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)
JULY 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
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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 July 25, 2001 registrant issued a press release entitled "Halliburton
Company Second Quarter Revenues and Earnings Continue to Soar" pertaining, among
other things, to an announcement that registrant's 2001 second quarter net
income was $382 million ($0.89 per diluted share). Net income from continuing
operations was $143 million ($0.33 per diluted share), an increase of 175
percent compared to the prior year quarter. Revenues from continuing operations
were $3.3 billion in the 2001 second quarter, an increase of 16 percent compared
to the year ago quarter. Operating income of $272 million for the quarter
represents an increase of 116 percent compared to the 2000 second quarter
operating income of $126 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 July 25, 2001.
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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: July 25, 2001 By: /s/ John M. Allen
----------------------------------
John M. Allen
Assistant General Counsel and
Assistant Secretary
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EXHIBIT INDEX
Exhibit Description
20 Press Release Dated July 25, 2001
Incorporated by Reference
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FOR IMMEDIATE RELEASE Contact: Guy T. Marcus
07/25/01 Vice President-Investor Relations
214/978-2691
guy.marcus@halliburton.com
Wendy Hall
Manager-Media Relations
713-676-5227
wendy.hall@halliburton.com
HALLIBURTON COMPANY SECOND QUARTER REVENUES AND EARNINGS
CONTINUE TO SOAR
DALLAS, Texas -- Halliburton Company (NYSE: HAL) reported today that 2001
second quarter net income was $382 million ($0.89 per diluted share). Net income
from continuing operations was $143 million ($0.33 per diluted share), an
increase of 175 percent compared to the prior year quarter.
Revenues from continuing operations were $3.3 billion in the 2001 second
quarter, an increase of 16 percent compared to the year ago quarter. Operating
income of $272 million for the quarter represents an increase of 116 percent
compared to the 2000 second quarter operating income of $126 million. The
company's strong growth was driven by continued strong performance in the Energy
Services Group.
Dave Lesar, Halliburton's chairman of the board, president and chief
executive officer, said, "This was an excellent quarter for Halliburton. The
Energy Services Group benefited from high levels of activity, strong capacity
utilization, and better pricing in North America. We are particularly pleased
with increasing revenues and earnings internationally. Although there is some
uncertainty among market analysts about the impact of increasing gas storage
levels on prices for natural gas in the United States, we expect activity levels
to remain strong through the end of the year. We see continued contribution to
-more-
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both revenues and earnings from increased international activity by our
customers."
2001 Second Quarter Segment Results
The Energy Services Group segment posted 2001 second quarter revenues of
$2.2 billion representing an increase of 37 percent compared to the 2000 second
quarter. Energy Services Group revenues in the United States increased by over
60 percent from the year earlier quarter, while international revenues increased
by over 20 percent. Within the Energy Services Group, revenues at Halliburton
Energy Services increased 12 percent sequentially and increased compared to the
prior year quarter for all geographic regions and product service lines.
Operating income for the Energy Services Group segment was $267 million,
which more than doubled from the 2000 second quarter. Operating income
improvements for the segment were mostly attributable to Halliburton Energy
Services, where operating income increased over 170 percent compared to the 2000
second quarter and increased 38 percent sequentially. Operating margins within
Halliburton Energy Services were over 15 percent compared to less than 8 percent
a year earlier. This resulted in incremental margins at Halliburton Energy
Services of 34 percent year-over-year. Approximately one-third of the
incremental operating income was derived from outside North America.
The Engineering and Construction Group segment's 2001 second quarter
revenues were $1.1 billion, a decrease from the $1.3 billion achieved in the
2000 second quarter. The segment posted an operating profit of $25 million for
2001 second quarter as compared to the second quarter profits of $30 million in
2000. Despite lower revenues, operating margins remained relatively consistent
with the prior year second quarter.
