NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.
Basis of Presentation
The accompanying unaudited consolidated financial statements of Schlumberger Limited and its subsidiaries (Schlumberger) have been prepared in accordance with generally accepted accounting principles in the United States of America 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 Schlumberger management, all adjustments considered necessary for a fair statement have been included in the accompanying unaudited financial statements. All intercompany transactions and balances have been eliminated in consolidation. Operating results for the three-month period ended March 31, 2016 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2016. The December 31, 2015 balance sheet information has been derived from the Schlumberger 2015 audited 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, 2015, filed with the Securities and Exchange Commission on January 27, 2016.
Certain prior period items have been reclassified to conform to the current period presentation.
Merger with Cameron International Corporation
On April 1, 2016, Schlumberger acquired all of the outstanding shares of Cameron International Corporation (Cameron), a leading provider of flow equipment products, systems and services to the oil and gas industry worldwide. The merger will create technology-driven growth by integrating Schlumberger’s reservoir and well technologies with Cameron wellhead and surface equipment, flow control and processing technology. The combination of the two complementary technology portfolios provides the industry’s most comprehensive range of products and services, from exploration to production and integrated pore-to-pipeline solutions that optimize hydrocarbon recovery to deliver reservoir performance. Cameron’s revenue for the year ended December 31, 2015 and the three months ended March 31, 2016 was $8.8 billion and $1.6 billion, respectively.
Under the terms of the merger agreement, Cameron became a wholly-owned subsidiary of Schlumberger. Each share of Cameron common stock issued and outstanding immediately prior to the effective time of the merger was converted into the right to receive 0.716 share of Schlumberger stock and $14.44 in cash. As a result, Schlumberger issued approximately 138 million shares of its common stock and paid cash of approximately $2.8 billion in connection with this transaction. Based on the closing price of Schlumberger’s common stock on April 1, 2016, the total fair value of the consideration transferred to effect the acquisition of Cameron was approximately $12.9 billion. Due to the fact that the acquisition just recently closed, the initial accounting for the transaction has not yet been completed. Cameron reported net tangible assets of approximately $3.0 billion as of December 31, 2015, consisting of $2.4 billion of cash and short-term investments, $2.0 billion of accounts receivable, $2.4 billion of inventories, $1.7 billion of fixed assets, $2.8 billion of debt and $2.7 billion of other net liabilities.
As this transaction closed subsequent to the end of the first quarter of 2016, the
Consolidated
Financial
Statements
and the related footnotes do not reflect any amounts relating to the acquired Cameron business.
New Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09,
Revenue from Contracts with Customers
. This ASU amends the existing accounting standards for revenue recognition and is based on the principle
that revenue should be recognized to depict the transfer of goods or services to a customer at an amount that reflects the consideration
a company expects to receive in exchange for those goods or services. Schlumberger is required to adopt this ASU on January 1,
2018, with early adoption permitted on January 1, 2017, and does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.
In November 2015, the FASB issued ASU 2015-17
, Balance Sheet Classification of Deferred Taxes
, which amends existing guidance on income taxes to require the classification of all deferred tax assets and liabilities as non-current on the balance sheet. Schlumberger is required to adopt this ASU no later than January 1, 2018, with early adoption permitted, and the guidance may be applied either prospectively or retrospectively. Schlumberger does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.
In February 2016, the FASB issued ASU No. 2016-02,
Leases
. This ASU requires lessees to recognize for all leases, with the exception of short-term leases, a liability equal to the present value of lease payments and a corresponding right-of-use asset also
8
based on the
present value of
lease payments. Schlumberger is evaluating the impact
that the adoption of
this ASU will have on its conso
lidated financial statements.
2.
Charges and Credits
Schlumberger did not record any charges or credits during the first quarter of 2016.
