Investor BookJune 2006

Investor Relations Contacts:Evelyn Angelle, VP – 713.759.2688

Rob Kukla, Manager – 713.759.2692

NYSE Stock Symbol: HALCommon Dividend: $.15 per quarterShares Outstanding: 516 Million as of 4/24/2006www.halliburton.com

The statements in this presentation that are not historical statements, including statements regarding future financial performance, are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond the company's control, which could cause actual results to differ materially from the results expressed or implied by the statements. These risks and uncertainties include, but are not limited to: legal risks, including the risks of audits and investigations of the company by domestic and foreign government agencies and legislative bodies and related publicity; potential adverse proceedings and findings by such agencies, a delay in the receipt of additional agreed payments from insurers arising from asbestos and silica claims, the risks of judgments against the company and its subsidiaries in litigation and proceedings, including shareholder lawsuits, securities laws inquiries, contract disputes, patent infringements and environmental matters, legislation, changes in government regulations, and adverse reaction to scrutiny involving the company; political risks, including the risks of unsettled political conditions, war and the effects of terrorism, foreign operations and foreign exchange rates and controls; liquidity risks, including the risks of potential reductions in debt ratings, access to credit, availability and costs of financing, and ability to raise capital; weather-related risks; customer risks, including the risks of changes in capital spending and claims negotiations; industry risks, including the risks of changes that affect the demand for or price of oil and/or gas, structural changes in the industries in which the company operates, risks of fixed-fee projects, and risks of complex business arrangements; systems risks, including the risks of successful development and installation of financial systems; and personnel and merger/reorganization/disposition risks, including the risks of increased competition for employees, availability of raw materials, and successful integration of acquired businesses, effective restructuring efforts, and successful completion of planned dispositions. Please see Halliburton's Form 10-K for the year ended December 31, 2005, and Form 10-Q for the period ended March 31, 2006, for a more complete discussion of such risk factors.

1

Balancing Our Portfolio

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

Q103 Q203 Q303 Q403 Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106

ESG Revenue KBR Revenue (excluding Iraq) Iraq Revenue

Slide 1

2005 Energy Services Group

Notes: PO Operating Income and Operating Margin exclude gain on sale of Subsea 7, Inc.DFE Operating Income and Operating Margin exclude gain on patent settlement

BaroidFluid Services

BaroidFluid Services

CementingCementing

FluidSystems

FluidSystems

$2.8B

19.2%

ProductionEnhancementProduction

Enhancement

ProductionOptimizationProduction

Optimization

$4.3B

WellDynamicsWellDynamics

Completion ToolsCompletion Tools

23.2%

LoggingServicesLoggingServices

Security DBSDrill Bits

Security DBSDrill Bits

SperryDrilling Services

SperryDrilling Services

Drilling &FormationEvaluation

Drilling &FormationEvaluation

$2.3B

20.3%

Halliburton Project Management

Halliburton Project Management

LandmarkLandmark

Digital and ConsultingSolutions

Digital and ConsultingSolutions

$0.7B

20.3%

2005 Revenue 2005 Operating Income

Slide 2

2

Energy & ChemicalsDivision

Full range of service offerings to the upstream and

downstream energy market sectors, including: oil and

gas production; gas monetization (LNG and GTL);

petrochemicals; refining; syngas (fertilizers, hydrogen and methanol); and emerging

markets

Two distinct divisions serving different customers with streamlined corporate support

Government & Infrastructure Division

Largest government logistics and services

contractor with premier worldwide civil infrastructure capabilities.

KBR Structure

Slide 3

Global Spend & Reserves

Spend HeavyReserve Light

Spend LightReserve Heavy

US

Canada

Mexico

BrazilNorway

AngolaAlgeria

Libya

Venezuela

Saudi ArabiaRussia

Source: Spears & Associates December 2005 DPO Report; *Internal Estimates

2005 D&C Spend Estimates & Reserves BOE

D&C = Drilling & Completions; BOE = Barrels Oil Equivalent

Slide 4

3

Service Intensity of Drilling & CompletionsR

even

ue /

Rig

Inde

x

Source: Spears & Associates 2005 Oilfield Market Report and March 2006 Drilling & Production Outlook

100

105

110

115

120

125

130

135

140

145

150

2000 2001 2002 2003 2004 2005

Logging Services Drilling Related Services Completion Equipment & Services Pressure Pumping

Slide 5

North America Rig Count

0

500

1,000

1,500

2,000

2,500

1/5/01 6/5/01 11/5/01 4/5/02 9/5/02 2/5/03 7/5/03 12/5/03 5/5/04 10/5/04 3/5/05 8/5/05 1/5/06Oil Rigs Gas Rigs

