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 25, 2001
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
1
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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 25, 2001 registrant issued a press release entitled "Halliburton
Company First Quarter Earnings Increase 219 Percent - Energy Services Group
Operating Income Quadruples" pertaining, among other things, to an announcement
that registrant's 2001 first quarter net income was $109 million ($0.25 per
diluted share). Net income from continuing operations was $86 million, an
increase of 219 percent over the prior year quarter. Revenues from continuing
operations were $3.1 billion in the 2001 first quarter, an increase of 10
percent compared to the year ago quarter. Operating income of $198 million for
the quarter represents an increase of 144 percent compared to the 2000 first
quarter operating income of $81 million.
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 25, 2001.
2
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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 25, 2001 By: /s/ Susan S. Keith
-------------------------------------
Susan S. Keith
Vice President and Secretary
3
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EXHIBIT INDEX
Exhibit Description
20 Press Release Dated April 25, 2001
Incorporated by Reference
4
FOR IMMEDIATE RELEASE Contact: Guy T. Marcus
April 25, 2001 Vice President - Investor Relations
214/978-2691
Wendy Hall
Manager - Media Relations
713/676-5227
HALLIBURTON COMPANY FIRST QUARTER EARNINGS
INCREASE 219 PERCENT -
ENERGY SERVICES GROUP OPERATING INCOME QUADRUPLES
DALLAS, Texas -- Halliburton Company (NYSE: HAL) reported today that 2001
first quarter net income was $109 million ($0.25 per diluted share). Net income
from continuing operations was $86 million an increase of 219 percent over the
prior year quarter.
Revenues from continuing operations were $3.1 billion in the 2001 first
quarter, an increase of 10 percent compared to the year ago quarter. Operating
income of $198 million for the quarter represents an increase of 144 percent
compared to the 2000 first quarter operating income of $81 million. Strong
growth in Energy Services Group revenues and operating income were partially
offset by lower activity levels in the Engineering and Construction Group
business segment.
Dave Lesar, Halliburton's chairman of the board, president and chief
executive officer, said, "We had an outstanding quarter. The Energy Services
Group continues to provide both earnings and revenue growth, and we are
encouraged with the progress resulting from the restructuring of our engineering
and construction business. We are well positioned to build upon our excellent
performance within North America as well as capture benefits from increased
international exploration and production spending by our customers."
2001 First Quarter Segment Results
Effective with the 2001 financial reporting period, Halliburton's financial
statements have been restated to reflect the restructuring of the Company's
engineering and construction operations. The changes affect both the Energy
Services Group and the Engineering and Construction Group business segments. For
-more-
Halliburton Company page 2
investors' reference, supplemental tables are attached and provide restated data
for 1999 and 2000.
The Energy Services Group segment posted 2001 first quarter revenues of $2
billion representing an increase of 43 percent compared to the 2000 first
quarter. All product service lines and geographic regions increased revenues
compared to the prior year quarter. Energy Services Group revenues in the United
States increased by 63 percent from the year earlier quarter, while
international revenues increased by 31 percent.
Operating income for the Energy Services Group segment was $200 million,
which improved over 300 percent from the first quarter 2000. Operating margins
were 9.8 percent compared to 3.4 percent a year earlier. Operating income
improvements for this segment were mostly attributable to Halliburton Energy
Services, where operating income increased almost 250 percent compared to the
first quarter of 2000. This resulted in incremental margins at Halliburton
Energy Services of 30 percent year-over-year. The operating income improvement
at Halliburton Energy Services was primarily due to higher activity levels and
improved pricing for products and services in North America. The segment also
benefited from higher levels of software sales and consulting services offered
by Landmark and the ramp up of the Barracuda-Caratinga deepwater project in
Brazil.
The Engineering and Construction Group segment's first quarter 2001
revenues were $1.1 billion, a decrease from the $1.4 billion achieved in the
first quarter of 2000. The segment posted an operating profit of $18 million for
the 2001 first quarter as compared to the first quarter profits of $49 million
in 2000. Continued delays on project awards by our customers impacted revenue
and profitability for the first quarter compared to the prior year.
