Halliburton Announces Second Quarter 2019 Results
- Reported net income of
$0.09 per diluted share - Adjusted net income of
$0.35 per diluted share, excluding impairments and other charges
“Halliburton’s execution in the second quarter was outstanding and I am pleased with our results. We continue to build on the growth momentum internationally and successfully manage the market dynamics in North America,” commented
“Total company revenue was
“International revenue increased 6% sequentially, confirming our expectation of high single-digit international growth for all of 2019. Momentum is building internationally and activity improvement should continue into 2020.
“I’m pleased with how
“As international growth continues and North American unconventionals mature, we remain focused on delivering consistent execution, generating superior financial performance and providing industry-leading shareholder returns,” concluded Miller.
Operating Segments
Completion and Production
Completion and Production revenue in the second quarter of 2019 was
Drilling and Evaluation
Drilling and Evaluation revenue in the second quarter of 2019 was
Geographic Regions
International
International revenue in the second quarter of 2019 was
Corporate and Other Events
During the second quarter of 2019,
Selective Technology & Highlights
Halliburton acquired the PROMORE downhole pressure gauge business. PROMORE is a leader in the application of permanent well monitoring systems and will be a part ofHalliburton's Intelligent Completions group. The addition of PROMORE technologies aligns with the strategic focus within Halliburton Completion Tools on sensors and digitalization.
Halliburton released Flex™ Managed Pressure Drilling System (MPD), a scalable and mobile technology that can be configured to address specific operator challenges and deliver greater rig efficiency. The tiered system allows operators to select the right level of service to help maximize the cost/benefit of managed pressure drilling services.
The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), an institution established by the government of theRepublic ofIndonesia , selectedHalliburton's Landmark software technology for end-to-end workflow solutions. SKK Migas adopted the DecisionSpace® suite of software to improve exploration and production efficiency through data analytics, integration and cross-disciplinary collaboration.
Halliburton introduced the Elect® frac sleeve, a monobore sleeve solution that enables unlimited stage count in multistage fracturing operations. The Elect frac sleeve is an evolutionary step in completion sleeves, supporting greater flexibility for highly optimized reservoir access with pinpoint well stimulation options.
Halliburton announced the execution of an integrated offshore drilling services contract withKuwait Oil Company for six high-pressure high-temperature exploration wells on two jack-up rigs in the Arabian Gulf. Under the contract, which includes a three-year term with a six-month extension option,Halliburton will provide well construction, well testing, coring, coiled tubing, and the majority of offshore logistical services.
About
Founded in 1919,
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: the continuation or suspension of our stock repurchase program, the amount, the timing and the trading prices of
