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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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)
OCTOBER 11, 1995
Halliburton Company
(Exact name of registrant as specified in its charter)
State or other Commission IRS Employer
jurisdiction File Number Identification
of incorporation Number
Delaware 1-3492 No. 73-0271280
3600 Lincoln Plaza
500 North Akard Street
Dallas, Texas 75201-3391
(Address of principal executive offices)
Registrant's telephone number,
including area code - 214/978-2600
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INFORMATION TO BE INCLUDED IN REPORT
Item 5. Other Events
The registrant may, at its option, report under this item any events,
with respect to which information is not otherwise called for by this form, that
the registrant deems of importance to security holders.
On October 11, 1995, the registrant issued a press release entitled
Halliburton Announces Spin-Off of Insurance Unit pertaining, among other things,
to an announcement that registrant intends to spin-off its Highlands Insurance
Group, Inc. subsidiary to its shareholders by the end of 1995. In the spin-off
registrant will distribute to its shareholders one share of Highlands common
stock for every ten shares of registrant's common stock held. The spin-off will
be non-taxable to registrant shareholders. The record and distribution dates for
the spin-off will be set later this year when the necessary regulatory reviews
and approvals have been obtained. Registrant and Highlands have entered into
definitive agreements with Insurance Partners, L.P. Insurance Partners and
Highlands management will invest $60 million in Highlands at the time the
spin-off is completed in exchange for debentures and warrants that will allow
Insurance Partners to acquire up to approximately 43% of the common stock of
Highlands for a total investment of up to approximately $130 million. Registrant
will not receive a cash dividend or securities from Highlands in connection with
the spin-off. Richard M. Haverland will become chairman and CEO of Highlands
when the spin-off is completed.
The foregoing summary is subject to the full text of the press release
with respect thereto, a copy of which is attached hereto as Exhibit 20, which
exhibit is incorporated herein by reference.
Item 7. Financial Statements and Exhibits
List below the financial statements, pro forma financial information
and exhibits, if any, filed as part of this report.
(c) Exhibits.
Exhibit 20 - Press release dated October 11, 1995
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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: October 11, 1995 By: _______________________
Robert M. Kennedy
Vice President - Legal
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EXHIBIT INDEX
Exhibit Sequentially
Number Description Numbered Page
20 Press Release of
October 11, 1995 5 of 8
Incorporated by Reference
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FOR IMMEDIATE RELEASE Contact- Guy T. Marcus
October 11, 1995 Vice President-Inv. Rel.
(214) 978-2691
HALLIBURTON ANNOUNCES SPIN-OFF OF INSURANCE UNIT
DALLAS, Texas -- Halliburton Company announced today that it intends to
spin-off its Highlands Insurance Group, Inc. subsidiary to its shareholders by
the end of 1995. In the spin- off Halliburton will distribute to its
shareholders one share of Highlands common stock for every ten shares of
Halliburton common stock held. The spin-off will be non-taxable to Halliburton
shareholders. The record and distribution dates for the spin-off will be set
later this year when the necessary regulatory reviews and approvals have been
obtained.
The spin-off of Highlands will complete Halliburton's divestiture of its
Insurance Services business segment. A life insurance company was sold in 1988.
A health care management company was sold in 1992.
In connection with the spin-off, Halliburton and Highlands have entered
into definitive agreements with Insurance Partners, L.P., a private investment
group, pursuant to which Insurance Partners and Highlands management will invest
$60 million in Highlands at the time the spin-off is completed in exchange for
debentures and warrants that will allow Insurance Partners to acquire up to
approximately 43% of the common stock of Highlands for a total investment of up
to
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approximately $130 million. Halliburton will not receive a cash dividend
or securities from Highlands in connection with the spin-off.
Halliburton also stated that during its third quarter ending September 30,
1995, Highlands increased its reserves for claim losses and related expenses and
provisions for certain legal matters by $125 million before tax. These
provisions, together with certain other provisions associated with Halliburton's
complete exit from the insurance industry, will result in Halliburton reporting
in its third quarter ending September 30, 1995, an after-tax loss of about $67
million from its Insurance Services segment as a discontinued line of business,
or approximately $0.59 per Halliburton common share. This reserve strengthening
by Highlands primarily recognizes expected increased claims, particularly
environmental and asbestos claims, resulting from lines of insurance no longer
written by Highlands.
At June 30, 1995, Halliburton's investment in Highlands represented about
16% of Halliburton total shareholders' equity. The $125 million of pre-tax
reserve provisions will reduce the amount of Halliburton's investment in
Highlands, but will not increase the overall impact of the spin-off on
Halliburton shareholders' equity.
When the spin-off is completed Richard M. Haverland will become chairman of
Highlands' board of directors and its CEO. Haverland, 54, has more than 25
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years of insurance industry experience, having served most recently as vice as
vice chairman and chairman and CEO elect of Continental Corporation. From 1991
to 1994, Haverland served as executive vice president of insurance operations at
American Premier Underwriters, from 1984 to 1991 as executive vice president of
Great American Insurance Company and prior to then as president and COO of the
Progressive Corporation.
Thomas H. Cruikshank, chairman of Halliburton, said, "The spin-off of
Highlands to our shareholders completes our exit from the insurance services
business. Halliburton can now focus on its core businesses, oil field services
and engineering and construction services, and continue to improve their
performance. Our investment in Highlands has not added to our overall financial
performance in recent years. We believe Highlands will be a more successful
enterprise as a publicly-traded company with strengthened management and the new
investment of Insurance Partners. The spin-off allows Highlands to go forward as
an independent company with a strategy based solely on its own objectives. We
expect that Halliburton's 1995 third quarter earnings from continuing operations
will show significant improvement over the second quarter of this year and the
third quarter of 1994. We think this is an ideal solution for both Halliburton
and Highlands."
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Insurance Partners, L.P. is a $540 million investment partnership formed in
February 1994 to sponsor acquisitions, recapitalizations, demutualizations, and
other structured transactions in the property/casualty and life insurance
industries in the U.S. and abroad. Principal partners include Centre Reinsurance
Holdings Limited; Keystone, Inc. (formerly The Robert M. Bass Group); and The
Chase Manhattan Corporation. Since its formation, Insurance Partners has created
the largest dedicated corporate capital syndicate at Lloyd's, has partnered with
Zurich Insurance Company in the acquisition of Home Holdings and the pending
acquisition of Kemper Corporation and sponsored the spin-off of Transport
Holdings, Inc. from the Travelers Group. Insurance Partners Advisors, L.P., of
New York City, is the partnership's advisor.
Halliburton Company is one of the world's largest diversified energy
services, engineering, maintenance, and construction companies. Founded in 1919,
Halliburton provides a broad range of energy services and products, industrial
and marine engineering and construction services.
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