end		21,624			$	29.03				18,763			$	35.24				11,822			$	49.86

Discounted Stock Purchase Plan

Under the terms of the DSPP, employees can choose to have a portion of their earnings withheld, subject to certain restrictions, to purchase Schlumberger common stock. The purchase price of the stock is 92.5% of the lower of the stock price at the beginning or end of the plan period at six-month intervals.

The fair value of the employees’ purchase rights under the DSPP was estimated using the Black-Scholes model with the following assumptions and resulting weighted-average fair value per share:

	2021				2020				2019
Dividend yield		2.0	%			4.0	%			5.3	%
Expected volatility		67	%			43	%			30	%
Risk-free interest rate		0.07	%			0.88	%			2.3	%
Weighted-average fair value per share	$	6.72			$	5.38			$	5.81

Total Stock-based Compensation Expense

The following summarizes stock-based compensation expense recognized in income:

(Stated in millions)
	2021				2020				2019
Stock options	$	36			$	75			$	99
Restricted stock		254				293				274
DSPP		34				29				32
	$	324			$	397			$	405

At December 31, 2021, there was $277 million of total unrecognized compensation cost related to nonvested stock-based compensation arrangements, of which $171 million is expected to be recognized in 2022, $90 million in 2023, $15 million in 2024, and $1 million in 2025.

As of December 31, 2021, approximately 44 million shares of Schlumberger common stock were available for future grants under Schlumberger’s stock-based compensation programs.

12. Income Taxes

Income (loss) before taxes subject to United States and non-United States income taxes was as follows:

(Stated in millions)
	2021				2020				2019
United States	$	30			$	(4,394	)		$	(8,991	)
Outside United States		2,344				(6,904	)			(1,427	)
	$	2,374			$	(11,298	)		$	(10,418	)

Schlumberger recorded net pretax credits of $65 million in 2021 ($75 million of credits in the US and $10 million of charges outside the US). Schlumberger recorded net pretax charges of $12.515 billion in 2020 ($3.961 billion in the US and $8.554 billion outside the US); and $12.901 billion in 2019 ($8.769 billion in the US and $4.132 billion outside the US). These charges and credits are included in the table above and are more fully described in Note 3 – Charges and Credits.

The components of net deferred tax assets (liabilities) were as follows:

(Stated in millions)
	2021				2020
Intangible assets	$	(855	)		$	(881	)
Net operating losses		427				421
Research and development credits		118				96
Fixed assets, net		151				151
Inventories		58				59
Investments in non-US subsidiaries		(161	)			(171	)
Pension and other postretirement benefits		(136	)			(31	)
Other, net		304				337
	$	(94	)		$	(19	)

The deferred tax balances at December 31, 2021 and 2020 were net of valuation allowances relating to net operating losses in certain countries of $133 million and $127 million, respectively. Additionally, the deferred tax balances were net of valuation allowances relating to the following:

(Stated in millions)
	2021				2020
Foreign tax credits	$	210			$	106
Capital losses	$	49			$	54

Approximately $390 million of the $427 million deferred tax asset relating to net operating losses at December 31, 2021 can be carried forward indefinitely. The vast majority of the remaining balance expires at various dates between 2030 and 2040.

The components of Tax expense (benefit) were as follows:

(Stated in millions)
	2021				2020				2019
Current:
United States-Federal	$	(32	)		$	21			$	(81	)
United States-State		-				5				11
Outside United States		509				410				770
		477				436				700
Deferred:
United States-Federal	$	(132	)		$	(824	)		$	(660	)
United States-State		12				(67	)			(93	)
Outside United States		(15	)			(563	)			(257	)
Valuation allowance		104				206				(1	)
		(31	)			(1,248	)			(1,011	)
	$	446			$	(812	)		$	(311	)

A reconciliation of the United States statutory federal tax rate to the consolidated effective tax rate follows:

	2021				2020				2019
US federal statutory rate		21	%			21	%			21	%
Charges and credits (See Note 3)		-				(14	)			(19	)
Other		(2	)			-				1
		19	%			7	%			3	%

A number of the jurisdictions in which Schlumberger operates have tax laws that are not fully defined and are evolving. Schlumberger’s tax filings are subject to regular audit by the tax authorities. These audits may result in assessments for additional taxes that are resolved with the tax authorities or, potentially, through the courts. Tax liabilities are recorded based on estimates of

additional taxes that will be due upon the conclusion of these audits. Due to the uncertain and complex application of tax regulations, the ultimate resolution of audits may result in liabilities which could be materially different from these estimates.

A reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions for the years ended December 31, 2021, 2020 and 2019 is as follows:

(Stated in millions)
	2021				2020				2019
Balance at beginning of year	$	1,271			$	1,301			$	1,433
Additions based on tax positions related to the current year		38				76				86
Additions for tax positions of prior years		19				78				65
Impact of changes in exchange rates		(24	)			(3	)			2
Settlements with tax authorities		(49	)			(15	)			(50	)
Reductions for tax positions of prior years		(228	)			(87	)			(176	)
Reductions due to the lapse of the applicable statute of limitations		(26	)			(79	)			(59	)
	$	1,001			$	1,271			$	1,301

The amounts above exclude accrued interest and penalties of $164 million, $184 million and $188 million at December 31, 2021, 2020 and 2019, respectively. Schlumberger classifies interest and penalties relating to uncertain tax positions within Tax expense (benefit) in the Consolidated Statement of Income (Loss).

The following table summarizes the tax years that are either currently under audit or remain open and subject to examination by the tax authorities in the most significant jurisdictions in which Schlumberger operates:

Canada	2014 - 2021
Ecuador	2017 - 2021
Mexico	2013 - 2021
Norway	2016 - 2021
Russia	2016 - 2021
Saudi Arabia	2016 - 2021
United Kingdom	2017 - 2021
United States	2017 - 2021

13. Leases

Schlumberger’s leasing activities primarily consist of operating leases for administrative offices, manufacturing facilities, research centers, service centers, sales offices and certain equipment. Total operating lease expense, which approximates cash paid and includes short-term leases, was $1.2 billion in 2021, $1.4 billion in 2020 and $1.7 billion in 2019.

Maturities of operating lease liabilities as of December 31, 2021 were as follows:

(Stated in millions)
2022	$	191
2023		159
2024		128
2025		99
2026		73
Thereafter		286
Total lease payments	$	936
Less: Interest		(122	)
	$	814
Amounts recognized in balance sheet
Accounts payable and accrued liabilities	$	186
Other Liabilities		628
	$	814

Operating lease assets of $0.6 billion and $0.7 billion as of December 31, 2021 and 2020, respectively, were included in Other Assets in the Consolidated Balance Sheet. Operating lease liabilities as of December 31, 2020 were $1.0 billion, of which $0.2 billion was classified in Accounts payable and accrued liabilities and $0.8 billion was classified in Other Liabilities in the Consolidated Balance Sheet.

The weighted-average remaining lease term as of December 31, 2021 was 10 years. The weighted-average discount rate used to determine the operating lease liability as of December 31, 2021 was 3.1%.

14. Contingencies

Schlumberger is party to various legal proceedings from time to time. A liability is accrued when a loss is both probable and can be reasonably estimated. Management believes that the probability of a material loss with respect to any currently pending legal proceeding is remote. However, litigation is inherently uncertain, and it is not possible to predict the ultimate disposition of any of these proceedings.

15. Segment Information

Schlumberger is organized under four Divisions that combine and integrate Schlumberger’s technologies, enhancing the Company’s ability to support the emerging long-term growth opportunities in each of these market segments.

The four Divisions, representing Schlumberger’s segments, are:

	•	Digital & Integration – Combines Schlumberger’s digital workflow solutions and seismic data interpretation and management businesses with its integrated offering of Asset Performance Solutions.

	•	Reservoir Performance – Consists of reservoir-centric technologies and services that are critical to optimizing reservoir productivity and performance.

	•	Well Construction – Combines the full portfolio of products and services to optimize well placement and performance, maximize drilling efficiency, and improve wellbore assurance.

	•	Production Systems – Develops technologies and provides expertise that enhance production and recovery from subsurface reservoirs to the surface, into pipelines, and to refineries.

