UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
Current
Report
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (date of earliest event reported): July 20, 2006
HALLIBURTON
COMPANY
(Exact
Name of Registrant as Specified in Its Charter)
Delaware
(State
or Other Jurisdiction of
Incorporation)
|
1-3492
|
No.
75-2677995
|
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
|
1401
McKinney, Suite 2400, Houston, Texas
|
77010
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(713)
759-2600
(Registrant’s
Telephone Number, Including Area Code)
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General
Instruction A.2. below):
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
INFORMATION
TO BE INCLUDED IN REPORT
Item
2.02. Results
of Operations and Financial Condition
On
July
20, 2006, registrant issued a press release entitled “Halliburton Announces
Second Quarter Earnings of $0.55 Per Diluted Share.”
The
text
of the Press Release is as follows:
|
|
|
HALLIBURTON
ANNOUNCES SECOND QUARTER EARNINGS OF $0.55 PER DILUTED
SHARE
$0.48
earnings per diluted share from continuing operations, including a $0.04
charge
on a KBR project; all on a post-split basis
HOUSTON,
Texas
-
Halliburton (NYSE:HAL) announced today that income from continuing operations
in
the second quarter of 2006 was $509 million, or $0.48 per diluted
share. This compares to income from continuing operations of $384 million,
or
$0.37 per diluted share, in the second quarter of 2005. Net income in the
second
quarter of 2006 was $591 million, or $0.55 per diluted share. Second quarter
2006 income from discontinued operations was $82 million after tax, or
$0.07 per
diluted share, and included a pretax gain of $123 million on the sale of
KBR’s
Production Services group. Net income in the second quarter of 2005 was
$392
million, or $0.38 per diluted share.
Consolidated
revenue in the second quarter of 2006 was $5.5 billion, up 12% from the second
quarter of 2005. This increase was largely attributable to higher activity
in
the Energy Services Group (ESG), partially offset by lower revenue in KBR,
primarily on government services projects in the Middle East.
Consolidated
operating income was $718 million in the second quarter of 2006 compared
to $596
million in the second quarter of 2005. ESG experienced improved performance
reflecting increased rig activity, higher utilization of assets, and increased
pricing. KBR’s results in the second quarter of 2006 included a charge against
operating income, before minority interest, of $148 million (or $0.04 per
diluted share after minority interest and tax) on a consolidated 50% owned
gas-to-liquids project in Escravos, Nigeria. The charge was related to schedule
delays and cost increases resulting from site issues and scope changes
encountered on the project.
-more-
[Missing
Graphic Reference]
Halliburton/Page
2
“I
am
extremely pleased with the quarter for the Energy Services Group, where we
had
record revenue, operating income, and operating margins, despite the expected
seasonal impact from the Canadian spring breakup. ESG’s operating margins were
above 25 percent on strong demand for our services, with impressive Eastern
Hemisphere sequential revenue growth of 14 percent and operating income margins
of 21 percent. We are expecting continued strong performance in the future,”
said Dave Lesar, chairman, president, and chief executive officer of
Halliburton. “Although we are disappointed by the projected cost increases on
the KBR Escravos project, we are addressing our concerns with the customer.
The
balance of KBR’s second quarter 2006 performance was strong. We remain committed
to a full and complete separation of KBR from Halliburton in the near term
through an initial public offering and/or a tax free spin-off to our
shareholders.”
2006
Second Quarter Segment Results
Energy
Services Group
ESG
posted revenue of $3.1 billion in the second quarter of 2006, a $645 million
or
26% increase over the second quarter of 2005. ESG posted operating income
of
$791 million, up $269 million or 52% from the same period in the prior year.
ESG’s operating margin was 25% during the second quarter of 2006.
Production
Optimization operating income for the second quarter of 2006 was $357 million,
an increase of $126 million or 55% over the second quarter of 2005. Production
Enhancement services operating income grew 65%, with improvement in all regions,
driven by strong demand for well stimulation services, increased utilization
of
crews and assets, and improved pricing in the United States. Production
Enhancement also benefited from higher activity in Algeria, Malaysia, and
Kazakhstan. Completion Tools operating income increased 23% due to higher
sales
in the United States, Asia Pacific, and Africa.