Nor

th A

mer

ica

Rig

Cou

nt

Source: Baker Hughes Rotary Rig Count

Slide 6

4

U.S. Coalbed Methane Markets

Gulf Coast

Warrior

ForestCity

Uinta

San Juan

GreaterGreen River Wind River

Hanna-Carbon

Piceance

Western Washington

Powder River

Central Appalachia

NorthernAppalachia

Illinois

Raton

Cherokee/Arkoma

Slide 7

U.S. Shale Market

Barnett andWoodford

BarnettShale

Woodford Monterey

Antelope

LewisMaricos

Green RiverNiobrara

Bakken

Antrim

ChattanoogaNew Albany

Slide 8

5

Stimulation Techniques

Fracturing

Pinpoint Stimulation

Acidizing / Near-Wellbore Cleanout

Sand Control

Conductivity Endurance

Slide 9

2006 Industry Outlook

13%10%

North America Non-North America

(% increase from 2005)

25% 25%

North America Non-North America

Rig CountDrilling & Completion

Spending

Source: Credit Suisse 2006 Upstream Spending Outlook

Slide 10

6

Global ESG Growth Focus Areas

Slide 11

$0

$100

$200

$300

$400

PO Fluids DFE DCS

ESG Operating PerformanceSegment Operating Income ($MM) and Margins (%)

Q105 Q106

32.3%

26.7%

17.9%

21.8%

16.4%

24.1%

17.7%27.1%

$110 MM gain on sale of Subsea 7

Slide 12

7

North America

Fluids30%

DFE17%

PO49%

DCS4%

2006 YTD Revenue

Strong market development - Largest and fastest growing oil field services market

– Gas market with high depletion rate driving activity

– Increased opportunity through the application of new technology

Continued growth and development of non-conventional markets

– Coal Bed Methane– Heavy Oil

Recovery in the Gulf of Mexico– Deep Water, Shelf and Ultra Deep Opportunities

Pricing improvement in US Land, Gulf of Mexico, and Canada

– All product service lines

Pinpoint Stimulation

Slide 13

Mexico– Emerging Deep Water activity – Gas in the northern region

Venezuela– Significant reserves development potential– Heavy Oil– Mature fields

Brazil– Deep Water Oil exploration in new areas and

DW Gas– Deep Water heavy oil and mature fields for new

technology applications– Emerging participation of IOC’s and

Independents

Deepwater Expertise and Technology

Latin America

2006 YTD Revenue

Fluids26%

DFE29%

PO29%

DCS16%

Slide 14

8

West Africa– Strategic investment over the last several

years, positioned for profitable growth in Deep Water emerging markets of Angola and Nigeria

North Africa– Egypt/Algeria - Growth opportunities with IOC

gas development – Libya - Long term market entry strategy

developed and now deploying

Russia/Caspian– Russia growth focused on Production

Optimization and application of Halliburton’s significant technology portfolio

– Kazakhstan and Azerbaijan offer opportunity for continued growth with IOCs and national oil companies

Completion Tools Zonal Isolation Systems

Europe / Africa / CIS

2006 YTD Revenue

Fluids31%

DFE22%

PO41%

DCS6%

Slide 15

Middle East / Asia

2006 YTD Revenue

Fluids23%

DFE34%

PO37%

DCS6%

Saudi Arabia– Production targets driving rig activity (expect to

continue increasing rig capacity in 2006)

Oman– Steady rig activity with main customer– Heavy oil development, Mukhaizna field –

recent award positionsQatar

– LNG focus with prolific reservoirs– Technology opportunities driven by trends to

exploit stranded gas reserves

India, Vietnam– Emerging markets for ESG

South East Asia core areas– Thailand, Indonesia, Malaysia

Geo-Pilot® & WellDynamics

Slide 16

9

ESG North America vs. Non-North America

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106

North America Non-North America

Revenue($ millions)

Slide 17

ESG Non-North America

$600

$700

$800

$900

$1,000

$1,100

$1,200

$1,300

$1,400

$1,500

$1,600

Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106

Non-North America

Revenue($ millions)

Slide 18

10

ESG Operating Margins Relative to Peers

8%

12%

16%

20%

24%

28%

Q103 Q203 Q303 Q403 Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106

ESG Peer Average

*Peers include SLB, BHI, BJS, WFT, and SII. SLB and Baker Hughes excludes WesternGeco. Operating income excludes special itemsand corporate expenses.

Slide 19

CAPEX

$603

$453$498

$575

$800

$0

$300

$600

$900

2002 2003 2004 2005 2006E

ESG Capital Spending($ Millions)

$5

$4

$3

$2

$1

$0

($1)

($2)

($3)

CapitalEfficiency*

CAPEX ESG SLB

*Capital Efficiency is defined as the incremental $ of revenue per $ of capital spendNote: 2005 Schlumberger OFS CAPEX estimated

Slide 20

11

Sperry Drilling Services – Geo-Pilot®

Geo-Pilot®

Technology DifferentiatorsGeo-Pilot® rotary steerable systems

StrataSteer® 3D service and Real-Time Operations

Saudi Arabia Example– Saudi Aramco plans to double rig

capacity by year end– Geo-Pilot® set new Rate of

Penetration (ROP) record in Hamur field (55.1 ft/hr); 48% better than competitor’s performance