HALLIBURTON COMPANY Condensed Consolidated Statements of Operations (Millions of dollars and shares except per share data) (Unaudited) |
|||||||||||
|
Three Months Ended |
||||||||||
|
June 30 |
|
March 31 |
||||||||
|
2019 |
|
2018 |
|
2019 |
||||||
Revenue: |
|
|
|
|
|
||||||
Completion and Production |
$ |
3,805 |
|
|
$ |
4,164 |
|
|
$ |
3,662 |
|
Drilling and Evaluation |
2,125 |
|
|
1,983 |
|
|
2,075 |
|
|||
Total revenue |
$ |
5,930 |
|
|
$ |
6,147 |
|
|
$ |
5,737 |
|
Operating income: |
|
|
|
|
|
||||||
Completion and Production |
$ |
470 |
|
|
$ |
669 |
|
|
$ |
368 |
|
Drilling and Evaluation |
145 |
|
|
191 |
|
|
123 |
|
|||
Corporate and other |
(65 |
) |
|
(71 |
) |
|
(65 |
) |
|||
Impairments and other charges (a) |
(247 |
) |
|
— |
|
|
(61 |
) |
|||
Total operating income |
303 |
|
|
789 |
|
|
365 |
|
|||
Interest expense, net |
(144 |
) |
|
(137 |
) |
|
(143 |
) |
|||
Other, net |
(8 |
) |
|
(19 |
) |
|
(30 |
) |
|||
Income before income taxes |
151 |
|
|
633 |
|
|
192 |
|
|||
Income tax provision |
(74 |
) |
|
(125 |
) |
|
(40 |
) |
|||
Net income |
$ |
77 |
|
|
$ |
508 |
|
|
$ |
152 |
|
Net (income) loss attributable to noncontrolling interest |
(2 |
) |
|
3 |
|
|
— |
|
|||
Net income attributable to company |
$ |
75 |
|
|
$ |
511 |
|
|
$ |
152 |
|
|
|
|
|
|
|
||||||
Basic and diluted net income per share |
$ |
0.09 |
|
|
$ |
0.58 |
|
|
$ |
0.17 |
|
Basic weighted average common shares outstanding |
874 |
|
|
877 |
|
|
873 |
|
|||
Diluted weighted average common shares outstanding |
875 |
|
|
880 |
|
|
873 |
|
|||
(a) For further details of the 2019 impairments and other charges, see Footnote Table 1. |
|||||||||||
See Footnote Table 1 for Reconciliation of As Reported Operating Income to Adjusted Operating Income. |
|||||||||||
See Footnote Table 2 for Reconciliation of As Reported Net Income to Adjusted Net Income. |
HALLIBURTON COMPANY Condensed Consolidated Statements of Operations (Millions of dollars and shares except per share data) (Unaudited) |
|||||||
|
Six Months Ended June 30 |
||||||
|
2019 |
|
2018 |
||||
Revenue: |
|
|
|
||||
Completion and Production |
$ |
7,467 |
|
|
$ |
7,971 |
|
Drilling and Evaluation |
4,200 |
|
|
3,916 |
|
||
Total revenue |
$ |
11,667 |
|
|
$ |
11,887 |
|
Operating income: |
|
|
|
||||
Completion and Production |
$ |
838 |
|
|
$ |
1,169 |
|
Drilling and Evaluation |
268 |
|
|
379 |
|
||
Corporate and other |
(130 |
) |
|
(140 |
) |
||
Impairments and other charges (a) |
(308 |
) |
|
(265 |
) |
||
Total operating income |
668 |
|
|
1,143 |
|
||
Interest expense, net |
(287 |
) |
|
(277 |
) |
||
Other, net |
(38 |
) |
|
(44 |
) |
||
Income before income taxes |
343 |
|
|
822 |
|
||
Income tax provision |
(114 |
) |
|
(267 |
) |
||
Net income |
$ |
229 |
|
|
$ |
555 |
|
Net (income) loss attributable to noncontrolling interest |
(2 |
) |
|
2 |
|
||
Net income attributable to company |
$ |
227 |
|
|
$ |
557 |
|
Basic net income per share |
$ |
0.26 |
|
|
$ |
0.64 |
|
Diluted net income per share |
$ |
0.26 |
|
|
$ |
0.63 |
|
Basic weighted average common shares outstanding |
874 |
|
|
876 |
|
||
Diluted weighted average common shares outstanding |
874 |
|
|
879 |
|
(a) See Footnote Table 1 for details of the 2019 impairments and other charges. During the six months ended June 30, 2018, Halliburton recognized a pre-tax charge of $265 million related to a write-down of its remaining investment in Venezuela, consisting of receivables, fixed assets, inventory and other assets and liabilities. |
