Halliburton Announces Fourth Quarter Income From Continuing Operations Of $0.63 Per Diluted Share

Significant Recent Events and Achievements

• Halliburton was selected by TNK-BP to provide an integrated services solution to increase production from the complex and challenging tight oil reserves in the Em-Yoga license area of Russia's Krasnoleninskoe oil and natural gas field in Nyagan, Western Siberia. The two-year contract calls for Halliburton to provide subsurface consulting, project management, well construction, and completion services, including directional drilling, logging-while-drilling, fluids, bits, cementing, completion tools, coiled tubing, and multistage fracturing stimulation services, for multiple wells in Nyagan.
• Halliburton, Apache Corporation, and Caterpillar have developed innovative dual-fuel technology capable of safely and efficiently powering the pumping equipment used for fracturing treatments with a mixture of natural gas and diesel.
• Halliburton was recognized at the 11th Annual World Oil Awards with “Best” awards for its Frac of the Future equipment suite in the Best Health, Safety, Environment/Sustainable Development Onshore category and for its DecisionSpace® well planning software in the Best Visualization and Collaboration category.

Founded in 1919, Halliburton is one of the world’s largest providers of products and services to the energy industry. With more than 72,000 employees, representing 140 nationalities in approximately 80 countries, the company serves the upstream oil and gas industry throughout the lifecycle of the reservoir – from locating hydrocarbons and managing geological data, to drilling and formation evaluation, well construction and completion, and optimizing production through the life of the field. Visit the company’s website at www.halliburton.com.

NOTE: The statements in this press release 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, 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, 2011, Form 10-Q for the quarter ended September 30, 2012, recent Current Reports on Form 8-K, and other Securities and Exchange Commission 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.

HALLIBURTON COMPANYCondensed Consolidated Statements of Operations(Millions of dollars and shares except per share data)(Unaudited)
		Three Months Ended
		December 31								September 30
		2012				2011				2012
Revenue:
Completion and Production		$	4,337			$	4,328			$	4,293
Drilling and Evaluation		2,953				2,736				2,818
Total revenue		$	7,290			$	7,064			$	7,111
Operating income:
Completion and Production		$	603			$	1,087			$	591
Drilling and Evaluation		484				480				430
Corporate and other		(106		)		(137		)		(67		)
Total operating income		981				1,430				954
Interest expense, net		(73		)		(69		)		(71		)
Other, net		(9		)		(7		)		(6		)
Income from continuing operations before income taxes		899				1,354				877
Provision for income taxes		(307		)		(447		)		(267		)
Income from continuing operations		592				907				610
Income (loss) from discontinued operations, net (a)		80				—				(6		)
Net income		$	672			$	907			$	604
Noncontrolling interest in net income of subsidiaries		(3		)		(1		)		(2		)
Net income attributable to company		$	669			$	906			$	602
Amounts attributable to company shareholders:
Income from continuing operations		$	589			$	906			$	608
Income (loss) from discontinued operations, net (a)		80				—				(6		)
Net income attributable to company		$	669			$	906			$	602
Basic income per share attributable to company shareholders:
Income from continuing operations		$	0.63			$	0.98			$	0.66
Income (loss) from discontinued operations, net (a)		0.09				—				(0.01		)
Net income per share		$	0.72			$	0.98			$	0.65
Diluted income per share attributable to company shareholders:
Income from continuing operations		$	0.63			$	0.98			$	0.65
Income (loss) from discontinued operations, net (a)		0.09				—				—
Net income per share		$	0.72			$	0.98			$	0.65
Basic weighted average common shares outstanding		928				921				928
Diluted weighted average common shares outstanding		931				923				930

(a)		Includes an $80 million tax benefit in the three months ended December 31, 2012 related to a payment to Petrobras under a guarantee relating to work performed on the Barracuda-Caratinga project by KBR, Inc.
See Footnote Table 1 for a list of significant items included in operating income.
See Footnote Table 3 for adjusted total operating income excluding certain items.

