Income Tax

6 Months Ended

Jun. 30, 2014

Income Tax

12. Income Tax

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

	(Stated in millions)
	Second Quarter				Six Months
	2014		2013		2014		2013
United States	$	625	$	510	$	1,149	$	931
Outside United States		1,702		2,163		3,254		3,360
	$	2,327	$	2,673	$	4,403	$	4,291

Schlumberger recorded net pretax credits of $664 million during the second quarter of 2013 ($53 million of charges in the US and $717 million of net credits outside the US). These charges are included in the table above and are more fully described in Note 2 — Charges and Credits.

Schlumberger recorded net pretax credits of $572 million during the six months ended June 30, 2013 ($53 million of charges in the US and $625 million of net credits outside the US).

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

	(Stated in millions)
	Jun. 30,				Dec. 31,
	2014				2013
Postretirement benefits	$	242		$	236
Intangible assets		(1,486	)		(1,502	)
Investments in non-US subsidiaries		(278	)		(282	)
Other, net		101			128
	$	(1,421	)	$	(1,420	)

The above deferred tax balances at both June 30, 2014 and December 31, 2013 were net of valuation allowances relating to net operating losses in certain countries of $246 million and $238 million, respectively.

The components of consolidated Taxes on income were as follows:

	(Stated in millions)
	Second Quarter					Six Months
	2014		2013			2014			2013
Current:
United States — Federal	$	131	$	203		$	277		$	319
United States — State		12		20			19			35
Outside United States		355		298			691			546
	$	498	$	521		$	987		$	900
Deferred:
United States — Federal	$	4	$	(42	)	$	11		$	(24	)
United States — State		3		(3	)		2			(3	)
Outside United States		1		(7	)		(26	)		2
Valuation allowance		—		(20	)		—			(20	)
	$	8	$	(72	)	$	(13	)	$	(45	)
	$	506	$	449		$	974		$	855

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

	Second Quarter						Six Months
	2014			2013			2014			2013
US federal statutory rate		35	%		35	%		35	%		35	%
US state income taxes		—			—			—			1
Non-US income taxed at different rates		(11	)		(12	)		(11	)		(12	)
Charges and credits (See Note 2)		—			(6	)		—			(4	)
Other		(2	)		—			(2	)		—
		22	%		17	%		22	%		20	%