HALLIBURTON COMPANY
Condensed Consolidated Balance Sheets (Millions of dollars) (Unaudited) |
||||||||
|
June 30 |
|
December 31 |
|||||
|
2019 |
|
2018 |
|||||
Assets |
||||||||
Current assets: |
|
|
|
|||||
Cash and equivalents |
$ |
1,176 |
|
|
$ |
2,008 |
|
|
Receivables, net |
5,700 |
|
|
5,234 |
|
|||
Inventories |
3,347 |
|
|
3,028 |
|
|||
Other current assets |
997 |
|
|
881 |
|
|||
Total current assets |
11,220 |
|
|
11,151 |
|
|||
|
|
|
|
|||||
Property, plant and equipment, net |
8,778 |
|
|
8,873 |
|
|||
Goodwill |
2,825 |
|
|
2,825 |
|
|||
Deferred income taxes |
1,408 |
|
|
1,384 |
|
|||
Operating lease right-of-use assets (a) |
978 |
|
|
— |
|
|||
Other assets |
1,671 |
|
|
1,749 |
|
|||
Total assets |
$ |
26,880 |
|
|
$ |
25,982 |
|
|
|
|
|
|
|||||
Liabilities and Shareholders’ Equity |
||||||||
Current liabilities: |
|
|
|
|||||
Accounts payable |
$ |
3,017 |
|
|
$ |
3,018 |
|
|
Accrued employee compensation and benefits |
650 |
|
|
714 |
|
|||
Current portion of operating lease liabilities (a) |
215 |
|
|
— |
|
|||
Other current liabilities |
1,073 |
|
|
1,070 |
|
|||
Total current liabilities |
4,955 |
|
|
4,802 |
|
|||
|
|
|
|
|||||
Long-term debt |
10,307 |
|
|
10,312 |
|
|||
Operating lease liabilities (a) |
761 |
|
|
— |
|
|||
Employee compensation and benefits |
469 |
|
|
483 |
|
|||
Other liabilities |
864 |
|
|
841 |
|
|||
Total liabilities |
17,356 |
|
|
16,438 |
|
|||
|
|
|
|
|||||
Company shareholders’ equity |
9,508 |
|
|
9,522 |
|
|||
Noncontrolling interest in consolidated subsidiaries |
16 |
|
|
22 |
|
|||
Total shareholders’ equity |
9,524 |
|
|
9,544 |
|
|||
Total liabilities and shareholders’ equity |
$ |
26,880 |
|
|
$ |
25,982 |
|
(a) During the first quarter of 2019, Halliburton adopted a new lease accounting standard, resulting in $1.0 billion of additional assets and liabilities on the balance sheet at June 30, 2019. |
HALLIBURTON COMPANY Condensed Consolidated Statements of Cash Flows (Millions of dollars) (Unaudited) |
|||||||
|
Six Months Ended |
||||||
|
June 30 |
||||||
|
2019 |
|
2018 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
229 |
|
|
$ |
555 |
|
Adjustments to reconcile net income to cash flows from operating activities: |
|
|
|
||||
Depreciation, depletion and amortization |
836 |
|
|
784 |
|
||
Working capital (a) |
(755 |
) |
|
(163 |
) |
||
Impairments and other charges |
308 |
|
|
265 |
|
||
Other operating activities |
(211 |
) |
|
87 |
|
||
Total cash flows provided by (used in) operating activities |
407 |
|
|
1,528 |
|
||
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Capital expenditures |
(845 |
) |
|
(1,066 |
) |
||
Proceeds from sales of property, plant and equipment |
87 |
|
|
121 |
|
||
Payments to acquire businesses |
(21 |
) |
|
(148 |
) |
||
Other investing activities |
(32 |
) |
|
(344 |
) |
||
Total cash flows provided by (used in) investing activities |
(811 |
) |
|
(1,437 |
) |
||
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Dividends to shareholders |
(314 |
) |
|
(316 |
) |
||
Stock repurchase program |
(100 |
) |
|
— |
|
||
Other financing activities |
6 |
|
|
(14 |
) |
||
Total cash flows provided by (used in) financing activities |
(408 |
) |
|
(330 |
) |
||
|
|
|
|
||||
Effect of exchange rate changes on cash |
(20 |
) |
|
(40 |
) |
||
Decrease in cash and equivalents |
(832 |
) |
