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)
MAY 7, 2002
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
Page 1 of 12 Pages
The Exhibit Index Appears on Page 4
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 May 7, 2002 registrant issued a press release entitled "Halliburton
Announces First Quarter Results". Please see the full text of the attached press
release.
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 May 7, 2002.
Page 2 of 12 Pages
The Exhibit Index Appears on Page 4
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: May 7, 2002 By: /s/ Susan S. Keith
-------------------------------------------
Susan S. Keith
Vice President and Secretary
Page 3 of 12 Pages
The Exhibit Index Appears on Page 4
EXHIBIT INDEX
Exhibit Description
20 Press Release Dated May 7, 2002
Incorporated by Reference
Page 4 of 12 Pages
The Exhibit Index Appears on Page 4
FOR IMMEDIATE RELEASE Contact: Cedric Burgher
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May 7, 2002 Vice President, Investor Relations
713-676-4608
Wendy Hall
Manager, Media Relations
713-676-5227
HALLIBURTON ANNOUNCES FIRST QUARTER RESULTS
DALLAS, Texas -- Halliburton Company (NYSE:HAL) reported today first quarter
2002 net income from continuing operations of $83 million or $0.19 per diluted
share, excluding nonrecurring items, but inclusive of an $8 million pretax loss
($0.01 after-tax per diluted share) related to the Argentina peso's devaluation.
Including nonrecurring items, 2002 first quarter net income from continuing
operations was $50 million ($0.12 per diluted share). Total net income was $22
million ($0.05 per diluted share). Discontinued operations included $28 million
after-tax for asbestos-related expenses ($0.07 per diluted share).
Nonrecurring items in the 2002 first quarter resulted in a $33 million net
charge after-tax and consisted of: the gain on the sale of European Marine
Contractors Ltd. (EMC); a gain from shares received relating to the
demutualization of an insurance provider; the write-off of asbestos-related
receivables due from Highlands Insurance Company; an accrual for an adverse
patent infringement verdict that the Company will appeal; and severance costs
associated with the Company's reorganization. The first quarter 2001 includes $9
million, net of tax, in goodwill amortization compared to no amortization in the
first quarter of 2002. Tables outlining nonrecurring items and a reconciliation
of reported amounts to pro forma amounts used in this press release are
attached.
Revenues from continuing operations were $3 billion in the 2002 first quarter,
down slightly from a year ago. Operating income before nonrecurring items was
$176 million for the quarter, down 16 percent from last year, excluding 2001
goodwill amortization. Reduced gas drilling activities in the United States and
Canada resulted in lower revenues and profit margins.
"Our first quarter results were in line with our peers and down from last year
due to weaker North American industry conditions," said Dave Lesar, chairman,
president and chief executive officer, Halliburton. "I'm pleased with the
Engineering & Construction Group's solid improvement over last year, although
this was offset by lower results in Halliburton Energy Services, consistent with
the decline in customer activity."
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Halliburton Company\Page 2
Corporate Reorganization
Halliburton Company is in the process of a reorganization in which the Energy
Services and the Engineering and Construction groups will be separated into two
wholly-owned operating subsidiary groups. The separation of these businesses
will create two stronger, leaner, more competitive and cost-efficient
organizations. While the Company incurred $11 million before tax in severance
costs during the quarter, the majority of the reorganization costs --
principally severance and restructuring costs -- will be incurred in the second
quarter.
2002 First Quarter Segment Results
The Energy Services Group posted first quarter revenues of $2 billion,
representing a 2.5 percent decrease compared to the 2001 first quarter and a
nine percent decrease from the 2001 fourth quarter. Lower North American
drilling activity was the primary reason for the lower revenues. Energy Services
Group revenues in the United States decreased by 20 percent year-over-year,
while international revenues increased by 11 percent. Within the Energy Services
Group, revenues at Halliburton Energy Services decreased by five percent
year-over-year principally in North America, partially offset by increases in
the Eastern Hemisphere. In addition, Halliburton Energy Services' revenues
decreased by nine percent sequentially.
Operating income, as reported for the first quarter for the Energy Services
Group, was $162 million, a decrease of 22 percent year-over-year, excluding 2001
goodwill amortization. Excluding nonrecurring items, Energy Services Group
operating income was $157 million, a decrease of 24 percent year-over-year. Of
this amount, Halliburton Energy Services' operating income was $159 million, a
decrease of 19 percent year-over-year and 36 percent sequentially. Landmark
Graphics delivered another strong performance in revenues and profit during the
first quarter.
The Engineering and Construction Group's first quarter revenues were $1 billion,
down eight percent from the 2001 first quarter. Operating income increased 41
percent year-over-year to $31 million for the first quarter, excluding 2001
goodwill amortization. Excluding severance costs, operating income was $35
million, resulting in a margin of 3.4 percent.
Backlog
Backlog for the Company as of March 31, 2002, was $9.8 billion, comprised of
$7.7 billion for the Engineering and Construction Group and $2.1 billion for the
Energy Services Group.
