The following is a quarterly update presentation for Halliburton Company.

Transcription

1 The following is a quarterly update presentation for Halliburton Company. Filing pursuant to Rule 425 under the Securities Act of 1933, as amended Deemed filed under Rule 14a-12 under the Securities Exchange Act of 1934, as amended Filer: Halliburton Company Subject Company: Baker Hughes Incorporated Commission File No.: Quarter Update: Second Quarter 2015 Investor Relations Contacts: Kelly Youngblood, Vice President Scott Danby, Manager or investors@halliburton.com NYSE Stock Symbol: HAL Common Dividend:$0.18 in Second Quarter 2015 Shares Outstanding: 855 Million as of 7/17/2015

2 Safe the growth Harbor potential The statements and other in this expected presentation benefits that and are synergies not historical of the Baker statements, Hughes including transaction, statements are forward-looking regarding future statements financial within performance, the meaning the expected of the federal closing securities of the pending laws. These Baker Hughes transaction, are subject and 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 to uncertainties conditions to include, closing but of the are proposed not limited transaction to: with may respect not to be the satisfied pending or acquisition the closing of of Baker proposed Hughes, transaction the terms and otherwise timing does of any not divestitures occur, the risk undertaken that a regulatory in order to approval obtain required that may regulatory be required approvals, for the proposed the transaction operations of is Halliburton not obtained and or is Baker obtained Hughes subject and the to conditions ultimate outcome that are of not Halliburton s anticipated, the operating diversion efficiencies of management applied time to Baker on transaction-related Hughes products issues, and services, the ultimate the effects timing, of the outcome business and combination results of integrating of the Halliburton ability of Halliburton and Baker to Hughes, realize including such synergies the combined and other company s benefits, and future expectations financial condition, regarding regulatory results of approval operations, of strategy the transaction; and plans, changes expected in the synergies demand and for other or price benefits of oil from and/or the natural proposed gas can transaction be significantly and the impacted 2014, Halliburton s by weakness Form in the 10-Q worldwide for the quarter economy; ended changes June 30, in capital 2015, recent spending Current by customers; Reports and Form structural 8-K, and changes other in Securities the oil and and natural Exchange gas Commission industry. Halliburton s filings discuss Form some 10-K of for the the important year ended risk December factors 31, 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. 2

3 Safe communication Harbor Additional relates to information proposed This business communication combination does between not constitute Halliburton an offer and Baker to buy Hughes. or sell or In the connection solicitation with of this an offer proposed to buy business or sell combination, any securities Halliburton or a solicitation has filed of any with vote the or Securities approval. and This Commission (the SEC ) a registration statement on Form S-4, including Amendments No. 1 and 2 thereto, and a definitive joint proxy statement/prospectus of Halliburton and Baker Hughes and otherexchange documents Halliburton related and Baker to the Hughes. proposed INVESTORS transaction. AND The registration SECURITY statement HOLDERS was OF declared HALLIBURTON effective by the AND SEC BAKER on February HUGHES 17, 2015 and URGED the definitive TO READ proxy THE statement/prospectus JOINT PROXY STATEMENT/PROSPECTUS, has been mailed to stockholders of REGISTRATION CONTAIN IMPORTANT STATEMENT INFORMATION. AND OTHER Investors DOCUMENTS and security FILED holders OR may THAT obtain MAY free BE copies FILED of these WITH documents THE SEC and CAREFULLY other documents AND filed IN THEIR with the ENTIRETY SEC by Halliburton BECAUSE and/or THEY Baker CONTAIN Hughes OR through WILL website maintained by the SEC at Copies of the documents filed with the SEC by Halliburton are available free of charge on Halliburton s internet website at the by contacting Halliburton s Investor Relations Department by at investors@halliburton.com or by phone at Copies of the documents filed with the SEC by Baker Hughes are availableor free of charge Participants Baker Hughes in Solicitation internet website Halliburton, at Baker Hughes, their respective by directors contacting and Baker certain Hughes of their Investor respective Relations executive Department officers may by be considered at alondra.oteyza@bakerhughes.com participants in the solicitation or of by proxies phone at in+1- connection filed with the with SEC the on proposed February transaction. 24, 2015, Information its proxy statement about the for directors its 2015 and annual executive meeting officers stockholders, of Halliburton which is set was forth filed in with its Annual the SEC Report on April on Form 7, 2015, 10-K and for its the Quarterly year ended Report December on Form 31, 10-Q 2014, for which the quarter was ended December June 31, 30, 2014, 2015, which which was was filed filed with with the the SEC SEC on on February April 23, 26, , Information its proxy statement about the for directors its 2015 and annual executive meeting officers stockholders, of Baker Hughes which is set was forth filed in with its Annual the SEC Report on March on Form 27, 2015, 10-K and for the its Quarterly year ended Report information on Form regarding 10-Q the for the participants quarter ended in the June proxy 30, solicitations 2015, which and was a description filed with the of their SEC direct on July and 24, indirect interests, These documents by security can holdings be obtained or otherwise, free of charge are contained from the sources in the proxy indicated statement/prospectus above. Additional relevant materials filed with the SEC. 3 and other

