In September 2008, Schlumberger issued
A
500 million 5.25% Guaranteed Notes due 2013. 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 4.74%.
Commercial paper borrowings outstanding at December 31, 2010 and 2009 include certain notes issued in currencies
other than the US dollar which were swapped for US dollars and pounds sterling on the date of issue until maturity.
Commercial paper borrowings are classified as long-term debt to the extent of their backup by available and unused
committed credit facilities maturing in more than one year and to the extent it is Schlumberger’s intent to maintain
these obligations for longer than one year.
At December 31, 2010, Schlumberger had separate committed debt facility agreements aggregating $6.0 billion with
commercial banks, of which $3.7 billion was available and unused. This included $4.9 billion of committed facilities
which support commercial paper programs in the United States and Europe, of which $2.5 billion mature in December
2011 and $2.4 billion mature in April 2012. Interest rates and other terms of borrowing under these lines of credit vary
from country to country. Borrowings under the commercial paper programs at December 31, 2010 were $1.9 billion
($0.4 billion at December 31, 2009). At December 31, 2010, $1.5 billion of the commercial paper borrowings were
classified within
Long-term debt – current portion
in the
Consolidated Balance Sheet
.
On January 10, 2011, Schlumberger issued $1.1 billion of 4.200% Senior Notes due 2021 and $500 million of
2.650% Senior Notes due 2016.
A summary of
Long-term Debt
by currency, analyzed by Bonds and Notes, Commercial Paper (CP) and Other, at
December 31 follows. As described in further detail above, the currencies are presented after taking into account
currency swaps entered into on the date of issuance until maturity.
Bonds and
Notes
CP Other
Total
Bonds and
Notes
CP Other
Total
2010
2009
(Stated in millions)
US dollar
$5,017
$ –
$104 $5,121
$3,275 $ – $ 59 $3,334
Euro
–
183
–
183
362 135 231
728
Pound sterling
–
184
–
184
– 223
51
274
Norwegian kroner
–
–
17
17
–
– 19
19
Other
–
–
12
12
–
–
–
–
$5,017 $367 $133 $5,517
$3,637 $358 $360 $4,355
The weighted average interest rate on variable rate debt as of December 31, 2010 was 1.0%.
Long-term Debt
as of December 31, 2010, is due as follows: $445 million in 2012, $1.163 billion in 2013, $1.605 billion
in 2014, $1.310 billion in 2015 and $994 million after 2015.
The fair value of Schlumberger’s
Long-term Debt
at December 31, 2010 and December 31, 2009 was $5.6 billion and
$4.6 billion, respectively, and was estimated based on quoted market prices.
Convertible Debentures
During 2003, Schlumberger Limited issued $975 million aggregate principal amount of 1.5% Series A Convertible
Debentures due June 1, 2023 and $450 million aggregate principal amount of 2.125% Series B Convertible Debentures
due June 1, 2023. The Series A debentures were convertible, at the holders’ option, into shares of common stock of
Schlumberger Limited at a conversion rate of 27.651 shares for each $1,000 of principal amount (equivalent to an initial
conversion price of $36.165 per share) while the Series B debentures were convertible into common stock at a
conversion rate of 25.000 shares for each $1,000 of principal (equivalent to an initial conversion price of $40.00 per
share).
During 2008, all of the remaining $353 million of outstanding Series A debentures were converted into 9.8 million
shares of Schlumberger common stock.
During 2008, $95 million of the Series B debentures were converted into 2.4 million shares of Schlumberger common
stock. At December 31, 2009, there were $321 million of the Series B debentures outstanding. During 2010, $320 million
of these debentures were converted by holders into 8.0 million shares of Schlumberger common stock and the remaining
54
Part II, Item 8
