UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
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FORM
8-K
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Current
Report
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (date of earliest event reported): January 26,
2007
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HALLIBURTON
COMPANY
(Exact
Name of Registrant as Specified in Its Charter)
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Delaware
(State
or Other Jurisdiction of Incorporation)
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1-3492
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No.
75-2677995
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(Commission
File Number)
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(IRS
Employer Identification
No.)
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1401
McKinney, Suite 2400, Houston, Texas
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77010
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(713)
759-2600
(Registrant’s
Telephone Number, Including Area Code)
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
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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):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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[Missing
Graphic Reference]
[Missing
Graphic Reference]
[Missing
Graphic Reference]
INFORMATION
TO BE INCLUDED IN REPORT
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Item
2.02.
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Results
of Operations and Financial
Condition
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On
January 26, 2007, registrant issued a press release entitled “Halliburton
Announces Full Year and Fourth Quarter Results.”
The
text
of the Press Release is as follows:
HALLIBURTON
ANNOUNCES FULL YEAR AND FOURTH QUARTER RESULTS
$2.16
2006 earnings per diluted share from continuing operations and
$0.65
fourth quarter 2006 earnings per diluted share from continuing
operations
HOUSTON,
Texas
-
Halliburton (NYSE:HAL) announced today that revenue was $22.6 billion for the
full year 2006, an increase of 12% from the full year 2005, and operating income
was $3.5 billion, an increase of 33% from the full year 2005. Income from
continuing operations for the full year of 2006 was $2.3 billion, or $2.16
per
diluted share, compared to 2005 income from continuing operations of $2.3
billion, or $2.24 per diluted share, as significant tax benefits were recorded
in 2005.
Net
income in 2006 was $2.3 billion, or $2.23 per diluted share, compared to 2005
net income of $2.4 billion, or $2.27 per diluted share. Net income in 2006
included $76 million, or $0.07 per diluted share, in after-tax income from
discontinued operations related primarily to the gain on the sale of KBR’s
Production Services Group. Income from discontinued operations in 2005 was
$31
million, or $0.03 per diluted share, related primarily to KBR’s Production
Services Group operating results.
In
the
fourth quarter of 2006, income from continuing operations was $667 million,
or
$0.65 per diluted share. This compares to income from continuing operations
of
$1.1 billion, or $1.03 per diluted share, in the fourth quarter of 2005. The
fourth quarter of 2005 included $540 million, or $0.51 per diluted share, of
income related to a reduction in a deferred tax asset valuation allowance.
Net
income in the fourth quarter of 2006 was $658 million, or $0.64 per diluted
share, compared to net income in the fourth quarter of 2005 of $1.1 billion,
or
$1.04 per diluted share.
Revenue
in the fourth quarter of 2006 was $6.0 billion, up 8% from the fourth quarter
of
2005. This increase was largely attributable to higher activity in the Energy
Services Group (ESG), particularly in the United States and Europe/Africa/CIS,
partially offset by lower revenue in KBR, primarily due to decreased activity
on
government services projects for the United States military.
Operating
income was $1.0 billion in the fourth quarter of 2006 compared to $766 million
in the fourth quarter of 2005. Operating income in the fourth quarter of 2006
was positively impacted by a $48 million gain on the sale of lift boats in
West
Africa and the North Sea. Operating income for the fourth quarter of 2005
included a $24 million gain related to a patent infringement case
settlement.
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more
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[Missing
Graphic Reference]
Halliburton/Page
2
“For
Halliburton, 2006 was an exciting year as the oilfield experienced exceptional
growth in energy services. The ESG benefited from strong global demand,
resulting in record revenue, operating income, and operating income margins
for
2006. Although we experienced weather-related activity decreases and holiday
impacts in the United States during the fourth quarter, we expect demand for
our
services to remain strong throughout 2007. We will continue to invest in
equipment and infrastructure, with a focus on international growth in areas
such
as the Middle East, Africa, and Asia,” said Dave Lesar, chairman, president, and
chief executive officer of Halliburton. “KBR had its Initial Public Offering
last November and is off to a great start as a public company. We anticipate
completing the separation of KBR from Halliburton within the next three
months.”
2006
Fourth Quarter Segment Results
Energy
Services Group
ESG
posted record revenue of $3.5 billion in the fourth quarter of 2006, a $661
million or 23% increase over the fourth quarter of 2005. ESG posted operating
income of $959 million, up $281 million or 41% from the same period in the
prior
year. ESG’s operating margin was 27.3% during the fourth quarter of 2006, a 350
basis point improvement from the fourth quarter of 2005. Included in the fourth
quarter of 2006 operating results was the $48 million gain on sale of the lift
boats. The fourth quarter of 2006 results also included $38 million for business
interruption resulting from the 2005 Gulf of Mexico hurricanes, offset by
activity declines in the western United States due to severe winter weather
and
holidays.
