Halliburton Revises Fourth Quarter Pre-Tax Earnings Downward By $3 Million; Collection of Receivable and Change in Lease Accounting
HOUSTON, March 1 /PRNewswire-FirstCall/ -- Halliburton (NYSE: HAL) announced today that it will make two adjustments to the previously announced fourth quarter 2004 earnings that were released on January 28, 2005. The net impact of these adjustments is $3 million pre-tax expense, or $0.004 per share.
The adjustments, detailed in the attached financial tables, are attributed to (1) a collection of a $10 million receivable in February 2005 that was previously reserved and (2) a correction of the accounting treatment for leasehold improvements. As a result of a February 7, 2005 clarification by the Chief Accountant of the Securities and Exchange Commission on lease accounting, the Company has adjusted its method for amortization of leasehold improvements and recorded a pre-tax expense of $13 million for increased depreciation, depletion and amortization. Management has determined that the impact of this matter on prior periods is immaterial. In connection with this clarification by the Chief Accountant, a large number of public companies have announced adjustments to their financial statements relating to lease accounting.
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 and Engineering and Construction Groups. The company's World Wide Web site can be accessed at http://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: legal risks, including the risks of audits and investigations of the company by domestic and foreign government agencies and legislative bodies and potential adverse proceedings and findings by such agencies, a delay in the receipt of additional agreed payments from insurers arising from asbestos and silica claims, the risks of judgments against the company and its subsidiaries in litigation and proceedings, including shareholder lawsuits, securities laws inquiries, contract disputes, patent infringements and environmental matters, legislation, changes in government regulations and adverse reaction to scrutiny involving the company; political risks, including the risks of unsettled political conditions, war and the effects of terrorism, foreign operations and foreign exchange rates and controls; liquidity risks, including the risks of potential reductions in debt ratings, access to credit, availability and costs of financing and ability to raise capital; weather- related risks; customer risks, including the risks of changes in capital spending and claims negotiations; industry risks, including the risks of changes that affect the demand for or price of oil and/or gas, structural changes in the industries in which the company operates, risks of fixed-fee projects and risks of complex business arrangements; systems risks, including the risks of successful development and installation of financial systems; and personnel and merger/reorganization/disposition risks, including the risks of increased competition for employees, successful integration of acquired businesses, effective restructuring efforts and successful completion of planned dispositions. Please see Halliburton's Form 10-K/A for the year ended December 31, 2003 and Form 10-Q for the quarter ended September 30, 2004 for a more complete discussion of such risk factors.
HALLIBURTON COMPANY
Condensed Consolidated Statements of Operations
(Millions of dollars and shares except per share data)
(Unaudited)
Three Months Three Months
Ended Ended
December 31 September 30
2004 2003 2004
Revenue
Production Optimization $ 912 $ 713 $ 886
Fluid Systems 617 531 618
Drilling and Formation Evaluation 465 417 450
Digital and Consulting Solutions 176 138 154
Total Energy Services Group 2,170 1,799 2,108
Government and Infrastructure 2,295 2,691 1,993
Energy and Chemicals 736 974 689
Total KBR 3,031 3,665 2,682
Total revenue $5,201 $5,464 $4,790
Operating income (loss)
Production Optimization $ 208 $ 115 $ 222
Fluid Systems 98 73 113
Drilling and Formation Evaluation 61 17 62
Digital and Consulting Solutions --- 36 17
Total Energy Services Group 367 241 414
Government and Infrastructure 9 69 (6)
Energy and Chemicals (9) 15 (44)
Asbestos and silica --- (2) ---
Total KBR --- 82 (50)
General corporate (21) (20) (22)
Total operating income 346 303 342
Interest expense (69) (54) (51)
Interest income 14 8 13
Foreign currency, net 6 4 1
Other, net --- (1) (2)
Income from continuing operations before
income taxes and minority interest 297 260 303
Provision for income taxes (110) (92) (111)
Minority interest in net income of
subsidiaries (6) (22) (6)
Income from continuing operations 181 146 186
Loss from discontinued operations, net (384) (1,093) (230)
Net loss $ (203) $ (947) $ (44)
Basic income (loss) per share:
Income from continuing operations $ 0.41 $ 0.34 $0.43
Loss from discontinued operations, net (0.88) (2.52) (0.54)
Net loss $(0.47) $(2.18) $(0.11)
Diluted income (loss) per share:
Income from continuing operations $ 0.40 $ 0.34 $ 0.42
Loss from discontinued operations, net (0.86) (2.51) (0.51)
Net loss $(0.46) $(2.17) $(0.09)
Basic weighted average common
shares outstanding 439 435 438
Diluted weighted average common
shares outstanding 444 438 442