Slide 21

KBR

Slide 22

12

P/E Multiples Comparison

10.0

15.0

20.0

25.0

30.0

1/1/

04

3/1/

04

5/1/

04

7/1/

04

9/1/

04

11/1

/04

1/1/

05

3/1/

05

5/1/

05

7/1/

05

9/1/

05

11/1

/05

1/1/

06

3/1/

06

P/E

Mul

tiple

s

HAL OFS Composite E&C Composite

*OFS Composite includes Schlumberger, Baker Hughes, National Oilwell Varco, BJ Services, Weatherford, Smith International and Cooper CameronE&C Composite includes Fluor, Technip, Saipem, Jacobs, JGC, CB&I, Aker Kvaerner, Shaw Group, Washington Group, WorleyParsons, Petrofac, URS, Foster Wheeler, McDermott, Chiyoda and Wood Group

Data Source: Credit Suisse

Slide 23

Prioritize Uses of Cash

Organic Growth - ESG Capital Spend increase of

approximately 40% in 2006 over 2005

Acquisitions – ESG closed four acquisitions in second half

of 2005

Dividend Increase – Halliburton announced 20% increase in

quarterly dividend in February 2006

Share Repurchase – Halliburton announced up to $1 billion

share repurchase program in February 2006

Slide 24

Appendix

HAL – Segment Results($ millions) Q103 Q203 Q303 Q403 Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106 2003 2004 2005 2006 YTDRevenue

Production Optimization 627$ 692$ 726$ 713$ 708$ 797$ 886$ 912$ 900$ 1,046$ 1,107$ 1,231$ 1,274$ 2,758$ 3,303$ 4,284$ 1,274$

Fluid Systems 480 518 510 531 535 554 618 617 631 699 731 777 836 2,039 2,324 2,838 836

Drilling and Formation Evaluation 379 414 433 417 444 423 450 465 489 566 588 615 647 1,643 1,782 2,258 647

Digital & Consulting Solutions 125 156 136 138 129 130 154 176 164 160 171 225 181 555 589 720 181

ESG Total 1,611 1,780 1,805 1,799 1,816 1,904 2,108 2,170 2,184 2,471 2,597 2,848 2,938 6,995 7,998 10,100 2,938

Government & Infrastructure 518 780 1,428 2,691 2,868 2,237 1,993 2,291 2,088 2,035 1,880 2,130 1,734 5,417 9,389 8,133 1,734

Energy & Chemicals 819 921 794 851 698 671 540 583 511 467 435 594 538 3,385 2,492 2,007 538

KBR Total 1,337 1,701 2,222 3,542 3,566 2,908 2,533 2,874 2,599 2,502 2,315 2,724 2,272 8,802 11,881 10,140 2,272

Total Company 2,948$ 3,481$ 4,027$ 5,341$ 5,382$ 4,812$ 4,641$ 5,044$ 4,783$ 4,973$ 4,912$ 5,572$ 5,210$ 15,797$ 19,879$ 20,240$ 5,210$

Operating Income

Production Optimization 68$ 112$ 118$ 115$ 82$ 121$ 222$ 208$ 291$ 245$ 263$ 307$ 340$ 413$ 633$ 1,106$ 340$

Fluid Systems 55 68 55 73 60 77 113 98 113 135 139 157 182 251 348 544 182

Drilling and Formation Evaluation 66 49 45 17 43 59 62 61 80 126 129 148 156 177 225 483 156

Digital & Consulting Solutions (9) 6 (48) 36 29 14 17 - 29 16 35 66 49 (15) 60 146 49

ESG Total 180 235 170 241 214 271 414 367 513 522 566 678 727 826 1,266 2,279 727

Government & Infrastructure 26 33 66 69 62 19 (6) 9 53 73 148 55 20 194 84 329 20

Energy & Chemicals (41) (187) (18) 6 (81) (301) (44) (15) 41 39 (10) 54 42 (240) (441) 124 42

Asbsetos & Silica Liabiltiy (2) - (1) (2) - - - - - - - - - (5) - - -

KBR Total (17) (154) 47 73 (19) (282) (50) (6) 94 112 138 109 62 (51) (357) 453 62

General Corporate (19) (16) (15) (20) (24) (20) (22) (21) (32) (37) (26) (20) (34) (70) (87) (115) (34)

Total Company 144$ 65$ 202$ 294$ 171$ (31)$ 342$ 340$ 575$ 597$ 678$ 767$ 755$ 705$ 822$ 2,617$ 755$

CAPEX 101 128 142 144 130 154 138 153 142 147 185 177 160 515 575 651 160

DDA 127 125 132 134 132 124 118 135 125 127 125 127 128 518 509 504 128

HAL – Segment Items($ millions) Q103 Q203 Q303 Q403 Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106 2003 2004 2005 2006 YTD

Production Optimization:

HMS gain on sale -$ 24$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 24$ -$ -$ -$

