Charges

3 Months Ended

Jun. 30, 2011

2. Charges

Schlumberger recorded the following charges during the first six months of 2011 and 2010:

2011

Second quarter of 2011:

	•		Schlumberger made a $50 million grant to the Schlumberger Foundation to support the Foundation’s Faculty for the Future program. This program supports talented women scientists from the developing world by helping them pursue advanced graduate studies in scientific disciplines at leading universities worldwide. This $50 million charge ($40 million after-tax) is classified in General & administrative in the Consolidated Statement of Income.

	•		Schlumberger recorded $32 million of pretax merger and integration-related charges ($24 million after-tax) in connection with the acquisitions of Smith International, Inc. (“Smith”) and Geoservices. This amount is classified in Merger & integration in the Consolidated Statement of Income.

First quarter of 2011:

	•		Schlumberger recorded $34 million of pretax merger and integration-related charges ($28 million after-tax) in connection with the acquisitions of Smith and Geoservices. This amount is classified in Merger & integration in the Consolidated Statement of Income.

			The following is a summary of these charges:


	(Stated in millions)						Consolidated Statement
	Pretax		Tax		Net		of Income Classification
Merger-related integration costs	$	66	$	14	$	52	Merger & integration
Donation to the Schlumberger Foundation		50		10		40	General & administrative

	$	116	$	24	$	92

2010

First quarter of 2010:

	•		Schlumberger incurred $35 million of merger-related costs in connection with the Smith and Geoservices transactions. These costs primarily consisted of legal and other advisory fees.

	•		During March 2010, the Patient Protection and Affordable Care Act (“PPACA”) was signed into law in the United States. Among other things, the PPACA eliminated 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.

			The following is a summary of these charges:


	(Stated in millions)							Consolidated Statement
	Pretax		Tax			Net		of Income Classification
Merger-related transaction costs	$	35	$	—		$	35	Merger & integration
Impact of elimination of tax deduction related to Medicare Part D subsidy		—		(40	)		40	Taxes on income

	$	35	$	(40	)	$	75

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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