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

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

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

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

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

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

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

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

	(Stated in millions, except per share amounts)				(Stated in millions, except per share amounts)

	Three Months Ended March 31,				Three Months Ended March 31,
	2019		2018		2020			2019
Revenue
Services	$	5,906	$	5,736	$	5,426		$	5,906
Product sales		1,973		2,093		2,029			1,973
Total Revenue		7,879		7,829		7,455			7,879
Interest & other income		14		42		39			14
Expenses
Cost of services		5,111		4,880		4,727			5,111
Cost of sales		1,841		1,922		1,897			1,841
Research & engineering		173		172		173			173
General & administrative		112		111		127			112
Impairments & other						8,523			-
Interest		147		143		136			147
Income before taxes		509		643
Tax expense		79		113
Net income		430		530
Income (loss) before taxes						(8,089	)		509
Tax expense (benefit)						(721	)		79
Net income (loss)						(7,368	)		430
Net income attributable to noncontrolling interests		9		5		8			9
Net income attributable to Schlumberger	$	421	$	525
Net income (loss) attributable to Schlumberger					$	(7,376	)	$	421

Basic earnings per share of Schlumberger	$	0.30	$	0.38
Basic earnings (loss) per share of Schlumberger					$	(5.32	)	$	0.30

Diluted earnings per share of Schlumberger	$	0.30	$	0.38
Diluted earnings (loss) per share of Schlumberger					$	(5.32	)	$	0.30

Average shares outstanding:
Basic		1,385		1,385		1,387			1,385
Assuming dilution		1,397		1,394		1,387			1,397

(Stated in millions)

Three Months Ended March 31,

2019

2018

Net income
$
430

$
530

Currency translation adjustments

Unrealized net change arising during the period

77

39

Marketable securities

Unrealized gain arising during the period

-

19

Cash flow hedges

Net gain (loss) on cash flow hedges

(5
)

5

Reclassification to net income of net realized (gain) loss

2

(3
)
Pension and other postretirement benefit plans

Amortization to net income of net actuarial loss

24

56

Amortization to net income of net prior service credit

(3
)

(1
)
Comprehensive income

525

645

Comprehensive income attributable to noncontrolling interests

9

5

Comprehensive income attributable to Schlumberger
$
516

$
640

(Stated in millions)

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

(Stated in millions)

Mar. 31,

2019

Dec. 31,

(Unaudited)

2018

ASSETS

Current Assets

Cash
$
1,230

$
1,433

Short-term investments

925

1,344

Receivables less allowance for doubtful accounts (2019 - $244; 2018 - $249)

8,171

7,881

Inventories

4,224

4,010

Other current assets

1,223

1,063

15,773

15,731

Investments in Affiliated Companies

1,544

1,538

Fixed Assets less accumulated depreciation

11,533

11,679

Multiclient Seismic Data

584

601

Goodwill

24,945

24,931

Intangible Assets

8,611

8,727

Other Assets

7,331

7,300

$
70,321

$
70,507

LIABILITIES AND EQUITY

Current Liabilities

Accounts payable and accrued liabilities
$
9,702

$
10,223

Estimated liability for taxes on income

1,194

1,155

Short-term borrowings and current portion of long-term debt

99

1,407

Dividends payable

702

701

11,697

13,486

Long-term Debt

16,449

14,644

Postretirement Benefits

1,136

1,153

Deferred Taxes

1,375

1,441

Other Liabilities

3,140

3,197

33,797

33,921

Equity

Common stock

13,000

13,132

Treasury stock

(3,756
)

(4,006
)
Retained earnings

31,386

31,658

Accumulated other comprehensive loss

(4,527
)

(4,622
)
Schlumberger stockholders' equity

36,103

36,162

Noncontrolling interests

421

424

36,524

36,586

$
70,321

$
70,507

(Stated in millions)

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

(Stated in millions)

Three Months Ended March 31,

2019

2018

Cash flows from operating activities:

Net income
$
430

$
530

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization ⁽¹⁾

903

874

Stock-based compensation expense

108

90

Earnings of equity method investments, less dividends received

3

(5
)
Change in assets and liabilities: ⁽²⁾

Increase in receivables

(280
)

(152
)
Increase in inventories

(197
)

(81
)
Increase in other current assets

(93
)

(48
)
Decrease (increase) in other assets

2

(70
)
Decrease in accounts payable and accrued liabilities

(483
)

(600
)
Increase in estimated liability for taxes on income

5

45

Decrease in other liabilities

(42
)

(7
)
Other

(30
)

(8
)
NET CASH PROVIDED BY OPERATING ACTIVITIES

326

568

Cash flows from investing activities:

Capital expenditures

(413
)

(454
)
SPM investments

(151
)

(240
)
Multiclient seismic data costs capitalized

(45
)

(26
)
Business acquisitions and investments, net of cash acquired

(5
)

(13
)
Sale of investments, net

420

980

Other

(36
)

35

NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES

(230
)

282

Cash flows from financing activities:

Dividends paid

(692
)

(692
)
Proceeds from employee stock purchase plan

85

107

Proceeds from exercise of stock options

22

20

Stock repurchase program

(98
)

(97
)
Proceeds from issuance of long-term debt

1,812

12

Repayment of long-term debt

(1,368
)

(51
)
Net decrease in short-term borrowings

(38
)

(105
)
Other

(20
)

19

NET CASH USED IN FINANCING ACTIVITIES

(297
)

(787
)
Net (decrease) increase in cash before translation effect

(201
)

63

Translation effect on cash

(2
)

3

Cash, beginning of period

1,433

1,799

Cash, end of period
$
1,230

$
1,865

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

	(Stated in millions)																		(Stated in millions, except per share amounts)

										Accumulated																		Accumulated
										Other																		Other
	Common Stock						Retained			Comprehensive			Noncontrolling						Common Stock						Retained			Comprehensive			Noncontrolling
January 1, 2019 – March 31, 2019	Issued			In Treasury			Earnings			Loss			Interests			Total
Balance, January 1, 2019	$	13,132		$	(4,006	)	$	31,658		$	(4,622	)	$	424		$	36,586
Net income								421						9			430
January 1, 2020 – March 31, 2020																			Issued			In Treasury			Earnings			Loss			Interests			Total
Balance, January 1, 2020																			$	13,078		$	(3,631	)	$	18,751		$	(4,438	)	$	416		$	24,176
Net loss																										(7,376	)					8			(7,368	)
Currency translation adjustments											77						77												(125	)		(3	)		(128	)
Changes in fair value of cash flow hedges											(3	)					(3	)											(202	)					(202	)
Pension and other postretirement benefit plans											21						21												42						42
Shares sold to optionees, less shares exchanged		(25	)		47												22
Vesting of restricted stock		(100	)		100												-			(117	)		117												-
Shares issued under employee stock purchase plan		(115	)		200												85			(95	)		180												85
Stock repurchase program					(98	)											(98	)					(26	)											(26	)
Stock-based compensation expense		108															108			108															108
Dividends declared ($0.50 per share)								(693	)								(693	)								(694	)								(694	)
Other					1									(12	)		(11	)		(11	)											1			(10	)
Balance, March 31, 2019	$	13,000		$	(3,756	)	$	31,386		$	(4,527	)	$	421		$	36,524
Balance, March 31, 2020																			$	12,963		$	(3,360	)	$	10,681		$	(4,723	)	$	422		$	15,983

	(Stated in millions)																		(Stated in millions, except per share amounts)

