developments. There will be exploration activity around the potential that shale gas offers in many other parts of the
world.
Increased activity coupled with the greater technology needs of higher exploration, deepwater, and tight gas activity –
particularly outside North America – will make 2011 a stronger year for Schlumberger. The importance of risk reduction
and the minimization of drilling cost make the acquisitions of Geoservices and Smith major contributors to our future
growth in this scenario.
The following discussion and analysis of results of operations should be read in conjunction with the
Consolidated
Financial Statements
.
Fourth Quarter 2010 Results
Revenue
Income
before
taxes
Revenue
Income
before
taxes
Fourth Quarter 2010
Third Quarter 2010
(Stated in millions)
OILFIELD SERVICES
North America
$1,604 $ 385
$1,259 $ 219
Latin America
1,050
174
1,071
159
Europe/CIS/Africa
1,783
339
1,734
317
Middle East & Asia
1,491
434
1,402
425
Elims/Other
81
(1)
71
(18)
6,009
1,331
5,537
1,102
WESTERNGECO
560
113
478
40
M-I SWACO
(1)
1,185
149
383
48
SMITH OILFIELD
(1)
729
106
228
27
DISTRIBUTION
(1)
576
21
199
9
9,059
1,720
6,825
1,226
Corporate
(2)
8
(156)
20
(81)
Interest income
(3)
9
10
Interest expense
(4)
(58)
(51)
Charges & credits
(5)
(180)
836
$9,067 $1,335
$6,845 $1,940
(1) The third quarter of 2010 includes one month of post-merger activity following the Smith transaction on August 27, 2010. See Note 4 to the
Consolidated Financial Statements
for further details.
(2) Comprised principally of corporate expenses not allocated to the segments, interest on postretirement medical benefits, stock-based compen-
sation costs, amortization expense associated with intangible assets recorded as a result of the merger with Smith and certain other nonoperating
items.
(3) Excludes interest income included in the segments’ income (fourth quarter 2010 – $1 million; third quarter 2010 – $2 million).
(4) Excludes interest expense included in the segments’ income (fourth quarter 2010 - $2 million; third quarter 2010 – $- million).
(5) Charges and credits are described in detail in Note 3 to the
Consolidated Financial Statements
.
Oilfield Services
Fourth-quarter revenue of $6.01 billion increased 9% sequentially. Sequentially, North America Area revenue
increased 27% on strong activity on land in the US and Canada as well as from the early payout of an IPM gain
share project. In the Middle East & Asia Area, revenue grew on year-end equipment, Schlumberger Information
Solutions (SIS) software sales, and on higher activity in the Iraq, East Asia and Indonesia GeoMarkets. Europe/CIS/
Africa Area revenue increased from stronger activity in the North Sea, West & South Africa, Caspian and Continental
Europe GeoMarkets, as well as from year-end SIS software sales. These increases were partially offset by a decrease in
Latin America Area revenue primarily due to continuing weakness in the Mexico/Central America GeoMarket.
All Technologies recorded sequential growth, most notably Well Services due to continuing strong activity in North
America, and SIS and Artificial Lift from year-end sales. IPM revenue also increased as a result of the early payout on the
IPM project in North America.
19
Part II, Item 7