Surface well testing gain on sale - - - - - - 40 14 - - - - - - 54 - -

Subsea 7, Inc. gain on sale - - - - - - - - 110 - - - - - - 110 -

Drilling and Formation Evaluation:

Mono Pumps gain on sale 36 - - - - - - - - - - - - 36 - - -

Patent settlement - - - - - - - - - - - 24 - - - 24 -

Digital & Consulting Solutions

Anglo-Dutch lawsuit - - (77) - 13 - - - - - - - - (77) 13 - -

Wellstream loss on sale (15) - - - - - - - - - - - - (15) - - -

Intellectual property settlement - - - - - - - (11) - - - - - - (11) - -

Total ESG 21 24 (77) - 13 - 40 3 110 - - 24 - (32) 56 134 -

Government & Infrastucture

Restructuring charge - - - - - - (4) (8) (1) - - - - (12) (1) -

Sale of interest in toll road - - - - - - - - - 85 - - 85 -

Railroad impairment charge - - - - - - - - - - - - (30) - - - (30)

Energy & Chemicals

Barracuda-Caratinga project loss (55) (173) - (10) (97) (310) - - - - - - (15) (238) (407) - (15)

Restructuring charge - - - - - - (14) (14) (1) - - - - - (28) (1) -

Asbestos and silica liability (2) - (1) (2) - - - - - - - - - (5) - - -

Total KBR (57) (173) (1) (12) (97) (310) (18) (22) (2) - 85 - (45) (243) (447) 83 (45)

General corporate:

SEC settlement - - - - - (8) - - - - - - - - (8) - -

Total (36)$ (149)$ (78)$ (12)$ (84)$ (318)$ 22$ (19)$ 108$ -$ 85$ 24$ (45)$ (275)$ (399)$ 217$ (45)$

ESG – Geographic Results($ millions) Q103 Q203 Q303 Q403 Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106 2003 2004 2005 2006 YTDRevenue

North America 745$ 762$ 791$ 787$ 814$ 846$ 969$ 980$ 1,059$ 1,137$ 1,270$ 1,353$ 1,513$ 3,085$ 3,609$ 4,819$ 1,513$

Latin America 182 226 244 255 229 257 295 301 314 333 324 373 351 907 1,082 1,344 351

Europe / Africa / CIS 395 467 415 411 433 464 510 517 463 565 589 631 595 1,688 1,924 2,248 595

Middle East / Asia 289 325 355 346 340 337 334 372 348 436 414 491 479 1,315 1,383 1,689 479

Total Revenues 1,611$ 1,780$ 1,805$ 1,799$ 1,816$ 1,904$ 2,108$ 2,170$ 2,184$ 2,471$ 2,597$ 2,848$ 2,938$ 6,995$ 7,998$ 10,100$ 2,938$

Operating Income

North America 84$ 91$ 31$ 100$ 118$ 152$ 228$ 224$ 353$ 289$ 347$ 387$ 480$ 306$ 722$ 1,376$ 480$

Latin America 23 43 51 48 30 36 52 12 46 39 40 67 53 165 130 192 53

Europe / Africa / CIS 29 54 30 39 27 35 88 64 62 105 101 119 93 152 214 387 93

Middle East / Asia 44 47 58 54 39 48 46 67 52 89 78 105 101 203 200 324 101

Total Company 180$ 235$ 170$ 241$ 214$ 271$ 414$ 367$ 513$ 522$ 566$ 678$ 727$ 826$ 1,266$ 2,279$ 727$

ESG – Geographic Items($ millions) Q103 Q203 Q303 Q403 Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106 2003 2004 2005 2006 YTD

North America

Mono Pumps gain on sale 24$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 24$ -$ -$ -$

Wellstream loss on sale (11) - - - - - - - - - - - - (11) - - -

HMS gain on sale - 24 - - - - - - - - - - - 24 - - -

Anglo-Dutch lawsuit - - (77) - 13 - - - - - - - - (77) 13 - -

Surface well testing gain on sale - - - - - - 19 3 - - - - - - 22 - -

Subsea 7, Inc. gain on sale - - - - - - - - 107 - - - - - - 107 -

Patent settlement - - - - - - - - - - - 12 - - - 12 -

Latin America

Surface well testing gain on sale - - - - - - 7 - - - - - - - 7 - -

Patent settlement - - - - - - - - - - - 2 - - - 2 -

Europe / Africa / CIS

Mono Pumps gain on sale 12 - - - - - - - - - - - - 12 - - -

Wellstream loss on sale (4) - - - - - - - - - - - - (4) - - -

Surface well testing gain on sale - - - - - - 14 4 - - - - - - 18 - -

Intellectual property settlement - - - - - - - (11) - - - - - - (11) - -

Subsea 7, Inc. gain on sale - - - - - - - - 3 - - - - - - 3 -

Patent settlement - - - - - - - - - - - 6 - - - 6 -

Middle East / Asia

Surface well testing gain on sale - - - - - - - 7 - - - - - - 7 - -

Patent settlement - - - - - - - - - - - 4 - - - 4 -

Total 21$ 24$ (77)$ -$ 13$ -$ 40$ 3$ 110$ -$ -$ 24$ -$ (32)$ 56$ 134$ -$

Press Release 5 Houston Center • 1401 McKinney Street • Suite 2400 • Houston, Texas 77010 Phone 713.759.2600 • Fax 713.759.2635 FOR IMMEDIATE RELEASE Contact: Evelyn Angelle April 20, 2006 Vice President, Investor Relations 713-759-2688 Cathy Mann Director, Communications 713-759-2605

