Schlumberger Limited (SLB) 10-Q 28 Apr 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information
	3 Months Ended Mar. 31, 2010	Mar. 31, 2010
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-03-31
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Trading Symbol	SLB
Entity Registrant Name	SCHLUMBERGER LTD /NV/
Entity Central Index Key	0000087347
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,192,808,544

CONSOLIDATED STATEMENT OF INCOM

CONSOLIDATED STATEMENT OF INCOME (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Revenue	$5,598	$6,000
Interest & other income, net	64	77
Expenses
Cost of revenue	4,343	4,510
Research & engineering	207	190
General & administrative	144	130
Merger & integration	35
Interest	45	55
Income before taxes	888	1,192
Taxes on income	214	252
Net Income	674	940
Net income attributable to noncontrolling interests	(2)	(2)
Net Income attributable to Schlumberger	672	938
Schlumberger amounts attributable to:
Net Income	$672	$938
Basic earnings per share of Schlumberger:
Net Income	0.56	0.78
Diluted earnings per share of Schlumberger:
Net Income	0.56	0.78
Average shares outstanding:
Basic	1,195	1,196
Assuming dilution	1,215	1,210

CONSOLIDATED BALANCE SHEET

CONSOLIDATED BALANCE SHEET (USD $)
In Millions	Mar. 31, 2010	Dec. 31, 2009
Current Assets
Cash	$271	$243
Short-term investments	3,932	4,373
Receivables less allowance for doubtful accounts (2010-$144; 2009-$160)	5,972	6,088
Inventories	1,851	1,866
Deferred taxes	154	154
Other current assets	885	926
Assets, Current, Total	13,065	13,650
Fixed Income Investments, held to maturity	708	738
Investments in Affiliated Companies	2,360	2,306
Fixed Assets less accumulated depreciation	9,545	9,660
Multiclient Seismic Data	333	288
Goodwill	5,397	5,305
Intangible Assets	840	786
Deferred Taxes	301	376
Other Assets	334	356
Assets, Total	32,883	33,465
Current Liabilities
Accounts payable and accrued liabilities	4,705	5,003
Estimated liability for taxes on income	865	878
Dividend payable	250	253
Long-term debt-current portion	456	444
Short-term borrowings	179	360
Convertible debentures	299	321
Liabilities, Current, Total	6,754	7,259
Long-term Debt	4,052	4,355
Postretirement Benefits	1,623	1,660
Other Liabilities	915	962
Liabilities, Total	13,344	14,236
Equity
Common stock	4,841	4,777
Treasury stock	(5,221)	(5,002)
Retained earnings	22,440	22,019
Accumulated other comprehensive loss	(2,632)	(2,674)
Schlumberger stockholders' equity	19,428	19,120
Noncontrolling interests	111	109
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Total	19,539	19,229
Liabilities and Stockholders' Equity, Total	$32,883	$33,465

CONSOLIDATED BALANCE SHEET (Par

CONSOLIDATED BALANCE SHEET (Parenthetical) (USD $)
In Millions	Mar. 31, 2010	Dec. 31, 2009
Receivables, allowance for doubtful accounts	$144	$160