Fluid
Systems operating income for the second quarter of 2006 was $193 million,
a $58
million or 43% increase over the second quarter of 2005. Cementing services
operating income increased 43% due to higher drilling activity and improved
pricing in the United States and improved sales and service activity in Russia,
the North Sea, and Asia Pacific. These results were partially offset by lower
offshore activity in Mexico. Baroid Fluid Services operating income grew
44% on
strong drilling activity and pricing improvements in the United States and
higher activity in Latin America and Russia.
Drilling
and Formation Evaluation operating income for the second quarter of 2006
was
$189 million, a $49 million or 35% increase over the prior year second quarter.
Sperry Drilling Services operating income increased 28%, benefiting from
increased drilling activity in the United States, Australia, and the North
Sea.
Logging services operating income increased 42% due to improved pricing and
increased activity in the United States, Latin America, the Middle East,
and
Asia Pacific. Security DBS Drill Bits operating income improved 39% over
the
prior year second quarter, reflecting improved pricing and fixed cutter activity
in North America and Europe, as well as improved roller cone bit demand in
the
Middle East.
-more-
[Missing
Graphic Reference]
Halliburton/Page
3
Digital
and Consulting Solutions operating income in the second quarter of 2006 was
$52
million, more than tripling operating income of the prior year period.
Landmark’s operating income grew 55% due to improved sales of software and
consulting and customer support services in all four regions. Second quarter
of
2005 results included a $15 million loss on the integrated solutions projects
in
southern Mexico.
KBR
KBR
revenue for the second quarter of 2006 was $2.4 billion, a $73 million or
3%
decline compared to the second quarter of 2005, primarily due to decreased
military support activities in Iraq. KBR posted a second quarter of 2006
operating loss of $41 million due primarily to a $148 million charge on the
Escravos gas-to-liquids project for projected future increased costs to complete
the project. The charge relates to significant disruptions encountered in
the
Western Niger Delta region. In addition, the project is experiencing delays
and
cost increases relating to site soil conditions, scope changes, and various
engineering and construction modifications. Discussions of these matters
are
underway with the customer with a view to reduce KBR’s risk exposure. KBR
operating income in the second quarter of 2005 was $111 million.
Government
and Infrastructure operating income for the second quarter of 2006 was $68
million, a $4 million or 6% decrease compared to the second quarter of 2005.
Results in the second quarter of 2006 included an impairment charge of $17
million on an equity investment in a joint venture road project in the United
Kingdom. Second quarter of 2005 results reflected $29 million of award fee
income under the LogCAP contract.
Energy
and Chemicals posted an operating loss of $109 million in the second quarter
of
2006 primarily related to the Escravos gas-to-liquids project. Other projects
in
the segment posted strong operating margins, consistent with recent prior
quarters. Operating income was $39 million in the second quarter of
2005.
Halliburton’s
Iraq-related work contributed approximately $1.3 billion in revenue in the
second quarter of 2006 and $47 million of operating income, a 3.7% margin,
before corporate expenses and taxes.
Technology
and Significant Achievements
Halliburton
made a number of advances in technology and new contract awards.
Energy
Services Group new contract awards and technologies:
|
|
·
|
Halliburton
has been awarded the oilfield services component of the largest
oil
development project in the Arabian Gulf Region since the 1950s
- the Saudi
Aramco Khurais mega project. This three-year contract includes
a full
range of Halliburton’s integrated services and technologies. In order to
produce an expected 1.2 million barrels of oil per day for several
years,
the project will utilize up to 23 rigs to support the drilling
and
completion of more than 300 wells. Development of this project
is a key
contributor to Saudi Aramco’s plan of increasing production
capacity.
|
-more-
[Missing
Graphic Reference]
Halliburton/Page
4
|
|
·
|
Halliburton’s
Fluid Systems segment has been awarded contracts by Statoil valued
in
excess of $193 million for cementing services and drilling and
completion
fluids. The initial contract duration is two years with additional
extension options of three two-year periods. The scope of work
includes
drilling fluids and drilling waste management, cementing services
and
completion fluids, and pumping services in the following fields:
Sleipner/Volve, Visund, Snorre, Tordis/Vigdis, Tyrihans, Heidrun,
and
Åsgard; as well as exploration drilling. In addition, the contract
includes cementing services, completion fluids, and pumping services
in
the following fields: Statfjord, Statfjord satellites, Gullfaks
satellites, and Kvitebjørn/Valemon; and cementing services in the Norne
field.
|
|
|
·
|
Halliburton
has been awarded a $150 million contract to provide integrated
drilling
and well services in Norway to Drilling Production Technology AS.
