characteristics as well as its impact on the overall investment return. As part of its strategy, Schlumberger may utilize
certain derivative instruments, such as options, futures, swaps and forwards, within the plans to manage risks
(currency, interest rate, etc.), as a substitute for physical securities or to obtain exposure to different markets.
Asset performance is monitored frequently with an overall expectation that plan assets will meet or exceed the
weighted index of its target asset allocation and component benchmark over rolling five-year periods.
The expected long-term rate of return on assets assumptions reflect the average rate of earnings expected on funds
invested or to be invested. The assumptions have been determined by reflecting expectations regarding future rates of
return for the portfolio considering the asset allocation and related historical rates of return. The appropriateness of
the assumptions is reviewed annually.
The fair value of Schlumberger’s pension plan assets at December 31, 2011 and 2010, by asset category, are
presented below and were determined based on valuation techniques categorized as follows:
Š
Level One: The use of quoted prices in active markets for identical instruments.
Š
Level Two: The use of quoted prices for similar instruments in active markets or quoted prices for identical or
similar instruments in markets that are not active or other inputs that are observable in the market or can be
corroborated by observable market data.
Š
Level Three: The use of significantly unobservable inputs that typically require the use of management’s
estimates of assumptions that market participants would use in pricing.
(Stated in millions)
US Plan Assets
2011
2010
Total
Level
One
Level
Two
Level
Three Total
Level
One
Level
Two
Level
Three
Asset Category:
Cash and Cash Equivalents
$ 147 $ 39 $ 108 $ –
$ 67 $ 35 $ 32 $ –
Equity Securities:
US
(a)
806 471 335
885
635
250
International
(b)
453 369
84
473
370
103
Debt Securities:
Corporate bonds
(c)
340
340
220
220
Government and government-related debt securities
(d)
545 146 399
554
148
406
Government agency collateralized mortgage obligations and
mortgage backed securities
(e)
96
96
201
201
Other collateralized mortgage obligations and mortgage-backed
securities
(f)
58
58
67
67
Alternative Investments:
Private equity
(g)
160
160
128
128
Real estate
(h)
50
50
40
40
Total
$2,655 $1,025 $1,420 $210
$2,635 $1,188 $1,279 $168
66
