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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | 14. Income Taxes Schlumberger operates in more than 100 tax jurisdictions, where statutory tax rates generally vary from 0% to 35%. Income (loss) before taxes subject to United States and non-United States income taxes was as follows:
(Stated in millions) |
| 2018 |  |  | 2017 |  |  | 2016 |
United States | $ | (55 | ) |  | $ | (841 | ) |  | $ | (3,103 | )
Outside United States |  | 2,679 |  |  |  | (342 | ) |  |  | 1,198 |
| $ | 2,624 |  |  | $ | (1,183 | ) |  | $ | (1,905 | )
Schlumberger recorded net pretax charges of $141 million in 2018 ($102 million in the US and $39 million outside the US); $3.764 billion in 2017 ($533 billion in the US and $3.231 billion outside the US); and $3.820 billion in 2016 ($1.848 billion in the US and $1.972 billion outside the US). These charges and credits are included in the table above and are more fully described in Note 3 – Charges and Credits. The components of net deferred tax assets (liabilities) were as follows:
(Stated in millions) |
| 2018 |  |  | 2017 |
Postretirement benefits | $ | 122 |  |  | $ | 135 |
Intangible assets |  | (2,110 | ) |  |  | (2,186 | )
Investments in non-US subsidiaries |  | (223 | ) |  |  | (224 | )
Fixed assets, net |  | (140 | ) |  |  | (55 | )
Inventories |  | 111 |  |  |  | 126 |
Foreign tax credits |  | 343 |  |  |  | 118 |
Other, net |  | 456 |  |  |  | 436 |
| $ | (1,441 | ) |  | $ | (1,650 | )
The above deferred tax balances at December 31, 2018 and 2017 were net of valuation allowances relating to net operating losses in certain countries of $87 million and $119 million, respectively. Schlumberger generally does not provide for taxes related to its undistributed earnings because such earnings either would not be taxable when remitted or they are considered to be indefinitely reinvested. Taxes that would be incurred if the undistributed earnings of other Schlumberger subsidiaries were distributed to their ultimate parent company would not be material. The components of Tax expense (benefit) were as follows:
(Stated in millions) |
| 2018 |  |  | 2017 |  |  | 2016 |
Current: |  |  |  |  |  |  |  |  |  |  |
United States-Federal | $ | 124 |  |  | $ | (170 | ) |  | $ | (511 | )
United States-State |  | (50 | ) |  |  | 57 |  |  |  | (36 | )
Outside United States |  | 618 |  |  |  | 703 |  |  |  | 648 |
|  | 692 |  |  |  | 590 |  |  |  | 101 |
Deferred: |  |  |  |  |  |  |  |  |  |  |
United States-Federal | $ | (143 | ) |  | $ | (225 | ) |  | $ | (352 | )
United States-State |  | (4 | ) |  |  | 4 |  |  |  | (13 | )
Outside United States |  | (69 | ) |  |  | (47 | ) |  |  | (51 | )
Valuation allowance |  | (29 | ) |  |  | 8 |  |  |  | 37 |
|  | (245 | ) |  |  | (260 | ) |  |  | (379 | )
| $ | 447 |  |  | $ | 330 |  |  | $ | (278 | )
A reconciliation of the United States statutory federal tax rate to the consolidated effective tax rate follows:
| 2018 |  |  | 2017 |  |  | 2016 |
US federal statutory rate |  | 21 | % |  |  | 35 | % |  |  | 35 | %
State tax |  | (2 | ) |  |  | - |  |  |  | 2 |
Non-US income taxed at different rates |  | (2 | ) |  |  | (24 | ) |  |  | (21 | )
Charges and credits (See Note 3) |  | - |  |  |  | (40 | ) |  |  | (1 | )
Enactment of US tax reform (See Note 3) |  | - |  |  |  | (6 | ) |  |  | - |
Other |  | - |  |  |  | 7 |  |  |  | - |
|  | 17 | % |  |  | (28 | )% |  |  | 15 | %
A number of the jurisdictions in which Schlumberger operates have tax laws that are not fully defined and are evolving. Schlumberger’s tax filings are subject to regular audit by the tax authorities. These audits may result in assessments for additional taxes that are resolved with the tax authorities, or potentially through the courts. Tax liabilities are recorded based on estimates of additional taxes that will be due upon the conclusion of these audits. Due to the uncertain and complex application of tax regulations, the ultimate resolution of audits may result in liabilities which could be materially different from these estimates. A reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions for the years ended December 31, 2018, 2017 and 2016 is as follows:
(Stated in millions) |
| 2018 |  |  | 2017 |  |  | 2016 |
Balance at beginning of year | $ | 1,393 |  |  | $ | 1,419 |  |  | $ | 1,285 |
Additions based on tax positions related to the current year |  | 88 |  |  |  | 132 |  |  |  | 70 |
Additions for tax positions of prior years |  | 145 |  |  |  | 58 |  |  |  | 119 |
Additions related to acquisitions |  | - |  |  |  | - |  |  |  | 127 |
Impact of changes in exchange rates |  | (41 | ) |  |  | 23 |  |  |  | (25 | )
Settlements with tax authorities |  | (22 | ) |  |  | (41 | ) |  |  | (45 | )
Reductions for tax positions of prior years |  | (57 | ) |  |  | (157 | ) |  |  | (85 | )
Reductions due to the lapse of the applicable statute of limitations |  | (73 | ) |  |  | (41 | ) |  |  | (27 | )
Balance at end of year | $ | 1,433 |  |  | $ | 1,393 |  |  | $ | 1,419 |
The amounts above exclude accrued interest and penalties of $205 million, $195 million and $178 million at December 31, 2018, 2017 and 2016, respectively. Schlumberger classifies interest and penalties relating to uncertain tax positions within Tax expense (benefit) in the Consolidated Statement of Income (Loss). 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:
Canada | 2011 - 2018
Ecuador | 2015 - 2018
Mexico | 2011 - 2018
Norway | 2013 - 2018
Russia | 2015 - 2018
Saudi Arabia | 2004 - 2018
United Kingdom | 2016 - 2018
United States | 2015 - 2018
In certain of the jurisdictions noted above, Schlumberger operates through more than one legal entity, each of which may have 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.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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