4 Agenda? Company Overview? Market Outlook? Acquisition Update? Unconventionals? Deepwater? Mature Fields? Financials 4

5 Service Offerings Drilling and Evaluation Completion and Production Baroid Consulting & Drill Bits Landmark Artificial Cementing Completion Project and Services Software and Lift Tools Management Services Sperry Testing and Wireline and Multi-Chem Production Production Drilling Subsea Perforating Enhancement Solutions 5

6 Halliburton Global Franchise North America H H Middle East/Asia Pacific Europe/Africa/CIS Latin America Halliburton Locations H Halliburton Headquarters Halliburton Research Centers 2015 Operational Research Corporate Founded Employees Countries Centers Headquarters Customers FAST FACTS 1919 Over Houston National, International and 70,000 Dubai Independent entities worldwide 6

7 Comparing North America Cycles Index of the US Rig Count during Last 3 Major Cycles Count Rig 0.80 Indexed % % 2014-Curr -56% % Weeks Source: Baker Hughes US Rig Count through 7/24/15 7

8 Growth in Key Segments 5-Year Market Share Change Market HAL Market HAL Peer HAL Size Position Size Position Average Hydraulic Fracturing 1 1 (5.9%) (1.2%) Directional Drilling/LWD/SDL 2 2 (1.9%) (5.2%) Wireline % Artificial Lift N/A % (3.7%) Drilling & Completion Fluids 2 2 (1.4%) (1.2%) Completion Equipment % (3.4%) Cementing % (4.2%) Specialty Chemicals N/A 4 1.7% (5.8%) Drill Bits % (5.5%) Source: Spears & Associates 2014 Oilfield Market Report (Apr 2015 Update) Primary Peers: SLB, BHI 8

9 Halliburton products and and R&D Baker Corporate Hughes services Creating Optimization a Leading Oilfield Accelerates Services Halliburton Company Strategy A Compelling 11% 9% with Real Nearly Estate $2 Unconventionals, billion of Strategic Deepwater Combination and Mature Annual Fields Cost Administration/ Synergies Unsurpassed 8% Organizational breadth and Combined depth of company 31% International well-positioned year two for after continued close Operational Efficiencies Operational 18% superior Efficiencies growth, margins Efficiencies and Deal returns Updates... 23% Accretive Halliburton cash began flow marketing by end of for year sale one its after drill close; bits business accretive (Fixed to earnings Cutter per and share Roller by end Cone of bits), North and American drilling services business (Directional Drilling, Logging-While-Drilling and Measurement-While-Drilling) in the second quarter During the first round, received nearly 25 indications of interest for each business its Halliburton in the third quarter and Baker We Hughes are fully entered committed into a to timing our target agreement of closing with the the acquisition Antitrust Division late in 2015 of the 9 U.S. Department of Justice in the third quarter Halliburton submitted its filing with the European Commission

10 Key Strategic Markets 2014 Revenue $32.9B Over 60% of 2014 Revenue came from our 3 Key Strategic Markets 10

11 Global Methane Unconventional Opportunity Unconventional Challenges ? 13 Geology Russia? Infrastructure U.S. China? Regulatory Argentina Environment Libya Venezuela? Economic Mexico Pakistan Viability Canada Unconventional Indonesia Basins Brazil 75 Russia Tight South Gas 1,115 Australia Shale Mexico Gas Coal Canada Bed Algeria Argentina China Africa Shale Oil Technically Recoverable Resources Shale Gas Technically Recoverable Resources (billion barrels) (trillion cubic feet) Source: EIA, Technically Recoverable Shale U.S. Oil and Shale Gas Resources, June,