2015
Schlumberger recorded the following charges and credits during the first quarter of 2015:
|
·
|
As a result of the severe fall in activity in North America, combined with the impact of lower international activity due to customer budget cuts driven by lower oil prices, Schlumberger decided to reduce its headcount during the first quarter of 2015. Schlumberger recorded a $390 million charge during the first quarter associated with this headcount reduction as well as an incentivized leave of absence program.
|
|
·
|
In February 2015, the Venezuelan government replaced the SICAD II exchange rate with a new foreign exchange market system known as SIMADI. The SIMADI exchange rate was approximately 192 Venezuelan
Bolivares
fuertes to the US dollar as of March 31, 2015. As a result, Schlumberger recorded a $49 million devaluation charge during the first quarter of 2015, reflecting the adoption of the SIMADI exchange rate. This
change resulted in a reduction in the US dollar reported amount of local currency denominated revenues, expenses and, consequently, income before taxes and net income in Venezuela.
|
The following is a summary of these charges, all of which were classified as
Restructuring & other
in the
Consolidated Statement of Income
:
|
(Stated in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax
|
|
|
Tax
|
|
|
Net
|
|
Workforce reduction
|
$
|
390
|
|
|
$
|
56
|
|
|
$
|
334
|
|
Currency devaluation loss in Venezuela
|
|
49
|
|
|
|
-
|
|
|
|
49
|
|
|
$
|
439
|
|
|
$
|
56
|
|
|
$
|
383
|
|
3.
Earnings Per Share
The following is a reconciliation from basic earnings per share of Schlumberger to diluted earnings per share of Schlumberger:
(Stated in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
Schlumberger Net Income
|
|
|
Average
Shares
Outstanding
|
|
|
Earnings per Share
|
|
|
Schlumberger Net Income
|
|
|
Average
Shares
Outstanding
|
|
|
Earnings per Share
|
|
First Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
501
|
|
|
|
1,254
|
|
|
$
|
0.40
|
|
|
$
|
975
|
|
|
|
1,276
|
|
|
$
|
0.76
|
|
Assumed exercise of stock options
|
|
-
|
|
|
|
1
|
|
|
|
|
|
|
|
-
|
|
|
|
5
|
|
|
|
|
|
Unvested restricted stock
|
|
-
|
|
|
|
4
|
|
|
|
|
|
|
|
-
|
|
|
|
4
|
|
|
|
|
|
Diluted
|
$
|
501
|
|
|
|
1,259
|
|
|
$
|
0.40
|
|
|
$
|
975
|
|
|
|
1,285
|
|
|
$
|
0.76
|
|
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, was as follows:
(Stated in millions)
|
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
First Quarter
|
|
32
|
|
|
|
16
|
|
9
4
.
Inventories
A summary of inventories follows:
(Stated in millions)
|
|
|
|
|
|
|
|
|
|
|
Mar. 31,
|
|
|
Dec. 31,
|
|
|
2016
|
|
|
2015
|
|
Raw materials & field materials
|
$
|
2,355
|
|
|
$
|
2,300
|
|
Work in progress
|
|
155
|
|
|
|
178
|
|
Finished goods
|
|
1,102
|
|
|
|
1,278
|
|
|
$
|
3,612
|
|
|
$
|
3,756
|
|
5.
Fixed Assets
A summary of fixed assets follows:
(Stated in millions)
|
|
|
|
|
|
|
|
|
|
|
Mar. 31,
|
|
|
Dec. 31,
|
|
|
2016
|
|
|
2015
|
|
Property, plant & equipment
|
$
|
37,275
|
|
|
$
|
37,120
|
|
Less: Accumulated depreciation
|
|
24,016
|
|
|
|
23,705
|
|
|
$
|
13,259
|
|
|
$
|
13,415
|
|
Depreciation expense relating to fixed assets was $682 million and $827 million in the first quarter of 2016 and 2015, respectively.
6.
Multiclient Seismic Data
The change in the carrying amount of multiclient seismic data for the three months ended March 31, 2016 was as follows:
(Stated in millions)
|
|
|
|
|
|
Balance at December 31, 2015
|
$
|
1,026
|
|
Capitalized in period
|
|
167
|
|
Charged to expense
|
|
(85
|
)
|
Balance at March 31, 2016
|
$
|
1,108
|
|
7.
