A significant portion of our revenue is derived from our non-United States operations, which exposes us to
risks inherent in doing business in each of the approximately 80 countries in which we operate.
Our non-United States operations accounted for approximately 76% of our consolidated revenue in 2010, 84% in 2009
and 78% in 2008. Operations in countries other than the United States are subject to various risks, including:
k
unsettled political and economic conditions in certain areas;
k
exposure to possible expropriation of our assets or other governmental actions;
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social unrest, acts of terrorism, war or other armed conflict;
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confiscatory taxation or other adverse tax policies;
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deprivation of contract rights;
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trade restrictions or embargoes imposed by the United States or other countries;
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restrictions under the United States Foreign Corrupt Practices Act or similar legislation in other countries;
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restrictions on the repatriation of income or capital;
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currency exchange controls;
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inflation; and
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currency exchange rate fluctuations and devaluations.
In addition, we are subject to risks associated with our operations in countries, including Iran, Syria, Sudan and Cuba,
that are subject to trade and economic sanctions or other restrictions imposed by the United States or other
governments or organizations. United States law enforcement authorities are currently conducting a grand jury
investigation and an associated regulatory inquiry related to our operations in certain of these countries. Additionally, in
2009 prior to its merger with Schlumberger, Smith received an administrative subpoena with respect to its historical
business practices in certain countries that are subject to United States trade and economic sanctions. If any of the risks
described above materialize, or if any governmental investigation results in criminal or civil penalties or other remedial
measures, it could reduce our earnings and our cash available for operations.
We are also subject to risks related to investment in our common stock in connection with certain US state divestment
or investment limitation legislation applicable to companies with operations in these countries, and similar actions by
some private investors, which could adversely affect the market price of our common stock.
Our merger with Smith will continue to be dilutive to our earnings per share in the near term, which may nega-
tively affect the market price of our common stock.
Our merger with Smith will continue to be dilutive to earnings per share in the near term. Future events and
conditions could decrease or delay any accretion, result in dilution or cause greater dilution than is currently expected,
including adverse changes in:
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energy market conditions;
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commodity prices for oil, natural gas and natural gas liquids;
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production levels;
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reserve levels;
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operating results;
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competitive conditions;
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laws and regulations affecting the energy business;
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capital expenditure obligations; and
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general economic conditions.
8
Part I, Item 1A
