View Filing Data

789

1,539

2,344

4,272

Net income attributable to noncontrolling interests

789

1,539

2,344

4,310

(2)

(13)

(6)

(25)

Net Income attributable to Schlumberger

787

1,526

2,338

4,285

Schlumberger amounts attributable to:

787

1,526

2,338

4,247

Basic earnings per share of Schlumberger:

$ 787

$ 1,526

$ 2,338

$ 4,285

$ 0.66

$ 1.27

$ 1.95

$ 3.55

0.00

0.03

Diluted earnings per share of Schlumberger:

0.66

1.27

1.95

3.58

0.65

1.25

1.93

3.46

0.00

0.03

Cash flows from operating activities:

^[1]

$ 0.65

$ 1.25

$ 1.93

$ 3.50

Average shares outstanding:

Basic

1,200

1,199

1,198

1,197

Assuming dilution

1,218

1,225

1,214

1,229

[1]	Amounts may not add due to rounding

Statement Of Financial Position Classified - USD ($) $ in Millions	Sep. 30, 2009	Dec. 31, 2008
Current Assets
Cash	$ 194	$ 189
Short-term investments	4,035	3,503
Receivables less allowance for doubtful accounts (2009-$149; 2008-$133)	6,087	6,258
Inventories	1,967	1,919
Deferred taxes	158	184
Other current assets	941	933
Assets, Current, Total	13,382	12,986
Fixed Income Investments, held to maturity	625	470
Investments in Affiliated Companies	2,243	1,870
Fixed Assets less accumulated depreciation	9,610	9,690
Multiclient Seismic Data	285	287
Goodwill	5,296	5,189
Intangible Assets	813	820
Deferred Taxes	317	565
Other Assets	504	217
Assets, Total	33,075	32,094
Current Liabilities
Accounts payable and accrued liabilities	4,736	5,319
Estimated liability for taxes on income	929	1,007
Dividend payable	250	252
Long-term debt-current portion	596	1,138
Convertible debentures	321	0
Bank & short-term loans	283	459
Liabilities, Current, Total	7,115	8,175
Convertible Debentures	0	321
Other Long-term Debt	4,312	3,372
Postretirement Benefits	1,293	2,369
Other Liabilities	892	923
Liabilities, Total	13,612	15,160
Equity
Common stock	4,746	4,668
Treasury stock	(4,568)	(4,796)
Retained earnings	21,475	19,891
Accumulated other comprehensive loss	(2,298)	(2,901)
Schlumberger stockholders' equity	19,355	16,862
Noncontrolling interests	108	72
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Total	19,463	16,934
Liabilities and Stockholders' Equity, Total	$ 33,075	$ 32,094

Statement Of Cash Flows Indirect - USD ($)
$ in Millions

3 Months Ended

9 Months Ended

Sep. 30, 2009

Sep. 30, 2008

Sep. 30, 2009

Sep. 30, 2008

Less: Income from discontinued operations

$ 789

$ 1,539

$ 2,344

$ 4,310

(38)

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

Depreciation and amortization

^[1]

1,848

1,656

Non-cash postretirement benefits curtailment charge

136

Earnings of companies carried at equity, less dividends received

(54)

(178)

Deferred income taxes

258

(1)

Stock-based compensation expense

139

126

Provision for losses on accounts receivable

Other non-cash items

Change in assets and liabilities:

Decrease (increase) in receivables

^[2]

154

(1,278)

Increase in inventories

^[2]

(42)

(242)

Increase in other current assets

^[2]

(9)

(167)

(Decrease) increase in accounts payable and accrued liabilities

^[2]

(556)

527

(Decrease) increase in estimated liability for taxes on income

^[2]

(238)

100

Decrease in postretirement benefits

^[2]

(701)

(28)

Decrease in other liabilities

^[2]

(39)

(33)

Other-net

^[2]

(13)

NET CASH PROVIDED BY OPERATING ACTIVITIES

3,344

4,894

Cash flows from investing activities:

