FINANCIAL SUMMARY
Mark McCollum
Executive Vice President and
Chief Financial Officer
© 2013 HALLIBURTON. ALL RIGHTS RESERVED.
SAFE HARBOR
The statements in this presentation that are not historical statements, including statements regarding future financial performance,
are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks
and uncertainties, many of which are beyond the company’s control, which could cause actual results to differ materially from the
results expressed or implied by the statements. These risks and uncertainties include, but are not limited to: results of litigation,
settlements, and investigations; actions by third parties, including governmental agencies; changes in the demand for or price of oil
and/or natural gas can be significantly impacted by weakness in the worldwide economy; consequences of audits and investigations
by domestic and foreign government agencies and legislative bodies and related publicity and potential adverse proceedings by
such agencies; indemnification and insurance matters; protection of intellectual property rights and against cyber attacks;
compliance with environmental laws; changes in government regulations and regulatory requirements, particularly those related to
offshore oil and natural gas exploration, radioactive sources, explosives, chemicals, hydraulic fracturing services and climate-related
initiatives; compliance with laws related to income taxes and assumptions regarding the generation of future taxable income; risks of
international operations, including risks relating to unsettled political conditions, war, the effects of terrorism, and foreign exchange
rates and controls, international trade and regulatory controls, and doing business with national oil companies; weather-related
issues, including the effects of hurricanes and tropical storms; changes in capital spending by customers; delays or failures by
customers to make payments owed to us; execution of long-term, fixed-price contracts; impairment of oil and natural gas properties;
structural changes in the oil and natural gas industry; maintaining a highly skilled workforce; availability and cost of raw materials;
and integration of acquired businesses and operations of joint ventures. Halliburton’s Form 10-K for the year ended December 31,
2012, Form 10-Q for the quarter ended September 30, 2013, recent Current Reports on Form 8-K, and other Securities and
Exchange Commission (SEC) filings discuss some of the important risk factors identified that may affect Halliburton’s business,
results of operations, and financial condition. Halliburton undertakes no obligation to revise or update publicly any forward-looking
statements for any reason.
© 2013 HALLIBURTON. ALL RIGHTS RESERVED.
© 2013 HALLIBURTON. ALL RIGHTS RESERVED.
Mid
20s
Low
20s
▐ Unconventional Service Intensity
17.8%
▐ Gulf of Mexico
▐ HALvantage
▐ Natural Gas Activity
3Q13*
* Adjusted for third quarter 2013 restructuring charges
See page 15 for a reconciliation of as reported margins to adjusted margins
© 2013 HALLIBURTON. ALL RIGHTS RESERVED.
Short-Term
Normalized
Low 20s
Upper
Teens
▐ Deepwater Share/Service Intensity
16.0%
▐ Mature Fields Expansion
▐ New Technology
▐ Unconventionals
3Q13*
* Adjusted for third quarter 2013 restructuring charges
See page 15 for a reconciliation of as reported margins to adjusted margins
© 2013 HALLIBURTON. ALL RIGHTS RESERVED.
Short-Term
Normalized
Global Business
Realignment
© 2013 HALLIBURTON. ALL RIGHTS RESERVED.
Global
Sourcing
Battle Red
$8
$6
▐
North America Growth and Margin Improvement
▐
International Growth and Margin Improvement
▐
Corporate Initiatives and Tax
▐
Achieving Normalized Margins
$4
$2
Potential Earnings Per Share
© 2013 HALLIBURTON. ALL RIGHTS RESERVED.
▐
MARGINS
X
VELOCITY
© 2013 HALLIBURTON. ALL RIGHTS RESERVED.
▐
▐
▐
▐
Growth Opportunities
Service Intensity
Cost Management
Asset Utilization
Working Capital Efficiency
Revenue/Net Assets
1.58
1.06
▐
Organic Growth
▐
Global Infrastructure Absorption
▐
HALvantage
Trailing 12 Months (TTM)
HAL
Net Assets = Equity + Debt – Cash & ST Investments
Peer Group Includes: SLB, BHI
© 2013 HALLIBURTON. ALL RIGHTS RESERVED.
Peer Group
110
Q3 2013 TTM
92
92
78
42
48
28
30
Days Sales Outstanding
Days Inventory Outstanding
Days Payable Outstanding
Days Working Cap.
(DSO)
(DIO)
(DPO)
(DWC) = DSO + DIO - DPO
HAL
© 2013 HALLIBURTON. ALL RIGHTS RESERVED.
Peer Group
110
Q3 2013 TTM
92
92
78
82
42
48
28
30
Days Sales Outstanding
Days Inventory Outstanding
Days Payable Outstanding
Days Working Cap.
(DSO)
(DIO)
(DPO)
(DWC) = DSO + DIO - DPO
HAL
© 2013 HALLIBURTON. ALL RIGHTS RESERVED.
Peer Group
Return on Capital Employed
20%
▐ Growth Opportunities
MARGINS
X
VELOCITY
▐ Service Intensity
▐ Cost Management
11%
▐ Asset Utilization
▐ Working Capital Efficiency
2013 Estimate
© 2013 HALLIBURTON. ALL RIGHTS RESERVED.
2016 Goal
Use of Cash for Shareholder Returns
35%
▐
Enhanced Buyback Program
▐
Dividend Policy: At Least 15-20%
of Net Income
19%
2011-2013 *
Goal
* 2011-2013 Use of Cash for Shareholder Returns includes forecasted information for
fourth quarter 2013; excludes 2013 $3.3B Modified Dutch Auction Tender Offer
© 2013 HALLIBURTON. ALL RIGHTS RESERVED.
Outgrow a
Growing Market
by 25%
© 2013 HALLIBURTON. ALL RIGHTS RESERVED.
3x Growth to
$9 Billion
500bps in
North America
and Subsurface
Leadership
20% ROCE and
35% Operating
Cash Flow
Distributed
by 2016
Reconciliation of As Reported Margins to Adjusted Margins
Q3 2013 (in millions)
North America
International
$ 657
$ 556
34
17
$ 691
$ 573
$ 3,881
$ 3,591
As reported operating margin (b)
16.9%
15.5%
Adjusted operating margin (b)
17.8%
16.0%
As reported operating income
Restructuring charges
Adjusted operating income (a)
Revenue
(a)
Management believes that operating income adjusted for the restructuring-related charges for the three months ended September 30, 2013 is useful to investors to assess and
understand operating performance, especially when comparing those results with previous and subsequent periods or forecasting performance for future periods, primarily
because management views the excluded item to be outside of the company's normal operating results. Management analyzes operating income without the impact of this item
as an indicator of performance, to identify underlying trends in the business, and to establish operational goals. The adjustment removes the effects of these expenses.
(b)
As reported operating margin is calculated as: “As reported operating income” divided by “Revenue.” Adjusted operating margin is calculated as: “Adjusted operating income”
divided by “Revenue.”
© 2013 HALLIBURTON. ALL RIGHTS RESERVED.