12 Surface Efficiency FRAC 20% LESS OF THE CAPITAL FUTURE 35% LESS PERSONNEL 40% LESS COMPLETION TIME SandCastle Vertical Sand Logistics Q10 Pump Mobile Technologies Storage Bins Command Center Reduce footprint at wellsite, Allows procurement and logistics Streamline well site Significantly lowers downtime significantly lowers operational specialists to monitor sand supply processes and increase and maintenance costs and capital costs and deliveries in real time back office efficiencies 12

13 Making completions Better during Wells plug Custom and perf Chemistry operations SM Old Conventional Fractures Dynamic AccessFrac Diversion Chemistry OilPerm Combines FMM leading enables unconventional deeper fluid movement hydraulic Restored fracturing Fracture techniques Conductivity with proprietary RockPermSM diversion A chemistry laboratory to testing enhance process multi-zone select the optimum OilPerm Fluid Mobility Modifiers (FMM) for a stimulation treatment. New Stimulated OilPerm FMMs are designed to improve flow and enhance Volume Analysis hydrocarbon production to from shale reservoirs.

14 Making production Better and Wells minimize Sub cost Surface integrating Insight geological FracInsightSM data with Service well DecisionSpace construction? Evaluates Earth Modeling rock properties Select perforation to identify clusters optimal and entry frac points stage? locations Full field Helping 3-D visualization design more tools cost-effective? Works with wells horizontal by to maximize logs, horizontal cased-hole logs,? Accelerates seismic data analysis by up to 80% or vertical open-hole logs + LWD data? Saved 15 drilling days for deepwater NOC customer by optimizing? Eliminated open-hole unnecessary treatments for Eagle Ford customer, well construction plan reducing stimulation costs by 35% 14

15 Outgrowing the Deep Water Market? Delivering the Safest, Lowest Cost Finding Market per Foot Drilled Leadership? Leveraging leadership positions in Geoscience and Completions Drilling? Providing a Compelling Choice in Formation Evaluation Evaluating? Leading in High Pressure/High Temperature (HP/HT) Solutions? Positioning through Global Deepwater Infrastructure Completing Market Leadership 15

16 Deepwater Time ESTMZ Technology Helps Reducing reduce Industry s Uncertainty Leading Increasing Downhole, Reliability Collects SM and Enhanced Identifies Single-Trip Monitoring Multi-ICE and Drilling Core completion Service GeoTap cost in multiple IDS Sensor Real-Time, DrillingXpert Laboratory-Grade Software zone Fluid FracPac Samples during System Drilling Consolidates Modeling Real- Into resolution Single? Platform Collect multiple zone completions samples within Fluid? ID High-volume Platform Operations fracturing?? Improved Increased planning drilling efficiency? Simultaneous? Solid-state perforations device? hours, Over 110 not patents days? and Reduces filings costly? Improved rig time sample? Real-time integrity optimization capabilities 16? Higher accuracy,

17 Impacting the Decline Curve? Collaborate with our customers? Grow through consulting-led mature field projects? Deploy multi-lateral and infill drilling technologies? Penetrate intervention segment by focusing on key markets and acquisitions? Mature fields a technically underserved market 50 Mature Field day 40 Original Vertical Wells Final (?) per Decline Curve 30 Infill Vertical Wells barrels Infill Horizontal Wells 20 CO2 Injection Thousand 10 Economic Limit

18 Consulting-Led horizontal? Re-developing Mature Fields Bayan Projects oil and Mexico Humapa gas field off techniques? Contracted and technology to manage as asset well block as East and Malaysia to deliver experience services from nearby asset Remolino planning to project Malaysia Bayan? Project includes production seismic operations analysis,? workover Leveraging of unconventional and new well drilling Ecuador Igapo? Multi-billion dollar opportunity over 9 mature fields? Contracted to provide consulting, drilling, and completions services? Total project term is 15 years, existing with potential wells, for a 5-year extension 18

