Acquisitions (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Fair Value of Consideration Transferred to Effect Acquisition

The fair value of the consideration transferred to effect the acquisition of Cameron was as follows:

(stated in millions, except exchange ratio and per share amounts)

Equity consideration:
Number of shares of Cameron stock outstanding	192
Exchange ratio	0.716
Schlumberger shares of common stock issued		138
Schlumberger closing stock share price on April 1, 2016	$	72.12
Equity consideration			$	9,924
Cash consideration:
Number of shares of Cameron stock outstanding	192
Cash consideration per Cameron share	$	14.44
Cash consideration				2,776
Other:
Fair value of replacement equity awards			103
Total fair value of the consideration transferred			$	12,803

Schedule of Fair Values of Identifiable Assets Acquired and Liabilities Assumed

The following amounts represent the fair value of assets acquired and liabilities assumed in the merger.

(Stated in millions)

Cash	$	785
Short-term investments		1,448
Accounts receivable		1,669
Inventories ⁽¹⁾		2,350
Fixed assets		1,320
Intangible assets:
Customer relationships (weighted-average life of 25 years)		2,371
Technology/Technical know-how (weighted-average life of 16 years)		1,736
Tradenames (weighted-average life of 25 years)		1,225
Other assets		511
Accounts payable and accrued liabilities		(2,604	)
Long-term debt⁽²⁾		(3,018	)
Deferred taxes ⁽³⁾		(1,343	)
Other liabilities		(538	)
Sub-total	$	5,912
Less:
Investment in OneSubsea ⁽⁴⁾		(2,065	)
Noncontrolling interests		(57	)
Total identifiable net assets	$	3,790
Goodwill ⁽⁵⁾		9,013
Total consideration transferred	$	12,803

⁽¹⁾ Schlumberger recorded an adjustment of $299 million to write-up the acquired inventory to its estimated fair value. Schlumberger’s 2016 Cost of sales reflected this increased valuation.

⁽²⁾ In connection with the merger, Schlumberger assumed all of the debt obligations of Cameron, including its $2.75 billion of fixed rate notes. Schlumberger recorded a $244 million adjustment to increase the carrying amount of these notes to their estimated fair value. This adjustment is being amortized as a reduction of interest expense over the remaining term of the respective obligations.

⁽³⁾ In connection with the acquisition accounting, Schlumberger provided deferred taxes related to, among other items, the estimated fair value adjustments for acquired inventory, intangible assets and assumed debt obligations.

⁽⁴⁾ Prior to the completion of the merger, Cameron and Schlumberger operated OneSubsea, a joint venture that manufactured and developed products, systems and services for the subsea oil and gas market, which was 40% owned by Schlumberger and 60% owned by Cameron. OneSubsea is now owned 100% by Schlumberger. As a result of obtaining control of this joint venture, Schlumberger was required to remeasure its previously held equity interest in the joint venture to its acquisition-date fair value. Schlumberger determined that the estimated fair value of its previously held equity interest approximated its carrying value. Accordingly, Schlumberger did not recognize any gain or loss on this transaction.

⁽⁵⁾ The goodwill recognized is primarily attributable to expected synergies that will result from combining the operations of Schlumberger and Cameron, as well as intangible assets which do not qualify for separate recognition. The amount of goodwill that is deductible for income tax purposes is not significant.

Schedule of Supplemental Pro Forma Financial Information from Results of Operations

The supplemental pro forma financial information presented below is unaudited and does not include any anticipated cost savings or the expected realization of other synergies associated with this transaction. Accordingly, this supplemental pro forma financial information is presented for informational purposes only and is not necessarily indicative of what the actual results of operations of the combined company would have been had the acquisition occurred on January 1, 2015, nor is it indicative of future results of operations.

	(Stated in millions, except per share amounts)

		2016			2015
Revenue		$	29,438		$	44,306
Net income (loss) attributable to Schlumberger		$	(1,419	)	$	2,000
Diluted earnings (loss) per share		$	(1.02	)	$	1.42