HALLIBURTON ANNOUNCES FIRST QUARTER RESULTS $0.91 earnings per diluted share; ESG revenue up 35%

HOUSTON, Texas – Halliburton (NYSE:HAL) announced today that net income in the first quarter of 2006 was $488 million, or $0.91 per diluted share, compared to net income of $365 million, or $0.72 per diluted share, in the first quarter of 2005. Net income in the first quarter of 2006 included income from discontinued operations of $7 million after tax, or $0.01 per diluted share, primarily related to the operations of KBR’s Production Services group, which is expected to be sold in the second quarter of 2006 with a pretax gain of approximately $100 million. Net income in the first quarter of 2005 also included income from discontinued operations of $6 million after tax, or $0.01 per diluted share. Income from continuing operations in the first quarter of 2006 was $481 million, or $0.90 per diluted share, compared to income from continuing operations of $359 million, or $0.71 per diluted share, in the first quarter of 2005. Consolidated revenue in the first quarter of 2006 was $5.2 billion compared to $4.8 billion in the first quarter of 2005. This increase was largely attributable to higher activity in the Energy Services Group (ESG), where revenue increased 35% from the prior year first quarter to a record level of $2.9 billion. Lower revenue in KBR, primarily on government services projects in the Middle East, partially offset this increase. Consolidated operating income was $755 million in the first quarter of 2006 compared to $575 million in the first quarter of 2005, a 31% increase. ESG’s operating income improved 42%, reflecting increased rig activity, higher utilization of assets, and increased pricing. First quarter of 2005 operating income included a $110 million gain on the sale of the company’s 50% interest in the Subsea 7, Inc. joint venture. KBR’s operating income in the first quarter of 2006 declined compared to the prior year first quarter, primarily due to $30 million in charges related to an equity method investment in an Australian railroad and reduced activities for Government and Infrastructure (G&I) operations in Iraq.

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Halliburton/Page 2 “I am pleased to report another record quarter for the Energy Services Group. We continue to benefit from our strength in North America, where our customers’ spending is most concentrated. Our investment in key Eastern Hemisphere markets is also resulting in quality growth,” said Dave Lesar, chairman, president, and chief executive officer of Halliburton. “Last week’s filing of KBR, Inc.’s Form S-1 marks a significant milestone in our strategy to separate KBR from the Energy Services Group.” 2006 First Quarter Segment Results Energy Services Group ESG posted revenue of $2.9 billion in the first quarter of 2006, a $754 million or 35% increase over the first quarter of 2005. ESG’s operating income was $727 million, up $214 million or 42% from the same period in the prior year. ESG’s operating income margin was 24.7% during the first quarter of 2006. First quarter of 2006 revenue in the Western Hemisphere grew 36% over the previous year first quarter. First quarter of 2006 Western Hemisphere operating income margins were 28.6%, compared to 29.1% in the first quarter of 2005, which included the $110 million Subsea 7, Inc. gain. Gains in both revenue and operating income margins were led by the strong United States and Canadian markets. Eastern Hemisphere results were impacted by the typical first quarter reduction in Landmark revenue and weather-related factors. In addition, the direct export sales of equipment were low as a result of a change in strategy regarding direct sales. Nonetheless, Eastern Hemisphere first quarter of 2006 revenue grew 32% over the prior year first quarter, while operating income improved 70% over the same period. Production Optimization operating income for the first quarter of 2006 was $340 million, an increase of $49 million or 17% over the first quarter of 2005, which included a $110 million gain on the sale of the Subsea 7, Inc. equity interest. Production Enhancement operating income more than doubled, driven by strong demand for well stimulation services in natural gas applications, increased utilization of crews and assets, and improved pricing, particularly in the United States. Completion Tools operating income increased 21% due to higher activity in the United States, the North Sea, and Saudi Arabia. Fluid Systems operating income for the first quarter of 2006 was $182 million, a $69 million or 61% increase over the first quarter of 2005. Cementing Services operating income increased 66% due to higher drilling activity, improved pricing, and increased asset utilization in the United States and growth in offshore activity in the Gulf of Mexico, western Africa, and the North Sea. These results were partially offset by lower offshore activity in Latin America. Baroid Fluid Services operating income grew 49% on strong activity and improved product mix in the United States and higher activity in western Africa.

