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 24, 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 October 24, 2000 registrant issued a press release entitled
"Halliburton Releases Third Quarter Earnings, Up Significantly Over Prior Year
and Previous Quarter," pertaining to, among other things, an announcement that
registrant's 2000 third quarter net income was $157 million ($0.35 per share
diluted), representing a 109 percent increase over the prior quarter and, a 171
percent increase compared to the third quarter of 1999.
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 24, 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: October 25, 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 12
October 24, 2000
Incorporated by Reference
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FOR IMMEDIATE RELEASE Contact: Guy T. Marcus
10/26/00 Vice President-Investor Relations
214/978-2691
HALLIBURTON RELEASES THIRD QUARTER EARNINGS, UP SIGNIFICANTLY
OVER PRIOR YEAR AND PREVIOUS QUARTER
DALLAS, Texas -- Halliburton Company (NYSE:HAL) reported today that
2000 third quarter net income was $157 million ($0.35 per share diluted),
representing a 109 percent increase over the prior quarter, and a 171 percent
increase compared to the third quarter of 1999.
Revenues from continuing operations were $3 billion, representing an
increase of $156 million on a sequential basis. Operating income followed suit,
increasing $122 million over the same period. Compared to the prior year's
quarter, operating income increased $167 million on increased revenues.
Two nonrecurring items affected the third quarter. Operating results
benefited from an $88 million pre-tax gain ($0.12 per share diluted, after tax)
on the sale of marine vessels and were reduced by a $9 million pre-tax expense
($0.01 per share diluted, after tax) associated with the early retirement of the
previous chairman of the Company. Without these items, operating income
increased over 100 percent year-over-year and 34 percent sequentially. Net
income excluding these items was $109 million ($0.24 cents per share diluted).
Dave Lesar, Halliburton's chairman of the board, president and chief
executive officer, said, "I am very pleased with the Company's growth in
earnings, which were driven by substantial operating improvements in our Energy
Services Group. As activity levels within the oil and gas industry have
continued to accelerate, we have increased our capacity utilization, especially
in North America. Combined with the effects of stronger pricing of products and
services within Halliburton Energy Services, we have been able to continue our
strong performance that began earlier this year."
2000 Third Quarter Segment Results
The Energy Services Group business segment's 2000 third quarter
revenues were $2 billion, representing a 19 percent increase year-over-year and
a 7 percent increase sequentially. The Halliburton Energy Services business unit
led the segment
-more-
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Halliburton Company page 2
with a 31 percent quarterly increase in revenues year-over-year and a 9 percent
increase sequentially.
Geographically, the Energy Services Group business segment's United
States revenues increased 53 percent year-over-year and 20 percent sequentially.
International revenues increased five percent year-over-year and were flat
sequentially. In total, international revenues represented 63 percent of the
segment's revenues for the quarter.
The Energy Services Group segment's 2000 third quarter operating income
of $233 million increased $177 million from the year ago quarter and $126
million sequentially. Excluding the $88 million gain on the sale of marine
vessels, operating income for the quarter increased 159 percent year-over-year
and 36 percent sequentially. These improvements in operating income primarily
resulted from higher capacity utilization and price improvements within
Halliburton Energy Services, where incremental margins were 30 percent
year-over-year and 28 percent sequentially. Excluding the gain on the sale of
marine vessels, Brown & Root Energy Services' operating income of $10 million
was negatively impacted by continuing low capacity utilization and by delayed
customer projects. Increased sales and profitability on software at Landmark
Graphics contributed to the segment's improved operating income.
The Engineering and Construction Group business segment's revenues in
the 2000 third quarter were $1 billion, a 3 percent increase sequentially but a
21 percent decline from the year ago quarter. Most of the decline was
attributable to reduced customer spending associated with Kellogg Brown & Root's
downstream petroleum industry business. Operating income from the Engineering
and Construction Group in the 2000 third quarter was $41 million, up $5 million
sequentially and flat compared to the year ago quarter.
Discontinued Operations
Earlier this year we announced plans to sell our Dresser Equipment
Group's business units to sharpen focus on our core business activities.
