Three Months Ended

June 30

March 31

Revenue:

Completion and Production

$

3,132

$

2,114

$

2,604

Drilling and Evaluation

1,825

1,721

1,675

Total revenue

$

4,957

$

3,835

$

4,279

Operating income (loss):

Completion and Production

$

$

(32

)

$

Drilling and Evaluation

Corporate and other (a)

(114

)

(60

)

(66

)

Impairments and other charges (b)

(262

)

(423

)

Merger termination fee and related costs (c)

(3,519

)

Total operating income (loss)

(3,880

)

Interest expense, net (d)

(121

)

(196

)

(242

)

Other, net

(26

)

(31

)

(18

)

Loss before income taxes

(1

)

(4,107

)

(57

)

Income tax benefit

Income (loss) from continuing operations

(3,205

)

(32

)

Net income attributable to noncontrolling interest

(3

)

Net income (loss) attributable to company

$

$

(3,208

)

$

(32

)

Basic and diluted net income (loss) per share

$

0.03

$

(3.73

)

$

(0.04

)

Basic weighted average common shares outstanding

Diluted weighted average common shares outstanding

(a) Includes an aggregate $42 million of litigation settlements and one-time executive compensation charges in the three months ended June 30, 2017.

(b) During the three months ended June 30, 2017, Halliburton recognized a $262 million fair market value adjustment associated with an expected promissory note in Venezuela.

(c) Includes a $3.5 billion merger termination fee recognized in the three months ended June 30, 2016.

(d) Includes $104 million of costs related to the early extinguishment of $1.4 billion of senior notes in the three months ended March 31, 2017, as well as $41 million of debt redemption fees and associated expenses in the three months ended June 30, 2016.

See Footnote Table 1 for Reconciliation of As Reported Operating Income to Adjusted Operating Income

See Footnote Table 2 for Reconciliation of As Reported Income (Loss) from Continuing Operations to Adjusted Income from Continuing Operations.

Six Months Ended June 30

Revenue:

Completion and Production

$

5,736

$

4,438

Drilling and Evaluation

3,500

3,595

Total revenue

$

9,236

$

8,033

Operating income (loss):

Completion and Production

$

$

(2

)

Drilling and Evaluation

Corporate and other

(180

)

(106

)

Impairments and other charges (a)

(262

)

(3,189

)

Merger termination fee and related costs (b)

(4,057

)

Total operating income (loss)

(6,959

)

Interest expense, net (c)

(363

)

(361

)

Other, net

(44

)

(78

)

Loss before income taxes

(58

)

(7,398

)

Income tax benefit

1,777

Loss from continuing operations

(4

)

(5,621

)

Loss from discontinued operations, net

(2

)

Net loss

$

(4

)

$

(5,623

)

Net loss attributable to noncontrolling interest

Net loss attributable to company

$

(4

)

$

(5,620

)

Amounts attributable to company shareholders:

Loss from continuing operations

$

(4

)

$

(5,618

)

Loss from discontinued operations, net

(2

)

Net loss attributable to company

$

(4

)

$

(5,620

)

Basic and diluted net loss per share

$

$

(6.54

)

Basic and diluted weighted average common shares outstanding

(a) During the six months ended June 30, 2017, Halliburton recognized a $262 million fair market value adjustment associated with an expected promissory note in Venezuela.

(b) During the six months ended June 30, 2016, Halliburton recognized a $3.5 billion merger termination fee and an aggregate $464 million of charges for the reversal of assets held for sale accounting.

(c) Includes $104 million of costs related to the early extinguishment of $1.4 billion of senior notes in the six months ended June 30, 2017, as well as $41 million of debt redemption fees and associated expenses in the six months ended June 30, 2016.

June 30

December 31

Assets

Current assets:

Cash and equivalents

$

2,139

$

4,009

Receivables, net

4,385

3,922

Inventories

2,283

2,275

Prepaid income taxes

Other current assets

Total current assets

10,260

11,677

Property, plant and equipment, net

8,374

8,532

Goodwill

2,407

2,414

Deferred income taxes

2,232

1,960

Other assets

2,052

2,417

Total assets

$

25,325

$

27,000

Liabilities and Shareholders’ Equity

Current liabilities:

Accounts payable

$

2,166

$

1,764

Accrued employee compensation and benefits

Short-term borrowings and current maturities of long-term debt

Other current liabilities

1,545

Total current liabilities

4,068

4,023

Long-term debt

10,816

12,214

Employee compensation and benefits

Other liabilities

Total liabilities

16,372

17,552

Company shareholders’ equity

8,917

9,409

Noncontrolling interest in consolidated subsidiaries

Total shareholders’ equity

8,953

9,448

Total liabilities and shareholders’ equity

$

25,325

$

27,000

Six Months Ended June 30

Cash flows from operating activities:

Net loss

$

(4

)

$

(5,623

)

Adjustments to reconcile net loss to cash flows from operating activities:

Depreciation, depletion and amortization

Payment related to the Macondo well incident

(368

)

(33

)