Capital expenditures

(1,719)

(2,553)

Multiclient seismic data capitalized

(150)

(263)

(150)

(263)

Business acquisitions, net of cash acquired

(475)

(345)

Purchases of investments, net

(674)

(417)

Other

134

(171)

NET CASH USED BY INVESTING ACTIVITIES

(2,884)

(3,749)

Cash flows from financing activities:

Dividends paid

(758)

(712)

Proceeds from employee stock purchase plan

108

Proceeds from exercise of stock options

164

Tax benefits on stock options

109

Stock repurchase plan

(1,665)

Proceeds from issuance of long-term debt

1,980

1,052

Repayment of long-term debt

(1,652)

(224)

Net decrease in short-term debt

(185)

(48)

NET CASH USED IN FINANCING ACTIVITIES

(455)

(1,216)

Cash flow from discontinued operations-operating activities

Net increase (decrease) in cash before translation effect

(8)

Translation effect on cash

Cash, beginning of period

189

197

Cash, end of period

$ 194

$ 189

$ 194

$ 189

[1]	Includes multiclient seismic data costs.
[2]	Net of the effect of business acquisitions.

Statement Of Shareholders Equity And Other Comprehensive Income - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2009	Sep. 30, 2008	Sep. 30, 2009	Sep. 30, 2008
In Treasury
Beginning Balance			$ 16,934	$ 14,938
Comprehensive income
Net Income	$ 789	$ 1,539	2,344	4,310
Total comprehensive income			2,947	4,358
Shares sold to optionees, less shares exchanged			59	164
Shares granted to directors			1	1
Vesting of restricted stock			0
Shares issued under employee stock purchase plan			166	172
Stock repurchase plan				(1,665)
Stock-based compensation cost			139	126
Acquisition of noncontrolling interest			(6)
Shares issued on conversion of debentures				436
Other			(27)	(12)
Dividends declared ($0.63 per share)			(754)	(756)
Tax benefits on stock options			4	109
Ending Balance	$ 19,463	17,871	$ 19,463	17,871
Beginning Balance			1,194
Shares sold to optionees, less shares exchanged			2
Shares issued under employee stock purchase plan			4
Ending Balance	1,200		1,200
Common Stock Issued
In Treasury
Beginning Balance			$ 4,668	4,136
Comprehensive income
Shares sold to optionees, less shares exchanged			(8)	22
Shares granted to directors				1
Vesting of restricted stock			(19)
Shares issued under employee stock purchase plan			25	115
Stock-based compensation cost			139	126
Acquisition of noncontrolling interest			(6)
Shares issued on conversion of debentures				84
Other			(57)	1
Tax benefits on stock options			4	109
Ending Balance	$ 4,746	4,594	4,746	4,594
Common Stock In Treasury
In Treasury
Beginning Balance			(4,796)	(3,549)
Comprehensive income
Shares sold to optionees, less shares exchanged			67	142
Shares granted to directors			1
Vesting of restricted stock			19
Shares issued under employee stock purchase plan			141	57
Stock repurchase plan				(1,665)
Shares issued on conversion of debentures				352
Ending Balance	(4,568)	(4,663)	(4,568)	(4,663)
Retained Earnings
In Treasury
Beginning Balance			19,891	15,462
Comprehensive income
Net Income			2,338	4,285
Dividends declared ($0.63 per share)			(754)	(756)
Ending Balance	21,475	18,991	21,475	18,991
Accumulated Other Comprehensive Income (Loss)
In Treasury
Beginning Balance			(2,901)	(1,173)
Comprehensive income
Currency translation adjustments			(35)	87
Changes in fair value of derivatives			157	(87)
Deferred employee benefits liabilities, net of tax			481	48
Ending Balance	(2,298)	(1,125)	(2,298)	(1,125)
Noncontrolling Interests
In Treasury
Beginning Balance			72	62
Comprehensive income
Net Income			6	25
Other			30	(13)
Ending Balance	$ 108	$ 74	$ 108	$ 74
Issued
Comprehensive income
Beginning Balance			1,334
Ending Balance	1,334		1,334
In Treasury
Comprehensive income
Beginning Balance			(140)
Shares sold to optionees, less shares exchanged			2
Shares issued under employee stock purchase plan			4
Ending Balance	(134)		(134)