Therefore, such businesses are accounted for as discontinued operations. Net
income from discontinued operations in the 2000 third quarter was $27 million
($0.06 per share diluted) compared to $20 million ($0.04 per share diluted) in
the year ago quarter. Sale of the Group's business units is expected to be
completed before the end of the first quarter of 2001.
-more-
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Technology and Business Successes
During the last three months, Halliburton achieved a number of technology
and business successes, including:
o Halliburton Company acquired a 15 percent equity position in
Petroleum Place, Inc., a leading industry Internet company focused on
the global oil and gas property acquisition and divestiture market.
Landmark Graphics Corporation, a Halliburton Company, will form a
strategic alliance with Petroleum Place to provide online access to
relevant Landmark software for use in the acquisition and development
process, and will participate in joint software development for
Internet-based property evaluations.
o Halliburton Energy Services announced the introduction of DeepWater
Flo-Stop(TM) (DWFS) 5000 - a single liquid additive used to control
hazardous shallow water flow zones while cementing in deepwater. The
additive can be used with cement already on the rig; thus,
eliminating the logistics, rig-time and bulk transfer problems
generally associated with costly specialty blends.
o Baroid Drilling Fluids, a product-service line of Halliburton Energy
Services, participated in drilling one of the world's most extreme
inclination wells - at an angle of 164.7 degrees - offshore East
Asia. Utilizing Baroid's PETROFREE drilling fluid system, the
Operator was able to successfully drill the world record well while
minimizing potential risks to the environment.
o Halliburton Energy Services entered into a strategic agreement with
4th Wave Imaging Corporation to offer 3D time-lapse vertical seismic
profile services to oil and gas producing companies. The agreement
brings together Halliburton's global leadership in providing
reservoir management solutions with 4th Wave Imaging's industry
recognized expertise in time-lapse 3D surface seismic data analysis
and interpretation (commonly referred to as 4D seismic).
o Halliburton Energy Services introduced two new cementing unit designs
that will integrate the proven pumping and mixing systems its
customers have come to expect, with innovative safety and
technologically-advanced features. As a result of the growing demand
for the company's products and services, more than 60 new cementing
units - consisting of the Elite(TM) model, along with the
Precision(TM) model - will be manufactured and deployed throughout
North America over the next 12 months.
o Halliburton Energy Services has been selected by Shell Petroleum
Development Company of Nigeria Limited (SPDC) and its partners to
provide
-more-
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cementing and drilling fluids services on Shell's EA Development
offshore Nigeria. This 54-well project is the first major offshore
oil and gas development for SPDC in Nigeria and is expected to begin
operations in April 2001. The contract is valued at approximately $50
million.
This is the same development for which, earlier this year, SPDC
awarded Brown & Root Energy Services an engineering, procurement,
installation and commission lump sum contract that includes
fabrication of a mooring facility and one of the largest floating
production, storage and offloading vessels built in the last five
years. That contract is valued at approximately $300 million.
o Brown & Root Services has been awarded a contract by the Defense
Threat Reduction Agency to provide integrated project management,
integrated logistics support, and data management to eliminate
Russian Inter-Continental Ballistic Missiles and their silos. The
project, under the Strategic Arms Reduction Treaty, consists of a
two-year base agreement with seven option years. The project has a
maximum value of $283 million and is currently in the start-up phase.
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.
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 Form 10-Q for
the quarter ended June 30, 2000 for a more complete discussion of such risk
factors.
