How did the acquisition of Sema plc impact Schlumberger's financial statements?

The acquisition of Sema plc for $5.15 billion in April 2001 significantly impacted Schlumberger's balance sheet, creating $5.19 billion in goodwill and identifiable intangibles. For financial reporting, Sema's results were included from April 1, 2001. The company also incurred substantial debt to finance the acquisition, which was subsequently refinanced with long-term European bonds. The acquisition also led to increased interest expense and amortization of intangibles, impacting net income.

What is the performance of the Oilfield Services segment?

The Oilfield Services segment demonstrated strong performance. For the third quarter of 2001, revenue increased by 36% year-over-year to $2.5 billion, driven by a 14% increase in the worldwide M-I rig count and increased activity in North America and the Middle East & Asia. Pretax operating income for the segment increased significantly, up 74% year-over-year for the third quarter, reflecting improved pricing and higher activity levels.

What are the key charges and credits impacting net income?

The company reported several significant charges and credits during the period. These include an in-process R&D charge for the Bull CP8 acquisition, an impairment charge related to the expected disposition of certain Resource Management Services businesses, and a gain on the sale of Production Operators Corporation. These items, along with other adjustments, significantly affected the reported net income and earnings per share for the nine-month period.

How did the company manage its liquidity following the Sema acquisition?

Following the Sema acquisition, which required substantial financing, Schlumberger initially used short-term bank loans. To manage its liquidity and long-term debt, the company issued $1.9 billion in European bonds in October 2001. The proceeds from these bonds were used to repay the short-term bank loans, effectively refinancing the debt used to finance the Sema acquisition.

SLB 10-Q Quarterly Report Q3 FY2001 — Revenue, Net Income, EPS

Summary

Schlumberger Limited (SLB) reported its third-quarter and nine-month results for 2001. The company experienced a significant increase in revenue, primarily driven by the Oilfield Services segment, which saw a 36% year-over-year increase in revenue for the third quarter. This growth was bolstered by rising rig counts and increased activity in key geographic regions. The company also completed the significant acquisition of Sema plc in April 2001 for $5.15 billion, integrating it into a new SchlumbergerSema segment. While this acquisition substantially increased the company's debt and goodwill, it also expanded its service offerings into IT services, telecommunications, and finance sectors. Despite a reported net loss for the nine-month period including acquisition-related charges and divestitures, the underlying operational performance of the Oilfield Services segment remained robust.

Key Highlights

1Total revenue for the nine months ended September 30, 2001, was $10.17 billion, a 47% increase compared to the same period in 2000.
2Net income for the third quarter was $194.6 million, a slight decrease from $204.6 million in the prior year's third quarter.
3Diluted earnings per share for the nine months ended September 30, 2001, were $0.59, down from $0.86 in the prior year.
4The acquisition of Sema plc was completed in April 2001 for $5.15 billion, financed by cash and borrowings, and has been accounted for using the purchase method, creating significant goodwill and intangible assets.
5The Oilfield Services segment showed strong year-over-year revenue growth of 36% in Q3 2001 and 43% for the nine-month period.
6SchlumbergerSema, a new segment resulting from the Sema acquisition, reported $870 million in revenue for Q3 2001, with pretax operating income of $19 million.
7The company issued $1.9 billion in European bonds in October 2001 to repay short-term debt incurred for the Sema acquisition.

SLB LIMITED/NV Quarterly Report for Q3 Ended Sep 30, 2001

Summary

Key Highlights

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