										Accumulated																		Accumulated
										Other																		Other
	Common Stock						Retained			Comprehensive			Noncontrolling						Common Stock						Retained			Comprehensive			Noncontrolling
January 1, 2018 – March 31, 2018	Issued			In Treasury			Earnings			Loss			Interests			Total
Balance, January 1, 2018	$	12,975		$	(4,049	)	$	32,190		$	(4,274	)	$	419		$	37,261
January 1, 2019 –March 31, 2019																			Issued			In Treasury			Earnings			Loss			Interests			Total
Balance, January 1, 2019																			$	13,132		$	(4,006	)	$	31,658		$	(4,622	)	$	424		$	36,586
Net income								525						5			530									421						9			430
Currency translation adjustments											39						39												77						77
Changes in unrealized gain on marketable securities											19						19
Changes in fair value of cash flow hedges											2						2												(3	)					(3	)
Pension and other postretirement benefit plans											55						55												21						21
Shares sold to optionees, less shares exchanged		(20	)		40												20			(25	)		47												22
Vesting of restricted stock		(29	)		29												-			(100	)		100												-
Shares issued under employee stock purchase plan		(33	)		140												107			(115	)		200												85
Stock repurchase program					(97	)											(97	)					(98	)											(98	)
Stock-based compensation expense		90															90			108															108
Dividends declared ($0.50 per share)								(693	)								(693	)								(693	)								(693	)
Other		15												(22	)		(7	)					1									(12	)		(11	)
Balance, March 31, 2018	$	12,998		$	(3,937	)	$	32,022		$	(4,159	)	$	402		$	37,326
Balance, March 31, 2019																			$	13,000		$	(3,756	)	$	31,386		$	(4,527	)	$	421		$	36,524

			(Stated in millions)								(Stated in millions)

						Shares								Shares
	Issued		In Treasury			Outstanding			Issued		In Treasury			Outstanding
Balance, January 1, 2019		1,434		(51	)		1,383
Balance, January 1, 2020										1,434		(49	)		1,385
Vesting of restricted stock		-		1			1			-		2			2
Shares issued under employee stock purchase plan		-		3			3			-		2			2
Stock repurchase program		-		(2	)		(2	)		-		(1	)		(1	)
Balance, March 31, 2019		1,434		(49	)		1,385
Balance, March 31, 2020										1,434		(46	)		1,388

The accompanying unaudited consolidated financial statements of Schlumberger Limited and its subsidiaries (“Schlumberger”) have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of Schlumberger management, all adjustments considered necessary for a fair statement have been included in the accompanying unaudited financial statements. All intercompany transactions and balances have been eliminated in consolidation. Operating results for the three-month period ended March 31, ~~2019~~2020 are not necessarily indicative of the results that may be expected for the full year ending December 31, ~~2019.~~2020. The December 31, ~~2018~~2019 balance sheet information has been derived from the Schlumberger ~~2018~~2019 audited financial statements. For further information, refer to the Consolidated Financial Statements and notes thereto included in the Schlumberger Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, filed with the Securities and Exchange Commission on January ~~23, 2019.~~ 22, 2020.

In connection with the preparation of its first-quarter 2020 financial statements, Schlumberger recorded the following charges:

All of the pretax charges presented above are classified in Impairments & other in the Consolidated Statement of Income (Loss).

Schlumberger had 11 reporting units with goodwill balances aggregating $16.0 billion. Schlumberger determined that the fair value of 4 of its reporting units, representing $4.5 billion of the goodwill, was substantially in excess of their carrying value. Schlumberger performed a detailed quantitative impairment assessment of the remaining 7 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. This charge primarily relates to goodwill associated with the Drilling and Production segments.

Following the $3.1 billion goodwill impairment charge relating to these seven reporting units, 6 of these reporting units had a remaining goodwill balance. These six reporting units had goodwill balances which 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 the current 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 7 reporting units, on average, by less than 5%.

The fair value of these impaired assets 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.

Schlumberger expects to record a significant charge relating to severance during the second quarter of 2020. However, at this time the amount cannot be reasonably estimated. Additionally, as market conditions evolve and Schlumberger further develops its strategy to deal with such conditions, it may result in further restructuring and/or impairment charges in future periods relating to, among other things, inventory, fixed assets and other assets.

The following is a reconciliation from basic earnings (loss) per share of Schlumberger to diluted earnings (loss) per share of Schlumberger:

(Stated in millions, except per share amounts)	(Stated in millions, except per share amounts)												(Stated in millions, except per share amounts)

	2019						2018						2020								2019
	Schlumberger Net Income		Average Shares Outstanding		Earnings per Share		Schlumberger Net Income		Average Shares Outstanding		Earnings per Share		Schlumberger Loss			Average Shares Outstanding		Loss per Share			Schlumberger Net Income		Average Shares Outstanding		Earnings per Share
First Quarter
Basic	$	421		1,385	$	0.30	$	525		1,385	$	0.38	$	(7,376	)		1,387	$	(5.32	)	$	421		1,385	$	0.30
Assumed exercise of stock options		-		-				-		1
Unvested restricted stock		-		12				-		8				-			-					-		12
Diluted	$	421		1,397	$	0.30	$	525		1,394	$	0.38	$	(7,376	)		1,387	$	(5.32	)	$	421		1,397	$	0.30

The number of outstanding options to purchase shares of Schlumberger common stock that were not included in the computation of diluted earnings per share, because to do so would have had an antidilutive effect, was as follows:

(Stated in millions)	(Stated in millions)				(Stated in millions)

	2019		2018		Three Months Ended March 31,
First Quarter		43		39
					2020		2019
Employee stock options						51		43
Unvested restricted stock						16		11

A summary of inventories, which are stated at the lower of average cost or net realizable value, is as follows:

(Stated in millions)	(Stated in millions)				(Stated in millions)

	Mar. 31,		Dec. 31,		Mar. 31,		Dec. 31,
	2019		2018		2020		2019
Raw materials & field materials	$	1,877	$	1,803	$	1,949	$	1,857
Work in progress		549		519		542		515
Finished goods		1,798		1,688		1,657		1,758
	$	4,224	$	4,010	$	4,148	$	4,130

(Stated in millions)	(Stated in millions)				(Stated in millions)

	Mar. 31,		Dec. 31,		Mar. 31,		Dec. 31,
	2019		2018		2020		2019
Property, plant & equipment	$	38,714	$	38,664	$	34,105	$	35,009
Less: Accumulated depreciation		27,181		26,985		25,555		25,739
	$	11,533	$	11,679	$	8,550	$	9,270

Depreciation expense relating to fixed assets was ~~$512~~$449 million and ~~$523~~$512 million in the first quarter of 2020 and 2019, ~~and 2018,~~ respectively.

The change in the carrying amount of multiclient seismic data for the three months ended March 31, ~~2019~~2020 was as follows:

(Stated in millions)	(Stated in millions)			(Stated in millions)

Balance at December 31, 2018	$	601
Balance at December 31, 2019				$	568
Capitalized in period		45			35
Charged to expense		(62	)		(47	)
Balance at March 31, 2019	$	584
Balance at March 31, 2020				$	556

The gross book value, accumulated amortization and net book value of intangible assets were as follows:

	(Stated in millions)												(Stated in millions)

	Mar. 31, 2019						Dec. 31, 2018						Mar. 31, 2020						Dec. 31, 2019
	Gross		Accumulated		Net Book		Gross		Accumulated		Net Book		Gross		Accumulated		Net Book		Gross		Accumulated		Net Book
	Book Value		Amortization		Value		Book Value		Amortization		Value		Book Value		Amortization		Value		Book Value		Amortization		Value
Customer relationships	$	4,772	$	1,302	$	3,470	$	4,768	$	1,243	$	3,525	$	1,758	$	442	$	1,316	$	3,779	$	868	$	2,911
Technology/technical know-how		3,463		1,275		2,188		3,494		1,246		2,248		1,387		512		875		2,498		779		1,719
Tradenames		2,799		653		2,146		2,799		628		2,171		772		146		626		1,885		264		1,621
Other		1,428		621		807		1,404		621		783		1,553		697		856		1,514		676		838
	$	12,462	$	3,851	$	8,611	$	12,465	$	3,738	$	8,727	$	5,470	$	1,797	$	3,673	$	9,676	$	2,587	$	7,089

Amortization expense charged to income was $133 million during the first quarter of 2020 and $160 million during the first quarter of ~~2019 and $165 million during the first quarter of 2018.~~

Based on the net book value of intangible assets at March 31, ~~2019,~~2020, amortization charged to income for the subsequent five years is estimated to be: remaining three quarters of ~~2019—$510 million;~~ 2020—$~~657~~237 million; 2021—$~~628~~307 million; 2022—$~~622~~298 million; 2023—$~~609~~280 million; 2024—$259 million; and ~~2024—~~2025—$~~563~~254 million.

