CURAÇAO

52-0684746

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

42 RUE SAINT-DOMINIQUE

PARIS, FRANCE

75007

5599 SAN FELIPE, 17th FLOOR

HOUSTON, TEXAS, U.S.A.

77056

PARKSTRAAT 83 THE HAGUE,

THE NETHERLANDS

2514 JG

(Addresses of principal executive offices)

(Zip Codes)

Large accelerated filer

x

Accelerated filer

¨

Non-accelerated filer

¨  (Do not check if a smaller reporting company)

Smaller reporting company

¨

Class

Outstanding at September 30, 2013

COMMON STOCK, $0.01 PAR VALUE PER SHARE

1,316,954,935

Page

 PART I

Financial Informaiton

Item 1.

Financial Statements  

 3

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations  

19

Item 3.

Quantitative and Qualitative Disclosures about Market Risk  

 28

Item 4.

Controls and Procedures  

 28

 PART II

Other Information

Item 1.

Legal Proceedings  

 29

Item 1A.

Risk Factors  

 29

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds  

 29

Item 3.

Defaults Upon Senior Securities  

 29

Item 4.

Mine Safety Disclosures  

 29

Item 5.

Other Information  

 29

Item 6.

Exhibits  

 30

Certifications

(Stated in millions, except per share amounts)

Third Quarter

Nine Months

2013

2012

2013

2012

Revenue

$

11,608

$

10,498

$

33,360

$

30,648

Interest & other income

43

44

105

137

Gain on formation of OneSubsea

—  

—  

1,028

—  

Expenses

Cost of revenue

8,926

8,237

26,047

24,124

Research & engineering

286

291

870

849

General & administrative

110

95

305

294

Merger & integration

—  

32

—  

68

Impairment & other

—  

—  

456

—  

Interest

98

89

294

246

Income before taxes

2,231

1,798

6,521

5,204

Taxes on income

506

436

1,361

1,268

Income from continuing operations

1,725

1,362

5,160

3,936

Income (loss) from discontinued operations

—  

65

(69

)

211

Net income

1,725

1,427

5,091

4,147

Net income attributable to noncontrolling interests

10

3

23

20

Net income attributable to Schlumberger

$

1,715

$

1,424

$

5,068

$

4,127

Schlumberger amounts attributable to:

Income from continuing operations

$

1,715

$

1,359

$

5,137

$

3,916

Income (loss) from discontinued operations

—  

65

(69

)

211

Net income

$

1,715

$

1,424

$

5,068

$

4,127

Basic earnings per share of Schlumberger:

Income from continuing operations

$

1.30

$

1.02

$

3.87

$

2.94

Income (loss) from discontinued operations

—  

0.05

(0.05

)

0.16

Net income

$

1.30

$

1.07

$

3.82

$

3.10

Diluted earnings per share of Schlumberger:

Income from continuing operations

$

1.29

$

1.02

$

3.84

$

2.92

Income (loss) from discontinued operations

—  

0.05

(0.05

)

0.16

Net income

$

1.29

$

1.07

$

3.79

$

3.08

Average shares outstanding:

Basic

1,322

1,328

1,326

1,331

Assuming dilution

1,333

1,336

1,336

1,340

(Stated in millions)

Third Quarter

Nine Months

2013

2012

2013

2012

Net income

$

1,725

$

1,427

$

5,091

$

4,147

Currency translation adjustments

Unrealized net change arising during the period

95

138

(139

)

45

Marketable securities

Unrealized (loss) gain arising during the period

(25

) 

—  

58

—  

Derivatives

Net derivatives gain (loss) on hedge transactions (see Note 11)

76

142

(27

)

(35

)

Reclassification to net income of net realized (gain) loss (see Note 11)

(30

)

(92

)

15

58

Pension and other postretirement benefit plans

Actuarial loss

Actuarial loss arising during the period

(18

)

(14

)

(23

)

(35

)

Amortization to net income of net actuarial loss (see Note 15)

73

51

224

137

Prior service cost

Amortization to net income of net prior service cost (see Note 15)

31

31

94

93

Income taxes on pension and other postretirement benefit plans

(9

)

(8

)

(40

)

(31

)

Comprehensive income

1,918

1,675

5,253

4,379

Comprehensive income attributable to noncontrolling interests

10

3

23

20

Comprehensive income attributable to Schlumberger

$

1,908

$

1,672

$

5,230

$

4,359

(Stated in millions)

