$0.34 Fourth Quarter 2008 Earnings Per Diluted Share Impact from $303 Million Charge to Discontinued Operations
HOUSTON--(BUSINESS WIRE)--Jan. 26, 2009--As previously disclosed in its public filings, Halliburton (NYSE:HAL)
has engaged in settlement discussions with the Department of Justice
(DOJ) and the Securities and Exchange Commission (SEC) with regard to
the ongoing FCPA investigations involving Halliburton and KBR, Inc.
(KBR). These discussions have resulted in prospective settlements with
both agencies. The settlement with the DOJ has been fully negotiated and
Halliburton has been advised that it is being reviewed for final
approval. The settlement with the SEC has been approved contingent upon
the completion of the settlement with the DOJ. There can be no
assurance, however, that the settlement with the DOJ will be approved or
that, consequently, the condition to the settlement with the SEC will be
satisfied.
To enhance KBR's financial stability and solvency, making possible the
separation of KBR, Halliburton indemnified KBR from fines or other
monetary penalties or direct monetary damages, including disgorgement,
as a result of a claim made or assessed by a governmental authority in
the United States and certain other countries related to alleged or
actual violations occurring prior to November 20, 2006 of the FCPA or
particular, analogous applicable foreign statutes, laws, rules, and
regulations in connection with investigations pending as of that date.
As a result of the indemnity and the terms of the prospective settlement
with the DOJ, Halliburton would agree to pay $382 million on behalf of
KBR in eight installments over the next two years. Pursuant to the terms
of the prospective settlement with the SEC, Halliburton would agree to
be jointly and severally liable with KBR for and, as a result of the
indemnity, to pay to the SEC $177 million in disgorgement. KBR would
separately agree that Halliburton's indemnification obligations with
respect to the DOJ and SEC investigations would be fully satisfied.
The prospective settlement with the DOJ would not require Halliburton to
engage a monitor. The prospective settlement with the SEC would require
Halliburton to retain an independent consultant to perform a 60-day
initial and, approximately one year later, a 30-day follow-up review and
evaluation of Halliburton's anti-bribery and foreign agent internal
controls and record-keeping policies and to adopt any necessary
improvements.
During the second quarter of 2007, in connection with the separation of
KBR from Halliburton, Halliburton recorded a gain on the disposition of
KBR of approximately $933 million, net of tax and the estimated fair
value of the FCPA and other indemnities and guarantees provided to KBR,
which was included in "Income (loss) from discontinued operations, net
of income tax" on the consolidated statement of operations. During the
second quarter of 2008, Halliburton recorded additional adjustments to
the estimated liability for the indemnities and guarantees provided to
KBR. These indemnities and guarantees are primarily included in "Other
liabilities" on the consolidated balance sheets and totaled $342 million
at September 30, 2008.
As a result of these prospective settlements, Halliburton recorded in
the fourth quarter of 2008 an additional charge to discontinued
operations of $303 million or $0.34 per diluted share.
Commenting on these matters, a Company spokesperson stated, "The Company
will not further comment or take questions regarding the prospective
settlements, given that there can be no assurance that they will become
effective in accordance with their respective terms."
CONTACT: Halliburton
Vice President, Investor Relations
Christian Garcia, 713-759-2688
or
Director, Corporate Affairs
Cathy Mann, 713-759-2605
Source: Halliburton