Goodwill
The changes in the carrying amount of goodwill by reporting unit for the three months ended March 31, 2016 were as follows:
|
(Stated in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reservoir
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Characterization
|
|
|
Drilling
|
|
|
Production
|
|
|
Total
|
|
Balance at December 31, 2015
|
$
|
3,798
|
|
|
$
|
8,584
|
|
|
$
|
3,223
|
|
|
$
|
15,605
|
|
Acquisitions
|
|
-
|
|
|
|
-
|
|
|
|
24
|
|
|
|
24
|
|
Impact of changes in exchange rates
|
|
9
|
|
|
|
4
|
|
|
|
7
|
|
|
|
20
|
|
Balance at March 31, 2016
|
$
|
3,807
|
|
|
$
|
8,588
|
|
|
$
|
3,254
|
|
|
$
|
15,649
|
|
10
8
.
Intangible Assets
The gross book value, accumulated amortization and net book value of intangible assets were as follows:
|
(Stated in millions)
|
|
|
|
|
|
Mar. 31, 2016
|
|
|
Dec. 31, 2015
|
|
|
Gross
|
|
|
Accumulated
|
|
|
Net Book
|
|
|
Gross
|
|
|
Accumulated
|
|
|
Net Book
|
|
|
Book
Value
|
|
|
Amortization
|
|
|
Value
|
|
|
Book Value
|
|
|
Amortization
|
|
|
Value
|
|
Customer Relationships
|
$
|
2,503
|
|
|
$
|
686
|
|
|
$
|
1,817
|
|
|
$
|
2,489
|
|
|
$
|
645
|
|
|
$
|
1,844
|
|
Technology/Technical Know-How
|
|
1,866
|
|
|
|
681
|
|
|
|
1,185
|
|
|
|
1,864
|
|
|
|
653
|
|
|
|
1,211
|
|
Tradenames
|
|
1,623
|
|
|
|
380
|
|
|
|
1,243
|
|
|
|
1,625
|
|
|
|
367
|
|
|
|
1,258
|
|
Other
|
|
557
|
|
|
|
251
|
|
|
|
306
|
|
|
|
513
|
|
|
|
257
|
|
|
|
256
|
|
|
$
|
6,549
|
|
|
$
|
1,998
|
|
|
$
|
4,551
|
|
|
$
|
6,491
|
|
|
$
|
1,922
|
|
|
$
|
4,569
|
|
Amortization expense charged to income was $89 million during the first quarter of 2016 and $88 million during the first quarter of 2015
Based on the net book value of intangible assets at March 31, 2016, amortization charged to income for the subsequent five years is estimated to be: remaining three quarters of 2016—$287 million; 2017—$372 million; 2018—$364 million; 2019—$351 million; 2020—$330 million; and 2021—$307 million.
9.
Long-term Debt
A summary of
Long-term Debt
follows:
(Stated in millions)
|
|
|
|
|
|
|
|
|
|
|
Mar. 31,
|
|
|
Dec. 31,
|
|
|
2016
|
|
|
2015
|
|
4.00% Senior Notes due 2025
|
$
|
1,739
|
|
|
$
|
1,741
|
|
3.30% Senior Notes due 2021
|
|
1,593
|
|
|
|
1,597
|
|
3.00% Senior Notes due 2020
|
|
1,590
|
|
|
|
1,591
|
|
3.65% Senior Notes due 2023
|
|
1,490
|
|
|
|
1,496
|
|
2.35% Senior Notes due 2018
|
|
1,296
|
|
|
|
1,297
|
|
4.20% Senior Notes due 2021
|
|
1,099
|
|
|
|
1,100
|
|
1.25% Senior Notes due 2017
|
|
999
|
|
|
|
1,000
|
|
2.40% Senior Notes due 2022
|
|
995
|
|
|
|
999
|
|
3.63% Senior Notes due 2022
|
|
845
|
|
|
|
845
|
|
0.63% Guaranteed Notes due 2019
|
|
669
|
|
|
|
-
|
|
1.50% Guaranteed Notes due 2019
|
|
581
|
|
|
|
566
|
|
1.90% Senior Notes due 2017
|
|
498
|
|
|
|
499
|
|
Commercial paper borrowings
|
|
2,624
|
|
|
|
1,000
|
|
Other
|
|
1,215
|
|
|
|
711
|
|
|
$
|
17,233
|
|
|
$
|
14,442
|
|
The estimated fair value of Schlumberger’s
Long-term Debt
at March 31, 2016 and December 31, 2015, based on quoted market prices, was $17.5 billion and $14.4 billion, respectively.