Production
Optimization posted operating income in the fourth quarter of 2006 of $443
million, including the lift boat gains, an increase of $149 million or 51%
over
the fourth quarter of 2005. Production Enhancement services operating income
grew 27%, driven by strong demand for well stimulation services, improved
pricing, high equipment utilization in the United States, and increased activity
in Asia. Results were partially offset by United States weather-related activity
decreases and higher holiday impacts during the fourth quarter of 2006, and
decreased activity in Canada. Completion Tools operating income improved 55%
over the prior year fourth quarter, with improvements in all
regions.
Fluid
Systems operating income for the fourth quarter of 2006 was $209 million, a
$52
million or 33% increase over the fourth quarter of 2005. Fourth quarter of
2006
results were positively impacted by insurance proceeds related to the 2005
Gulf
of Mexico hurricanes, partially offset by increased start-up costs for new
Eastern Hemisphere contracts. Cementing services operating income increased
due
to strength in the United States land, recovery of Gulf of Mexico, and increased
rig activity in Africa.
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more
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[Missing
Graphic Reference]
Halliburton/Page
3
Drilling
and Formation Evaluation posted record operating income for the fourth quarter
of 2006 of $230 million, a $69 million or 43% increase over the prior year
fourth quarter. Operating income in the fourth quarter of 2005 included a $24
million gain related to a patent infringement case settlement. Sperry Drilling
Services operating income increased 72% with improvement in all regions, led
by
increased activity in Europe, Africa, and the Middle East. Sperry’s Geo-Pilot®
and GeoTap® technologies continued to show solid revenue growth over the prior
year quarter. Wireline and Perforating Services operating income increased
56%
due to increased activity, pricing, and improved asset utilization in the United
States, Latin America, Africa, and Asia Pacific. Security DBS Drill Bits
operating income was positively impacted by increased sales in all regions,
reflecting improved fixed cutter bit activity.
Digital
and Consulting Solutions posted record operating income in the fourth quarter
of
2006 of $77 million, an increase of $11 million or 17% compared to the prior
year quarter, driven by strong international software sales and consulting
services.
KBR
KBR
revenue for the fourth quarter of 2006 was $2.5 billion compared to $2.7 billion
in the fourth quarter of 2005. Operating income for the fourth quarter of 2006
was $120 million compared to operating income of $108 million in the prior
year
fourth quarter.
Energy
and Chemicals posted operating income of $59 million in the fourth quarter
of
2006 compared to $54 million in the fourth quarter of 2005. Significant
contributors to fourth quarter of 2006 results were a gas-to-liquids project
in
Qatar, liquefied natural gas projects in Nigeria, Indonesia, and Yemen, and
an
ammonia plant in Egypt.
Government
and Infrastructure operating income for the fourth quarter of 2006 was $61
million, compared to $54 million in the fourth quarter of 2005. The increase
was
attributable to higher income related to the DML shipyard, which was offset
partially by a $12 million loss on an embassy project for the U.S. State
Department in Macedonia.
Corporate
Under
the
common stock repurchase program, the company repurchased 8.6 million shares
at
an average price of $32.69 per share, for approximately $280 million in the
fourth quarter of 2006. Approximately 40 million shares at an average price
of
$32.93 per share have been repurchased since the commencement of the program
in
March 2006.
Technology
and Significant Achievements
Energy
Services Group new contract awards and technologies:
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·
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Landmark
announced a new visual cataloging and tapeless archiving solution
designed
to simplify and accelerate data archival and retrieval. The solution
tightly integrates Landmark’s industry-leading reporting tool Corporate
Data Archiver™ software with the purpose built, software-driven EMC
Centera™ content-addressed storage system to provide instant
retrievability of archived data.
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more
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[Missing
Graphic Reference]
Halliburton/Page
4
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—
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Halliburton’s
Energy Services Group has been awarded a $59 million contract by
Rosneft-YNG for the provision of hydraulic fracturing services on
the
Right Bank of the Priobskoye field in Siberia. The scope of work
includes providing services for 327 wells. Halliburton will execute
the
project in 2007 from its base in Poikovo,
Nefteyugansk.
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—
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Halliburton’s
Energy Services Group has been awarded a multi-services contract,
valued
at approximately $100 million over three years, by TNK-BP for work
in the
Tyumen region of Russia. The contract also has the option for three
additional one-year periods. The Energy Services Group will be providing
drilling fluids, waste management services, cementing, drill bits,
directional drilling, and logging-while-drilling services for the
Uvat
development, which is expected to begin in the second quarter of
2007.
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—
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Halliburton’s
Drilling and Formation Evaluation segment has entered into a definitive
agreement to acquire all intellectual property, current assets, and
existing wireline services business associated with Calgary-based
Ultraline Services Corporation, a division of Savanna Energy Services
Corp. (TSX: SVY) for approximately $177 million, subject to adjustments
for working capital purposes.
