1996
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
-
EXCHANGE ACT OF 1934
For fiscal year ended DECEMBER 31, 1996
-----------------
OR
_ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition period from to
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Commission File Number 1-4601
SCHLUMBERGER N.V. (SCHLUMBERGER LIMITED)
----------------------------------------
(Exact name of registrant as specified in its charter)
NETHERLANDS ANTILLES 52-0684746
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
277 PARK AVENUE
NEW YORK, NEW YORK, U.S.A. 10172-0266
42, RUE SAINT DOMINIQUE
PARIS, FRANCE 75007
LAAN VAN MEERDERVOORT 55,
THE HAGUE,
THE NETHERLANDS 2517 AG
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(Addresses of principal (Zip Codes)
executive offices)
Registrant's telephone number in the United States, including area code, is:
(212) 350-9400.
(Cover page 1 of 2 pages)
PART I
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Item 1 Business
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All references herein to "Registrant" and "Company" refer to Schlumberger
Limited and its consolidated subsidiaries. Registrant's business is comprised of
three industry segments - l) Oilfield Services, 2) Measurement & Systems, and 3)
Omnes. Due to immateriality, Omnes is not a reportable segment for financial
reporting purposes.
Oilfield Services
- -----------------
Oilfield Services offers exploration and production services to the petroleum
industry throughout the world in its search for and recovery of oil and gas.
Essentially, the services are provided at the wellsite. Oilfield Services is
comprised of Wireline & Testing, Dowell, Geco-Prakla, Sedco Forex, Anadrill,
GeoQuest, and Integrated Project Management. Wireline & Testing provides well
evaluation, well testing and production enhancement and monitoring services on
land and offshore. Dowell provides cementing, stimulation, coiled tubing and
drilling fluids services to enhance well productivity. Geco-Prakla provides
acquisition, processing and interpretation of land, transition zone and marine
seismic data. Sedco Forex owns and operates offshore and land drilling rigs.
Anadrill provides directional drilling services as well as measurements-while-
drilling and logging-while-drilling services. GeoQuest provides oil companies
with software and computer services to maximize the value of their exploration
and production data. Integrated Project Management offers the selection of
optimum oilfield technology, safety and quality management systems for well
construction, production and field development projects.
Registrant's Oilfield Services are marketed by its own personnel. The customer
base, business risks, and opportunities for growth are essentially uniform
across all the product lines. There is a sharing of production facilities and
research centers; labor force is interchangeable. Technological innovation,
quality of service, and price are the principal methods of competition.
Competition varies geographically with respect to the different services
offered. While there are numerous competitors, both large and small, Registrant
believes that it is an industry leader in providing contract drilling services,
seismic services, measurements-while-drilling and logging-while-drilling
services, and fully computerized wireline logging and geoscience software and
computing services.
Measurement & Systems
- ---------------------
Measurement & Systems products are essentially "measurement instruments", be
they for measuring telecommunications operations, quality defects in
semiconductors or energy/water consumption. The predominant source of revenue
is from customers which are mainly suppliers of energy, water, communications,
transportation and semiconductors. All businesses market both high volume/low
price and low volume/high price products. In all businesses the production
process is primarily one of assembly/test with various production sites serving
several product lines.
Measurement & Systems businesses consist of metering (Electricity & Gas
Management and Water Management), Systems & Services, Electronic Transactions
and Automatic Test Equipment. Electricity & Gas Management manufactures
electricity and gas meters and provides automatic metering reading, revenue
collection and load management applications as well as providing gas regulation
systems, gas management services and billing systems. Water Management
manufactures meters for measuring water, thermal energy and industrial fluids
consumption and provides water management services, automatic reading services
and billing systems. Systems & Services provides metering communication
1
systems and services for Water, Gas, Electricity and Heat markets worldwide
including remote reading and wireless communication systems for utility markets;
distributed measurement solutions, providing systems integration and data
services; and related services including meter reading and installation services
worldwide.
Electronic Transactions provides cards, terminals, systems and services for
secure financial and data transactions: smart/cards, pay phones, point-of-sale
and vending terminals, parking and mass transit management, health care
management, gasoline dispensers. Automatic Test Equipment is a supplier of
automatic test equipment for semiconductors and electronic circuit boards and
diagnostic systems.
Various Measurement & Systems production sites operate for several product
lines: St. Etienne, France - Automatic Test Equipment; Simi Valley, California,
USA - Automatic Test Equipment and Electronic Transactions; Campinas, Brazil -
Electricity Management, Water Management and Electronic Transactions; Buenos
Aires, Argentina - Electricity, Water, and Gas Management and Electronic
Transactions. Major software and product development efforts are centralized.
Products of the Measurement & Systems industry segment are primarily sold
through Registrant's own sales force, augmented through distributors and
representatives. The nature of the product range and customer profile allow for
transferability of sales personnel among the product lines and cross-product
line sales forces in key geographic areas. Such teams represent all five
product lines and geographic areas. Such teams operate in Asia, Russia, South
America and Central America. Product demand and pricing in all product lines
are affected by global and national economic conditions. The price of products
in this industry segment varies from less than one hundred dollars to more than
a million dollars. There are numerous competitors with regard to these
products, and the principal methods of competition are price, performance, and
service.
Omnes
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Through a joint venture formed with Cable & Wireless plc in January 1995, Omnes
provides communications and information technology solutions to oil and gas
companies and to companies with operations in remote locations. Omnes provides
products and services in the following areas: internet and electronic messaging
services, wide-area and local-area network design and maintenance, and
satellite, security, and business applications solutions. Through these
activities, Omnes enables energy exploration and production companies to
efficiently exchange information and communicate anywhere in the world.
The activities carried on within the industry segments are:
OILFIELD SERVICES
Wireline & Testing
Formation evaluation, well testing and production services for oil and gas
wells: borehole measurements of petrophysical, geological and seismic
properties; cement and corrosion evaluation; perforating; modular production
systems; permanent monitoring and control systems; production logging; and light
remedial and abandonment services.
Dowell
Engineering and pumping services for cementing, drilling fluids, fracturing,
acidizing, sand control, water control and coiled tubing applications.
2
Geco-Prakla
Seismic data acquisition, processing and interpretation services for marine,
land and transition zone; seismic reservoir monitoring and characterization
services; fully integrated project management including survey evaluation and
design services; acquisition, processing and sales of non-exclusive surveys.
Sedco Forex
Contract drilling services, offshore and on land, with dynamically positioned
drillships, semisubmersibles, jackup rigs, drilling tenders, swamp barges and
land rigs; 83 rigs, comprising 50 offshore (4 offshore charters and 6 management
contracts) and 33 land rigs.
Anadrill
Real-time drilling services: directional drilling, measurements-while-drilling
and logging-while-drilling.
GeoQuest
Exploration and production solutions for optimizing the value of oil and gas
reservoirs: integrated software systems, data management solutions and
processing and interpretive services.
Integrated Project Management
Project management and well engineering services: selection of optimum oilfield
technology; implementation of safety and quality management systems;
coordination and management of operations for well construction, production and
field development projects.
MEASUREMENT & SYSTEMS
Metering
ELECTRICITY
Systems for management of electricity distribution and usage: residential
metering and energy management systems; utility revenue collection systems;
commercial, industrial, transmission and distribution measurement and billing
products and systems; load management systems.
GAS
Systems for management of gas usage: residential, commercial and industrial gas
meters; regulators, governors, safety valves, stations and systems; gas
treatment including filtration, odorization and heating; network management; and
prepayment systems.
WATER
Meters and systems for management of residential, commercial and industrial
water usage covering the range of effective water distribution management and
diverse heat distribution and industrial applications.
Systems & Services
Meter communication systems, including remote metering and wireless
communication systems for utility markets; distributed measurement solutions,
systems integration and data services; and services, providing software and
turnkey installation, repair and maintenance solutions to add value in fully
managed projects.
3
Electronic Transactions
Electronic transaction systems: smart and magnetic cards, terminals, equipment
and management systems for transactions in a wide range of sectors, including
telecommunications, retail and banking, network access and security, systems for
retail petroleum, parking and mass transit, health care management and campus
communities.
Automatic Test Equipment
Design and manufacture of automatic test equipment, diagnostic systems, back-end
automation systems for the testing of semiconductor devices, board test systems
as well as testing complete electronic assemblies.
OMNES
Communications and information technology solutions: wide- and local-area
networks, including satellite based networks, security, Internet, Intranet,
messaging and business application solutions for the energy exploration and
production sector that allow information technology systems to communicate
anywhere in the world.
Acquisitions
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During 1996, subsidiaries of the Company acquired Solaic, SA (on December 31,
1996), a magnetic and smart card manufacturer; an 80% interest in Printer, a
magnetic stripe card manufacturer; Oilphase Sampling Services Ltd., a reservoir
fluid sampling company; The Production Analyst* and OilField Manager* software
products from OGCI Software, Inc.; Germann, a turnkey gasoline station provider;
Gueant, a gas dispenser service company; and a 33% equity interest in DAP
Technologies Limited, a developer and manufacturer of rugged handheld computer
products. The purchase prices were $75 million, $9 million, $7 million, $8
million, $8 million, $7 million and $4 million, respectively. These acquisitions
were accounted for as purchases. Costs in excess of net assets acquired were $91
million which are being amortized on a straight-line basis over periods between
7 and 25 years.
During 1995, subsidiaries of the Company acquired a further 40% interest in
CGST-Save, a French gas meter service company; the remaining 40% interest in
J.B. Rombach, a German metering business; G.S.I. Saudi Arabia Ltd., a land
seismic company; the Petroleum Division of Intera Information Technologies
Corporation, a reservoir simulation software company; and Danyl Inc., a point-
of-sale terminal manufacturer. The purchase prices were $71 million, $42
million, $15 million, $59 million and $12 million, respectively. These
acquisitions were accounted for as purchases. Costs in excess of net assets
acquired were $167 million which are being amortized on a straight-line basis
over periods between 15 and 25 years.
GENERAL
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Research & Development
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Research to support the engineering and development efforts of Registrant's
activities is conducted at Schlumberger Austin Product Center, Austin, Texas;
Schlumberger Doll Research, Ridgefield, Connecticut; Schlumberger Cambridge
Research, Cambridge, England, and at Fuchinobe, Japan and Montrouge, France.
4
Patents
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While Registrant seeks and holds numerous patents, no particular patent or group
of patents is considered material to Registrant's business.
Seasonality
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Although weather and natural phenomena can temporarily affect delivery of
oilfield services, the widespread geographic location of such services precludes
the overall business from being characterized as seasonal. However, because
oilfield services are provided in the Northern Hemisphere, severe winter weather
can temporarily affect the delivery of such services and products in the winter
months.
Customers and Backlogs
- ----------------------
Neither Oilfield Services nor Measurement & Systems is dependent on one or a few
customers, the loss of which would have a significant adverse impact on its
business. Oilfield Services has no backlog since this segment is primarily
service rather than product related. The Measurement & Systems segment had a
backlog of orders, believed to be firm, of $764 million at December 31, 1996 and
a backlog of $751 million at December 31, 1995 on a comparable basis. There is
no assurance that any of the current backlog will actually result in sales.
About 60% of Omnes' revenue comes from data communications and networking
services provided to a number of Schlumberger's companies. Omnes has no backlog
since this segment is primarily service, rather than product, related.
Government Contracts
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No material portion of Registrant's business is subject to renegotiation of
profits or termination of contracts by the US Government.
Employees
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As of December 31, 1996, Registrant had approximately 57,000 employees.
Non-US Operations
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Registrant's non-US operations are subject to the usual risks which may affect
such operations. Such risks include unsettled political conditions in certain
areas, exposure to possible expropriation or other governmental actions,
exchange controls, and currency fluctuations. Although it is impossible to
predict such occurrences or their effect on the Registrant, management believes
these risks to be acceptable.
Environmental Protection
- ------------------------
Compliance with governmental provisions relating to the protection of the
environment does not materially affect Registrant's capital expenditures,
earnings or competitive position.
Financial Information
- ---------------------
Financial information by industry segment and by geographic area for the years
ended December 31, 1996, 1995 and 1994 follows on pages 35 through 39.
5
Item 2 Properties
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Registrant owns or leases manufacturing facilities, administrative offices,
service centers, research centers, sales offices and warehouses in North
America, Latin America, Europe, Africa, Australia, New Zealand and Asia. Most
facilities are owned in fee although a few are held through long-term leases.
No significant lease is scheduled to terminate in the near future, and
Registrant believes comparable space is readily obtainable should any lease
expire without renewal. Registrant believes all of its properties are generally
well maintained and adequate for the intended use.
The principal manufacturing facilities related to the Oilfield Services industry
segment are owned in fee and located at Clamart, France; Hannover and Utze,
Germany; Fuchinobe, Japan; Horten and Bergen, Norway; and Tulsa, Oklahoma, and
Austin, Houston, La Marque, Rosharon and Sugar Land, Texas, USA. Many of the
Registrant's activities in this segment are performed at the client's wellsite.
Outside of the United States, the principal owned or leased facilities related
to the Measurement & Systems industry segment are located at Buenos Aires,
Argentina; Mulgrave, Australia; Vienna, Austria; Brussels, Belgium; Americana
and Campinas, Brazil; Trois Rivieres, Quebec, Canada; Santiago, Chile; Changsha,
China; Abbeville, Bagnolet, Besancon, Chambray-les-Tours, Chasseneuil,
Colombes, Hagenau, Macon, Massy, Montrouge, Orleans, Poitiers, Pont Audemer,
Reims, Saint Etienne, and Velizy, France; Berlin, Dreieich, Ettlingen, Hameln,
Karlsruhe, Munich, Oldenburg, and Schwelm, Germany; Bladel and Dordrecht,
Holland; Budapest and Godollo, Hungary; Jakarta, Indonesia; Asti, Barlassina,
Frosinone, Milazzo, Milan, Naples, Torino and Vicenza, Italy; Fuchinobe, Japan;
Kuala Lumpur, Malaysia; Famalicao, Portugal; St. Petersburg, Russia; Leon,
Montornes and Rubi, Spain; Taipeh County, Taiwan; Blackburn, Dundee, Felixstowe,
Ferndown, Manchester, Oldham, and Port Glasgow in the United Kingdom.
Within the United States, Measurement & Systems facilities are located in
Tallassee, Montgomery and Mobile, Alabama; San Jose and Simi Valley, California;
Norcross, Georgia; Owenton, Kentucky; Owings Mills, Maryland; Moorestown, New
Jersey; Columbus, Ohio; Greenwood and Oconee, South Carolina; Bonham, Texas, and
Chesapeake, Virginia.
Outside of the United States the principal facilities (all leased) related to
Omnes are located in London, England; Caracas, Venezuela; Montrouge, France; and
Jakarta, Indonesia. Within the United States, Omnes' principal facilities are
located in Houston, Texas.
See also description of research facilities, "Research & Development", page 4.
Item 3 Legal Proceedings
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The Company and its subsidiaries comply with government laws and regulations and
responsible management practices for the protection of the environment. The
Consolidated Balance Sheet includes accruals for the estimated future costs
associated with certain environmental remediation activities related to the past
use or disposal of hazardous materials. Substantially all such costs relate to
divested operations and to facilities or locations that are no longer in
operation. Due to a number of uncertainties, including uncertainty of timing,
the scope of remediation, future technology, regulatory changes and other
factors, it is possible that the ultimate remediation costs may exceed the
amounts accrued. However, in the opinion of management, such additional costs
are not expected to be material relative to consolidated liquidity, financial
position or future results of operations.
6
In a case in Texas involving the validity of a 1988 settlement and release in
connection with an incidental business venture, the trial court, in 1993,
rendered a judgment notwithstanding the verdict of the jury, exonerating
Schlumberger from any liability. In late 1994, a Texas Court of Appeals reversed
the trial court judgment and reinstated the jury award of about $75 million
against Schlumberger. The Texas Supreme Court granted the Schlumberger motion to
hear the case. Oral argument was held before the Texas Supreme Court on October
11, 1995. Schlumberger and outside counsel believe the decision of the trial
court was correct. Consequently, no provision has been made in the Consolidated
Financial Statements for this matter.
In May 1996, in a case involving a $3 million contract dispute, the trial court
in Johnson County, Texas, entered judgment on jury findings adverse to
Schlumberger for $23 million in damages, which has been doubled, plus attorneys'
fees and interest. The Company and its outside counsel believe the findings and
the judgment are not supported by the evidence and law, and have filed an
appeal. Accordingly, no provision has been made in the financial statements for
this matter.
In addition, the Company and its subsidiaries are party to various other legal
proceedings. Although the ultimate disposition of these proceedings is not
presently determinable, in the opinion of the Company any liability that might
ensue would not be material in relation to the Consolidated Financial
Statements.
Item 4 Submission of Matters to a Vote of Security Holders
- ------ ---------------------------------------------------
No matters were submitted to a vote of Registrant's security holders during the
fourth quarter of the fiscal year covered by this report.
Executive Officers of the Registrant
The executive officers of the Registrant, their ages as of
March 1, 1997, and their five-year business histories are as follows:
Name Age Present Position and 5-Year Business Experience
- --------------------------------------------------------------------------------
D. Euan Baird 59 Chairman, President and Chief Executive Officer
since prior to 1991.
Arthur Lindenauer 59 Executive Vice President - and Chief Financial
Officer since prior to 1990; Chief Accounting
Officer since April 1992 .
Victor E. Grijalva 58 Executive Vice President - Oilfield Services since
1994; Executive Vice President for Wireline, Testing
& Anadrill 1992, 1993; Executive Vice President for
Wireline Testing & Seismic, 1991.
7
Name Age Present Position and 5-Year Business Experience
- --------------------------------------------------------------------------------
Clermont A. Matton 55 Executive Vice President - Measurement & Systems
since 1993; Executive Vice President - Technologies
1992, 1991 and previous.
Ian Strecker 57 Executive Vice President - Technology and Quality,
Health, Safety & Environment since January 1, 1996;
Executive Vice President - Technology and
Communication August 1991 through 1995; Executive
Vice President - Drilling & Pumping Services June
1985 to July 1991.
David S. Browning 57 Secretary and General Counsel since prior to 1991.
Pierre E. Bismuth 52 Vice President - Personnel since 1994; Personnel
Director - Oilfield Services October 1993 to January
1994; Personnel Director - Wireline, Testing &
Anadrill 1991 to October 1993.
Jean-Marc Perraud 49 Vice President - Director of Taxes since May 1993;
Controller Dowell Schlumberger January to May 1993;
Controller Schlumberger Industries 1991, 1992.
J-D. Percevault 51 Vice President January 1996; May 1994 to January
1996 Vice President European Affairs; August 1991 to
May 1994 President Geco-Prakla; July 1991 and
previous Vice President - Personnel.