|
(279 |
) |
||
Cash and equivalents at beginning of period |
2,008 |
|
|
2,337 |
|
||
Cash and equivalents at end of period |
$ |
1,176 |
|
|
$ |
2,058 |
|
(a) Working capital includes receivables, inventories and accounts payable. |
HALLIBURTON COMPANY Revenue and Operating Income Comparison By Operating Segment and Geographic Region (Millions of dollars) (Unaudited) |
|||||||||||
|
Three Months Ended |
||||||||||
|
June 30 |
|
March 31 |
||||||||
Revenue |
2019 |
|
2018 |
|
2019 |
||||||
By operating segment: |
|
|
|
|
|
||||||
Completion and Production |
$ |
3,805 |
|
|
$ |
4,164 |
|
|
$ |
3,662 |
|
Drilling and Evaluation |
2,125 |
|
|
1,983 |
|
|
2,075 |
|
|||
Total revenue |
$ |
5,930 |
|
|
$ |
6,147 |
|
|
$ |
5,737 |
|
|
|
|
|
|
|
||||||
By geographic region: |
|
|
|
|
|
||||||
North America |
$ |
3,327 |
|
|
$ |
3,834 |
|
|
$ |
3,275 |
|
Latin America |
571 |
|
|
479 |
|
|
587 |
|
|||
Europe/Africa/CIS |
823 |
|
|
726 |
|
|
748 |
|
|||
Middle East/Asia |
1,209 |
|
|
1,108 |
|
|
1,127 |
|
|||
Total revenue |
$ |
5,930 |
|
|
$ |
6,147 |
|
|
$ |
5,737 |
|
|
|
|
|
|
|
||||||
Operating Income |
|
|
|
|
|
||||||
By operating segment: |
|
|
|
|
|
||||||
Completion and Production |
$ |
470 |
|
|
$ |
669 |
|
|
$ |
368 |
|
Drilling and Evaluation |
145 |
|
|
191 |
|
|
123 |
|
|||
Total |
615 |
|
|
860 |
|
|
491 |
|
|||
Corporate and other |
(65 |
) |
|
(71 |
) |
|
(65 |
) |
|||
Impairments and other charges |
(247 |
) |
|
— |
|
|
(61 |
) |
|||
Total operating income |
$ |
303 |
|
|
$ |
789 |
|
|
$ |
365 |
|
See Footnote Table 1 for Reconciliation of As Reported Operating Income to Adjusted Operating Income. |
HALLIBURTON COMPANY Revenue and Operating Income Comparison By Operating Segment and Geographic Region (Millions of dollars) (Unaudited) |
|||||||
|
Six Months Ended June 30 |
||||||
Revenue |
2019 |
|
2018 |
||||
By operating segment: |
|
|
|
||||
Completion and Production |
$ |
7,467 |
|
|
$ |
7,971 |
|
Drilling and Evaluation |
4,200 |
|
|
3,916 |
|
||
Total revenue |
$ |
11,667 |
|
|
$ |
11,887 |
|
|
|
|
|
||||
By geographic region: |
|
|
|
||||
North America |
$ |
6,602 |
|
|
$ |
7,351 |
|
Latin America |
1,158 |
|
|
936 |
|
||
Europe/Africa/CIS |
1,571 |
|
|
1,442 |
|
||
Middle East/Asia |
2,336 |
|
|
2,158 |
|
||
Total revenue |
$ |
11,667 |
|
|
$ |
11,887 |
|
|
|
|
|
||||
Operating Income |
|
|
|
||||
By operating segment: |
|
|
|
||||
Completion and Production |
$ |
838 |
|
|
$ |
1,169 |
|
Drilling and Evaluation |
268 |
|
|
379 |
|
||
Total |
1,106 |
|
|
1,548 |
|
||
Corporate and other |
(130 |
) |
|
(140 |
) |
||
Impairments and other charges |
(308 |
) |
|
(265 |
) |
||
Total operating income |
$ |
668 |
|
|
$ |
1,143 |
|
FOOTNOTE TABLE 1
HALLIBURTON COMPANY Reconciliation of As Reported Operating Income to Adjusted Operating Income (Millions of dollars) (Unaudited) |
||||||||
Three Months Ended |
||||||||
|
|
June 30, 2019 |
March 31, 2019 |
|||||
As reported operating income |
$ |
303 |
|
$ |
365 |
|
||
|
|
|
||||||
Impairments and other charges: |
|
|
||||||
Long-lived asset impairments |
108 |
|
42 |
|
||||
Severance costs |
58 |
|
19 |
|
||||
Inventory write-downs |
33 |
|
— |
|
||||
Other |
48 |
|
— |
|
||||
Total impairments and other charges |
247 |
|
61 |
|
||||
|
|
|
||||||
Adjusted operating income (a) |
$ |
550 |
|
$ |
426 |
|
(a) |
