Halliburton 2013 Annual Report Download - page 28

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We are subject to foreign exchange risks and limitations on our ability to reinvest earnings from operations in one
country to fund the capital needs of our operations in other countries or to repatriate assets from some countries.
A sizable portion of our consolidated revenue and consolidated operating expenses is in foreign currencies. As a result,
we are subject to significant risks, including:
- foreign currency exchange risks resulting from changes in foreign currency exchange rates and the implementation of
exchange controls; and
- limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our
operations in other countries.
As an example, we conduct business in countries, such as Venezuela, that have non-traded or “soft” currencies that,
because of their restricted or limited trading markets, may be more difficult to exchange for “hard” currency. We may accumulate
cash in soft currencies, and we may be limited in our ability to convert our profits into United States dollars or to repatriate the
profits from those countries. In addition, we may accumulate cash in foreign jurisdictions that may be subject to taxation if
repatriated to the United States. For further information, see "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Business Environment and Results of Operations" and Note 9 to the Consolidated Financial Statements,
"Income Taxes."
Our failure to protect our proprietary information and any successful intellectual property challenges or
infringement proceedings against us could materially and adversely affect our competitive position.
We rely on a variety of intellectual property rights that we use in our services and products. We may not be able to
successfully preserve these intellectual property rights in the future, and these rights could be invalidated, circumvented, or
challenged. In addition, the laws of some foreign countries in which our services and products may be sold do not protect
intellectual property rights to the same extent as the laws of the United States. Our failure to protect our proprietary information
and any successful intellectual property challenges or infringement proceedings against us could materially and adversely affect
our competitive position.
If we are not able to design, develop, and produce commercially competitive products and to implement commercially
competitive services in a timely manner in response to changes in the market, customer requirements, competitive pressures,
and technology trends, our business and consolidated results of operations could be materially and adversely affected, and the
value of our intellectual property may be reduced.
The market for our services and products is characterized by continual technological developments to provide better and
more reliable performance and services. If we are not able to design, develop, and produce commercially competitive products
and to implement commercially competitive services in a timely manner in response to changes in the market, customer
requirements, competitive pressures, and technology trends, our business and consolidated results of operations could be
materially and adversely affected, and the value of our intellectual property may be reduced. Likewise, if our proprietary
technologies, equipment, facilities, or work processes become obsolete, we may no longer be competitive, and our business and
consolidated results of operations could be materially and adversely affected.
If our customers delay paying or fail to pay a significant amount of our outstanding receivables, it could have a
material adverse effect on our liquidity, consolidated results of operations, and consolidated financial condition.
We depend on a limited number of significant customers. While none of these customers represented more than 10% of
consolidated revenue in any period presented, the loss of one or more significant customers could have a material adverse effect
on our business and our consolidated results of operations.
In most cases, we bill our customers for our services in arrears and are, therefore, subject to our customers delaying or
failing to pay our invoices. In weak economic environments, we may experience increased delays and failures due to, among
other reasons, a reduction in our customers’ cash flow from operations and their access to the credit markets. If our customers
delay paying or fail to pay us a significant amount of our outstanding receivables, it could have a material adverse effect on our
liquidity, consolidated results of operations, and consolidated financial condition.
Our business in Venezuela subjects us to actions by the Venezuelan government and delays in receiving payments,
which could have a material adverse effect on our liquidity, consolidated results of operations, and consolidated financial
condition.
We believe there are risks associated with our operations in Venezuela, including the possibility that the Venezuelan
government could assume control over our operations and assets. We also continue to see a delay in receiving payment on our
receivables from our primary customer in Venezuela. If our customer further delays paying or fails to pay us a significant amount
of our outstanding receivables, it could have a material adverse effect on our liquidity, consolidated results of operations, and
consolidated financial condition.