Halliburton’s scope of work on the project will include directional
drilling, logging-while-drilling, mud logging, drilling fluids
and
drilling waste management, cementing, and coring services. Halliburton’s
project management team will manage and integrate the service offerings
with support from one of our Real Time Centers, and the customer
will be
able to monitor ongoing rig operations by accessing real-time information
in its offices.
|
|
|
·
|
Halliburton
announced that the company’s Fluid Systems segment has developed the
world’s first combined cutting slurrification and cement batch mixer
package. This package offers operators an integrated solution to
their
cementing and waste management needs, while saving valuable rig
space and
reducing manpower and inventory
requirements.
|
|
|
·
|
Halliburton’s
Production Optimization segment announced its most recent technology,
PropStopSM
service, which is designed to help address the declining production
rates
often seen in fractured wells in mature assets. PropStop service
extends
an already broad and unique range of offerings designed to mitigate
proppant and fines production. When applied, PropStop service helps
maintain highly conductive fractures and long-term
productivity.
|
|
|
·
|
Halliburton
announced that it has won four Hart's
E&P
meritorious engineering achievement awards for 2006. William Pike,
Hart's
editor-in-chief, presented the awards on May 1, 2006, at the Offshore
Technology Conference in Houston. The four winning Halliburton
technologies are: the Hostile Sequential Formation Tester (HSFT™) logging
tool; the Chi Modeling® post-processing system; the StimWatchSM
stimulation monitoring service; and the Swellpacker™ isolation
system.
|
-more-
[Missing
Graphic Reference]
Halliburton/Page
5
KBR
new
technologies and contract awards:
|
|
·
|
KBR
announced that it has been awarded a lump-sum services contract
by Saudi
Kayan Petrochemical Company (a Saudi Basic Industries Corp. affiliate)
for
engineering, procurement, and construction management of a 1.35
million-ton-per-year ethylene plant to be built in Jubail City,
Saudi
Arabia. The 1.35 million-ton-per-year plant is the fourth grassroots
cracker that will use KBR’s SCORE™ (Selective Cracking Optimum Recovery)
technology. Front-end engineering and design work will take place
in KBR’s
Houston headquarters, while engineering and procurement activities
will
take place in the company’s Singapore
facility.
|
|
|
·
|
Aspire
Defence, a joint venture between KBR, Mowlem plc, and a financial
investor, has been awarded the Ministry of Defence’s Allenby and Connaught
£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. KBR’s June 30,
2006 firm-order backlog figures reflect $2.1 billion related to
this
award.
|
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 venture, and completion of planned dispositions.
Halliburton's Form 10-K for the year ended December 31, 2005, Form 10-Q for
the
period ended March 31, 2006, recent Current Reports on Form 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 Ended
June
30
|
|
Three
Months Ended
March
31
|
|