Financial information for the years ended December 31, 2021, 2020 and 2019, by segment, is as follows:

					(Stated in millions)
	2021
													Depreciation
					Income								and				Capital
	Revenue				Before Taxes				Assets				Amortization				Investments
Digital & Integration	$	3,290			$	1,141			$	3,134			$	446			$	516
Reservoir Performance		4,599				648				2,923				415				348
Well Construction		8,706				1,195				4,714				537				424
Production Systems		6,710				634				4,684				302				267
Eliminations & other		(376	)			(253	)			1,501				269				99
						3,365
Goodwill and intangible assets										16,201
Cash and short-term investments										3,139
All other assets										5,215
Corporate & other (1)						(573	)							151
Interest income (2)						31
Interest expense (3)						(514	)
Charges & credits (4)						65
	$	22,929			$	2,374			$	41,511			$	2,120			$	1,654

					(Stated in millions)
	2020
													Depreciation
					Income (Loss)								and				Capital
	Revenue				Before Taxes				Assets				Amortization				Investments
Digital & Integration	$	3,067			$	727			$	3,595			$	615			$	413
Reservoir Performance		5,602				353				3,489				549				384
Well Construction		8,614				870				4,768				580				420
Production Systems		6,650				623				4,665				338				240
Eliminations & other		(332	)			(172	)			940				276				63
						2,401
Goodwill and intangible assets										16,436
Cash and short-term investments										3,006
All other assets										5,535
Corporate & other (1)						(681	)							208
Interest income (2)						31
Interest expense (3)						(534	)
Charges & credits (4)						(12,515	)
	$	23,601			$	(11,298	)		$	42,434			$	2,566			$	1,520

					(Stated in millions)
	2019
													Depreciation
					Income (Loss)								and				Capital
	Revenue				Before Taxes				Assets				Amortization				Investments
Digital & Integration	$	4,145			$	882			$	6,388			$	1,069			$	1,020
Reservoir Performance		9,299				992				5,198				807				569
Well Construction		11,880				1,429				6,913				656				650
Production Systems		8,167				847				5,625				390				384
Eliminations & other		(574	)			(172	)			1,314				250				113
						3,978
Goodwill and intangible assets										23,130
Cash and short-term investments										2,167
All other assets										5,577
Corporate & other (1)						(957	)							417
Interest income (2)						33
Interest expense (3)						(571	)
Charges & credits (4)						(12,901	)
	$	32,917			$	(10,418	)		$	56,312			$	3,589			$	2,736

(1)	Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs, amortization expense associated with certain intangible assets, certain centrally managed initiatives and other nonoperating items.

(2)	Interest income excludes amounts which are included in the segments’ income (2021: $2 million; 2020: $2 million; 2019: $8 million).

(3)	Interest expense excludes amounts which are included in the segments’ income (2021: $15 million; 2020: $28 million; 2019: $38 million).

(4)	See Note 3 – Charges and Credits.

Segment assets consist of receivables, inventories, fixed assets, multiclient seismic data and APS investments.

Capital investments includes capital expenditures, APS investments and multiclient seismic data cost capitalized.

Depreciation and amortization includes depreciation of property, plant and equipment and amortization of intangible assets, multiclient seismic data costs and APS investments.

Revenue by geographic area for the years ended December 31, 2021, 2020 and 2019 is as follows:

(Stated in millions)
	2021				2020				2019
North America	$	4,466			$	5,478			$	10,446
Latin America		4,459				3,472				4,544
Europe/CIS/Africa		5,778				5,963				7,682
Middle East & Asia		8,059				8,567				10,016
Eliminations & other		167				121				229
	$	22,929			$	23,601			$	32,917

Revenue is based on the location where services are provided and products are sold.

During each of the three years ended December 31, 2021, 2020 and 2019, no single customer exceeded 10% of consolidated revenue.

Schlumberger did not have revenue from third-party customers in its country of domicile during the last three years. Revenue in the United States in 2021, 2020 and 2019 was $3.4 billion, $4.5 billion and $9.3 billion, respectively.

