We also used these opportunities to redesign and refocus our business to successfully navigate the downturn and position us for future success. As we look ahead, we are optimistic about the unfolding economic and demand recovery and are prepared to thrive by executing on five key Strategic Priorities.
Our Strategic Priorities
Drive Profitable Growth Internationally
This past year demonstrated that Halliburton has a strong international business that is deeper technically, geographically, and organizationally than ever before and it generated more than half of our 2020 revenue and income. Against a tough activity backdrop, we remained focused on increasing profitability and our actions resulted in overall international margin improvement. We also saw increasing international adoption and expansion of our newest drilling and digital technologies. We have a strong portfolio of mature fields completions and interventions work, a solid base of resilient integrated contracts, leverage to unconventional developments in Latin America and the Middle East, and a leading position in key active offshore areas. Adding to our existing business lines, Halliburton has unique growth opportunities through the international expansion of our artificial lift and production chemicals businesses, especially in mature fields around the world. As we deliver existing products and services with new technologically advanced digital offerings, our current international strength combined with future opportunities will allow Halliburton to deliver profitable, returns-driven growth in the international markets.
Maximize Value in North America
North America today is a different market than ever before. Even as customers shift their priorities from growth to returns, a structurally smaller North America remains a critical part of the global energy supply stack. As the market evolves, Halliburton has responded. In 2020, we redesigned our service delivery platform and reset our earnings power in North America, where we remain the leading integrated services provider. We implemented digital technologies and process innovations to complete the most aggressive set of structural cost reductions in our history, which gave us meaningful operating leverage and cash flow generation ability. Our margins significantly outperformed expectations in the downturn and are poised to move higher as the recovery unfolds. These changes are sustainable, and, as the market recovers, are expected to improve margins and free cash flows. Our actions contributed to a leaner and more valuable North American business and, by resetting our earnings power, we have best positioned Halliburton to lead in the market’s recovery.
Accelerate and Integrate Digital Technologies
This is the decade of delivering on the promises of a digital and technologically advanced energy supply, and, at Halliburton, we’ve been investing for years for this moment. Halliburton 4.0 – our digital framework – permeates everything we do and is gaining traction every day. We are accelerating the deployment and integration of digital technologies both internally and with our customers. In 2020, we increased the breadth and depth of our digital offerings and delivered best-in-class performance across a spectrum of digital technologies. By deploying Halliburton 4.0, our customers improve productivity and efficiency, and Halliburton creates new revenue opportunities, even as it redefines our cost profile. These digital capabilities and customer offerings deliver future returns, increase business agility, and reduce capital expenditures.
Improve Capital Efficiency
Halliburton is focused on future growth that requires lower capital expenditures than in the past decade. This is consistent with our goal to deliver strong and sustainable free cash flow to shareholders. As the market recovery unfolds, our investment in the digitalization of our tools and processes – together with materials science and design advancements – will improve our capital efficiency. At the same time, we will exercise continued thoughtful capital allocation to the best returns opportunities.
Advance Cleaner, Affordable Energy
Halliburton actively participates in advancing a sustainable energy future for our customers, our Company, and all our stakeholders. This report details our commitment to the Science Based Targets initiative (SBTi), which will help us reduce our carbon footprint and environmental impact. This commitment and our other environmental goals align with the latest climate science and contribute to sustainable energy advancement. You will also see many examples of innovative solutions we have developed to help customers produce oil and gas more efficiently while reducing their emissions. We have created a Sustainability Label, much like a Nutrition Label, that allows our customers to make choices based on the emissions profiles of our offerings. And to advance sustainable energy solutions, we successfully launched Halliburton Labs – an accelerator, where entrepreneurs, academics, investors, and industrial labs come together to develop solutions that enable cleaner, affordable energy.
Halliburton has embraced change throughout our history, and our core values have guided our actions in response to a century of change. In 2020, those core values – Integrity, Safety, Collaboration, Competition, Creativity, Reliability and Respect –strengthened our response to a global pandemic and commodity supply-demand imbalance. Those Halliburton core values empowered change as we navigated each of 2020’s many and varied challenges. We reset our earnings power. We deployed digital solutions that set records for autonomous, efficient operations. We focused on safety and service quality and delivered Company-best results. We renewed our core value of “respect” to further embrace our commitment to diversity and inclusion, and to strengthen our culture and workplace, so everyone can be their authentic self and do their best work. We delivered on our customer commitment to collaborate and engineer solutions to maximize their asset value. And we remained committed to delivering industry-leading returns and strong free cash flows for our shareholders. In closing, we thank our employees around the world for their dedication, determination, and collaboration. They make Halliburton’s service to our customers and stakeholders possible. In 2020, they did so under remarkably challenging conditions and extraordinary times. When faced with a global pandemic and supply-demand challenges, they responded with better service quality and safety performance, and, because of their and our customers’ efforts, the essential service of providing energy to the world continued uninterrupted. We are all in this together, and we optimistically look to a future filled with confidence, innovation, and expectations for a brighter tomorrow.
Jeffrey A. Miller
Chairman of the Board,
Chief Executive Officer
Lance T. Loeffler
Executive Vice President
and Chief Financial Officer
Lawrence J. Pope
Executive Vice President
of Administration and
Chief Human Resources Officer
Executive Vice President,
Secretary and Chief Legal Officer
Eric J. Carre
Executive Vice President of Global Business Lines, and Chief Health,
Safety and Environment Officer
Mark J. Richard
Joe D. Rainey