# TO OUR
STAKEHOLDERS

_Source: `DeepSeekOCR_Ardian_pruned_1k/energy-oil-gas-equipment-services/NYSE_HAL_2018/NYSE_HAL_2018.mmd` · pages 3-9_

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TO OUR
STAKEHOLDERS

As we celebrate 100 years of growth, innovation and unparalleled customer service, Halliburton remains committed to generating industry-leading returns for our shareholders, flawlessly executing for our customers and outperforming our peers. We commence our next 100 years with a clear sense of purpose. Our industry produces affordable and reliable energy that improves the quality of life for people around the world, and reasonable projections show that oil and gas will remain an essential part of the world's energy portfolio for many years to come. At Halliburton, our purpose is to help our customers satisfy the world's need for oil and gas – more effectively and efficiently, safely and ethically, while minimizing environmental impact and generating leading returns for our shareholders. This purpose aligns with our core values and underlies our strategy, value proposition and financial objectives.

During 2018, we once again delivered superior growth and returns by capitalizing on the market rebound in North America and the emerging international recovery. We maintained our leading position in a tough, fiercely competitive market, sustained a steady pace of new technology development and improved service quality – all with a goal of helping our customers maximize their asset value and delivering leading returns to our shareholders. Thanks to the exceptional performance and commitment of over 60,000 Halliburton employees, we outperformed our peers and generated approximately $3.2 billion in operating cash flow. At the same time, we reduced our debt by $400 million, strengthening our balance sheet and enhancing our financial flexibility. We continued to exercise
capital discipline, while also advancing our differentiating technologies and digital capabilities and expanding our product and service offerings. We also returned $1 billion to our shareholders in the form of dividends and stock repurchases.

As we enter 2019, our industry is going through a transformation brought on by the shale revolution and the recent down cycle. North America is now the world's leading oil producer, the industry is more efficient than ever before and our customers are increasingly focused on generating cash flow. We believe this evolving landscape plays to Halliburton's strengths. As we have proven over the years and demonstrated again in 2018 – our technology, our people, our customer alignment and our financial discipline position us to thrive in any market condition and to deliver leading returns for our shareholders.

In 2019, we will continue to focus on the right things. We have permanently removed over \(1 billion in costs over the last three years, and we will continue to reduce costs through our continuous improvement initiatives. We will effectively use our coherent asset base through increasing asset velocity and superior job site execution. We will be disciplined in our capital spending, while continuing to support our business, developing differentiating technologies and selectively investing to grow our product and services portfolio. And we will focus on optimizing cash flow from our operations and producing superior returns.

Sustainability is imbedded in our strategy and is integral to our overall mission. We seek to deliver superior financial performance and returns while minimizing environmental impacts and acting as a responsible corporate citizen. Our Guiding Principles for Sustainability provide the framework for sustainable action and align with our purpose and core values. Because sustainability performance is an important measure of our overall performance, this year we are combining our annual financial report with our corporate sustainability report. We believe that this combined report further emphasizes the strategic significance of sustainability to our Company.

## "We seek to deliver superior financial performance and returns while minimizing environmental impacts and acting as a responsible corporate citizen."

Ethics and integrity are at the heart of the Halliburton corporate culture and provide the foundation for our Guiding Principles, our operations and our future. They are the foundation for everything we do. By adhering to the Halliburton Code of Business Conduct, we conduct our business "the RED way" – in a responsible, ethical and diligent manner. This includes a strong human rights policy, a zero-tolerance anti-corruption policy, a clear mandate to use and develop local resources and a strong commitment to create social and economic opportunities for the local communities in which we operate. We earn the trust of our stakeholders through relationships based on honesty, transparency and respect. And we hold our vendors, suppliers, and customers to the same high standard of integrity.

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"We look forward to our next century and continuing to deliver superior service and differentiating technologies to our customers and strong cash flow and industry-leading returns to our shareholders."

Our commitment to our stakeholders, combined with the delivery of superior services and products, has earned Halliburton the reputation as the execution company – and our people are at the heart of this reputation. We are successful because of the continuous dedication of our employees to provide our customers with outstanding service. We strive to provide our employees a work environment that is challenging, focused on diversity and inclusion and free of discrimination or harassment. Our employees receive essential safety training and are responsible for Halliburton's safety culture. We provide a structured development program to help our employees build skills and competencies and develop leadership capabilities. At Halliburton, the way we look out for one another day after day and our sense of camaraderie engenders a high degree of trust, which in turn fosters respect for one another, the people we work with and the communities in which we live.

We prioritize health, safety and environmental stewardship. We remain committed to advancing our Journey to ZERO, which is the Company's path to achieve zero safety incidents, environmental incidents and non-productive time every day, on every job. At Halliburton, environmental stewardship includes the development of new technology that seeks to minimize social and environmental impacts while delivering value to our customers. We make significant investments in research and development to create solutions that allow our customers to maximize the value of their assets – while helping them reduce energy and water usage, curb emissions and shrink their environmental footprint. For example, our surface equipment is among the cleanest available, and it comprises the largest fleet of Tier 4-compliant diesel engines currently in operation in the U.S. In addition, Halliburton is developing and planning to deploy electrically powered pressure pumping equipment going forward. We have also made significant investments in our surface efficiency strategy, including the ExpressSand™ containerized proppant delivery system, which has helped to significantly reduce equipment and logistics needs, along with noise and dust generation on the wellsite. We have also developed new chemistries and separation technologies that enable the recycling of flowback water and help our customers reduce the volume of fresh water utilized in hydraulic fracturing operations.

In closing, we want to thank our employees, our Board of Directors and our shareholders for the vital role they all play in the success of Halliburton. In 2019, we celebrate 100 years since our founder, Erle P. Halliburton, started an oil well cementing business with a borrowed pump, a horse-drawn wagon and a mixing box. Reaching our centennial is a milestone few companies achieve and it is a testament to the hard work of our employees, who deliver on our core values of integrity, safety, creativity and reliability. Our Company has innovated, collaborated and executed through economic and industry cycles to become a global leader in oilfield services and technology. We look forward to our next century and continuing to deliver superior service and differentiating technologies to our customers and strong cash flow and industry-leading returns to our shareholders.
LANCET. LOEFFLER
Executive Vice President
and Chief Financial Officer

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JEFFREY A. MILLER
Chairman of the Board,
President and
Chief Executive Officer

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LAWRENCE J. POPE
Executive Vice President
of Administration and
Chief Human Resources
Officer

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ROBB L. VOYLES
Executive Vice President,
Secretary and General Counsel

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ERIC J. CARRE
Executive Vice President
Global Business Lines and
Chief Health, Safety and
Environment Officer

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MARK J. RICHARD
President,
Western Hemisphere

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JOE D. RAINEY
President,
Eastern Hemisphere