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Halliburton Company\Page 3
General Corporate
General corporate costs of $70 million include an $80 million write-off of
asbestos-related insurance receivables from Highlands Insurance Company, $5
million for engineering and construction asbestos-related expenses, $2 million
in severance costs and a $28 million gain from shares received relating to the
demutualization of an insurance provider.
Discontinued Operations
The first quarter net loss from discontinued operations was $28 million
after-tax ($0.07 per diluted share), which reflects asbestos-related expenses of
previously disposed businesses and a $40 million payment ($26 million, net of
tax) to the parent company of Harbison-Walker Refractories Company. This payment
was made concurrent with Harbison-Walker's bankruptcy petition to protect the
insurance asset shared between Dresser Industries Inc. and Harbison-Walker. In
the 2001 first quarter, net income from discontinued operations was $22 million
($0.05 per diluted share), reflecting contributions by the Dresser Equipment
Group, which was sold in April 2001.
Technology and Significant Achievements
Halliburton recently announced a number of advances in technology and new
contract awards including:
o Nigeria LNG Limited has awarded the engineering, procurement and
construction (EPC) contract for the realization of the trains 4 and 5
expansion project, at its existing $3.8 billion liquefied natural gas
facility to a joint venture team, which includes KBR. The partners of
the equal joint venture team, known as TSKJ, will have an EPC contract
valued at over $1.7 billion.
o Halliburton KBR and Hunt Oil Company's Camisea LNG Company signed a
contract for the front-end engineering design of a four million tons
per annum liquefied natural gas (LNG) facility. The scope of the
project includes studying the feasibility of building a grassroots LNG
liquefaction facility for exporting liquefied natural gas from Peru to
the Baja area of Mexico and California. The front end work, scheduled
for completion in October 2002, could yield a cost estimate comparable
to other such LNG projects of around $1 billion.
o Halliburton KBR has been awarded a contract to provide Front End
Engineering Design for BP Angola BV's (Block 18) Greater Plutonio Deep
Water Development of Angola. The work includes further development of
the engineering design and preparation of invitation to tender for the
main execution contracts. The work is expected to be completed by the
end of 2002.
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Halliburton Company\Page 4
o Landmark Graphics announced the release of two industry-leading
technologies, ProMAX(TM) and VIP(TM) for the Linux operating system.
Linux versions of ProMAX(TM) for seismic processing and VIP(TM) for
reservoir simulation provide valuable price-performance customer
benefits. Customers can now achieve supercomputer-level productivity
and processing on personal computers through these cost-effective
information technology configurations.
o Halliburton International Inc. and Sibneft, signed an agreement that
will give Halliburton the ability to deploy all of its product service
lines to serve Sibneft's Russian oil and gas operations. Sibneft
intends to use Halliburton's new technologies to improve well
construction and production processes and overall project management.
o Halliburton Energy Services introduced its FullDrift(TM) drilling
suite, which includes the SlickBore(TM) matched drilling system, the
Geo-Pilot(TM) rotary steerable system, and the new SlickBore Plus(TM)
drilling and reaming system. The new suite of tools greatly reduces
hole spiraling and tortuosity lowering well construction costs and
improving LWD/MWD tool performance.
o Halliburton Energy Services performed the first data acquisition
project using the Acoustic Telemetry System for Gaz de France, off the
coast of the Netherlands. Acoustic signals were transmitted through
production tubing, allowing bottomhole reservoir data to be monitored
at surface without the use of electrical cables, reducing the
dependency on wireline operations. Using this advanced technology
resulted in enhanced control over the well clean up and well testing
operations while lowering the cost and improving the quality of the
reservoir data.
o Landmark Graphics announced the release of SpecDecomp(TM), a new,
innovative reservoir imaging and interpretation technology solution.
SpecDecomp(TM) provides greater resolution of reservoir boundaries,
heterogeneities and thickness than previously possible with traditional
broadband seismic displays.
o Halliburton Energy Services has won awards worth $100 million to supply
both well construction and formation evaluation services on
TotalFinaElf's (TFE) Amenam/Kpono project in Nigeria. This is the first
time TFE has ever entrusted so many components of a project to
Halliburton. Located in shallow water, the Amenam/Kpono project will
consist of 31 wells, including some of the deepest wells ever completed
in Nigeria - up to 22,300 feet. They will also be some of the hottest
wells ever completed - up to 300 degrees Fahrenheit at 3,850 meters in
vertical depth.
o Halliburton Energy Services recently won several contracts with the
Korea National Oil Corporation to provide drilling fluids, drilling
bits, coring services, MWD (measurement-while-drilling) and directional
drilling operations, and bundled subsea well completion services.
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Halliburton Company\Page 5
Halliburton, founded in 1919, is one of the world's largest providers 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.
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 previous year ended December 31, 2001 for a more complete discussion of such
risk factors.