Sept. 30, 2013

(Unaudited)

Dec. 31,

2012

ASSETS

Current Assets

Cash

$

3,149

$

1,905

Short-term investments

3,286

4,369

Receivables less allowance for doubtful accounts

(2013—$254; 2012—$202)

12,057

11,351

Inventories

4,895

4,785

Deferred taxes

278

343

Other current assets

1,428

1,403

25,093

24,156

Fixed Income Investments, held to maturity

363

245

Investments in Affiliated Companies

3,298

1,502

Fixed Assets less accumulated depreciation

14,828

14,780

Multiclient Seismic Data

650

518

Goodwill

14,623

14,585

Intangible Assets

4,732

4,802

Other Assets

1,536

959

$

65,123

$

61,547

LIABILITIES AND EQUITY

Current Liabilities

Accounts payable and accrued liabilities

$

8,366

$

8,453

Estimated liability for taxes on income

1,471

1,426

Long-term debt—current portion

1,876

1,163

Short-term borrowings

622

958

Dividends payable

418

368

12,753

12,368

Long-term Debt

9,916

9,509

Postretirement Benefits

1,833

2,169

Deferred Taxes

1,479

1,493

Other Liabilities

1,111

1,150

27,092

26,689

Equity

Common stock

12,108

11,912

Treasury stock

(7,208

)

(6,160

)

Retained earnings

36,711

32,887

Accumulated other comprehensive loss

(3,726

)

(3,888

)

Schlumberger stockholders’ equity

37,885

34,751

Noncontrolling interests

146

107

38,031

34,858

$

65,123

$

61,547

(Stated in millions)

Nine Months Ended Sept. 30,

2013

2012

Cash flows from operating activities:

Net income

$

5,091

$

4,147

Less: Loss (income) from discontinued operations

69

(211

)

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization ⁽¹⁾..................................................................................................

2,737

2,570

Non-cash charges

459

—  

Gain on formation of OneSubsea

(1,028

)

—  

Earnings of companies carried at equity, less dividends received

(46

)

(87

)

Deferred income taxes

16

(88

)

Stock-based compensation expense

255

251

Pension and other postretirement benefits expense

388

298

Pension and other postretirement benefits funding

(468

)

(462

)

Change in assets and liabilities: ⁽²⁾

Increase in receivables

(1,292

)

(2,180

)

Increase in inventories

(96

)

(787

)

Decrease (increase) in other current assets

28

(392

)

Increase in other assets

(614

)

(104

)

Increase in accounts payable and accrued liabilities

189

340

Increase in liability for taxes on income

15

131

Increase (decrease) in other liabilities

2

(23

)

Other

233

33

NET CASH PROVIDED BY OPERATING ACTIVITIES

5,938

3,436

Cash flows from investing activities:

Capital expenditures

(2,753

)

(3,161

)

Multiclient seismic data capitalized

(300

)

(260

)

Business acquisitions, net of cash acquired

(544

)

(713

)

Payment for OneSubsea transaction

(600

)

—  

Sale of investments, net

963

221

Other

131

(124

)

NET CASH USED IN INVESTING ACTIVITIES

(3,103

)

(4,037

)

Cash flows from financing activities:

Dividends paid

(1,196

)

(1,067

)

Proceeds from employee stock purchase plan

270

247

Proceeds from exercise of stock options

145

139

Stock repurchase program

(1,526

)

(972

)

Proceeds from issuance of long-term debt

2,267

2,788

Repayment of long-term debt

(1,211

)

(1,718

)

Net (decrease) increase in short-term borrowings

(306

)

223

Other

3

15

NET CASH USED IN FINANCING ACTIVITIES

(1,554

)

(345

)

Cash flows from discontinued operations—operating activities

(2

)

76

Cash flows from discontinued operations—investing activities

(28

)

1,011

Cash flows from discontinued operations

(30

)

1,087

Net increase in cash before translation effect

1,251

141

Translation effect on cash

(7

)

6

Cash, beginning of period

1,905

1,705

Cash, end of period

$

3,149

$

1,852

⁽¹⁾

Includes multiclient seismic data costs.

⁽²⁾

Net of the effect of business acquisitions and divestitures.