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Halliburton/Page 3 Drilling and Formation Evaluation operating income for the first quarter of 2006 was $156 million, a $76 million or 95% increase over the prior year first quarter. Sperry Drilling Services operating income increased 117% in the first quarter of 2006 compared to the first quarter of 2005, benefiting from increased activity in the Gulf of Mexico, the Middle East, Asia Pacific, and the North Sea. Logging Services operating income increased 50% due to increased activity in the United States and Asia Pacific. Security DBS Drill Bits operating income doubled over the prior year first quarter, reflecting improved pricing and fixed cutter activity in North America and Europe, as well as improved pricing and roller cone bit demand in the Middle East. Digital and Consulting Solutions operating income in the first quarter of 2006 was $49 million, an increase of $20 million or 69% over the prior year period. First quarter of 2005 Digital and Consulting Solutions operating income included a $17 million favorable insurance claim settlement, partially offset by an $8 million loss on two integrated solutions projects in Mexico. Landmark operating income nearly tripled compared to the prior year first quarter due to improved sales of software and consulting services primarily in the United States and Latin America, as well as improvements in its cost structure. KBR KBR revenue for the first quarter of 2006 was $2.3 billion, a $327 million or 13% decrease compared to the first quarter of 2005, primarily due to decreased military support activities in Iraq. Operating income for the first quarter of 2006 was $62 million, a $32 million or 34% decrease compared to the prior year quarter. Government and Infrastructure operating income for the first quarter of 2006 was $20 million, a $33 million or 62% decrease compared to the first quarter of 2005. The decrease was attributable in part to reduced activity on the LogCAP III contract and differences in award fees and settlements recorded in each period related to that contract. First quarter of 2006 results were impacted by a $30 million impairment charge and loss recorded on an equity investment in an Australian railroad operation due to delays in the expansion of the Port of Darwin and a delay in mining operations that resulted in reduced freight. Energy and Chemicals operating income for the first quarter of 2006 was $42 million, a $1 million increase compared to the first quarter of 2005. KBR and its customer, Petrobras, have now agreed on the technical and operational acceptance of the completed floating production vessels. Although later than previously expected, final lender approval is expected shortly. The first quarter of 2006 results included a $15 million charge on the Barracuda-Caratinga project, reflecting additional costs to finalize the project and for warranty matters. Halliburton’s Iraq-related work contributed approximately $1.1 billion in revenue in the first quarter of 2006 and $27 million of operating income, or a 2.5% margin, before corporate expenses and taxes.

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Halliburton/Page 4 Technology and Significant Achievements Halliburton made a number of advances in technology and new contract awards. Energy Services Group new technologies and contract awards:

• Sperry Drilling Services is helping to improve heavy oil economics for Petrozuata in the Faja del Orinoco field of Eastern Venezuela, using its LatchRite® multilateral system technology in more than 65 wells. Petrozuata is a Venezuelan company with partners PDVSA and ConocoPhillips.

• Baroid Fluid Services has introduced the new INNOVERT™ drilling fluid system

for use in areas where paraffin/mineral oil is the preferred base oil. Derived from the proven barite sag-eliminating technology used in Halliburton’s award-winning ACCOLADE® drilling fluid, the INNOVERT™ system replaces existing approaches for treating barite sag in paraffin and mineral oil-based fluids, while providing operators excellent technical and economic performance.

• Halliburton has been awarded a multi-million dollar contract by Salym Petroleum

Development N.V. (SPD) for exploration and production services in Russia. Under the contract, Halliburton will carry out directional drilling support and performance optimization as well as provide drilling fluids engineering, cementing, and pumping services. The three-year contract calls for new wells to be drilled from five drilling rigs and will include 300 S-shaped wells, as well as directional and extended reach wells. The average true vertical depth of the wells will be 2,600 meters (8,500 feet).

• Halliburton has been awarded a two-year, $40 million multi-service contract by

Occidental Mukhaizna, LLC, a subsidiary of Occidental Petroleum Corporation for the Mukhaizna field in the Sultanate of Oman. The contract calls for Halliburton to provide an integration of services from the Fluid Systems, Drilling and Formation Evaluation, and Production Optimization divisions.

• Landmark was awarded a two-year, multi-million dollar contract to support, train,

and consult for Petrobras on a full suite of software and information technology services. Landmark's participation in Petrobras' streamlined contract system places the company's technology on Petrobras' "Global Purchase Order" system, which allows suppliers to set fixed prices for their products and services.

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Halliburton/Page 5 KBR new technologies and contract awards:

• Aspire Defence, a joint venture between KBR, Mowlem plc, and a financial investor, has been awarded the Ministry of Defence’s £8 billion (US$13.9 billion) private finance initiative contract to upgrade and provide a range of services to the British Army's garrisons at Aldershot and around Salisbury Plain in the United Kingdom. In addition to a £3.2 billion (US$5.6 billion) package of services to be delivered over 35 years, Project Allenby/Connaught includes a £1.2 billion (US$2 billion), nine-year construction program that will improve soldiers’ single living, technical, and administrative accommodations, along with leisure and recreational facilities.