Addressing the company's results, Dave Lesar said, "We are very pleased
with the continued strong performance of our pressure pumping business in North
America. We are also encouraged by the improved profitability of our other
product service lines within the Energy Services Group as well as the increased
profitability we are beginning to see in some international areas. Discussions
with customers support my confidence that the improvements in our Energy
Services business will continue throughout 2001. The overall trend of delayed
engineering and construction projects is expected to continue into the second
half of the year when new projects should begin to be awarded. Our newly aligned
and consolidated engineering and construction segment has us well positioned and
eagerly awaiting the anticipated new project awards. We are committed to deliver
revenues of $4.0 billion to $4.2 billion in the Engineering and Construction
Group with margins in the 2.5 percent to 3.0 percent range."
Discontinued Operations
Income from discontinued operations in the 2001 first quarter was $22
million ($0.05 cents per diluted share), unchanged from the 2000 first quarter.
-more-
Halliburton Company page 3
The Company announced completion of the sale of the Dresser Equipment Group on
April 10, 2001 for a value of $1.55 billion in cash and assumed liabilities, and
about a $300 million after-tax gain, or approximately $0.69 per share. This gain
will be recognized in the 2001 second quarter.
Technology and Business Successes
During 2001, Halliburton achieved a number of business and technology
successes including:
o Halliburton Energy Services (Sperry Sun product service line) completed
the installation of the industry's first ITBS(TM) Isolated Tie-Back
System for Norsk Hydro in the Troll Olje field from the
semi-submersible "West Vanguard" in the North Sea. The system, which
was specifically designed to create a TAML (Technology Advancement for
Multilaterals) level 5 for multilateral wells that require hydraulic
pressure and mechanical integrity at the junction, has the ability to
increase the reservoir exposure and to isolate the junction from sand
production.
o Halliburton Energy Services (Sperry Sun product service line) achieved
another multilateral milestone with the installation of its 275th
multilateral junction successfully completed onshore in eastern
Venezuela. The TAML level 4 tri-lateral was one of 24 junctions
completed on 13 of the operator's wells (nine tri-lateral and four
dual-lateral) using Sperry Sun propriety technology and systems.
o Halliburton Subsea has been awarded a work order from Statoil to repair
subsea connectors in the Asgard field in the Norwegian sector of the
North Sea valued at approximately $28 million. The work order includes
the recovery of spool pieces to surface for repair as well as the
recovery of several pipeline ends. The agreement calls for specially
designed and fabricated equipment. The Semi 2, MSV Maxita and MV
Geofjord will be utilized as tie-in vessels.
o Landmark Graphics Corporation announced a definitive agreement to
acquire majority ownership in LMK Resources Ltd., a consulting and
information technologies company based in Islamabad, Pakistan. Once
complete, the acquisition will expand Landmark's development resources,
as well as provide additional technical and consulting resources in the
Caspian area, the Middle East and Africa.
o Landmark Graphics Corporation completed the acquisition of PGS Data
Management, its PetroBank solutions and related trademarks from
Petroleum Geo-Services ASA (PGS). The acquisition, which will now form
the basis for Landmark's emerging DSP - Data Service Provider -
-more-
Halliburton Company page 4
solutions, adds proven network-centric products and services which
offer E&P companies the ability to find, access and exploit relevant
information on a 24 hours a day, 7 days a week basis through secure,
web-based access to all PetroBank centers worldwide. PetroBank has more
than 90 terabytes of data available via the internet, providing
comprehensive information for more than 280,000 square kilometers of
PGS' worldwide data on prospects and producing basins, in addition to
other major customer data. PetroBank has been selected as the
repository for E&P data in Norway and Brazil.
o The Asia Pacific Transportation Consortium, led by Kellogg Brown &
Root, finalized the contract for the Alice Springs to Darwin Rail Link
Project in Australia. This 1,420 kilometer railway link will provide a
strategically important rail link between the southern and northern
portions of Australia. Kellogg Brown & Root's share of the design and
construction contract is approximately $300 million.
o Kellogg Brown & Root completed the successful construction, onshore
commissioning and installation of Asia Pacific's largest integrated
deck for Shell Philippines Exploration B.V.'s Malampaya, the largest
offshore installation in the world using the float over method. The
topside facility was set on its concrete base as a complete integrated
deck 14 days ahead of schedule. Kellogg Brown & Root pioneered the
method to install the deck as one unit, which maximized onshore
fabrication and testing work, and continues to complete various
engineering, procurement, fabrication, installation and commissioning
elements for Malampaya.
o Kellogg Brown & Root was selected by CNOOC Chemical Ltd., a 100 percent
owned China National Offshore Oil Corporation company, to build a new
fertilizer complex on Hainan Island, The People's Republic of China.