Michel Soublin 51 Vice President - Controller Oilfield Services since
January 1996; Vice President - Business Development
and Treasurer 1991 and previous.
Pierre-Jean Sivignon 41 Treasurer since January 1996; September 1994 to
January 1996 Manager Business Development; prior to
1991 and to September 1994, Manager of Smart Card
Systems - Banking & Industry.
8
PART II
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Item 5 Market for the Registrant's Common Stock and Related
- ------ -----------------------------------------------------
Stockholder Matters
-------------------
As of December 31, 1996, there were 246,537,181 shares of the Common Stock of
the Registrant outstanding, exclusive of 62,330,812 shares held in Treasury, and
held by approximately 22,000 stockholders of record. The principal United
States market for Registrant's Common Stock is the New York Stock Exchange.
Registrant's Common Stock is also traded on the Paris, London, Amsterdam,
Brussels, Frankfurt, Tokyo and Swiss Stock Exchanges. During 1997 delisting
from the Brussels, Frankfurt, and Tokyo Stock Exchanges was commenced.
Common Stock, Market Prices and Dividends Declared per Share
- ------------------------------------------------------------
Quarterly high and low prices for the Company's Common Stock as reported by the
New York Stock Exchange (composite transactions), together with dividends
declared per share in each quarter of 1996 and 1995 were:
Price Range
------------------- Dividends
High Low Declared
-------- --------- --------
1996
QUARTERS
First $80 5/8 $65 3/8 $0.375
Second 91 3/8 80 1/8 0.375
Third 89 1/8 79 3/8 0.375
Fourth 108 1/4 84 1/4 0.375
1995
QUARTERS
First $60 1/8 $50 1/8 $0.300
Second 66 5/8 58 1/8 0.375
Third 69 5/8 61 1/4 0.375
Fourth 70 1/2 58 7/8 0.375
There are no legal restrictions on the payment of dividends or ownership or
voting of such shares. United States stockholders are not subject to any
Netherlands Antilles withholding or other Netherlands Antilles taxes
attributable to ownership of such shares.
9
Item 6 Selected Financial Data
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FIVE-YEAR SUMMARY
(Stated in millions except per share amounts)
Year Ended December 31, 1996 1995 1994 1993 1992
------- ------- -------- -------- --------
SUMMARY OF OPERATIONS
Operating revenue:
Oilfield Services $6,129 $4,868 $4,365 $4,338 $3,849
Measurement & Systems 2,834 2,759 2,339 2,370 2,484
Total operating revenue $8,956 $7,622 $6,697 $6,705 $6,332
====== ====== ====== ====== ======
% increase over prior year 18% 14% -% 6% 3%
------ ------ ------ ------ ------
Operating income:
Oilfield Services $ 986 $ 627 $ 495 $ 468 $ 546
Measurement & Systems 124 151 121 184 178
Eliminations (52) (17) (23) (23) (28)
------ ------ ------ ------ ------
$1,058 $ 761 $ 593 $ 629 $ 696
====== ====== ====== ====== ======
% increase (decrease)
over prior year 39% 28% (6%) (10%) (5%)
------ ------ ------ ------ ------
Interest expense 72 82 63 69 77
------ ------ ------ ------ ------
Taxes on income (1) (176) 121 81 81 86
------ ------ ------ ------ ------
Income, before cumulative
effect of a change
in accounting principle $ 851 $ 649 $ 536 $ 583 $ 662
------ ------ ------ ------ ------
% increase (decrease)
over prior year 31% 21% (8%) (12%) (19%)
------ ------ ------ ------ ------
Postretirement benefits - - - (248) -
------ ------ ------ ------ ------
Net income $ 851 $ 649 $ 536 $ 335 $ 662
====== ====== ====== ====== ======
Income per share:
Before cumulative effect
of a change in accounting
principle $ 3.47 $ 2.69 $ 2.21 $ 2.40 $ 2.75
Postretirement benefits - - - (1.03) -
------ ------ ------ ------ ------
Net income $ 3.47 $ 2.69 $ 2.21 $ 1.37 $ 2.75
====== ====== ====== ====== ======
Cash dividends declared $ 1.50 $1.425 $ 1.20 $ 1.20 $ 1.20
====== ====== ====== ====== ======
10
(Stated in millions except per share amounts)
Year Ended December 31, 1996 1995 1994 1993 1992
----------- ----------- ----------- --------- ---------
SUMMARY OF FINANCIAL DATA
Income as % of operating revenue 10% 9% 8% 9% 10%
------- ------- ------- ------- -------
Return on average
stockholders' equity 16% 14% 12% 14% 16%
------- ------- ------- ------- -------
Fixed asset additions $ 1,158 $ 939 $ 783 $ 691 $ 809
------- ------- ------- ------- -------
Depreciation expense $ 819 $ 760 $ 722 $ 739 $ 671
------- ------- ------- ------- -------
Avg. number of shares outstanding 245 242 243 243 241
------- ------- ------- ------- -------
AT DECEMBER 31,
Liquidity $ 232 $ 188 $ 404 $ 696 $ 663
------- ------- ------- ------- -------
Working capital $ 1,568 $ 1,259 $ 1,037 $ 908 $ 1,242
------- ------- ------- ------- -------
Total assets $10,325 $ 8,910 $ 8,322 $ 7,917 $ 7,007
------- ------- ------- ------- -------
Long-term debt $ 637 $ 613 $ 394 $ 447 $ 374
------- ------- ------- ------- -------
Stockholders' equity $ 5,626 $ 4,964 $ 4,583 $ 4,406 $ 4,231
------- ------- ------- ------- -------
Number of employees 57,000 51,000 48,000 48,000 51,000
------- ------- ------- ------- -------
(1) In 1996, the normal recurring provision for income taxes, before
recognition of the US tax loss carryforward benefit and the tax effect of the
unusual items, was $206 million.
Item 7 Management's Discussion and Analysis of Financial Condition
-----------------------------------------------------------
and Results of Operations
-------------------------
The Company has two reportable business industry segments, Oilfield Services and
Measurement & Systems.
(Stated in millions)
Oilfield Services Measurement & Systems
----------------------------------- ------------------------------
1996 1995 %Change 1996 1995 %Change
------- ------- ----------- ------- ------- -------
Operating revenue $ 6,129 $ 4,868 26% $ 2,834 $ 2,759 3%
Operating income 1 $ 986 $ 627 57% $ 124 $ 151 (18%)
1 Operating income represents income before income taxes, excluding interest
expense and interest and other income, and the unusual items previously
announced in the third quarter of 1996. Explanation of these unusual items
appears in the Notes to Consolidated Financial Statements under "Unusual Items."
11
Oilfield Services
- -----------------
1996 RESULTS
- ------------
Operating revenue for Oilfield Services was 26% above last year with strong
contributions from all activities. Operating income increased 57%.
North America
- -------------
In 1996, North American revenue and operating income rose 21% and 111%,
respectively, compared to 1995, while rig count increased 10%. All activities
contributed to this growth. Most significantly, GeoQuest revenue increased 52%,
with Information Technology and Data Management revenue quadrupling. Dowell and
Wireline & Testing revenues increased 17% and 13%, respectively.
Geco-Prakla significantly expanded its marine activities to acquire high-
quality, non-exclusive seismic data in the Gulf of Mexico. After a five-year
absence, Sedco Forex returned to North America with two rigs under management
contract, the Laffit Pincay in the Gulf of Mexico and the Bill Shoemaker being
readied for work offshore Canada in early 1997.
Outside North America
- ---------------------
Outside North America, revenue and operating income increased 28% and 51%,
respectively, and rig count rose 5%. All regions grew, with significant upswings
in the North Sea, Latin America and West Africa. The largest contributors were
Wireline & Testing and Sedco Forex, up 17% and 42%, respectively. Offshore
dayrates for Sedco Forex increased significantly. Activity for heavy land rigs
grew in the Middle East during the fourth quarter. The trend toward integrated
services continued, resulting in the expansion of Integrated Project Management
(IPM) operations.
Highlights
- ----------
The strong 26% growth of Schlumberger Oilfield Services in 1996 drew from four
factors:
. growth of the overall market
. added value of new technology
. client outsourcing and Schlumberger joint services
. new markets.
Growth of the Overall Market
In 1996, many events impacted the oilfield environment and Schlumberger
business. The most significant has been an increase in worldwide oil demand of
2.3% over 1995, to a daily average of 72 million barrels. This has driven up the
oil price from $17 to $24 a barrel, a sizable increase of 41%, despite the
partial resumption of Iraqi exports after a six-year absence from the market. In
this environment of strong demand and higher oil prices, oil companies increased
their exploration and production expenditure by 15% in 1996.
With its broad portfolio of services, leading technology and global presence,
Schlumberger is uniquely positioned to take full advantage of this industry
growth. To keep pace with market expansion, Schlumberger boosted capital
expenditures for Oilfield Services by 27%.
Increased exploration and production activity may greatly impact some prices, as
illustrated by surging dayrates for drilling rigs, driven by the shrinking
supply of offshore rigs. The average Sedco Forex rig utilization rate for 1996
was 78.5% compared to 66% in the previous year. Average offshore rig utilization
increased from 89% to 94%, aided by jackup utilization of 100% and
semisubmersible utilization of 96%. Industry-wide competitive offshore rig
utilization was 89% compared to 81% last year. At year end, the
12
Sedco Forex fleet consisted of 83 rigs, up from 76 at the end of 1995, with 33
land rigs and 50 offshore rigs, including four offshore units under charter,
plus three lake barges and three semisubmersibles under management contract. The
third-generation semisubmersible Actinia was acquired in October. In other
business areas, prices have been generally stable, improving where new
technology was introduced and where activity increased significantly, such as in
North America.
Added Value of New Technology
During the market downturn in the late 1980s, Schlumberger continued to invest
heavily in research and engineering. Today the Company is harvesting the fruits
of this commitment. In response to client needs, new technology is successfully
being applied to improve recovery from existing fields, to lower finding and
producing costs for new reservoirs and to reduce risk. Schlumberger affirmed its
leadership in all its Oilfield Services activities in 1996, and successfully
introduced new technologies and products, among them:
The GeoSteering* tool, which enables the driller to make rapid course
corrections while drilling, made substantial gains in markets in the Far East,
where it contributed to improving well productivity.
The PowerPak* steerable drilling motor, the PowerPulse* measurements-while-
drilling (MWD) telemetry tool and the CDR* Compensated Dual Resistivity tool
enabled Anadrill to set a world record of 15,446 feet drilled in a single run in
an extended-reach well in Argentina. Clients recognized benefits in economic
efficiency and reduced environmental impact.
The SIMPLER* 101 drilling rig, a new modular land rig, was introduced in Gabon,
where it began a five-year integrated services contract in April. This
revolutionary rig introduces a major redesign with streamlined functionalities
to drill high-quality wells at optimum cost. It achieves greater efficiency
through integration of the various elements of the drilling process, requiring
fewer rig personnel. Because it is much smaller than conventional land rigs,
simpler equipment can be quickly moved to new locations, occupies a smaller
footprint and has the flexibility to reduce nondrilling expenses.
Several Dowell drilling fluids products, including QUADRILL*, VISPLEX* and
ULTIDRILL* fluids, gained increased acceptance in 1996, in recognition of their
contributions to drilling efficiency and well productivity. Dowell became the
leader in the technically challenging high-pressure, high-temperature pumping
and cementing markets in the North Sea, Far East and Gulf of Mexico. This
leadership was affirmed by the success of the DeepSEA EXPRES* cementing head, an
innovative technology used for subsea completions. This system greatly improves
the efficiency of casing cementing operations in deep water.
PLATFORM EXPRESS* services, providing the industry's most advanced basic
formation evaluation, and the CMR* Combinable Magnetic Resonance tool, improve
the efficiency of wireline logging and deliver critical answers to difficult
formation evaluation problems. Activities of both services increased eightfold
over 1995 levels.
Marine seismic efficiency continued to improve due to aggressive deployment of
the TRILOGY* onboard data management system and Monowing* multistreamer towing
technology, the most advanced in the industry. Late in the year, the
introduction of the fourth-generation NESSIE* marine streamer, the slimmest in
the world with a 54-mm [2.1-inch] outside diameter, further extended the towing
capacity and efficiency of Geco-Prakla vessels. Efficiency also improved for
Land and Transition Zone seismic, where the Olympus-IMS* land information
management system was completed. These
13
improvements, combined with highly successful geographic positioning of the
fleet, better weather offshore and stable prices per streamer, led to a 32%
increase in revenue.
Client Outsourcing and
Schlumberger Joint Services
The trend among oil companies to refocus on their core business and outsource
noncore activities plays directly to the technical strength of Schlumberger.
Indicative of this continuing trend, GeoQuest realized its strongest growth in
1996 from Data Management and Information Technology products and services, as
major data management contracts were awarded to Schlumberger for projects
throughout the world.
Because of the increased demand for integrated solutions in the various phases
of the exploration and production process, IPM, the Schlumberger Integrated
Project Management group, was formed in 1995. At the end of 1996, IPM was
supervising, on behalf of clients, the operations of 34 drilling rigs. Having
started mainly with well construction projects, IPM is now also expanding into
production enhancement and maintenance. The priority of IPM is to provide best-
in-class solutions using an independent approach that brings together IPM
expertise, including management tools such as the well engineering management
system, with other Schlumberger expertise and third parties as needed.
Customers are demanding more sophisticated reservoir characterization, more
accurate reservoir monitoring and greater production performance. By taking
advantage of the synergy of technologies across Schlumberger oilfield
activities, the Company has been able to meet these new client demands. For
example, the combination of our efforts in directional drilling, in MWD service
and in wireline logging led to a 57% leap in the Schlumberger logging-while-
drilling (LWD) business. Also, as part of the industry's push toward greater
reservoir efficiency and integration of services, Sedco Forex won the management
contract for two lake barges from Lagoven in Lake Maracaibo, Venezuela. These
two barges were converted to multipurpose service vessels, which can each offer
the combined intervention capabilities of several barges and boats.
Another cross disciplinary technology introduced worldwide in 1996 was the
RAPID* Reentry and Production Improvement Drilling service. RAPID technology is
the single source for a complete range of multidisciplinary services dedicated
to improving production economics through reentry, sidetracking and extending
existing wellbores. The rapid concept was accepted by our clients and activity
increased briskly, led by strong gains in North America.
Coiled tubing drilling (CTD*) technology is providing an effective alternative
to conventional drilling in reentry drilling markets. Dowell and Sedco Forex
joined forces and expertise in CTD technology, and Anadrill developed the new
VIPER* slimhole directional bottomhole assembly for coiled tubing service and
introduced it in the North Sea and in South America. The VIPER system is able to
orient, measure and drill simultaneously, resulting in improved wellbore
efficiency.
Coiled tubing technology also benefited workover activity. In the fourth
quarter, Dowell and Baker Oil Tools introduced CoilWORKS* technology, drawing on
the strategic alliance between Schlumberger and Baker Hughes. The CoilWORKS
service is a seamless answer to workover applications by which the two companies
have combined their best-in-class technologies to address the growing demand for
economic, total system workover solutions for mature fields.
14
New Markets
The world's first commercial 4D seismic service using a proprietary seabed
sensor to compare 3D seismic surveys over time, was successfully launched with
several surveys acquired in the North Sea. This service delivers to clients
improved reservoir characterization and monitoring over the life of the
reservoir and allows more efficient production management.
Reservoir optimization is a key developing market. To enhance Schlumberger
capability in this field and to improve our expertise in fluid acquisition and
analysis, Wireline & Testing acquired the Aberdeen-based company, Oilphase
Sampling Services Limited, a reservoir fluid sampling company.
In order to broaden its software offerings, GeoQuest acquired The Production
Analyst* and OilField Manager* products. Added to existing applications, such as
the Dowell CADE Office* suite of software and the QLA* Quick Look Analysis
software, these products allowed GeoQuest to move fully into both PC- and UNIX-
based production data analysis, reservoir management applications and support.
With the ECLIPSE* reservoir simulation software, the GeoFrame* integrated
reservoir characterization system and the Finder* line of data management
products, GeoQuest now offers the oil industry the most comprehensive range of
integrated software systems, data management solutions and processing and
interpretation services.
Throughout the year, solutions were implemented to respond to complex well
problems. For instance, tracking the flow of different fluids in horizontal and
high-angle wells was once nearly impossible. Now, the newly introduced
production logging technology, PL Flagship* advanced well flow diagnosis
service, can evaluate complex multiphase flow behavior and diagnose production
problems in horizontal wells.
Building on a solid track record in well testing, the Wireline & Testing early
production system (EPS) group has expanded significantly. Modular EPS technology
reduces clients' capital investment, improves their cash flow and lowers risk.
It also provides an efficient means to improve the economics of marginal fields.
Early production systems saw activity in the North Sea and Africa. An additional
unit is being readied for installation in early 1997.
In Marine seismic, Geco-Prakla continued to develop its onboard offshore
processing services. This premium-rate business is now regularly provided on
many deep-sea vessels, reducing drastically the processing turnaround time for
large-volume surveys.
1995 RESULTS
- ------------
North America
- -------------
North American revenue in 1995 rose 3%, and operating income declined 43%,
compared to 1994, while rig count declined 8%.
During the year, PLATFORM EXPRESS technology, the latest-generation wireline
logging service, was introduced, setting new standards for efficiency,
reliability and answers in the wireline logging industry. By year end, there
were 17 PLATFORM EXPRESS units deployed in North America.
15
The erosion of gas prices in 1995 hindered pressure pumping activity. New
stimulation techniques, such as the PropNET* fluid system for hydraulic
fracturing, were successfully implemented, helping to improve customers'
hydrocarbon recovery.
Seismic activities were adversely impacted by weather in the Gulf of Mexico and
lower profitability on sales of non-exclusive seismic data. Market and
technological leadership in MWD and LWD services continued. The ARC5* Array
Resistivity Compensated tool was introduced and received wide client acceptance.
This tool provides accurate LWD resistivity measurements in small-diameter
wellbores.
Sales for Software Products rose sharply, driven by demand for geological,
petrophysical and seismic interpretation software products. During the year,
GeoQuest purchased the Petroleum Division of Intera Information Technologies
Corporation, which was renamed Reservoir Technologies.
Outside North America
- ---------------------
Outside North America, revenue and operating income increased 16% and 53%,
respectively, and rig count rose 3%. Activity was driven predominantly by Latin
America, Africa and the North Sea.
Several important rig contracts were signed, including integrated service
contracts in Thailand and Gabon and the opportunity to reenter the Gulf of
Mexico after a five-year absence. Demand for Modular Early Production Facilities
and sales of the Universal Pressure Platform continued to grow at a rapid rate.
Drilling Fluids services grew substantially in 1995, led by activity in Latin
America and the UK sector of the North Sea.