(Stated in millions)	(Stated in millions)				(Stated in millions)

	Mar. 31,		Dec. 31,		Mar. 31,		Dec. 31,
	2019		2018		2020		2019
3.30% Senior Notes due 2021					$	1,598	$	1,597
3.65% Senior Notes due 2023						1,495		1,495
3.90% Senior Notes due 2028						1,445		1,444
2.40% Senior Notes due 2022						998		998
0.25% Notes due 2027						983		550
0.50% Notes due 2031						972		544
4.00% Senior Notes due 2025	$	1,743	$	1,742		929		929
3.30% Senior Notes due 2021		1,597		1,596
3.00% Senior Notes due 2020		1,596		1,596
3.65% Senior Notes due 2023		1,494		1,493
4.20% Senior Notes due 2021		1,100		1,100
2.40% Senior Notes due 2022		997		997
3.63% Senior Notes due 2022		847		847
4.30% Senior Notes due 2029						845		845
3.75% Senior Notes due 2024		745		-		746		746
4.30% Senior Notes due 2029		844		-
1.00% Guaranteed Notes due 2026		671		678		656		665
2.65% Senior Notes due 2022		598		598		598		598
2.20% Senior Notes due 2020		499		499
0.00% Notes due 2024						548		551
3.63% Senior Notes due 2022						295		294
7.00% Notes due 2038		209		210		207		208
4.50% Notes due 2021		132		132
5.95% Notes due 2041		115		115		114		114
3.60% Notes due 2022		109		109
5.13% Notes due 2043		99		99		99		99
4.00% Notes due 2023		81		82		81		81
3.70% Notes due 2024		55		55		55		55
4.20% Senior Notes due 2021						-		600
Commercial paper borrowings		2,655		2,433		2,745		2,222
Other		263		263		-		135
	$	16,449	$	14,644	$	15,409	$	14,770

During the first quarter of 2020, Schlumberger issued €400 million of 0.25% Notes due 2027 and €400 million of 0.50% Notes due 2031.

The estimated fair value of Schlumberger’s Long-term Debt, based on quoted market prices at March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, was ~~$16.7~~$15.1 billion and ~~$14.6~~$15.3 billion, respectively.

At March 31, ~~2019,~~2020, Schlumberger had separate committed credit facility agreements aggregating ~~$6.5~~$6.25 billion with commercial banks, of which ~~$3.8~~$3.5 billion was available and unused. These committed facilities support commercial paper programs in the United States and Europe, of which ~~$1.0~~$2.75 billion matures in February ~~2020,~~2023, $1.5 billion matures in ~~November 2020, $2.0 billion matures in February 2023~~July 2024 and $2.0 billion matures in February ~~2024.~~2025. Interest rates and other terms of borrowing under these lines of credit vary by facility.

Subsequent to the end of the first quarter of 2020, Schlumberger entered into a €1.2 billion committed revolving credit facility. This one-year facility can be extended at Schlumberger’s option for up to an additional year. Schlumberger can potentially upsize this facility through syndication. As of April 22, 2020, 0 amounts have been drawn under this facility.

Borrowings under ~~Schlumberger’s~~the commercial paper programs at March 31, ~~2019 and December 31, 2018~~2020 were ~~$2.7~~$2.75 billion, ~~and $2.4 billion, respectively, all of which were classified in~~ ~~Long-term Debt~~ ~~in the~~ ~~Consolidated Balance Sheet~~.

In April 2019, Schlumberger completed a debt exchange offer, pursuant to which it issued $1.500 billion in principal of 3.90% Senior Notes due 2028 (the “New Notes”) in exchange for $401 million of 3.00% Senior Notes due 2020, $234 million of 3.63% Senior Notes due 2022 and $817 million of 4.00% Senior Notes due 2025. In connection with the exchange of principal, Schlumberger paid a premium of $48 million, substantially all of which was classified in Long-term debtin the ~~form~~Consolidated Balance Sheet. At December 31, 2019, borrowings under the commercial paper programs were $2.22 billion, all of ~~New Notes. This premium will be amortized as additional interest expense over~~which was classified in Long-term debt in the ~~term of the New Notes.~~Consolidated Balance Sheet.

Schlumberger is exposed to market risks related to fluctuations in foreign currency exchange rates and interest rates. To mitigate these risks, Schlumberger utilizes derivative instruments. Schlumberger does not enter into derivative transactions for speculative purposes.

Schlumberger is subject to interest rate risk on its debt and its investment portfolio. Schlumberger maintains an interest rate risk management strategy that uses a mix of variable and fixed rate debt combined with its investment portfolio, ~~and occasionally interest rate swaps,~~ to mitigate the exposure to changes in interest rates.

During 2017, a Canadian-dollar functional currency subsidiary of Schlumberger issued $1.1 billion of US-dollar denominated debt. Schlumberger entered into cross-currency swaps for an aggregate notional amount of $1.1 billion in order to hedge changes in the fair value of its $0.5 billion 2.20% Senior Notes due 2020 and its $0.6 billion 2.65% Senior Notes due 2022. These cross-currency swaps effectively convert the US-dollar notes to Canadian-dollar denominated debt with fixed annual interest rates of 1.97% and 2.52%, respectively.

~~These cross-currency swaps are designated as cash flow hedges. The changes in the fair values of the hedges are recorded on the~~ ~~Consolidated Balance Sheet~~ ~~and in~~ ~~Accumulated Other Comprehensive Loss.~~ ~~Amounts recorded in~~ ~~Accumulated Other Comprehensive Loss~~ ~~are reclassified to earnings in the same periods that the underlying hedged item is recognized in earnings.~~

At March 31, ~~2019,~~2020, Schlumberger had fixed rate debt aggregating ~~$13.5~~$13.7 billion and variable rate debt aggregating ~~$3.0 billion, after taking into account the effect of interest rate swaps.~~$2.9 billion.

As a multinational company, Schlumberger generates revenue in more than 120 countries. Schlumberger’s functional currency is primarily the US dollar. However, outside the United States, a significant portion of Schlumberger’s expenses isare 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 ~~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 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.

~~At March 31, 2019,~~ Schlumberger ~~recognized a cumulative net $16 million loss in~~ ~~Accumulated Other Comprehensive Loss~~is also exposed to risks on future cash flows relating to ~~revaluation~~certain of ~~foreign currency forward contracts designated as~~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 ~~hedges,~~risks.

