Halliburton 2011 Annual Report Download - page 69

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54
Following is a discussion of our results of operations by reportable segment.
Completion and Production increase in revenue compared to 2010 was primarily a result of higher
activity in North America. North America revenue rose 76%, primarily due to increased cementing services
and higher activity in production enhancement from an increased demand for hydraulic fracturing in the
United States. Latin America revenue increased 33% due to improved activity in all product service lines
across the region. Europe/Africa/CIS revenue decreased 3%, as less activity in North Africa and lower
vessel utilization in the North Sea and Nigeria was partially offset by higher activity in our Boots & Coots
product service line in Angola and Norway. Middle East/Asia revenue grew 17% due to higher activity in
all product service lines in Australia, Malaysia, and Indonesia, partially offset by lower completion tools
sales in China. Revenue outside of North America was 28% of total segment revenue in 2011 and 38% of
total segment revenue in 2010.
The Completion and Production segment operating income increase compared to 2010 was
primarily due to the North America region, where operating income grew $1.9 billion on higher demand for
production enhancement services in unconventional basins located in the United States land market. Latin
America operating income increased 38% due to higher demand for cementing services in Colombia,
Brazil, and Argentina, partially offset by higher costs and pricing adjustments in Mexico.
Europe/Africa/CIS operating income declined 84% due to an impairment charge on an asset held for sale in
the third quarter of 2011 and activity disruptions in North Africa, including the Libya-related reserve for
certain account receivables and inventory recognized in the first quarter of 2011. Middle East/Asia
operating income decreased 4% due to higher costs across most of the region and higher start-up costs
associated with the commencement of work in Iraq, which were partially offset by higher activity levels in
Australia, Malaysia, and Indonesia.
Drilling and Evaluation revenue increased 21% compared to 2010 as drilling activity improved
across all regions, especially North America and Latin America. North America revenue grew 33% on
substantial activity increases in the United States land market. Latin America revenue increased 34% due to
higher demand in most product services lines in Brazil, Mexico, Venezuela, and Colombia.
Europe/Africa/CIS revenue increased 4% due to improved drilling service in Angola, Nigeria, and Norway
and increased fluid demand in Egypt, partially offset by lower activity in Libya. Middle East/Asia revenue
rose 15% primarily due to the commencement of work in Iraq, increased fluid demand in Southeast Asia,
and higher wireline direct sales. Revenue outside North America was 64% of total segment revenue in 2011
and 67% of total segment revenue in 2010.
Segment operating income compared to 2010 increased 16% due to increased activity in North
America and Latin America, partially offset by lower activity associated with the disruptions in North
Africa and less favorable pricing in the Eastern Hemisphere. North America operating income increased
42% from improved pricing and increased demand for most of our services and products. Latin America
operating income grew 74% as a result of activity increases in Mexico, Venezuela, and Brazil. The
Europe/Africa/CIS region operating income fell 33% due to costs associated with activity disruptions in
North Africa, including the reserve charge for certain account receivables and inventory recognized in the
first quarter of 2011, partially offset by improved drilling service in Norway and Nigeria and higher fluid
demand in Angola. Middle East/Asia operating income decreased 12% mainly due to start-up costs
associated with the commencement of work in Iraq and higher costs in Saudi Arabia. Operating income in
2010 was adversely impacted by a $50 million non-cash impairment charge for an oil and natural gas
property in Bangladesh.
Corporate and other expenses were $399 million, including a $37 million environmental-related
matter in 2011, compared to $236 million in 2010. The 69% increase was primarily due to higher legal and
environmental costs and additional expenses associated with strategic investments in our operating model
and creating competitive advantages by repositioning our technology, supply chain, and manufacturing
infrastructure.