As of December 31, 2012, Schlumberger had approximately $6.3 billion of cash and short-term investments on hand.
Schlumberger had separate committed debt facility agreements aggregating $4.1 billion with commercial banks, of
which $3.8 billion was available and unused as of December 31, 2012. This included $3.5 billion of committed facilities
which support commercial paper borrowings in the United States and Europe. Schlumberger believes that these
amounts are sufficient to meet future business requirements for at least the next 12 months.
Schlumberger did not have any commercial paper borrowings outstanding as of December 31, 2012.
Summary of Major Contractual Obligations
(Stated in millions)
Payment Period
Contractual Obligations
Total
2013 2014 – 2015 2016 – 2017 After 2017
Debt
(1)
$11,630 $2,121
$2,975
$2,842
$3,692
Interest on fixed rate debt obligations
(2)
1,445
292
425
282
446
Operating leases
1,615
371
442
283
519
Purchase obligations
(3)
1,574 1,432
138
4
–
$16,264 $4,216
$3,980
$3,411
$4,657
(1)
Excludes future payments for interest.
(2)
Excludes interest on $1.6 billion of variable rate debt, which had a weighted average interest rate of 3.6% as of December 31, 2012.
(3)
Represents an estimate of contractual obligations in the ordinary course of business. Although these contractual obligations are considered
enforceable and legally binding, the terms generally allow Schlumberger the option to reschedule and adjust its requirements based on
business needs prior to the delivery of goods.
Refer to Note 18
Pension and Other Benefit Plans
of the
Consolidated Financial Statements
for details regarding
Schlumberger’s pension and other postretirement benefit obligations.
As discussed in Note 14
Income Taxes
of the
Consolidated Financial Statements
, included in the Schlumberger
Consolidated Balance Sheet
at December 31, 2012 is approximately $1.45 billion of liabilities associated with uncertain
tax positions in the over 100 jurisdictions in which Schlumberger conducts business. Due to the uncertain and complex
application of tax regulations, combined with the difficulty in predicting when tax audits throughout the world may be
concluded, Schlumberger cannot make reliable estimates of the timing of cash outflows relating to these liabilities.
Schlumberger has outstanding letters of credit/guarantees which relate to business performance bonds,
custom/excise tax commitments, facility lease/rental obligations, etc. These were entered into in the ordinary course of
business and are customary practices in the various countries where Schlumberger operates.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with accounting principles generally
accepted in the United States requires Schlumberger to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of
revenue and expenses. The following accounting policies involve “critical accounting estimates” because they are
particularly dependent on estimates and assumptions made by Schlumberger about matters that are inherently
uncertain. A summary of all of Schlumberger’s significant accounting policies is included in Note 2 to the
Consolidated
Financial Statements
.
Schlumberger bases its estimates on historical experience and on various assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.
Multiclient Seismic Data
The WesternGeco business capitalizes the costs associated with obtaining multiclient seismic data. The carrying
value of the multiclient seismic data library at December 31, 2012 and 2011 was $518 million and $425 million,
respectively. Such costs are charged to
Cost of revenue
based on the percentage of the total costs to the estimated total
revenue that Schlumberger expects to receive from the sales of such data. However, under no circumstances will an
individual survey carry a net book value greater than a 4-year, straight-line amortized value.
The carrying value of surveys is reviewed for impairment annually as well as when an event or change in
circumstance indicates an impairment may have occurred. Adjustments to the carrying value are recorded when it is
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