Momentum built in the first three quarters of 1995 in seismic operations was
offset in the fourth quarter by poor weather in the North Sea and operational
difficulties in Transition Zone operations. Deployment of Monowing multistreamer
towing technology and the TRILOGY data management system continued.
Higher activity and improved drilling rig dayrates in both the North Sea and
West Africa contributed to revenue growth, which was partially offset by a
temporary softening in the swamp barge and tender markets and falling demand for
semisubmersibles in Southeast Asia.
New IDEAL* Integrated Drilling Evaluation and Logging systems were deployed
worldwide, while the PowerPulse MWD telemetry tool continued to set new
standards for reliability and durability.
1994 RESULTS
- ------------
North America
- -------------
In 1994, revenue and operating income in North America rose 19% and 28%,
respectively, over 1993, while rig count grew 11%.
Growth was supported by the continuing deployment of the MAXIS 500* Multitask
Acquisition and Imaging System and the successful introduction of the MAXIS
Express* high-efficiency acquisition system. This innovative system was
specifically designed to operate in high-volume and development markets. Coiled
tubing services, rig-related activity and increased client acceptance of DESC*
Design and Evaluation Services for Clients program combined to offset a slowdown
in fracturing activity due to softening of natural gas prices. In Louisiana, the
Digiseis-FLX* transition zone telemetric acquisition system
16
was successfully introduced. Directional drilling activity grew with continued
implementation of PowerPak steerable motors and the successful integration of
Great Land Directional Drilling Inc., Alaska's leading directional drilling
company.
Outside North America
- ---------------------
Outside North America, revenue and operating income fell 6% and 1%,
respectively, and rig count fell 5%.
The MAXIS 500 acquisition system was aggressively deployed worldwide, together
with new imaging technology logging tools. Activity from recently acquired
Drilling Fluids services contributed positively to results, with strong activity
in the Far East and Latin America. In Marine seismic, there was a shift away
from proprietary surveys in favor of non-exclusive data in the Gulf of Mexico
and the North Sea. Fleet upgrading was continued to expand the number of
streamers towed per vessel. A decline in Land and Transition Zone activity had
an adverse impact on results. In drilling, weak activity in the first two
quarters was offset by higher activity in the second half of the year. Two
semisubmersibles, the Sedco 700 and Sedneth 701, underwent life-enhancement
modifications in preparation for contracts for tender-assisted drilling in 1995.
Directional drilling activity was strong, supported by MWD and LWD services. The
GeoSteering tool performed successfully in the Gulf of Mexico, the North Sea,
Africa and the Far East. Long-term data management contracts were finalized in
Africa, Europe, Latin America and the Middle East to assist oil companies in
maximizing their computing and data resources.
Measurement & Systems
- ---------------------
1996 RESULTS
- ------------
Revenue for Measurement & Systems increased 3% from 1995, as significant gains
in Electronic Transactions and Systems & Services offset poorer performance in
Electricity & Gas Metering. Orders for the year were up 2%, led by Electronic
Transactions, Water Management and Systems & Services.
Measurement & Systems operating income was 18% below 1995 due to a shift in the
business environment for Electricity & Gas Metering in Europe and a temporary
decline in the demand for semiconductor test equipment, which affected the
Automatic Test Equipment business.
Metering revenue and orders fell 1% and 3%, respectively. Electricity & Gas
Metering revenue was down 5%. European results suffered due to lower demand for
electricity meters, particularly in the UK and Germany, which led to weaker
prices. In France, a shift from electromechanical to lower priced electronic
products exacerbated this problem. In the US, the metering businesses
experienced growth, led by increased worldwide acceptance of their multifunction
and multimeasurement products. Sales of gas meters increased, led by strong
demand from the CIS. Water Management revenue improved 7% supported by a greater
worldwide recognition of the need to conserve water.
Systems & Services revenue increased 12% from 1995. The service businesses grew
in Europe, particularly in the UK, where deregulation has enabled us to do work
previously handled by the utilities. Meter Communication Systems (MCS) grew
through increased shipments of radio meter communication devices to electric
utilities. A new business group, Distributed Measurement Solutions (DMS), was
formed to address opportunities created by deregulation of the energy industry.
Orders were up 10% from 1995 through increased contractual activity in France
and the UK.
17
In 1996, Electronic Transactions revenue and orders grew 18% and 17%,
respectively, from 1995. These results include the impact of the acquisition of
a majority interest in Printer, a Mexican magnetic stripe card manufacturer, and
of Germann, a German turnkey gasoline station provider. Electronic Transactions
also acquired Solaic, a French smart card manufacturer, on December 31, 1996.
Sales of smart cards grew 42% from 1995, excluding the effect of business
acquisitions. This growth was driven by widening acceptance of memory and
microprocessor cards for payphones and cellular phones in China, Italy and the
US. The growth accelerated rapidly throughout the year. Electronic
Transactions was the principal supplier of electronic cash cards and terminals
for the 1996 Olympic Games in Atlanta.
Automatic Test Equipment revenues in 1996 were comparable to 1995. Significantly
higher volume of IDS10000* diagnostic systems compensated for reduced demand for
other products. Orders increased 3% due to a surge in orders for ITS9000* test
systems during the last quarter.
1995 RESULTS
- ------------
Revenue and orders increased 18% and 21%, respectively, from 1994 due primarily
to acquisitions, favorable currency fluctuations and strong activity in Europe
and Asia. Operating income increased 25% from 1994, led by the metering business
and robust growth of Electronic Transactions.
Compared to 1994, revenue and orders from the metering business improved 14% and
17%, respectively, due to the acquisition of AEG's worldwide electricity
metering operations and healthy demand across Europe. Gains in Electricity can
be attributed to increased demand for remote reading systems in the US, for
electronic meters from EDF, the French national utility, and from telemanagement
systems from ENEL, the national utility in Italy. Demand increased for gas
products in the CIS and Eastern Europe. Expansion in the UK was supported by the
reorganization of British Gas and higher demand from municipalities. Water
Management continued to grow in Western Europe and the US, combined with
significant demand in both Eastern Europe and Asia. During the year, the MAPS*
communications systems were introduced.
In 1995, Systems & Services revenue and orders increased 25%, primarily due to
solid growth of service activities in the UK.
Electronic Transactions revenue and orders increased 31% and 36%, respectively.
These results include the effects of the acquisition of Malco Plastics and
Messerschmidt Apparate in late 1994 and the acquisition of Danyl in 1995. Cards
activity continued to grow due to stronger cellular subscriber demand in Europe
and shipments to China. Telecom benefited from card-based payphone applications,
with higher shipments to Latin America, the Middle East and France. Retail
Petroleum Systems exhibited growth from equipment and service revenue from North
America and Europe, and was further supported by a new service operation in
Russia.
Automatic Test Equipment revenue and orders were both up 32% from 1994. At Test
Systems, sustained growth was spurred by strong demand for the ITS9000 family of
semiconductor test systems in North America, Europe and Asia. Revenue doubled at
Automated Systems, driven by contributions from the entire product range.
18
1994 RESULTS
- ------------
Revenue and orders decreased 1% and 2%, respectively, from 1993. Operating
income was 34% below the prior year.
Compared to 1993, metering revenue was essentially flat while orders dropped 3%.
The majority of growth resulted from the acquisition of AEG's European metering
operations, with additional support from exports to the Middle East and Europe,
and the acquisition of Heliowatt Germany in 1993. For Gas, growth in the UK was
severely impacted by significant curtailments in the conventional residential
meter replacement program. Improvements in Water Management were driven by the
continued strength of the US economy, the economic recovery in France and
Germany, and healthy demand for water meters in Mexico and Argentina.
Systems & Services revenue and orders increased 32% from 1993.
In 1994, Electronic Transactions revenue and orders were up by 9% and 6%,
respectively. Retail Petroleum Systems revenue increased for both equipment and
services in most countries; however, lower product prices resulted in reduced
margins. Messerschmidt Apparate and Malco Plastics were acquired late in the
year.
Revenue and orders at Automatic Test Equipment increased 23% and 29%,
respectively, with all activities experiencing growth. The IDS10000 system was
successfully launched by Diagnostic Systems, and Automated Systems doubled its
activity run rate. Activity continued to strengthen through the year, most
notably in Asia.
Net Income (Stated in millions except per share amounts)
- ------------ ---------------------------------------------
1996 1995 1994
------------ ------------- -------------
Per Per Per
Amount Share Amount Share Amount Share
------ ----- ------ ----- ------ -----
Net Income $851 $3.47 $ 649 $2.69 $ 536 $2.21
==== ===== ====== ===== ====== =====
In 1996, operating income of the Oilfield Services segment increased $359
million, or 57%, to $986 million. Growth was due to underlying economic factors,
strong demand and the price increases of oil and gas. Other factors included the
success of new and existing services such as PLATFORM EXPRESS and LWD
technologies. In addition, the strong contribution of Geco-Prakla, which has
returned to profitability, had a significant impact. Measurement & Systems
operating income declined by 18% to $124 million because of steep declines at
Automatic Test Equipment and Electricity & Gas Metering. A temporary weakness in
the semiconductor industry was due to soft market conditions and reduced capital
spending by our customers leading to postponements of product deliveries.
Turbulence in the electricity metering markets was due to strong pricing
pressures and lower volumes in the European markets.
In 1995, operating income of the Oilfield Services segment increased $132
million, or 27%, to $627 million. Higher activity outside North America and an
improved Geco-Prakla were partially offset by lower results in the United
States. The only setback was the deterioration in the results of Geco-Prakla,
where operational problems in the last quarter offset significant improvements
during the first nine months. Severe weather in the Gulf of Mexico and West of
Shetland in the North Sea region, lower profitability on NEPS sales and losses
resulting from technical and operational problems in Transition Zone activities
19
were the major factors. Measurement & Systems operating income increased by 25%
to $151 million because of strong growth at Electronic Transactions and
Automatic Test Equipment, and acquisitions.
In 1994, operating income of the Oilfield Services segment increased $27
million, or 6%, to $495 million. Strong oilfield activity in North America and
an improved Geco-Prakla were only partially offset by declines in activity
outside North America. Measurement & Systems operating income declined 34% to
$121 million due mainly to lower results at Electronic Transactions, Gas
Management and Electricity Management. Improvements at Automatic Test Equipment
were not sufficient to offset these shortfalls.
Currency Risks
- --------------
Refer to "Translation of Non-US Currencies" in the Notes to Consolidated
Financial Statements for a description of the Company's policy on currency
hedging. There are no material unhedged assets, liabilities or commitments
which are denominated in other than a business' functional currency.
While changes in exchange rates do affect revenue, especially in the Measurement
& Systems segment, they also affect costs. Generally speaking, the Company is
currency-neutral. For example, a 5% change in average exchange rates of OECD
currencies would have had no material effect on consolidated revenue and net
income.
In general, when the US dollar weakens against other currencies, consolidated
revenue increases with usually no material effect on net income. This is
principally because the fall-through incremental margin in Measurement & Systems
offsets the higher Oilfield Services non-US dollar denominated expenses.
The Company's businesses operate principally in US dollars, most European
currencies and most South American currencies.
Income Tax Expense
- ------------------
With increasing profitability and strong outlook in the US, the Company
recognized 50% of the US income tax benefit related to its US subsidiary's tax
loss carryforward and all temporary differences. This resulted in a credit of
$360 million. Refer to the Notes to Consolidated Financial Statements under
"Income Tax Expense" for more information.
Research & Engineering
- ----------------------
Expenditures were as follows: (Stated in millions)
1996 1995 1994
----- ----- -----
Oilfield Services $ 294 $ 279 $ 279
Measurement & Systems 158 148 139
Other 1 1 1
----- ----- -----
$ 453 $ 428 $ 419
===== ===== =====
Interest Expense
- ----------------
Interest expense decreased $10 million in 1996 following a $18 million rise in
1995. The decrease in 1996 was due to lower average rates which more than offset
higher average debt outstanding.
The increase in 1995 was due to an increase in both average debt outstanding and
average rates.
20
Liquidity
- ---------
A key measure of financial position is liquidity, defined as cash plus short-
term and long-term investments less debt. The following table summarizes the
Company's change in consolidated liquidity for each of the past three years:
(Stated in millions)
1996 1995 1994
-------- ------- -------
Net income $ 851 $ 649 $ 536
Depreciation &
amortization 885 820 776
Other (1) (14) (5)
------- ------ ------
1,735 1,455 1,307
Increase in working
capital requirements (273) (238) (356)
Fixed asset additions (1,158) (939) (783)
Dividends paid (367) (327) (292)
Other 132 (6) 85
------- ------ ------
69 (55) (39)
Proceeds from
employee stock plans 180 74 61
Purchase of shares
for Treasury - (41) (148)
Businesses acquired (139) (217) (172)
Other (66) 23 6
------- ------ ------
Net increase (decrease)
in liquidity $ 44 $ (216) $ (292)
======= ====== ======
Liquidity-end of period $ 232 $ 188 $ 404
======= ====== ======
In 1996, 1995 and 1994, the significant increase in working capital requirements
followed the higher business activity. The major increases were in the working
capital components of receivables and inventory. Higher fixed asset additions
reflected the significant increase in Oilfield Services activities.
The current consolidated liquidity level, combined with liquidity expected from
operations, should satisfy future business requirements.
21
Common Stock, Market Prices and Dividends Declared per Share
- ------------------------------------------------------------
Quarterly high and low prices for the Company's Common Stock as reported by the
New York Stock Exchange (composite transactions), together with dividends
declared per share in each quarter of 1996 and 1995 were:
Price Range
------------------ Dividends
High Low Declared
-------- -------- --------
1996
QUARTERS
First $ 80 5/8 $65 3/8 $0.375
Second 91 3/8 80 1/8 0.375
Third 89 1/8 79 3/8 0.375
Fourth 108 1/4 84 1/4 0.375
1995
QUARTERS
First $60 1/8 $50 1/8 $0.300
Second 66 5/8 58 1/8 0.375
Third 69 5/8 61 1/4 0.375
Fourth 70 1/2 58 7/8 0.375
The number of holders of record of the Common Stock of the Company at December
31, 1996, was approximately 22,000. There are no legal restrictions on the
payment of dividends or ownership or voting of such shares. United States
stockholders are not subject to any Netherlands Antilles withholding or other
Netherlands Antilles taxes attributable to ownership of such shares.
Environmental Matters
- ---------------------
The Company and its subsidiaries comply with government laws and regulations and
responsible management practices for the protection of the environment. The
Consolidated Balance Sheet includes accruals for the estimated future costs
associated with certain environmental remediation activities related to the past
use or disposal of hazardous materials. Substantially all such costs relate to
divested operations and to facilities or locations that are no longer in
operation. Due to a number of uncertainties, including uncertainty of timing,
the scope of remediation, future technology, regulatory changes and other
factors, it is possible that the ultimate remediation costs may exceed the
amounts accrued. However, in the opinion of management, such additional costs
are not expected to be material relative to consolidated liquidity, financial
position or future results of operations. Consistent with the Company's
commitment to protection of the environment, safety and employee health,
additional costs, including capital expenditures, are incurred related to
current operations.
22
Item 8 Financial Statements and Supplementary Data
- ------ -------------------------------------------
CONSOLIDATED STATEMENT OF INCOME
- --------------------------------
(Stated in thousands except per share amounts)
Year Ended December 31, 1996 1995 1994
----------- ----------- -----------
Revenue
Operating $8,956,150 $7,621,694 $6,696,845
Interest and other income 69,515 91,536 83,898
---------- ---------- ----------
9,025,665 7,713,230 6,780,743
---------- ---------- ----------
Expenses
Cost of goods sold
and services 6,835,444 5,804,157 5,107,889
Research & engineering 452,608 427,848 418,871
Marketing 301,304 283,790 251,750
General 355,392 345,441 321,433
Interest 72,020 81,620 63,328
Unusual items 333,091 - -
Taxes on income (175,677) 121,217 81,395
---------- ---------- ----------
8,174,182 7,064,073 6,244,666
---------- ---------- ----------
Net Income $ 851,483 $ 649,157 $ 536,077
========== ========== ==========
Net income per share $3.47 $2.69 $2.21
========== ========== ==========
Average shares outstanding 245,021 242,374 243,423
See Notes to Consolidated Financial Statements
Schlumberger Limited (Schlumberger N.V., Incorporated in the Netherlands
Antilles) and Subsidiary Companies.
23
Item 8 Financial Statements and Supplementary Data (cont.)
- ------ ---------------------------------------------------
CONSOLIDATED BALANCE SHEET
- ----------------------------------------------------
(Stated in thousands)
December 31, 1996 1995
------------- ------------
ASSETS
Current Assets
Cash and short-term investments $ 1,358,948 $ 1,120,533
Receivables less allowance for doubtful accounts
(1996 $58,981; 1995 $58,246) 2,260,091 1,939,873
Inventories 938,974 782,168
Deferred taxes on income 222,456 -
Other current assets 262,148 181,129
----------- -----------
5,042,617 4,023,703
Long-Term Investments, held to maturity 323,717 279,950
Fixed Assets less accumulated depreciation 3,358,581 3,118,458
Excess of Investment Over Net Assets
of Companies Purchased less amortization 1,225,335 1,330,490
Deferred Taxes on Income 203,983 -
Other Assets 170,818 157,499
----------- -----------
$10,325,051 $ 8,910,100
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities $ 2,200,161 $ 1,773,605
Estimated liability for taxes on income 367,562 299,841
Bank loans 743,018 515,703
Dividend payable 92,842 91,706
Long-term debt due within one year 70,827 83,417
----------- -----------
3,474,410 2,764,272
Long-Term Debt 637,203 613,404
Postretirement Benefits 383,129 354,830
Other Liabilities 203,929 213,577
----------- -----------
4,698,671 3,946,083
----------- -----------
Stockholders' Equity
Common stock 818,803 737,328
Income retained for use in the business 7,137,744 6,654,072
Treasury stock at cost (2,315,946) (2,414,577)
Translation adjustment (14,221) (12,806)
----------- -----------
5,626,380 4,964,017
----------- -----------
$10,325,051 $ 8,910,100
=========== ===========
See Notes to Consolidated Financial Statements
Schlumberger Limited (Schlumberger N.V., Incorporated in the Netherlands
Antilles) and Subsidiary Companies.
24
Item 8 Financial Statements and Supplementary Data (cont.)