North America and International revenue disaggregated by segment was as follows:

(Stated in millions)
	2021
	North America				International				Eliminations & other				Total
Digital & Integration	$	812			$	2,474			$	4			$	3,290
Reservoir Performance		329				4,266				4				4,599
Well Construction		1,485				7,025				196				8,706
Production Systems		1,832				4,865				13				6,710
Eliminations & other		8				(334	)			(50	)			(376	)
	$	4,466			$	18,296			$	167			$	22,929

(Stated in millions)
	2020
	North America				International				Eliminations & other				Total
Digital & Integration	$	573			$	2,487			$	7			$	3,067
Reservoir Performance		1,547				4,043				12				5,602
Well Construction		1,453				6,965				196				8,614
Production Systems		1,921				4,702				27				6,650
Eliminations & other		(16	)			(195	)			(121	)			(332	)
	$	5,478			$	18,002			$	121			$	23,601

(Stated in millions)
	2019
	North America				International				Eliminations & other				Total
Digital & Integration	$	865			$	3,272			$	8			$	4,145
Reservoir Performance		3,779				5,508				12				9,299
Well Construction		2,814				8,809				257				11,880
Production Systems		3,053				5,060				54				8,167
Eliminations & other		(65	)			(407	)			(102	)			(574	)
	$	10,446			$	22,242			$	229			$	32,917

Fixed Assets less accumulated depreciation by geographic area are as follows:

(Stated in millions)
	2021				2020
North America	$	1,368			$	1,588
Latin America		868				841
Europe/CIS/Africa		1,690				1,840
Middle East & Asia		2,049				2,353
Unallocated		454				204
	$	6,429			$	6,826

16. Pension and Other Postretirement Benefit Plans

Pension Plans

Schlumberger sponsors several defined benefit pension plans that cover substantially all US employees hired prior to October 1, 2004. The benefits are based on years of service and compensation, on a career-average pay basis.

In addition to the US defined benefit pension plans, Schlumberger sponsors several other international defined benefit pension plans. The most significant of these international plans are the International Staff Pension Plan and the UK pension plan (collectively, the “International plans”). The International Staff Pension Plan covers certain international employees hired prior to July 1, 2014 and is based on years of service and compensation on a career-average pay basis. The UK plan covers employees hired prior to April 1, 1999, and is based on years of service and compensation, on a final salary basis.

The weighted-average assumed discount rate, compensation increases and expected long-term rate of return on plan assets used to determine the net pension cost for the US and International plans were as follows:

	US												International
	2021				2020				2019				2021				2020				2019
Discount rate		2.60	%			3.30	%			4.30	%			2.38	%			3.27	%			4.00	%
Compensation increases		4.00	%			4.00	%			4.00	%			4.82	%			4.83	%			4.83	%
Return on plan assets		6.60	%			6.60	%			6.60	%			6.73	%			6.71	%			7.22	%

Net pension cost (credit) included the following components:

(Stated in millions)
	US												International
	2021				2020				2019				2021				2020				2019
Service cost	$	44			$	55			$	49			$	117			$	140			$	112
Interest cost		127				148				180				267				301				333
Expected return on plan assets		(254	)			(233	)			(232	)			(640	)			(591	)			(592	)
Amortization of prior service cost		-				8				10				-				-				7
Amortization of net loss		44				41				29				227				159				70
Settlement charge		-				-				37				-				-				-
	$	(39	)		$	19			$	73			$	(29	)		$	9			$	(70	)

During 2019, certain of Schlumberger’s deferred benefit pension plans offered former Schlumberger employees, who had not yet commenced receiving their pension benefits, an opportunity to receive a lump sum payout of their vested pension benefit. Schlumberger’s pension plans paid $257 million from pension plan assets to those who accepted this offer, thereby reducing its pension benefit obligations. These transactions resulted in a non-cash pension settlement charge of $37 million, representing the immediate recognition of the related deferred actuarial losses in Accumulated Other Comprehensive Loss, in the fourth quarter of 2019. See Note 3 – Charges and Credits.

The weighted-average assumed discount rate and compensation increases used to determine the projected benefit obligations for the US and International plans were as follows:

	US								International
	2021				2020				2021				2020
Discount rate		3.00	%			2.60	%			2.83	%			2.38	%
Compensation increases		4.00	%			4.00	%			4.83	%			4.82	%

The changes in the projected benefit obligation, plan assets and funded status of the plans were as follows:

(Stated in millions)
	US								International
	2021				2020				2021				2020
Change in Projected Benefit Obligations
Projected benefit obligation at beginning of year	$	4,940			$	4,593			$	11,140			$	9,647
Service cost		44				55				117				140
Interest cost		127				148				267				301
Contribution by plan participants		-				-				53				94
Actuarial (gains) losses		(211	)			370				(586	)			1,228
Currency effect		-				-				(18	)			68
Benefits paid		(232	)			(226	)			(355	)			(338	)
Projected benefit obligation at end of year	$	4,668			$	4,940			$	10,618			$	11,140
Change in Plan Assets
Plan assets at fair value at beginning of year	$	4,776			$	4,236			$	10,493			$	9,363
Actual return on plan assets		145				760				1,040				1,282
Currency effect		-				-				(28	)			72
Company contributions		7				6				18				20
Contributions by plan participants		-				-				53				94
Benefits paid		(232	)			(226	)			(355	)			(338	)
Plan assets at fair value at end of year	$	4,696			$	4,776			$	11,221			$	10,493
Asset / (Unfunded Liability)	$	28			$	(164	)		$	603			$	(647	)
Amounts Recognized in Balance Sheet
Postretirement Benefits	$	(212	)		$	(199	)		$	(19	)		$	(849	)
Other Assets		240				35				622				202
	$	28			$	(164	)		$	603			$	(647	)
Amounts Recognized in Accumulated Other Comprehensive Loss
Actuarial losses	$	276			$	423			$	1,174			$	1,981
Prior service cost		-				1				-				-
	$	276			$	424			$	1,174			$	1,981
Accumulated benefit obligation	$	4,484			$	4,739			$	10,370			$	10,844

The asset / (unfunded liability) represents the difference between the plan assets and the projected benefit obligation (“PBO”). The PBO represents the actuarial present value of benefits based on employee service and compensation and includes an assumption about future compensation levels. The accumulated benefit obligation (“ABO”) represents the actuarial present value of benefits based on employee service and compensation but does not include an assumption about future compensation levels.

Actuarial gains arising during 2021 and actuarial losses arising during 2020 were primarily attributable to changes in the discount rate used to determine the PBO.

The weighted-average allocation of plan assets and the target allocations by asset category as of December 31, 2021 are as follows:

	US															International
	Target					2021					2020					Target					2021					2020
Equity securities	4 - 8			%			5		%			15		%		20 - 30			%			23		%			45		%
Debt securities	80 - 90						84					76				50 - 60						53					35
Cash and cash equivalents	0 - 3						2					3				0 - 5						3					3
Alternative investments	8 - 15						9					6				19 - 26						21					17
		100		%			100		%			100		%			100		%			100		%			100		%

Asset performance is monitored frequently with an overall expectation that plan assets will meet or exceed the weighted index of its target asset allocation and component benchmark over rolling five-year periods.

The expected rate of return on assets assumptions reflect the long-term average rate of earnings expected on funds invested or to be invested. The assumptions have been determined based on expectations regarding future rates of return for the portfolio considering the asset allocation and related historical rates of return. The appropriateness of the assumptions is reviewed annually.

The fair value of Schlumberger’s pension plan assets at December 31, 2021 and 2020, by asset category, is presented below and was determined based on valuation techniques categorized as follows:

	•	Level One: The use of quoted prices in active markets for identical instruments.

	•	Level Two: The use of quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or other inputs that are observable in the market or can be corroborated by observable market data.

	•	Level Three: The use of significant unobservable inputs that typically require the use of management’s estimates of assumptions that market participants would use in pricing.

(Stated in millions)
	US Plan Assets
	2021																2020
					Level				Level				Level								Level				Level				Level
	Total				One				Two				Three				Total				One				Two				Three
Asset Category:
Cash and Cash Equivalents	$	68			$	61			$	7			$	-			$	140			$	127			$	13			$	-
Equity Securities:
US		212				196				16				-				527				441				86				-
International		49				48				1				-				186				182				4				-
Debt Securities:
Corporate bonds		2,583				-				2,583				-				1,945				-				1,945				-
Government and government-related debt securities		1,353				199				1,154				-				1,679				180				1,499				-
Alternative Investments:
Private equity		293				-				-				293				204				-				-				204
Real estate		99				-				-				99				95				-				-				95
Private debt		39				-				-				39				-				-				-				-
Total	$	4,696			$	504			$	3,761			$	431			$	4,776			$	930			$	3,547			$	299