-more-
HALLIBURTON COMPANY
Consolidated Statements of Income
(Unaudited)
Three Months Ended
March 31
-----------------------------------------
2002 2001
-----------------------------------------
Millions of dollars except per share data
Revenues
Energy Services Group $ 1,980 $ 2,031
Engineering and Construction Group 1,027 1,113
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Total revenues $ 3,007 $ 3,144
================== ==================
Operating income (loss)
Energy Services Group $ 162 $ 200
Engineering and Construction Group 31 18
General corporate (70) (20)
------------------ ------------------
Total operating income 123 198
Interest expense (32) (47)
Interest income 4 4
Foreign currency losses, net (8) (3)
Other nonoperating, net 4 -
------------------ ------------------
Income from continuing operations before
income taxes, minority interests, and
change in accounting method 91 152
Provision for income taxes (36) (61)
Minority interest in net income of subsidiaries (5) (5)
------------------ ------------------
Income from continuing operations
before change in accounting method 50 86
Discontinued operations:
Income (loss) from discontinued operations (28) 22
Cumulative effect of change in accounting
method, net - 1
------------------ ------------------
Net income $ 22 $ 109
================== ==================
Basic income per share:
Continuing operations before change
in accounting method $ 0.12 $ 0.20
Income (loss) from discontinued operations (0.07) 0.05
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0.05 0.25
Change in accounting method - -
------------------ ------------------
Net income $ 0.05 $ 0.25
================== ==================
Diluted income per share:
Continuing operations before change in
accounting method $ 0.12 $ 0.20
Income (loss) from discontinued operations (0.07) 0.05
------------------ ------------------
0.05 0.25
Change in accounting method - -
------------------ ------------------
Net income $ 0.05 $ 0.25
================== ==================
Basic average common shares outstanding 432 426
Diluted average common shares outstanding 433 430
-more-
HALLIBURTON COMPANY
Reconciliation of As Reported Results to Pro Forma Results
Three months ended March 31, 2002
(Unaudited)
Other Income/ Net Income Earnings per
Operating Expense from Share from
Income, (including Provision Continuing Continuing
Pretax interest) for Taxes Operations* Operations
- -------------------------------------------------------------------------------------------------------------------
Pro forma results (excluding
nonrecurring items) $ 176 $ (31) $ (57) $ 83 $ 0.19
Nonrecurring items:
Sale of EMC 108 3 (43) 68 0.16
Patent lawsuit (98) (4) 40 (62) (0.14)
Highlands receivable write-off (80) - 31 (49) (0.11)
Demutualization of an
insurance company 28 - (11) 17 0.04
Severance costs (11) - 4 (7) (0.02)
- -------------------------------------------------------------------------------------------------------------------
As reported $ 123 $ (32) $ (36) $ 50 $ 0.12
===================================================================================================================
* As reported and pro forma basis net income from continuing operations includes $5 million in expense due to minority
interest.
HALLIBURTON COMPANY
Reconciliation of As Reported Segment Results to Pro Forma Results
Three months ended March 31, 2002
(Unaudited)
Energy Services Engineering and Operating Income,
Group Construction Group Corporate Pretax
- ---------------------------------------------------------------------------------------------------------------
Pro forma results (excluding
nonrecurring items) $ 157 $ 35 $ (16) $ 176
Nonrecurring items:
Sale of EMC 108 - - 108
Patent lawsuit (98) - - (98)
Highlands receivable write-off - - (80) (80)
Demutualization of an
insurance company - - 28 28
Severance costs (5) (4) (2) (11)
- ---------------------------------------------------------------------------------------------------------------
As reported $ 162 $ 31 $ (70) $ 123
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HALLIBURTON COMPANY
Reconciliation of As Reported Results to Pro Forma Results
Three months ended March 31, 2001
(Unaudited)
Other Income/ Net Income Earnings per
Operating Expense from Share from
Income, (including Provision Continuing Continuing
Pretax interest) for Taxes Operations* Operations
- ----------------------------------------------------------------------------------------------------------------
Pro forma results (excluding
nonrecurring items) $ 209 $ (46) $ (65) $ 93 $ 0.22
Nonrecurring items:
Goodwill amortization (11) - 2 (9) (0.02)
- ----------------------------------------------------------------------------------------------------------------
As reported $ 198 $ (46) $ (63) $ 84 $ 0.20
================================================================================================================
* As reported and pro forma basis net income from continuing operations includes $5 million in expense due to minority
interest.
HALLIBURTON COMPANY
Reconciliation of As Reported Segment Results to Pro Forma Results
Three months ended March 31, 2001
(Unaudited)
Energy Services Engineering and Operating Income,
Group Construction Group Corporate Pretax
- ------------------------------------------------------------------------------------------------------------
Pro forma results (excluding
nonrecurring items) $ 207 $ 22 $ (20) $ 209
Nonrecurring items:
Goodwill amortization (7) (4) - (11)
- ------------------------------------------------------------------------------------------------------------
As reported $ 200 $ 18 $ (20) $ 198
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