Borrowings under the commercial paper program at March 31, 2016 were $4.8 billion, of which $2.6 billion was classified within
Long-term debt
and $2.2 billion was classified within
Long-term debt – current portion
in the
Consolidated Balance Sheet
. At December 31, 2015, borrowings under the commercial paper program were $2.4 billion, of which $1.0 billion was classified within
Long-term debt
and $1.4 billion was classified within
Long-term debt – current portion
in the
Consolidated Balance Sheet
.
11
10
.
Derivative Instruments and Hedging Activities
Schlumberger is exposed to market risks related to fluctuations in foreign currency exchange rates and interest rates. To mitigate these risks, Schlumberger utilizes derivative instruments. Schlumberger does not enter into derivative transactions for speculative purposes.
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 occasionally interest rate swaps to mitigate the exposure to changes in interest rates.
During the fourth quarter of 2013, Schlumberger entered into a cross currency swap for a notional amount of €0.5 billion in order to hedge changes in the fair value of Schlumberger’s €0.5 billion 1.50% Guaranteed Notes due 2019. Under the terms of this swap, Schlumberger receives interest at a fixed rate of 1.50% on the euro notional amount and pays interest at a floating rate of three-month LIBOR plus approximately 64 basis points on the US dollar notional amount.
This cross currency swap is designated as a fair value hedge of the underlying debt. This derivative instrument is marked to market with gains and losses recognized in income to largely offset the respective gains and losses recognized on changes in the fair value of the hedged debt.
At March 31, 2016, Schlumberger had fixed rate debt of $13.9 billion and variable rate debt of $7.6 billion after taking into account the effect of the swap.
Short-term investments
and
Fixed income investments
,
held to maturity
totaled $12.8 billion at March 31, 2016. The carrying value of these investments approximated fair value, which was estimated using quoted market prices for those or similar investments.
Foreign Currency Exchange Rate Risk
As a multinational company, Schlumberger conducts its business in more than 85 countries. Schlumberger’s functional currency is primarily the US dollar. 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 the local currency is not the functional currency and expenses denominated in local currency are not equal to revenues denominated in local currency. Schlumberger is also exposed to risks on future cash flows relating to certain of its fixed rate debt which is denominated in currencies 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
Accumulated other comprehensive loss.
Amounts recorded in
Accumulated other comprehensive 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 hedging instruments, if any, is recorded directly to earnings.
At March 31, 2016, Schlumberger recognized a cumulative net $30 million loss in
Accumulated other comprehensive loss
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 12 months.
Schlumberger is exposed to changes in the fair value of assets and liabilities which are denominated in currencies other than the functional currency. While Schlumberger uses foreign currency forward contracts and foreign currency options to economically hedge this exposure as it relates to certain currencies, these contracts are not designated as hedges for accounting purposes. Instead, the fair value of the contracts is recorded on the
Consolidated Balance Sheet,
and changes in the fair value are recognized in the
Consolidated Statement of Income
as are changes in fair value of the hedged item.
At March 31, 2016, contracts were outstanding for the US dollar equivalent of $4.1 billion in various foreign currencies, of which $0.7 billion relate to hedges of debt denominated in currencies other than the functional currency.