HALLIBURTON COMPANYCondensed Consolidated Statements of Operations(Millions of dollars and shares except per share data)(Unaudited)
				Year Ended December 31
				2012				2011
Revenue:
Completion and Production				$	17,380			$	15,143
Drilling and Evaluation				11,123				9,686
Total revenue				$	28,503			$	24,829
Operating income:
Completion and Production				$	3,144			$	3,733
Drilling and Evaluation				1,675				1,403
Corporate and other (a)				(660		)		(399		)
Total operating income				4,159				4,737
Interest expense, net				(298		)		(263		)
Other, net				(39		)		(25		)
Income from continuing operations before income taxes				3,822				4,449
Provision for income taxes				(1,235		)		(1,439		)
Income from continuing operations				2,587				3,010
Income (loss) from discontinued operations, net (b) (c)				58				(166		)
Net income				$	2,645			$	2,844
Noncontrolling interest in net income of subsidiaries				(10		)		(5		)
Net income attributable to company				$	2,635			$	2,839
Amounts attributable to company shareholders:
Income from continuing operations				$	2,577			$	3,005
Income (loss) from discontinued operations, net (b) (c)				58				(166		)
Net income attributable to company				$	2,635			$	2,839
Basic income per share attributable to company shareholders:
Income from continuing operations				$	2.78			$	3.27
Income (loss) from discontinued operations, net (b) (c)				0.07				(0.18		)
Net income per share				$	2.85			$	3.09
Diluted income per share attributable to company shareholders:
Income from continuing operations				$	2.78			$	3.26
Income (loss) from discontinued operations, net (b) (c)				0.06				(0.18		)
Net income per share				$	2.84			$	3.08
Basic weighted average common shares outstanding				926				918
Diluted weighted average common shares outstanding				928				922

(a)		Includes, among other items, a $300 million, pre-tax, charge in 2012 related to the Macondo well incident.
(b)		Includes an $80 million tax benefit in 2012 related to a payment to Petrobras under a guarantee relating to work performed on the Barracuda-Caratinga project by KBR, Inc.
(c)		Includes, among other items, a $163 million loss in 2011 for an arbitration award against KBR, Inc. relating to the Barracuda-Caratinga project, a project for which Halliburton had provided a guarantee.
See Footnote Table 2 for a list of significant items included in operating income.

HALLIBURTON COMPANYCondensed Consolidated Balance Sheets(Millions of dollars)(Unaudited)
			December 31
			2012				2011
Assets
Current assets:
Cash and equivalents			$	2,484			$	2,698
Receivables, net			5,787				5,084
Inventories			3,186				2,570
Other current assets (a)			1,629				1,225
Total current assets			13,086				11,577
Property, plant, and equipment, net			10,257				8,492
Goodwill			2,135				1,776
Other assets (b)			1,932				1,832
Total assets			$	27,410			$	23,677
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable			$	2,041			$	1,826
Accrued employee compensation and benefits			930				862
Other current liabilities			1,781				1,433
Total current liabilities			4,752				4,121
Long-term debt			4,820				4,820
Other liabilities			2,048				1,520
Total liabilities			11,620				10,461
Company shareholders’ equity			15,765				13,198
Noncontrolling interest in consolidated subsidiaries			25				18
Total shareholders’ equity			15,790				13,216
Total liabilities and shareholders’ equity			$	27,410			$	23,677

(a)		Includes $270 million of investments in fixed income securities at December 31, 2012 and $150 million of fixed income securities at December 31, 2011.
(b)		Includes $128 million of investments in fixed income securities at December 31, 2012.

HALLIBURTON COMPANYCondensed Consolidated Statements of Cash Flows(Millions of dollars)(Unaudited)
		Year Ended
		December 31
		2012				2011
Cash flows from operating activities:
Net income		$	2,645			$	2,844
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation, depletion, and amortization		1,628				1,359
Loss contingency for Macondo well incident		300				—
(Income) loss from discontinued operations		(58		)		166
Other, primarily working capital		(861		)		(685		)
Total cash flows from operating activities		3,654				3,684
Cash flows from investing activities:
Capital expenditures		(3,566		)		(2,953		)
Purchases of investment securities		(506		)		(501		)
Sales of property, plant, and equipment		395				160
Sales of investment securities		258				1,001
Acquisitions, net of cash acquired		(214		)		(880		)
Other		(55		)		(17		)
Total cash flows from investing activities		(3,688		)		(3,190		)
Cash flows from financing activities:
Dividends to shareholders		(333		)		(330		)
Proceeds from long-term borrowings, net of offering costs		—				978
Other		161				185
Total cash flows from financing activities		(172		)		833
Effect of exchange rate changes on cash		(8		)		(27		)
Increase (decrease) in cash and equivalents		(214		)		1,300
Cash and equivalents at beginning of year		2,698				1,398
Cash and equivalents at end of year		$	2,484			$	2,698