• An approximately $400 million project to construct an anhydrous ammonia plant

in Sokhna Port, Egypt for Egypt Basic Industries Company (EBIC), a joint venture including KBR, certain Egyptian petrochemical and construction companies, the Egyptian state-owned oil and gas company, and other private investors, reached financial close. The project will construct a greenfield 2,000 metric tons per day anhydrous ammonia plant, including a pipeline corridor connecting the ammonia production plant to product storage tanks located in Sokhna Port. The plant design is based on the proprietary KBR Advanced Ammonia Process (KAAP™).

Halliburton, founded in 1919, is one of the world’s largest providers of products and services to the petroleum and energy industries. The company serves its customers with a broad range of products and services through its Energy Services Group and KBR. The company’s World Wide Web site can be accessed at www.halliburton.com. NOTE: The statements in this press release that are not historical statements, including statements regarding future financial performance, are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond the company's control, which could cause actual results to differ materially from the results expressed or implied by the statements. These risks and uncertainties include, but are not limited to: consequences of audits and investigations of the company by domestic and foreign government agencies and legislative bodies and related publicity; potential adverse proceedings by such agencies; contract disputes with the company’s customers; protection of intellectual property rights; compliance with environmental laws; changes in government regulations and regulatory requirements, particularly those related to radioactive sources, explosives and chemicals; compliance with laws related to income taxes and assumptions regarding the generation of future taxable income; unsettled political conditions, war and the effects of terrorism, foreign operations and foreign exchange rates and controls; weather-related issues including the effects of hurricanes and tropical storms; changes in capital spending by, and claims negotiations with, customers; changes in the demand for or price of oil and/or gas, structural changes in the industries in which the company operates, and performance of fixed-fee projects; the development and installation of financial systems; increased competition for employees; availability of raw materials; and integration of acquired businesses, operations of joint ventures, and completion of planned dispositions. Halliburton's Form 10-K for the year ended December 31, 2005, recent Current Reports on Forms 8-K, and other Securities and Exchange Commission filings discuss some of the important risk factors identified that may affect the business, results of operations and financial condition. Halliburton undertakes no obligation to revise or update publicly any forward-looking statements for any reason. -more-

HALLIBURTON COMPANY

Condensed Consolidated Statements of Operations (Millions of dollars and shares except per share data)

(Unaudited)

Three Months Three Months Ended Ended March 31 December 31 2006 2005 2005

Revenue: Production Optimization $ 1,274 $ 900 $ 1,231 Fluid Systems 836 631 777 Drilling and Formation Evaluation 647 489 615 Digital and Consulting Solutions 181 164 225 Total Energy Services Group 2,938 2,184 2,848 Government and Infrastructure 1,734 2,088 2,130 Energy and Chemicals 538 511 594 Total KBR 2,272 2,599 2,724 Total revenue $ 5,210 $ 4,783 $ 5,572 Operating income (loss): Production Optimization $ 340 $ 291 $ 307 Fluid Systems 182 113 157 Drilling and Formation Evaluation 156 80 148 Digital and Consulting Solutions 49 29 66 Total Energy Services Group 727 513 678 Government and Infrastructure 20 53 55 Energy and Chemicals 42 41 54 Total KBR 62 94 109 General corporate (34) (32) (20) Total operating income 755 575 767 Interest expense (47) (52) (53) Interest income 28 12 26 Foreign currency, net 8 – (4) Other, net 3 (2) (7) Income from continuing operations before income taxes and minority interest 747 533 729 Benefit (provision) for income taxes (255) (166) 380 Minority interest in net income of subsidiaries (11) (8) (17) Income from continuing operations 481 359 1,092 Income from discontinued operations, net 7 6 10 Net income $ 488 $ 365 $ 1,102 Basic income per share: Income from continuing operations $ 0.94 $ 0.72 $ 2.14 Income from discontinued operations, net 0.01 0.01 0.02 Net income $ 0.95 $ 0.73 $ 2.16 Diluted income per share: Income from continuing operations $ 0.90 $ 0.71 $ 2.06 Income from discontinued operations, net 0.01 0.01 0.02 Net income $ 0.91 $ 0.72 $ 2.08 Basic weighted average common shares outstanding 512 501 509 Diluted weighted average common shares outstanding 534 510 529

See Footnote Table 1 for a list of significant items included in income.

All periods presented reflect the reclassification of KBR’s Production Services operations to discontinued operations.