-------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS (Stated in thousands)
- --------------------------------------
Year Ended December 31, 1996 1995 1994
Cash flows from operating activities: ----------- ----------- ------------
Net income $ 851,483 $ 649,157 $ 536,077
Adjustments to reconcile
net income
to net cash provided by
operating activities:
Depreciation and
amortization 885,198 820,196 776,167
Earnings of companies
carried at equity,
less dividends received
(1996 $1,911; 1995 $1,000;
1994 $5,377) 5,212 (3,791) (1,621)
Provision for losses on
accounts receivable 27,036 20,306 23,039
Other adjustments (4,613) (3,562) (3,574)
Change in operating
assets and liabilities:
Increase in receivables (319,448) (136,312) (182,989)
Increase in inventories (144,774) (99,334) (37,444)
Increase in deferred
taxes (26,226) - -
Increase (decrease) in
accounts payable
and accrued liabilities 161,463 (9,243) (77,412)
Increase (decrease) in
estimated liability
for taxes on income 39,851 (3,684) (73,801)
Other - net (73,044) (39,389) (15,379)
----------- ---------- ---------
NET CASH PROVIDED
BY OPERATING ACTIVITIES 1,402,138 1,194,344 943,063
----------- ---------- ---------
Cash flows from investing
activities:
Purchases of fixed assets (1,157,957) (938,847) (782,837)
Sales/retirements of
fixed assets 98,584 26,936 105,240
Payment for purchase of
businesses (115,262) (200,805) (171,631)
(Increase) decrease in
investments (218,914) 129,165 50,230
Decrease (increase) in
other assets 1,050 42,496 (88)
----------- ---------- ---------
NET CASH USED IN
INVESTING ACTIVITIES (1,392,499) (941,055) (799,086)
----------- ---------- ---------
Cash flows from financing
activities:
Dividends paid (366,791) (327,189) (292,368)
Proceeds from employee
stock purchase plan 38,807 36,159 36,183
Proceeds from exercise of
stock options 141,299 37,518 25,145
Purchase of shares for
Treasury - (40,552) (148,089)
Proceeds from issuance of
long-term debt 195,009 486,518 143,889
Payments of principal on
long-term debt (165,742) (287,455) (176,420)
Net increase (decrease)
in short-term debt 212,523 (143,444) 261,616
----------- ---------- ---------
NET CASH PROVIDED BY(USED IN)
FINANCING ACTIVITIES 55,105 (238,445) (150,044)
---------- ---------- ---------
Net increase (decrease) in
cash 64,744 14,844 (6,067)
Cash, beginning of year 72,515 57,671 63,738
----------- ---------- ---------
CASH, END OF YEAR $ 137,259 $ 72,515 $ 57,671
=========== ========== =========
See Notes to Consolidated Financial Statements
Schlumberger Limited (Schlumberger N.V., Incorporated in the Netherlands Antilles) and Subsidiary Companies.
25
Item 8 Financial Statements and Supplementary Data (cont.)
- ------- --------------------------------------------------
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
- ------------------------------------------------
(Dollar amounts in thousands)
Common Stock
--------------------------------------------------- Income
Issued In Treasury Retained for
------------------------ ------------------------ Translation Use in the
Shares Amount Shares Amount Adjustment Business
----------- ----------- ---------- ----------- ---------- ------------
Balance,
Jan. 1, 1994 306,667,168 $660,129 63,118,111 $2,283,743 $(76,507) $6,106,461
Translation
adjustment 19,403
Sales to optionees less
shares exchanged (366) (702,621) (25,511)
Purchases for
Treasury 2,754,000 148,089
Employee stock
purchase plan 734,284 36,183
Net income 536,077
Dividends declared
($1.20 per share) (292,105)
----------- ------- ---------- --------- ------- ------------
Balance,
Dec. 31, 1994 307,401,452 695,946 65,169,490 2,406,321 (57,104) 6,350,433
Translation
adjustment 44,298
Sales to optionees less
shares exchanged 5,223 (871,330) (32,296)
Purchases for
Treasury 690,000 40,552
Employee stock
purchase plan 724,794 36,159
Net income 649,157
Dividends declared
($1.425 per share) (345,518)
----------- ------- ---------- --------- ------- ------------
Balance,
Dec. 31, 1995 308,126,246 737,328 64,988,160 2,414,577 (12,806) 6,654,072
Translation
adjustment (1,415)
Sales to optionees less
shares exchanged 42,668 (2,657,348) (98,631)
Purchases for
Treasury
Employee stock
purchase plan 741,747 38,807
Net income 851,483
Dividends declared
($1.50 per share) (367,811)
----------- -------- ---------- ----------- --------- ------------
Balance,
Dec. 31, 1996 308,867,993 $818,803 62,330,812 $2,315,946 $(14,221) $7,137,744
=========== ======== ========== =========== ========== ============
See Notes to Consolidated Financial Statements
Schlumberger Limited (Schlumberger N.V., Incorporated in the Netherlands
Antilles) and Subsidiary Companies.
26
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------
Summary of Accounting Policies
- ------------------------------
The Consolidated Financial Statements of Schlumberger Limited and its
subsidiaries have been prepared in accordance with accounting principles
generally accepted in the United States.
Principles of Consolidation
- ---------------------------
The Consolidated Financial Statements include the accounts of majority-owned
subsidiaries. Significant 20% - 50% owned companies are carried on the equity
method and classified in Other Assets. The Company's pro rata share of after-tax
earnings is included in Interest and other income. Equity in undistributed
earnings of all 50% owned companies at December 31, 1996, was not material.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. While actual
results could differ from these estimates, management believes that the
estimates are reasonable.
Revenue Recognition
- -------------------
Generally, revenue is recognized after services are rendered and products are
shipped.
Translation of Non-US Currencies
- --------------------------------
All assets and liabilities recorded in functional currencies other than US
dollars are translated at current exchange rates. The resulting adjustments are
charged or credited directly to the Stockholders' Equity section of the
Consolidated Balance Sheet. Revenue and expenses are translated at the weighted
average exchange rates for the period. All realized and unrealized transaction
gains and losses are included in income in the period in which they occur.
Included in the 1996 results were transaction gains of $10 million, compared to
a loss of $2 million and a gain of $2 million in 1995 and 1994, respectively.
Currency exchange contracts are entered into as a hedge against the effect of
future settlement of assets and liabilities denominated in other than the
functional currency of the individual businesses. Gains or losses on the
contracts are recognized when the currency exchange rates fluctuate, and the
resulting charge or credit offsets the unrealized currency gains or losses on
those assets and liabilities. At December 31, 1996, contracts were outstanding
to purchase the US dollar equivalent of $103 million in various foreign
currencies and to sell the equivalent of $62 million at forward rates on the
dates the contracts were entered. These contracts mature on various dates in
1997.
Investments
- -----------
The Consolidated Balance Sheet reflects the Company's investment portfolio
separated between current and long-term based on maturity. Except for $111
million of investments which are considered trading at December 31, 1996 (1995
$104 million), it is the Company's intent to hold the investments until
maturity.
Both short-term and long-term investments held to maturity are stated at cost
plus accrued interest, which approximates market, and comprise primarily
Eurodollar time deposits, certificates of deposit and commercial paper,
Euronotes and Eurobonds, substantially all denominated in US dollars.
Substantially all the investments designated as held to maturity
27
that were purchased and sold during the year had original maturities of less
than three months. Short-term investments that are designated as trading are
stated at market. The unrealized holding gain on such securities was not
significant.
Long-term investments mature in 1998-$78 million, in 1999-$92 million and $154
million thereafter.
For purposes of the Consolidated Statement of Cash Flows, the Company does not
consider short-term investments to be cash equivalents as they generally have
original maturities in excess of three months. Short-term investments at
December 31, 1996 and 1995, were $1.2 billion and $1.0 billion, respectively.
Inventories
- -----------
Inventories are stated principally at average or standard cost, which
approximates average cost, or at market, if lower. Inventory consists primarily
of materials and supplies.
Excess of Investment Over Net Assets of Companies Purchased
- -----------------------------------------------------------
Cost in excess of net assets of purchased companies is amortized on a straight-
line basis over periods ranging from 7 to 40 years. Accumulated amortization was
$287 million and $278 million at December 31, 1996 and 1995, respectively.
Fixed Assets and Depreciation
- -----------------------------
Fixed assets are stated at cost less accumulated depreciation, which is provided
for by charges to income over the estimated useful lives of the assets by the
straight-line method. Fixed assets include the manufacturing cost (average cost)
of oilfield technical equipment manufactured by subsidiaries of the Company.
Expenditures for renewals, replacements and betterments are capitalized.
Maintenance and repairs are charged to operating expenses as incurred. Upon sale
or other disposition, the applicable amounts of asset cost and accumulated
depreciation are removed from the accounts and the net amount, less proceeds
from disposal, is charged or credited to income.
Taxes on Income
- ---------------
The Company and its subsidiaries compute taxes on income in accordance with the
tax rules and regulations of the many taxing authorities where the income is
earned. The income tax rates imposed by these taxing authorities vary
substantially. Taxable income may differ from pretax income for financial
accounting purposes. To the extent that differences are due to revenue or
expense items reported in one period for tax purposes and in another period for
financial accounting purposes, an appropriate provision for deferred income
taxes is made.
Approximately $2.5 billion of consolidated income retained for use in the
business at December 31, 1996, represented undistributed earnings of
consolidated subsidiaries and the Company's pro rata share of 20% - 50% owned
companies. No provision is made for deferred income taxes on those earnings
considered to be indefinitely reinvested or earnings that would not be taxed
when remitted.
Tax credits and other allowances are credited to current income tax expense on
the flow-through method of accounting.
28
Net Income Per Share
- --------------------
Net income per share is computed by dividing net income by the average number of
common shares outstanding during the year. The effect of common stock
equivalents on the computation of earnings per share was not significant.
Research & Engineering
- ----------------------
All research and engineering expenditures are expensed as incurred, including
costs relating to patents or rights that may result from such expenditures.
Unusual Items
- -------------
The Company announced a charge of $300 million after tax in the third quarter
related primarily to the Electricity & Gas and Geco-Prakla Land and Transition
Zone businesses. During the quarter, the Electricity and Gas Management product
lines were combined into a single business in response to the huge market and
technology changes occurring in the energy supply sector. This combination will
result in lower headcount and fewer manufacturing facilities and products. At
Geco-Prakla, the Land and Transition Zone businesses have improved; however,
they are still in a loss position and accordingly, require radical changes in
organization and structure, and the write-off of Land goodwill. The after-tax
charge of $300 million includes pre-tax charges of $112 million for severance
and termination costs, other facilities' closure costs of $39 million, goodwill
write-offs of $122 million, and other asset impairments/charges of $60 million.
The severance and termination costs relate to less than 5% of the worldwide
workforce primarily in Europe and pertain to both manufacturing and operating
personnel in about 30 locations. Most of the other facilities' closure costs
relate to the write-down of buildings, equipment and other assets to net
realizable value.
In addition, the Company recorded a charge of $58 million after tax, including a
loss on the divestiture of the remaining defense-related activity, certain asset
impairments and other charges. The amount is classified in cost of goods sold
and services ($47 million) and taxes on income ($11 million).
As of December 31, 1996, $12 million of the severance and termination had been
spent. The remainder should be spent within the next 18 months.
Acquisitions
- ------------
During 1996, subsidiaries of the Company acquired Solaic, SA (on December 31,
1996), a magnetic and smart card manufacturer; an 80% interest in Printer, a
magnetic stripe card manufacturer; Oilphase Sampling Services Ltd., a reservoir
fluid sampling company; The Production Analyst* and OilField Manager* software
products from OGCI Software, Inc.; Germann, a turnkey gasoline station
provider; Gueant, a gas dispenser service company; and a 33% equity interest
in DAP Technologies Limited, a developer and manufacturer of rugged handheld
computer products. The purchase prices were $75 million, $9 million, $7 million,
$8 million, $8 million, $7 million and $4 million, respectively. These
acquisitions were accounted for as purchases. Costs in excess of net assets
acquired were $91 million which are being amortized on a straight-line basis
over periods between 7 and 25 years.
During 1995, subsidiaries of the Company acquired a further 40% interest in CGST
Save, a French gas meter service company; the remaining 40% interest in J.B.
Rombach, a German metering business; G.S.I. Saudi Arabia Ltd., a land seismic
company; the Petroleum Division of Intera Information Technologies Corporation,
a reservoir simulation software company; and Danyl Inc., a point-of-sale
terminal manufacturer. The purchase prices were $71 million, $42 million, $15
million, $59 million and $12 million,
29
respectively. These acquisitions were accounted for as purchases. Costs in
excess of net assets acquired were $167 million which are being amortized on a
straight-line basis over periods between 15 and 25 years.
Fixed Assets
- ------------
A summary of fixed assets follows:
(Stated in millions)
December 31, 1996 1995
------ ------
Land $ 71 $ 78
Buildings &
improvements 1,040 1,027
Machinery and
equipment 8,467 8,003
------ ------
Total cost 9,578 9,108
Less accumulated
depreciation 6,219 5,990
------ ------
$3,359 $3,118
====== ======
Estimated useful lives of Buildings & improvements range from 5 to 50 years and
of Machinery and equipment from 2 to 25 years.
Long-Term Debt
- --------------
A summary of long-term debt by currency follows:
(Stated in millions)
December 31, 1996 1995
----- -----
US dollar $ 195 $ 110
German mark 185 165
UK pound 137 192
Japanese yen 101 113
Other 19 33
----- -----
$ 637 $ 613
===== =====
Long-term debt is at variable rates; substantially all of the debt is at rates
up to 7%. Such rates are reset every six months or sooner. Accordingly, the
carrying value of long-term debt at December 31, 1996, approximates the
aggregate fair value.
Long-term debt at December 31, 1996, is due $208 million in 1998, $33 million in
1999, $190 million in 2000, $101 million in 2001 and $105 million thereafter.
At December 31, 1996, there were no interest rate swap arrangements outstanding.
At times, interest rate swap arrangements are entered into to adjust non-US
dollar denominated debt and interest rates into US dollars. Interest rate swap
arrangements had no impact in 1996 and an immaterial effect on consolidated
interest expense in 1995. The exposure in the event of nonperformance by the
other parties to the arrangements is not significant.
30
Lines of Credit
- ---------------
At December 31, 1996, the Company's principal US subsidiary had an available
unused Revolving Credit Agreement with a group of banks. The Agreement provided
that the subsidiary may borrow up to $500 million until December 1998 at money
market-based rates. In addition, at December 31, 1996, the Company and its
subsidiaries had available unused lines of credit of approximately $626 million.
Capital Stock
- -------------
The Company is authorized to issue 500,000,000 shares of Common Stock, par value
$0.01 per share, of which 246,537,181 and 243,138,086 shares were outstanding on
December 31, 1996 and 1995, respectively. The Company is also authorized to
issue 200,000,000 shares of cumulative Preferred Stock, par value $0.01 per
share, which may be issued in series with terms and conditions determined by the
Board of Directors. No shares of Preferred Stock have been issued. Holders of
Common Stock and Preferred Stock are entitled to one vote for each share of
stock held.
In January 1993, Schlumberger acquired the remaining 50% interest in the Dowell
Schlumberger group of companies. The purchase price included a warrant, expiring
in 7.5 years and valued at $100 million, to purchase 7.5 million shares of
Schlumberger Limited Common Stock at an exercise price of $59.95 per share. The
warrant is fully vested and nontransferable.
Stock Compensation Plans
- ------------------------
As of December 31, 1996, the Company has two types of stock-based compensation
plans, which are described below. The Company applies APB Opinion 25 and related
Interpretations in accounting for its plans. Accordingly, no compensation cost
has been recognized for its stock option plans and its stock purchase plan. Had
compensation cost for the Company's stock-based plans been determined based on
the fair value at the grant dates for awards under those plans, consistent with
the method of FASB Statement 123, the Company's net income and earnings per
share would have been the pro forma amounts indicated below:
(Stated in millions except per share amounts)
1996 1995
---- ----
Net Income
As reported $ 851 $ 649
Pro forma $ 809 $ 641
----- -----
Earnings per share
As reported $3.47 $2.69
Pro forma $3.30 $2.65
As required by FASB Statement 123, the above pro forma data reflects the effect
of stock option grants and the employee stock purchase plan during 1996 and
1995.
Stock Option Plans
- ------------------
During 1996, 1995 and in prior years, officers and key employees were granted
stock options under the Company's stock option plans. The exercise price of each
option equals the market price of the Company's stock on the date of grant; an
option's maximum term is ten years, and options generally vest in 20% increments
over five years.
31
As required by FASB Statement 123, the fair value of each grant is estimated on
the date of grant using the multiple option Black-Scholes option-pricing model
with the following weighted-average assumptions used for 1996 and 1995: dividend
yield of 1.5%; expected volatility of 20%; risk-free interest rates for 1996
grants of 5.38% - 6.36% for officers and 5.09% - 6.01% for all other employees;
risk-free interest rates for 1995 grants of 5.85% - 7.88% for officers and 5.70%
- - 7.66% for all other employees; and expected option lives of 5.50 years for
officers and 2.39 years for other employees. The weighted-average fair value of
options granted during 1996 and 1995 is $21.07 and $17.40, respectively.
A summary of the status of the Company's stock option plans as of December 31,
1996 and 1995, and changes during the years ending on those dates is presented
below:
Number Weighted Average
of Shares Exercise Price
----------- ----------------
Outstanding
Jan. 1, 1995 11,560,849 $56
Granted 753,700 $62
Exercised (897,919) $44
Lapsed or
cancelled (346,150) $61
---------- ---
Outstanding
Dec. 31, 1995 11,070,480 $58
Granted 4,131,000 $79
Exercised (2,758,242) $54
Lapsed or
cancelled (244,840) $64
---------- ---
Outstanding
Dec. 31, 1996 12,198,398 $65
========== ===
Exercisable at
Dec. 31, 1995 6,259,270
Dec. 31, 1996 4,963,908
Available for grant
Dec. 31, 1995 9,444,095
Dec. 31, 1996 5,557,935
32
The following table summarizes information concerning currently outstanding and
exercisable options by two ranges of exercise prices:
- -----------------------------------------------
Range of exercise prices $29.250 - $64.500
- -----------------------------------------------
Number outstanding
at 12/31/96 7,343,448
Weighted average remaining
contractual life 5.93
Weighted average
exercise price $58
- -----------------------------------------------
Number exercisable
at 12/31/96 4,494,418
Weighted average
exercise price $58
- -----------------------------------------------
Range of exercise prices $64.813 - $93.625
- -----------------------------------------------
Number outstanding
at 12/31/96 4,854,950
Weighted average remaining
contractual life 8.83
Weighted average
exercise price $77
- -----------------------------------------------
Number exercisable
at 12/31/96 469,490
Weighted average
exercise price $59
- -----------------------------------------------
Employee Stock Purchase Plan
- ----------------------------
Under the Schlumberger Discounted Stock Purchase Plan, the Company is authorized
to issue up to 8,000,000 shares of Common Stock to its employees. Under the
terms of the Plan, employees can choose each year to have up to 10% of their
annual earnings withheld to purchase the Company's Common Stock. The purchase
price of the stock is 85% of the lower of its beginning or end of the plan year
market price. Under the Plan, the Company sold 741,747 shares and 724,794 shares
to employees in 1996 and 1995, respectively. Compensation cost has been computed
for the fair value of the employees' purchase rights, which was estimated using
the Black-Scholes model with the following assumptions for 1996 and 1995:
dividend yield of 1.5%; expected life of one year; expected volatility of 20%;
and risk-free interest rates of 5.71% for 1996 and 5.61% for 1995. The weighted-
average fair value of those purchase rights granted in 1996 and 1995 is $19.45
and $14.42, respectively.