|||||
|
|
|
2006
|
|
2005
|
|
2006
|
|
|||
|
Revenue:
|
|
|
|
|
|
|
|
|||
|
Production
Optimization
|
|
$
|
1,292
|
|
$
|
971
|
|
$
|
1,196
|
|
|
Fluid
Systems
|
|
|
870
|
|
|
699
|
|
|
836
|
|
|
Drilling
and Formation Evaluation
|
|
|
774
|
|
|
641
|
|
|
725
|
|
|
Digital
and Consulting Solutions
|
|
|
180
|
|
|
160
|
|
|
181
|
|
|
Total
Energy Services Group
|
|
|
3,116
|
|
|
2,471
|
|
|
2,938
|
|
|
Government
and Infrastructure
|
|
|
1,881
|
|
|
2,035
|
|
|
1,708
|
|
|
Energy
and Chemicals
|
|
|
548
|
|
|
467
|
|
|
538
|
|
|
Total
KBR
|
|
|
2,429
|
|
|
2,502
|
|
|
2,246
|
|
|
Total
revenue
|
|
$
|
5,545
|
|
$
|
4,973
|
|
$
|
5,184
|
|
|
Operating
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Production
Optimization
|
|
$
|
357
|
|
$
|
231
|
|
$
|
324
|
|
|
Fluid
Systems
|
|
|
193
|
|
|
135
|
|
|
182
|
|
|
Drilling
and Formation Evaluation
|
|
|
189
|
|
|
140
|
|
|
172
|
|
|
Digital
and Consulting Solutions
|
|
|
52
|
|
|
16
|
|
|
49
|
|
|
Total
Energy Services Group
|
|
|
791
|
|
|
522
|
|
|
727
|
|
|
Government
and Infrastructure
|
|
|
68
|
|
|
72
|
|
|
20
|
|
|
Energy
and Chemicals
|
|
|
(109
|
)
|
|
39
|
|
|
42
|
|
|
Total
KBR
|
|
|
(41
|
)
|
|
111
|
|
|
62
|
|
|
General
corporate
|
|
|
(32
|
)
|
|
(37
|
)
|
|
(34
|
)
|
|
Total
operating income
|
|
|
718
|
|
|
596
|
|
|
755
|
|
|
Interest
expense
|
|
|
(43
|
)
|
|
(51
|
)
|
|
(47
|
)
|
|
Interest
income
|
|
|
38
|
|
|
9
|
|
|
28
|
|
|
Foreign
currency, net
|
|
|
(10
|
)
|
|
(7
|
)
|
|
8
|
|
|
Other,
net
|
|
|
(4
|
)
|
|
(3
|
)
|
|
3
|
|
|
Income
from continuing operations before income taxes and minority
interest
|
|
|
699
|
|
|
544
|
|
|
747
|
|
|
Provision
for income taxes
|
|
|
(226
|
)
|
|
(150
|
)
|
|
(255
|
)
|
|
Minority
interest in net income (loss) of subsidiaries
|
|
|
36
|
|
|
(10
|
)
|
|
(11
|
)
|
|
Income
from continuing operations
|
|
|
509
|
|
|
384
|
|
|
481
|
|
|
Income
from discontinued operations, net
|
|
|
82
|
|
|
8
|
|
|
7
|
|
|
Net
income
|
|
$
|
591
|
|
$
|
392
|
|
$
|
488
|
|
|
Basic
income per share:
|
|
|
|
|
|
|
|
|
|
|
|
Income
from continuing operations
|
|
$
|
0.50
|
|
$
|
0.38
|
|
$
|
0.47
|
|
|
Income
from discontinued operations, net
|
|
|
0.08
|
|
|
0.01
|
|
|
0.01
|
|
|
Net
income
|
|
$
|
0.58
|
|
$
|
0.39
|
|
$
|
0.48
|
|
|
Diluted
income per share:
|
|
|
|
|
|
|
|
|
|
|
|
Income
from continuing operations
|
|
$
|
0.48
|
|
$
|
0.37
|
|
$
|
0.45
|
|
|
Income
from discontinued operations, net
|
|
|
0.07
|
|
|
0.01
|
|
|
0.01
|
|
|
Net
income
|
|
$
|
0.55
|
|
$
|
0.38
|
|
$
|
0.46
|
|
|
Basic
weighted average common shares outstanding
|
|
|
1,026
|
|
|
1,006
|
|
|
1,024
|
|
|
Diluted
weighted average common shares outstanding
|
|
|
1,070
|
|
|
1,026
|
|
|
1,068
|
|
See
Footnote Table 1 for a list of significant items included in operating
income.
All
periods presented reflect the reclassification of KBR’s Production Services
operations to discontinued operations, as well as the reorganization of
tubing
conveyed perforating, slickline, and underbalanced applications operations
from
Production Optimization into the Drilling and Formation Evaluation division.