Impairments and other charges

3,189

Working capital (a)

(222

)

Deferred income tax benefit, continuing operations

(216

)

(1,516

)

Other

(634

)

Total cash flows provided by (used in) operating activities (b)

(3,803

)

Cash flows from investing activities:

Capital expenditures

(592

)

(447

)

Proceeds from sales of property, plant and equipment

Other investing activities

(29

)

(60

)

Total cash flows used in investing activities

(545

)

(393

)

Cash flows from financing activities:

Payments on long-term borrowings

(1,623

)

(2,525

)

Dividends to shareholders

(312

)

(309

)

Borrowings on short-term debt, net

Other financing activities

Total cash flows used in financing activities

(1,641

)

(2,732

)

Effect of exchange rate changes on cash

(35

)

(41

)

Decrease in cash and equivalents

(1,870

)

(6,969

)

Cash and equivalents at beginning of period

4,009

10,077

Cash and equivalents at end of period

$

2,139

$

3,108

(a) Working capital includes receivables, inventories and accounts payable.

(b) Includes a $3.5 billion merger termination fee paid during the second quarter of 2016.

Three Months Ended

June 30

March 31

Revenue

By operating segment:

Completion and Production

$

3,132

$

2,114

$

2,604

Drilling and Evaluation

1,825

1,721

1,675

Total revenue

$

4,957

$

3,835

$

4,279

By geographic region:

North America

$

2,770

$

1,516

$

2,231

Latin America

Europe/Africa/CIS

Middle East/Asia

1,000

1,048

Total revenue

$

4,957

$

3,835

$

4,279

Operating Income (Loss)

By operating segment:

Completion and Production

$

$

(32

)

$

Drilling and Evaluation

Total

Corporate and other

(114

)

(60

)

(66

)

Impairments and other charges

(262

)

(423

)

Merger termination fee and related costs

(3,519

)

Total operating income (loss)

$

$

(3,880

)

$

See Footnote Table 1 for Reconciliation of As Reported Operating Income to Adjusted Operating Income

Six Months Ended June 30

Revenue

By operating segment:

Completion and Production

$

5,736

$

4,438

Drilling and Evaluation

3,500

3,595

Total revenue

$

9,236

$

8,033

By geographic region:

North America

$

5,001

$

3,310

Latin America

1,017

Europe/Africa/CIS

1,283

1,573

Middle East/Asia

1,981

2,133

Total revenue

$

9,236

$

8,033

Operating Income (Loss)

By operating segment:

Completion and Production

$

$

(2

)

Drilling and Evaluation

Total

Corporate and other

(180

)

(106

)

Impairments and other charges

(262

)

(3,189

)

Merger termination fee and related costs

(4,057

)

Total operating income (loss)

$

$

(6,959

)

Three Months Ended

June 30, 2017

March 31, 2017

As reported operating income

$

$

Impairments and other charges (a)

Adjusted operating income (b)

$

$

(a)

During the three months ended June 30, 2017, Halliburton recognized a $262 million fair market value adjustment associated with an expected promissory note in Venezuela. There were no such operating charges or costs for the three months ended March 31, 2017.

(b)

Management believes that operating income adjusted for impairments and other charges for the three months ended June 30, 2017 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 this 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 adjustments remove the effect of this item. Adjusted operating income is calculated as: “As reported operating income” plus "Impairments and other charges" for the three months ended June 30, 2017.

Three Months Ended

June 30, 2017

March 31, 2017

As reported income (loss) from continuing operations attributable to company

$

$

(32

)

Adjustments:

Impairments and other charges

Costs related to the early extinguishment of debt

Total adjustments, before taxes (a)

Income tax benefit

(89

)

(38

)

Total adjustments, net of tax

$

$

Adjusted income from continuing operations attributable to company

$

$

As reported diluted weighted average common shares outstanding (b)

Adjusted diluted weighted average common shares outstanding (b)

As reported income (loss) from continuing operations per diluted share (c)

$

0.03

$

(0.04

)

Adjusted income from continuing operations per diluted share (c)

$

0.23

$

0.04

(a)

Management believes that income (loss) from continuing operations adjusted for impairments and other charges and costs related to the early extinguishment of debt 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 (loss) from continuing operations without the impact of these items as an indicator of performance, to identify underlying trends in the business and to establish operational goals. The adjustment removes the effect of these items. Adjusted income from continuing operations attributable to company is calculated as: “As reported income (loss) from continuing operations attributable to company” plus "Total adjustments, net of tax" for the three months ended June 30, 2017 and March 31, 2017.

(b)

As reported diluted weighted average common shares outstanding for the three months ended March 31, 2017 excludes options to purchase four million shares of common stock, respectively, as their impact would be antidilutive because our reported income from continuing operations attributable to company was in a loss position during the period. When adjusting income from continuing operations attributable to company in the period for the adjustments discussed above, these shares become dilutive.

(c)

As reported income (loss) from continuing operations per diluted share is calculated as: "As reported income (loss) 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 "Adjusted diluted weighted average common shares outstanding."