A reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions for the
years ended December 31, 2012, 2011 and 2010 is as follows:
(Stated in millions)
2012
2011 2010
Balance at beginning of year
$1,353
$1,338 $1,026
Additions based on tax positions related to the current year
156
153
190
Additions for tax positions of prior years
98
49
8
Additions related to acquisitions
–
48
288
Impact of changes in exchange rates
12
(18)
(3)
Settlements with tax authorities
(17)
(77)
(36)
Reductions for tax positions of prior years
(103)
(102)
(99)
Reductions due to the lapse of the applicable statute of limitations
(46)
(38)
(36)
Balance at end of year
$1,453
$1,353 $1,338
The amounts above exclude accrued interest and penalties of $250 million, $225 million and $210 million at
December 31, 2012, 2011 and 2010 respectively.
Schlumberger classifies interest and penalties relating to uncertain tax positions within
Taxes on income
in the
Consolidated Statement of Income
. During 2012, 2011 and 2010, Schlumberger recognized approximately $25 million,
$15 million and $42 million in interest and penalties, respectively.
The following table summarizes the tax years that are either currently under audit or remain open and subject to
examination by the tax authorities in the most significant jurisdictions in which Schlumberger operates:
Brazil
2006 – 2012
Canada
2005 – 2012
Mexico
2007 – 2012
Norway
2003 – 2012
Russia
2009 – 2012
Saudi Arabia
2001 – 2012
United Kingdom
2009 – 2012
United States
2008 – 2012
In certain of the jurisdictions noted above, Schlumberger operates through more than one legal entity, each of which
has different open years subject to examination. The table above presents the open years subject to examination for
the most material of the legal entities in each jurisdiction. Additionally, it is important to note that tax years are
technically not closed until the statute of limitations in each jurisdiction expires. In the jurisdictions noted above, the
statute of limitations can extend beyond the open years subject to examination.
15. Leases and Lease Commitments
Total rental expense was $1.9 billion in 2012, $1.6 billion in 2011, and $1.2 billion in 2010. Future minimum rental
commitments under noncancelable operating leases for each of the next five years are as follows:
(Stated in millions)
2013
$ 371
2014
250
2015
192
2016
154
2017
129
Thereafter
519
$1,615
16. Contingencies
In 2007, Schlumberger received an inquiry from the United States Department of Justice (“DOJ”) related to the
DOJ’s investigation of whether certain freight forwarding and customs clearance services of Panalpina, Inc., and other
companies provided to oil and oilfield service companies, including Schlumberger, violated the Foreign Corrupt
Practices Act. In October 2012, Schlumberger was advised by the DOJ that it has closed its inquiry as it relates to
Schlumberger.
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