During 2017, a Canadian-dollar functional currency subsidiary of Schlumberger issued $1.1 billion of US-dollar denominated debt. Schlumberger entered into cross-currency swaps for an aggregate notional amount of $1.1 billion in order to hedge changes in the ~~majority~~fair value of ~~which is expected~~its $0.5 billion of 2.20% Senior Notes due 2020 and its $0.6 billion of 2.65% Senior Notes due 2022. These cross-currency swaps effectively convert the US-dollar denominated notes to ~~be reclassified~~Canadian-dollar denominated debt with fixed annual interest rates of 1.97% and 2.52%, respectively.

During 2019, a US-dollar functional currency subsidiary of Schlumberger issued €1.5 billion of Euro-denominated debt. Schlumberger entered into ~~earnings within~~cross-currency swaps for an aggregate notional amount of €1.5 billion in order to hedge changes in the ~~next 12 months.~~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 the first quarter of 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.

Schlumberger is exposed to changes in the fair value of assets and liabilities that are denominated in currencies other than the functional currency. While Schlumberger uses foreign currency forward contracts and foreign currency options 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 fair value of the hedged item.

At March 31, ~~2019,~~2020, contracts were outstanding for the US dollar equivalent of ~~$4.0~~$7.3 billion in various foreign currencies, of which ~~$1.1~~$4.0 billion relates to hedges of debt denominated in currencies other than the functional currency.

At March 31, 2020, Schlumberger recognized a cumulative $202 million loss in Accumulated Other Comprehensive Loss relating to changes in the fair value of foreign currency forward contracts and cross-currency swaps.

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

	(Stated in millions)						(Stated in millions)

	Gain (Loss) Recognized in Income						Gain (Loss) Recognized in Income (Loss)
	First Quarter						First Quarter
	2019			2018		Consolidated Statement of Income Classification
Derivatives designated as fair value hedges:
Cross currency swaps	$	-		$	27	Interest expense
							2020			2019			Consolidated Statement of Income (Loss) Classification
Derivatives designated as cash flow hedges:
Foreign exchange contracts	$	(2	)	$	4	Cost of services/sales	$	(1	)	$	(2	)	Cost of services/sales
Cross currency swaps		(16	)		19	Interest expense		58			(16	)	Interest expense
	$	(18	)	$	23		$	57		$	(18	)
Derivatives not designated as hedges:
Foreign exchange contracts	$	6		$	28	Cost of services/sales	$	(9	)	$	6		Cost of services/sales

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.

				(Stated in millions)												(Stated in millions)

	First Quarter 2019						First Quarter 2018						First Quarter 2020						First Quarter 2019
				Income						Income						Income (Loss)						Income (Loss)
				Before						Before						Before						Before
	Revenue			Taxes			Revenue			Taxes			Revenue			Taxes			Revenue			Taxes
Reservoir Characterization	$	1,543		$	293		$	1,559		$	306		$	1,311		$	184		$	1,459		$	281
Drilling		2,387			307			2,126			293			2,291			285			2,387			307
Production		2,890			217			2,956			217			2,703			212			2,890			217
Cameron		1,174			137			1,310			166			1,254			121			1,259			148
Eliminations & other		(115	)		(46	)		(122	)		(8	)		(104	)		(26	)		(116	)		(45	)
Pretax operating income					908						974
																	776						908
Corporate & other ⁽¹⁾					(273	)					(225	)					(228	)					(273	)
Interest income ⁽²⁾					10						25						15						10
Interest expense ⁽³⁾					(136	)					(131	)					(129	)					(136	)
Charges and credits ⁽⁴⁾																	(8,523	)					-
	$	7,879		$	509		$	7,829		$	643		$	7,455		$	(8,089	)	$	7,879		$	509

⁽¹⁾~~Comprised principally of certain corporate expenses not allocated~~Certain prior period amounts have been reclassified to conform to the ~~segments, stock-based compensation costs, amortization expense associated with certain intangible assets, certain centrally managed initiatives and other nonoperating items.~~ current period presentation.

⁽²⁾~~Interest income excludes amounts which are included in the segments’ income ($1 million in 2019; $3 million in 2018).~~

⁽³⁾~~Interest expense excludes amounts which are included in the segments’ income ($11 million in 2019; $12 million in 2018).~~

	(Stated in millions)				(Stated in millions)

	First Quarter				First Quarter
	2019		2018		2020		2019
North America	$	2,738	$	2,835	$	2,279	$	2,738
Latin America		992		870		945		992
Europe/CIS/Africa		1,707		1,713		1,751		1,707
Middle East & Asia		2,338		2,300		2,425		2,338
Eliminations & other		104		111		55		104
	$	7,879	$	7,829	$	7,455	$	7,879

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

							(Stated in millions)												(Stated in millions)

	First Quarter 2019												First Quarter 2020
	North						Eliminations						North						Eliminations
	America			International			& other			Total			America			International			& other			Total
Reservoir Characterization	$	216		$	1,252		$	75		$	1,543		$	199		$	1,107		$	5		$	1,311
Drilling		578			1,755			54			2,387			524			1,722			45			2,291
Production		1,373			1,516			1			2,890			1,066			1,637			-			2,703
Cameron		560			568			46			1,174			506			726			22			1,254
Other		11			(54	)		(72	)		(115	)		(16	)		(71	)		(17	)		(104	)
	$	2,738		$	5,037		$	104		$	7,879		$	2,279		$	5,121		$	55		$	7,455


	First Quarter 2018												First Quarter 2019
	North						Eliminations						North						Eliminations
	America			International			& other			Total			America			International			& other			Total
Reservoir Characterization	$	222		$	1,200		$	137		$	1,559		$	216		$	1,239		$	4		$	1,459
Drilling		564			1,513			49			2,126			578			1,755			54			2,387
Production		1,500			1,455			1			2,956			1,373			1,516			1			2,890
Cameron		550			736			24			1,310			581			621			57			1,259
Other		(1	)		(21	)		(100	)		(122	)		(10	)		(94	)		(12	)		(116	)
	$	2,835		$	4,883		$	111		$	7,829		$	2,738		$	5,037		$	104		$	7,879

Revenue in excess of billings related to contracts where revenue is recognized over time was $0.2 billion at both March 31, ~~2019~~2020 and December 31, ~~2018.~~2019. Such amounts are included within Receivables less allowance for doubtful accounts in the Consolidated Balance Sheet.

Due to the nature of its business, Schlumberger does not have significant backlog. Total backlog was ~~$2.9~~$3.0 billion at March 31, ~~2019,~~2020, of which approximately ~~49%~~50% is expected to be recognized as revenue over the next 12 months.

Billings and cash collections in excess of revenue was ~~$1.0~~$1.1 billion at March 31, ~~2019~~2020 and $0.9 billion at December 31, ~~2018.~~2019. Such amounts are included within Accounts payable and accrued liabilities in the Consolidated Balance Sheet.