1. Basis of Presentation	9 Months Ended
1. Basis of Presentation	Sep. 30, 2009
Notes to Financial Statements [Abstract]
1. Basis of Presentation	1. Basis of Presentation The accompanying unaudited consolidated financial statements, which include the accounts of Schlumberger Limited and its subsidiaries (“Schlumberger”), have been prepared in accordance with generally accepted accounting principles 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 management, all adjustments considered necessary for a fair presentation have been included in the accompanying unaudited financial statements. All intercompany transactions and balances have been eliminated in consolidation. Operating results for the nine month period ended September 30, 2009 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2009. The December 31, 2008 balance sheet information has been derived from the audited 2008 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, 2008, filed with the Securities and Exchange Commission on February 11, 2009. Certain items from prior year have been reclassified to conform to the current year presentation. Subsequent events have been evaluated through October 28, 2009, which is the date the financial statements were issued. Recently Adopted Accounting Pronouncement Effective January 1, 2009, Schlumberger adopted newly issued accounting guidance that changed the accounting for, and reporting of, minority interests (now referred to as noncontrolling interests). Noncontrolling interests are now classified as Equity in the Schlumberger Consolidated Balance Sheet. The new guidance also changed the way the consolidated income statement is presented, by requiring net income to include the net income for both the parent and the noncontrolling interests, with disclosure of both amounts on the consolidated statement of income. The calculation of earnings per share continues to be based on income amounts attributable to the parent. Prior period amounts related to noncontrolling interests have been reclassified to conform to the current period presentation.

3. Earnings Per Share

9 Months Ended

Sep. 30, 2009

3. Earnings Per Share

3. Earnings Per Share

The following is a reconciliation from basic earnings per share of Schlumberger from continuing operations to diluted earnings per share of Schlumberger from continuing operations:


						(Stated in millions, except per share amounts)
	2009					2008
	Schlumberger Income from Continuing Operations		Average Shares Outstanding	Earnings per Share		Schlumberger Income from Continuing Operations		Average Shares Outstanding	Earnings per Share
Third Quarter
Basic	$	787	1,200	$	0.66	$	1,526	1,199	$	1.27

Assumed conversion of debentures		2	8				2	9
Assumed exercise of stock options		—	9				—	16
Unvested restricted stock		—	1				—	1

Diluted	$	789	1,218	$	0.65	$	1,528	1,225	$	1.25


	Schlumberger Income from Continuing Operations		Average Shares Outstanding	Earnings per Share		Schlumberger Income from Continuing Operations		Average Shares Outstanding	Earnings per Share
Nine Months
Basic	$	2,338	1,198	$	1.95	$	4,247	1,197	$	3.55

Assumed conversion of debentures		6	8				10	15
Assumed exercise of stock options		—	7				—	16
Unvested restricted stock		—	1				—	1

Diluted	$	2,344	1,214	$	1.93	$	4,257	1,229	$	3.46

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


	(Stated in millions)
	2009	2008
Third Quarter	10	1
Nine Months	17	1

10. Derivative Instruments and Hedging Activities

9 Months Ended

Sep. 30, 2009

10. Derivative Instruments and Hedging Activities

10. Derivative Instruments and Hedging Activities

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

Foreign Currency Exchange Rate Risk

As a multinational company, Schlumberger conducts its business in approximately 80 countries. Schlumberger’s functional currency is primarily the US dollar, which is consistent with the oil and gas industry. However, outside the United States, a significant portion of Schlumberger’s expenses is 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 local currency expenses exceed revenues denominated in local currency that are other than the functional currency. Schlumberger uses foreign currency forward contracts and foreign currency options to provide a hedge against a portion of these cash flow risks. These contracts are accounted for as cash flow hedges, with the effective portion of changes in the fair value of the hedge recorded on the Consolidated Balance Sheet and in Other Comprehensive Income (Loss). Amounts recorded in Other Comprehensive Income (Loss) are reclassified into earnings in the same period or periods that the hedged item is recognized in earnings. The ineffective portion of changes in the fair value of the hedged item is recorded directly to earnings.