CONSOLIDATED STATEMENT OF CASH

CONSOLIDATED STATEMENT OF CASH FLOWS (USD $)
In Millions	3 Months Ended Mar. 31, 2010		3 Months Ended Mar. 31, 2009
Cash flows from operating activities:
Net Income	$674		$940
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	620	[1]	609	[1]
Earnings of companies carried at equity, less dividends received	(47)		(55)
Deferred income taxes	33		78
Stock-based compensation expense	47		47
Pension and other postretirement benefits expense	79		86
Pension and other postretirement benefits funding	(64)		(273)
Other non-cash items	2		39
Change in assets and liabilities:
Decrease (increase) in receivables	125	[2]	(429)	[2]
Decrease (increase) in inventories	17	[2]	(118)	[2]
Decrease (increase) in other current assets	39	[2]	(48)	[2]
Decrease in accounts payable and accrued liabilities	(299)	[2]	(285)	[2]
Decrease in estimated liability for taxes on income	(1)	[2]	(42)	[2]
(Decrease) increase in other liabilities	(32)	[2]	23	[2]
Other-net	(204)	[2]	(21)	[2]
NET CASH PROVIDED BY OPERATING ACTIVITIES	989		551
Cash flows from investing activities:
Capital expenditures	(449)		(748)
Multiclient seismic data capitalized	(91)		(48)
Business acquisitions and investments, net of cash acquired	(117)		(12)
Sale (purchase) of investments, net	468		(475)
Other	(5)		66
NET CASH USED BY INVESTING ACTIVITIES	(194)		(1,217)
Cash flows from financing activities:
Dividends paid	(254)		(251)
Proceeds from employee stock purchase plan	84		1
Proceeds from exercise of stock options	31		14
Tax benefits on stock options			4
Stock repurchase program	(337)
Proceeds from issuance of long-term debt			1,287
Repayment of long-term debt	(109)		(521)
Net (decrease) increase in short-term borrowings	(182)		137
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES	(767)		671
Net increase (decrease) in cash before translation effect	28		5
Translation effect on cash			(2)
Cash, beginning of period	243		189
Cash, end of period	$271		$192
[1]Includes multiclient seismic data costs.
[2]Net of the effect of business acquisitions.

CONSOLIDATED STATEMENT OF EQUIT

CONSOLIDATED STATEMENT OF EQUITY (USD $)
In Millions	Common Stock Issued	Common Stock In Treasury	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interests	Total
Beginning Balance at Dec. 31, 2008	$4,668	($4,796)	$19,891	($2,901)	$72	$16,934
Comprehensive income
Net Income			938		2	940
Currency translation adjustments				(118)
Changes in fair value of derivatives				12
Deferred employee benefits liabilities				38
Total comprehensive income						872
Shares sold to optionees, less shares exchanged	(4)	18				14
Shares issued under employee stock purchase plan	9	61				70
Stock-based compensation cost	47					47
Other	(5)					(5)
Dividends declared ($0.21 per share)			(251)			(251)
Tax benefits on stock options	4					4
Ending Balance at Mar. 31, 2009	4,719	(4,717)	20,578	(2,969)	74	17,685
Ending Balance (in shares) at Mar. 31, 2009
Beginning Balance (in shares) at Dec. 31, 2009	1,334	(139)				1,195
Beginning Balance at Dec. 31, 2009	4,777	(5,002)	22,019	(2,674)	109	19,229
Comprehensive income
Net Income			672		2	674
Currency translation adjustments				11
Changes in fair value of derivatives				(22)
Deferred employee benefits liabilities				53
Total comprehensive income						716
Shares sold to optionees, less shares exchanged		31				31
Vesting of restricted stock	(8)	8
Shares issued under employee stock purchase plan	25	59				84
Stock repurchase program		(337)				(337)
Stock-based compensation cost	47					47
Shares issued on conversion of debentures	2	20				22
Other	(2)					(2)
Dividends declared ($0.21 per share)			(251)			(251)
Shares sold to optionees, less shares exchanged (in shares)		1				1
Shares issued under employee stock purchase plan (in shares)		1				1
Stock repurchase plan (in shares)		(5)				(5)
Shares issued on conversion of debebtures (in shares)		1				1
Ending Balance at Mar. 31, 2010	$4,841	($5,221)	$22,440	($2,632)	$111	$19,539
Ending Balance (in shares) at Mar. 31, 2010	1,334	(141)				1,193

1_CONSOLIDATED STATEMENT OF EQU

CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) (USD $)
	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Dividends declared, per share	0.21	0.21

Basis of Presentation

Basis of Presentation
	3 Months Ended Mar. 31, 2010
Basis of Presentation	1. Basis of Presentation The accompanying unaudited consolidated financial statements, which include the accounts of Schlumberger Limited and its subsidiaries (Schlumberger), have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included in the accompanying unaudited financial statements. All intercompany transactions and balances have been eliminated in consolidation. Operating results for the three month period ended March31, 2010 are not necessarily indicative of the results that may be expected for the full year ending December31, 2010. The December31, 2009 balance sheet information has been derived from the audited 2009 financial statements. For further information, refer to the Consolidated Financial Statements and notes thereto, included in the Schlumberger Annual Report on Form 10-K for the year ended December31, 2009, filed with the Securities and Exchange Commission on February5, 2010. Certain items from prior year have been reclassified to conform to the current year presentation.

