Pension and Other Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2012

Weighted-Average Assumed Discount Rate, Compensation Increases and Expected Long-Term Rate of Return on Plan Assets Used to Determine Net Pension Cost for US and International Plans

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

	US									International
	2012			2011			2010			2012			2011			2010
Discount rate		5.00	%		5.50	%		6.00	%		4.95	%		5.47	%		5.89	%
Compensation increases		4.00	%		4.00	%		4.00	%		4.91	%		4.91	%		4.93	%
Return on plan assets		7.50	%		7.50	%		8.50	%		7.50	%		7.50	%		8.00	%

Net Pension Cost for Schlumberger Pension Plans and US Postretirement Medical Plan

Net pension cost for 2012, 2011 and 2010 included the following components:

(Stated in millions)
	US									International
	2012			2011			2010			2012			2011			2010
Service cost – benefits earned during the period	$	68		$	59		$	56		$	86		$	64		$	51
Interest cost on projected benefit obligation		152			150			142			241			226			208
Expected return on plan assets		(185	)		(170	)		(191	)		(328	)		(279	)		(228	)
Amortization of net loss		93			90			60			76			31			19
Amortization of prior service cost		16			12			4			120			120			113
	$	144		$	141		$	71		$	195		$	162		$	163

(Stated in millions)
	2012			2011			2010
Service cost – benefits earned during the period	$	29		$	24		$	23
Interest cost on projected benefit obligation		58			57			58
Expected return on plan assets		(30	)		(20	)		(6	)
Amortization of net loss		16			13			11
Amortization of prior service credit		(8	)		(12	)		(21	)
	$	65		$	62		$	65

Weighted-Average Assumed Discount Rate and Compensation Increases Used to Determine Projected Benefit Obligations for US and International Plans

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

	US						International
	2012			2011			2012			2011
Discount rate		4.25	%		5.00	%		4.38	%		4.95	%
Compensation increases		4.00	%		4.00	%		4.83	%		4.91	%

Changes in Projected Benefit Obligation, Plan Assets and Funded Status of Plans

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

							(Stated in millions)
	US						International
	2012			2011			2012			2011
Change in Projected Benefit Obligations
Projected benefit obligation at beginning of year	$	3,073		$	2,769		$	4,666		$	4,088
Service cost		68			59			86			64
Interest cost		152			150			241			226
Contributions by plan participants		–			–			97			102
Actuarial losses		399			225			786			321
Currency effect		–			–			62			(8	)
Benefits paid		(134	)		(130	)		(140	)		(127	)
Projected benefit obligation at end of year	$	3,558		$	3,073		$	5,798		$	4,666
Change in Plan Assets
Plan assets at fair value at beginning of year	$	2,655		$	2,635		$	4,097		$	3,764
Actual return on plan assets		336			78			490			–
Currency effect		–			–			62			(6	)
Company contributions		53			72			514			364
Contributions by plan participants		–			–			97			102
Benefits paid		(134	)		(130	)		(140	)		(127	)
Plan assets at fair value at end of year	$	2,910		$	2,655		$	5,120		$	4,097
Unfunded Liability	$	(648	)	$	(418	)	$	(678	)	$	(569	)
Amounts Recognized in Balance Sheet
Postretirement Benefits	$	(648	)	$	(418	)	$	(687	)	$	(569	)
Other Assets		–			–			9			–
	$	(648	)	$	(418	)	$	(678	)	$	(569	)
Amounts Recognized in Accumulated Other Comprehensive Loss
Actuarial losses	$	1,197		$	1,048		$	1,234		$	1,002
Prior service cost		90			101			598			729
	$	1,287		$	1,149		$	1,832		$	1,731
Accumulated benefit obligation	$	3,262		$	2,861		$	5,401		$	4,336

Weighted-Average Allocation of Plan Assets and Target Allocation by Asset Category

The weighted-average allocation of plan assets and the target allocation by asset category are as follows:

	US									International
	Target			2012			2011			Target			2012			2011
Equity securities		45 – 55	%		47	%		47	%		50 – 70	%		56	%		51	%
Debt securities		33 – 45			42			39			25 – 40			35			38
Cash and cash equivalents		0 – 3			2			6			0 – 3			3			4
Alternative investments		0 – 10			9			8			0 – 20			6			7
		100	%		100	%		100	%		100	%		100	%		100	%

Fair Value of Schlumberger's Pension Plan Assets

(Stated in millions)
	US Plan Assets
	2012								2011
	Total		Level One		Level Two		Level Three		Total		Level One		Level Two		Level Three
Asset Category:
Cash and Cash Equivalents	$	56	$	5	$	51	$	–	$	147	$	39	$	108	$	–
Equity Securities:
US (a)		868		502		366				806		471		335
International (b)		513		406		107				453		369		84
Debt Securities:
Corporate bonds (c)		495				495				340				340
Government and government-related debt securities (d)		638		157		481				545		146		399
Government agency collateralized mortgage obligations and mortgage backed securities (e)		88				88				96				96
Other collateralized mortgage obligations and mortgage-backed securities (f)		11				11				58				58
Alternative Investments:
Private equity (g)		185						185		160						160
Real estate (h)		56						56		50						50
Total	$	2,910	$	1,070	$	1,599	$	241	$	2,655	$	1,025	$	1,420	$	210