Income Tax Expense
- ------------------
With increasing profitability and strong outlook in the US, in the third quarter
of 1996 the Company recognized 50% of the US income tax benefit related to its
US subsidiary's tax loss carryforward and all temporary differences. This
resulted in a credit of $360 million.
The Company and its subsidiaries operate in over 100 taxing jurisdictions.
33
At December 31, 1996, the US deferred tax asset was $381 million and the
valuation allowance was $53 million.
The Company's US consolidated group has a net operating loss carryforward at
December 31, 1996, of $293 million and net deductible temporary differences were
$782 million. Significant temporary differences pertain to postretirement
medical benefits and fixed assets. Most of the tax loss carryforward will expire
in the years 2002 - 2003.
The normal recurring provision for income taxes in 1996 was $206 million;
effective tax rate was 20%. In 1995 and 1994, the effective tax rates were 16%
and 13%, respectively. The effect of the US operating loss carryforward was a
significant reconciling item between the US statutory federal tax rate (35%) and
the Company's effective tax rate in each year.
The Company's provision for deferred taxes (excluding the effect of the unusual
items) was less than $5 million in each of the three years in the period ended
December 31, 1996. The remaining component of income tax expense was the current
provision in each year.
Leases and Lease Commitments
- ----------------------------
Total rental expense was $232 million in 1996, $206 million in 1995 and $192
million in 1994. Future minimum rental commitments under noncancelable leases
for years ending December 31 are: 1997 $90 million; 1998 $72 million; 1999 $58
million; 2000 $40 million; and 2001 $30 million. For the ensuing three five-year
periods, these commitments decrease from $35 million to $3 million. The minimum
rentals over the remaining terms of the leases aggregate $25 million.
Contingencies
- -------------
The Company and its subsidiaries comply with government laws and regulations and
responsible management practices for the protection of the environment. The
Consolidated Balance Sheet includes accruals for the estimated future costs
associated with certain environmental remediation activities related to the past
use or disposal of hazardous materials. Substantially all such costs relate to
divested operations and to facilities or locations that are no longer in
operation. Due to a number of uncertainties, including uncertainty of timing,
the scope of remediation, future technology, regulatory changes and other
factors, it is possible that the ultimate remediation costs may exceed the
amounts accrued. However, in the opinion of management, such additional costs
are not expected to be material relative to consolidated liquidity, financial
position or future results of operations.
In a case in Texas involving the validity of a 1988 settlement and release in
connection with an incidental business venture, the trial court, in 1993,
rendered a judgment notwithstanding the verdict of the jury, exonerating
Schlumberger from any liability. In late 1994, a Texas Court of Appeals reversed
the trial court judgment and reinstated the jury award of about $75 million
against Schlumberger. The Texas Supreme Court granted the Schlumberger motion to
hear the case. Oral argument was held before the Texas Supreme Court on October
11, 1995. Schlumberger and outside counsel believe the decision of the trial
court was correct. Consequently, no provision has been made in the Consolidated
Financial Statements for this matter.
In May 1996, in a case involving a $3 million contract dispute, the trial court
in Johnson County, Texas, entered judgment on jury findings adverse to
Schlumberger for $23 million in damages, which has been doubled, plus attorneys'
fees and interest. The Company and its outside counsel believe the findings and
the judgment are not supported by the
34
evidence and law, and have filed an appeal. Accordingly, no provision has been
made in the financial statements for this matter.
In addition, the Company and its subsidiaries are party to various other legal
proceedings. Although the ultimate disposition of these proceedings is not
presently determinable, in the opinion of the Company any liability that might
ensue would not be material in relation to the Consolidated Financial
Statements.
Segment Information
- -------------------
The Company's business comprises three segments: Oilfield Services, Measurement
& Systems and Omnes. Services and products are described in more detail on pages
2,3 and 4 in this report.
Oilfield Services and Measurement & Systems are reportable segments.
Financial information for the years ended December 31, 1996, 1995 and 1994, by
industry segment and by geographic area is as follows:
Transfers between segments and geographic areas are for the most part made at
regular prices available to unaffiliated customers.
Certain Oilfield Services segment fixed assets are manufactured within that
segment.
During the years ended December 31, 1996, 1995 and 1994, neither sales to any
government nor sales to any single customer exceeded 10% of consolidated
operating revenue.
Corporate assets largely comprise short-term and long-term investments.
35
(Stated in millions)
Oilfield Measurement Adjust. Consol-
Services & Systems & Elim. idated
---------- ------------- -------- -------
INDUSTRY SEGMENT 1996
Operating revenue
Customers $6,129 $2,827 $ - $ 8,956
Inter-segment transfers - 7 (7) -
------ ------ ---- -------
$6,129 $2,834 $ (7) $ 8,956
====== ====== ==== =======
Operating income $ 986 $ 124 $(52) $ 1,058
------ ------ ----
Interest expense (72)
Interest and other income 70
Unusual items (380)
-------
Income before taxes $ 676
=======
Depreciation expense $ 700 $ 111 $ 8 $ 819
------ ------ ---- -------
Fixed asset additions $1,018 $ 131 $ 9 $ 1,158
------ ------ ---- -------
At December 31
Identifiable assets $5,961 $2,518 $(41) $ 8,438
Corporate assets 1,887
-------
Total assets $10,325
=======
INDUSTRY SEGMENT 1995
Operating revenue
Customers $4,867 $2,755 $ - $ 7,622
Inter-segment transfers 1 4 (5) -
------ ------ ---- -------
$4,868 $2,759 $ (5) $ 7,622
====== ====== ==== =======
Operating income $ 627 $ 151 $(17) $ 761
------ ------ ----
Interest expense (82)
Interest and other income
less other charges -$1 91
-------
Income before taxes $ 770
=======
Depreciation expense $ 650 $ 104 $ 6 $ 760
------ ------ ---- -------
Fixed asset additions $ 800 $ 122 $ 17 $ 939
------ ------ ---- -------
At December 31
Identifiable assets $5,192 $2,213 $(29) $ 7,376
Corporate assets 1,534
-------
Total assets $ 8,910
=======
36
8
(Stated in millions)
Oilfield Measurement Adjust. Consol-
Services & Systems & Elim. idated
-------- ----------- ------- -------
INDUSTRY SEGMENT 1994
Operating revenue
Customers $4,362 $2,335 $ - $6,697
Inter-segment transfers 3 4 (7) -
------ ------ ---- -------
$4,365 $2,339 $ (7) $6,697
====== ====== ==== =======
Operating income $ 495 $ 121 $(23) $ 593
------ ------ ----
Interest expense (63)
Interest and other income plus other credits -$3 87
-------
Income before taxes $ 617
=======
Depreciation expense $ 625 $ 92 $ 5 $ 722
------ ------ ---- -------
Fixed asset additions $ 661 $ 91 $ 31 $ 783
------ ------ ---- -------
At December 31
Identifiable assets $4,766 $1,936 $(14) $6,688
Corporate assets 1,634
-------
Total assets $8,322
=======
37
(Stated in millions)
Western Hemisphere Eastern Hemisphere
------------------ ------------------ Adjust. Consol-
US Other Europe Other & Elim. idated
-------- -------- -------- -------- ------- -------
GEOGRAPHIC AREA 1996
Operating revenue
Customers $2,103 $1,150 $3,065 $2,638 $ - $ 8,956
Inter-area transfers 443 7 169 35 (654) -
------ ------ ------ ------ ------- -------
$2,546 $1,157 $3,234 $2,673 $(654) $ 8,956
====== ====== ====== ====== ======= =======
Operating income $ 195 $ 166 $ 243 $ 546 $ (92) $ 1,058
Interest expense (72)
Interest and other income 70
Unusual items (380)
-------
Income before taxes $ 676
=======
At December 31
Identifiable assets $2,249 $ 885 $3,300 $2,069 $ (65) $ 8,438
Corporate assets 1,887
-------
Total assets $10,325
=======
GEOGRAPHIC AREA 1995
Operating revenue
Customers $1,826 $ 905 $2,779 $2,112 $ - $ 7,622
Inter-area transfers 358 17 149 30 (554) -
------ ------ ------ ------ ------- -------
$2,184 $ 922 $2,928 $2,142 $(554) $ 7,622
====== ====== ====== ====== ======= =======
Operating income $ 130 $ 135 $ 170 $ 367 $ (41) $ 761
Interest expense (82)
Interest and other income
less other charges - $1 91
-------
Income before taxes $ 770
=======
At December 31
Identifiable assets $1,748 $ 720 $2,894 $2,025 $ (11) $ 7,376
Corporate assets 1,534
-------
Total assets $ 8,910
38
(Stated in millions)
Western Hemisphere Eastern Hemisphere
------------------ ------------------ Adjust. Consol-
US Other Europe Other & Elim. idated
--------- ------- --------- ------- -------- --------
GEOGRAPHIC AREA 1994
Operating revenue
Customers $1,650 $749 $2,299 $1,999 $ - $6,697
Inter-area transfers 251 10 140 30 (431) -
------ ------- --------- ------- ------- -------
$1,901 $759 $2,439 $2,029 $(431) $6,697
====== ======= ========= ======= ======= =======
Operating income $ 177 $106 $ 49 $ 304 $ (43) $ 593
Interest expense (63)
Interest and other income
plus other credits - $3 87
-------
Income before taxes $ 617
=======
At December 31
Identifiable assets $1,660 $620 $2,387 $2,210 $(189) $6,688
Corporate assets 1,634
-------
Total assets $8,322
=======
39
Pension and Other Benefit Plans
- -------------------------------
US Pension Plans
- ----------------
The Company and its US subsidiary sponsor several defined benefit pension plans
that cover substantially all employees. The benefits are based on years of
service and compensation on a career-average pay basis. These plans are
substantially fully funded with a trustee in respect to past and current
service. Charges to expense are based upon costs computed by independent
actuaries. The funding policy is to contribute annually amounts that are
allowable for federal income tax purposes. These contributions are intended to
provide for benefits earned to date and those expected to be earned in the
future.
The assumed discount rate, compensation increases and return on plan assets used
to determine pension expense in all years were 7.5%, 4.5% and 8.5%,
respectively.
Net pension cost in the US for 1996, 1995 and 1994, included the following
components:
(Stated in millions)
1996 1995 1994
------ ------ ------
Service cost -benefits
earned during the period $ 27 $ 26 $ 25
Interest cost on projected
benefit obligation 50 46 44
Expected return on
plan assets (actual
return: 1996 $94;
1995 $137; 1994 $3) (52) (47) (46)
Amortization of
transition asset (2) (2) (2)
Amortization of prior
service cost/other 4 4 6
----- ----- -----
Net pension cost $ 27 $ 27 $ 27
===== ===== =====
Effective January 1, 1996, the Company and its subsidiaries amended their
pension plans to improve retirement benefits for current employees. The funded
status at December 31, 1995, reflects the amendment.
40
The funded status of the plans at December 31, 1996 and 1995, was as follows:
(Stated in millions)
1996 1995
---------- ---------
Actuarial present value
of obligations:
Vested benefit obligation $ 639 $ 615
===== =====
Accumulated benefit
obligation $ 641 $ 617
===== =====
Projected benefit obligation $ 700 $ 675
Plan assets at market value 771 698
----- -----
Excess of assets over projected
benefit obligation 71 23
Unrecognized net gain (155) (96)
Unrecognized prior service cost 34 39
Unrecognized net asset
at transition date (7) (9)
----- -----
Pension liability $ (57) $ (43)
===== =====
Assumed discount rate and rate of compensation increases used to determine the
projected benefit obligations were 8% and 4.5%, respectively; the expected long-
term rate of return on plan assets was 8.5%. Plan assets at December 31, 1996,
consist of common stocks ($504 million), cash or cash equivalents ($42 million),
fixed income investments ($135 million) and other investments ($90 million).
Less than 1% of the plan assets at December 31, 1996, represented Schlumberger
Limited Common Stock.
Non-US Pension Plans
- --------------------
Outside of the US, subsidiaries of the Company sponsor several defined benefit
and defined contribution plans that cover substantially all employees who are
not covered by statutory plans. For defined benefit plans, charges to expense
are based upon costs computed by independent actuaries. These plans are
substantially fully funded with trustees in respect to past and current service.
For all defined benefit plans, pension expense was $16 million, $13 million and
$16 million in 1996, 1995 and 1994, respectively. The only significant defined
benefit plan is in the UK.
The assumed discount rate, compensation increases and return on plan assets used
to determine pension expense in all years were 7.5%, 5% and 8.5%, respectively.
41
Net pension cost in the UK plan for 1996, 1995 and 1994 (translated into US
dollars at the average exchange rate for the periods), included the following
components:
(Stated in millions)
1996 1995 1994
------ ------ ------
Service cost - benefits
earned during the period $ 12 $ 10 $ 10
Interest cost on projected
benefit obligation 9 9 10
Expected return on
plan assets (actual
return: 1996 $36;
1995 $43; 1994 $(11)) (18) (16) (15)
Amortization of transition
asset and other (3) (2) (3)
----- ----- -----
Net pension cost $ - $ 1 $ 2
===== ===== =====
The funded status of the plan (translated into US dollars at year-end exchange rates) was as
follows:
(Stated in millions)
1996 1995
----- -----
Actuarial present value
of obligations:
Vested benefit obligation $ 132 $ 108
===== =====
Accumulated benefit
obligation $ 132 $ 108
===== =====
Projected benefit obligation $ 150 $ 129
Plan assets at market value 276 222
----- -----
Excess of assets over
projected benefit obligation 126 93
Unrecognized net gain (111) (85)
Unrecognized prior service cost 4 4
Unrecognized net asset
at transition date (4) (5)
----- -----
Pension asset $ 15 $ 7
===== =====
The assumed discount rate and rate of compensation increases used to determine
the projected benefit obligation were 8% and 5%, respectively; the expected
long-term rate of return on plan assets was 8.5%. Plan assets consist of common
stocks ($219 million), cash or cash equivalents ($6 million) and fixed income
investments ($52 million). None of the plan assets represents Schlumberger
Limited Common Stock.
42
For defined contribution plans, funding and cost are generally based upon a
predetermined percentage of employee compensation. Charges to expense in 1996,
1995 and 1994, were $15 million, $14 million and $12 million, respectively.
Other Deferred Benefits
- -----------------------
In addition to providing pension benefits, the Company and its subsidiaries have
other deferred benefit programs. Expense for these programs was $93 million, $80
million and $71 million in 1996, 1995 and 1994, respectively.
Health Care Benefits
- --------------------
The Company and its US subsidiary provide health care benefits for certain
active employees. The cost of providing these benefits is recognized as expense
when incurred and aggregated $38 million, $37 million and $34 million in 1996,
1995 and 1994, respectively. Outside of the United States, such benefits are
mostly provided through government-sponsored programs.
Postretirement Benefits Other Than Pensions
- -------------------------------------------
The Company and its US subsidiary provide certain health care benefits to former
employees who have retired under the US pension plans.
In 1996, service cost and interest cost expenses were $13 million and $26
million, respectively, compared to $12 million and $25 million in 1995. The
principal actuarial assumptions used to measure the above-mentioned costs were a
discount rate of 7.5% in 1996 and 7.5% in 1995, and a medical cost trend rate of
10% graded to 6% over the next six years and 6% thereafter.
The funded status at December 31, 1996 and 1995, was as follows:
(Stated in millions)
1996 1995
--------- ---------
Accumulated postretirement
benefit obligation:
Retirees $ 143 $ 173
Fully eligible 8 6
Actives 135 181
----- -----
$ 286 $ 360
Unrecognized net gain (loss) 92 (5)
Unrecognized prior service 5 -
----- -----
Postretirement benefit
liability at December 31 $ 383 $ 355
===== =====
The assumed discount rate used to determine the accumulated postretirement
benefit obligation was 8% for 1996 and 7.5% in 1995. At December 31, 1996, the
medical cost trend rate has been lowered to reflect actual experience over the
last four years to 9% graded to 5% over the next six years and 5% thereafter.
If the assumed medical cost trend rate was increased by one percentage point,
health care cost in 1996 would have been $45 million, and the accumulated
postretirement benefit obligation would have been $324 million at December 31,
1996.
43
Supplementary Information
- -------------------------
Operating revenue and related cost of goods sold and services comprised the
following:
(Stated in millions)
Year ended
December 31, 1996 1995 1994
------ ------ ------
Operating revenue
Sales $2,428 $2,372 $2,019
Services 6,528 5,250 4,678
------ ------ ------
$8,956 $7,622 $6,697
====== ====== ======
Direct operating costs
Goods sold $1,704 $1,645 $1,372
Services 5,131 4,159 3,736
------ ------ ------
$6,835 $5,804 $5,108
====== ====== ======
Cash paid for interest and income taxes was as follows:
(Stated in millions)
Year ended
December 31, 1996 1995 1994
------ ------ ------
Interest $ 73 $ 81 $ 64
Income taxes $ 179 $ 132 $ 148
Accounts payable and accrued liabilities are summarized as follows:
(Stated in millions)
December 31, 1996 1995
------ ------
Payroll, vacation and
employee benefits $ 488 $ 425
Trade 712 564
Taxes, other than income 182 156
Other 818 629
------ ------
$2,200 $1,774
====== ======
The caption "Interest and other income" includes interest income, principally
from short-term and long-term investments, of $73 million, $89 million and $78
million for 1996, 1995 and 1994, respectively, partially offset by the Company's
share of the loss from the Omnes joint venture of $5 million in 1996.
44
To the Board of Directors and Stockholders
of Schlumberger Limited
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, of stockholders' equity and of cash flows
present fairly, in all material respects, the financial position of Schlumberger
Limited and its subsidiaries at December 31, 1996 and 1995, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1996, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
Price Waterhouse LLP
New York, New York
January 23, 1997
45
QUARTERLY RESULTS (UNAUDITED)
- -----------------------------
The following table summarizes results for each of the four quarters for the
years ended December 31, 1996 and 1995. Gross profit equals operating revenue
less cost of goods sold and services.
