Income Tax

3 Months Ended

Jun. 30, 2011

Income Tax [Abstract]

Income Tax

12. Income Tax

Income from continuing operations before taxes which was subject to US and non-US income taxes was as follows:

	(Stated in millions)
	Second Quarter				Six Months
	2011		2010		2011		2010
United States	$	559	$	83	$	924	$	144
Outside United States		939		910		1,812		1,738
	$	1,498	$	993	$	2,736	$	1,882

Schlumberger recorded pretax charges of $82 million ($44 million in the US and $38 million outside of the US) during the second quarter of 2011.

Schlumberger recorded $116 million of pretax charges during the six months ended June 30, 2011 ($68 million in the US and $48 million outside of the US) and $34 million of pretax charges during the three months ended March 31, 2011.

During the first quarter of 2010, Schlumberger recorded net pretax charges of $35 million outside of the US.

These charges are included in the table above and are more fully described in Note 2 — Charges.

The components of net deferred tax assets (liabilities) were as follows:

	(Stated in millions)
	Jun. 30,			Dec. 31,
	2011			2010
Postretirement benefits, net	$	339		$	327
Intangible assets		(1,453	)		(1,674	)
Investments in non-US subsidiaries		(339	)		(353	)
Other, net		155			115
	$	(1,298	)	$	(1,585	)

The above deferred tax balances at June 30, 2011 and December 31, 2010 were net of valuation allowances relating to net operating losses in certain countries of $276 million and $263 million, respectively.

The components of consolidated Taxes on income were as follows:

	(Stated in millions)
	Second Quarter						Six Months
	2011			2010			2011			2010
Current:
United States — Federal	$	296		$	26		$	451		$	48
United States — State		(4	)		3			12			6
Outside United States		170			150			234			306
	$	462		$	179		$	697		$	360
Deferred:
United States — Federal	$	(96	)	$	(3	)	$	(125	)	$	39
United States — State		(14	)		—			(11	)		2
Outside United States		20			10			113			—
Valuation allowance		2			(9	)		(5	)		(10	)
	$	(88	)	$	(2	)	$	(28	)	$	31
Consolidated taxes on income	$	374		$	177		$	669		$	391

A reconciliation of the US statutory federal tax rate of 35% to the consolidated effective income tax rate follows:

	Second Quarter						Six Months
	2011			2010			2011			2010
US federal statutory rate		35	%		35	%		35	%		35	%
US state income taxes		(1	)		—			—			—
Non-US income taxed at different rates		(10	)		(14	)		(11	)		(14	)
Charges (See Note 2)		—			—			—			2
Other		1			(3	)		—			(2	)
Effective income tax rate		25	%		18	%		24	%		21	%