Addressing the company's results, Dave Lesar said, "While North American
pressure pumping continues to deliver increasing profitability within
Halliburton Energy Services, we were also very pleased with the increasing
levels of revenue and earnings from our other Halliburton Energy Services
product service lines, both in the United States and internationally. Focused
spending and deployment of capital equipment has positioned Halliburton to
benefit from buoyant activity in the United States and increasing exploration
and production spending internationally. I am also encouraged by the increasing
bid and proposal activity in our engineering and construction business as
delayed projects are now being revitalized and new projects identified by our
customers. We expect this to develop into future project awards during the
remainder of this year."
Discontinued Operations
Total net income from discontinued operations was $239 million ($0.56 per
diluted share). This is comprised of a $299 million after-tax gain on sale of
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the Dresser Equipment Group partially offset by a $60 million after-tax charge
for asbestos litigation related to discontinued operations.
Halliburton completed the sale of the Dresser Equipment Group on April 10,
2001 for $1.55 billion in cash and assumed liabilities, and reported a $299
million after-tax gain ($0.70 per diluted share) on the sale of discontinued
operations, subject to any final closing adjustments.
As previously reported on June 28, 2001, in response to a request from
Harbison-Walker Refractories Company for assistance to fund settlements of
asbestos claims Harbison assumed at the time it was spun-off by Dresser
Industries, Inc. in 1992, Dresser has decided that it will not relieve Harbison
from its obligation to indemnify and defend Dresser from such claims and it will
not assist Harbison in paying settlements of asbestos claims Harbison has
assumed. Dresser will separately and aggressively assert its own defense of
those claims where Dresser is a named defendant and will take other legal action
it determines to be in its best interest, including action to protect its
insurance coverage program.
Based on Halliburton's analysis of Harbison's asbestos claims management
and concern that Harbison will not be able to fully perform its obligation to
defend and indemnify Dresser, during the 2001 second quarter Halliburton accrued
$60 million after-tax ($0.14 per diluted share) under discontinued operations
which represents management's judgement of potential exposures, net of insurance
recovery.
Technology and Business Successes
During 2001, Halliburton achieved a number of business and technology
successes including:
- - Halliburton signed a definitive agreement to acquire Magic Earth, Inc., a
leading 3-D visualization and interpretation technology company with broad
applications in the area of data mining. The addition of Magic Earth will
further enhance Halliburton's suite of integrated software solutions for
the energy industry and grow its information products and services
business.
- - The Energy Services Group's new H2Zero(TM) technology, which uses a
revolutionary polymer system to provide unprecedented capabilities for
controlling unwanted water production, has reduced the amount of unwanted
water produced from an oil well by 98 percent for Shell U.K. Exploration
and Production. The treatment, with 403 feet of perforations, is the
longest horizontal, subsea, water shut-off treatment completed to date.
- - Halliburton Energy Services announced the global commercialization of the
oil and gas industry's first Magnetic Resonance Imaging Logging While
Drilling (MRIL-WD(TM)) tool. The new tool provides well operators with the
-more-
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same critical porosity and fluid information currently available with its
MRIL-Prime (TM) tool, now making this important reservoir data available
during the real-time drilling phase. The MRIL-WD tool meets industry
expectations by replicating the measurements of its wireline counterpart in
the drilling environment.
- - Halliburton Energy Services commercialized its Reservoir Description Tool
(RDT(TM)), an innovative pumpout design with a digital control feedback
system, that continuously samples and monitors formation fluids, thus
enabling the advanced wireline formation testing system to provide
operators with accurate, extensive reservoir information. By monitoring
fluid and formation properties in real time, operators can determine the
optimum point to obtain the highest sample quality possible, especially
where zones are tested over a wide range of overbalance pressures in a
single trip.
- - Kellogg Brown & Root (KBR) was selected by Shanghai Gaoqiao Petrochemical
Corporation, a subsidiary of China Petrochemical International Company
(Sinopec), for its phenol technology for another new 200,000
metric-tons-per-year phenol and acetone plant to be located in Shanghai,
China. KBR will provide the technology license, process design package and
commissioning services for the plant, which is scheduled to come on stream
before 2005.