(Stated in millions except per share amounts)
Operating Net Income
------------------------- ------------------
Revenue Gross Profit Amount Per Share
---------- ------------- ------- ---------
Quarters-1996
First $2,028 $ 478 $171 $0.70
Second 2,151 519 196 0.80
Third 2,262 510 229 0.93
Fourth 2,515 614 255 1.04
------ ------ ---- -----
$8,956 $2,121 $851 $3.47
====== ====== ==== =====
Quarters-1995
First $1,762 $ 426 $147 $0.61
Second 1,877 459 167 0.69
Third 1,919 464 169 0.70
Fourth 2,064 469 166 0.69
------ ------ ---- -----
$7,622 $1,818 $649 $2.69
====== ====== ==== =====
Item 9 Disagreements on Accounting and Financial Disclosures
- ------ -----------------------------------------------------
NONE
46
PART III
- --------
Item 10 Directors and Executive Officers of the Registrant
- ------- --------------------------------------------------
See Part I (pages 7 and 8) for Item 10 information regarding Executive
Officers of the Registrant. The information with respect to the remaining
portion of Item 10 is set forth in the first section under the caption,
"Election of Directors", in the Proxy Statement, and is incorporated by
reference.
Item 11 Executive Compensation
- ------- ----------------------
The information set forth under "EXECUTIVE COMPENSATION" (other than that set
forth under the subcaptions "Corporate Performance Graph" and "Compensation
Committee Report on Executive Compensation") in the Proxy Statement is
incorporated by reference.
Item 12 Security Ownership of Certain Beneficial Owners and Management
- ------- --------------------------------------------------------------
The information with respect to Item 12 is set forth in the Proxy Statement
under the caption, "Security Ownership of Certain Beneficial Owners and
Management" and such information is incorporated herein by reference.
Item 13 Certain Relationships and Related Transactions
- ------- ----------------------------------------------
The information with respect to Item 13 is set forth in the last paragraph of
the section headed, "Board and Committees", in the Company's Proxy Statement
dated March 7, 1997, and such information is incorporated herein by reference.
47
PART IV
- --------
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K
- ------- ----------------------------------------------------------------
The following documents are filed as part of this report: Page(s)
(1) Financial Statements
Consolidated Statement of
Income for the three years
ended December 31, 1996 23
Consolidated Balance Sheet
at December 31, 1996 and
1995 24
Consolidated Statement of Cash
Flows for the three years ended
December 31, 1996 25
Consolidated Statement of
Stockholders' Equity for the
three years ended December 31, 1996 26
Notes to Consolidated Financial
Statements 27 through 44
Report of Independent
Accountants 45
Selected Quarterly Financial
Data (Unaudited) 46
Financial statements of 20% - 50% owned companies accounted for under the equity
method and unconsolidated subsidiaries have been omitted because they do not
meet the materiality tests for assets of income.
(2) Financial Statement Schedules
Not required.
(3) The following Exhibits are filed:
---------------------------------
Deed of Incorporation as last
amended on May 21, 1987 Exhibit 3
By-Laws as last amended on
October 20, 1993 Exhibit 3
Schlumberger 1994 Stock Option Plan,
as amended on January 5, 1995* Exhibit 10(a)
48
Schlumberger Limited Supplementary
Benefit Plan, as amended on January 1,
1995* Exhibit 10(b)
Schlumberger 1989 Stock Incentive
Plan, as amended* Exhibit 10(c)
Schlumberger 1979 Stock
Incentive Plan, as amended* Exhibit 10(d)
Schlumberger 1979 Incentive
Stock Option Plan, as amended* Exhibit 10(e)
Schlumberger Restoration Savings Plan* Exhibit 10(f)
*Compensatory plan required to be filed as an exhibit.
Subsidiaries Exhibit 21
Consent of Independent
Accountants Exhibit 23
Powers of Attorney
dated January 24, 1997: Exhibit(s) 24
Don E. Ackerman (a)
D. Euan Baird (b)
Denys Henderson (c)
Andre Levy-Lang (d)
William T. McCormick, Jr. (e)
Didier Primat (f)
Nicolas Seydoux (g)
Linda G. Stuntz (h)
Sven Ullring (i)
Eiji Umene (j)
Additional Exhibit:
Form S-8 Undertakings Exhibit 99
No reports on Form 8-K have been filed during the last quarter of the period
covered by this report.
49
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
SCHLUMBERGER LIMITED
Date: March 31, 1997 By : /s/ Arthur Lindenauer
---------------------
Arthur Lindenauer
Executive Vice President -
Finance; Chief Financial Officer
and Chief Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
Name Title
- ----------------------------- --------------------------
*
_____________________________ Director, Chairman, President
D. Euan Baird and Chief Executive Officer
/s/ Arthur Lindenauer Executive Vice President
- ----------------------------- Finance; Chief Financial Officer
Arthur Lindenauer and Chief Accounting Officer
*
_____________________________ Director
Don E. Ackerman
*
_____________________________ Director
Denys Henderson
*
_____________________________ Director
Andre Levy-Lang
*
_____________________________ Director
William T. McCormick, Jr.
50
Name Title
- ----------------------------- --------------------------
*
_____________________________ Director
Didier Primat
*
_____________________________ Director
Sven Ullring
*
_____________________________ Director
Nicolas Seydoux
*
_____________________________ Director
Linda G. Stuntz
*
_____________________________ Director
Eiji Umene
/s/ David S. Browning March 31, 1997
- -----------------------------
* By David S. Browning
Attorney-in-Fact
51
INDEX TO EXHIBITS Exhibit Page
Deed of Incorporation as last amended
on May 21, 1987, incorporated by reference
to Exhibit 3 to Form 10-K for 1992 3 -
By-Laws as last amended on October 20, 1993,
incorporated by reference to Exhibit 3 to
Form 10-K for 1993 3 -
Schlumberger 1994 Stock Option Plan,
as amended, incorporated by reference to
Exhibit 10(a) to Form 10-K for year 1995 10(a) -
Schlumberger Limited Supplementary Benefit Plan,
as amended, on January 1, 1995 10(b) 53
Schlumberger 1989 Stock Incentive Plan, as
amended, incorporated by reference to
Exhibit 10(c) to Form 10-K for year 1995 10(c) -
Schlumberger 1979 Stock Incentive Plan, as
amended, incorporated by reference to Exhibit
10(c) to Annual Report 10-K filed for year 1992 10(d) -
Schlumberger 1979 Incentive Stock Option Plan,
as amended, incorporated by reference to Exhibit
10(d) to Annual Report 10-K filed for year 1992 10(e) -
Schlumberger Restoration Savings Plan,
incorporated by reference to Exhibit 10(f) to
Form 10-K for year 1995 10(f) -
Subsidiaries 21 77
Consent of Independent Accountants 23 78
Powers of Attorney dated January 24, 1997: 24
D. Euan Baird (a) 79
Don E. Ackerman (b) 80
Denys Henderson (c) 81
Andre Levy-Lang (d) 82
William T. McCormick, Jr. (e) 83
Didier Primat (f) 84
Nicolas Seydoux (g) 85
Linda G. Stuntz (h) 86
Sven Ullring (i) 87
Eiji Umene (j) 88
Additional Exhibits:
Form S-8 Undertakings 99 89
52
EXHIBIT 10(b)
SCHLUMBERGER LIMITED
SUPPLEMENTARY BENEFIT PLAN
(As Amended and Restated Effective January 1, 1995)
I N D E X
Page
----
ARTICLE I DEFINITIONS AND CONSTRUCTION 2
Section:
1.1 Definitions.......................................... 2
Administrative Committee............................. 2
Affiliate............................................ 2
Board of Directors................................... 3
Code................................................. 3
Code Section 401(a)(17) Limitations.................. 3
Code Section 415 Limitations......................... 3
Company.............................................. 3
Employee............................................. 3
Employer............................................. 3
ERISA................................................ 3
Participant.......................................... 3
Plan................................................. 3
Prior Plan........................................... 4
Qualified Defined Benefit Plans...................... 4
Qualified Defined Contribution Plans................. 4
Qualified Plans...................................... 4
STC Plan............................................. 4
STC Plan Benefit..................................... 4
1.2 Gender and Number.................................... 5
1.3 Severability......................................... 5
1.4 Applicable Law....................................... 5
1.5 Plan Not an Employment Contract...................... 5
1.6 Source of Payment.................................... 5
1.7 Tax Withholding...................................... 6
53
Page
----
ARTICLE II PARTICIPATION........................................ 6
ARTICLE III PROGRAM A: RESTORATION OF BENEFITS REDUCED BY
CODE SECTION 401(a)(17).............................. 7
Section:
3.1 Purpose.............................................. 7
3.2 Eligibility.......................................... 7
3.3 Calculation of Restoration Benefit................... 8
ARTICLE IV PROGRAM B: RESTORATION OF BENEFITS REDUCED BY
CODE SECTION 415..................................... 11
Section:
4.1 Purpose.............................................. 11
4.2 Eligibility.......................................... 11
4.3 Calculation of Restoration Benefit................... 11
ARTICLE V VESTING AND FORM OF PAYMENT.......................... 14
Section:
5.1 Vesting.............................................. 14
5.2 Defined Contribution Plan Benefits................... 14
5.3 Defined Benefit Plan Benefits........................ 16
5.4 Non-Duplication of Benefits.......................... 17
5.5 STC Plan Benefits.................................... 17
ARTICLE VI ADMINISTRATION....................................... 17
Section:
6.1 Administration....................................... 17
6.2 Expenses............................................. 18
6.3 Indemnification...................................... 18
6.4 Non-Alienation of Benefits........................... 18
ARTICLE VII MERGER, AMENDMENT AND TERMINATION.................... 19
Section:
7.1 Merger, Consolidation or Acquisition................. 19
7.2 Amendment and Termination............................ 19
7.3 Participating Affiliates............................. 19
SCHLUMBERGER LIMITED
SUPPLEMENTARY BENEFIT PLAN
(As Amended and Restated Effective January 1, 1995)
PREAMBLE
Schlumberger Limited (Schlumberger N.V.), a Netherlands Antilles
corporation (the "Company"), established an unfunded deferred compensation plan
known as the Schlumberger Limited Supplementary Benefit Plan, effective as of
January 1, 1981, and thereafter amended and restated such plan effective January
1, 1990. The amended and restated plan, as amended by the First Amendment
thereto, is referred to herein as the "Prior Plan." The purpose of the Prior
Plan was to restore to eligible key employees of the Company and its
participating subsidiaries and affiliated companies the amount of benefits which
they are unable to receive under the Qualified Plans as a result of the Code
Section 401(a)(17) Limitations, which limit the annual compensation that may be
taken into account in computing benefits under the Qualified Plans, and by the
Code Section 415 Limitations, which limit benefits and contributions under the
Qualified Plans. Effective as of January 1, 1995, the Company hereby amends and
restates the Prior Plan to (i) reflect the withdrawal of Schlumberger Technology
Corporation and its subsidiaries as employers under the Prior Plan, (ii) reflect
that all STC Plan Benefits (as herein defined) will be paid pursuant to the
Schlumberger Technology Corporation Supplementary Benefit Plan, as established
effective as of January 1, 1995, and (iii) incorporate the First Amendment to
the Prior Plan (the "Plan").
Program A of the Plan, set forth in Article III below, is intended to
qualify for the exemptions provided under Title I of ERISA for plans that are
not tax-qualified and that are maintained primarily to provide deferred
compensation for a select group of management or highly compensated employees.
Program B of the Plan, set forth in Article IV below, is intended to qualify for
the exemptions provided under Title I of ERISA for plans that are excess benefit
plans.
NOW, THEREFORE, Schlumberger Limited hereby amends and restates the Prior
Plan, effective as of January 1, 1995, to read as follows:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
----------------------------
1.1 Definitions: Except as otherwise indicated, the terms used in this
-----------
Plan shall have the same meaning as they have under the applicable Qualified
Plans. For purposes of this Plan, the following definitions shall apply:
"ADMINISTRATIVE COMMITTEE" shall mean the Administrative Committee of
the Schlumberger Limited Pension Plan.
"AFFILIATE" shall mean any corporation in which the shares owned or
controlled directly or indirectly by Schlumberger Limited shall represent 50% or
more of the voting power of the issued and outstanding capital stock of such
corporation. In addition to the above, the term "Affiliate" shall include any
corporation or other trade or business which, together with Schlumberger
Limited,
is "under common control" within the meaning of Code Section 414(b) or
(c) as defined in Code Section 1563(a)(1) and modified by Code Section 415(h).
Notwithstanding the foregoing, the term "Affiliate" shall not include
Schlumberger Technology Corporation, a Texas corporation, or any subsidiary of
Schlumberger Technology Corporation.
"BOARD OF DIRECTORS" shall mean the Board of Directors of Schlumberger
Limited.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"CODE SECTION 401(A)(17) LIMITATIONS" shall mean the limitations imposed
by Code Section 401(a)(17).
"CODE SECTION 415 LIMITATIONS" shall mean the limitations imposed by
Code Section 415 without regard to Code Section 415(c)(1)(B).
"COMPANY" shall mean Schlumberger Limited (Schlumberger N.V.), a
Netherlands Antilles corporation.
"EMPLOYEE" shall mean any person who is employed by and carried on the
payroll of an Employer and who meets the requirements for participation in a
Qualified Defined Benefit Plan or Qualified Defined Contribution Plan maintained
by an Employer .
"EMPLOYER" shall mean the Company and any Affiliate which meets
the definition of an Employer in the applicable Qualified Plan.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"PARTICIPANT" shall mean a participant in a Qualified Defined
Contribution Plan or a Qualified Defined Benefit Plan of the Company or any
Affiliate.
"PLAN" shall mean the Schlumberger Limited Supplementary Benefit Plan,
as amended and restated effective January 1, 1995 and set forth herein, and as
amended from time to time.
"PRIOR PLAN" shall mean the Schlumberger Limited Supplementary Benefit
Plan, effective as of January 1, 1990, as thereafter amended.
"QUALIFIED DEFINED BENEFIT PLANS" shall mean the defined benefit plans
of the Company and its Affiliates which are intended to meet the requirements of
ERISA and of Code Sections 401(a) and 501(a).
"QUALIFIED DEFINED CONTRIBUTION PLANS" shall mean the profit-sharing
plans of the Company and its Affiliates which are intended to meet the
requirements of ERISA and of Code Sections 401(a) and 501(a); provided, however,
that the term "Qualified Defined Contribution Plan" shall only include the
portion of such a profit-sharing plan that provides for discretionary employer
contributions and shall not include any portion of such a profit-sharing plan
that is subject to Code Section 401(k) or 401(m).
"QUALIFIED PLANS" shall mean the Qualified Defined Contribution Plans
and Qualified Defined Benefit Plans.
"STC PLAN" shall mean the Schlumberger Technology Corporation
Supplementary Benefit Plan, as established effective January 1, 1995 and as
thereafter amended from time to time.
"STC PLAN BENEFIT" shall mean any benefit accrued pursuant to Section
3.3 or 4.3 of the Prior Plan and unpaid as of January 1, 1995, to the extent
calculated with reference to any Qualified Plan thereunder sponsored or
contributed to by Schlumberger Technology Corporation or any subsidiary thereof.
1.2 Gender and Number: Except when otherwise indicated by the context,
-----------------
any masculine pronoun when used in the Plan shall refer to either male or
female Participants, and the definition of any term in the singular shall also
include the plural.
1.3 Severability: In the event any provision of the Plan shall be held
------------
invalid or illegal for any reason, any illegality or invalidity shall not affect
the remaining parts of the Plan, but the Plan shall be construed and enforced as
if the illegal or invalid provision had never been inserted, and the Company
shall have the privilege and opportunity to correct and remedy questions of
illegality or invalidity by amendment as provided in the Plan.
1.4 Applicable Law: This Plan shall be governed and construed in
--------------
accordance with the laws of the State of New York.
1.5 Plan Not an Employment Contract: The Plan is not an employment
-------------------------------
contract. The receipt of benefits under the Plan does not give to any person
the right to be continued in employment by the Company or an Affiliate, and all
Employees remain subject to change of salary, transfer, change of job,
discipline, layoff, discharge (with or without cause), or any other change of
employment status.
1.6 Source of Payment: The benefits described in this Plan are
-----------------
contractual obligations and liabilities of the applicable Employer to pay
compensation for services in accordance with the terms hereof. All amounts paid
under this Plan shall be paid in cash from the general assets of the applicable
Employer. Benefits shall be reflected on the accounting records of the
Employers, but shall not be construed to create, or require the creation of, a
trust, custodial or escrow account. No special or separate fund need be
established and no segregation of assets need be made to assure the payment of
such benefits. No Participant shall have any right, title, or interest whatever
in or to any investment reserves, accounts, funds or assets that the Company or
the Employers may purchase, establish, or accumulate to aid in providing the
benefits described in this Plan. Nothing contained in this Plan, and no action
taken pursuant to its provisions, shall create or be construed to create a trust
or a fiduciary relationship of any kind between an Employer or the Company and a
Participant or any other person. Neither a Participant nor the beneficiary of a
Participant shall acquire any interest hereunder greater than that of an
unsecured creditor.
1.7 Tax Withholding: The Employer may withhold from a payment any
---------------
federal,
state, or local taxes required by law to be withheld with respect to such
payment and such sums as the Employer may reasonably estimate as necessary to
cover any taxes for which the Employer may be liable and which may be assessed
with regard to such payment.
ARTICLE II
PARTICIPATION
-------------
A Participant entitled to benefits under the Prior Plan shall receive
such benefits, together with any benefits accrued hereunder from and after
January 1, 1995, pursuant to the provisions of this Plan. Notwithstanding the
foregoing, no Participant shall receive STC Plan Benefits hereunder from and
after January 1, 1995, but such benefits shall instead be treated as provided in
Section 5.5. An Employee who becomes eligible for participation in Program A of
this Plan (as described in Section 3.2) from and after January 1, 1995 shall
become a Participant in Program A of this Plan if, as of or after such date, the
benefits he would otherwise receive as a result of his participation in one or
more of the Qualified Plans are reduced as a result of the Code Section
401(a)(17) Limitations. An Employee who becomes eligible for participation in
Program B of this Plan (as described in Section 4.2) from and after January 1,
1995 shall become a Participant in Program B of this Plan if, as of or after
such date, the benefits he would otherwise receive as a result of his
participation in one or more of the Qualified Plans are reduced as a result of
the Code Section 415 Limitations. An Employee who becomes eligible for
participation in both Program A and B of this Plan from and after January 1,
1995 and whose Qualified Plan benefits have been reduced by both the Code
Section 401(a)(17) Limitations and
the Code Section 415 Limitations shall participate in both Program A and B;
provided, however, that nothing in this Plan shall entitle him to receive an
amount that exceeds the total benefits that would have been his due under the
Qualified Plans in the absence of the Code Section 401(a)(17) Limitations and
the Code Section 415 Limitations.