(Stated in millions)
	International Plan Assets
	2021																2020
					Level				Level				Level								Level				Level				Level
	Total				One				Two				Three				Total				One				Two				Three
Asset Category:
Cash and Cash Equivalents	$	362			$	353			$	9			$	-			$	288			$	215			$	73			$	-
Equity Securities:
US		1,909				1,600				309				-				3,075				2,393				682				-
International		717				717				-				-				1,711				1,615				96				-
Debt Securities:
Corporate bonds		2,859				-				2,859				-				1,223				-				1,223				-
Government and government-related debt securities		2,390				221				2,169				-				2,371				213				2,158				-
Collateralized mortgage obligations and mortgage backed securities		644				-				644				-				84				-				84				-
Alternative Investments:
Private equity		1,284				-				-				1,284				842				-				-				842
Private debt		869				-				-				869				699				-				-				699
Real estate		187				-				-				187				200				-				-				200
Total	$	11,221			$	2,891			$	5,990			$	2,340			$	10,493			$	4,436			$	4,316			$	1,741

Schlumberger’s funding policy is to annually contribute amounts that are based upon a number of factors including the actuarial accrued liability, amounts that are deductible for income tax purposes, legal funding requirements and available cash flow. Schlumberger does not expect to make any material contributions to its postretirement benefit plans in 2022.

Postretirement Benefits Other Than Pensions

Schlumberger provides healthcare benefits to certain former US employees who have retired.

The actuarial assumptions used to determine the accumulated postretirement benefit obligation and net periodic benefit cost for the US postretirement medical plan were as follows:

	Benefit Obligations								Net Periodic Benefit
	At December 31,								Cost for the Year
	2021				2020				2021				2020				2019
Discount rate		3.00	%			2.60	%			2.60	%			3.30	%			4.30	%
Return on plan assets	-				-					7.00	%			7.00	%			7.00	%
Current medical cost trend rate		6.75	%			7.25	%			7.00	%			7.25	%			7.50	%
Ultimate medical cost trend rate		4.50	%			4.50	%			4.50	%			4.50	%			4.50	%
Year that the rate reaches the ultimate trend rate	2031				2031				2031				2031				2031

The net periodic benefit credit for the US postretirement medical plan included the following components:

(Stated in millions)
	2021				2020				2019
Service cost	$	28			$	31			$	29
Interest cost		32				36				45
Expected return on plan assets		(73	)			(70	)			(64	)
Amortization of prior service credit		(23	)			(25	)			(28	)
Curtailment gain		-				(69	)			-
	$	(36	)		$	(97	)		$	(18	)

Due to the actions taken by Schlumberger to reduce its global workforce during 2020, Schlumberger experienced a significant reduction in the expected aggregate years of future service of its employees in its US postretirement medical plan. Accordingly, Schlumberger recorded a curtailment gain of $69 million during the second quarter of 2020 relating to this plan. The curtailment gain includes recognition of the decrease in the benefit obligation as well as a portion of the previously unrecognized prior service credit, reflecting the reduction in expected years of future service. As a result of the curtailment, Schlumberger performed a remeasurement of the plan, which had an immaterial impact. This gain was classified in Impairments & other in the Consolidated Statement of Income (Loss). See Note 3 – Charges and Credits.

The changes in the accumulated postretirement benefit obligation, plan assets and funded status were as follows:

(Stated in millions)
	2021				2020
Change in Projected Benefit Obligations
Benefit obligation at beginning of year	$	1,234			$	1,193
Service cost		28				31
Interest cost		32				36
Contribution by plan participants		10				8
Actuarial (gains) losses		(95	)			64
Benefits paid		(63	)			(58	)
Curtailment		-				(40	)
Benefit obligation at end of year	$	1,146			$	1,234
Change in Plan Assets
Plan assets at fair value at beginning of year	$	1,356			$	1,185
Actual return on plan assets		15				221
Contributions by plan participants		10				8
Benefits paid		(63	)			(58	)
Plan assets at fair value at end of year	$	1,318			$	1,356
Asset	$	172			$	122
Amounts Recognized in Accumulated Other Comprehensive Loss
Actuarial gains	$	225			$	186
Prior service credit		81				104
	$	306			$	290

The asset balance relating to this plan was included in Other Assets in the Consolidated Balance Sheet.

