(Stated in millions)
2011
2010
Revenue
Income
before
taxes
Revenue
Income
before
taxes
Oilfield Services
North America
$12,273 $3,051
$ 6,729 $1,145
Latin America
6,453 1,072
4,985
808
Europe/CIS/Africa
9,761 1,489
8,024 1,457
Middle East & Asia
8,065 1,868
6,650 1,764
Eliminations & other
407 (175)
285
(103)
36,959 7,305
26,673 5,071
Distribution
2,621
103
774
29
Eliminations
(40)
–
–
–
2,581
103
774
29
Corporate & other
(1)
– (592)
– (405)
Interest income
(2)
–
37
–
43
Interest expense
(3)
– (290)
– (202)
Charges & credits
(4)
– (225)
–
620
$39,540 $6,338
$27,447 $5,156
(1)
Comprised principally of corporate expenses not allocated to the segments, interest on postretirement medical benefits, stock-based
compensation costs, amortization expense associated with intangible assets recorded as a result of the acquisition of Smith and certain other
nonoperating items.
(2)
Excludes interest income included in the segments’ income (2011 – $3 million; 2010 – $7 million).
(3)
Excludes interest expense included in the segments’ income (2011 – $8 million; 2010 – $5 million).
(4)
Charges and credits are described in detail in Note 3 to the
Consolidated Financial Statements
.
Oilfield Services
Full-year 2011 revenue of $37.0 billion was 39% higher than 2010 primarily reflecting the acquisition of Smith on
August 27, 2010 as well as the significantly improved activity, pricing and asset efficiency for Well Services
Technologies in North America as the market transitioned to liquid-rich plays demanding increasing service intensity
in drilling and completing horizontal wells.
Year-on-year pretax operating margin increased 75 bps to 19.8% largely due to the improved pricing and asset
efficiency for Well Services Technologies in North America and the resumption of higher-margin activity in the US Gulf
of Mexico. However, the margin expansion was tempered by activity disruptions from the geopolitical unrest in North
Africa and in the Middle East during the first quarter of 2011.
Reservoir Characterization
Revenue of $9.93 billion was 7% higher than the same period last year on stronger Wireline activity, higher
WesternGeco marine and multiclient sales, and increased SIS software sales.
Year-on-year, pretax operating margin decreased 23 bps to 24.7% led by margin declines in Wireline and Testing
Services, largely due to the revenue mix, as well as the impact of geopolitical events which prevailed during the first
quarter of 2011. The margin decline however was partially offset by a favorable WesternGeco multiclient sales mix and
improved marine vessel utilization.
Drilling
Revenue of $14.25 billion was 73% higher than the same period last year reflecting the acquisitions of Smith, in
August 2010, and Geoservices, in April 2010, partially offset by a decrease in IPM activities in Mexico. The ramp-up of
IPM projects in Iraq also contributed to the revenue increase.
Year-on-year, pretax operating margin decreased 24 bps to 16.0% largely due to the addition of the Smith and
Geoservices activities as well as the effects of the geopolitical events.
20