At September 30, 2009, Schlumberger recognized a cumulative net $53 million gain in Equity relating to revaluation of foreign currency forward contracts and foreign currency options designated as cash flow hedges, the majority of which is expected to be reclassified into earnings within the next twelve months.

Schlumberger is also exposed to changes in the fair value of assets and liabilities, including certain of its long-term debt, which are denominated in currencies other than the functional currency. Schlumberger uses foreign currency forward contracts and foreign currency options to hedge this exposure as it relates to certain currencies. These contracts are accounted for as fair value hedges with the fair value of the contracts recorded on the Consolidated Balance Sheet and changes in the fair value recognized in the Consolidated Statement of Income along with the change in fair value of the hedged item.

At September 30, 2009, contracts were outstanding for the US dollar equivalent of $4.4 billion in various foreign currencies.

Commodity Price Risk

Schlumberger is exposed to the impact of market fluctuations in the price of commodities, such as copper and lead. Schlumberger has entered into forward contracts on these commodities to manage the price risk associated with forecasted purchases. The objective of these contracts is to reduce the variability of cash flows associated with the forecasted purchase of those commodities. These contracts do not qualify for hedge accounting treatment and therefore, changes in the fair value of the forward contracts are recorded directly to earnings.

Interest Rate Risk

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 interest rate swaps to mitigate the exposure to changes in interest rates.

During the third quarter of 2009, Schlumberger entered into interest rate swaps relating to two of its debt instruments. The first swap was for a notional amount of $600 million in order to hedge a portion of the changes in fair value of Schlumberger’s $650 million 6.50% Notes due 2012. Under the terms of this swap agreement, Schlumberger will receive interest at a fixed rate of 6.5% semi-annually and will pay interest semi-annually at a floating rate of one-month LIBOR plus a spread of 4.84%. The second swap was for a notional amount of $450 million in order to hedge changes in the fair value of Schlumberger’s $450 million 3.00% Notes due 2013. Under the terms of this swap, Schlumberger will receive interest at a fixed rate of 3.0% annually and will pay interest quarterly at a floating rate of three-month LIBOR plus a spread of 0.765%.

These interest rate swaps are designated as fair value hedges of the underlying debt. These derivative instruments are marked to market with gains and losses recognized currently in income to offset the respective losses and gains recognized on changes in the fair value of the hedged debt. This results in no net gain or loss being recognized in the Consolidated Statement of Income.

At September 30, 2009, Schlumberger had fixed rate debt aggregating approximately $3.1 billion and variable rate debt aggregating approximately $2.4 billion, after taking into account the effects of the interest rate swaps.

Short-term investments and Fixed income investments, held to maturity, totaled approximately $4.7 billion at September 30, 2009, and are comprised primarily of money market funds, eurodollar time deposits, certificates of deposit, commercial paper, euro notes and Eurobonds, and are substantially all denominated in US dollars.

The fair values of outstanding derivative instruments is summarized as follows:


(Stated in millions)
	Fair Value of Derivatives				Classification
	Sept. 30 2009		Dec. 31 2008
Derivative assets
Derivative assets
Derivative designated as hedges:
Foreign exchange contracts	$	21	$	62	Other current assets
Foreign exchange contracts		188		3	Other Assets
Interest rate swaps		2		—	Other Assets

	$	211	$	65

Derivative not designated as hedges:
Commodity contracts	$	2	$	—	Other current assets
Foreign exchange contracts		11		30	Other current assets
Foreign exchange contracts		3		8	Other Assets

