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, 2000
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, 2000 registrant issued a press release entitled
"Halliburton Announces First Quarter 11 Cents Per Share Before Gain on Sale -
Also to Sell Dresser Equipment Group and Implement Share Repurchase Program,"
pertaining to, among other things, the announcement that registrant's board of
directors approved plans to sell registrant's Dresser Equipment Group business
segment and implement a share repurchase program for up to 44 million shares, or
about 10 percent of registrant's outstanding common stock. Registrant also
reported 2000 first quarter net income of $264 million, or $.59 per share
diluted. These amounts included an after-tax gain of $215 million, or $.48 per
share diluted on the sale of registrant's 51 percent equity interest in the
Dresser-Rand joint venture. Excluding that gain, net income was $49 million or
$.11 per share diluted. Registrant's 1999 first quarter net income was $62
million or $.14 per share diluted, after recognizing an after-tax charge of $19
million, or $.04 per share diluted, related to a change in accounting method.
Revenues from continuing operations were $2.9 billion in the 2000 first quarter,
a decline of 12 percent from the 1999 first quarter.
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, 2000.
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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, 2000 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 13
April 26, 2000
Incorporated by Reference
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FOR IMMEDIATE RELEASE Contact: Guy T. Marcus
April 26, 2000 Vice President-Investor Relations
214/978-2691
HALLIBURTON ANNOUNCES FIRST QUARTER 11 CENTS PER SHARE
BEFORE GAIN ON SALE - ALSO TO SELL DRESSER EQUIPMENT GROUP
AND IMPLEMENT SHARE REPURCHASE PROGRAM
DALLAS, Texas -- Halliburton Company (NYSE:HAL) announces today that
its board of directors approved plans to sell the company's Dresser Equipment
Group (DEG) business segment and implement a share repurchase program for up to
44 million shares, or about 10 percent of the company's outstanding common
stock.
Separately, Halliburton reports 2000 first quarter net income of $264
million, or $ .59 per share diluted. These amounts include an after-tax gain of
$215 million, or $ .48 per share diluted, on the February sale of the company's
51 percent equity interest in the segment's Dresser-Rand joint venture.
Excluding that gain, net income was $49 million or $ .11 per share diluted. The
Dresser Equipment Group is now accounted for as discontinued operations. In the
1999 first quarter Halliburton's net income was $62 million, or $ .14 per share
diluted, after recognizing an after-tax charge of $19 million, or $ .04 per
share diluted, related to a change in accounting method.
Revenues from continuing operations were $2.9 billion in the 2000 first
quarter, a decline of 12 percent from the 1999 first quarter. A drop in revenues
experienced by the Engineering and Construction Group business segment was the
principal cause for the decline.
Plans to Sell DEG and Repurchase Common Stock
Dick Cheney, Halliburton's chairman of the board and chief executive
officer, said, "Halliburton originally obtained the DEG business operations as
part of the Dresser Industries acquisition in 1998. The previously announced
sales of DEG's interests in the Dresser-Rand (DR) and Ingersoll Dresser Pump
(IDP) joint ventures prompted a thorough review of DEG's remaining lines of
business. It has now been determined that these businesses do not closely fit
Halliburton's core businesses and long-term goals and objectives. The eventual
disposition of these businesses will benefit Halliburton by bringing sharper
focus of the company's resources on its core business activities. Proceeds from
the recent sales of DEG's interests in DR and IDP, and from the planned sale of
the remaining businesses, will be used by Halliburton for a combination of
acquisitions supporting core activities and for internal investment
opportunities."
-more-
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Halliburton Company page 2
"The sales of DEG's remaining businesses are not expected to close until the
fourth quarter of 2000 or first quarter of 2001. Since we cannot predict the
timing of future acquisitions which will replace the earnings from DEG, we feel
the implementation of a share repurchase program is timely and is an appropriate
means of utilizing the company's strong and liquid balance sheet in the
interim," continued Cheney. "The share repurchase program will be used in
combination with other investments designed to contribute to growth of long-term
shareholder value." The share repurchases will be effected from time-to-time
through open market purchases or privately negotiated transactions.