Recently Announced Transactions

Recently Announced Transactions
	3 Months Ended Mar. 31, 2010
Recently Announced Transactions	2. Recently Announced Transactions On February21, 2010, Schlumberger and Smith International, Inc. (Smith) jointly announced that their Boards of Directors approved a definitive merger agreement in which the companies would combine in a stock-for-stock transaction.Under the terms of the agreement, Smith shareholders will receive 0.6966 shares of Schlumberger in exchange for each Smith share.Schlumberger estimates that it will issue approximately 177million shares of its common stock in this transaction.The value of this transaction using the Schlumbergers stock price at the end of March is approximately $11.2 billion.Such amount excludes Smiths net debt which was $1.2 billion as of December31, 2009. Smith is a leading supplier of premium products and services to the oil and gas exploration and production industry and reported revenues of $8.2 billion in 2009.The transaction is subject to various conditions including Smith stockholder approval and customary regulatory approvals, including the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.It is anticipated that the closing of the transaction will occur in the latter half of 2010. On March, 24, 2010, Schlumberger announced the acquisition of Geoservices, a privately owned oilfield services company specializing in mud logging, slickline and production surveillance operations.The purchase price is approximately $0.9 billion, excluding net debt assumed of approximately $0.1 billion.Geoservices revenue in 2009 was approximately $0.5 billion.This transaction closed on April23, 2010.

Charges

Charges
	3 Months Ended Mar. 31, 2010
Charges	3. Charges Schlumberger recorded the following charges during the first quarter of 2010: Schlumberger incurred $35 million of merger-related costs in connection with the Smith and Geoservices transactions. These costs primarily consist of advisory and legal fees and are classified in Merger integration in the Consolidated Statement of Income. During March 2010, the Patient Protection and Affordable Care Act (PPACA) was signed into law in the United States. Among other things, the PPACA eliminates the tax deductibility of retiree prescription drug benefits to the extent of the Medicare Part D Subsidy that companies, such as Schlumberger, receive. As a result of this change in law, Schlumberger recorded a $40 million charge to adjust its deferred tax assets to reflect the loss of this future tax deduction. This charge is classified in Taxes on income in the Consolidated Statement of Income. The following is a summary of these charges: (Stated in millions) Pretax Tax Net Charges - Merger-related transaction costs $ 35 $ $ 35 - Impact of elimination of tax deduction related to Medicare Part D subsidy 40 40 $ 35 $ 40 $ 75 There were no charges in the first quarter of 2009.

Earnings Per Share

Earnings Per Share
	3 Months Ended Mar. 31, 2010
Earnings Per Share	4. Earnings Per Share The following is a reconciliation from basic earnings per share of Schlumberger to diluted earnings per share of Schlumberger: (Statedinmillions,exceptpershareamounts) 2010 2009 Schlumberger Net Income Average Shares Outstanding Earnings perShare Schlumberger Net Income Average Shares Outstanding Earnings perShare First Quarter Basic $ 672 1,195 $ 0.56 $ 938 1,196 $ 0.78 Assumed conversion of debentures 2 7 2 8 Assumed exercise of stock options 11 4 Unvested restricted stock 2 2 Diluted $ 674 1,215 $ 0.56 $ 940 1,210 $ 0.78 The number of outstanding options to purchase shares of Schlumberger common stock which were not included in the computation of diluted earnings per share, because to do so would have had an antidilutive effect, were as follows: (Statedinmillions) 2010 2009 First Quarter 13 17

Acquisitions

Acquisitions
	3 Months Ended Mar. 31, 2010
Acquisitions	5. Acquisitions During the first quarter of 2010, Schlumberger made certain acquisitions and minority interest investments for $117 million, net of cash acquired, none of which were significant on an individual basis or in the aggregate.