19 2Q15 Pacific Revenue North America Breakdown rig count. North Lower America activity Middle levels East/Asia were offset Pacific by Revenue customer declined budgets 25% translated sequentially, into improvements Modest sequential in Iraq, improvement Kuwait and the in relative additional to a reductions 40% reduction in activity in the levels operating UAE. income. Iraq margins Lower reached Asia double- improvements 23% throughout in Eurasia the and second Norway, quarter, along digits with higher during Latin the second America quarter. stimulation accompanied activity by and further completion significant tools price sales reductions in both Algeria across all and product Angola lines. Double-digit 45% 19% sequential Europe/Africa/CIS declines in 13% revenue Seasonal drove activity sequential improvement for and operating income were driven by the quarter, offsetting weaker activity Venezuela, primarily due to the negative levels in the UK and Egypt. currency impact of the new the rate. This was partially offset by improved profitability in Brazil resulting from the recently retendered directional drilling contract. 19 exchange

20 Financial 13% 13% Goals % Total 12% Revenue % (Indexed) 10% 140 Return 120 on 118 Average 100 Q1 Capital 2010 = Employed* Q10 1Q10 1Q11 to 1Q12 2Q151Q Q14 to 2015Q2 1Q15 TTM** HAL 2012 Peer 2013 Group 2014 HAL 2Q15** Peer Group * Excludes certain 19% charges % See 16% page 17% 26 for 200 reconciliation 15% % of long-term adjusted debt return plus on shareholders capital employed. equity **(average TTM Trailing values from Twelve the beginning Months and Return end of on the Average period) Capital 20 Employed is defined as net income attributable to company plus after tax interest expense divided by

21 Global Revenue North America Revenue (Indexed) International Revenue (Indexed) 1Q10 to 2Q15 1Q10 to 2Q15 HAL Peer Group HAL Peer Group Q = 100 Q = Q10 1Q11 1Q12 1Q13 1Q14 1Q15 1Q10 1Q11 1Q12 1Q13 1Q14 1Q15 21

22 Geographic 3,542 2,671 Results 15,212 ($ millions) 17,6981Q13 6,213 2Q13 Latin 3Q13 America 4Q13 1Q Q14 1,002 3Q14 1,018 4Q Q ,045 2Q , ,909 YTD 3,875 Revenue 1,716 North Europe America / Africa $ 3,706 / CIS $ 1,187 3,8021,299 $ 3,881 1,340 $ 3,823 1,399 $3,901 1,299 $ 1,381 4,3441,464 $ 4,724 1,346 $ 4,729 1,097$ 1,095 7,050 5,225 $ 5,9195,490 $ 29,402 $ 2,192 $ 32,870 Middle $ East 12,969 / Asia Operating 1,136 1,272 Income/(Loss) 1,249 1,399 North 1,289 America 1,429 $ 1, $ 1, $ 1, $ 1, $ 5, $ 5, $ 2, $ Total 918 $ $ 279 6,974 $ 130 $ 7,317 $ 2,572 $ 7,472 $ 3,216 $ 7,639 $ 409 $ Latin 7,348 America $ 8, $ 8, $ 155 8, $ Europe / Africa / CIS Middle East / Asia , Corporate and 100 Other (17)(1,120) (122) related (163) (105) costs (119) Total (89) $ (98) (107) $ $ (83) 1,108 (69) $ 1,144 (70) (1,507) $ 970 $ (167) 1,194 (139) $ 1,634 Impairments $ 1,299 $ and (548) other $ 254 charges $ 3,138 $ (129) 5,097 $ (294) (1,208) 22 (306) (129) (1,514) Baker Hughes acquisition (17) (39) (83)

23 Items (34) (7) included in (41) Geographic Latin Results America ($ Restructuring millions) 1Q13 charges 2Q13 3Q13 (4) 4Q13 (4) 1Q14 2Q14 (8) 3Q14 Europe 4Q14 / Africa 1Q15 / 2Q15 CIS YTD Operating (6) (2) Income/(Loss) (8) Middle North America East / Asia Restructuring Restructuring charges charges (7) (5) (12) Corporate and other: Macondo-related activity (1,000) 195 (1,000) 195 Restructuring charges (3) (20) (23) Charitable contributions (55) (55) Patent infringement case settlement Impairments and other charges: (129) (1,208) (306) (129) (1,514) Baker Hughes acquisition-related (17) (39) (83) (17) costs: (122) Total $ (1,000) $ (55) $ (54) $ (38) $ $ $ 195 $ (146) $ (1,247) $ (389) $ (1,147) $ 49 $ (1,636) 23