2000 First Quarter Segment Results
The Energy Services Group business segment's revenues were $1.7
billion, down two percent from the first quarter of 1999. Revenues in the United
States increased by 12 percent compared to the year earlier quarter.
International revenues continued to lag in the first quarter and, as a result,
were seven percent lower than a year ago and represented approximately 68
percent of the segment's total revenues. Pressure pumping services and Landmark
Graphics Corporation led the way with year-over-year revenue increases of 12
percent and 10 percent, respectively. The upstream engineering and construction
revenues of Brown & Root Energy Services declined eight percent in the 2000
first quarter compared to the year ago quarter.
Despite lower revenues, the Energy Services Group's operating income
increased by nine percent to $62 million in the 2000 first quarter, compared to
$57 million in the 1999 first quarter. The segment's improved profitability was
principally the result of higher revenues and operating margins experienced in
the United States by Halliburton Energy Services.
The Engineering and Construction Group business segment's 2000 first
quarter revenues were $1.1 billion, down two percent sequentially and down 25
percent from the 1999 first quarter. The year-over-year decline is associated
with lower levels of activity experienced by Kellogg Brown & Root's downstream
petroleum industry business.
The Engineering and Construction Group's operating income in the 2000
first quarter was $36 million, a decline of 38 percent from the 1999 first
quarter, primarily related to the decline of revenues.
As previously mentioned, Halliburton plans to sell the Dresser
Equipment Group, and the Group's financial results are now being accounted for
as discontinued operations. The net income recognized by these discontinued
operations was $22 million, or $ .05 diluted per share, in the 2000 first
quarter compared to $28 million, or $ .06 diluted per share, in the 1999 first
quarter.
-more-
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Technology and Business Successes
During the 2000 first quarter Halliburton achieved a number of
technology and business successes, including:
o Halliburton Company and Science Applications International Corporation
(SAIC) announced their intent to form a venture to provide web-based
portals tailored to enhance the way upstream E&P professionals are hosted.
Through Knowledge Service Providers (KSP) -- which provide an integrated
set of software applications, data integration and collaboration
capabilities -- teams of industry scientists, engineers, and investment
analysts will be able to collaborate more effectively by working together
and exchanging information interactively over a secure network.
o During the first quarter Halliburton announced the appointment of Robert
Heinemann as Halliburton's Chief Technology Officer. Heinemann, a 20-year
Mobil Oil Corporation veteran, most recently served as vice president of
Mobil Technology Company.
o Halliburton acquired the remaining shares of PES (International)
Limited (PES), the recognized market leader in intelligent completion
solutions. PES, combined with Halliburton's SmartWell(TM) technology,
is revolutionizing reservoir optimization.
o As a result of the PES acquisition, Shell International Exploration and
Production and Halliburton Company signed a Memorandum of Understanding
in April to establish a 50-50 joint venture to be called WellDynamic to
further develop and market Halliburton's SmartWell technology and
Shell's iWell(TM) technology to the oil and gas industry on a global
basis.
o Sperry-Sun Drilling Services and Landmark Graphics Corporation
introduced their RESolution 3D(TM) system. This complete, real-time, 3D
drilling and reservoir solution system revolutionizes the drilling
decision-making process by enabling real-time visualization and
updating of earth models in both rig and office settings.
o Sperry-Sun also introduced the Geo-Pilot(TM) rotary steerable system.
Designed to drill a higher quality wellbore and minimize hole
spiraling, Geo-Pilot(TM) should have a profound impact on drilling.
