International revenue improved by 17% in 2023, driven by higher activity for drilling and completions-related services in Latin America, Africa, and the Middle East/Asia. This was partially offset by the exit from Russia.

North America revenue increased by 9% despite a 4% decrease in average rig count, resulting from higher pressure pumping and artificial lift activity in North America land, increased completion tool sales in the Gulf of Mexico, and improved fluid and wireline services across the region.

Halliburton began migrating to SAP S4 in the second quarter of 2023, with completion expected by the end of 2025, at an estimated cost of $250 million. The company believes the new system will enhance visibility to operations and provide important efficiency benefits, cost savings, and advanced analytics.

The company maintained its capital expenditures at approximately 6% of revenue, focusing on technological advancements and process changes to reduce manufacturing and maintenance costs and improve equipment movement and market responsiveness.

Halliburton returned $1.4 billion of capital to shareholders through buybacks and dividends, consistent with its capital returns framework. The company aims to return over 50% of annual free cash flow to shareholders.

Halliburton's long-term safety programs and processes, including the Journey to ZERO initiative, are maintained. Total recordable incident rates were 0.25 in 2023 compared to 0.29 in 2022.

The company's performance is closely tied to oil and natural gas prices, which are subject to significant fluctuations due to supply and demand imbalances, market uncertainty, and geopolitical events. Prolonged reductions in commodity prices could materially impact the business.

Halliburton acknowledges its increasing dependence on digital technologies and the potential for cybersecurity incidents to disrupt operations, compromise data, and harm its reputation. The company routinely monitors systems for threats and has processes in place to remediate vulnerabilities.

The company's operations in various countries are exposed to risks such as political instability, terrorism, civil unrest, currency fluctuations, and governmental actions, including expropriation and nationalization. These risks could materially affect the business and consolidated financial condition.

The company acknowledges operating in highly competitive markets within the energy services industry. Key competitive factors include price, service delivery, health, safety, and environmental standards, service quality, global talent retention, and technical proficiency.

Halliburton emphasizes its accelerated deployment and integration of digital and automation technologies to create technical differentiation in the market and contribute to higher margins and increased internal efficiencies.

The company maintains an active research and development program to improve products, processes, and engineering standards and practices. R&D expenses were $408 million in 2023, $345 million in 2022, and $321 million in 2021.

Halliburton acknowledges being impacted by increased supply chain lead times and inflationary cost increases, primarily related to chemicals, cement, and logistics costs. The company monitors market trends and works to mitigate cost impacts through economies of scale, technology modifications, and efficient sourcing practices.

The company is migrating to SAP S4, expecting to complete the process by the end of 2025. This migration is intended to enhance visibility to operations and provide important efficiency benefits, cost savings, and advanced analytics.

Halliburton maintains a focus on capital efficiency, aiming to maintain capital expenditures at approximately 6% of revenue. This includes focusing on technological advancements and process changes to reduce manufacturing and maintenance costs.

Halliburton is focused on driving differentiation and efficiencies through the deployment and integration of digital and automation technologies, both internally and for its customers. This includes the iStar Intelligent Drilling and Logging Platform and the iCruise Intelligent Rotary Steerable System.

The company is investing in the construction and deployment of its Zeus electric fracturing systems in North America. This is part of its strategy to maximize value by utilizing premium low-emissions technologies.

Halliburton maintains an active research and development program to improve products, processes, and engineering standards and practices. R&D expenses were $408 million in 2023.

Halliburton's capital return framework includes a goal of returning at least 50% of annual free cash flow to shareholders through dividends and share repurchases. The Board of Directors authorizes dividends and share repurchases at its sole discretion.

The company repurchased 22.7 million shares of its common stock for $800 million and paid $576 million of dividends to shareholders in 2023. Approximately $4.1 billion remained authorized for repurchases as of December 31, 2023.

The company expects capital spending for 2024 to be approximately 6% of revenue. This level of spend will allow the company to invest in key strategic technologies.

Halliburton aims to achieve a 40% reduction in Scope 1 and 2 emissions by 2035 from the 2018 baseline. The company continues to execute on priorities to progress toward this target.

Halliburton Labs allows the company to participate in the energy mix transition at relatively low risk by investing its expertise, resources, and team without a significant outlay of capital. As of December 31, 2023, Halliburton Labs had 32 participating companies and alumni.

Halliburton was named to the Dow Jones Sustainability North America Index for the third consecutive year, recognizing its sustainability performance.

Halliburton anticipates that long-term expansion of the global economy will continue to increase demands on all forms of energy, including oil and natural gas. The International Energy Agency forecasts 2024 global oil demand to reach 102.7 million barrels per day.

Halliburton believes oil supply dynamics have fundamentally changed due to investor return requirements and regulatory initiatives adverse to oil and natural gas exploration and production.

Halliburton believes that increased investment in existing and new sources of production is the only solution to increase supply and that production will be needed from conventional and unconventional, deep-water and shallow-water, and short and long-cycle projects.