-more-
[Missing
Graphic Reference]
HALLIBURTON
COMPANY
Condensed
Consolidated Statements of Operations
(Millions
of dollars and shares except per share data)
(Unaudited)
|
|
|
Six
Months Ended
June
30
|
|
||||
|
|
|
2006
|
|
2005
|
|
||
|
Revenue:
|
|
|
|
|
|
||
|
Production
Optimization
|
|
$
|
2,488
|
|
$
|
1,805
|
|
|
Fluid
Systems
|
|
|
1,706
|
|
|
1,330
|
|
|
Drilling
and Formation Evaluation
|
|
|
1,499
|
|
|
1,196
|
|
|
Digital
and Consulting Solutions
|
|
|
361
|
|
|
324
|
|
|
Total
Energy Services Group
|
|
|
6,054
|
|
|
4,655
|
|
|
Government
and Infrastructure
|
|
|
3,589
|
|
|
4,123
|
|
|
Energy
and Chemicals
|
|
|
1,086
|
|
|
978
|
|
|
Total
KBR
|
|
|
4,675
|
|
|
5,101
|
|
|
Total
revenue
|
|
$
|
10,729
|
|
$
|
9,756
|
|
|
Operating
income (loss):
|
|
|
|
|
|
|
|
|
Production
Optimization
|
|
$
|
681
|
|
$
|
511
|
|
|
Fluid
Systems
|
|
|
375
|
|
|
248
|
|
|
Drilling
and Formation Evaluation
|
|
|
361
|
|
|
231
|
|
|
Digital
and Consulting Solutions
|
|
|
101
|
|
|
45
|
|
|
Total
Energy Services Group
|
|
|
1,518
|
|
|
1,035
|
|
|
Government
and Infrastructure
|
|
|
88
|
|
|
125
|
|
|
Energy
and Chemicals
|
|
|
(67
|
)
|
|
80
|
|
|
Total
KBR
|
|
|
21
|
|
|
205
|
|
|
General
corporate
|
|
|
(66
|
)
|
|
(69
|
)
|
|
Total
operating income
|
|
|
1,473
|
|
|
1,171
|
|
|
Interest
expense
|
|
|
(90
|
)
|
|
(103
|
)
|
|
Interest
income
|
|
|
66
|
|
|
21
|
|
|
Foreign
currency, net
|
|
|
(2
|
)
|
|
(7
|
)
|
|
Other,
net
|
|
|
(1
|
)
|
|
(5
|
)
|
|
Income
from continuing operations before income taxes and minority interest
|
|
|
1,446
|
|
|
1,077
|
|
|
Provision
for income taxes
|
|
|
(481
|
)
|
|
(316
|
)
|
|
Minority
interest in net income (loss) of subsidiaries
|
|
|
25
|
|
|
(18
|
)
|
|
Income
from continuing operations
|
|
|
990
|
|
|
743
|
|
|
Income
from discontinued operations, net
|
|
|
89
|
|
|
14
|
|
|
Net
income
|
|
$
|
1,079
|
|
$
|
757
|
|
|
Basic
income per share:
|
|
|
|
|
|
|
|
|
Income
from continuing operations
|
|
$
|
0.97
|
|
$
|
0.74
|
|
|
Income
from discontinued operations, net
|
|
|
0.08
|
|
|
0.01
|
|
|
Net
income
|
|
$
|
1.05
|
|
$
|
0.75
|
|
|
Diluted
income per share:
|
|
|
|
|
|
|
|
|
Income
from continuing operations
|
|
$
|
0.93
|
|
$
|
0.73
|
|
|
Income
from discontinued operations, net
|
|
|
0.08
|
|
|
0.01
|
|
|
Net
income
|
|
$
|
1.01
|
|
$
|
0.74
|
|
|
Basic
weighted average common shares outstanding
|
|
|
1,025
|
|
|
1,004
|
|
|
Diluted
weighted average common shares outstanding
|
|
|
1,069
|
|
|
1,024
|
|
See
Footnote Table 1 for a list of significant items included in operating
income.
All
periods presented reflect the reclassification of KBR’s Production Services
operations to discontinued operations, as well as the reorganization of
tubing
conveyed perforating, slickline, and underbalanced applications operations
from
Production Optimization into the Drilling and Formation Evaluation
division.