Management believes that operating income adjusted for impairments and other charges for the three months ended June 30, 2019 and March 31, 2019 is useful to investors to assess and understand operating performance, especially when comparing those results with previous and subsequent periods or forecasting performance for future periods, primarily because management views the excluded items to be outside of the company's normal operating results. Management analyzes operating income without the impact of these items as an indicator of performance, to identify underlying trends in the business, and to establish operational goals. The adjustments remove the effect of these items. Adjusted operating income is calculated as: “As reported operating income” plus "Impairments and other charges" for the three months ended June 30, 2019 and March 31, 2019. |
FOOTNOTE TABLE 2
HALLIBURTON COMPANY Reconciliation of As Reported Net Income to Adjusted Net Income (Millions of dollars and shares except per share data) (Unaudited) |
||||||||
|
|
Three Months Ended |
||||||
|
|
June 30, 2019 |
March 31, 2019 |
|||||
As reported net income attributable to company |
$ |
75 |
|
$ |
152 |
|
||
|
|
|
||||||
Adjustments: |
|
|
||||||
Impairments and other charges |
247 |
|
61 |
|
||||
Total adjustments, before taxes |
247 |
|
61 |
|
||||
Tax benefit |
(19 |
) |
(12 |
) |
||||
Total adjustments, net of taxes (a) |
$ |
228 |
|
$ |
49 |
|
||
|
|
|
||||||
Adjusted net income attributable to company |
$ |
303 |
|
$ |
201 |
|
||
|
|
|
||||||
Diluted weighted average common shares outstanding |
875 |
|
873 |
|
||||
|
|
|
|
|||||
As reported net income per diluted share (b) |
$ |
0.09 |
|
$ |
0.17 |
|
||
Adjusted net income per diluted share (b) |
$ |
0.35 |
|
$ |
0.23 |
|
(a) |
Management believes that net income adjusted for impairments and other charges, is useful to investors to assess and understand operating performance, especially when comparing those results with previous and subsequent periods or forecasting performance for future periods, primarily because management views the excluded items to be outside of the company's normal operating results. Management analyzes net income without the impact of these items as an indicator of performance, to identify underlying trends in the business and to establish operational goals. Total adjustments remove the effect of these items. Adjusted net income attributable to company is calculated as: “As reported net income attributable to company” plus "Total adjustments, net of taxes" for the three months ended June 30, 2019 and March 31, 2019. |
(b) |
As reported net income per diluted share is calculated as: "As reported net income attributable to company" divided by "Diluted weighted average common shares outstanding." Adjusted net income per diluted share is calculated as: "Adjusted net income attributable to company" divided by "Diluted weighted average common shares outstanding." |
Conference Call Details
Please visit the website to listen to the call via live webcast. You may also participate in the call by dialing (888) 393-0263 within
A replay of the conference call will be available on Halliburton’s website until
View source version on businesswire.com: https://www.businesswire.com/news/home/20190722005113/en/
Source:
For Investors:
Abu Zeya
Halliburton, Investor Relations
Investors@Halliburton.com
281-871-2688
For Media:
Emily Mir
Halliburton, Public Relations
PR@Halliburton.com
281-871-2601