(Stated in millions)
	International Plan Assets
	2012								2011
	Total		Level One		Level Two		Level Three		Total		Level One		Level Two		Level Three
Asset Catergory:
Cash and Cash Equivalents	$	168	$	157	$	11	$	–	$	152	$	152	$	–	$	–
Equity Securities:
US (a)		1,583		1,152		431				1,170		1,018		152
International (b)		1,258		765		493				937		651		286
Debt Securities:
Corporate bonds (c)		540				540				399				399
Government and government-related debt securities (d)		976				976				808				808
Government agency collateralized mortgage obligations and mortgage backed securities (e)		196				196				268				268
Other collateralized mortgage obligations and mortgage-backed securities (f)		93				93				93				93
Alternative Investments:
Private equity (g)		128						128		150						150
Real estate (h)		55						55		62						62
Other		123						123		58						58
Total	$	5,120	$	2,074	$	2,740	$	306	$	4,097	$	1,821	$	2,006	$	270

(a) US equities include companies that are well diversified by industry sector and equity style (i.e., growth and value strategies). Active and passive management strategies are employed. Investments are primarily in large capitalization stocks and, to a lesser extent, mid- and small-cap stocks.

(b) International equities are invested in companies that are traded on exchanges outside the US and are well diversified by industry sector, country and equity style. Active and passive strategies are employed. The vast majority of the investments are made in companies in developed markets with a small percentage in emerging markets.

(c) Corporate bonds consist primarily of investment grade bonds from diversified industries.

(d) Government and government-related debt securities are comprised primarily of inflation protected US treasuries and, to a lesser extent, other government-related securities.

(e) Government agency collateralized mortgage obligations and mortgage backed-securities are debt obligations that represent claims to the cash flows from pools of mortgage loans which are purchased from banks, mortgage companies, and other originators and then assembled into pools by governmental and quasi-governmental entities.

(f) Other collateralized mortgage obligations and mortgage-backed securities are debt obligations that represent claims to the cash flows from pools of mortgage loans which are purchased from banks, mortgage companies, and other originators and then assembled into pools by private entities.

(g) Private equity includes investments in several fund of funds limited partnerships.

(h) Real estate primarily includes investments in real estate limited partnerships, concentrated in commercial real estate.

Defined Benefit Plan Weighted Average Assumptions Used in Calculating Benefit Obligation and Net Periodic Benefit Cost for US Postretirement Medical Plan

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

	Benefit Obligation at December 31,						Net Periodic Benefit Cost for the year
	2012			2011			2012			2011			2010
Discount rate		4.25	%		5.00	%		5.00	%		5.50	%		6.00	%
Return on plan assets		–			–			7.00	%		7.00	%		8.00	%
Current medical cost trend rate		7.50	%		8.00	%		8.00	%		8.00	%		8.00	%
Ultimate medical cost trend rate		5.00	%		5.00	%		5.00	%		5.00	%		5.00	%
Year that the rate reaches the ultimate trend rate		2023			2018			2018			2017			2016

Changes in Accumulated Postretirement Benefit Obligation, Plan Assets and Funded Status

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

(Stated in millions)
	2012			2011
Change in Accumulated Postretirement Benefit Obligation
Benefit obligation at beginning of year	$	1,188		$	1,051
Service cost		29			24
Interest cost		58			57
Contributions by plan participants		6			6
Actuarial losses		171			90
Benefits paid		(42	)		(40	)
Benefit obligation at end of year	$	1,410		$	1,188
Change in Plan Assets
Plan assets at fair value at beginning of year	$	443		$	290
Company contributions		106			165
Contributions by plan participants		6			6
Benefits paid		(42	)		(40	)
Actual return on plan assets		63			22
Plan assets at fair value at end of year	$	576		$	443
Unfunded Liability	$	(834	)	$	(745	)
Amounts Recognized in Accumulated Other Comprehensive Loss
Actuarial losses	$	411		$	286
Prior service cost		(16	)		(24	)
	$	395		$	262

Effect of One Percentage Point Change in Assumed Health Care Cost Trend Rates

A one percentage point change in assumed health care cost trend rates would have the following effects:

(Stated in millions)
	One percentage point increase		One percentage point decrease
Effect on total service and interest cost components	$	18	$	(14	)
Effect on accumulated postretirement benefit obligation	$	287	$	(203	)

Expected Benefits to be Paid Under US and International Pension Plans and Postretirement Medical Plan

The expected benefits to be paid under the US and International pension plans as well as the postretirement medical plan (which is disclosed net of the annual Medicare Part D subsidy, which ranges from $4 million to $11 million per year) were as follows:

(Stated in millions)
	Pension Benefits				Postretirement Medical Plan
	US		International
2013	$	141	$	179	$	48
2014		145		193		51
2015		151		208		54
2016		158		223		58
2017		166		242		62
2018-2022		971		1,397		380

Defined Benefit Plan, Amounts That Will be Amortized from Accumulated Other Comprehensive Income (loss) in Next Fiscal Year

The estimated amounts that will be amortized from the estimated portion of each component of Accumulated other comprehensive loss which is expected to be recognized as a component of net periodic benefit cost during the year ending December 31, 2013 are as follows:

(Stated in millions)
	Pension Plans		Postretirement Medical Plan
Net actuarial losses	$	249	$	27
Prior service cost (credit)	$	133	$	(4	)