HALLIBURTON COMPANYRevenue and Operating Income ComparisonBy Segment and Geographic Region(Millions of dollars)(Unaudited)
		Three Months Ended
		December 31								September 30
Revenue by geographic region:		2012				2011				2012
Completion and Production:
North America		$	2,830			$	3,148			$	2,978
Latin America		396				312				373
Europe/Africa/CIS		569				497				523
Middle East/Asia		542				371				419
Total		4,337				4,328				4,293
Drilling and Evaluation:
North America		923				962				965
Latin America		687				565				579
Europe/Africa/CIS		645				588				605
Middle East/Asia		698				621				669
Total		2,953				2,736				2,818
Total revenue by region:
North America		3,753				4,110				3,943
Latin America		1,083				877				952
Europe/Africa/CIS		1,214				1,085				1,128
Middle East/Asia		1,240				992				1,088
Operating income by geographic region:
Completion and Production:
North America		$	315			$	940			$	383
Latin America		57				51				40
Europe/Africa/CIS		107				44				88
Middle East/Asia		124				52				80
Total		603				1,087				591
Drilling and Evaluation:
North America		150				178				174
Latin America		136				119				106
Europe/Africa/CIS		79				65				63
Middle East/Asia		119				118				87
Total		484				480				430
Total operating income by region:
North America		465				1,118				557
Latin America		193				170				146
Europe/Africa/CIS		186				109				151
Middle East/Asia		243				170				167
Corporate and other		(106		)		(137		)		(67		)
Total operating income		$	981			$	1,430			$	954

See Footnote Table 1 for a list of significant items included in operating income.

See Footnote Table 3 for adjusted total operating income excluding certain items.

HALLIBURTON COMPANYRevenue and Operating Income ComparisonBy Segment and Geographic Region(Millions of dollars)(Unaudited)
		Year Ended December 31
Revenue by geographic region:		2012				2011
Completion and Production:
North America		$	12,157			$	10,907
Latin America		1,415				1,117
Europe/Africa/CIS		2,099				1,746
Middle East/Asia		1,709				1,373
Total		17,380				15,143
Drilling and Evaluation:
North America		3,847				3,506
Latin America		2,279				1,865
Europe/Africa/CIS		2,411				2,210
Middle East/Asia		2,586				2,105
Total		11,123				9,686
Total revenue by region:
North America		16,004				14,413
Latin America		3,694				2,982
Europe/Africa/CIS		4,510				3,956
Middle East/Asia		4,295				3,478
Operating income by geographic region:
Completion and Production:
North America		$	2,260			$	3,341
Latin America		206				159
Europe/Africa/CIS		347				48
Middle East/Asia		331				185
Total		3,144				3,733
Drilling and Evaluation:
North America		680				641
Latin America		393				305
Europe/Africa/CIS		246				191
Middle East/Asia		356				266
Total		1,675				1,403
Total operating income by region:
North America		2,940				3,982
Latin America		599				464
Europe/Africa/CIS		593				239
Middle East/Asia		687				451
Corporate and other		(660		)		(399		)
Total operating income		$	4,159			$	4,737

See Footnote Table 2 for a list of significant items included in operating income.

FOOTNOTE TABLE 1HALLIBURTON COMPANYItems Included in Operating Income(Millions of dollars except per share data)(Unaudited)
		Three Months Ended								Three Months Ended
		December 31, 2011								September 30, 2012
		Operating				After Tax				Operating				After Tax
		Income				per Share				Income				per Share
Completion and Production:
North America
Acquisition-related charge		$	—			$	—			$	(40	)		$	(0.02	)
Latin America
Acquisition-related charge		—				—				(8		)		(0.01		)
Corporate and other:
Environmental charge		(24		)		(0.02		)		—				—
Patent infringement case settlement		—				—				20				0.01