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—
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Sperry
Drilling Services and IntelliServ Inc., a wholly owned subsidiary
of Grant
Prideco (NYSE: GRP), have interfaced their technologies and successfully
tested a system using The IntelliServ® Network drill string telemetry to
transfer data and information generated by downhole drilling and
formation
evaluation tools to the surface in real time, at rates up to 10,000
times
faster than those available today. Halliburton and IntelliServ Inc.
have
entered into an agreement to globally market and deploy their respective
technologies to joint customers.
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—
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Halliburton’s
Production Optimization segment has been awarded a contract by Pemex
valued at $73 million to provide stimulation services in the Bay
of
Campeche, Mexico. The stimulation services to be supplied by Halliburton
are acidizing, acid fracturing, water control, and nitrogen
services.
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KBR
announcements:
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—
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KBR
announced that it has closed its initial public offering of 32,016,000
shares of common stock at a price of $17.00 per share. The number of
shares of common stock issued at closing included 4,176,000 shares
for the
underwriters’ over-allotment option. KBR received approximately $508
million of proceeds from the offering, net of underwriting fees and
estimated expenses.
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more
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[Missing
Graphic Reference]
Halliburton/Page
5
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 natural 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,
Form
10-Q for the period ended September 30, 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. Risk factors specific to KBR are discussed
in the final prospectus for its initial public offering dated November 15,
2006.
Halliburton undertakes no obligation to revise or update publicly any
forward-looking statements for any reason.
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more
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[Missing
Graphic Reference]
HALLIBURTON
COMPANY
Condensed
Consolidated Statements of Operations
(Millions
of dollars and shares except per share data)
(Unaudited)
|
|
|
Three
Months
Ended
December
31
|
|
Three
Months
Ended
September
30
|
|
|||||
|
|
|
2006
|
|
2005
|
|
2006
|
|
|||
|
Revenue:
|
|
|
|
|
|
|
|
|||
|
Production
Optimization
|
|
$
|
1,454
|
|
$
|
1,153
|
|
$
|
1,418
|
|
|
Fluid
Systems
|
|
|
964
|
|
|
777
|
|
|
928
|
|
|
Drilling
and Formation Evaluation
|
|
|
877
|
|
|
693
|
|
|
845
|
|
|
Digital
and Consulting Solutions
|
|
|
214
|
|
|
225
|
|
|
201
|
|
|
Total
Energy Services Group
|
|
|
3,509
|
|
|
2,848
|
|
|
3,392
|
|
|
Energy
and Chemicals
|
|
|
686
|
|
|
595
|
|
|
601
|
|
|
Government
and Infrastructure
|
|
|
1,821
|
|
|
2,129
|
|
|
1,838
|
|
|
Total
KBR
|
|
|
2,507
|
|
|
2,724
|
|
|
2,439
|
|
|
Total
revenue
|
|
$
|
6,016
|
|
$
|
5,572
|
|
$
|
5,831
|
|
|
Operating
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Production
Optimization
|
|
$
|
443
|
|
$
|
294
|
|
$
|
406
|
|
|
Fluid
Systems
|
|
|
209
|
|
|
157
|
|
|
211
|
|
|
Drilling
and Formation Evaluation
|
|
|
230
|
|
|
161
|
|
|
227
|
|
|
Digital
and Consulting Solutions
|
|
|
77
|
|
|
66
|
|
|
62
|
|
|
Total
Energy Services Group
|
|
|
959
|
|
|
678
|
|
|
906
|
|
|
Energy
and Chemicals
|
|
|
59
|
|
|
54
|
|
|
45
|
|
|
Government
and Infrastructure
|
|
|
61
|
|
|
54
|
|
|
53
|
|
|
Total
KBR
|
|
|
120
|
|
|
108
|
|
|
98
|
|
|
General
corporate
|
|
|
(36
|
)
|
|
(20
|
)
|
|
(36
|
)
|
|
Total
operating income
|
|
|
1,043
|
|
|
766
|
|
|
968
|
|
|
Interest
expense
|
|
|
(43
|
)
|
|
(53
|
)
|
|
(42
|
)
|
|
Interest
income
|
|
|
52
|
|
|
26
|
|
|
44
|
|
|
Foreign
currency, net
|
|
|
(10
|
)
|
|
(4
|
)
|
|
(10
|
)
|
|
Other,
net
|
|
|
1
|
|
|
(7
|
)
|
|
-
|
|
|
Income
from continuing operations before income taxes and minority
interest
|
|
|
1,043
|
|
|
728
|
|
|
960
|
|
|
Benefit
(provision) for income taxes
|
|
|
(343
|
)
|
|
381
|
|
|
(320
|
)
|
|
Minority
interest in net income of subsidiaries
|
|
|
(33
|
)
|
|
(17
|
)
|
|
(25
|
)
|
|
Income
from continuing operations
|
|
|
667
|
|
|
1,092
|
|
|
615
|
|
|
Income
(loss) from discontinued operations, net
|
|
|
(9
|
)
|
|
10
|
|
|
(4
|
)
|
|
Net
income
|
|
$
|
658
|
|
$
|
1,102
|
|
$
|
611
|
|
|
Basic
income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
Income
from continuing operations
|
|
$
|
0.67
|
|
$
|
1.07
|
|
$
|
0.61
|
|
|
Income
(loss) from discontinued operations, net
|
|
|
(0.01
|
)
|
|
0.01
|
|
|
-
|
|
|
Net
income
|
|
$
|
0.66
|
|
$
|
1.08
|
|
$
|
0.61
|
|
|
Diluted
income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
Income
from continuing operations
|
|
$
|
0.65
|
|
$
|
1.03
|
|
$
|
0.58
|
|
|
Income
(loss) from discontinued operations, net
|
|
|
(0.01
|
)
|
|
0.01
|
|
|
-
|
|
|
Net
income
|
|
$
|
0.64
|
|
$
|
1.04
|
|
$
|
0.58
|
|
|
Basic
weighted average common shares outstanding
|
|
|
996
|
|
|
1,018
|
|
|
1,011
|
|
|
Diluted
weighted average common shares outstanding
|
|
|
1,030
|
|
|
1,058
|
|
|
1,048
|
|
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 segment.