- - Kellogg Brown & Root was awarded a four year contract with the Australian
Formula One Grand Prix to provide engineering project management services
that will commence immediately, with preparations for the 2002 event, and
will run through to park restoration following the 2005 event. Under the
contract, KBR will oversee an asset replacement program on behalf of the
Australian Grand Prix Corporation and will include race-related assets such
as safety and access structures (crash barriers, debris fence panels and
overpasses), demountable grandstands, an engineering operations center and
a transportable medical center.
- - M.W. Kellogg Limited, the London-based Kellogg Brown & Root and JGC
Corporation jointly-owned company, has again received recognition for their
outstanding safety record by winning the prestigious RoSPA (the Royal
Society for the Prevention of Accidents) President's Award. These annual
awards are presented to companies who achieve the highest standards in the
prevention and control of occupational accidents and ill health, and who
attain the RoSPA Gold Award consistently for 10 successive years.
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 www.halliburton.com.
-more-
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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 March 31, 2001 for a more complete discussion of such risk
factors.
###
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Consolidated Statements of Income
(Unaudited)
Quarter Ended Six Months Ended
June 30 June 30
---------------------------- ---------------------------
2001 2000 2001 2000
------------ ------------ ------------ -----------
Millions of dollars except per share data
Revenues
Energy Services Group $ 2,214 $ 1,615 $ 4,245 $ 3,038
Engineering and Construction Group 1,125 1,253 2,238 2,689
------------ ------------ ------------ -----------
Total revenues $ 3,339 $ 2,868 $ 6,483 $ 5,727
============ ============ ============ ===========
Operating income
Energy Services Group $ 267 $ 113 $ 467 $ 162
Engineering and Construction Group 25 30 43 79
General corporate (20) (17) (40) (34)
------------ ------------ ------------ -----------
Total operating income 272 126 470 207
Interest expense (34) (33) (81) (66)
Interest income 6 3 10 10
Foreign currency losses, net (1) (3) (4) (7)
------------ ------------ ------------ -----------
Income from continuing operations before
income taxes, minority interests, and change
in accounting method 243 93 395 144
Provision for income taxes 98 (36) (159) (56)
Minority interest in net income of subsidiaries (2) (5) (7) (9)
------------ ------------ ------------ -----------
Income from continuing operations
before change in accounting method 143 52 229 79
Discontinued operations, net
Income (loss) from discontinued operations (60) 23 (38) 45
Gain on disposal of discontinued operations 299 - 299 215
------------ ------------ ------------ -----------
Income from discontinued operations 239 23 261 260
------------ ------------ ------------ -----------
Cumulative effect of change in accounting
method, net - - 1 -
------------ ------------ ------------ -----------
Net income $ 382 $ 75 $ 491 $ 339
============ ============ ============ ===========
Basic income per share:
Continuing operations $ 0.34 $ 0.12 $ 0.54 $ 0.18
Discontinued operations, net
Income (loss) from discontinued operations (0.14) 0.05 (0.09) 0.10
Gain on disposal of discontinued operations 0.70 - 0.70 0.49
------------ ------------ ------------ -----------
Income from discontinued operations 0.56 0.05 0.61 0.59
------------ ------------ ------------ -----------
Net income $ 0.90 $ 0.17 $ 1.15 $ 0.77
============ ============ ============ ===========
Diluted income per share:
Continuing operations $ 0.33 $ 0.12 $ 0.53 $ 0.18
Discontinued operations, net
Income (loss) from discontinued operations (0.14) 0.05 (0.09) 0.10
Gain on disposal of discontinued operations 0.70 - 0.70 0.48
------------ ------------ ------------ -----------
Income from discontinued operations 0.56 0.05 0.61 0.58
------------ ------------ ------------ -----------
Net income $ 0.89 $ 0.17 $ 1.14 $ 0.76
============ ============ ============ ===========
Basic average common shares outstanding 427 444 427 443
Diluted average common shares outstanding 430 449 430 447
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