The assets of the US postretirement medical plan are invested 13% in equity securities and 87% in debt securities at December 31, 2021. The fair value of these assets was primarily determined based on Level Two valuation techniques.

Other Information

The expected benefits to be paid under the US and International pension plans as well as the postretirement medical plan are as follows:

(Stated in millions)
	Pension Benefits								Postretirement
	US				International				Medical Plan
2022	$	237			$	370			$	53
2023	$	238			$	380			$	53
2024	$	239			$	391			$	53
2025	$	239			$	403			$	54
2026	$	240			$	407			$	54
2027-2031	$	1,213			$	2,260			$	294

17. Supplementary Information

Cash paid for interest and income taxes was as follows:

(Stated in millions)
	2021				2020				2019
Interest	$	560			$	598			$	558
Income tax	$	591			$	582			$	739

Interest and other income includes the following:

(Stated in millions)
	2021				2020				2019
Earnings of equity method investments	$	40			$	91			$	45
Interest income		33				33				41
Unrealized gain on marketable securities (see Note 3)		47				39				-
Gain on sale of Liberty shares (see Note 3)		28				-				-
	$	148			$	163			$	86

The components of depreciation and amortization expense are as follows:

(Stated in millions)
	2021				2020				2019
Depreciation of fixed assets	$	1,402			$	1,625			$	1,976
Amortization of APS investments		305				396				731
Amortization of intangible assets		302				371				618
Amortization of multiclient seismic data		111				174				264
	$	2,120			$	2,566			$	3,589

The change in Allowance for doubtful accounts is as follows:

(Stated in millions)
	2021				2020				2019
Balance at beginning of year	$	301			$	255			$	249
Additions		47				58				5
Amounts written off		(29	)			(12	)			1
Balance at end of year	$	319			$	301			$	255

Revenue in excess of billings related to contracts where revenue is recognized over time was $0.2 billion at both December 31, 2021 and 2020. Such amounts are included within Receivables less allowance for doubtful accounts in the Consolidated Balance Sheet.

Other Assets consist of the following:

(Stated in millions)
	2021				2020
Investments in APS projects	$	1,786			$	1,713
Pension and other postretirement		1,034				360
Operating lease assets		553				710
Multiclient seismic data		154				317
Fair value of hedge contracts		66				427
Other		590				666
	$	4,183			$	4,193

Accounts payable and accrued liabilities consist of the following:

(Stated in millions)
	2021				2020
Trade	$	3,205			$	2,937
Payroll, vacation and employee benefits		1,377				1,524
Billings and cash collections in excess of revenue		1,088				941
Other		2,712				3,040
	$	8,382			$	8,442

Management’s Report on Internal Control Over Financial Reporting

Schlumberger management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a–15(f) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Schlumberger’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Schlumberger management assessed the effectiveness of its internal control over financial reporting as of December 31, 2021. In making this assessment, it used the criteria set forth in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework. Based on this assessment Schlumberger’s management has concluded that, as of December 31, 2021, its internal control over financial reporting is effective based on those criteria.

The effectiveness of Schlumberger’s internal control over financial reporting as of December 31, 2021 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

of Schlumberger Limited

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheet of Schlumberger Limited and its subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of income (loss), comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2021, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Uncertain Tax Positions

As described in Note 12 to the consolidated financial statements, the Company’s tax filings are subject to regular audit by the tax authorities, and those audits may result in assessments for additional taxes that are resolved with the tax authorities or, potentially, through the courts. Tax liabilities are recorded based on estimates of additional taxes that will be due upon the conclusion of these audits.

The principal considerations for our determination that performing procedures relating to uncertain tax positions is a critical audit matter are the significant judgment applied by management in determining these liabilities including a high degree of estimation uncertainty due to the uncertain and complex application of tax regulations, which in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate management’s estimates.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the identification and recognition of uncertain tax positions. These procedures also included, among others (i) evaluating management’s process for determining the estimated liabilities for uncertain tax positions, (ii) testing the completeness and reasonableness of uncertain tax positions recorded in the consolidated financial statements, and (iii) evaluating assessments received from the relevant tax authorities. Professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of assumptions used by management, including management’s assessment of whether tax positions are more-likely-than-not of being sustained.

/s/ PricewaterhouseCoopers LLP
Houston, Texas
January 26, 2022

We have served as the Company’s auditor since 1952.