-
more
-
[Missing
Graphic Reference]
HALLIBURTON
COMPANY
Condensed
Consolidated Statements of Operations
(Millions
of dollars and shares except per share data)
(Unaudited)
|
|
|
Years
Ended December 31
|
|
||||
|
|
|
2006
|
|
2005
|
|
||
|
Revenue:
|
|
|
|
|
|
||
|
Production
Optimization
|
|
$
|
5,360
|
|
$
|
3,990
|
|
|
Fluid
Systems
|
|
|
3,598
|
|
|
2,838
|
|
|
Drilling
and Formation Evaluation
|
|
|
3,221
|
|
|
2,552
|
|
|
Digital
and Consulting Solutions
|
|
|
776
|
|
|
720
|
|
|
Total
Energy Services Group
|
|
|
12,955
|
|
|
10,100
|
|
|
Energy
and Chemicals
|
|
|
2,373
|
|
|
2,008
|
|
|
Government
and Infrastructure
|
|
|
7,248
|
|
|
8,132
|
|
|
Total
KBR
|
|
|
9,621
|
|
|
10,140
|
|
|
Total
revenue
|
|
$
|
22,576
|
|
$
|
20,240
|
|
|
Operating
income (loss):
|
|
|
|
|
|
|
|
|
Production
Optimization
|
|
$
|
1,530
|
|
$
|
1,053
|
|
|
Fluid
Systems
|
|
|
795
|
|
|
544
|
|
|
Drilling
and Formation Evaluation
|
|
|
818
|
|
|
536
|
|
|
Digital
and Consulting Solutions
|
|
|
240
|
|
|
146
|
|
|
Total
Energy Services Group
|
|
|
3,383
|
|
|
2,279
|
|
|
Energy
and Chemicals
|
|
|
37
|
|
|
124
|
|
|
Government
and Infrastructure
|
|
|
202
|
|
|
329
|
|
|
Total
KBR
|
|
|
239
|
|
|
453
|
|
|
General
corporate
|
|
|
(138
|
)
|
|
(115
|
)
|
|
Total
operating income
|
|
|
3,484
|
|
|
2,617
|
|
|
Interest
expense
|
|
|
(175
|
)
|
|
(207
|
)
|
|
Interest
income
|
|
|
162
|
|
|
64
|
|
|
Foreign
currency, net
|
|
|
(22
|
)
|
|
(13
|
)
|
|
Other,
net
|
|
|
-
|
|
|
(14
|
)
|
|
Income
from continuing operations before income taxes and minority
interest
|
|
|
3,449
|
|
|
2,447
|
|
|
Provision
for income taxes
|
|
|
(1,144
|
)
|
|
(64
|
)
|
|
Minority
interest in net income of subsidiaries
|
|
|
(33
|
)
|
|
(56
|
)
|
|
Income
from continuing operations
|
|
|
2,272
|
|
|
2,327
|
|
|
Income
from discontinued operations, net
|
|
|
76
|
|
|
31
|
|
|
Net
income
|
|
$
|
2,348
|
|
$
|
2,358
|
|
|
Basic
income per share:
|
|
|
|
|
|
|
|
|
Income
from continuing operations
|
|
$
|
2.24
|
|
$
|
2.31
|
|
|
Income
from discontinued operations, net
|
|
|
0.07
|
|
|
0.03
|
|
|
Net
income
|
|
$
|
2.31
|
|
$
|
2.34
|
|
|
Diluted
income per share:
|
|
|
|
|
|
|
|
|
Income
from continuing operations
|
|
$
|
2.16
|
|
$
|
2.24
|
|
|
Income
from discontinued operations, net
|
|
|
0.07
|
|
|
0.03
|
|
|
Net
income
|
|
$
|
2.23
|
|
$
|
2.27
|
|
|
Basic
weighted average common shares outstanding
|
|
|
1,014
|
|
|
1,010
|
|
|
Diluted
weighted average common shares outstanding
|
|
|
1,054
|
|
|
1,038
|
|
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
segment.
