The changes in the projected benefit obligation, plan assets and funded status of the plans were as follows:
(Stated in millions)
US
International
2011 2010 2011 2010
Change in Projected Benefit Obligations
Projected benefit obligation at beginning of year
$2,769
$2,439
$4,088
$3,518
Service cost
59
56
64
51
Interest cost
150
142
226
208
Contributions by plan participants
–
–
102
76
Actuarial losses
225
172
321
310
Currency effect
–
–
(8)
(28)
Benefits paid
(130)
(122)
(127)
(121)
Plan amendments
–
82
–
74
Projected benefit obligation at end of year
$3,073
$2,769
$4,666
$4,088
Change in Plan Assets
Plan assets at fair value at beginning of year
$2,635
$2,254
$3,764
$2,976
Actual return on plan assets
78
316
–
426
Currency effect
–
–
(6)
(26)
Company contributions
72
187
364
433
Contributions by plan participants
–
–
102
76
Benefits paid
(130)
(122)
(127)
(121)
Plan assets at fair value at end of year
$2,655
$2,635
$4,097
$3,764
Unfunded Liability
$ (418)
$ (134)
$ (569)
$ (324)
Amounts Recognized in Balance Sheet
Postretirement Benefits
$ (418)
$ (134)
$ (569)
$ (367)
Other Assets
–
–
–
43
$ (418)
$ (134)
$ (569)
$ (324)
Amounts Recognized in Accumulated Other Comprehensive Loss
Actuarial losses
$1,048
$ 819
$1,002
$ 447
Prior service cost
101
114
729
840
$1,149
$ 933
$1,731
$1,287
Accumulated benefit obligation
$2,861
$2,568
$4,336
$3,785
The unfunded liability represents the difference between the plan assets and the projected benefit obligation (“PBO”). The
PBO represents the actuarial present value of benefits based on employee service and compensation and includes an
assumption about future compensation levels. The accumulated benefit obligation represents the actuarial present value of
benefits based on employee service and compensation, but does not include an assumption about future compensation levels.
The weighted-average allocation of plan assets and the target allocation by asset category are as follows:
US
International
Target 2011 2010 Target 2011 2010
Equity securities
45 – 50% 47%
52%
50 – 70% 51%
61%
Debt securities
33 –43 39
40
25 – 35 38
31
Cash and cash equivalents
0 – 2 6
2
0 – 2 4
3
Alternative investments
0 – 10 8
6
0 – 20 7
5
100% 100%
100%
100% 100%
100%
Schlumberger’s investment policy includes various guidelines and procedures designed to ensure that assets are
prudently invested in a manner necessary to meet the future benefit obligation of the pension plans. The policy does
not permit the direct investment of plan assets in any Schlumberger security. Schlumberger’s investment horizon is
long-term and accordingly the target asset allocations encompass a strategic, long-term perspective of capital markets,
expected risk and return behavior and perceived future economic conditions. The key investment principles of
diversification, assessment of risk and targeting the optimal expected returns for given levels of risk are applied. The
target asset allocation is reviewed periodically and is determined based on a long-term projection of capital market
outcomes, inflation rates, fixed income yields, returns, volatilities and correlation relationships. The inclusion of any
given asset class in the target asset allocation is considered in relation to its impact on the overall risk/return
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