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HALLIBURTON COMPANY

Condensed Consolidated Balance Sheets (Millions of dollars)

(Unaudited)

March 31 December 31 2006 2005

Assets Current assets: Cash and equivalents $ 2,278 $ 2,391 Receivables, net 4,952 4,801 Inventories, net 1,086 953 Other current assets 1,423 1,115 Total current assets 9,739 9,260 Property, plant, and equipment, net 2,675 2,648 Other assets 2,756 3,102 Total assets $ 15,170 $ 15,010

Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ 1,688 $ 1,967 Current maturities of long-term debt 360 361 Other current liabilities 2,114 2,099 Total current liabilities 4,162 4,427 Long-term debt 2,793 2,813 Other liabilities 1,192 1,253 Total liabilities 8,147 8,493 Minority interest in consolidated subsidiaries 151 145 Shareholders’ equity 6,872 6,372 Total liabilities and shareholders’ equity $ 15,170 $ 15,010

Note – Certain prior period amounts have been reclassified to be consistent with the current presentation. All periods presented reflect the reclassification of KBR’s Production Services operations to discontinued

operations. At March 31, 2006, Production Services assets were $236 million, of which $170 million were classified as current, and liabilities were $80 million, of which $76 million were classified as current. At December 31, 2005, Production Services assets were $207 million, of which $140 million were classified as current, and liabilities were $64 million, of which $54 million were classified as current.

HALLIBURTON COMPANY Selected Cash Flow Information

(Millions of dollars) (Unaudited)

Three Months Ended Three Months Ended March 31 December 31 2006 2005 2005 Capital expenditures: Energy Services Group $ 137 $ 131 $ 151 KBR 22 11 26 General corporate 1 – – Total capital expenditures $ 160 $ 142 $ 177 Depreciation, depletion, and amortization: Energy Services Group $ 117 $ 110 $ 115 KBR 11 15 12 Total depreciation, depletion, and amortization $ 128 $ 125 $ 127

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HALLIBURTON COMPANY Revenue and Operating Income Comparison

By Geographic Region – Energy Services Group Only (Millions of dollars)

(Unaudited)

Three Months Ended Three Months Ended March 31 December 31 2006 2005 2005

Revenue: North America $ 1,513 $ 1,059 $ 1,353 Latin America 351 314 373 Europe/Africa/CIS 595 463 631 Middle East/Asia 479 348 491 Total revenue $ 2,938 $ 2,184 $ 2,848 Operating income: North America $ 480 $ 353 $ 387 Latin America 53 46 67 Europe/Africa/CIS 93 62 119 Middle East/Asia 101 52 105 Total operating income $ 727 $ 513 $ 678

See Footnote Table 2 for a list of significant items included in income.

HALLIBURTON COMPANY Backlog Information (Millions of dollars)

(Unaudited)

March 31 December 31 2006 2005 Firm orders: Government and Infrastructure $ 3,418 $ 3,403 Energy and Chemicals – Gas monetization 3,451 3,651 Energy and Chemicals – Other (a) 1,978 1,786 Energy Services Group segments 133 180 Total firm orders $ 8,980 $ 9,020 Government orders firm but not yet funded, letters of intent, and contracts awarded but not signed: Government and Infrastructure $ 474 $ 1,775 Total backlog $ 9,454 $ 10,795

(a) The amounts presented represent backlog for our continuing operations and do not include backlog

associated with KBR’s Production Services operations, which we have agreed to sell and now account for as discontinued operations. Backlog for the Production Services operations was $1.1 billion as of March 31, 2006 and $1.2 billion as of December 31, 2005.

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FOOTNOTE TABLE 1

HALLIBURTON COMPANY

Items included in Operating Income and After Tax Impact per Diluted Share By Operating Segment

(Millions of dollars except per share data) (Unaudited)

Three Months Ended Three Months Ended Three Months Ended March 31, 2006 March 31, 2005 December 31, 2005 Operating After Tax Operating After Tax Operating After Tax Income per Share Income per Share Income per Share Production Optimization: Subsea 7, Inc. gain on sale $ – $ – $ 110 $ 0.14 $ – $ – Drilling and Formation Evaluation: Patent settlement – – – – 24 0.03 Digital and Consulting Solutions: Integrated solutions projects in Mexico – – (8) (0.01) – – Government and Infrastructure: Railroad impairment charge and loss (30) (0.05) – – – – Energy and Chemicals: Barracuda-Caratinga project loss (15) (0.02) – – – –

FOOTNOTE TABLE 2

HALLIBURTON COMPANY Items included in Operating Income and After Tax Impact per Diluted Share

By Geographic Region – Energy Services Group Only (Millions of dollars except per share data)

(Unaudited)

Three Months Ended Three Months Ended Three Months Ended March 31, 2006 March 31, 2005 December 31, 2005 Operating After Tax Operating After Tax Operating After Tax Income per Share Income per Share Income per Share North America: Patent settlement $ – $ – $ – $ – $ 12 $ 0.02 Subsea 7, Inc. gain on sale – – 107 0.14 – – Latin America: Patent settlement – – – – 2 – Integrated solutions projects in Mexico – – (8) (0.01) – – Europe/Africa/CIS: Patent settlement – – – – 6 0.01 Subsea 7, Inc. gain on sale – – 3 – – – Middle East/Asia: Patent settlement – – – – 4 –

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