-
more
-
[Missing
Graphic Reference]
HALLIBURTON
COMPANY
Condensed
Consolidating Statements of Operations
(Millions
of dollars)
(Unaudited)
|
Three
Months Ended December 31, 2006
|
|
Halliburton
Consolidated
|
|
KBR,
Inc.
|
|
Consolidating
Adjustments
|
|
ESG
and
Corporate
|
|
||||
|
Revenue:
|
|
|
|
|
|
|
|
|
|
||||
|
Production
Optimization
|
|
$
|
1,454
|
|
$
|
-
|
|
$
|
-
|
|
$
|
1,454
|
|
|
Fluid
Systems
|
|
|
964
|
|
|
-
|
|
|
-
|
|
|
964
|
|
|
Drilling
and Formation Evaluation
|
|
|
877
|
|
|
-
|
|
|
-
|
|
|
877
|
|
|
Digital
and Consulting Solutions
|
|
|
214
|
|
|
-
|
|
|
-
|
|
|
214
|
|
|
Total
Energy Services Group
|
|
|
3,509
|
|
|
-
|
|
|
-
|
|
|
3,509
|
|
|
Energy
and Chemicals
|
|
|
686
|
|
|
687
|
|
|
(1
|
)
|
|
-
|
|
|
Government
and Infrastructure
|
|
|
1,821
|
|
|
1,822
|
|
|
(1
|
)
|
|
-
|
|
|
Total
KBR
|
|
|
2,507
|
|
|
2,509
|
|
|
(2
|
)
|
|
-
|
|
|
Total
revenue
|
|
$
|
6,016
|
|
$
|
2,509
|
|
$
|
(2
|
)
|
$
|
3,509
|
|
|
Operating
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
Optimization
|
|
$
|
443
|
|
$
|
-
|
|
$
|
-
|
|
$
|
443
|
|
|
Fluid
Systems
|
|
|
209
|
|
|
-
|
|
|
-
|
|
|
209
|
|
|
Drilling
and Formation Evaluation
|
|
|
230
|
|
|
-
|
|
|
-
|
|
|
230
|
|
|
Digital
and Consulting Solutions
|
|
|
77
|
|
|
-
|
|
|
-
|
|
|
77
|
|
|
Total
Energy Services Group
|
|
|
959
|
|
|
-
|
|
|
-
|
|
|
959
|
|
|
Energy
and Chemicals
|
|
|
59
|
|
|
59
|
|
|
-
|
|
|
-
|
|
|
Government
and Infrastructure
|
|
|
61
|
|
|
62
|
|
|
(1
|
)
|
|
-
|
|
|
Total
KBR
|
|
|
120
|
|
|
121
|
|
|
(1
|
)
|
|
-
|
|
|
General
corporate
|
|
|
(36
|
)
|
|
-
|
|
|
-
|
|
|
(36
|
)
|
|
Total
operating income
|
|
|
1,043
|
|
|
121
|
|
|
(1
|
)
|
|
923
|
|
|
Interest
income (expense), net
|
|
|
9
|
|
|
14
|
|
|
2
|
|
|
(7
|
)
|
|
Foreign
currency, net
|
|
|
(10
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|
Other,
net
|
|
|
1
|
|
|
-
|
|
|
(1
|
)
|
|
2
|
|
|
Income
from continuing operations before income taxes and minority
interest
|
|
|
1,043
|
|
|
133
|
|
|
(1
|
)
|
|
911
|
|
|
Provision
for income taxes
|
|
|
(343
|
)
|
|
(65
|
)
|
|
12
|
|
|
(290
|
)
|
|
Minority
interest in net income of subsidiaries
|
|
|
(33
|
)
|
|
(25
|
)
|
|
(4
|
)
|
|
(4
|
)
|
|
Income
from continuing operations
|
|
|
667
|
|
|
43
|
|
|
7
|
|
|
617
|
|
|
Loss
from discontinued operations, net
|
|
|
(9
|
)
|
|
-
|
|
|
-
|
|
|
(9
|
)
|
|
Net
income
|
|
$
|
658
|
|
$
|
43
|
|
$
|
7
|
|
$
|
608
|
|
-
more
-
[Missing
Graphic Reference]
HALLIBURTON
COMPANY
Condensed
Consolidated Balance Sheets
(Millions
of dollars)
(Unaudited)
|
|
|
December
31,
2006
|
|
September
30,
2006
(b)
|
|
December
31,
2005
(b) (c)
|
|
|||
|
Assets
|
|
|||||||||
|
Current
assets:
|
|
|
|
|
|
|
|
|||
|
Cash
and equivalents
|
|
$
|
4,379
|
|
$
|
3,549
|
|
$
|
2,391
|
|
|
Receivables,
net
|
|
|
4,674
|
|
|
4,617
|
|
|
4,801
|
|
|
Inventories,
net
|
|
|
1,261
|
|
|
1,213
|
|
|
953
|
|
|
Other
current assets
|
|
|
869
|
|
|
916
|
|
|
1,241
|
|
|
Total
current assets
|
|
|
11,183
|
|
|
10,295
|
|
|
9,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property,
plant, and equipment, net
|
|
|
3,048
|
|
|
2,884
|
|
|
2,648
|
|
|
Other
assets
|
|
|
2,589
|
|
|
2,848
|
|
|
3,014
|
|
|
Total
assets (a)
|
|
$
|
16,820
|
|
$
|
16,027
|
|
$
|
15,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and Shareholders’ Equity
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
1,931
|
|
$
|
1,871
|
|
$
|
1,967
|
|
|
Current
maturities of long-term debt
|
|
|
45
|
|
|
86
|
|
|
361
|
|
|
Other
current liabilities
|
|
|
2,751
|
|
|
2,745
|
|
|
2,099
|
|
|
Total
current liabilities
|
|
|
4,727
|
|
|
4,702
|
|
|
4,427
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
