Income Tax

9 Months Ended

Sep. 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)
	Third Quarter				Nine Months
	2011		2010		2011		2010
United States	$	651	$	168	$	1,575	$	312
Outside United States		1,066		1,772		2,878		3,510
	$	1,717	$	1,940	$	4,453	$	3,822

During the third quarter of 2011, Schlumberger recorded pretax charges of $27 million ($23 million in the US and $4 million outside of the US).

During the third quarter of 2010, Schlumberger recorded a net pretax credit of $836 million, consisting of net charges in the US of $63 million and a net pretax credit of $899 million outside of the US.

Schlumberger recorded pretax charges of $143 million during the nine months ended September 30, 2011 ($91 million in the US and $52 million outside of the US).

During the nine months ended September 30, 2010, Schlumberger recorded net pretax charges in the US of $63 million and a net pretax credit of $864 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)
	Sept. 30,			Dec. 31,
	2011			2010
Postretirement benefits, net	$	273		$	327
Intangible assets		(1,523	)		(1,674	)
Investments in non-US subsidiaries		(325	)		(353	)
Other, net		61			115
	$	(1,514	)	$	(1,585	)

The above deferred tax balances at September 30, 2011 and December 31, 2010 were net of valuation allowances relating to net operating losses in certain countries of $274 million and $263 million, respectively.

The components of consolidated Taxes on income were as follows:

	(Stated in millions)
	Third Quarter						Nine Months
	2011			2010			2011			2010
Current:
United States — Federal	$	102		$	(60	)	$	553		$	(12	)
United States — State		16			4			28			10
Outside United States		224			150			458			456
	$	342		$	94		$	1,039		$	454
Deferred:
United States — Federal	$	86		$	96		$	(39	)	$	135
United States — State		4			3			(7	)		5
Outside United States		(20	)		16			93			16
Valuation allowance		(2	)		—			(7	)		(10	)
	$	68		$	115		$	40		$	146
Consolidated taxes on income	$	410		$	209		$	1,079		$	600

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

	Third Quarter						Nine 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	)		(12	)		(10	)		(14	)
Charges (See Note 2)		—			(10	)		—			(4	)
Other		(2	)		(2	)		(1	)		(1	)
Effective income tax rate		24	%		11	%		24	%		16	%