Net pension cost (credit) for the Schlumberger pension plans included the following components:

(Stated in millions)	(Stated in millions)												(Stated in millions)

	First Quarter												First Quarter
	2019						2018						2020						2019
	US			Int'l			US			Int'l			US			Int'l			US			Int'l
Service cost	$	14		$	32		$	16		$	32		$	15		$	37		$	14		$	32
Interest cost		45			83			43			77			37			75			45			83
Expected return on plan assets		(58	)		(150	)		(62	)		(147	)		(58	)		(147	)		(58	)		(150	)
Amortization of prior service cost		2			2			3			3			2			-			2			2
Amortization of net loss		8			16			12			44			11			40			8			16
	$	11		$	(17	)	$	12		$	9		$	7		$	5		$	11		$	(17	)

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

(Stated in millions)	(Stated in millions)						(Stated in millions)

	First Quarter						First Quarter
	2019			2018			2020			2019
Service cost	$	8		$	8		$	9		$	8
Interest cost		12			11			10			12
Expected return on plan assets		(16	)		(15	)		(17	)		(16	)
Amortization of prior service credit		(7	)		(7	)		(7	)		(7	)
	$	(3	)	$	(3	)	$	(5	)	$	(3	)

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

				(Stated in millions)												(Stated in millions)

	First Quarter 2019						Fourth Quarter 2018						First Quarter 2020						Fourth Quarter 2019
				Income						Income						Income (Loss)						Income (Loss)
				Before						Before						Before						Before
	Revenue			Taxes			Revenue			Taxes			Revenue			Taxes			Revenue			Taxes
Reservoir Characterization	$	1,543		$	293		$	1,651		$	364		$	1,311		$	184		$	1,643		$	368
Drilling		2,387			307			2,461			318			2,291			285			2,442			303
Production		2,890			217			2,936			198			2,703			212			2,867			253
Cameron		1,174			137			1,265			127			1,254			121			1,387			126
Eliminations & other		(115	)		(46	)		(133	)		(40	)		(104	)		(26	)		(111	)		(44	)
Pretax operating income					908						967
																	776						1,006
Corporate & other ⁽¹⁾					(273	)					(238	)					(228	)					(215	)
Interest income ⁽²⁾					10						8						15						8
Interest expense ⁽³⁾					(136	)					(132	)					(129	)					(138	)
Charges and credits⁽⁴⁾					-						43						(8,523	)					(209	)
	$	7,879		$	509		$	8,180		$	648		$	7,455		$	(8,089	)	$	8,228		$	452

⁽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 ($1 million in 2019; $2 million in 2018).~~

⁽³⁾~~Interest expense excludes amounts which are included in the segments’ income ($11 million in 2019; $9 million in 2018).~~

⁽⁴⁾ Charges and credits recorded during the fourth quarter of 2018 consisted of a $215 million gain on sale of marine seismic acquisition business, a $184 million charge associated with workforce reductions and a $172 million charge related to the impairment of certain long-lived assets.

First-quarter revenue of ~~$7.9~~$7.5 billion declined 4%9% sequentially ~~reflecting~~and 5% year-on-year as the ~~expected reduction~~unprecedented global health and economic crisis sparked by the COVID-19 pandemic increasingly impacted industry activity during the quarter. The effect of this was amplified late in the quarter by a new battle for market share between the world’s largest oil producers. This created simultaneous shocks in oil supply and demand resulting in the most challenging industry environment in many decades. The spread of COVID-19 has caused more than 50 countries to implement lockdown measures affecting three billion people. Worldwide economic activity is falling sharply, and oil demand destruction is leading to an unprecedented supply-demand imbalance in the range of 20–30 million bbl/d. This is translating to near-term uncertainties in activity and budget projections.

Customer spending and drilling activity in North America ~~land~~declined as oil prices slipped early in the quarter before falling abruptly in March. This resulted in a 7% sequential decrease in North America revenue to $2.3 billion. International activity, ~~and~~which was expected to be seasonally lower sequentially, suffered from COVID-19-related activity disruptions and initial customer spending cuts in response to falling oil prices. International revenue of $5.1 billion declined 10% sequentially.

The sequential international revenue decline was led by lower winter activity in the ~~Northern Hemisphere. In addition,~~Europe/CIS/Africa area, particularly in the Russia & Central Asia and the United Kingdom & Continental Europe GeoMarkets. Latin America area revenue also decreased, mainly due to reduced ~~software, product, and~~WesternGeco^® multiclient seismic license sales. Middle East & Asia area revenue declined on lower product sales following strong year-end sales and a seasonal decline in activity. COVID-19-related activity disruptions during the ~~fourth-quarter increase~~quarter impacted our operations, particularly in China, Malaysia, Iraq, Italy, Romania, the United Kingdom, Gabon, Mozambique, Congo, Nigeria, Angola, and ~~lower Cameron long-cycle~~offshore North America.

At this time, customer feedback and Schlumberger’s analysis indicate global capex spend is expected to decline by about 20% in 2020, with the largest share of the reduction affecting North America, which is estimated to drop by about 40%. In contrast, international E&P capex is expected to decline by about 15%. Final investment decision sanctions are expected to fall back to trough levels of 2015, which would indicate project ~~deliveries contributed~~delays to 2021 and beyond.

In this environment—the duration of which remains uncertain—Schlumberger has planned for a range of scenarios and has taken a number of actions. To protect its workforce in the wake of COVID-19, Schlumberger has taken steps to keep its people safe by supporting those affected, mandating that as many employees and contractors as possible work from home, and monitoring those who cannot do so and are required to be at work. To reinforce cost control and cash discipline, Schlumberger is reducing its structural and variable costs, and restructuring its organization to match activity where necessary, including furloughing personnel, cutting salaries, lowering headcount, and closing facilities. Additionally, Schlumberger's Board of Directors and executive officers have voluntarily agreed to reductions in their cash compensation. The capital investment program has been reduced by more than 30% and resources will be allocated to the ~~sequential decline. Improved sequential activity~~more resilient markets while Schlumberger remains focused on capital stewardship and maintaining its commitment to a strong balance sheet.

The second quarter is likely to be the most uncertain and disruptive quarter the industry has ever seen. The extent to which Schlumberger’s future results are affected by COVID-19 will depend on various factors and consequences beyond the Company’s control, such as the duration and scope of the pandemic; additional actions by businesses and governments in ~~Latin America marginally offset these declines.~~response to the pandemic, and the speed and effectiveness of responses to combat the virus. COVID-19, and the volatile regional and global economic conditions stemming from the pandemic, could also aggravate the risk factors identified in Schlumberger’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019. COVID-19 may also materially adversely affect Schlumberger’s results in a manner that is either not currently known or that Schlumberger does not currently consider to be a significant risk to its business. See also the risk factor relating to COVID-19 disclosed in Item 8.01 of Schlumberger’s Current Report on Form 8-K filed on April 17, 2020.

~~International business results were strong, with the~~ Reservoir Characterization

Reservoir Characterization ~~Drilling, and Production segments combining to deliver year-on-year international~~ revenue ~~growth~~ of ~~8%, tracking Schlumberger’s expectation of high single-digit growth in the international markets for these segments for the full-year 2019.~~

~~In North America, first-quarter revenue~~$1.3 billion decreased 20% sequentially. This decrease was 3% lower sequentially driven by softer pricing and lower activity for both the hydraulic fracturing- and drilling-related businesses, while revenue from the artificial lift product line was flat sequentially. Offshore revenue in North America was slightly down sequentially with increased wireline activity in the US Gulf of Mexico offset by lower multiclient seismic license sales.

~~First-quarter revenue for Reservoir Characterization fell 7% sequentially~~primarily due to seasonally lower sales of software and multiclient seismic ~~licenses. Drilling revenue declined 3% sequentially due to~~licenses and reduced winter activity in the Northern Hemisphere. ~~Production revenue was 2% lower sequentially, driven by decreased OneStim~~^® ~~revenue~~Additionally, customers began to cut both discretionary spend and activity toward the end of the quarter, which affected exploration activity in North America and reduced artificial lift sales in the international markets. Cameron revenue declined 7% sequentially, primarily due to lower project deliveries from the long-cycle businesses of OneSubsea^® ~~and Drilling Systems.~~several GeoMarkets.

Reservoir Characterization pretax operating margin of ~~19% was 308~~14% fell 839 basis points (“bps”) ~~lower~~ sequentially due to ~~seasonally~~the lower sales of software and multiclient seismic licenses as well as the effects of lower exploration activity.