(Stated in millions)

Common Stock

Accumulated
Other
Comprehensive
Loss

Total

January 1, 2013—September 30, 2013

Issued

In Treasury

Retained
Earnings

Noncontrolling
Interests

Balance, January 1, 2013

$

11,912

$

(6,160

)

$

32,887

$

(3,888

)

$

107

$

34,858

Net income

5,068

23

5,091

Currency translation adjustments

(139

)

(139

)

Changes in unrealized gain on marketable securities

58

58

Changes in fair value of derivatives

(12

)

(12

)

Pension and other postretirement benefit plans

255

255

Shares sold to optionees, less shares exchanged

(31

)

176

145

Vesting of restricted stock

(48

)

48

—  

Shares issued under employee stock purchase plan

18

252

270

Stock repurchase program

(1,526

)

(1,526

)

Stock-based compensation expense

255

255

Dividends declared ($0.9375 per share)

(1,244

)

(1,244

)

Other

2

2

16

20

Balance, September 30, 2013

$

12,108

$

(7,208

)

$

36,711

$

(3,726

)

$

146

$

38,031

(Stated in millions)

Common Stock

Accumulated
Other
Comprehensive
Loss

January 1, 2012—September 30, 2012

Issued

In Treasury

Retained
Earnings

Noncontrolling
Interests

Total

Balance, January 1, 2012

$

11,639

$

(5,679

)

$

28,860

$

(3,557

)

$

129

$

31,392

Net income

4,127

20

4,147

Currency translation adjustments

40

40

Changes in fair value of derivatives

23

23

Pension and other postretirement benefit plans

164

164

Shares sold to optionees, less shares exchanged

(63

)

202

139

Vesting of restricted stock

(16

)

16

—  

Shares issued under employee stock purchase plan

16

231

247

Stock repurchase program

(972

)

(972

)

Stock-based compensation expense

251

251

Dividends declared ($0.825 per share)

(1,098

)

(1,098

)

Other

13

2

5

(42

)

(22

)

Balance, September 30, 2012

$

11,840

$

(6,200

)

$

31,889

$

(3,325

)

$

107

$

34,311

(Stated in millions)

Issued

In Treasury

Shares
Outstanding

Balance, January 1, 2013

1,434

(106

)

1,328

Shares sold to optionees, less shares exchanged

—  

3

3

Vesting of restricted stock

—  

1

1

Shares issued under employee stock purchase plan

—  

4

4

Stock repurchase program

—  

(19

)

(19

)

Balance, September 30, 2013

1,434

(117

)

1,317

•

Schlumberger recorded a pretax and after-tax gain of $1.028 billion as a result of the deconsolidation of its subsea business in connection with the formation of the OneSubsea joint venture with Cameron International Corporation (“Cameron”). Refer to Note 4 – Acquisitions for further details.

•

Schlumberger recorded a $222 million pretax ($203 million after-tax) impairment charge relating to an investment in a company involved in developing drilling-related technology and a $142 million pretax and after-tax impairment charge relating to an investment in a contract drilling business.

(Stated in millions)

Consolidated Statement

of Income Classification

Pretax

Tax

Net

Gain on formation of OneSubsea joint venture

$

(1,028

)

$

—  

$

(1,028

)

Gain on formation of OneSubsea

Impairment of equity-method investments

364

19

345

Impairment & other

$

(664

)

$

19

$

(683

)

•

Although the functional currency of Schlumberger’s operations in Venezuela is the US dollar, a portion of the transactions are denominated in local currency. In February 2013, Venezuela’s currency was devalued from the prior exchange rate of 4.3 Bolivar Fuertes per US dollar to 6.3 Bolivar Fuertes per US dollar. As a result of this devaluation, Schlumberger recorded a pretax and after-tax foreign currency loss of $92 million during the first quarter of 2013.

(Stated in millions)

Consolidated Statement

of Income Classification

Pretax

Tax

Net

Gain on formation of OneSubsea joint venture

$

(1,028

)

$

—  

$

(1,028

)

Gain on formation of OneSubsea

Impairment of equity-method investments

364

19

345

Impairment & other

Currency devaluation loss in Venezuela

92

—  

92

Impairment & other

$

(572

)

$

19

$

(591

)

(Stated in millions)

Pretax

Tax

Net

First Quarter

$

14

$

1

$

13

Second Quarter

22

1

21

Third Quarter

32

4

28

$

68

$

6

$

62