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)
APRIL 26, 1999
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. 75-2677995
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 April 26, 1999 registrant issued a press release entitled
Halliburton Reports 1999 First Quarter pertaining, among other things, to an
announcement that registrant earned $81 million ($.18 per diluted share) in the
1999 first quarter before the net cumulative effect of a change in accounting
method, compared to net income of $203 million ($.46 per diluted share) earned
in first quarter 1998. Registrant's 1999 first quarter revenues were $3.9
billion, down eight percent compared to a year ago. During first quarter 1999
registrant adopted the American Institute of Certified Public Accountants'
Statement of Position 98-5 (SOP 98-5). As a result of the adoption of SOP 98-5
in the 1999 first quarter, registrant recognized a $19 million after tax charge
($.04 per diluted share) which brought net income to $62 million ($.14 per
diluted share).
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 April 26, 1999.
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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: April 27, 1999 By: /s/ Susan S. Keith
-------------------------------
Susan S. Keith
Vice President and Secretary
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EXHIBIT INDEX
Exhibit Sequentially
Number Description Numbered Page
20 Press Release of 5 of 8
April 26, 1999
Incorporated by Reference
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FOR IMMEDIATE RELEASE Contact: Guy T. Marcus
04/26/99 Vice President-Investor Relations
214/978-2691
HALLIBURTON REPORTS 1999 FIRST QUARTER
DALLAS, Texas -- Halliburton Company (NYSE:HAL) today announces that
the company earned $81 million ($ .18 per diluted share) in the 1999 first
quarter before the net cumulative effect of a change in accounting method,
compared to net income of $203 million ($ . 46 per diluted share) earned in the
year earlier first quarter. The company's 1999 first quarter revenues were $3.9
billion, down only eight percent compared to a year ago.
Reduced revenues and lower earnings for the company in the 1999 first
quarter are attributable to petroleum industry customers' sharp reduction of
spending in response to very low crude oil and natural gas prices in the latter
part of 1998 and the 1999 first quarter. The poor market conditions had the
greatest impact on the financial results of the Energy Services Group business
segment.
During the 1999 first quarter Halliburton adopted the American
Institute of Certified Public Accountants' Statement of Position 98-5,
"Reporting on Costs of Start-Up Activities (SOP 98-5)", which requires such
costs to be expensed as incurred rather than being capitalized. As a result of
the adoption of SOP 98-5 in the 1999 first quarter, the company recognized a $19
million after tax charge ($ .04 per diluted share) which brought net income to
$62 million ($ .14 per diluted share).
The Energy Services Group business segment's revenues were down 23
percent to $1,753 million in the 1999 first quarter, as compared to the 1998
-more-
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Halliburton Company page 2
quarter, while activity levels as measured by the worldwide rotary rig count
declined by 35 percent over the same time period. Sharp revenue reductions were
experienced in both the U.S. and international areas. International areas
represented more than 70 percent of the segment's revenues in the quarter.
The Energy Services Group's operating income was $57 million in the
1999 first quarter, 80 percent lower than a year ago. The segment's operating
margins fell from 12.4 percent in last year's quarter to 3.2 percent in the 1999
first quarter. Lower profit margins were principally driven by negative
operating leverage on the lower revenues, increased price competition and
discounting of services and products, and lower profitability on upstream
engineering and construction work by the segment's Brown & Root Energy Services
business unit.
The Engineering and Construction Group business segment's revenues were
$1,508 million, up 12 percent compared to the 1998 first quarter. Both of the
segment's business units, Kellogg Brown & Root and Brown & Root Services,
increased revenues more than 10 percent. Operating income for the segment in the
1999 first quarter was $58 million, a decline of two percent from last year's
quarter, and operating margins were 3.8 percent in the 1999 first quarter
compared to 4.4 percent a year ago. The lower profit margins resulted primarily
from lower margin work accomplished in the United Kingdom and Asia Pacific
regions during the quarter.
The Dresser Equipment Group business segment's revenues of $663 million
in the 1999 first quarter were six percent higher than the 1998 quarter.
Operating income was $54 million for the quarter, an increase of 38 percent
compared to last year's first quarter. Operating margins increased to 8.1
percent in the 1999 first quarter compared to 6.3 percent in the last year's
quarter. Improved activity in the U.S., which represented 50 percent of 1999
first quarter revenues compared to 40 percent last year, contributed to the
improved financial performance of the segment.
-more-
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Halliburton Company page 3
Dick Cheney, Halliburton Company's chief executive officer, commented,
"As I've said previously, 1999 is going to be a tough year for the oil services
industry. But recent actions by OPEC and the improvement of oil and natural gas
prices gives us reason to believe customer spending will pick up late this year
or early in 2000. During the 1999 first quarter, the company reduced employment
levels by about an additional 10 percent and consolidated many facilities to
reduce our cost structure to better meet the needs of our markets. With our more
efficient organization and a strong technological base I am optimistic about
opportunities for future growth."
Halliburton Company, founded in 1919, is the world's largest provider
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, Engineering and Construction Group and Dresser Equipment
Group business segments. The company's World Wide Web site can be accessed at
http://www.halliburton.com.
###
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HALLIBURTON COMPANY
Consolidated Statements of Income
(Unaudited)
Quarter Ended
March 31
1999 1998
Millions of dollars except per share data
Revenues
Energy Services Group $ 1,753 $ 2,285
Engineering and Construction Group 1,508 1,347
Dresser Equipment Group 663 623
----------- -----------
Total revenues $ 3,924 $ 4,255
----------- -----------
----------- -----------
Operating income
Energy Services Group $ 57 $ 283
Engineering and Construction Group 58 59
Dresser Equipment Group 54 39
General corporate (17) (20)
----------- -----------
Total operating income 152 361
Interest expense (36) (30)
Interest income 32 7
Foreign currency losses, net (1) -
Other nonoperating, net 2 -
----------- -----------
Income before income
taxes, minority interests, and
change in accounting method 149 338
Provision for income taxes (60) (128)
Minority interest in net income
of subsidiaries (8) (7)
----------- -----------
Income before accounting change 81 203
Cumulative effect of change in
accounting method, net (19) -
----------- -----------
Net income $ 62 $ 203
----------- -----------
----------- -----------
Basic income per share:
Before change in accounting method $ 0.18 $ 0.46
Change in accounting method (0.04) -
----------- -----------
Net income $ 0.14 $ 0.46
Diluted income per share:
Before change in accounting method $ 0.18 $ 0.46
Change in accounting method (0.04) -
----------- -----------
Net income $ 0.14 $ 0.46
Basic average common
shares outstanding 440 438
Diluted average common
shares outstanding 442 443
Prior year restated for the acquisition of Dresser Industries, Inc.,
which has been accounted for as a pooling of interests.
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