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HALLIBURTON COMPANY
Consolidated Statements of Income
(Unaudited)
Third Quarter Ended Nine Months Ended
September 30 September 30
---------------------------- ---------------------------
2000 1999 2000 1999
------------ ------------ ------------ -----------
Millions of dollars except per share data
Revenues
Energy Services Group $ 2,021 $ 1,700 $ 5,641 $ 5,134
Engineering and Construction Group 1,003 1,273 3,110 4,153
------------ ------------ ------------ -----------
Total revenues $ 3,024 $ 2,973 $ 8,751 $ 9,287
============ ============ ============ ===========
Operating income
Energy Services Group * $ 233 $ 56 $ 402 $ 162
Engineering and Construction Group 41 41 113 163
General corporate (26) (16) (60) (50)
Special charges and credits - - - 47
------------ ------------ ------------ -----------
Total operating income 248 81 455 322
Interest expense (38) (38) (104) (106)
Interest income 6 31 16 68
Foreign currency gains (losses), net 4 (4) (3) (2)
Other nonoperating, net (1) (1) (1) (25)
------------ ------------ ------------ -----------
Income from continuing operations before
income taxes, minority interests, and change
in accounting method 219 69 363 257
Provision for income taxes (84) (27) (140) (98)
Minority interest in net income of subsidiaries (5) (4) (14) (13)
------------ ------------ ------------ -----------
Income from continuing operations before
change in accounting method 130 38 209 146
Discontinued operations:
Income from discontinued operations 27 20 72 76
Gain on disposal of discontinued operations - - 215 -
------------ ------------ ------------ -----------
Total discontinued operations 27 20 287 76
------------ ------------ ------------ -----------
Cumulative effect of change in accounting
method, net - - - (19)
------------ ------------ ------------ -----------
Net income $ 157 $ 58 $ 496 $ 203
============ ============ ============ ===========
Basic income per share:
Continuing operations before
change in accounting method $ 0.29 $ 0.09 $ 0.47 $ 0.33
Income from discontinued operations 0.06 0.04 0.16 0.17
------------ ------------ ------------ -----------
0.35 0.13 0.63 0.50
Gain on disposal of discontinued operations - - 0.49 -
Change in accounting method - - - (0.04)
------------ ------------ ------------ -----------
Net income $ 0.35 $ 0.13 $ 1.12 $ 0.46
============ ============ ============ ===========
Diluted income per share:
Continuing operations before change in
accounting method $ 0.29 $ 0.09 $ 0.47 $ 0.33
Income from discontinued operations 0.06 0.04 0.16 0.17
------------ ------------ ------------ -----------
0.35 0.13 0.63 0.50
Gain on disposal of discontinued operations - - 0.48 -
Change in accounting method - - - (0.04)
------------ ------------ ------------ -----------
Net income $ 0.35 $ 0.13 $ 1.11 $ 0.46
============ ============ ============ ===========
Basic average common shares outstanding 445 441 444 440
Diluted average common shares outstanding 451 445 448 443
* Includes $88m gain on sale of marine vessels in the third quarter ended and nine months ended September 30, 2000.
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HALLIBURTON COMPANY
Pro Forma Statements of Income
(Unaudited)
Third Quarter Ended Nine Months Ended
September 30 September 30
---------------------------- ---------------------------
2000 1999 2000 1999
------------ ------------ ------------ -----------
Millions of dollars except per share data
Revenues
Energy Services Group $ 2,021 $ 1,700 $ 5,641 $ 5,134
Engineering and Construction Group 1,003 1,273 3,110 4,153
Dresser Equipment Group 346 560 1,037 1,840
------------ ------------ ------------ -----------
Total revenues $ 3,370 $ 3,533 $ 9,788 $11,127
============ ============ ============ ===========
Operating income
Energy Services Group * $ 233 $ 56 $ 402 $ 162
Engineering and Construction Group 41 41 113 163
Dresser Equipment Group 42 33 115 140
General corporate (26) (16) (60) (50)
Special charges and credits - - - 47
------------ ------------ ------------ -----------
Total operating income 290 114 570 462
Interest expense (39) (38) (107) (108)
Interest income 7 32 19 70
Foreign currency gains (losses), net 4 (4) (2) (1)
Other nonoperating, net (1) (1) (1) (25)
------------ ------------ ------------ -----------
Pro forma income before income taxes,
minority interests, and change in accounting
method 261 103 479 398
Provision for income taxes (99) (40) (184) (153)
Minority interest in net income of subsidiaries (5) (5) (14) (23)
------------ ------------ ------------ -----------
Pro forma income before change in
accounting method 157 58 281 222
Cumulative effect of change in accounting
method, net - - - (19)
------------ ------------ ------------ -----------
Pro forma net income $ 157 $ 58 $ 281 $ 203
============ ============ ============ ===========
Basic pro forma income per share:
Before change in accounting method $ 0.35 $ 0.13 $ 0.63 $ 0.50
Change in accounting method - - - (0.04)
------------ ------------ ------------ -----------
Pro forma net income $ 0.35 $ 0.13 $ 0.63 $ 0.46
============ ============ ============ ===========
Diluted pro forma income per share:
Before change in accounting method $ 0.35 $ 0.13 $ 0.63 $ 0.50
Change in accounting method - - - (0.04)
------------ ------------ ------------ -----------
Pro forma net income $ 0.35 $ 0.13 $ 0.63 $ 0.46
============ ============ ============ ===========
Basic average common shares outstanding 445 441 444 440
Diluted average common shares outstanding 451 445 448 443
Note: The above pro forma financial information is for comparative purposes and
presented on a basis other than generally accepted accounting principles. This
pro forma income statement excludes the gain on sale of the Dresser-Rand joint
venture and treats Dresser Equipment Group as continuing operations.
