Halliburton announced Monday that income from continuing operations for the fourth quarter of 2011 was $921 million, or $1.00 per diluted share, excluding a $15 million charge, after-tax, or $0.02 per diluted share, for an environmental-related matter included in Corporate and other. This compares to income from continuing operations for the third quarter of 2011 of $867 million, or $0.94 per diluted share, excluding a $19 million, after-tax, or $0.02 per diluted share, impairment charge on an asset held for sale in the Europe/Africa/CIS region. Net income attributable to company in the fourth quarter of 2011 was $906 million, or $0.98 per diluted share.
Halliburton's consolidated revenue in the fourth quarter of 2011 was $7.1 billion, compared to $6.5 billion in the third quarter of 2011. Consolidated operating income was $1.4 billion in the fourth quarter of 2011, compared to $1.3 billion in the third quarter of 2011. Improved international results accounted for the majority of these increases.
Halliburton's revenue was $24.8 billion for the full year 2011, an increase of 38 percent from 2010, and consolidated operating income was $4.7 billion, an increase of 57 percent from 2010. Income from continuing operations for the full year 2011 was $3.0 billion, or $3.26 per diluted share, compared to full year 2010 income from continuing operations of $1.8 billion, or $1.97 per diluted share. These increases were largely attributable to strong results in North America, with higher activity in the unconventional oil and natural gas basins, partially offset by disruptions caused by geopolitical events in North Africa.
Commenting on 2011 results, Dave Lesar, chairman, president, and chief executive officer said, "I am very pleased with our fourth quarter and full year 2011 results, which set records for revenue and operating income. For the full year, we delivered record revenue for both of our business segments and three of our four geographies. During 2011, we continued to execute our growth strategy in North America while expanding our presence in key emerging international markets. Overall, we were able to deliver on our goals of superior growth, margins, and returns while strengthening our position for future growth.
"In North America, the trend toward increased horizontal oil-directed activity continued in the fourth quarter with the United States oil-directed rig count up 8 percent sequentially compared to a natural gas rig count decline of 2 percent. We expect this trend will persist into 2012, along with continued improvements in drilling and completion efficiency, leading to an overall increase in demand for our services.
"Our results in North America in 2011 were truly outstanding, with each quarter setting a new record for revenue. Fourth quarter revenue was up 6 percent sequentially, compared to United States rig count growth of 3 percent. Operating income declined slightly from the third quarter due to merger and acquisition related costs from recent acquisitions, normal seasonal factors, cost inflation, logistical challenges, and equipment and crew relocations from natural gas to liquids-rich basins.
"The improvement in the Gulf of Mexico in 2011 was encouraging. We saw increased rig count as the year progressed, particularly in deepwater, as our customers' success with permitting improved and they resumed operations. Our strategy of keeping our infrastructure intact has paid off, with our fourth quarter revenue now above pre-moratorium levels. We expect continued activity increases in 2012.
"While international markets were challenging in 2011, I am pleased with our results. Latin America had an outstanding year topped off by a fourth quarter in which revenue and operating income increased sequentially 9 percent and 24 percent, respectively.
"Eastern Hemisphere proved challenging in 2011 as impacts from the unrest in North Africa, continued competitive pricing, and delays in Iraq weighed on our results. However, we saw progress through the year as Egypt and Algeria recovered, activity in Iraq improved, and we continued to execute strategies to improve profitability in other markets. In the fourth quarter, our Eastern Hemisphere operations experienced sequential revenue and operating income growth of 11 percent and 69 percent, respectively, compared to rig count growth of 3 percent, supported by strong year-end sales of software and equipment. We expect pricing will remain competitive in 2012 with improvements anticipated for select basins and some of our new technologies.
"In 2011, we executed with tremendous success our North America strategy that was started in the downturn of 2009. Similarly, we are building a position in key international markets that will enable growth as those markets develop. We are proud of the results delivered in 2011 and excited about the opportunities in 2012.
"In 2012, we expect revenue growth in excess of rig count growth in both the Eastern and Western Hemispheres. We are proactively moving equipment from dry natural gas to liquids plays in North America in response to recent rig moves. We believe strongly that we will not experience a collapse of margins in North America and, as a result, we expect revenue and operating income will increase in 2012 in North America.
"We believe that operators in North America will continue to focus on the development of their liquids-rich unconventional resource base resulting in robust demand for our services. Given the dramatic growth experienced by us and the industry during 2011, we expect continued challenges in the areas of material costs, labor, and logistics. We plan to mitigate these challenges through investment in technology and our logistical infrastructure and by seeking to recover increased costs from our customers. As a result of the recent decline in natural gas prices and corresponding decline in natural gas rig count, we are relocating people and equipment into oil and liquids-rich basins. We believe that reduced productivity and increased costs resulting from this relocation will be a short-term disruption for us and that the impact we saw in the fourth quarter will continue into 2012. We have dealt successfully with some significant logistical challenges in 2011 to accommodate the tremendous growth we have seen, and we expect to address these near-term issues with the same intensity.
"We anticipate that Eastern Hemisphere margins will return to the mid- to high-teens at the end of 2012 as we gain traction on new projects while growing revenue at a higher rate than rig count growth. Our positive view of the market supports an increase in capital spending in 2012. However, we expect pressure pumping horsepower additions will not increase over 2011, and an increased proportion of horsepower will be directed to international markets," concluded Lesar.
2011 4Q Significant Recent Events and Achievements
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