Schlumberger 2010 Annual Report - page 62

Schlumberger generally does not provide income taxes relating to undistributed earnings, as the earnings either
would not be taxable when remitted or are considered to be indefinitely reinvested.
Concentration of Credit Risk
Schlumberger’s assets that are exposed to concentrations of credit risk consist primarily of cash, short-term
investments, fixed income investments held to maturity, receivables from clients and derivative financial instruments.
Schlumberger places its cash, short-term investments and fixed income investments held to maturity with financial
institutions and corporations, and limits the amount of credit exposure with any one of them. Schlumberger regularly
evaluates the creditworthiness of the issuers in which it invests. The receivables from clients are spread over many
countries and customers. Schlumberger maintains an allowance for uncollectible accounts receivable based on
expected collectibility and performs ongoing credit evaluations of its customers’ financial condition. By using derivative
financial instruments to hedge exposure to changes in exchange rates and commodity prices, Schlumberger exposes
itself to some credit risk. Schlumberger minimizes this credit risk by entering into transactions with high-quality
counterparties, limiting the exposure to each counterparty and monitoring the financial condition of its counterparties.
Research & Engineering
All research and engineering expenditures are expensed as incurred.
Earnings per Share
Basic earnings per share is calculated by dividing net income by the weighted average number of common shares
outstanding during the year. Diluted earnings per share is calculated by first adding back to net income the interest
expense on any outstanding convertible debentures and then dividing this adjusted net income attributable to
Schlumberger by the sum of (i) unvested restricted stock units; and (ii) the weighted average number of common
shares outstanding assuming dilution. The weighted average number of common shares outstanding assuming dilution
assumes (a) that all stock options which are in the money are exercised at the beginning of the period and that the
proceeds are used by Schlumberger to purchase shares at the average market price for the period, and (b) the
conversion of any outstanding convertible debentures.
Part II, Item 8
1...,52,53,54,55,56,57,58,59,60,61 63,64,65,66,67,68,69,70,71,72,...108
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