* Includes $88m gain on sale of marine vessels in the third quarter ended and
nine months ended September 30, 2000.
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HALLIBURTON COMPANY
Comparisons on Depreciation, Depletion & Amortization, Capex
And Research & Development
(Unaudited)
($ in millions)
3rd Qtr 3rd Qtr Incr/ 2nd Qtr Incr/
2000 1999 (Decr) 2000 (Decr)
--------- --------- --------- -------- ---------
Depreciation, Depletion & Amortization
Depreciation, Depletion, Amortization of Intangibles 100 108 (8) 96 4
Amortization of Goodwill 12 4 8 7 5
Energy Services Group Total 112 112 0 103 9
Depreciation, Depletion, Amortization of Intangibles 7 7 0 7 0
Amortization of Goodwill 2 2 0 2 0
Engineering & Construction Group Total 9 9 0 9 0
Depreciation, Depletion, Amortization of Intangibles 18 14 4 16 2
Amortization of Goodwill 0 0 0 0 0
Corporate Total 18 14 4 16 2
Total Depreciation, Depletion, Amortization of Intangibles 125 129 (4) 119 6
Total Amortization of Goodwill 14 6 8 9 5
--------- --------- --------- -------- ---------
Total Expense for Continuing Operations $ 139 $ 135 $ 4 $ 128 $ 11
Depreciation, Depletion, Amortization of Intangibles 10 20 (10) 10 0
Amortization of Goodwill 2 2 0 2 0
--------- --------- --------- -------- ---------
Dresser Equipment Group Total (Discontinued Ops) $ 12 $ 22 $ (10) $ 12 $ 0
--------- --------- --------- -------- ---------
Total Depreciation, Depletion, Amortization Expense $ 151 $ 157 $ (6) $ 140 $ 11
========= ========= ========= ======== =========
Capital Expenditures
Energy Services Group 163 136 27 104 59
Engineering & Construction Group 1 9 (8) (3) 4
Corporate and Other 11 2 9 10 1
--------- --------- --------- -------- ---------
Total for Continuing Operations $ 175 $ 147 $ 28 $ 111 $ 64
Dresser Equipment Group (Discontinued Ops) 6 19 (13) 6 0
--------- --------- --------- -------- ---------
Total Capital Expenditures $ 181 $ 166 $ 15 $ 117 $ 64
========= ========= ========= ======== =========
Research and Development
Energy Services Group 60 49 11 56 4
Engineering & Construction Group 2 1 1 3 (1)
Dresser Equipment Group 6 9 (3) 6 0
--------- --------- --------- -------- ---------
Total Research and Development $ 68 $ 59 $ 9 $ 65 $ 3
========= ========= ========= ======== =========
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HALLIBURTON COMPANY
Backlog
Quarters Ended
($ in millions)
Dec 31 Mar 31 Jun 30 Sep 30
1999 2000 2000 2000
-------------- -------------- --------------- --------------
Energy Services Group $ 2,604 $ 2,251 $ 4,014 $ 3,801
Engineering and Construction Group 6,541 6,076 5,527 6,065
-------------- -------------- --------------- --------------
Backlog from Continuing Operations $ 9,145 $ 8,327 $ 9,541 $ 9,866
Backlog from Discontinued Operations $ 1,022 $ 331 $ 334 $ 321
-------------- -------------- --------------- --------------
Total Backlog $ 10,167 $ 8,658 $ 9,875 $ 10,187
============== ============== =============== ==============
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