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Employee motivation has a direct bearing on financial results. With $13 billion in revenue, 2001 was a good year for Halliburton, and I’d like to thank the management team and our highly motivated workforce for their contributions that help continue to position Halliburton as one of the best, most focused and innovative service companies in the world.
Our Energy Services Group ended 2001 with record operating income while our Engineering & Construction Group, Halliburton KBR, exceeded its revenue and margin commitments and continues to be awarded quality jobs on terms that should enhance future returns on capital.
Within the Energy Services Group, both Landmark Graphics and Halliburton Energy Services had excellent results, despite the decline in rig activity in the United States toward the end of the year. Both businesses benefited from their strong international presence and broad suite of products and services.
The pressures facing Halliburton’s customers are among our biggest challenges. What drives the oil and gas industry is the same today as it will always be. Our customers have to find and replace the oil and gas they produce every year. They have to do it from increasingly remote and hostile locations, and they have to bring it to market at a cost that’s commercially and politically acceptable.
The future performance of Halliburton strongly depends on technology. In 2001, Halliburton spent just under $300 million on technologies aimed at our existing businesses and product lines. We plan to continue our technology spending at approximately this rate in 2002.
In addition, we are prepared to make equity investments in technologies that are attractive in the marketplace to either expand our current portfolio or to create entirely new businesses. This type of investment is not new to our Company; Halliburton has spent almost $600 million on external technology over the past three years. These types of opportunities do not come along every day. Continuing this pace of external investment depends on our ability to identify and acquire new technologies that will create value to our shareholders.
Halliburton’s technology investment will ensure that we increase production, increase reserves, decrease capital and operating costs, reduce uncertainty and improve productivity for our customers.
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