-more-
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Halliburton Company page 4
o Kellogg Brown & Root formed an alliance with Fortum Oil & Gas to offer
a new process technology for high octane gasoline. The technology,
called NExOCTANE, will enable refiners to resolve how to replace methyl
tertiary butylether (MTBE) in gasoline production and how best to
utilize "stranded MTBE" facilities and feedstocks. The new technology
offers a high-octane replacement product called isooctane at a high
efficiency and low capital cost.
o During the first quarter, Shell Petroleum Development Company (SPDC) of
Nigeria Limited and its partners awarded Brown & Root Energy Services a
contract, valued at approximately US $300 million, to work on the
development of the first major offshore oil and gas facility for SPDC
in Nigeria.
o Halliburton Energy Services announced that Halliburton Worldwide
Limited has been awarded a five-year pressure pumping services contract
for Petroleum Development Oman. The five-year contract was effective
February 1, 2000 and incorporates cementing, stimulation, coiled
tubing, nitrogen, special tools and gravel pack.
o Halliburton's Brown & Root Energy Services and Halliburton Energy
Services business units continue to work towards finalizing an
agreement with the Barracuda & Caratinga Development Corporation (BCDC)
for the development of both the Barracuda and the Caratinga offshore
fields in Brazil. The contract is valued at more than $2.5 billion.
Dick Cheney Comments
"Halliburton operates an extensive worldwide business infrastructure in
over 120 countries. While low levels of international business activity have
hampered the company's financial progress in recent quarters, I am enthusiastic
about the second half of the year and the future outlook for our strong
international business operations. We are now beginning to see indications of an
upward turn in international customer spending. This will lead to increased
utilization of our infrastructure and will benefit our future financial
results," commented Dick Cheney.
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 and Engineering and Construction Group business segments.
The company's World Wide Web site can be accessed at http://www.halliburton.com.
-more-
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Halliburton Company page 5
================================================================================
NOTE: In accordance with the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995, Halliburton Company cautions that statements in
this press release which are forward looking and which provide other than
historical information involve risks and uncertainties that may impact the
company's actual results of operations. Please see Halliburton's Annual Report
on Form 10-K for the year ended December 31, 1999 for a more complete discussion
of such risk factors.
###
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HALLIBURTON COMPANY
Consolidated Statements of Income
(Unaudited)
Quarter Ended
March 31
-----------------------------------------
2000 1999
----------------- ----------------
Millions of dollars except per share data
Revenues
Energy Services Group $ 1,723 $ 1,753
Engineering and Construction Group 1,136 1,508
--------- ---------
Total revenues $ 2,859 $ 3,261
========= =========
Operating income
Energy Services Group $ 62 $ 57
Engineering and Construction Group 36 58
General corporate (17) (17)
--------- ---------
Total operating income 81 98
Interest expense (33) (35)
Interest income 7 31
Foreign currency losses, net (4) (1)
Other nonoperating, net - 2
--------- ---------
Income from continuing operations
before income taxes, minority interests,
and change in accounting method 51 95
Provision for income taxes (20) (38)
Minority interest in net income of subsidiaries (4) (4)
--------- ---------
Income from continuing operations before
change in accounting method 27 53
Discontinued operations:
Income from discontinued operations 22 28
Gain on disposal of discontinued operations 215 -
--------- ---------
Total discontinued operations 237 28
Cumulative effect of change in
accounting method, net - (19)
--------- ---------
Net income $ 264 $ 62
========= =========
Basic income per share:
Continuing operations before
change in accounting method $ 0.06 $ 0.12
Income from discontinued operations 0.05 0.06
--------- ---------
0.11 0.18
Gain on disposal of discontinued operations 0.49 -
Change in accounting method - (0.04)
--------- ---------
Net income $ 0.60 $ 0.14
========= =========
Diluted income per share:
Continuing operations before
change in accounting method $ 0.06 $ 0.12
Income from discontinued operations 0.05 0.06
--------- ---------
0.11 0.18
Gain on disposal of discontinued operations 0.48 -
Change in accounting method - (0.04)
--------- ---------
Net income $ 0.59 $ 0.14