	$	16	$	38

	$	227	$	103

Derivative Liabilities
Derivative designated as hedges:
Foreign exchange contracts	$	27	$	148	Accounts payable and accrued liabilities
Foreign exchange contracts		1		53	Other Liabilities

	$	28	$	201

Derivative not designated as hedges:
Commodity contracts	$	—	$	5	Accounts payable and accrued liabilities
Foreign exchange contracts		—		4	Accounts payable and accrued liabilities
Foreign exchange contracts		1		—	Other Liabilities

	$	1	$	9

	$	29	$	210

The fair value of all outstanding derivatives is determined using a model with inputs that are observable in the market or can be derived from or corroborated by observable data.

The effect of derivative instruments designated as fair value hedges and not designated as hedges on the Consolidated Statement of Income was as follows:


(Stated in millions)
	Gain/(Loss) Recognized in Income
	2009
	Third Quarter		Nine Months		Classification
Derivatives designated as fair value hedges:
Foreign exchange contracts	$	67	$	106	Cost of revenue
Interest rate swaps		1		1	Interest expense

	$	68	$	107

Derivatives not designated as hedges:
Foreign exchange contracts	$	28	$	6	Cost of revenue
Commodity contracts		1		2	Cost of revenue

	$	29	$	8

The effect of derivative instruments in cash flow hedging relationships on income and other comprehensive income (OCI) was as follows:


(Stated in millions)
	Gain/(Loss) Recognized in OCI				Gain (Loss) Reclassified from Accumulated OCI into Income
	2009				2009
	Third Quarter		Nine Months		Third Quarter			Nine Months			Classification
Foreign exchange contracts	$	106	$	274	$	106		$	133		Cost of revenue
						(2	)		(16	)	Research & engineering
						(2	)		(16	)	Research & engineering

					$	104		$	117

11. Other Financial Instruments

9 Months Ended

Sep. 30, 2009

11. Other Financial Instruments

11. Other Financial Instruments

Both Short-term investments and Fixed Income Investments, held to maturity are comprised primarily of money market funds, eurodollar time deposits, certificates of deposits, commercial paper, euro notes and Eurobonds, and are substantially denominated in US dollars. The carrying value of these investments approximates fair value, which was estimated using quoted market prices for those or similar investments.

A summary of Other Long-Term Debt follows:


					(Stated in millions)
	Sept. 30, 2009				Dec. 31, 2008
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
5.25% Guaranteed Notes due 2013	$	730	$	779	$	714	$	731
6.50% Notes due 2012		648		711		647		651
3.00% Guaranteed Notes due 2013		450		454		—		—
5.875% Guaranteed Bonds due 2011		369		395		355		390
5.14% Guaranteed Notes due 2010		—		—		203		209
4.50% Guaranteed Notes due 2014		1,457		1,530		—		—
Commercial paper borrowings		292		292		771		771
Other variable rate debt		364		364		682		682

		4,310		4,525		3,372		3,434
Fair value adjustment—hedging		2		2		—		—

	$	4,312	$	4,527	$	3,372	$	3,434

At both September 30, 2009 and December 31, 2008, there were $321 million outstanding of 2.125% Series B Convertible Debentures due June 1, 2023. On June 1, 2010, holders may require Schlumberger to repurchase their Series B debentures for cash. Accordingly, these debentures are classified within Current Liabilities on the Consolidated Balance Sheet at September 30, 2009. The fair value of these Series B debentures at September 30, 2009 and December 31, 2008 was $510 million and $398 million, respectively. For further information regarding the debentures refer to Note 11 to the Consolidated Financial Statements included in the Schlumberger Annual Report on Form 10-K for the year ended December 31, 2008.

The fair value adjustment presented above represents changes in the fair value of the portion of Schlumberger’s fixed rate debt that is hedged through the use of interest rate swaps.

During the third quarter of 2009, Schlumberger issued $450 million of 3.00% Guaranteed Notes due 2013.