12
The fair values of outstanding derivative instruments
were
as follows:
|
|
|
|
|
(Stated in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value of Derivatives
|
|
|
Consolidated Balance Sheet Classification
|
|
Mar. 31,
|
|
|
Dec. 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
Derivative Assets
|
|
|
|
|
|
|
|
|
|
Derivatives designated as hedges:
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
$
|
5
|
|
|
$
|
4
|
|
|
Other current assets
|
Foreign exchange contracts
|
|
1
|
|
|
|
6
|
|
|
Other Assets
|
|
$
|
6
|
|
|
$
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
$
|
11
|
|
|
$
|
15
|
|
|
Other current assets
|
|
$
|
17
|
|
|
$
|
25
|
|
|
|
Derivative Liabilities
|
|
|
|
|
|
|
|
|
|
Derivatives designated as hedges:
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
$
|
27
|
|
|
$
|
37
|
|
|
Accounts payable and accrued liabilities
|
Foreign exchange contracts
|
|
3
|
|
|
|
3
|
|
|
Other Liabilities
|
Cross currency swap
|
|
27
|
|
|
|
22
|
|
|
Other Liabilities
|
|
$
|
57
|
|
|
$
|
62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
$
|
6
|
|
|
$
|
25
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
63
|
|
|
$
|
87
|
|
|
|
The fair value of all outstanding derivatives was determined using a model with inputs that are observable in the market or that can be derived from, or corroborated by, observable data.
The effect of derivative instruments designated as fair value hedges and those not designated as hedges on the
Consolidated Statement of Income
was as follows:
|
(Stated in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (Loss) Recognized in Income
|
|
|
|
|
First Quarter
|
|
|
|
|
2016
|
|
|
2015
|
|
|
Consolidated
Statement
of Income Classification
|
Derivatives designated as fair value hedges:
|
|
|
|
|
|
|
|
|
|
Cross currency swap
|
$
|
10
|
|
|
$
|
(70
|
)
|
|
Interest
|
|
|
|
|
|
|
|
|
|
|
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
$
|
(81
|
)
|
|
$
|
(118
|
)
|
|
Cost of revenue
|
11.
Income Taxes
Income before taxes
subject to US and non-US income taxes was as follows:
(Stated in millions)
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
|
2016
|
|
|
2015
|
|
United States
|
$
|
(203
|
)
|
|
$
|
165
|
|
Outside United States
|
|
825
|
|
|
|
1,129
|
|
|
$
|
622
|
|
|
$
|
1,294
|
|
13
Schlumberger recorded pretax
charges
of $
439
million during the
three
months ended
March 31
, 201
5
($
93
million of charges in the US and $
346
million of
charges
outside the US). See Note 2 –
Charges and Credits
.
The components of net deferred tax assets (liabilities) were as follows:
(Stated in millions)
|
|
|
|
|
|
|
|
|
|
|
Mar. 31,
|
|
|
Dec. 31,
|
|
|
2016
|
|
|
2015
|
|
Postretirement benefits
|
$
|
264
|
|
|
$
|
266
|
|
Intangible assets
|
|
(1,414
|
)
|
|
|
(1,418
|
)
|
Investments in non-US subsidiaries
|
|
(149
|
)
|
|
|
(152
|
)
|
Fixed assets, net
|
|
(173
|
)
|
|
|
(176
|
)
|
Inventories
|
|
144
|
|
|
|
159
|
|
Other, net
|
|
613
|
|
|
|
454
|
|
|
$
|
(715
|
)
|
|
$
|
(867
|
)
|
The above deferred tax balances at March 31, 2016 and December 31, 2015 were net of valuation allowances relating to net operating losses in certain countries of $155 million and $162 million, respectively.