Drilling revenue of $2.3 billion decreased 6% sequentially with approximately half of the revenue decline attributable to the divestiture of the businesses and associated assets of DRILCO, Thomas Tools, and Fishing & Remedial Services (the “Drilling Tools businesses”) which was completed at the end of the fourth quarter of 2019. Revenue also decreased due to seasonality effects in the Northern Hemisphere. The US land rig count was 6% lower sequentially including a 15% drop in the last two weeks of March.

Drilling pretax operating margin of 12% was resilient, as it remained flat with the previous quarter despite the sequential revenue decline as profitability was boosted by the divestiture of the Drilling Tools businesses, which were previously dilutive to margins.

Production revenue of $2.7 billion declined 6% sequentially.This was driven by lower Well Services activity and weaker Artificial Lift Solutions sales in the international markets. OneStim^® revenue grew slightly as its scale-to-fit strategy successfully generated higher fleet utilization, however activity fell sharply in mid-March as customers cut their spending. OneStim began to stack more frac fleets in response and have reduced their active fleets by 27% during March.

Production pretax operating margin of 8% contracted by 98 bps sequentially due to reduced profitability in North America while international margins were flat despite lower revenue.

Cameron revenue of $1.3 billion decreased 10% sequentially mostly due to lower revenue in North America from the short-cycle businesses of Surface Systems and Valves & Process Systems. Revenue was impacted by the temporary closure of manufacturing facilities in Italy and Malaysia caused by COVID-19-related disruptions that impacted OneSubsea^®, Surface Systems, and Valves & Process Systems activity.

				(Stated in millions)

	First Quarter 2020						First Quarter 2019
				Income (Loss)						Income (Loss)
				Before						Before
	Revenue			Taxes			Revenue			Taxes
Reservoir Characterization	$	1,311		$	184		$	1,459		$	281
Drilling		2,291			285			2,387			307
Production		2,703			212			2,890			217
Cameron		1,254			121			1,259			148
Eliminations & other		(104	)		(26	)		(116	)		(45	)
					776						908
Corporate & other ⁽¹⁾					(228	)					(273	)
Interest income ⁽²⁾					15						10
Interest expense ⁽³⁾					(129	)					(136	)
Charges and credits⁽⁴⁾					(8,523	)					-
	$	7,455		$	(8,089	)	$	7,879		$	509

First-quarter 2020 revenue of $7.5 billion decreased 5% year-on-year as customers began to cut spending in response to falling oil prices caused by the simultaneous shocks in oil supply and demand due to the unprecedented global health and economic crisis sparked by the COVID-19 pandemic. North America revenue declined 17% year-on-year. The international business showed some resilience as revenue increased 2% year-on-year against the backdrop of an increasingly difficult operating environment.

First-quarter 2020 revenue of $1.3 billion fell 10% year-on-year as customers began to cut discretionary spending, which caused a reduction in exploration activity that impacted Wireline, ~~activity~~WesternGeco, and Software Integrated Solutions (“SIS”). Activity was also lower in ~~the Russia & Central Asia GeoMarket and decreased overall~~a number of countries affected by COVID-19-related disruptions.

Year-on-year, pretax operating margin dropped 525 bps year-on-year to 14% due to lower high-margin exploration activity. Lower sales of SIS software and WesternGeco multiclient seismic ~~licenses.~~licenses also contributed to the year-on-year margin contraction.

First-quarter 2020 revenue of ~~13% and 8%, respectively, were essentially flat sequentially while Cameron pretax operating margin of 12% was 161 bps higher sequentially~~$2.3 billion decreased 4% year-on-year largely due to ~~improved profitability in OneSubsea and Drilling Systems, and higher sales volumes and improved pricing in Valves & Measurement.~~

~~From a macro perspective, Schlumberger expects~~ the oil market sentiments to steadily improve over the course of 2019, supported by a solid demand outlook combined with the OPEC and Russia production cuts taking full effect, slowing shale oil production growth in North America, and a further weakeningdivestiture of the ~~international production base as the impact of four years of underinvestment becomes increasingly evident.~~

Schlumberger also continues to see clear signs that E&P investments are starting to normalize as the industry heads toward a more sustainable financial stewardship of the global resource base. Directionally, this means that higher investments in the international markets are required simply to keep production flat, while North America land is set for lower investments with a likely downward adjustment to the current production growth outlook.

Schlumberger’s view of the international markets is consistent with recent third-party spending surveys, suggesting that E&P investments will increase by 7 to 8% in 2019, supported by a higher rig count and a rise in the number of customer project FIDs. In line with this, offshore development activity plans continue to strengthen, with subsea tree awards reaching their highest level since 2013 last year. Schlumberger is also seeing the start of a return to exploration activity on renewed interest in reserves replacement. Notably, new discoveries in 2018 wereDrilling Tools businesses at the ~~lowest level since 2000.~~

~~Conversely in North America land, the higher cost~~end of capital, lower borrowing capacity, and investors looking for increased returns suggest that future E&P investment levels will likely be dictated by free cash flow. Schlumberger therefore expects E&P investments in North America land to be down 10% in 2019. In addition, rising technical challenges—from parent-child well interference, step-outs from core acreage, and limited growth in lateral length and proppant per stage—all point to more moderate growth in US shale oil production in the coming years.

(Stated in millions)

First Quarter 2019

First Quarter 2018

Income

Income

Before

Before

Revenue

Taxes

Revenue

Taxes

Reservoir Characterization
$
1,543

$
293

$
1,559

$
306

Drilling

2,387

307

2,126

293

Production

2,890

217

2,956

217

Cameron

1,174

137

1,310

166

Eliminations & other

(115
)

(46
)

(122
)

(8
)
Pretax operating income

908

974

Corporate & other ⁽¹⁾

(273
)

(225
)
Interest income ⁽²⁾

10

25

Interest expense ⁽³⁾

(136
)

(131
)

$
7,879

$
509

$
7,829

$
643

⁽²⁾~~Interest income excludes amounts which are included in the segments’ income ($1 million in 2019; $3 million in 2018).~~

⁽³⁾~~Interest expense excludes amounts which are included in the segments’ income ($11 million in 2019; $12 million in 2018).~~

First-quarter 2019 revenue of $1.5 billion decreased by 1% year-on-year. Revenue for Wireline, Testing Services and Software Integrated Solutions all slightly improved year-on-year, but was more than offset by the impact of the sale of the marine seismic acquisition business during the fourth quarter of ~~2018 and lower revenue for OneSurface on long-term projects~~2019. Revenue also declined due to the significant drop in rig count in North America as customers reduced spending due to falling oil prices. Internationally, activity was also reduced in a number of countries in the Middle ~~East.~~

~~First-quarter~~ ~~2019 revenue of $2.4 billion increased 12% year-on-year primarily due to strong growth from Integrated Drilling Services projects in several GeoMarkets that also benefited M-I SWACO~~East & Asia and ~~Drilling & Measurements.~~

~~Year-on-year, pretax operating margin declined 90 bps to 13% despite the higher revenue, driven primarily~~Europe/CIS/Africa areas impacted by ~~the new integrated contracts.~~

~~First-quarter~~ ~~2019 revenue of $2.9 billion decreased 2% year-on-year with most of the revenue decrease attributable to lower OneStim activity in North America land.~~

~~First-quarter 2019 revenue of $1.2 billion decreased 10% versus the same period last year driven primarily by the decline of the long-cycle business of OneSubsea.~~COVID-19-related disruptions.

Year-on-year, pretax operating margin decreased ~~102~~42 bps to 12%. While margins were lower due ~~mainly~~ to the decrease in revenue and COVID-19-related disruptions, profitability was boosted by the divestiture of the Drilling Tools businesses which was previously dilutive to margins.