ARTICLE III
PROGRAM A: RESTORATION OF
BENEFITS REDUCED BY CODE SECTION 401(a)(17)
-------------------------------------------
3.1 Purpose: Code Section 401(a)(17) limits the amount of compensation
-------
that may be taken into account under the Qualified Plans. The purpose of
Program A is to restore to Participants in the Qualified Plans any benefits that
would have been available to them under the Qualified Plans had the Code Section
401(a)(17) Limitations not been imposed.
3.2 Eligibility: In order to participate in Program A of this Plan, an
-----------
individual must (a) be a Participant in one of the Qualified Plans and (b) have
experienced a reduction in the benefits he would have received from the
Qualified Plan in which he is a Participant as a result of the Code Section
401(a)(17) Limitations on the amount of annual compensation that may be included
in the calculation of benefits. In addition, this Program is intended solely for
the participation of a select group of management or highly compensated
employees, as those terms are set forth in Section 201(2) of ERISA.
3.3 Calculation of Restoration Benefit: The amount of restoration
----------------------------------
benefits payable to a Participant in Program A of this Plan with reference to
each Qualified Defined Benefit Plan under which the Participant may claim
benefits will be calculated in the manner described in
Subsection (a). The amount of benefits payable to a Participant in Program A of
this Plan with reference to each Qualified Defined Contribution Plan under which
the Participant may claim benefits will be calculated in the manner described in
Subsection (b).
(a) Restoration of Amounts Under Qualified Defined Benefit Plans: When a
------------------------------------------------------------
Participant's defined benefit commences under a Qualified Defined Benefit
Plan, the Company will calculate a benefit in an amount equal to the excess
of (i) over (ii), where (i) is equal to the amount of the defined benefit
which would have been payable under the Qualified Defined Benefit Plan but
for the Code Section 401(a)(17) Limitations and (ii) is equal to the amount
of the benefit actually payable under the Qualified Defined Benefit Plan,
which excess is hereinafter referred to as the "Defined Benefit Restoration
Benefit." The Company shall pay a Defined Benefit Restoration Benefit to
the Participant or to such other person or persons as may be eligible for a
survivor's benefit under the applicable Qualified Defined Benefit Plan, at
such times and in such manner as the benefit is payable pursuant to the
terms of the Qualified Defined Benefit Plan; provided, however, that such a
Defined Benefit Restoration Benefit shall only be paid to or in respect of
a Participant who terminates Active Service after attaining age 55.
(b) Restoration of Amounts Under Qualified Defined Contribution Plans: A
-----------------------------------------------------------------
benefit, hereinafter referred to as the "Defined Contribution Restoration
Benefit," shall be provided to each Participant in Program A whose
discretionary Employer profit-sharing contribution under a Qualified
Defined Contribution Plan was reduced as a result of the Code Section
401(a)(17) Limitations. The Defined Contribution Plan Restoration Benefit
shall be equal to the excess, if any, of (i) over (ii) where (i) is equal
to the amount of the discretionary Employer profit-sharing contribution the
Employer would have made to the Qualified Defined Contribution Plan for a
Plan Year on behalf of the Participant, based on the Participant's
compensation for that Plan Year without regard to the Code Section
401(a)(17) Limitations, and (ii) is equal to the amount of the
discretionary Employer profit-sharing contribution that the Employer
actually paid into the Qualified Defined Contribution Plan on behalf of the
Participant for such Plan Year, after application of the Code Section
401(a)(17) Limitations.
The Defined Contribution Restoration Benefit shall be treated as if it
is actually invested in the applicable Qualified Defined Contribution Plan
and shall be credited with gains and losses at the same time and in the
same manner as amounts which are actually invested under the Qualified
Defined Contribution Plan; provided, however, that any dividend or interest
amounts credited with respect to the Schlumberger Common Stock Fund which
are deemed to be credited to a Participant's benefit under the Plan shall
be characterized instead as if such dividend or interest amounts are
invested in the General Fund. In addition, each
Participant who is deemed to have an amount invested in the Schlumberger
Common Stock Fund with respect to Prior Plan benefits accrued as of March
31, 1991, shall be deemed to have been credited with the equivalent number
of whole shares of common stock of Schlumberger Limited as could have been
purchased on March 31, 1991 based on the amount of the Participant's
Defined Contribution Restoration Benefit which was deemed to be invested in
the Schlumberger Common Stock Fund on March 31, 1991 and the closing price
of the common stock of Schlumberger Limited as listed on the New York Stock
Exchange Composite Transactions Quotations on March 31, 1991. The number of
shares of Schlumberger Limited common stock which are deemed to be held in
such a Participant's account under the Plan shall be frozen effective as of
April 1, 1991 and no additional shares shall be credited to such account.
Any investment election made pursuant to the Qualified Defined Contribution
Plan shall also apply to the Defined Contribution Restoration Benefit and
shall be effective at the same time that such election is applicable to the
Participant's Account under the Qualified Defined Contribution Plan. The
Administrative Committee shall develop such procedures as it deems
necessary for purposes of valuing the Defined Contribution Restoration
Benefits and maintaining records thereof. The Defined Contribution
Restoration Benefit shall be calculated for every Plan Year until the
expiration of the Plan Year during which occurs the earliest of (1) the
Participant's termination of employment for any reason or (2) the
termination of the Qualified Defined Contribution Plan under which the
Participant is receiving benefits. The Defined Contribution Restoration
Benefit shall become payable as provided in Section 5.2 hereof.
ARTICLE IV
PROGRAM B: RESTORATION OF
BENEFITS REDUCED BY CODE SECTION 415
------------------------------------
4.1 Purpose: Code Section 415 limits the amount of benefits available
-------
under a defined benefit plan and the amount of contributions permissible under a
defined contribution plan. The purpose of Program B is to restore to
Participants any Qualified Plan benefits that have been reduced as a result of
the Code Section 415 Limitations.
4.2 Eligibility: An employee is eligible to participate in Program B of
-----------
this Plan if he (a) is a Participant in one of the Qualified Plans and (b) has
experienced a reduction in the amount of benefits he would have received from
the Qualified Plan in which he is a Participant as a result of the Code Section
415 Limitations.
4.3 Calculation of Restoration Benefit: The amount of restoration
----------------------------------
benefits payable to a Participant in Program B of this Plan with reference to
each Qualified Defined Benefit Plan under which the Participant may claim
benefits will be calculated in the manner described in Subsection (a). The
amount of benefits payable to a Participant in Program B of this Plan with
reference to each Qualified Defined Contribution Plan under which the
Participant may claim benefits will be calculated in the manner described in
Subsection (b).
(a) Restoration of Amounts Under Qualified Defined Benefit Plans: When a
------------------------------------------------------------
Participant retires under a Qualified Defined Benefit Plan after attaining
age 55, the Company will calculate a benefit equal to the excess of (i)
over (ii), where (i) is equal to the amount of the defined benefit that
would have been payable under the Qualified Defined Benefit Plan without
regard to the Code Section 415 Limitations and (ii) is equal to the amount
of benefit actually payable under the Qualified Defined Benefit Plan, which
excess is hereinafter referred to as the "Section 415 Defined Benefit
Restoration Benefit." The Company shall pay a Section 415 Defined Benefit
Restoration Benefit to the Participant or to such person or persons as may
be eligible for a survivor's benefit under the applicable Qualified Defined
Benefit Plan, at such times and such manner as the benefit is payable
pursuant to the terms of the Qualified Defined Benefit Plan; provided,
however, that such Section 415 Defined Benefit Restoration Benefit shall
only be paid to or in respect of a Participant who terminates Active
Service after attaining age 55.
(b) Restoration of Amounts Under Qualified Defined Contribution Plans: A
-----------------------------------------------------------------
benefit, hereinafter referred to as the "Section 415 Defined Contribution
Restoration Benefit," will be payable to Participants in Program B whose
Qualified Defined Contribution Plan benefits were reduced as a result of
the Code Section 415 Limitations. The Section 415 Defined Contribution
Restoration
Benefit shall be payable in an amount equal to the excess of (i) over (ii),
where (i) is equal to the amount of the benefit which would have been
payable under the Qualified Defined Contribution Plan without regard to the
Code Section 415 Limitations and (ii) is equal to the amount of the benefit
actually payable under the Qualified Defined Contribution Plan.
The Section 415 Defined Contribution Restoration Benefit shall be
treated as if it is actually invested in the applicable Qualified Defined
Contribution Plan and shall be credited with gains and losses at the same
time and in the same manner as amounts which are actually invested under
the Qualified Defined Contribution Plan; provided, however, that any
dividend or interest amounts credited with respect to the Schlumberger
Common Stock Fund which are deemed to be credited to a Participant's
benefit under the Plan shall be characterized instead as if such dividend
or interest amounts are invested in the General Fund. In addition, each
Participant who is deemed to have an amount invested in the Schlumberger
Common Stock Fund with respect to Prior Plan benefits accrued as of March
31, 1991, shall be deemed to have been credited with the equivalent number
of whole shares of common stock of Schlumberger Limited as could have been
purchased on March 31, 1991 based on the amount of the Participant's
Section 415 Defined Contribution Restoration Benefit which was deemed to be
invested in the Schlumberger Common Stock Fund on March 31, 1991 and the
closing price of the common stock of Schlumberger Limited as listed on the
New York Stock Exchange Composite Transactions Quotations on March 31,
1991. The number of shares of Schlumberger Limited common stock which are
deemed to be held in such a Participant's account under the Plan shall be
frozen effective as of April 1, 1991 and no additional shares shall be
credited to such account. Any investment elections made pursuant to the
Qualified Defined Contribution Plan shall also apply to the Section 415
Defined Contribution Restoration Benefit and shall be effective at the same
time that such election is applicable to the Participant's Account under
the Qualified Defined Contribution Plan. The Administrative Committee shall
develop such procedures as it deems necessary for purposes of valuing the
Section 415 Defined Contribution Restoration Benefits and maintaining
records thereof. The Section 415 Defined Contribution Restoration Benefit
shall be calculated for every Plan Year until the expiration of the Plan
Year during which occurs the earliest of (1) the Participant's termination
of employment for any reason or (2) the termination of the Qualified
Defined Contribution Plan under which the Participant is receiving
benefits. The Section 415 Defined Contribution Restoration Benefit shall
become payable as provided in Section 5.2 hereof.
ARTICLE V
VESTING AND FORM OF PAYMENT
---------------------------
5.1 Vesting: A Participant shall become vested in the benefits payable
-------
under Sections 3.3 and 4.3 hereof at the same time that he becomes vested under
the applicable Qualified Plan; provided, however, that in order to become vested
in the Defined Benefit Restoration Benefit and the Section 415 Defined Benefit
Restoration Benefit, the Participant must attain age 55 before he terminates
Active Service. Notwithstanding the foregoing, a Participant (and his survivor
or Beneficiary) shall have no right to a benefit under this Plan if the
Administrative Committee determines that the Participant engaged in a dishonest
act injurious to the finances or reputation of the Company or any of its
Affiliates or that the Participant has violated the Patent and Confidential
Information Agreement between the Participant and the Company or any of its
Affiliates or any other confidential arrangement involving the Company or any of
its Affiliates to which he is a party or by which he is bound.
5.2 Defined Contribution Plan Benefits: The Defined Contribution
----------------------------------
Restoration Benefit and the Section 415 Defined Contribution Restoration Benefit
(the "Defined Contribution Benefits") shall be payable in the form of a lump
sum. Such lump-sum payment shall be made as soon as practicable following the
end of the Plan Year in which the Participant's termination of Active Service
occurs. In the event of the death of the Participant prior to full payment of
his Defined Contribution Benefits, any such unpaid benefits shall be paid in a
lump sum to the person or persons who are designated as the Participant's
Beneficiaries under the applicable Qualified Defined Contribution Plan (with the
valid consent of the Participant's spouse where required under the Qualified
Defined Contribution Plan). Any such Defined Contribution
Benefits which are paid as a result of the death of the Participant shall be
paid in a lump sum as soon as practicable following the end of the Plan Year in
which the Participant's death occurs.
Notwithstanding the above, a Participant or Beneficiary may request
that the lump-sum payment be made as soon as practicable following the end of
the Plan Quarter in which the Participant's termination of Active Service occurs
(hereinafter referred to as an "Early Distribution"). Any such request for an
Early Distribution under this Plan may only be made if the Participant or
Beneficiary has first elected an Early Distribution under the Qualified Defined
Contribution Plan and, thereby, has agreed to forfeit all discretionary Employer
profit-sharing contributions and reallocated forfeitures under the Qualified
Defined Contribution Plan for the Plan Year in which the Participant's
termination of Active Service occurs. A request for an Early Distribution under
this Plan must be submitted to the Administrative Committee prior to the end of
the Plan Quarter in which the Participant terminates Active Service. An Early
Distribution is subject to the unanimous approval of the Administrative
Committee. When considering a request for an Early Distribution under this Plan,
the Administrative Committee will review all relevant factors, including but not
limited to, a review of (i) the impact of the proposed Early Distribution on the
liquidity of the Company, (ii) the business conditions prevailing at the time of
the proposed Early Distribution, and (iii) the Participant's compliance with the
terms of the Patent and Confidential Information Agreement between the
Participant and the Company or the applicable Affiliate. If the Administrative
Committee does not approve the request for an Early Distribution, the lump-sum
payment will be made after the end of the Plan Year in which the
Participant's termination of Active Service occurs. If the Administrative
Committee approves the request of a Participant or Beneficiary for an Early
Distribution, the Participant or Beneficiary will forfeit all Qualified Defined
Contribution Plan benefits for the entire Plan Year in which the Participant's
termination of Active Service occurs. In the case of the death of a Participant,
if there is more than one designated Beneficiary, all Beneficiaries must request
the Early Distribution and such request must be approved by the Administrative
Committee, otherwise payment will be made after the end of the Plan Year in
which the Participant's death occurs.
5.3 Defined Benefit Plan Benefits: The Defined Benefit Restoration
-----------------------------
Benefit and the Section 415 Defined Benefit Restoration Benefit (the "Defined
Benefits") shall be paid in the same manner and shall commence on the same date
that benefits commence under the applicable Qualified Defined Benefit Plan. In
the event of the death of a Participant either (i) prior to commencement of his
Defined Benefits or (ii) after commencement of such benefits, but prior to final
satisfaction of all such amounts under this Plan, Defined Benefits shall be paid
to an eligible survivor only if a death benefit is also payable to such survivor
under the terms of the applicable Qualified Defined Benefit Plan (including
payment under any optional form of payment elected by the Participant under such
plan). If a Qualified Joint and Survivor Annuity is payable upon the
Participant's death under the applicable Qualified Defined Benefit Plan, then
any Defined Benefits payable under this Plan as a result of the Participant's
death shall also be paid in the form of a Qualified Joint and Survivor Annuity.
Notwithstanding the above, the Administrative
Committee, in its discretion, may determine that certain small monthly amounts
of Defined Benefits shall be paid on a quarterly or annual basis, rather than on
a monthly basis.
5.4 Non-Duplication of Benefits: The purpose of this Plan is to restore
---------------------------
certain benefits which would otherwise be lost under the Qualified Plans. The
benefits payable under this Plan shall be coordinated to ensure that benefit
reductions attributable to the Code Section 401(a)(17) Limitations and the Code
Section 415 Limitations are calculated to prevent duplication of benefits under
this Plan. As pension payment amounts are adjusted annually under the Qualified
Defined Benefit Plans to take into account cost of living adjustments prescribed
by the Secretary of Treasury, the amount of the Section 415 Defined Benefit
Restoration Benefit shall be adjusted annually to reflect such changes.
5.5 STC Plan Benefits: Notwithstanding any provisions of this Plan or the
-----------------
Prior Plan to the contrary, all STC Plan Benefits otherwise payable pursuant
thereto shall not be so paid, but shall be payable instead pursuant to the STC
Plan. To the extent that any STC Plan Benefits are paid pursuant to this Plan,
such benefits shall be deemed for all purposes to have been paid pursuant to the
terms of the STC Plan. Notwithstanding any provision herein to the contrary,
this Plan shall be administered to prevent duplication of any benefits paid
under the STC Plan.
ARTICLE VI
ADMINISTRATION
--------------
6.1 Administration: The Plan shall be administered, construed and
--------------
interpreted by the Administrative Committee. The determinations by the
Administrative Committee as to any
disputed questions arising under the Plan, including questions concerning the
Employees who are eligible to be Participants in the Plan and the amounts of
their benefits under the Plan, and the construction and interpretation by the
Administrative Committee of any provision of the Plan, shall be final,
conclusive and binding upon all persons including Participants, their
Beneficiaries and survivors, the Company, its stockholders and Employees, and
the Employers. A member of the Administrative Committee who is also a
Participant in the Plan must abstain from voting on any matter relating
specifically to his own benefits under the Plan.
6.2 Expenses: The expenses of administering the Plan shall be borne by
--------
the Company.
6.3 Indemnification: The members of the Administrative Committee and its
---------------
agents shall be indemnified and held harmless by the Company against and from
any and all loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by them in connection with or resulting from any claim,
action, suit, or proceeding to which they may be a party or in which they may be
involved by reason of any action taken or failure to act under this Plan and
against and from any and all amounts paid by them in settlement (with the
Company's written approval) or paid by them in satisfaction of a judgement in
any such action, suit, or proceeding. The foregoing provisions shall not be
applicable to any person if the loss, cost, liability or expense is due to such
person's gross negligence or willful misconduct.
6.4 Non-Alienation of Benefits: Except by mutual agreement between the
--------------------------
Company and the Participant, any benefit payable under this Plan shall not be
subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or
charge, whether voluntary, involuntary, by operation of law or otherwise, and
any attempt at such shall be void, and any such benefit shall not in any way be
subject to the debts, contract, liabilities, engagements, or torts of the person
who shall be entitled to such benefit, nor shall it be subject to attachment or
legal process for or against such person.
ARTICLE VII
MERGER, AMENDMENT AND TERMINATION
---------------------------------
7.1 Merger, Consolidation or Acquisition: In the event of a merger,
------------------------------------
consolidation or acquisition where an Employer is not the surviving corporation,
unless the successor or acquiring corporation shall elect to continue and carry
on the Plan, this Plan shall terminate with respect to such Employer, and no
additional benefits shall accrue for the Employees of such Employer. Unpaid
vested benefits which have been accrued up to the date of the merger,
consolidation or acquisition shall be paid as scheduled unless the successor or
acquiring corporation elects to accelerate payment.
7.2 Amendment and Termination: The Board of Directors may amend, modify,
-------------------------
or terminate the Plan in whole or in part at any time. In the event of a
termination of the Plan pursuant to this Section, unpaid vested benefits shall
continue to be an obligation of the Company or other applicable Employer and
shall be paid as scheduled.