The complex will include a 1,500 ton/day ammonia plant which will
utilize Kellogg Brown & Root's Purifier Process technology. The new
complex is expected to have the lowest energy consumption for an
ammonia plant in the country.
o Kellogg Brown & Root was selected by Thai Olefins Company to provide
engineering, procurement, and construction services for a new ethylene
plant in Map Ta Phut. The new 300-ktpa plant will be built using
Kellogg Brown & Root's Selective Cracking Optimum REcovery (SCORE (TM))
ethylene process, and will be based on ethane and LPG feedstock.
o The AlasCan group, a ive-company joint venture in which Kellogg Brown
& Root is a member, was awarded the conceptual engineering contract for
a multi-billion dollar pipeline that will stretch from Alberta, Canada
-more-
Halliburton Company page 5
to Chicago, Illinois. The customers, a consortium of ExxonMobil, BP
and Phillips, plan to deliver natural gas from Prudhoe Bay in Alaska to
the lower 48 states.
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 web site can be accessed at 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-K for
the year ended December 31, 2000 for a more complete discussion of such risk
factors.
###
HALLIBURTON COMPANY
Consolidated Statements of Income
(Unaudited)
Three Months Ended
March 31
---------------------------------------------
2001 2000
-------------------- ---------------------
Millions of dollars except per share data
Revenues
Energy Services Group $ 2,031 $ 1,423
Engineering and Construction Group 1,113 1,436
-------------------- ---------------------
Total revenues $ 3,144 $ 2,859
==================== =====================
Operating income
Energy Services Group $ 200 $ 49
Engineering and Construction Group 18 49
General corporate (20) (17)
-------------------- ---------------------
Total operating income 198 81
Interest expense (47) (33)
Interest income 4 7
Foreign currency losses, net (3) (4)
-------------------- ---------------------
Income from continuing operations
before income taxes, minority interests,
and change in accounting method 152 51
Provision for income taxes (61) (20)
Minority interest in net income of subsidiaries (5) (4)
-------------------- ---------------------
Income from continuing operations before
change in accounting method 86 27
-------------------- ---------------------
Discontinued operations:
Income from discontinued operations 22 22
Gain on disposal of discontinued operations - 215
-------------------- ---------------------
Total discontinued operations 22 237
-------------------- ---------------------
Cumulative effect of change in
accounting method, net 1 -
-------------------- ---------------------
Net income $ 109 $ 264
==================== =====================
Basic income per share:
Continuing operations before
change in accounting method $ 0.20 $ 0.06
Income from discontinued operations 0.05 0.05
-------------------- ---------------------
0.25 0.11
Gain on disposal of discontinued operations - 0.49
Change in accounting method - -
-------------------- ---------------------
Net income $ 0.25 $ 0.60
==================== =====================
Diluted income per share:
Continuing operations before
change in accounting method $ 0.20 $ 0.06
Income from discontinued operations 0.05 0.05
-------------------- ---------------------
0.25 0.11
Gain on disposal of discontinued operations - 0.48
Change in accounting method - -
-------------------- ---------------------
Net income $ 0.25 $ 0.59
==================== =====================
Basic average common shares outstanding 426 442
Diluted average common shares outstanding 430 444
HALLIBURTON COMPANY
Pro Forma Statements of Income
(Unaudited)
Three Months Ended
March 31
---------------------------------------------
2001 2000
-------------------- ---------------------
Millions of dollars except per share data
Revenues
Energy Services Group $ 2,031 $ 1,423
Engineering and Construction Group 1,113 1,436
Dresser Equipment Group 359 337
-------------------- ---------------------
Total revenues $ 3,503 $ 3,196
==================== =====================
Operating income
Energy Services Group $ 200 $ 49
Engineering and Construction Group 18 49
Dresser Equipment Group 37 36
General corporate (20) (17)
-------------------- ---------------------
Total operating income 235 117
Interest expense (48) (34)
Interest income 5 8
Foreign currency losses, net (4) (4)
Other nonoperating, net - 1
-------------------- ---------------------
Pro forma income before income taxes,
minority interests, and change
in accounting method 188 88
Provision for income taxes (75) (34)
Minority interest in net income
of subsidiaries (5) (4)
-------------------- ---------------------
Proforma income before
change in accounting method 108 50
Cumulative effect of change in
accounting method, net 1 -
-------------------- ---------------------
Pro forma net income $ 109 $ 50
==================== =====================
Basic pro forma income per share:
Before change in accounting method $ 0.25 $ 0.11
Change in accounting method - -
-------------------- ---------------------
Pro forma net income $ 0.25 $ 0.11
==================== =====================
Diluted pro forma income per share:
Before change in accounting method $ 0.25 $ 0.11
Change in accounting method - -
--------------------- ---------------------
Pro forma net income $ 0.25 $ 0.11
==================== =====================
Basic average common shares outstanding 426 442
Diluted average common shares outstanding 430 444
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.