First-quarter 2020 revenue of $2.7 billion decreased 6% year-on-year primarily due to lower OneStim revenue as customers in North America land continued to decrease their investment spending resulting in the stacking of additional fleet capacity.

Year-on-year, pretax operating margin increased by 32 bps to 8% as improved margins in Asset Performance Solutions (“APS”) internationally were largely offset by reduced profitability in OneStim in North America land.

First-quarter 2020 revenue of $1.3 billion was essentially flat compared to the same period in 2019, as revenue growth from the long cycle businesses of OneSubsea and Drilling Systems was offset by a revenue decline in ~~higher-margin OneSubsea activities .~~Valves & Process Systems.

Year-on-year, pretax operating margin decreased 209 bps to 10% primarily driven by reduced profitability in the short cycle businesses of Surface Systems and Valves & Process Systems.

(Stated in millions)	(Stated in millions)				(Stated in millions)

	First Quarter				First Quarter
	2019		2018		2020		2019
Equity in net earnings of affiliated companies	$	3	$	14	$	24	$	3
Interest income		11		28		15		11
	$	14	$	42	$	39	$	14

The increases in earnings from equity method investments primarily relates to higher income associated with Schlumberger's equity investments in rig- and seismic-related businesses.

Research & engineering and General & administrative expenses, as a percentage of Revenue, for the first quarter ended March 31, ~~2019~~2020 and ~~2018~~2019 were as follows:

	First Quarter						First Quarter
	2019			2018			2020			2019
Research & engineering		2.2	%		2.2	%		2.3	%		2.2	%
General & administrative		1.4	%		1.4	%		1.7	%		1.4	%

The effective tax rate for the first quarter of ~~2019 declined year-on-year~~2020 was 9%, as compared to ~~15.5% from 17.6%, driven~~16% for the same period of 2019. The lower effective tax rate was almost entirely due to the charges described in Note 2 to the Consolidated Financial Statements, which were primarily ~~by the geographic mix of earnings.~~related to non-deductible goodwill.

Schlumberger recorded the following charges in connection with the preparation of its first quarter 2020 financial statements, which are fully described in Note 2 to the Consolidated Financial Statements:

The first quarter 2020 results did not include any benefit from reduced depreciation and amortization expense as a result of the first quarter impairment charges. However, going forward, depreciation and amortization expense will be reduced by approximately $95 million on a quarterly basis. Approximately $45 million of this quarterly reduction will be reflected in the Production segment, with the remaining $50 million reflected in the “Corporate & other” line item.

Schlumberger expects to record a significant charge relating to severance during the second quarter of 2020. However, at this time the amount cannot be reasonably estimated.

The effects of the COVID-19 pandemic have resulted in a significant and swift reduction in international and U.S. economic activity. These effects have adversely affected the demand for oil and natural gas, as well as for Schlumberger’s products and services, and caused significant volatility and disruption of the financial markets. This period of extreme economic disruption, low oil prices and reduced demand for Schlumberger’s products and services has had, and is likely to continue to have, a material adverse impact on our business, results of operations, access to sources of liquidity and financial condition.

In view of the uncertainty of the depth and extent of the contraction in oil demand due to the COVID-19 pandemic combined with the weaker commodity price environment, Schlumberger has turned its strategic focus to cash conservation and protecting its balance sheet. Schlumberger therefore reduced its dividend by 75%, commencing with the next dividend payment in July 2020. The revised dividend supports Schlumberger’s value proposition through a balanced approach of shareholder distributions and organic investment, while providing the flexibility to weather the uncertain environment. This decision reflects the Company’s focus on its capital stewardship program as well as its commitment to maintain both a strong liquidity position and a strong investment grade credit rating that provides privileged access to the financial markets.

Changes in Liquidity:
Three Months Ended Mar. 31,

2019

2018

Net income
$
430

$
530

Depreciation and amortization ⁽²⁾

903

874

Earnings of equity method investments, less dividends received

3

(5
)
Stock-based compensation expense

108

90

Increase in working capital ⁽³⁾

(1,048
)

(836
)
Other

(70
)

(85
)
Cash flow from operations

326

568

Capital expenditures

(413
)

(454
)
SPM investments

(151
)

(240
)
Multiclient seismic data costs capitalized

(45
)

(26
)
Free cash flow ⁽⁴⁾

(283
)

(152
)
Dividends paid

(692
)

(692
)
Proceeds from employee stock plans

106

127

Stock repurchase program

(98
)

(97
)

(967
)

(814
)
Business acquisitions and investments, net of cash acquired plus debt assumed

(5
)

(13
)
Other

(147
)

(10
)
Increase in net debt

(1,119
)

(837
)
Net debt, beginning of period

(13,274
)

(13,110
)
Net debt, end of period
$
(14,393
)

$
(13,947
)

	(Stated in millions)

	Mar. 31,			Mar. 31,			Dec. 31,
Components of Liquidity:	2020			2019			2019
Cash	$	1,375		$	1,230		$	1,137
Short-term investments		1,969			925			1,030
Short-term borrowings and current portion of long-term debt		(1,233	)		(99	)		(524	)
Long-term debt		(15,409	)		(16,449	)		(14,770	)
Net debt ⁽¹⁾	$	(13,298	)	$	(14,393	)	$	(13,127	)

Changes in Liquidity:	Three Months Ended Mar. 31,
	2020			2019
Net income (loss)	$	(7,368	)	$	430
Impairment and other charges		8,523			-
Depreciation and amortization ⁽²⁾		792			903
Earnings of equity method investments, less dividends received		(10	)		3
Deferred taxes		(781	)		(72	)
Stock-based compensation expense		108			108
Increase in working capital ⁽³⁾		(482	)		(1,048	)
Other		2			2
Cash flow from operations		784			326
Capital expenditures		(407	)		(413	)
APS investments		(163	)		(151	)
Multiclient seismic data costs capitalized		(35	)		(45	)
Free cash flow ⁽⁴⁾		179			(283	)
Dividends paid		(692	)		(692	)
Proceeds from employee stock plans		74			106
Stock repurchase program		(26	)		(98	)
Net proceeds from asset divestitures		298			-
Business acquisitions and investments, net of cash acquired plus debt assumed		-			(5	)
Other		(4	)		(147	)
Increase in net debt		(171	)		(1,119	)
Net debt, beginning of period		(13,127	)		(13,274	)
Net debt, end of period	$	(13,298	)	$	(14,393	)

Key liquidity events during the first three months of ~~2019~~2020 and ~~2018~~2019 included:

(Stated in millions, except per share amounts)	(Stated in millions, except per share amounts)						(Stated in millions, except per share amounts)

	Total cost		Total number		Average price		Total cost		Total number		Average price
	of shares		of shares		paid per		of shares		of shares		paid per
	purchased		purchased		share		purchased		purchased		share
Three months ended March 31, 2020							$	26		0.8	$	33.81
Three months ended March 31, 2019	$	98		2.3	$	42.79	$	98		2.3	$	42.79
Three months ended March 31, 2018	$	97		1.4	$	69.79

~~During the first quarter of 2019, Schlumberger issued $750 million of 3.75% Senior Notes due 2024 and $850 million of 4.30% Senior Notes due 2029.~~

Schlumberger generates revenue in more than 120 countries. As of March 31, ~~2019, only~~2020, four of those countries individually accounted for greater than 5% of Schlumberger’s net receivables balance, of which only the United States accounted for greater than 10% of such receivables.