2,786
|
|
|
2,745
|
|
|
2,813
|
|
|
Other
liabilities
|
|
|
1,484
|
|
|
1,345
|
|
|
1,291
|
|
|
Total
liabilities (a)
|
|
|
8,997
|
|
|
8,792
|
|
|
8,531
|
|
|
Minority
interest in consolidated subsidiaries (a)
|
|
|
447
|
|
|
146
|
|
|
145
|
|
|
Shareholders’
equity (a)
|
|
|
7,376
|
|
|
7,089
|
|
|
6,372
|
|
|
Total
liabilities and shareholders’ equity
|
|
$
|
16,820
|
|
$
|
16,027
|
|
$
|
15,048
|
|
|
(a)
|
In
the fourth quarter of 2006, the company adopted Statement of Financial
Accounting Standards No. 158 (SFAS No. 158), “Employers’ Accounting for
Defined Benefit Pension and Other Postretirement Plans, an amendment
of
FASB Statements No. 87, 88, 106, and 132(R).” The adoption of
SFAS No. 158 impacted the balance sheet at December 31, 2006 as
follows: a decrease to total assets of $235 million, an increase to
total liabilities of $110 million, a decrease to minority interest
of $98
million, and a decrease to shareholders’ equity of $247
million.
|
|
(b)
|
Certain
prior period amounts have been reclassified to be consistent with
the
current presentation.
|
|
(c)
|
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 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.
|
-
more
-
[Missing
Graphic Reference]
HALLIBURTON
COMPANY
Selected
Cash Flow Information
(Millions
of dollars)
(Unaudited)
|
|
|
Three
Months Ended
December
31
|
|
Years
Ended
December
31
|
|
||||||||
|
|
|
2006
|
|
2005
|
|
2006
|
|
2005
|
|
||||
|
Capital
expenditures:
|
|
|
|
|
|
|
|
|
|
||||
|
Energy
Services Group
|
|
$
|
265
|
|
$
|
151
|
|
$
|
831
|
|
$
|
575
|
|
|
KBR
|
|
|
7
|
|
|
26
|
|
|
57
|
|
|
76
|
|
|
General
corporate
|
|
|
-
|
|
|
-
|
|
|
3
|
|
|
-
|
|
|
Total
capital expenditures
|
|
$
|
272
|
|
$
|
177
|
|
$
|
891
|
|
$
|
651
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation,
depletion, and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy
Services Group
|
|
$
|
124
|
|
$
|
115
|
|
$
|
480
|
|
$
|
448
|
|
|
KBR
|
|
|
15
|
|
|
12
|
|
|
47
|
|
|
56
|
|
|
Total
depreciation, depletion, and amortization
|
|
$
|
139
|
|
$
|
127
|
|
$
|
527
|
|
$
|
504
|
|
HALLIBURTON
COMPANY
Revenue
and Operating Income Comparison
By
Geographic Region - Energy Services Group Only
(Millions
of dollars)
(Unaudited)
|
|
|
Three
Months Ended
December
31
|
|
Three
Months Ended
September
30
|
|
|||||
|
|
|
2006
|
|
2005
|
|
2006
|
|
|||
|
Revenue:
|
|
|
|
|
|
|
|
|||
|
North
America
|
|
$
|
1,666
|
|
$
|
1,353
|
|
$
|
1,738
|
|
|
Latin
America
|
|
|
418
|
|
|
373
|
|
|
390
|
|
|
Europe/Africa/CIS
|
|
|
821
|
|
|
631
|
|
|
708
|
|
|
Middle
East/Asia
|
|
|
604
|
|
|
491
|
|
|
556
|
|
|
Total
revenue
|
|
$
|
3,509
|
|
$
|
2,848
|
|
$
|
3,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
|
$
|
525
|
|
$
|
387
|
|
$
|
558
|
|
|
Latin
America
|
|
|
92
|
|
|
67
|
|
|
79
|
|
|
Europe/Africa/CIS
|
|
|
205
|
|
|
119
|
|
|
132
|
|
|
Middle
East/Asia
|
|
|
137
|
|
|
105
|
|
|
137
|
|
|
Total
operating income
|
|
$
|
959
|
|
$
|
678
|
|
$
|
906
|
|
|
|
|
Years
Ended
December
31
|
|
||||
|
|
|
2006
|
|
2005
|
|
||
|
Revenue:
|
|
|
|
|
|
||
|
North
America
|
|
$
|
6,458
|
|
$
|
4,819
|
|
|
Latin
America
|
|
|
1,514
|
|
|
1,344
|
|
|
Europe/Africa/CIS
|
|
|
2,798
|
|
|
2,248
|
|
|
Middle
East/Asia
|
|
|
2,185
|
|
|
1,689
|
|
|
Total
revenue
|
|
$
|
12,955
|
|
$
|
10,100
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
|
North
America
|
|
$
|
2,033
|
|
$
|
1,376
|
|
|
Latin
America
|
|
|
289
|
|
|
192
|
|
|
Europe/Africa/CIS
|
|
|
555
|
|
|
387
|
|
|
Middle
East/Asia
|
|
|
506
|
|
|
324
|
|
|
Total
operating income
|
|
$
|
3,383
|
|
$
|
2,279
|
|
See
Footnote Table 2 for a list of significant items included in operating
income.
