UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
| For the Quarter ended: | Commission file No.: | |
| September 30, 2004 | 1-4601 |
SCHLUMBERGER N.V.
(SCHLUMBERGER LIMITED)
(Exact name of registrant as specified in its charter)
| NETHERLANDS ANTILLES | 52-0684746 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| 153 EAST 53 STREET, 57th Floor | ||
| NEW YORK, NEW YORK, U.S.A. | 10022 | |
| 42 RUE SAINT-DOMINIQUE | ||
| PARIS, FRANCE | 75007 | |
| PARKSTRAAT 83 THE HAGUE, THE NETHERLANDS |
2514 JG | |
| (Addresses of principal executive offices) | (Zip Codes) | |
Registrant’s telephone number: (212) 350-9400
Indicate by check mark whether 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 and (2) has been subject to such filing requirements for the past 90 days. YES x NO ¨
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES x NO ¨
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class |
Outstanding at September 30, 2004 | |
| COMMON STOCK, $0.01 PAR VALUE | 588,743,138 |
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
SCHLUMBERGER LIMITED
(Schlumberger N.V., Incorporated in the Netherlands Antilles)
and Subsidiary Companies
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(Stated in thousands except per share amounts)
| Period Ended September 30, | |||||||||||||||
| Third Quarter |
Nine Months | ||||||||||||||
| 2004 |
2003 |
2004 |
2003 | ||||||||||||
| REVENUE: |
|||||||||||||||
| Operating |
$ | 2,931,092 | $ | 2,544,875 | $ | 8,482,340 | $ | 7,474,854 | |||||||
| Interest & other income |
35,278 | 29,579 | 83,232 | 98,325 | |||||||||||
| 2,966,370 | 2,574,454 | 8,565,572 | 7,573,179 | ||||||||||||
| EXPENSES: |
|||||||||||||||
| Cost of goods sold & services |
2,324,497 | 2,457,643 | 6,713,695 | 6,374,328 | |||||||||||
| Research & engineering |
121,271 | 117,049 | 359,224 | 330,095 | |||||||||||
| Marketing |
11,905 | 15,325 | 35,249 | 43,915 | |||||||||||
| General |
84,795 | 81,877 | 244,394 | 244,480 | |||||||||||
| Debt extinguishment costs |
— | 86,328 | 114,894 | 167,801 | |||||||||||
| Interest |
43,706 | 75,926 | 227,660 | 261,090 | |||||||||||
| 2,586,174 | 2,834,148 | 7,695,116 | 7,421,709 | ||||||||||||
| Income (Loss) from Continuing Operations before taxes and minority interest |
380,196 | (259,694 | ) | 870,456 | 151,470 | ||||||||||
| Taxes on income |
75,442 | (59,645 | ) | 202,253 | 66,414 | ||||||||||
| Income (Loss) from Continuing Operations before minority interest |
304,754 | (200,049 | ) | 668,203 | 85,056 | ||||||||||
| Minority interest |
(7,684 | ) | 112,035 | (12,597 | ) | 120,468 | |||||||||
| Income (Loss) from Continuing Operations |
297,070 | (88,014 | ) | 655,606 | 205,524 | ||||||||||
| Income from Discontinued Operations |
21,135 | 32,691 | 238,492 | 437 | |||||||||||
| Net Income (Loss) |
$ | 318,205 | $ | (55,323 | ) | $ | 894,098 | $ | 205,961 | ||||||
| Basic earnings per share: |
|||||||||||||||
| Income (Loss) from Continuing Operations |
$ | 0.50 | $ | (0.15 | ) | $ | 1.11 | $ | 0.35 | ||||||
| Income from Discontinued Operations |
0.04 | 0.06 | 0.41 | — | |||||||||||
| Net Income (Loss) |
$ | 0.54 | $ | (0.09 | ) | $ | 1.52 | $ | 0.35 | ||||||
| Diluted earnings per share: |
|||||||||||||||
| Income (Loss) from Continuing Operations |
$ | 0.50 | $ | (0.15 | ) | $ | 1.10 | $ | 0.35 | ||||||
| Income from Discontinued Operations |
0.03 | 0.06 | 0.39 | — | |||||||||||
| Net Income (Loss) |
$ | 0.53 | $ | (0.09 | ) | $ | 1.49 | $ | 0.35 | ||||||
| Average shares outstanding: |
|||||||||||||||
| Basic |
589,936 | 585,179 | 589,186 | 583,288 | |||||||||||
| Assuming dilution |
613,787 | 585,179 | 613,009 | 585,700 | |||||||||||
See Notes to Consolidated Financial Statements
-2-
SCHLUMBERGER LIMITED
(Schlumberger N.V., Incorporated in the Netherlands Antilles)
and Subsidiary Companies
CONSOLIDATED BALANCE SHEET
| (Stated in thousands) | ||||||||
| Sept. 30, 2004 (Unaudited) |
Dec. 31, 2003 |
|||||||
| ASSETS |
||||||||
| CURRENT ASSETS: |
||||||||
| Cash |