HALLIBURTON COMPANY
Supplemental Schedule of Revenue and Operating Income by Restated Operating Segments
(Unaudited)
Quarter ended
-----------------------------------------------------
Mar 31 Jun 30 Sep 30 Dec 31 Year
------------ ------------ ------------ ------------ ------------
(Amounts in millions)
2000
Revenues
Energy Services Group $ 1,423 $ 1,615 $ 1,736 $ 2,002 $ 6,776
Engineering and Construction Group 1,436 1,253 1,288 1,191 5,168
------------ ------------ ------------ ------------ ------------
Total revenues $ 2,859 $ 2,868 $ 3,024 $ 3,193 $ 11,944
============ ============ ============ ============ ============
Operating income
Energy Services Group $ 49 $ 113 $ 228 $ 192 $ 582
Engineering and Construction Group 49 30 46 (167) (42)
General corporate (17) (17) (26) (18) (78)
------------ ------------ ------------ ------------ ------------
Total operating income $ 81 $ 126 $ 248 $ 7 $ 462
============ ============ ============ ============ ============
1999
Revenues
Energy Services Group $ 1,481 $ 1,417 $ 1,459 $ 1,564 $ 5,921
Engineering and Construction Group 1,780 1,636 1,514 1,462 6,392
------------ ------------ ------------ ------------ ------------
Total revenues $ 3,261 $ 3,053 $ 2,973 $ 3,026 $ 12,313
============ ============ ============ ============ ============
Operating income
Energy Services Group $ 62 $ 56 $ 66 $ 66 $ 250
Engineering and Construction Group 53 57 31 34 175
General corporate (17) (17) (16) (21) (71)
Special charges and credits - 47 - - 47
------------ ------------ ------------ ------------ ------------
Total operating income $ 98 $ 143 $ 81 $ 79 $ 401
============ ============ ============ ============ ============
The Energy Services Group includes Halliburton Energy Services, Landmark
Graphics, Halliburton Subsea, Wellstream, Production Services, Granhearne, and
the Bredero-Shaw and EMC joint ventures. Also included in this segment are large
integrated Engineering, Procurement and Construction (EPC) projects containing
both surface and sub-surface components such as Barracuda / Caratinga and Terra
Nova. EPC projects which do not have a sub-surface scope are included in our
Engineering and Construction Group.
The Engineering and Construction Group, operating under Kellogg Brown & Root,
includes the following five product lines: Onshore Operations, Offshore
Operations, Government Operations, Operations and Maintenance, and Asia Pacific.
HALLIBURTON COMPANY
Supplemental Information on Restated Operating Segments
(Unaudited)
Years ended
-------------------------------
2000 1999
-------------- -------------
(Amounts in millions)
Depreciation, Depletion and Amortization
- ---------------------------------------------
Depreciation, depletion and amortization
of intangibles other than goodwill $ 380 $ 393
Amortization of goodwill 23 16
-------------- -------------
Energy Services Group 403 409
-------------- -------------
Depreciation, depletion and amortization
of intangibles other than goodwill 31 38
Amortization of goodwill 22 17
-------------- -------------
Engineering and Construction Group 53 55
-------------- -------------
Depreciation, depletion and amortization
of intangibles other than goodwill 47 47
Amortization of goodwill - -
-------------- -------------
General corporate and shared assets 47 47
-------------- -------------
Depreciation, depletion and amortization
of intangibles other than goodwill 458 478
Amortization of goodwill 45 33
-------------- -------------
Total continuing operations $ 503 $ 511
============== =============
Capital Expenditures
- -------------------------------
Energy Services Group $ 494 $ 413
Engineering and Construction Group 33 35
General corporate and shared assets 51 72
-------------- -------------
Total continuing operations $ 578 $ 520
============== =============
Research and development
- -------------------------------
Energy Services Group $ 224 $ 207
Engineering and Construction Group 7 4
General corporate and shared assets - -
-------------- -------------
Total continuing operations $ 231 $ 211
============== =============