24 Segment 5,420 5,471 Results $ 4,246 ($ millions) $ 3,4441Q13 $ 17,506 2Q13 3Q13 20,253 4Q13 $ 7,690 1Q14 Drilling 2Q14 3Q14 and Evaluation 4Q14 1Q15 2,874 2Q152, , , YTD 2,928 Revenue 3,109 3,281 Completion 3,299 2,804 and Production 2,475 11,896 $ 4,100 12,617 $ 4,363 5,279 $ Total 4,501 $ $ 6,974 4,542 $ $ 7,317 4,420 $ 7,472 4,942 $ $7,348 $ 8,051 $ 8,701 $ 8,770 $ 7,050 $ 5,919 $ 29,402 $ 32,870 $ 12,969 Operating Income/(Loss) Completion and Production $ 615 $ 732 $ 763 $ 765 $ 661 $ 887 $ 1,071 $ 1,051 $ 462 $ 313 2,875 7,639 3, Drilling and Evaluation ,770 1, Corporate and other (1,120) (163) (105) (119) (89) (107) 112 (83) (69) (70) (1,507) (167) (139) Impairments and (548) other $ 254 charges $ 3,138 $ 5,097 (129) $ (294) (1,208) CAPEX (306) (129) (1,514) Baker 732 Hughes acquisition ,934 3,283 (17) 1,223 (39) DDA (83) (17) (122) related 510 costs 524 Total $ (98) 560 $ ,900 $1,108 2,126 $ 1,144 1,016 $ $ 1,194 $ 1,634 $ 1,299 $

25 Items (40) included (10) in Segment (50) Results Drilling ($ millions) and Evaluation: 1Q13 2Q13 Restructuring 3Q13 4Q13 charges 1Q14 2Q14 (11) (8) 3Q14 4Q14 1Q15 (19) 2Q15 Corporate and other: 2015 YTD Macondo-related Operating Income/(Loss) activity (1,000) Completion 195 and (1,000) Production: 195 Restructuring charges charges (17) (3) (39) (20) (83) (17) (122) (23) Total Charitable $ (1,000) contributions (55) $ $ (54) $ (38) $ $ $ 195 (55) $ (146) Impairments $ (1,247) and $ (389) other $ charges (1,147) $ 49 $ (129) (1,636) 25(1,208) (306) (129) (1,514) Baker Hughes acquisition-related costs

26 Reconciliation expense, after-tax of As 181 Reported ROACE to As Adjusted reported operating ROACE ($ profit, millions) after-tax , , , Q15 3,789 TTM 1,833 As Adjustments, reported net after-tax income 88 attributable to (15) company 1,168 Adjusted $2,839 $2,635 operating $2,125 profit, $3,500 after-tax $1,515 (a) $3,108 Interest $3,123 3,774 3,001 Average capital employed (b) 16,124 19,323 21,021 22,785 22,978 As reported ROACE (c) 19% 15% 11% 17% 8% Adjusted ROACE (c) 19% 16% 15% 17% 13% (a) Management $3,049 that operating income adjusted for certain charges is useful to investors to assess and understand operating performance, especially when comparing results with previous and subsequent periods or forecasting believes performance charges as an for indicator future periods, of performance, primarily to because identify management underlying trends views in the the charges business, to be and outside to establish of the company s operational normal goals. See operating slides results. 23 and Management 25 for further analyzes details on operating these adjustments, income without pre-tax. the (b) impact Average of these employed is a statistical mean of the combined values of long-term debt and shareholders equity for the beginning and end of the period. (c) As reported return on average capital employed (ROACE) is capital calculated as: As reported operating profit, after-tax divided by Average capital employed. Adjusted ROACE is calculated as: Adjusted operating profit, after-tax divided by Average capital employed. 26

27 Recap Best-in-Class Robust Comprehensive Expanded Platform Unconventional Deep Water Mature Fields for Superior Solutions Technology Capabilities Growth, Margins & Portfolio Returns 27

28 Quarter Update: Second Quarter 2015 NYSE Stock Symbol: HAL Investor Relations Contacts: Common Dividend:$0.18 in Second Quarter 2015 Kelly Youngblood, Vice President Shares Outstanding: 855 Million as of 7/17/2015 Scott Danby, Manager or