-more-
[Missing
Graphic Reference]
HALLIBURTON
COMPANY
Condensed
Consolidated Balance Sheets
(Millions
of dollars)
(Unaudited)
|
|
|
June
30,
2006
|
|
March
31,
2006
|
|
December
31,
2005
|
|
|||
|
Assets
|
|
|||||||||
|
Current
assets:
|
|
|
|
|
|
|
|
|||
|
Cash
and equivalents
|
|
$
|
3,673
|
|
$
|
2,278
|
|
$
|
2,391
|
|
|
Receivables,
net
|
|
|
4,806
|
|
|
4,952
|
|
|
4,801
|
|
|
Inventories,
net
|
|
|
1,128
|
|
|
1,086
|
|
|
953
|
|
|
Other
current assets
|
|
|
1,044
|
|
|
1,474
|
|
|
1,167
|
|
|
Total
current assets
|
|
|
10,651
|
|
|
9,790
|
|
|
9,312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property,
plant, and equipment, net
|
|
|
2,774
|
|
|
2,675
|
|
|
2,648
|
|
|
Other
assets
|
|
|
2,749
|
|
|
2,705
|
|
|
3,050
|
|
|
Total
assets
|
|
$
|
16,174
|
|
$
|
15,170
|
|
$
|
15,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and Shareholders’ Equity
|
||||||||||
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
1,817
|
|
$
|
1,688
|
|
$
|
1,967
|
|
|
Current
maturities of long-term debt
|
|
|
360
|
|
|
360
|
|
|
361
|
|
|
Other
current liabilities
|
|
|
2,586
|
|
|
2,114
|
|
|
2,099
|
|
|
Total
current liabilities
|
|
|
4,763
|
|
|
4,162
|
|
|
4,427
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
2,772
|
|
|
2,793
|
|
|
2,813
|
|
|
Other
liabilities
|
|
|
1,218
|
|
|
1,192
|
|
|
1,253
|
|
|
Total
liabilities
|
|
|
8,753
|
|
|
8,147
|
|
|
8,493
|
|
|
Minority
interest in consolidated subsidiaries
|
|
|
93
|
|
|
151
|
|
|
145
|
|
|
Shareholders’
equity
|
|
|
7,328
|
|
|
6,872
|
|
|
6,372
|
|
|
Total
liabilities and shareholders’ equity
|
|
$
|
16,174
|
|
$
|
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, which were sold during the second quarter of 2006, 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
June
30
|
|
Six
Months Ended
June
30
|
|
||||||||
|
|
|
2006
|
|
2005
|
|
2006
|
|
2005
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Capital
expenditures:
|
|
|
|
|
|
|
|
|
|
||||
|
Energy
Services Group
|
|
$
|
200
|
|
$
|
129
|
|
$
|
337
|
|
$
|
260
|
|
|
KBR
|
|
|
20
|
|
|
18
|
|
|
42
|
|
|
29
|
|
|
General
corporate
|
|
|
1
|
|
|
-
|
|
|
2
|
|
|
-
|
|
|
Total
capital expenditures
|
|
$
|
221
|
|
$
|
147
|
|
$
|
381
|
|
$
|
289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation,
depletion, and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy
Services Group
|
|
$
|
117
|
|
$
|
112
|
|
$
|
234
|
|
$
|
222
|
|
|
KBR
|
|
|
12
|
|
|
15
|
|
|
23
|
|
|
30
|
|
|
Total
depreciation, depletion, and amortization
|
|
$
|
129
|
|
$
|
127
|
|
$
|
257
|
|
$
|
252
|
|
-more-
[Missing
Graphic Reference]
HALLIBURTON
COMPANY
Revenue
and Operating Income Comparison
By
Geographic Region - Energy Services Group Only
(Millions
of dollars)
(Unaudited)
|
|
|
Three
Months Ended
June
30
|
|
Three
Months
Ended
March
31
|
|
|||||
|
|
|
2006
|
|
2005
|
|
2006
|
|
|||
|
Revenue:
|
|
|
|
|
|
|
|
|||
|
North
America
|
|
$
|
1,541
|
|
$
|
1,137
|
|
$
|
1,513
|
|
|
Latin
America
|
|
|
355
|
|
|
333
|
|
|
351
|
|
|
Europe/Africa/CIS
|
|
|
674
|
|
|
565
|
|
|
595
|
|
|
Middle
East/Asia
|
|
|
546
|
|
|
436
|
|