Inventory

Inventory
	3 Months Ended Mar. 31, 2010
Inventory	6. Inventory A summary of inventory follows: (Stated in millions) Mar. 31 2010 Dec. 31 2009 Raw materials field materials $ 1,643 $ 1,646 Work in process 75 74 Finished goods 133 146 $ 1,851 $ 1,866

Fixed Assets

Fixed Assets
	3 Months Ended Mar. 31, 2010
Fixed Assets	7. Fixed Assets A summary of fixed assets follows: (Stated in millions) Mar. 31 2010 Dec. 31 2009 Property, plant equipment $ 21,820 $ 21,505 Less: Accumulated depreciation 12,275 11,845 $ 9,545 $ 9,660 Depreciation expense relating to fixed assets was $547 million and $530 million in the first quarters of 2010 and 2009, respectively.

Multiclient Seismic Data

Multiclient Seismic Data
	3 Months Ended Mar. 31, 2010
Multiclient Seismic Data	8. Multiclient Seismic Data The change in the carrying amount of multiclient seismic data for the three months ended March31, 2010 was as follows: (Statedinmillions) Balance at December31, 2009 $ 288 Capitalized in period 91 Charged to cost of revenue (46 ) Balance at March 31, 2010 $ 333

Goodwill

Goodwill
	3 Months Ended Mar. 31, 2010
Goodwill	9. Goodwill The changes in the carrying amount of goodwill by business segment for the three months ended March31, 2010 were as follows: (Stated in millions) Oilfield Services Western Geco Total Balance at December31, 2009 $ 4,290 $ 1,015 $ 5,305 Additions 70 24 94 Impact of change in exchange rates (2 ) (2 ) Balance at March31, 2010 $ 4,358 $ 1,039 $ 5,397

Intangible Assets

Intangible Assets
	3 Months Ended Mar. 31, 2010
Intangible Assets	10. Intangible Assets Intangible assets principally comprise software, technology and customer relationships. The gross book value and accumulated amortization of intangible assets were as follows: (Stated in millions) Mar. 31, 2010 Dec. 31, 2009 Gross BookValue Accumulated Amortization NetBook Value Gross BookValue Accumulated Amortization NetBook Value Software $ 328 $ 256 $ 72 $ 339 $ 262 $ 77 Technology 595 163 432 527 163 364 Customer Relationships 357 86 271 355 80 275 Other 121 56 65 121 51 70 $ 1,401 $ 561 $ 840 $ 1,342 $ 556 $ 786 Amortization expense charged to income was $28 million during the first quarter of 2010 and $29 million during the same period of 2009. The weighted average amortization period for all intangible assets is approximately 12 years. Based on the net book value of intangible assets at March31, 2010, amortization charged to income for the subsequent five years is estimated to be: remainder of 2010 $91 million; 2011 $109 million; 2012 $90 million; 2013 $73 million; 2014 $68million and 2015 $61 million.

Derivative Instruments and Hedg

Derivative Instruments and Hedging Activities
	3 Months Ended Mar. 31, 2010
Derivative Instruments and Hedging Activities	11. Derivative Instruments and Hedging Activities Schlumberger is exposed to market risks related to fluctuations in foreign currency exchange rates, commodity prices and interest rates. To mitigate these risks, Schlumberger utilizes derivative instruments. Schlumberger does not enter into derivatives for speculative purposes. Foreign Currency Exchange Rate Risk As a multinational company, Schlumberger conducts its business in approximately 80 countries. Schlumbergers functional currency is primarily the US dollar, which is consistent with the oil and gas industry. However, outside the United States, a significant portion of Schlumbergers expenses is incurred in foreign currencies. Therefore, when the US dollar weakens (strengthens) in relation to the foreign currencies of the countries in which Schlumberger conducts business, the US dollar reported expenses will increase (decrease). Schlumberger is exposed to risks on future cash flows to the extent that local currency expenses exceed revenues denominated in local currency that are other than the functional currency. Schlumberger uses foreign currency forward contracts and foreign currency options to provide a hedge against a portion of these cash flow risks. These contracts are accounted for as cash flow hedges, with the effective portion of changes in the fair value of the hedge recorded on the Consolidated Balance Sheet and in Other Comprehensive Income (Loss). Amounts recorded in Other Comprehensive Income (Loss) are reclassified into earnings in the same period or periods that the hedged item is recognized in earnings. The ineffective portion of changes in the fair value of the hedged item is recorded directly to earnings. At March31, 2010, Schlumberger recognized a cumulative net $18 million gain in Equity relating to revaluation of foreign currency forward contracts and foreign currency options designated as cash flow hedges, the majority of which is expected to be reclassified into earnings within the next twelve months. Schlumberger is also exposed to changes in the fair value of assets and liabilities, including certain of its long-term debt, which are denominated in currencies other than the functional currency. Schlumberger uses foreign currency forward contracts and foreign currency options to hedge this exposure as it relates to certain currencies. These contracts are accounted for as fair value hedges with the fair value of the contracts recorded on the Consolidated Balance Sheet and changes in the fair value recognized in the Consolidated Statement of Income along with the change in fair value of the hedged item. At March31, 2010, contracts were outstanding for the US dollar equivalent of $4.3 billion in various foreign currencies. Commodity Price Risk Schlumberger is exposed to the impact of market fluctuations in the price of commodities, such as copper and lead. Schlumberger has entered into forward contracts on these commodities to manage the price risk associated with forecasted purchases. The objective of these contracts is to reduce the variability of cash flows associated with the forecasted purchase of those commodities. These contracts do not q