The components of
Taxes on income
were as follows:
(Stated in millions)
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
|
2016
|
|
|
2015
|
|
Current:
|
|
|
|
|
|
|
|
United States-Federal
|
$
|
40
|
|
|
$
|
75
|
|
United States-State
|
|
1
|
|
|
|
5
|
|
Outside United States
|
|
217
|
|
|
|
248
|
|
|
|
258
|
|
|
|
328
|
|
Deferred:
|
|
|
|
|
|
|
|
United States-Federal
|
$
|
(116
|
)
|
|
$
|
(26
|
)
|
United States-State
|
|
(7
|
)
|
|
|
-
|
|
Outside United States
|
|
(35
|
)
|
|
|
4
|
|
Valuation Allowance
|
|
(1
|
)
|
|
|
-
|
|
|
|
(159
|
)
|
|
|
(22
|
)
|
|
$
|
99
|
|
|
$
|
306
|
|
A reconciliation of the US statutory federal tax rate (35%) to the consolidated effective income tax rate follows:
|
First Quarter
|
|
|
|
2016
|
|
|
2015
|
|
|
US federal statutory rate
|
|
35
|
%
|
|
|
35
|
%
|
|
State tax
|
|
(1
|
)
|
|
|
-
|
|
|
Non-US income taxed at different rates
|
|
(16
|
)
|
|
|
(12
|
)
|
|
Charges and credits (See Note 2)
|
|
-
|
|
|
|
3
|
|
|
Other
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
|
16
|
%
|
|
|
24
|
%
|
|
12.
Contingencies
Schlumberger and its subsidiaries are party to various legal proceedings from time to time. A liability is accrued when a loss is both probable and can be reasonably estimated. Management believes that the probability of a material loss with respect to any currently pending legal proceedings is remote. However, litigation is inherently uncertain and it is not possible to predict the ultimate disposition of any of these proceedings.
14
13
.
Segment Information
|
|
|
|
|
(Stated in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter 2016
|
|
|
First Quarter 2015
|
|
|
|
|
|
|
Income
|
|
|
|
|
|
|
Income
|
|
|
|
|
|
|
before
|
|
|
|
|
|
|
before
|
|
|
Revenue
|
|
|
Taxes
|
|
|
Revenue
|
|
|
Taxes
|
|
Reservoir Characterization
|
$
|
1,747
|
|
|
$
|
331
|
|
|
$
|
2,655
|
|
|
$
|
672
|
|
Drilling
|
|
2,493
|
|
|
|
371
|
|
|
|
3,922
|
|
|
|
778
|
|
Production
|
|
2,348
|
|
|
|
208
|
|
|
|
3,705
|
|
|
|
544
|
|
Eliminations & other
|
|
(68
|
)
|
|
|
(9
|
)
|
|
|
(34
|
)
|
|
|
(1
|
)
|
Pretax operating income
|
|
|
|
|
|
901
|
|
|
|
|
|
|
|
1,993
|
|
Corporate & other
(1)
|
|
|
|
|
|
(172
|
)
|
|
|
|
|
|
|
(192
|
)
|
Interest income
(2)
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
8
|
|
Interest expense
(3)
|
|
|
|
|
|
(120
|
)
|
|
|
|
|
|
|
(76
|
)
|
Charges and credits
(4)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
(439
|
)
|
|
$
|
6,520
|
|
|
$
|
622
|
|
|
$
|
10,248
|
|
|
$
|
1,294
|
|
(1)
Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs, amortization expense associated with certain intangible assets, certain centrally managed initiatives and other nonoperating items.
(2)
Interest income excludes amounts which are included in the segments’ income ($6 million in 2016; $5 million in 2015).
(3)
Interest expense excludes amounts which are included in the segments’ income ($13 million in 2016; $6 million in 2015).
(4
)
See Note 2 –
Charges and Credits
.
14.