-
more
-
[Missing
Graphic Reference]
HALLIBURTON
COMPANY
Reconciliation
of As Reported Segment Results to Adjusted Segment Results
Energy
Services Group Only
(Millions
of dollars except operating margin percentage)
(Unaudited)
|
|
|
Production
Optimization
|
|
Fluid
Systems
|
|
Drilling
and
Formation
Evaluation
|
|
Digital
and
Consulting
Solutions
|
|
Total
Energy
Services
Group
|
|
|||||
|
Three
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
December
31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Revenue
|
|
$
|
1,454
|
|
$
|
964
|
|
$
|
877
|
|
$
|
214
|
|
$
|
3,509
|
|
|
As
reported operating income
|
|
$
|
443
|
|
$
|
209
|
|
$
|
230
|
|
$
|
77
|
|
$
|
959
|
|
|
Gain
on sale of lift boats (a)
|
|
|
(48
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(48
|
)
|
|
Adjusted
operating income
|
|
$
|
395
|
|
$
|
209
|
|
$
|
230
|
|
$
|
77
|
|
$
|
911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
reported operating margin (b)
|
|
|
30.5
|
%
|
|
21.7
|
%
|
|
26.2
|
%
|
|
36.0
|
%
|
|
27.3
|
%
|
|
Adjusted
operating margin (b)
|
|
|
27.2
|
%
|
|
21.7
|
%
|
|
26.2
|
%
|
|
36.0
|
%
|
|
26.0
|
%
|
|
(a)
|
The
company is reporting strong operating income from the Energy Services
Group, particularly the Production Optimization segment. Management
believes it is important to point out to investors that a portion
of
operating income and operating margins growth is attributable to
the gain
on the sale of lift boats in the fourth quarter of 2006, because
investors
have indicated to management their desire to understand the current
drivers and future trends of the operating margins. The adjustment
removes
the effect of the gain on the sale of lift boats.
|
|
(b)
|
As
reported operating margin is calculated as: “As reported operating income”
divided by “Revenue.” Adjusted operating margin is calculated as:
“Adjusted operating income” divided by
“Revenue.”
|
HALLIBURTON
COMPANY
Reconciliation
of As Reported Results to Adjusted Results
(Millions
of dollars except per share data)
(Unaudited)
|
|
|
Income
from
Continuing
Operations
before
Income
Taxes
and
Minority
Interest
|
|
Benefit
(Provision)
For
Income
Taxes
|
|
Minority
Interest
in
Net
Income
of
Subsidiaries
|
|
Income
from
Continuing
Operations
|
|
Effective
Tax
Rate
|
|
Income
from
Continuing
Operations
per
Diluted
Share
|
|
||||||
|
Three
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
December
31, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
As
reported results
|
|
$
|
728
|
|
$
|
381
|
|
$
|
(17
|
)
|
$
|
1,092
|
|
|
(52
|
)%
|
$
|
1.03
|
|
|
Valuation
allowance adjustment (a)
|
|
|
-
|
|
|
(540
|
)
|
|
-
|
|
|
(540
|
)
|
|
-
|
|
|
(0.51
|
)
|
|
Adjusted
results
|
|
$
|
728
|
|
$
|
(159
|
)
|
$
|
(17
|
)
|
$
|
552
|
|
|
22
|
%
|
$
|
0.52
|
|
|
(a)
|
In
the fourth quarter of 2005, the company reported strong income from
continuing operations, and management believes it is important to
point
out to investors that a portion of the income from continuing operations
was attributable, based on the strong outlook for 2006 and beyond,
to the
reversal of a substantial portion of the deferred tax valuation allowance
originally established as part of the asbestos and silica settlement.