During the first quarter of 2009, Schlumberger entered into a €3.0 billion Euro Medium Term Note program. This program provides for the issuance of various types of debt instruments such as fixed or floating rate notes in Euro, US dollar or other currencies. Schlumberger issued €1.0 billion 4.50% Guaranteed Notes due 2014 in the first quarter of 2009 under this program. Schlumberger entered into agreements to swap these euro notes for US dollars on the date of issue until maturity, effectively making this a US dollar denominated debt on which Schlumberger will pay interest in US dollars at a rate of 4.95%.

The fair value of Schlumberger’s fixed rate long-term debt was estimated based on quoted market prices.

12. Income Tax

9 Months Ended

Sep. 30, 2009

12. Income Tax

12. Income Tax

Income from Continuing Operations before taxes which were subject to US and non-US income taxes was as follows:


						(Stated in millions)
	Third Quarter					Nine Months
	2009			2008		2009			2008
United States	$	(61	)	$	383	$	(21	)	$	1,117
Outside United States		1,041			1,574		2,960			4,259

	$	980		$	1,957	$	2,939		$	5,376

During the second quarter of 2009, Schlumberger recorded pretax charges of $73 million in the US and $165 million outside of the US. These charges are included in the above table and are more fully described in Note 2 – Charges.

The components of net deferred tax assets were as follows:


	(Stated in millions)
	Sept. 30 2009			Dec. 31 2008
Postretirement benefits, net	$	363		$	556
Multiclient seismic data		110			121
Intangible assets		(117	)		(106	)
Other, net		119			178

	$	475		$	749

The above deferred tax assets at September 30, 2009 and December 31, 2008 are net of valuation allowances relating to net operating losses in certain countries of $245 million and $197 million, respectively. The deferred tax assets are also net of valuation allowances relating to a capital loss carryforward of $136 million at September 30, 2009 ($140 million at December 31, 2008), of which $120 million expires in 2009 and $16 million expires in 2010, and a foreign tax credit carryforward of $30 million at September 30, 2009 ($49 million at December 31, 2008) which expires in 2012.

The components of consolidated Taxes on income were as follows:


							(Stated in millions)
	Third Quarter						Nine Months
	2009			2008			2009			2008
Current:
United States - Federal	$	(67	)	$	120		$	(122	)	$	335
United States - State		(1	)		14			(3	)		27
Outside United States		82			280			462			743

	$	14		$	414		$	337		$	1,105

Deferred:
United States - Federal	$	76		$	19		$	147		$	20
United States - State		3			—			7			—
Outside United States		81			(14	)		88			(10	)
Valuation allowance		17			(1	)		16			(11	)

	$	177		$	4		$	258		$	(1	)

Consolidated taxes on income	$	191		$	418		$	595		$	1,104

A reconciliation of the US statutory federal tax rate of 35% to the consolidated effective income tax rate follows:


	Third Quarter				Nine Months
	2009		2008		2009		2008
US federal statutory rate	35	%	35	%	35	%	35	%
US state income taxes	—		1		—		—
Non-US income taxed at different rates	(14	)	(12	)	(14	)	(12	)
Effect of equity method investment	—		(1	)	—		(1	)
Charges	—		—		1		—
Other	(2	)	(2	)	(2	)	(1	)