$ | 201,201 | $ | 234,192 | ||||
| Short-term investments |
2,339,148 | 2,874,781 | ||||||
| Receivables less allowance for doubtful accounts (2004 - $113,012; 2003 - $128,199) |
2,893,882 | 2,568,425 | ||||||
| Inventories |
822,391 | 796,559 | ||||||
| Deferred taxes |
284,689 | 315,350 | ||||||
| Other current assets |
328,366 | 341,973 | ||||||
| Assets held for sale |
— | 3,237,841 | ||||||
| 6,869,677 | 10,369,121 | |||||||
| FIXED INCOME INVESTMENTS, HELD TO MATURITY |
185,228 | 223,300 | ||||||
| INVESTMENTS IN AFFILIATED COMPANIES |
878,300 | 776,965 | ||||||
| FIXED ASSETS |
3,620,087 | 3,799,711 | ||||||
| MULTICLIENT SEISMIC DATA |
385,623 | 505,784 | ||||||
| GOODWILL |
2,772,699 | 3,377,583 | ||||||
| INTANGIBLE ASSETS |
356,631 | 403,319 | ||||||
| DEFERRED TAXES |
316,544 | 316,277 | ||||||
| OTHER ASSETS |
270,686 | 269,266 | ||||||
| $ | 15,655,475 | $ | 20,041,326 | |||||
| LIABILITIES & STOCKHOLDERS’ EQUITY |
||||||||
| CURRENT LIABILITIES: |
||||||||
| Accounts payable and accrued liabilities |
$ | 3,189,805 | $ | 3,247,546 | ||||
| Estimated liability for taxes on income |
832,093 | 807,938 | ||||||
| Dividend payable |
110,989 | 110,511 | ||||||
| Long-term debt - current portion |
120,819 | 889,678 | ||||||
| Bank & short-term loans |
524,254 | 521,489 | ||||||
| Liabilities held for sale |
— | 1,217,568 | ||||||
| 4,777,960 | 6,794,730 | |||||||
| LONG-TERM DEBT |
3,738,406 | 6,097,418 | ||||||
| POSTRETIREMENT BENEFITS |
657,770 | 614,850 | ||||||
| OTHER LIABILITIES |
156,161 | 254,709 | ||||||
| 9,330,297 | 13,761,707 | |||||||
| MINORITY INTEREST |
400,622 | 398,330 | ||||||
| STOCKHOLDERS’ EQUITY: |
||||||||
| Common stock |
2,433,593 | 2,258,488 | ||||||
| Income retained for use in the business |
6,068,472 | 5,505,744 | ||||||
| Treasury stock at cost |
(1,621,683 | ) | (1,508,239 | ) | ||||
| Accumulated other comprehensive loss |
(955,826 | ) | (374,704 | ) | ||||
| 5,924,556 | 5,881,289 | |||||||
| $ | 15,655,475 | $ | 20,041,326 | |||||
See Notes to Consolidated Financial Statements
-3-
SCHLUMBERGER LIMITED
(Schlumberger N.V., Incorporated in the Netherlands Antilles)
and Subsidiary Companies
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
| (Stated in thousands) | ||||||||
| Nine Months Ended Sept. 30, |
||||||||
| 2004 |
2003 |
|||||||
| Cash flows from operating activities: |
||||||||
| Income from continuing operations |
$ | 655,606 | $ | 205,524 | ||||
| Adjustments to reconcile income from continuing operations to cash provided by operating activities: |
||||||||
| Depreciation and amortization (1) |
978,562 | 1,032,131 | ||||||
| Gain on sale of Grant Prideco stock |
— | (1,320 | ) | |||||
| Charges, net of tax & minority interest (2) |
198,801 | 379,034 | ||||||
| Earnings of companies carried at equity, less dividends received |
(64,078 | ) | (51,944 | ) | ||||
| (Increase) decrease in deferred taxes |
10,113 | 2,618 | ||||||
| Provision for losses on accounts receivable |
26,005 | 54,497 | ||||||
| Change in operating assets and liabilities excluding acquisitions/divestitures: |
||||||||
| Increase in receivables |
(622,707 | ) | (302,148 | ) | ||||
| (Increase) decrease in inventories |
(164,131 | ) | 65,280 | |||||
| Increase in other current assets |
(10,703 | ) | (25,548 | ) | ||||
| Decrease in accounts payable and accrued liabilities |
(63,326 | ) | (441,984 | ) | ||||
| Increase in estimated liability for taxes on income |
25,038 | 72,507 | ||||||
| Postretirement benefits |
42,923 | 47,945 | ||||||
| Other - net |
(32,186 | ) | 43,548 | |||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES |
979,917 | 1,080,140 | ||||||
| Cash flows from investing activities: |
||||||||
| Purchase of fixed assets |
(800,598 | ) | (575,315 | ) | ||||
| Multiclient seismic data capitalized |
(44,619 | ) | (130,682 | ) | ||||
| Capitalization of intangible assets |
(55,471 | ) | (85,308 | ) | ||||
| Retirement of fixed assets & other |
8,179 | 107,941 | ||||||
| Sale of Grant Prideco stock |
— | |||||||