|
479
|
|
|
Total
revenue
|
|
$
|
3,116
|
|
$
|
2,471
|
|
$
|
2,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
|
$
|
470
|
|
$
|
289
|
|
$
|
480
|
|
|
Latin
America
|
|
|
65
|
|
|
39
|
|
|
53
|
|
|
Europe/Africa/CIS
|
|
|
125
|
|
|
105
|
|
|
93
|
|
|
Middle
East/Asia
|
|
|
131
|
|
|
89
|
|
|
101
|
|
|
Total
operating income
|
|
$
|
791
|
|
$
|
522
|
|
$
|
727
|
|
|
|
|
Six
Months Ended June 30
|
|
||||
|
|
|
2006
|
|
2005
|
|
||
|
Revenue:
|
|
|
|
|
|
||
|
North
America
|
|
$
|
3,054
|
|
$
|
2,196
|
|
|
Latin
America
|
|
|
706
|
|
|
647
|
|
|
Europe/Africa/CIS
|
|
|
1,269
|
|
|
1,028
|
|
|
Middle
East/Asia
|
|
|
1,025
|
|
|
784
|
|
|
Total
revenue
|
|
$
|
6,054
|
|
$
|
4,655
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
|
North
America
|
|
$
|
950
|
|
$
|
642
|
|
|
Latin
America
|
|
|
118
|
|
|
85
|
|
|
Europe/Africa/CIS
|
|
|
218
|
|
|
167
|
|
|
Middle
East/Asia
|
|
|
232
|
|
|
141
|
|
|
Total
operating income
|
|
$
|
1,518
|
|
$
|
1,035
|
|
See
Footnote Table 2 for a list of significant items included in operating
income.
-more-
[Missing
Graphic Reference]
HALLIBURTON
COMPANY
Backlog
Information
(Millions
of dollars)
(Unaudited)
|
|
|
June
30,
2006
|
|
March
31,
2006
|
|
December
31,
2005
|
|
|||
|
Firm
orders:
|
|
|
|
|
|
|
|
|||
|
Government
& Infrastructure
|
|
$
|
5,322
|
(a)
|
$
|
3,418
|
|
$
|
3,376
|
|
|
Energy
& Chemicals - Gas Monetization
|
|
|
3,478
|
|
|
3,451
|
|
|
3,651
|
|
|
Energy
& Chemicals - Other
|
|
|
1,909
|
(b)
|
|
1,978
|
|
|
1,786
|
|
|
Energy
Services Group segments
|
|
|
1
|
|
|
133
|
|
|
180
|
|
|
Total
firm orders
|
|
$
|
10,710
|
|
$
|
8,980
|
|
$
|
8,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government
orders firm but not yet funded, letters of intent, and contracts
awarded
but not signed:
|
|
|
|
|
|
|
|
|
|
|
|
Government
& Infrastructure
|
|
$
|
345
|
|
$
|
474
|
|
$
|
1,775
|
|
|
Total
backlog
|
|
$
|
11,055
|
|
$
|
9,454
|
|
$
|
10,768
|
|
|
|
(a)
|
The
$5.3 billion of firm orders in the Government & Infrastructure segment
as of June 30, 2006 includes $445 million for Task Order 89 and
$2.1
billion for the recently awarded Allenby and Connaught
project.
|
|
|
(b)
|
The
amounts presented represent backlog for continuing operations
and do not
include backlog associated with KBR’s Production Services operations,
which were sold and are accounted 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.
|
HALLIBURTON
COMPANY
Stock-Based
Compensation Expense
(Millions
of dollars)
|
|
|
Three
Months Ended
|
|
||||
|
|
|
June
30, 2006
|
|
June
30, 2005
|
|
||
|
Stock-based
compensation expense, pretax:
|
|
|
|
|
|
||
|
Stock
options and employee stock purchase plans (a)
|
|
$
|
10
|
|
$
|
-
(b
|
)
|
|
Restricted
stock
|
|
|
7
|
|
|
6
|
|
|
Employee
separation
|
|
|
2
|
|
|
1
|
|
|
Total
stock-based compensation expense
|
|
$
|
19
|
|
$
|
7
|
|
|
|
(a)
|
Incremental
expense incurred related to the adoption of FAS 123(R) effective
January
1, 2006.
|
|
|
(b)
|
Had
the provisions of FAS 123(R) been adopted during this period,
approximately $8 million of expense would have been
recorded.
