Other
Research & engineering
and
General & administrative
expenses, as a percentage of
Revenue
, were as follows:
2012
2011 2010
Research & engineering
2.8%
2.9% 3.4%
General & administrative
1.0%
1.1% 1.2%
Although
Research & engineering
decreased as a percentage of revenue in 2011 as compared to 2010, it increased in
absolute dollars by $154 million. This increase in absolute dollars was driven in large part by the impact of the Smith
acquisition.
Income Taxes
The Schlumberger effective tax rate was 24.0% in 2012, 24.2% in 2011, and 17.1% in 2010.
The Schlumberger effective tax rate is sensitive to the geographic mix of earnings. When the percentage of pretax
earnings generated outside of North America increases, the Schlumberger effective tax rate will generally decrease.
Conversely, when the percentage of pretax earnings generated outside of North America decreases, the Schlumberger
effective tax rate will generally increase.
The effective tax rate for both 2011 and 2010 was impacted by the charges and credits described in Note 3 to the
Consolidated Financial Statements
. Excluding the impact of these charges and credits, the effective tax rate in 2011
was 23.8% compared to 20.5% in 2010. This increase in the effective tax rate, excluding the impact of the charges and
credits, was primarily attributable to the fact that Schlumberger generated a larger proportion of its pretax earnings in
North America in 2011 as compared to 2010 as a result of improved market conditions and the effect of a full year’s
activity from the acquired Smith businesses.
Charges and Credits
Schlumberger recorded significant charges and credits in continuing operations during 2012, 2011 and 2010. These
charges and credits, which are summarized below, are more fully described in Note 3 to the
Consolidated Financial
Statements
.
The following is a summary of the 2012 charges and credits:
(Stated in millions)
Pretax Tax Net
Consolidated Statement
of Income Classification
Merger-related integration costs
$128 $16 $112
Merger & integration
Workforce reduction
33
6
27
Restructuring & other
$161 $22 $139
The following is a summary of the 2011 charges and credits:
(Stated in millions)
Pretax Tax Net
Consolidated Statement
of Income Classification
Merger-related integration costs
$113 $18 $ 95
Merger & integration
Donation to the Schlumberger Foundation
50
10
40
General & administrative
Write-off of assets in Libya
60
– 60
Cost of revenue
$223 $28 $195
23