Investors have indicated to management their desire to understand
the
current drivers and future trends of
results.
|
-
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
December
31, 2006
|
|
Three
Months Ended
December
31, 2005
|
|
Three
Months Ended
September
30, 2006
|
|
||||||||||||
|
|
|
Operating
Income
|
|
After
Tax
per
Share
|
|
Operating
Income
|
|
After
Tax
per
Share
|
|
Operating
Income
|
|
After
Tax
per
Share
|
|
||||||
|
Production
Optimization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Gain
on sale of lift boats
|
|
$
|
48
|
|
$
|
0.03
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
Drilling
and Formation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Evaluation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patent
settlement
|
|
|
-
|
|
|
-
|
|
|
24
|
|
|
0.02
|
|
|
-
|
|
|
-
|
|
|
Government
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Infrastructure:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railroad
impairment charge
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(32
|
)
|
|
(0.03
|
)
|
|
|
|
Year
Ended
December
31, 2006
|
|
Year
Ended
December
31, 2005
|
|
||||||||
|
|
|
Operating
Income
|
|
After
Tax
per
Share
|
|
Operating
Income
|
|
After
Tax
per
Share
|
|
||||
|
Production
Optimization:
|
|
|
|
|
|
|
|
|
|
||||
|
Gain
on sale of lift boats
|
|
$
|
48
|
|
$
|
0.03
|
|
$
|
-
|
|
$
|
-
|
|
|
Subsea
7, Inc. gain on sale
|
|
|
-
|
|
|
-
|
|
|
110
|
|
|
0.08
|
|
|
Drilling
and Formation Evaluation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patent
settlement
|
|
|
-
|
|
|
-
|
|
|
24
|
|
|
0.02
|
|
|
Government
and Infrastructure:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railroad
impairment charge
|
|
|
(58
|
)
|
|
(0.06
|
)
|
|
-
|
|
|
-
|
|
|
Sale
of interest in toll road
|
|
|
-
|
|
|
-
|
|
|
85
|
|
|
0.06
|
|
-
more
-
[Missing
Graphic Reference]
FOOTNOTE
TABLE 2
HALLIBURTON
COMPANY
Items
included in Income
By
Geographic Region - Energy Services Group Only
(Millions
of dollars except per share data)
(Unaudited)
|
|
|
Three
Months Ended
December
31, 2006
|
|
Three
Months Ended
December
31, 2005
|
|
||||||||
|
|
|
Operating
Income
|
|
After
Tax
per
Share
|
|
Operating
Income
|
|
After
Tax
per
Share
|
|
||||
|
North
America:
|
|
|
|
|
|
|
|
|
|
||||
|
Patent
settlement
|
|
$
|
-
|
|
$
|
-
|
|
$
|
12
|
|
$
|
0.01
|
|
|
Latin
America:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patent
settlement
|
|
|
-
|
|
|
-
|
|
|
2
|
|
|
-
|
|
|
Europe/Africa/CIS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
on sale of lift boats
|
|
|
48
|
|
|
0.03
|
|
|
-
|
|
|
-
|
|
|
Patent
settlement
|
|
|
-
|
|
|
-
|
|
|
6
|
|
|
0.01
|
|
|
Middle
East/Asia:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patent
settlement
|
|
|
-
|
|
|
-
|
|
|
4
|
|
|
-
|
|
|
|
|
Year
Ended
December
31, 2006
|
|
Year
Ended
December
31, 2005
|
|
||||||||
|
|
|
Operating
Income
|
|
After
Tax
per
Share
|
|
Operating
Income
|
|
After
Tax
per
Share
|
|
||||
|
North
America:
|
|
|
|
|
|
|
|
|
|
||||
|
Patent
settlement
|
|
$
|
-
|
|
$
|
-
|
|
$
|
12
|
|
$
|
0.01
|
|
|
Subsea
7, Inc. gain on sale
|
|
|
-
|
|
|
-
|
|
|
107
|
|
|
0.08
|
|
|
Latin
America:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patent
settlement
|
|
|
-
|
|
|
-
|
|
|
2
|
|
|
-
|
|
|
Europe/Africa/CIS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
on sale of lift boats
|
|
|
48
|
|
|
0.03
|
|
|
-
|
|
|
-
|
|
|
Patent
settlement
|
|
|
-
|
|
|
-
|
|
|
6
|
|
|
0.01
|
|
|
Subsea
7, Inc. gain on sale
|
|
|
-
|
|
|
-
|
|
|
3
|
|
|
-
|
|
|
Middle
East/Asia:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patent
settlement
|
|
|
-
|
|
|
-
|
|
|
4
|
|
|
-
|
|
####
[Missing
Graphic Reference]
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:
January 26, 2007
|
By:
|
/s/
Bruce A. Metzinger
|
|
|
|
Bruce
A. Metzinger
|
|
|
|
Assistant
Secretary
|
[Missing
Graphic Reference]