Long-term Debt

Long-term Debt
	3 Months Ended Mar. 31, 2010
Long-term Debt	12. Long-term Debt A summary of Long-Term Debt follows: (Stated in millions) Mar.31, 2010 Dec. 31, 2009 5.25% Guaranteed Notes due 2013 $ 674 $ 727 6.50% Notes due 2012 649 649 5.875% Guaranteed Bonds due 2011 341 362 4.50% Guaranteed Bonds due 2014 1,348 1,449 3.00% Guaranteed Notes due 2013 450 449 Commercial paper borrowings 200 358 Other variable rate debt 379 360 4,041 4,354 Fair value adjustmenthedging 11 1 $ 4,052 $ 4,355 The fair value adjustment presented above represents changes in the fair value of the portion of Schlumbergers fixed rate debt that is hedged through the use of interest rate swaps. The fair value of Schlumbergers Long-term Debt at March31, 2010 and December31, 2009 was $4.3 billion and $4.6 billion, respectively and was estimated based on quoted market prices. At March31, there were $299 million outstanding of 2.125% Series B Convertible Debentures due June1, 2023. During the first quarter of 2010, approximately $22 million of these debentures were converted by holders into 565,000 shares of Schlumberger common stock. On June1, 2010, holders may require Schlumberger to repurchase their Series B debentures for cash. Accordingly, these debentures are classified within Current Liabilities on the Consolidated Balance Sheet at March31, 2010. The fair value of these Series B debentures at March31, 2010 and December31, 2009 was $705 million and $527 million, respectively. For further information regarding the debentures refer to Note 11 to the Consolidated Financial Statements included in the Schlumberger Annual Report on Form 10-K for the year ended December31, 2009. On April26, 2010, Schlumberger caused a notice to be mailed to holders of the 2.125% Series B Convertible Debentures due 2023 stating that it is calling for redemption on June9, 2010 all of the outstanding 2.125% Series B debentures . The redemption price will be 100% of the principal amount thereof, plus accrued and unpaid interest up to, but not including, the redemption date.

Income Tax

Income Tax
	3 Months Ended Mar. 31, 2010
Income Tax	13. Income Tax Income from Continuing Operations before taxes which were subject to US and non-US income taxes was as follows: (Statedinmillions) First Quarter 2010 2009 United States $ 61 $ 103 Outside United States 827 1,089 $ 888 $ 1,192 The components of net deferred tax assets were as follows: (Statedinmillions) Mar.31 2010 Dec.31 2009 Postretirement benefits, net $ 403 $ 447 Multiclient seismic data 111 104 Intangible assets (152 ) (122 ) Other, net 93 101 $ 455 $ 530 The above deferred tax assets at March31, 2010 and December31, 2009 are net of valuation allowances relating to net operating losses in certain countries of $239 million and $251 million, respectively. The deferred tax assets are also net of valuation allowances relating to a capital loss carryforward of $16 million at March31, 2010 ($17 million at December31, 2009), which expires in 2010 and a foreign tax credit carryforward of $30 million at March31, 2010 ($30 million at December31, 2009) which expires in 2012. The components of consolidated Taxes on income were as follows: (Statedinmillions) First Quarter 2010 2009 Current: United States - Federal $ 22 $ (35 ) United States - State 3 (1 ) Outside United States 156 210 $ 181 $ 174 Deferred: United States - Federal $ 42 $ 74 United States - State 2 4 Outside United States (10 ) 1 Valuation allowance (1 ) (1 ) $ 33 $ 78 Consolidated taxes on income $ 214 $ 252 A reconciliation of the US statutory federal tax rate of 35% to the consolidated effective income tax rate follows: FirstQuarter 2010 2009 US federal statutory rate 35 % 35 % Non-US income taxed at different rates (16 ) (13 ) Effect of equity method investment (1 ) Charges (See Note 3) 5 Effective income tax rate 24 % 21 %