|
|
|
|
Six
Months Ended
|
|
||||
|
|
|
June
30, 2006
|
|
June
30, 2005
|
|
||
|
Stock-based
compensation expense, pretax:
|
|
|
|
|
|
||
|
Stock
options and employee stock purchase plans (a)
|
|
$
|
20
|
|
$
|
-
(b
|
)
|
|
Restricted
stock
|
|
|
15
|
|
|
11
|
|
|
Employee
separation
|
|
|
8
|
|
|
13
|
|
|
Total
stock-based compensation expense
|
|
$
|
43
|
|
$
|
24
|
|
|
|
(a)
|
Incremental
expense incurred related to the adoption of FAS 123(R) effective
January
1, 2006.
|
|
|
(b)
|
Had
the provisions of FAS 123(R) been adopted during this period,
approximately $14 million of expense would have been
recorded.
|
-more-
[Missing
Graphic Reference]
FOOTNOTE
TABLE 1
HALLIBURTON
COMPANY
Items
included in Income by Operating Segment
(Millions
of dollars except per share data)
(Unaudited)
|
|
|
Three
Months Ended
June
30, 2006
|
|
Three
Months Ended
June
30, 2005
|
|
Three
Months Ended
March
31, 2006
|
|
||||||||||||
|
|
|
Operating
Income
|
|
After
Tax per Share
|
|
Operating
Income
|
|
After
Tax per Share
|
|
Operating
Income
|
|
After
Tax per Share
|
|
||||||
|
Government
and Infrastructure:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Railroad
impairment charge
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
(30
|
)
|
$
|
(0.03
|
)
|
|
Energy
and Chemicals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Escravos
GTL project Loss (a)
|
|
|
(148
|
)
|
|
(0.04
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
Barracuda-Caratinga
project loss
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(15
|
)
|
|
(0.01
|
)
|
|
|
|
Six
Months Ended
June
30, 2006
|
|
Six
Months Ended
June
30, 2005
|
|
||||||||
|
|
|
Operating
Income
|
|
After
Tax per Share
|
|
Operating
Income
|
|
After
Tax per Share
|
|
||||
|
Production
Optimization:
|
|
|
|
|
|
|
|
|
|
||||
|
Subsea
7, Inc. gain on sale
|
|
$
|
-
|
|
$
|
-
|
|
$
|
110
|
|
$
|
0.08
|
|
|
Government
and Infrastructure:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railroad
impairment charge
|
|
|
(30
|
)
|
|
(0.03
|
)
|
|
-
|
|
|
-
|
|
|
Energy
and Chemicals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Escravos
GTL project loss (a)
|
|
|
(148
|
)
|
|
(0.04
|
)
|
|
-
|
|
|
-
|
|
|
Barracuda-Caratinga
project loss
|
|
|
(15
|
)
|
|
(0.01
|
)
|
|
-
|
|
|
-
|
|
|
(a)
|
Halliburton
consolidates the Escravos project; therefore the $148 million
charge to
operating income reflects the entire impact on the project, not
just
Halliburton’s 50% share. The 50% portion of the charge that is borne by
the other owner of the project is reflected, on an after-tax
basis as
minority interest.
|
FOOTNOTE
TABLE 2
HALLIBURTON
COMPANY
Items
included in Income
By
Geographic Region - Energy Services Group Only
(Millions
of dollars except per share data)
(Unaudited)
|
|
|
Six
Months Ended
June
30, 2006
|
|
Six
Months Ended
June
30, 2005
|
|
||||||||
|
|
|
Operating
Income
|
|
After
Tax per Share
|
|
Operating
Income
|
|
After
Tax per Share
|
|
||||
|
North
America:
|
|
|
|
|
|
|
|
|
|
||||
|
Subsea
7, Inc. gain on sale
|
|
$
|
-
|
|
$
|
-
|
|
$
|
107
|
|
$
|
0.08
|
|
|
Europe/Africa/CIS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsea
7, Inc. gain on sale
|
|
|
-
|
|
|
-
|
|
|
3
|
|
|
-
|
|
####
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
HALLIBURTON
COMPANY
|
||
|
Date:
July 25, 2006
|
By:
|
/s/ Bruce A. Metzinger |
|
Bruce
A. Metzinger
|
||
|
Assistant
Secretary
|