HALLIBURTON COMPANY
Condensed Consolidated Statements of Operations
(Millions of dollars and shares except per share data)
(Unaudited)
Twelve Months Ended
December 31
2004 2003
Revenue
Production Optimization $ 3,303 $ 2,758
Fluid Systems 2,324 2,039
Drilling and Formation Evaluation 1,782 1,643
Digital and Consulting Solutions 589 555
Total Energy Services Group 7,998 6,995
Government and Infrastructure 9,393 5,417
Energy and Chemicals 3,075 3,859
Total KBR 12,468 9,276
Total revenue $20,466 $16,271
Operating income (loss)
Production Optimization $ 633 $ 413
Fluid Systems 348 251
Drilling and Formation Evaluation 225 177
Digital and Consulting Solutions 60 (15)
Total Energy Services Group 1,266 826
Government and Infrastructure 84 194
Energy and Chemicals (426) (225)
Asbestos and silica --- (5)
Total KBR (342) (36)
General corporate (87) (70)
Total operating income 837 720
Interest expense (229) (139)
Interest income 44 30
Foreign currency, net (3) ---
Other, net 2 1
Income from continuing operations before
income taxes, minority interest and change
in accounting principle 651 612
Provision for income taxes (241) (234)
Minority interest in net income of subsidiaries (25) (39)
Income from continuing operations before
change in accounting principle 385 339
Loss from discontinued operations, net (1,364) (1,151)
Cumulative effect of change in accounting
principle, net --- (8)
Net loss $(979) $(820)
Basic income (loss) per share:
Income from continuing operations before
change in accounting principle $0.88 $0.78
Loss from discontinued operations, net (3.13) (2.65)
Cumulative effect of change in accounting
principle, net --- (0.02)
Net loss $(2.25) $(1.89)
Diluted income (loss) per share:
Income from continuing operations before
change in accounting principle $0.87 $0.78
Loss from discontinued operations, net (3.09) (2.64)
Cumulative effect of change in accounting
principle, net --- (0.02)
Net loss $(2.22) $(1.88)
Basic weighted average common shares
outstanding 437 434
Diluted weighted average common shares
outstanding 441 437
HALLIBURTON COMPANY
Revenue and Operating Income Comparison
By Geographic Region - Energy Services Group Only
(Millions of dollars)
(Unaudited)
Three Months Ended Three Months Ended
December 31 September 30
2004 2003 2004
Revenue:
North America $ 980 $ 787 $ 969
Latin America 301 255 295
Europe/Africa 454 350 442
Middle East/Asia 435 407 402
Total revenue $2,170 $1,799 $2,108
Operating income:
North America $ 224 $ 100 $ 228
Latin America 12 48 52
Europe/Africa 62 36 79
Middle East/Asia 69 57 55
Total operating income $ 367 $ 241 $ 414
Twelve Months Ended
December 31
2004 2003
Revenue:
North America $3,609 $3,085
Latin America 1,082 907
Europe/Africa 1,665 1,442
Middle East/Asia 1,642 1,561
Total revenue $7,998 $6,995
Operating income:
North America $ 722 $ 306
Latin America 130 165
Europe/Africa 186 147
Middle East/Asia 228 208
Total operating income $1,266 $ 826
HALLIBURTON COMPANY
Reconciliation of Previously Announced Results to Actual Results
Three and Twelve Months Ended December 31, 2004
Three Months Ended
December 31, 2004
Receivable Leasehold
As Reported Collection Adjustment Actual
Operating income (loss)
Production Optimization $209 $2 $(3) $208
Fluid Systems 102 4 (8) 98
Drilling and Formation Evaluation 59 4 (2) 61
Digital and Consulting Solutions --- --- --- ---
Total Energy Services Group 370 10 (13) 367
Total KBR --- --- --- ---
General corporate (21) --- --- (21)
Total operating income $349 $10 $(13) $346
Income from continuing
operations before income
taxes and minority
interest $300 $10 $(13) $297
Provision for income taxes (111) (4) 5 (110)
Income from continuing operations 183 6 (8) 181
Net income (loss) (201) 6 (8) (203)
Per share
Basic income from continuing
operations $0.42 $0.01 $(0.02) $0.41
Basic net income (loss) $(0.46) $0.01 $(0.02) $(0.47)
Diluted income from continuing
operations $0.41 $0.01 $(0.02) $0.40
Diluted net income (loss) $(0.45) $0.01 $(0.02) $(0.46)
Twelve Months Ended
December 31, 2004
Receivable Leasehold
As Reported Collection Adjustment Actual
Operating income (loss)
Production Optimization $634 $2 $(3) $633
Fluid Systems 352 4 (8) 348
Drilling and Formation Evaluation 223 4 (2) 225
Digital and Consulting Solutions 60 --- --- 60
Total Energy Services Group 1,269 10 (13) 1,266
Total KBR (342) --- --- (342)
General corporate (87) --- --- (87)
Total operating income $840 $10 $(13) $837
Income from continuing
operations before income taxes
and minority interest $654 $10 $(13) $651
Provision for income taxes (242) (4) 5 (241)
Income from continuing operations 387 6 (8) 385
Net income (loss) (977) 6 (8) (979)
Per share
Basic income from continuing
operations $0.89 $0.01 $(0.02) $0.88
Basic net income (loss) $(2.24) $0.01 $(0.02) $(2.25)
Diluted income from continuing
operations $0.88 $0.01 $(0.02) $0.87
Diluted net income (loss) $(2.21) $0.01 $(0.02) $(2.22)
SOURCE Halliburton
-0- 03/01/2005
/CONTACT: Paul Koeller, Investor Relations, +1-713-759-2688, or Wendy
Hall, Public Relations, +1-713-759-2605, both of Halliburton/
/Web site: http://www.halliburton.com /
(HAL)
CO: Halliburton
ST: Texas
IN: OIL
SU: ERN
CT-CD
-- DATU005 --
3939 03/01/2005 09:05 EST http://www.prnewswire.com