========= =========
Basic average common shares outstanding 442 440
Diluted average common shares outstanding 444 442
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HALLIBURTON COMPANY
Pro Forma Statements of Income
(Unaudited)
Quarter Ended
March 31
-----------------------------------------
2000 1999
--------------- -------------------
Millions of dollars except per share data
Revenues
Energy Services Group $ 1,723 $ 1,753
Engineering and Construction Group 1,136 1,508
Dresser Equipment Group 337 663
--------- ---------
Total revenues $ 3,196 $ 3,924
========= =========
Operating income
Energy Services Group $ 62 $ 57
Engineering and Construction Group 36 58
Dresser Equipment Group 36 54
General corporate (17) (17)
--------- ---------
Total operating income 117 152
Interest expense (34) (36)
Interest income 8 32
Foreign currency losses, net (4) (1)
Other nonoperating, net - 2
--------- ---------
Pro forma income before income taxes,
minority interests, and change
in accounting method 87 149
Provision for income taxes (34) (60)
Minority interest in net income
of subsidiaries (4) (8)
--------- ---------
Pro forma income before
change in accounting method 49 81
Cumulative effect of change in
accounting method, net - (19)
--------- ---------
Pro forma net income $ 49 $ 62
========= =========
Basic pro forma income per share:
Before change in accounting method $ 0.11 $ 0.18
Change in accounting method - (0.04)
--------- ---------
Pro forma net income $ 0.11 $ 0.14
========= =========
Diluted pro forma income per share:
Before change in accounting method $ 0.11 $ 0.18
Change in accounting method - (0.04)
--------- ---------
Pro forma net income $ 0.11 $ 0.14
========= =========
Basic average common shares outstanding 442 440
Diluted average common shares outstanding 444 442
Note: The above pro forma financial information is for comparative purposes.
This pro forma income statement excludes the gain on sale of the Dresser-Rand
joint venture and treats Dresser Equipment Group as continuing operations.
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HALLIBURTON COMPANY
Supplemental Restated Financial Information
Millions of dollars
(Unaudited)
1999
---------------------------------------------------------
Quarter ended
---------------------------------------------
Mar 31 Jun 30 Sep 30 Dec 31 Year
--------- --------- --------- --------- ---------
Revenues
Energy Services Group $ 1,753 $ 1,681 $ 1,700 $ 1,865 $ 6,999
Engineering and Construction Group 1,508 1,372 1,273 1,161 5,314
--------- --------- --------- --------- ---------
Total revenues $ 3,261 $ 3,053 $ 2,973 $ 3,026 $ 12,313
========= ========= ========= ========= =========
Operating income
Energy Services Group $ 57 $ 49 $ 56 $ 60 $ 222
Engineering and Construction Group 58 64 41 40 203
Special charges / credits - 47 - - 47
General corporate (17) (17) (16) (21) (71)
--------- --------- --------- --------- ---------
Total operating income 98 143 81 79 401
--------- --------- --------- --------- ---------
Other (2) (51) (10) (30) (93)
(Provision) benefit for income taxes (39) (32) (27) (19) (117)
Minority interest in earnings (4) (5) (4) (4) (17)
Change in accounting method (19) - - - (19)
--------- --------- --------- --------- ---------
Net income (loss) $ 34 $ 55 $ 40 $ 26 $ 155
========= ========= ========= ========= =========
Diluted income (loss) per share
Continuing operations $ 0.12 $ 0.13 $ 0.09 $ 0.06 $ 0.40
Change in accounting method (0.04) - - - (0.04)
--------- --------- --------- --------- ---------
Net income (loss) $ 0.08 $ 0.13 $ 0.09 $ 0.06 $ 0.36
========= ========= ========= ========= =========
Backlog $ 9,999 $ 9,449 $ 9,486 $ 9,145
Depreciation / amortization $ 120 $ 124 $ 135 $ 132 $ 511
Capital expenditures $ 129 $ 110 $ 147 $ 134 $ 520
Discontinued operations
Revenues $ 663 $ 617 $ 560 $ 745 $ 2,585
========= ========= ========= ========= =========
Operating income $ 54 $ 53 $ 33 $ 109 $ 249
Other (1) 1 (1) (1) (2)
(Provision) benefit for income taxes (21) (21) (13) (42) (97)
Minority interest in earnings (4) (5) (1) (16) (26)
Gain on disposal of discontinued
operations - - - 159 159
--------- --------- --------- --------- ---------
Net income (loss) $ 28 $ 28 $ 18 $ 209 $ 283
========= ========= ========= ========= =========
Diluted income (loss) per share
Income from discontinued operations $ 0.06 $ 0.06 $ 0.04 $ 0.11 $ 0.27
Gain on disposal of discontinued
operations - - - 0.36 0.36
--------- --------- --------- --------- ---------
Net income (loss) $ 0.06 $ 0.06 $ 0.04 $ 0.47 $ 0.63
========= ========= ========= ========= =========
Backlog $ 1,370 $ 1,397 $ 1,395 $ 1,022
Depreciation / amortization $ 24 $ 22 $ 22 $ 20 $ 88
Capital expenditures $ 14 $ 14 $ 19 $ 26 $ 73
Note: The above financial information has been restated to reflect Dresser Equipment Group as
discontinued operations.