As of March 31, ~~2019,~~2020, Schlumberger had ~~$2.2~~$3.3 billion of cash and short-term investments on hand. Schlumberger had separate committed debt facility agreements aggregating ~~$6.5~~$6.3 billion that support commercial paper programs, of which ~~$3.8~~$3.5 billion was available and unused. Additionally, subsequent to the end of the first quarter of 2020, Schlumberger entered into a €1.2 billion committed revolving credit facility. This one-year facility can be extended at Schlumberger’s option for up to an additional year. Schlumberger can potentially upsize this facility through syndication. Schlumberger believes these amounts are sufficient to meet future business requirements for at least the next 12 months.

Borrowings under the commercial paper programs at March 31, ~~2019~~2020 were ~~$2.7~~$2.8 billion.

This first-quarter ~~2019~~2020 Form 10-Q, as well as other statements we make, contain “forward-looking statements” within the meaning of the federal securities laws, which include any statements that are not historical facts, such as our forecasts or expectations regarding business outlook; growth for Schlumberger as a whole and for each of its segments (and for specified products or geographic areas within each segment); oil and natural gas demand and production growth; oil and natural gas prices; improvements in operating procedures and technology, including our transformation program; capital expenditures by Schlumberger and the oil and gas industry; the business strategies of Schlumberger’s customers; our effective tax rate; ~~Schlumberger’s SPM projects, joint ventures and alliances;~~ future global economic conditions; and future results of operations. These statements are subject to risks and uncertainties, including, but not limited to, changing global economic conditions; public health crises, such as the COVID-19 pandemic, and any related actions taken by businesses and governments; changes in exploration and production spending by Schlumberger’s customers and changes in the level of oil and natural gas exploration and development; the results of operations and financial condition of Schlumberger’s customers and suppliers, particularly during extended periods of low prices for crude oil and natural gas; general economic, political, and business conditions in key regions of the world; foreign currency risk; pricing pressure; weather and seasonal factors; operational modifications, delays or cancellations; production declines; changes in government regulations and regulatory requirements, including those related to offshore oil and gas exploration, radioactive sources, explosives, chemicals, hydraulic fracturing services and climate-related initiatives; the inability of technology to meet new challenges in exploration; the competitiveness of alternate-energy sources or product substitutes; and other risks and uncertainties detailed in this ~~first-quarter 2019~~ Form 10-Q and our most recent ~~Forms~~Form 10-K ~~10-Q,~~ and Form 8-K filed with or furnished to the ~~Securities and Exchange Commission.~~SEC. If one or more of these or other risks or uncertainties materialize (or the consequences of any such development changes), or should our underlying assumptions prove incorrect, actual outcomes may vary materially from those reflected in our forward-looking statements. Statements in this first-quarter 2020 Form 10-Q are made as of April 22, 2020, and Schlumberger disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.

For quantitative and qualitative disclosures about market risk affecting Schlumberger, see Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” of the Schlumberger Annual Report on Form 10-K for the fiscal year ended December 31, ~~2018.~~2019. Schlumberger’s exposure to market risk has not changed materially since December 31, ~~2018.~~2019.

Schlumberger has carried out an evaluation under the supervision and with the participation of Schlumberger’s management, including the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), of the effectiveness of Schlumberger’s “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report. Based on this evaluation, the CEO and the CFO have

concluded that, as of the end of the period covered by this report, Schlumberger’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that Schlumberger files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Schlumberger’s disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is accumulated and communicated to its management, including the CEO and the CFO, as appropriate, to allow timely decisions regarding required disclosure. There was no change in Schlumberger’s internal control over financial reporting during the quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, Schlumberger’s internal control over financial reporting.

The information with respect to this Item 1 is set forth under Note 9—10—Contingencies, in the Consolidated Financial Statements.

As of the date of this filing, there have been no material changes from the risk factors disclosed in Part 1, Item 1A, of Schlumberger’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2018.~~2019, other than the risk factor disclosed in Item 8.01 of Schlumberger’s Current Report on Form 8-K filed on April 17, 2020, which is hereby incorporated by reference into this Quarterly Report on Form 10-Q.

As of March 31, ~~2019,~~2020, Schlumberger had repurchased ~~$822 million~~$1.0 billion of Schlumberger common stock under its $10 billion share repurchase program.

Schlumberger’s common stock repurchase activity for the three months ended March 31, ~~2019~~2020 was as follows:

(Stated in thousands, except per share amounts)

Total number of shares purchased

Average price paid per share

Total number of shares purchased as part of publicly announced programs

Maximum value of shares that may yet be purchased under the programs

January 2019

832.6

$
40.93

832.6

$
9,242,498

February 2019

683.7

$
44.49

683.7

$
9,212,083

March 2019

776.1

$
43.30

776.1

$
9,178,477

2,292.4

$
42.79

2,292.4

	(Stated in thousands, except per share amounts)

	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced programs		Maximum value of shares that may yet be purchased under the programs
January 2020		179.5	$	35.08		179.5	$	8,992,119
February 2020		596.7	$	33.43		596.7	$	8,972,172
March 2020		-	$	-		-	$	8,972,172
		776.2	$	33.81		776.2

Our mining operations are subject to regulation by the federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977. Information concerning mine safety violations or other regulatory matters required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this report.

In 2013, Schlumberger completed the wind down of its service operations in Iran. Prior to this, certain non-US subsidiaries provided oilfield services to the National Iranian Oil Company and certain of its affiliates (“NIOC”).

Schlumberger’s residual transactions or dealings with the government of Iran during the first quarter of ~~2019~~2020 consisted of payments of taxes and other typical governmental charges. Certain non-US subsidiaries of Schlumberger maintain depository accounts at the Dubai branch of Bank Saderat Iran (“Saderat”), and at Bank Tejarat (“Tejarat”) in Tehran and in Kish for the deposit by NIOC of amounts owed to non-US subsidiaries of Schlumberger for prior services rendered in Iran and for the maintenance of such amounts previously received. One non-US subsidiary also maintained an account at Tejarat for payment of local expenses such as taxes. Schlumberger anticipates that it will discontinue dealings with Saderat and Tejarat following the receipt of all amounts owed to Schlumberger for prior services rendered in Iran.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized and in his capacity as Chief Accounting Officer.

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

42 RUE SAINT-DOMINIQUE
PARIS, FRANCE		75007

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

62 BUCKINGHAM GATE
LONDON, UNITED KINGDOM		SW1E 6AJ

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

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

Class	Outstanding at March 31, ~~2019~~2020
COMMON STOCK, $0.01 PAR VALUE PER SHARE	~~1,385,122,272~~1,387,812,907

		Page
PART I	Financial Information

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1517

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	1924

Item 4.	Controls and Procedures	1924

PART II	Other Information

Item 1.	Legal Proceedings	2025

Item 1A.	Risk Factors	2025

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2025

Item 3.	Defaults Upon Senior Securities	2025

Item 4.	Mine Safety Disclosures	2025

Item 5.	Other Information	2125

Item 6.	Exhibits	2226

		Schlumberger Limited (Registrant)
Date:	April ~~24, 2019~~22, 2020	/s/ Howard Guild
		Howard Guild
		Chief Accounting Officer and Duly Authorized Signatory

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

	(Stated in millions)

	Pretax		Tax			Net
Goodwill	$	3,070	$	-		$	3,070
Intangible assets		3,321		(815	)		2,506
APS investments		1,264		4			1,268
North America pressure pumping		587		(133	)		454
Severance		202		(7	)		195
Other		79		(9	)		70
Valuation allowance		-		164			164
	$	8,523	$	(796	)	$	7,727

	(Stated in thousands, except per share amounts)

	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced programs		Maximum value of shares that may yet be purchased under the programs
January 2019		832.6	$	40.93		832.6	$	9,242,498
February 2019		683.7	$	44.49		683.7	$	9,212,083
March 2019		776.1	$	43.30		776.1	$	9,178,477
		2,292.4	$	42.79		2,292.4