7.3 Participating Affiliates: Any Affiliate that meets the definition of
------------------------
a Participating Affiliate or an Employer under a Qualified Plan and that has any
Employees whose benefits
under such Qualified Plan are affected by the Code Section 401(a)(17)
Limitations or the Code Section 415 Limitations shall be deemed to have adopted
this Plan for the benefit of such eligible Employees. Such Affiliate shall be
bound as an Employer by all the terms, provisions, conditions, and limitations
of the Plan and shall compile and submit all information required by the Company
with reference to its Employees who are eligible for participation in the Plan.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officers in a number of copies, each of which
shall be deemed an original but all of which shall constitute one and the same
instrument, this _____ day of ____________________, 199__, but effective as of
the first day of January, 1995.
SCHLUMBERGER LIMITED
By
-----------------------------------------
ATTEST:
- -----------------------------
Exhibit 21
Significant Subsidiaries
Listed below are the significant first tier subsidiaries of the Registrant,
along with the total number of subsidiaries directly or indirectly owned by each
as of December 23,1996. Certain second and third tier subsidiaries, though
included in the numbers, are also shown by name. Ownership is 100% unless
otherwise indicated. The business activities of the subsidiaries have been keyed
as follows: (a) Oilfield Services, (b) Measurement & Systems, (c) Omnes, (d)
Other.
US Non-US
SCHLUMBERGER B.V., Netherlands (d) * 38 (a)
** 85 (b)
*** 4 (c)
9 (d)
SERVICES PETROLIERS SCHLUMBERGER, S.A., France (a)
SCHLUMBERGER INDUSTRIES, France (b)
SCHLUMBERGER CANADA LIMITED, Canada (a) (b)
SCHLUMBERGER PLC, U.K. (d)
SCHLUMBERGER HOLDING GmbH, Germany (a) (b)
AEG ZAHLER GmbH (b)
PRAKLA SEISMOS GmbH, Germany (a)
OMNES B.V., Netherlands (c)
OMNES S.A., France (c)
SCHLUMBERGER ANTILLES N.V., Netherlands Antilles (a) 8 (a)
SEDCO FOREX OFFSHORE INTERNATIONAL LIMITED Netherlands Antilles (a)
SCHLUMBERGER OFFSHORE SERVICES LIMITED Netherlands Antilles (a)
SCHLUMBERGER OILFIELD HOLDINGS LIMITED, B.V.I. (a) **** 137 (a)
2 (d)
DOWELL SCHLUMBERGER CORPORATION, B.V.I. (a)
SCHLUMBERGER HOLDINGS LIMITED, B.V.I. (a) (b) (d)
SCHLUMBERGER OVERSEAS, S.A., Panama (a) (d)
SCHLUMBERGER SURENCO, S.A. Panama (a)
ANADRILL HOLDINGS LIMITED, B.V.I. (a)
SCHLUMBERGER SEISMIC HOLDINGS LIMITED, B.V.I. (a)
SEDCO FOREX HOLDINGS LIMITED, B.V.I. (a)
SCHLUMBERGER TECHNOLOGY CORPORATION, Texas (a) 4 (a)
***** 9 (b)
****** 2 (c))
3 (d)
SCHLUMBERGER TECHNOLOGIES, INC., Delaware (b)
SCHLUMBERGER MALCO, INC. (b)
SCHLUMBERGER INDUSTRIES, INC., Delaware (b)
SCHLUMBERGER COMMUNICATIONS, INC., Delaware (c)
OMNES, Delaware (c)
GECO A.S., Norway (a) 3 (a)
* Includes four less-than 100% owned subsidiaries which are not named.
** Includes four 50% owned subsidiaries and thirteen other less-than 100%
owned subsidiaries which are not named.
*** Includes two 50% owned subsidiaries, one of which is named.
**** Includes two 50% owned subsidiaries and eleven other less-than 100%
owned subsidiaries which are not named.
***** Includes one 50% owned subsidiary which is not named.
****** Includes one 50% owned subsidiary which is named.
77
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (Nos. 2-64089 as amended; 33-21355; 33-35606; 33-47592;
33-86424) of Schlumberger Limited of our report dated January 23, 1997 appearing
on page 45 of this Form 10-K.
/s/ Price Waterhouse LLP
- --------------------------
Price Waterhouse LLP
New York, New York
March 26, 1997
78
Exhibit 24 (a)
Power of Attorney
-----------------
Each of the undersigned, in the capacity or capacities set forth below his
signature as a member of the Board of Directors and/or an officer of
Schlumberger Limited (the "Corporation"), a Netherlands Antilles corporation,
hereby appoints David S. Browning, Arthur Lindenauer and Ellen S. Summer, and
each of them, the attorney or attorneys of the undersigned, with full power of
substitution and revocation, for and in the name, place and stead of the
undersigned to execute and file with the Securities and Exchange Commission the
Form 10-K Annual Report under the Securities Exchange Act of 1934 for the year
ending 1996, and any amendment or amendments to any such Form 10-K Annual
Report, and any agreements, consents or waivers relative thereto, and to take
any and all such other action for and in the name and place and stead of the
undersigned as may be necessary or desirable in connection with any such Form
10-K Annual Report.
/s/ D. Euan Baird
____________________________ ----------------------------
D. Euan Baird Didier Primat
Director Director
Chairman, President and
Chief Executive Officer
- ---------------------------- --------------------------------
Don E. Ackerman Nicolas Seydoux
Director Director
- ---------------------------- --------------------------------
Denys Henderson Linda G. Stuntz
Director Director
- ---------------------------- --------------------------------
Andre Levy-Lang Sven Ullring
Director Director
- ---------------------------- --------------------------------
William T. McCormick, Jr. Eiji Umene
Director Director
Date: January 24, 1997
----------------
79
Exhibit 24 (b)
Power of Attorney
-----------------
Each of the undersigned, in the capacity or capacities set forth below his
signature as a member of the Board of Directors and/or an officer of
Schlumberger Limited (the "Corporation"), a Netherlands Antilles corporation,
hereby appoints David S. Browning, Arthur Lindenauer and Ellen S. Summer, and
each of them, the attorney or attorneys of the undersigned, with full power of
substitution and revocation, for and in the name, place and stead of the
undersigned to execute and file with the Securities and Exchange Commission the
Form 10-K Annual Report under the Securities Exchange Act of 1934 for the year
ending 1996, and any amendment or amendments to any such Form 10-K Annual
Report, and any agreements, consents or waivers relative thereto, and to take
any and all such other action for and in the name and place and stead of the
undersigned as may be necessary or desirable in connection with any such Form
10-K Annual Report.
____________________________ ----------------------------
D. Euan Baird Didier Primat
Director Director
Chairman, President and
Chief Executive Officer
/s/ Don E. Ackerman
- ---------------------------- --------------------------------
Don E. Ackerman Nicolas Seydoux
Director Director
- ---------------------------- --------------------------------
Denys Henderson Linda G. Stuntz
Director Director
- ---------------------------- --------------------------------
Andre Levy-Lang Sven Ullring
Director Director
- ---------------------------- --------------------------------
William T. McCormick, Jr. Eiji Umene
Director Director
Date: January 24, 1997
----------------
Exhibit 24 (c)
Power of Attorney
-----------------
Each of the undersigned, in the capacity or capacities set forth below his
signature as a member of the Board of Directors and/or an officer of
Schlumberger Limited (the "Corporation"), a Netherlands Antilles corporation,
hereby appoints David S. Browning, Arthur Lindenauer and Ellen S. Summer, and
each of them, the attorney or attorneys of the undersigned, with full power of
substitution and revocation, for and in the name, place and stead of the
undersigned to execute and file with the Securities and Exchange Commission the
Form 10-K Annual Report under the Securities Exchange Act of 1934 for the year
ending 1996, and any amendment or amendments to any such Form 10-K Annual
Report, and any agreements, consents or waivers relative thereto, and to take
any and all such other action for and in the name and place and stead of the
undersigned as may be necessary or desirable in connection with any such Form
10-K Annual Report.
- --------------------------- --------------------------------
D. Euan Baird Didier Primat
Director Director
Chairman, President and
Chief Executive Officer
- --------------------------- --------------------------------
Don E. Ackerman Nicolas Seydoux
Director Director
/s/ Denys Henderson
- --------------------------- --------------------------------
Denys Henderson Linda G. Stuntz
Director Director
- --------------------------- --------------------------------
Andre Levy-Lang Sven Ullring
Director Director
- --------------------------- --------------------------------
William T. McCormick, Jr. Eiji Umene
Director Director
Date: January 24, 1997
----------------
Exhibit 24 (d)
Power of Attorney
-----------------
Each of the undersigned, in the capacity or capacities set forth below his
signature as a member of the Board of Directors and/or an officer of
Schlumberger Limited (the "Corporation"), a Netherlands Antilles corporation,
hereby appoints David S. Browning, Arthur Lindenauer and Ellen S. Summer, and
each of them, the attorney or attorneys of the undersigned, with full power of
substitution and revocation, for and in the name, place and stead of the
undersigned to execute and file with the Securities and Exchange Commission the
Form 10-K Annual Report under the Securities Exchange Act of 1934 for the year
ending 1996, and any amendment or amendments to any such Form 10-K Annual
Report, and any agreements, consents or waivers relative thereto, and to take
any and all such other action for and in the name and place and stead of the
undersigned as may be necessary or desirable in connection with any such Form
10-K Annual Report.
- -------------------------- --------------------------------
D. Euan Baird Didier Primat
Director Director
Chairman, President and
Chief Executive Officer
- -------------------------- --------------------------------
Don E. Ackerman Nicolas Seydoux
Director Director
- -------------------------- --------------------------------
Denys Henderson Linda G. Stuntz
Director Director
/s/ Andre Levy-Lang
- -------------------------- --------------------------------
Andre Levy-Lang Sven Ullring
Director Director
- -------------------------- --------------------------------
William T. McCormick, Jr. Eiji Umene
Director Director
Date: January 24, 1997
----------------
Exhibit 24 (e)
Power of Attorney
-----------------
Each of the undersigned, in the capacity or capacities set forth below his
signature as a member of the Board of Directors and/or an officer of
Schlumberger Limited (the "Corporation"), a Netherlands Antilles corporation,
hereby appoints David S. Browning, Arthur Lindenauer and Ellen S. Summer, and
each of them, the attorney or attorneys of the undersigned, with full power of
substitution and revocation, for and in the name, place and stead of the
undersigned to execute and file with the Securities and Exchange Commission the
Form 10-K Annual Report under the Securities Exchange Act of 1934 for the year
ending 1996, and any amendment or amendments to any such Form 10-K Annual
Report, and any agreements, consents or waivers relative thereto, and to take
any and all such other action for and in the name and place and stead of the
undersigned as may be necessary or desirable in connection with any such Form
10-K Annual Report.
- -------------------------------- --------------------------------
D. Euan Baird Didier Primat
Director Director
Chairman, President and
Chief Executive Officer
- -------------------------------- --------------------------------
Don E. Ackerman Nicolas Seydoux
Director Director
- -------------------------------- --------------------------------
Denys Henderson Linda G. Stuntz
Director Director
- -------------------------------- --------------------------------
Andre Levy-Lang Sven Ullring
Director Director
/s/ William T. McCormick, Jr
- -------------------------------- --------------------------------
William T. McCormick, Jr. Eiji Umene
Director Director
Date: January 24, 1997
----------------
Exhibit 24 (f)
Power of Attorney
-----------------
Each of the undersigned, in the capacity or capacities set forth below his
signature as a member of the Board of Directors and/or an officer of
Schlumberger Limited (the "Corporation"), a Netherlands Antilles corporation,
hereby appoints David S. Browning, Arthur Lindenauer and Ellen S. Summer, and
each of them, the attorney or attorneys of the undersigned, with full power of
substitution and revocation, for and in the name, place and stead of the
undersigned to execute and file with the Securities and Exchange Commission the
Form 10-K Annual Report under the Securities Exchange Act of 1934 for the year
ending 1996, and any amendment or amendments to any such Form 10-K Annual
Report, and any agreements, consents or waivers relative thereto, and to take
any and all such other action for and in the name and place and stead of the
undersigned as may be necessary or desirable in connection with any such Form
10-K Annual Report.
/s/ Didier Primat
- ---------------------------- --------------------------------
D. Euan Baird Didier Primat
Director Director
Chairman, President and
Chief Executive Officer
- ---------------------------- --------------------------------
Don E. Ackerman Nicolas Seydoux
Director Director
- ---------------------------- --------------------------------
Denys Henderson Linda G. Stuntz
Director Director
- ---------------------------- --------------------------------
Andre Levy-Lang Sven Ullring
Director Director
- ---------------------------- --------------------------------
William T. McCormick, Jr. Eiji Umene
Director Director
Date: January 24, 1997
----------------
Exhibit 24 (g)
Power of Attorney
-----------------
Each of the undersigned, in the capacity or capacities set forth below his
signature as a member of the Board of Directors and/or an officer of
Schlumberger Limited (the "Corporation"), a Netherlands Antilles corporation,
hereby appoints David S. Browning, Arthur Lindenauer and Ellen S. Summer, and
each of them, the attorney or attorneys of the undersigned, with full power of
substitution and revocation, for and in the name, place and stead of the
undersigned to execute and file with the Securities and Exchange Commission the
Form 10-K Annual Report under the Securities Exchange Act of 1934 for the year
ending 1996, and any amendment or amendments to any such Form 10-K Annual
Report, and any agreements, consents or waivers relative thereto, and to take
any and all such other action for and in the name and place and stead of the
undersigned as may be necessary or desirable in connection with any such Form
10-K Annual Report.
- ---------------------------- --------------------------------
D. Euan Baird Didier Primat
Director Director
Chairman, President and
Chief Executive Officer
/s/ Nicolas Seydoux
- ---------------------------- --------------------------------
Don E. Ackerman Nicolas Seydoux
Director Director
- ---------------------------- --------------------------------
Denys Henderson Linda G. Stuntz
Director Director
- ---------------------------- --------------------------------
Andre Levy-Lang Sven Ullring
Director Director
- ---------------------------- --------------------------------
William T. McCormick, Jr. Eiji Umene
Director Director
Date: January 24, 1997
----------------
Exhibit 24 (h)
Power of Attorney
-----------------
Each of the undersigned, in the capacity or capacities set forth below his
signature as a member of the Board of Directors and/or an officer of
Schlumberger Limited (the "Corporation"), a Netherlands Antilles corporation,
hereby appoints David S. Browning, Arthur Lindenauer and Ellen S. Summer, and
each of them, the attorney or attorneys of the undersigned, with full power of
substitution and revocation, for and in the name, place and stead of the
undersigned to execute and file with the Securities and Exchange Commission the
Form 10-K Annual Report under the Securities Exchange Act of 1934 for the year
ending 1996, and any amendment or amendments to any such Form 10-K Annual
Report, and any agreements, consents or waivers relative thereto, and to take
any and all such other action for and in the name and place and stead of the
undersigned as may be necessary or desirable in connection with any such Form
10-K Annual Report.
- ---------------------------- --------------------------------
D. Euan Baird Didier Primat
Director Director
Chairman, President and
Chief Executive Officer
- ---------------------------- --------------------------------
Don E. Ackerman Nicolas Seydoux
Director Director
/s/ Linda G. Stuntz
- ---------------------------- --------------------------------
Denys Henderson Linda G. Stuntz
Director Director
- ---------------------------- --------------------------------
Andre Levy-Lang Sven Ullring
Director Director
- ---------------------------- --------------------------------
William T. McCormick, Jr. Eiji Umene
Director Director
Date: January 24, 1997
----------------
Exhibit 24 (i)
Power of Attorney
-----------------
Each of the undersigned, in the capacity or capacities set forth below his
signature as a member of the Board of Directors and/or an officer of
Schlumberger Limited (the "Corporation"), a Netherlands Antilles corporation,
hereby appoints David S. Browning, Arthur Lindenauer and Ellen S. Summer, and
each of them, the attorney or attorneys of the undersigned, with full power of
substitution and revocation, for and in the name, place and stead of the
undersigned to execute and file with the Securities and Exchange Commission the
Form 10-K Annual Report under the Securities Exchange Act of 1934 for the year
ending 1996, and any amendment or amendments to any such Form 10-K Annual
Report, and any agreements, consents or waivers relative thereto, and to take
any and all such other action for and in the name and place and stead of the
undersigned as may be necessary or desirable in connection with any such Form
10-K Annual Report.
- ------------------------- --------------------------------
D. Euan Baird Didier Primat
Director Director
Chairman, President and
Chief Executive Officer
- ------------------------- --------------------------------
Don E. Ackerman Nicolas Seydoux
Director Director
- ------------------------- --------------------------------
Denys Henderson Linda G. Stuntz
Director Director
/s/ Sven Ullring
- ------------------------- --------------------------------
Andre Levy-Lang Sven Ullring
Director Director
- ------------------------- --------------------------------
William T. McCormick, Jr. Eiji Umene
Director Director
Date: January 24, 1997
----------------
Exhibit 24 (j)
Power of Attorney
-----------------
Each of the undersigned, in the capacity or capacities set forth below his
signature as a member of the Board of Directors and/or an officer of
Schlumberger Limited (the "Corporation"), a Netherlands Antilles corporation,
hereby appoints David S. Browning, Arthur Lindenauer and Ellen S. Summer, and
each of them, the attorney or attorneys of the undersigned, with full power of
substitution and revocation, for and in the name, place and stead of the
undersigned to execute and file with the Securities and Exchange Commission the
Form 10-K Annual Report under the Securities Exchange Act of 1934 for the year
ending 1996, and any amendment or amendments to any such Form 10-K Annual
Report, and any agreements, consents or waivers relative thereto, and to take
any and all such other action for and in the name and place and stead of the
undersigned as may be necessary or desirable in connection with any such Form
10-K Annual Report.
- ---------------------------- --------------------------------
D. Euan Baird Didier Primat
Director Director
Chairman, President and
Chief Executive Officer
- ---------------------------- --------------------------------
Don E. Ackerman Nicolas Seydoux
Director Director
- ---------------------------- --------------------------------
Denys Henderson Linda G. Stuntz
Director Director
- ---------------------------- --------------------------------
Andre Levy-Lang Sven Ullring
Director Director
/s/ Eiji Umene
- ---------------------------- --------------------------------
William T. McCormick, Jr. Eiji Umene
Director Director
Date: January 24, 1997
----------------
Exhibit 99
For the purposes of complying with the amendments to the rules governing
Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the
undersigned registrant hereby undertakes as follows, which undertaking shall be
incorporated by reference into Registrant's Registration Statements on Form S-8
Nos. 2-64089, as amended; 33-21355; 33-35606; 33-47592 and 33-86424.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
89