Contingencies

Contingencies
	3 Months Ended Mar. 31, 2010
Contingencies	14. Contingencies In 2007, Schlumberger received an inquiry from the United States Department of Justice (DOJ) related to the DOJs investigation of whether certain freight forwarding and customs clearance services of Panalpina, Inc., and other companies provided to oil and oilfield service companies, including Schlumberger, violated the Foreign Corrupt Practices Act. Schlumberger is cooperating with the DOJ and is currently continuing its own investigation with respect to these services. In 2009, Schlumberger learned that United States officials began a grand jury investigation and an associated regulatory inquiry, both related to certain Schlumberger operations in specified countries that are subject to United States trade and economic sanctions. Schlumberger is cooperating with the governmental authorities and is currently unable to predict the outcome of these matters. Schlumberger and its subsidiaries are party to various other legal proceedings from time to time. A liability is accrued when a loss is both probable and can be reasonably estimated. At this time the ultimate disposition of these proceedings is not determinable and therefore, it is not possible to estimate the amount of loss or range of possible losses that might result from an adverse judgment or settlement in any of these matters. However, in the opinion of management, any liability that might ensue would not be material in relation to Schlumbergers consolidated liquidity, financial position or future results of operations.

Segment Information

Segment Information
	3 Months Ended Mar. 31, 2010
Segment Information	15. Segment Information Schlumberger operates two business segments: Oilfield Services and WesternGeco. (Stated in millions) First Quarter 2010 First Quarter 2009 Revenue Income before taxes Revenue Income before taxes Oilfield Services North America $ 1,033 $ 83 $ 1,191 $ 163 Latin America 1,057 185 1,029 203 Europe/CIS/Africa 1,625 294 1,803 467 Middle East Asia 1,322 410 1,375 456 Other 60 (3 ) 41 (34 ) 5,097 969 5,439 1,255 WesternGeco 472 67 551 55 Corporate Other 29 (82 ) 10 (91 ) Interest Income (1) 13 14 Interest Expense (2) (44 ) (41 ) Charges (35 ) $ 5,598 $ 888 $ 6,000 $ 1,192 1. Excludes interest income included in the segment results ($3 million in 2010; $4 million in 2009). 2. Excludes interest expense included in the segment results ($1 million in 2010; $14 million in 2009).

Pension and Other Postretiremen

Pension and Other Postretirement Benefits
	3 Months Ended Mar. 31, 2010
Pension and Other Postretirement Benefits	16. Pension and Other Postretirement Benefits Net pension cost for the Schlumberger pension plans included the following components: (Statedinmillions) First Quarter US Intl 2010 2009 2010 2009 Service costbenefits earned during period $ 15 $ 16 $ 14 $ 14 Interest cost on projected benefit obligation 36 27 52 45 Expected return on plan assets (48 ) (31 ) (58 ) (40 ) Amortization of net loss 16 9 5 Amortization of prior service cost 1 2 28 31 $ 20 $ 23 $ 41 $ 50 During the first quarter of 2010, Schlumberger made contributions to its international defined benefit pension plans of $38 million. The net periodic benefit cost for the Schlumberger US postretirement medical plan included the following components: (Stated in millions) First Quarter 2010 2009 Service costbenefits earned during period $ 5 $ 7 Interest cost on accumulated postretirement benefit obligation 15 12 Expected return on plan assets (1 ) (1 ) Amortization of prior service cost (5 ) (7 ) Amortization of net loss 4 3 $ 18 $ 14 During the first quarter of 2010, Schlumberger made a contribution to the US postretirement medical plan of $26 million.