Jeff Miller
Chairman of the Board of Directors, President, & Chief Executive Officer at Halliburton
Thank you, David, and good morning, everyone. Halliburton finished the year strong with solid financial and operational performance in both divisions and both hemispheres. Halliburton's execution in 2022 demonstrates the earnings power of our strategy and I expect this earnings power to strengthen in 2023 and beyond.
Let's jump right into the 2022 highlights. We delivered full year total company revenue of $20.3 billion and operating income of $2.7 billion. Adjusted operating income grew 70% compared to 2021 with improved margin performance in both divisions. Our full year international revenue grew 20% over 2021 and our revenue and operating income increased each quarter in 2022. I am pleased with the international growth and margin progression Halliburton demonstrated this year despite a second quarter exit from our Russian business.
Our full year North America revenue increased 51% over 2021 with improved margins driven by activity and pricing gains. Both our Drilling and Evaluation and Completion and Production divisions grew revenue and margins this year. The Drilling and Evaluation division generated full year operating margins of 15%, an increase of 320 basis points over 2021. The steady expansion of D&E margins demonstrates the global competitiveness of our D&E business. Our Completion and Production division posted 18% full year operating margins, a year-over-year increase of 290 basis points driven by activity and pricing improvements.
We generated strong free cash flow of $1.4 billion, retired $1.2 billion of debt, maintained capital spending within 5% to 6% of revenues and ended the year with $2.3 billion of cash on hand. Finally, our service quality performance excelled in 2022. Non-productive time improved by 7% over 2021, which drove the highest ever uptime across our business. Execution is at the heart of who we are and our results are a testament to our employees' continued commitment to superior service quality.
I'm pleased with the fourth quarter results. Revenue grew 4% and operating income grew 15% sequentially. Margins increased in both C&P and D&E divisions and in both hemispheres. Cash flow from operations in the quarter was $1.2 billion and free cash flow was $856 million building on the strong foundation of execution. Today, I am pleased to announce the following shareholder return actions. First, our Board approved an increase in our quarterly dividend to $0.16 per share in the first quarter of 2023, representing a 33% increase from last year. Second, we have resumed share buybacks under our existing Board authorization of approximately $5 billion and in the fourth quarter of 2022 bought back shares totaling $250 million.
Finally, our Board approved a capital return framework that we expect going forward to return at least 50% of our annual free cash flow to shareholders through dividends and buybacks. These actions demonstrate Halliburton's confidence in our business, customers, employees and industry outlook. Before we continue, I want to take a moment and thank the Halliburton employees around the world who made these results possible. Our success this quarter and throughout 2022 was a direct result of your hard work and dedication. I thank you for your relentless focus on safety, operational execution, customer collaboration and service quality performance.
Now let's turn to the macro outlook where everything I see today points towards continued oil and gas tightness. On the supply side, in the U.S., an increased spend of almost 50% and activity growth of nearly 30% yielded a production increase of about 5%. Given the increased spend required to grow and replace production, I expect activity to remain strong and service intensity to increase through 2023. I see the same supply side challenges in the international markets. One indicator being that despite opex 2022 production quotas several members did not meet their goals.
On the demand side, we saw the resilience of oil and gas demand throughout 2022 even as central banks raised interest rates to combat inflation. I expect oil and gas demand to remain strong. As we start 2023, I also expect China's reopening to further increase demand. It's clear to me that oil and gas is in short supply and only multiple years of increased investment in both stemming declines and reserve additions will solve short supply. I believe these investments will drive demand for oilfield services for the next several years. The unique feature of this up-cycle as I see it is the investor-driven return discipline by both operators and service companies, which I expect drives a longer duration cycle and translates into years of increasing demand for Halliburton services.
Now let's turn to Halliburton, starting with our performance in the international markets. We successfully executed our strategy to deliver profitable international growth through competitive technology offerings, improved pricing and selective contract wins. International revenue grew 20% year-on-year with strong growth and margin expansion from both divisions. This gives me confidence and the earnings power of our international strategy. In 2023, we expect international activity to grow at least mid-teens with most new activity coming from the Middle East and Latin-America.
As this up-cycle continues, I believe that we will see substantial growth in all international markets, both onshore and offshore, led by development activity and increased spend at the well bore. This is excellent news for Halliburton. About half our revenue comes from international markets. We have leading positions in key well construction product lines and a strong geographic footprint. I'm excited about the growth and profit opportunities that will come with the adoption of our new drilling technology platforms.
Our iCruise drilling technology, iStar Logging While Drilling platform and LOGIX automation capabilities, each of these technologies are in different stages of implementation and we are already seeing benefits. Our iCruise directional drilling system represents about half of our rotary steerable fleet while drilling about 70% of our global footage. It is a key contributor to increasing international profitability. Our iStar Logging While Drilling platform now delivers high definition measurements closer to the bid and deeper into the formation. While early in its rollout with only 600,000 feet logged, the iStar platform directly complements the iCruise directional drilling system. Finally, LOGIX automates drilling with iCruise and iStar. With more than 7 million feet drilled in 20 plus countries, the LOGIX platform reduces operational risk and delivers wells reliably.
Turning to North America. We had a terrific year. Our performance demonstrated our strategy to maximize value in North America through capital efficiency, improved pricing, differentiated technology and alignment with high quality customers. In 2022, our North America revenue grew 51% year-over-year, while revenue in the fourth quarter was flat sequentially due to weather-related downtime late in the year. Looking ahead, we expect strong activity and anticipate customer spending to grow by at least 15% in 2023. The market for equipment is tight. Lead times for new and replacement equipment remain long and service companies remain disciplined. Our completions calendar is fully booked and pricing continues to improve across all product service lines. Against this constructive market backdrop, Halliburton will outperform whether a unique strategy to maximize value.
We see strong demand for our Zeus e-fleets with several repeat customers contracting additional fleets. Zeus is a proven design with a strong operational track record. Our new automated fracturing platform active [Phonetic] fully automates equipment operation, reduces maintenance and extends component life. We are in the early innings of this rollout having proven it over 15,000 stages and I expect it to drive higher capital efficiency. Finally, our SmartFleet intelligent fracturing system is gaining significant traction with customers. SmartFleet data helps customers answer key questions such as the existence of flow barriers, well interference, parent-child performance and depletion, all to improve completion performance.
These are a few examples of how technology maximizes value in North America. Each example delivers better margins either by reducing capital cost or increasing capital velocity and in many cases both. Halliburton is unique and is the only integrated services company to have a strong presence in both North America and international markets, a strong execution culture and differentiated technology. We will continue to sharpen our value proposition to collaborate and engineer solutions to maximize asset value for our customers. I am confident in Halliburton's strong long-term outlook. This is the best setup and market outlook for oilfield services and Halliburton that I have seen in a very long time.
Our exceptional financial performance this year is a clear result of the execution of our strategic priorities to maximize value in North America, deliver profitable international growth and drive capital efficiency. I expect Halliburton to continue to deliver financial outperformance.
Now I will turn the call over to Eric to provide more details on our financial results. Eric?