FOOTNOTE TABLE 2HALLIBURTON COMPANYItems Included in Operating Income(Millions of dollars except per share data)(Unaudited)
		Year Ended								Year Ended
		December 31, 2012								December 31, 2011
		Operating				After Tax				Operating				After Tax
		Income				per Share				Income				per Share
Completion and Production:
North America
Acquisition-related charge		$	(40	)		$	(0.02	)		$	—			$	—
Latin America
Acquisition-related charge		(8		)		(0.01		)		—				—
Europe/Africa/CIS
Asset impairment charge		—				—				(25		)		(0.02		)
Employee separation costs		—				—				(5		)		(0.01		)
Libya reserve		—				—				(36		)		(0.03		)
Middle East/Asia
Employee separation costs		—				—				(1		)		—
Drilling and Evaluation:
Europe/Africa/CIS
Employee separation costs		—				—				(4		)		—
Libya reserve		—				—				(23		)		(0.02		)
Middle East/Asia
Employee separation costs		—				—				(1		)		—
Corporate and other:
Macondo-related charge		(300		)		(0.20		)		—				—
Patent infringement case settlement		20				0.01				—				—
Environmental charge		—				—				(24		)		(0.02		)

FOOTNOTE TABLE 3HALLIBURTON COMPANYAdjusted Total Operating Income Excluding Certain ItemsBy Segment and Geographic Region(Millions of dollars)(Unaudited)
			Three Months Ended
			December 31							September 30
Adjusted operating income by geographic region: (a) (b)			2012			2011				2012
Completion and Production:
North America			$	315		$	940			$	423
Latin America			57			51				48
Europe/Africa/CIS			107			44				88
Middle East/Asia			124			52				80
Total			603			1,087				639
Drilling and Evaluation:
North America			150			178				174
Latin America			136			119				106
Europe/Africa/CIS			79			65				63
Middle East/Asia			119			118				87
Total			484			480				430
Adjusted total operating income by region:
North America			465			1,118				597
Latin America			193			170				154
Europe/Africa/CIS			186			109				151
Middle East/Asia			243			170				167
Corporate and other			(106		)	(113		)		(87		)
Adjusted total operating income			$	981		$	1,454			$	982

(a)		Management believes that operating income adjusted for the fourth quarter of 2011 environmental-related charge and the third quarter of 2012 acquisition-related charge and settlement of a patent infringement case 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 these items to be outside of the company’s normal operating results. Management analyzes operating income without the impact of these items as an indicator of ongoing operating performance, to identify underlying trends in the business, and to establish operational goals, including segment and region operational goals. The adjustments remove the effects of these expenses.
(b)		Adjusted operating income for each segment and region is calculated as: “Operating income” less “Items Included in Operating Income.”

FOOTNOTE TABLE 4HALLIBURTON COMPANYReconciliation of As Reported Results to Adjusted Results(Millions of dollars)(Unaudited)
		Three Months Ended
		September 30, 2012
As reported income from continuing operations attributable to company			$	608
Acquisition-related charge, net of tax (a)			30
Patent infringement case settlement, net of tax (a)			(13		)
Adjusted income from continuing operations attributable to company (a)			$	625
As reported diluted weighted average common shares outstanding			930
As reported income from continuing operations per diluted share (b)			$	0.65
Adjusted income from continuing operations per diluted share (b)			$	0.67

(a)		Management believes that income from continuing operations attributable to company adjusted for the acquisition-related charge and patent infringement case settlement 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 items to be outside of the company's normal operating results. Management analyzes income from continuing operations attributable to company without the impact of these items as an indicator of performance, to identify underlying trends in the business, and to establish operational goals. The adjustments remove the effects of these expenses. Adjusted income from continuing operations attributable to company is calculated as: “As reported income from continuing operations attributable to company” plus “Acquisition-related charge, net of tax” plus “Patent infringement case settlement, net of tax” for the quarter ended September 30, 2012.
(b)		As reported income from continuing operations per diluted share is calculated as: “As reported income from continuing operations attributable to company” divided by “As reported diluted weighted average common shares outstanding.” Adjusted income from continuing operations per diluted share is calculated as: “Adjusted income from continuing operations attributable to company” divided by “As reported diluted weighted average common shares outstanding.”

Conference Call Details

Halliburton (NYSE:HAL) will host a conference call on Friday, January 25, 2013, to discuss the fourth quarter 2012 financial results. The call will begin at 8:00 AM Central Time (9:00 AM Eastern Time).

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