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HALLIBURTON COMPANY
Supplemental Restated Financial Information
Millions of dollars
(Unaudited)
1998
---------------------------------------------------------
Quarter ended
---------------------------------------------
Mar 31 Jun 30 Sep 30 Dec 31 Year
--------- --------- --------- --------- ---------
Revenues
Energy Services Group $ 2,285 $ 2,381 $ 2,163 $ 2,180 $ 9,009
Engineering and Construction Group 1,347 1,438 1,380 1,330 5,495
--------- --------- --------- --------- ---------
Total revenues $ 3,632 $ 3,819 $ 3,543 $ 3,510 $ 14,504
========= ========= ========= ========= =========
Operating income
Energy Services Group $ 283 $ 304 $ 263 $ 121 $ 971
Engineering and Construction Group 59 74 54 50 237
Special charges / credits - - (924) (35) (959)
General corporate (20) (19) (20) (20) (79)
--------- --------- --------- --------- ---------
Total operating income 322 359 (627) 116 170
--------- --------- --------- --------- ---------
Other (22) (25) (32) (36) (115)
(Provision) benefit for income taxes (112) (124) 118 (37) (155)
Minority interest in earnings (5) (6) (5) (4) (20)
--------- --------- --------- --------- ---------
Net income (loss) $ 183 $ 204 $ (546) $ 39 $ (120)
========= ========= ========= ========= =========
Diluted income (loss) per share
Continuing operations $ 0.41 $ 0.46 $ (1.24) $ 0.09 (0.27)
--------- --------- --------- --------- ---------
Net income (loss) $ 0.41 $ 0.46 $ (1.24) $ 0.09 $ (0.27)
========= ========= ========= ========= =========
Backlog $ 10,610 $ 11,715 $ 11,249 $ 9,866
Depreciation / amortization $ 125 $ 117 $ 131 $ 127 $ 500
Capital expenditures $ 214 $ 226 $ 196 $ 205 $ 841
Discontinued operations
Revenues $ 623 $ 766 $ 681 $ 779 $ 2,849
========= ========= ========= ========= =========
Operating income $ 39 $ 77 $ 50 $ 61 $ 227
Other (1) (2) - - (3)
(Provision) benefit for income taxes (16) (29) (21) (24) (90)
Minority interest in earnings (2) (7) (10) (10) (29)
--------- --------- --------- --------- ---------
Net income (loss) $ 20 $ 39 $ 19 $ 27 $ 105
========= ========= ========= ========= =========
Diluted income (loss) per share
Income from discontinued operations $ 0.05 $ 0.09 $ 0.04 $ 0.06 $ 0.24
--------- --------- --------- --------- ---------
Net income (loss) $ 0.05 $ 0.09 $ 0.04 $ 0.06 $ 0.24
========= ========= ========= ========= =========
Backlog $ 1,693 $ 1,655 $ 1,564 $ 1,311
Depreciation / amortization $ 23 $ 26 $ 20 $ 18 $ 87
Capital expenditures $ 13 $ 17 $ 21 $ 22 $ 73
Note: The above financial information has been restated to reflect Dresser Equipment Group as
discontinued operations.
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