Pension and Other Postretirement Benefit Plans
Net pension cost for the Schlumberger pension plans included the following components:
(Stated in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
|
|
2016
|
|
|
2015
|
|
|
|
US
|
|
|
Int'l
|
|
|
US
|
|
|
Int'l
|
|
|
Service cost
|
$
|
18
|
|
|
$
|
37
|
|
|
$
|
22
|
|
|
$
|
49
|
|
|
Interest cost
|
|
44
|
|
|
|
80
|
|
|
|
41
|
|
|
|
74
|
|
|
Expected return on plan assets
|
|
(61
|
)
|
|
|
(134
|
)
|
|
|
(56
|
)
|
|
|
(128
|
)
|
|
Amortization of prior service cost
|
|
3
|
|
|
|
30
|
|
|
|
5
|
|
|
|
30
|
|
|
Amortization of net loss
|
|
23
|
|
|
|
22
|
|
|
|
31
|
|
|
|
38
|
|
|
|
$
|
27
|
|
|
$
|
35
|
|
|
$
|
43
|
|
|
$
|
63
|
|
|
The net periodic benefit cost for the Schlumberger US postretirement medical plan included the following components:
(Stated in millions)
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
|
2016
|
|
|
2015
|
|
Service cost
|
$
|
8
|
|
|
$
|
11
|
|
Interest cost
|
|
12
|
|
|
|
13
|
|
Expected return on plan assets
|
|
(14
|
)
|
|
|
(13
|
)
|
Amortization of prior service credit
|
|
(8
|
)
|
|
|
(8
|
)
|
Amortization of net loss (gain)
|
|
-
|
|
|
|
5
|
|
|
$
|
(2
|
)
|
|
$
|
8
|
|
15
15
.
Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss
consists of the following:
|
(Stated in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized
|
|
|
|
|
|
|
Pension and
|
|
|
|
|
|
|
Currency
|
|
|
Gain/(Loss) on
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
Translation
|
|
|
Marketable
|
|
|
Cash Flow
|
|
|
Postretirement
|
|
|
|
|
|
|
Adjustments
|
|
|
Securities
|
|
|
Hedges
|
|
|
Benefit Plans
|
|
|
Total
|
|
Balance, January 1, 2016
|
$
|
(2,053
|
)
|
|
$
|
-
|
|
|
$
|
(39
|
)
|
|
$
|
(2,466
|
)
|
|
$
|
(4,558
|
)
|
Other comprehensive gain (loss) before reclassifications
|
|
17
|
|
|
|
3
|
|
|
|
(85
|
)
|
|
|
-
|
|
|
|
(65
|
)
|
Amounts reclassified from accumulated other comprehensive loss
|
|
-
|
|
|
|
-
|
|
|
|
94
|
|
|
|
70
|
|
|
|
164
|
|
Income taxes
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(7
|
)
|
|
|
(7
|
)
|
Net other comprehensive (loss) income
|
|
17
|
|
|
|
3
|
|
|
|
9
|
|
|
|
63
|
|
|
|
92
|
|
Balance, March 31, 2016
|
$
|
(2,036
|
)
|
|
$
|
3
|
|
|
$
|
(30
|
)
|
|
$
|
(2,403
|
)
|
|
$
|
(4,466
|
)
|
|
(Stated in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized
|
|
|
|
|
|
|
Pension and
|
|
|
|
|
|
|
Currency
|
|
|
Gain/(Loss) on
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
Translation
|
|
|
Marketable
|
|
|
Cash Flow
|
|
|
Postretirement
|
|
|
|
|
|
|
Adjustments
|
|
|
Securities
|
|
|
Hedges
|
|
|
Benefit Plans
|
|
|
Total
|
|
Balance, January 1, 2015
|
$
|
(1,531
|
)
|
|
$
|
10
|
|
|
$
|
(96
|
)
|
|
$
|
(2,589
|
)
|
|
$
|
(4,206
|
)
|
Other comprehensive loss before reclassifications
|
|
(113
|
)
|
|
|
(18
|
)
|
|
|
(152
|
)
|
|
|
-
|
|
|
|
(283
|
)
|
Amounts reclassified from accumulated other comprehensive loss
|
|
-
|
|
|
|
-
|
|
|
|
118
|
|
|
|
101
|
|
|
|
219
|
|
Income taxes
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(15
|
)
|
|
|
(15
|
)
|
Net other comprehensive (loss) income
|
|
(113
|
)
|
|
|
(18
|
)
|
|
|
(34
|
)
|
|
|
86
|
|
|
|
(79
|
)
|
Balance, March 31, 2015
|
$
|
(1,644
|
)
|
|
$
|
(8
|
)
|
|
$
|
(130
|
)
|
|
$
|
(2,503
|
)
|
|
$
|
(4,285
|
)
|
16