C I T IS P O N S O R E D S T A T E M E N T

Attaining Global Cash Efficiency: Best Practices Of A Global Energy Services Company

If oil and gas are the lifeblood of the globaleconomy, then the companies that service and

support energy production are vitally importantto maintaining the flow of these criticalresources. Halliburton isa leading provider of abroad array of productsand services to the oiland gas industries.Working across thefarthest reaches of theglobe, with over 50,000employees and revenuestotaling more than $15billion in 2007,Halliburton has grownto have operations inapproximately 70countries, helping toquench the world’sinsatiable thirst for energy.

Building a Truly Global Treasury StructureAs Halliburton’s business has grown, improving

internal cash efficiency has become a focus fortreasury, which identified two linked initiativesaround structure and process.To improve cashaccess, Halliburton’s treasury implemented aglobal cash concentration and pooling structureto optimize liquidity usage and application acrossthe firm.To improve cash velocity, the companycentralized third-party payments around theworld into two transaction centers, reducingpaper processing and increasing efficiencies.

Global Pooling: 20 Years of Planning To meet its expanding cash management needs,

Halliburton’s treasury put a complex global cashpooling structure in place.“As our business outsidethe United States has increased, we are constantlylooking for opportunities where we can utilizecash pooling, taking into account central bankregulations, foreign currency controls and in-houseinternational tax strategies” explains EdwardEichelberger, treasury manager, Cash Operationsfor Halliburton.“One of the primary benefits of a

cash pool is that we don’t end up with excess cashtrapped at the country level. From a cashrepatriation standpoint, we can get the cash outquickly and efficiently, which is key to our overall

liquidity strategy.”According to

Eichelberger about halfof the firm’s pools are inUS dollars and the otherhalf in foreigncurrencies. Up to 90%of the company’s globalcustomer receipts go topooled accounts.

Halliburton’s treasuryhas reaped tremendousbenefits from its globalpooling structure, whichsweeps funds based onlocal time zones and cut

offs to maximize investment opportunities.“Byfollowing the sun, we can sweep cash fromSingapore to the UK, the Middle East to theUK, and then UK back to our headquarters inHouston,” says Eichelberger.“So, for example, wehave until 10:00 a.m. Houston time to repatriatecash back to the US from our dollar pool atCitibank London if we are long, or fund poolsfor value tomorrow in the Middle East or Asia ifwe are short.”

As a result of Halliburton’s unique globalpooling structure, the company has tremendousefficiency and does not require personnel inSingapore, Dubai or the UK to handle thesetransactions. In fact, Halliburton’s cashmanagement group, which consists of fourtreasury professionals, manages all of its domesticand sweep activities from Houston.

One of the additional benefits of this globalpooling structure is that personnel at the countryand global transaction center level are relievedfrom the responsibility of managing bankaccounts.This allows these groups to put all oftheir focus on execution of the business, whichultimately translates into bottom line success.

Halliburton has implemented shared-service

1 6 S E P T E M B E R 2 0 0 8

Edward Eichelberger,treasury manager, cashoperations, Halliburton

How Halliburton Centralizes Treasury and Payment Operations Across 70 Countries

Stuart M. Heath, senioraccounting manager,Halliburton

centers for making third-party payments, amongstother activities, in Dubai.These centers utilizeenterprise resource planning (ERP) to share dataand execute transaction processing where it willbe most cost-effective.

“Having a standard payment file format foruse with Citi around the world is very beneficialfrom Halliburton’s standpoint,” explains StuartHeath, head of Halliburton’s Dubai TransactionCenter.“Using a single system, such as SAP®software, we can generate a payment file, whichwe run through the Mercator utility to formatfor local country use, enables us to achieve amuch greater level of efficiency as we reducepaper processing and become more automated.”

Heath adds that the key has been to reducethe frequency with which documents are handledduring processing.To that end, optical characterrecognition (OCR) technology allows accounts-payable documents to be read, interpreted andposted with minimal human intervention.

Ensuring Straight-through ProcessingReducing human intervention in payment files,

whether for AP invoices or payroll payments, is animportant step toward meeting corporatecompliance responsibilities. In addition, by issuingfiles that are compliant with each banking partner’sfile structures and data exchanges for a givencountry, Halliburton benefits from straight-throughprocessing. Heath says that much of the success ofHalliburton’s transaction centers has resulted froma combination of process focus, access to top-levelprofessionals, and a solid technology solution thathas allowed for a consistency in operation.

The Importance of a Global Banking PartnerHalliburton relies on its global banking

partners, and Citi’s global footprint has proven tobe a significant advantage in achievingHalliburton’s current treasury success.

“Citi has a local presence in more of thesecountries than any other bank, which provides uswith the innovative services we require to satisfylocal liquidity needs even outside of our poolingstructure.A key consideration for Halliburton hasbeen the reliability of the global informationplatform provided by our banking partners.A fewyears back when Houston was hit by a hurricaneand we had to evacuate our headquarters, ourtreasury department was able to manage thecompany’s global pools remotely,” says Eichelberger.

Halliburton relies on web-based platforms such

as CitiDirect®financial servicenetwork for remotevisibility into its globalaccounts and formanaging the entirecash pooling structure.Eichelberger notes thatCiti’s ability to providea single global pointfor customer service,client management andaccount managementhas greatly simplifiedits bankingrelationships.

A Benchmark for Excellence“Halliburton’s unique, integrated approach of

implementing the right structure as well as theright process—by way of global pooling andshared-service centralization—has made thecompany a benchmark for best-in-class practiceswithin the energy industry,” explains Lance T.Kawaguchi, Director, Global RelationshipManager, Citi’s Global Transaction Services.“Aspart of Citi’s role as Halliburton’s DubaiTransaction Center’s largest provider/partner, Ihave toured their operations, and I was taken withthe level of pride that their employees displayed inthe execution of their job responsibilities. Out ofnecessity, Halliburton has to use multiple bankingsoftware solutions, and as a result of the additionalcomplexity this entails, I believe their Dubai teamdeserves added recognition.”

As the company continues to expand itsoperations around the world, an elite team oftreasury professionals has put in place a globalpooling structure that is both nimble and highlyeffective in achieving Halliburton’s cashmanagement goals.And with the implementationof its shared-service centers, Halliburton hasreduced costs throughthe offshoring of back-office functions, therebyallowing the companyto drive greaterefficiencies in itspayment processing.

C I T IS P O N S O R E D S T A T E M E N T

2 0 0 8 S E P T E M B E R 1 7

Information for this article provided courtesy of Halliburton Company.(c) 2008 Citibank, N.A.All rights reserved. Citi and Arc Design andCitiDirect are trademarks and service marks of Citigroup Inc. or its

affiliates, used and registered throughout the world.

Lance T. Kawaguchi,Director, Citi’s GlobalTransaction Services