Effective income tax rate	19	%	21	%	20	%	21	%

13. Contingencies	9 Months Ended
13. Contingencies	Sep. 30, 2009
Notes to Financial Statements [Abstract]
13. Contingencies	13. Contingencies In 2007, Schlumberger received an inquiry from the United States Department of Justice (“DOJ”) related to the DOJ’s investigation of whether certain freight forwarding and customs clearance services of Panalpina, Inc., and other companies provided to oil and oilfield service companies, including Schlumberger, violated the Foreign Corrupt Practices Act. Schlumberger is cooperating with the DOJ and is currently continuing its own investigation with respect to these services. In 2009, Schlumberger learned that United States officials are currently conducting a grand jury investigation and an associated inquiry, both related to certain Schlumberger operations in specified countries that are subject to United States trade and economic sanctions. Schlumberger is cooperating with the governmental authorities and is currently unable to predict the outcome of these matters. During 1999, Schlumberger completed the spin-off of its offshore contract drilling business, Sedco Forex, to its stockholders and the subsequent merger of Sedco Forex and Transocean. Following the merger of Sedco Forex and Transocean, Brazilian subsidiaries of Transocean and Schlumberger became involved in legal proceedings regarding import duties related to a Transocean rig previously owned by Schlumberger. In 2004, the Brazilian customs authorities issued an assessment against Transocean’s subsidiary. During the third quarter of 2009, Transocean received an unfavorable ruling from the appellate court in Brazil. The appellate court further found Schlumberger to be jointly and severally liable with Transocean for the import duties. At September 30, 2009, the US dollar equivalent of the customs assessment was approximately $200 million. Transocean has stated that it considers any assessment to be solely the responsibility of Schlumberger and has initiated proceedings against Schlumberger in the United States seeking a declaratory judgment to this effect. Schlumberger is currently evaluating its potential options. Any liability that might ensue from this matter is not expected to be material in relation to Schlumberger’s consolidated liquidity or financial position. Furthermore, any liability that may result would be recorded within Discontinued Operations in the Consolidated Statement of Income. Schlumberger and its subsidiaries are party to various other legal proceedings from time to time. A liability is accrued when a loss is both probable and can be reasonably estimated. At this time the ultimate disposition of these proceedings is not determinable and therefore, it is not possible to estimate the amount of loss or range of possible losses that might result from an adverse judgment or settlement in any of these matters. However, in the opinion of management, any liability that might ensue would not be material in relation to Schlumberger’s consolidated liquidity, financial position or future results of operations.

14. Segment Information

9 Months Ended

Sep. 30, 2009

14. Segment Information

14. Segment Information

Schlumberger operates two business segments: Oilfield Services and WesternGeco.


						(Stated in millions)
	Third Quarter 2009					Third Quarter 2008
	Revenue		Income before taxes			Revenue		Income before taxes
Oilfield Services
North America	$	823	$	28		$	1,500	$	317
Latin America		1,071		197			1,141		230
Europe/CIS/Africa		1,782		422			2,165		628
Middle East & Asia		1,233		391			1,495		530
Other		44		4			55		(6	)

		4,953		1,042			6,356		1,699
WesternGeco		463		61			892		355

Corporate & Other		14		(87	)		11		(72	)
Interest Income ⁽¹⁾		—		13			—		28
Interest Expense ⁽²⁾		—		(49	)		—		(53	)

	$	5,430	$	980		$	7,259	$	1,957

1.	Excludes interest income included in the segment results ($2 million in 2009; $3 million in 2008).

2.	Excludes interest expense included in the segment results ($5 million in 2009; $9 million in 2008).


						(Stated in millions)
	Nine Months 2009					Nine Months 2008
	Revenue		Income before taxes			Revenue		Income before taxes
Oilfield Services
North America	$	2,833	$	198		$	4,357	$	1,024
Latin America		3,095		575			3,119		658
Europe/CIS/Africa		5,367		1,321			6,132		1,711
Middle East & Asia		3,920		1,268			4,258		1,515
Other		134		(42	)		161		(3	)

		15,349		3,320			18,027		4,905
WesternGeco		1,573		212			2,239		748

Corporate & Other		36		(254	)		29		(198	)
Interest Income ⁽¹⁾		—		40			—		87
Interest Expense ⁽²⁾		—		(141	)		—		(166	)
Charges		—		(238	)		—		—

	$	16,958	$	2,939		$	20,295	$	5,376

1.	Excludes interest income included in the segment results ($10 million in 2009; $6 million in 2008).

2.	Excludes interest expense included in the segment results ($29 million in 2009; $23 million in 2008).

15. Pension and Other Postretirement Benefits

9 Months Ended

Sep. 30, 2009