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Hal Revises Fourth Quarter Earnings Downward 03-01-05 8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): March 1, 2005
     

HALLIBURTON COMPANY
(Exact Name of Registrant as Specified in Its Charter)
     

Delaware
(State or Other Jurisdiction of Incorporation)

1-3492
No. 75-2677995
(Commission File Number)
(IRS Employer Identification No.)
   
1401 McKinney, Suite 2400, Houston, Texas
77010
(Address of Principal Executive Offices)
(Zip Code)

(713) 759-2600
(Registrant’s Telephone Number, Including Area Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
     

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


INFORMATION TO BE INCLUDED IN REPORT

Item 2.02 and Item 8.01.  Results of Operations and Financial Condition and Other Events.

On March 1, 2005 registrant issued a press release entitled “Halliburton Revises Fourth Quarter Pre-Tax Earnings Downward by $3 Million.”

The text of the Press Release is as follows:

 
HALLIBURTON REVISES FOURTH QUARTER PRE-TAX EARNINGS DOWNWARD BY $3 MILLION
 
Collection of receivable and change in lease accounting

HOUSTON, Texas - Halliburton (NYSE: HAL) announced today that it will make two adjustments to the previously announced fourth quarter 2004 earnings that were released on January 28, 2005. The net impact of these adjustments is $3 million pre-tax expense, or $0.004 per share.

The adjustments, detailed in the attached financial tables, are attributed to (1) a collection of a $10 million receivable in February 2005 that was previously reserved and (2) a correction of the accounting treatment for leasehold improvements. As a result of a February 7, 2005 clarification by the Chief Accountant of the Securities and Exchange Commission on lease accounting, the Company has adjusted its method for amortization of leasehold improvements and recorded a pre-tax expense of $13 million for increased depreciation, depletion and amortization. Management has determined that the impact of this matter on prior periods is immaterial. In connection with this clarification by the Chief Accountant, a large number of public companies have announced adjustments to their financial statements relating to lease account ing.


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 and Engineering and Construction Groups. The company’s World Wide Web site can be accessed at www.halliburton.com.


NOTE: The statements in this press release that are not historical statements, including statements regarding future financial performance, are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond the company's control, which could cause actual results to differ materially from the results expressed or implied by the statements. These risks and uncertainties include, but are not limited to: legal risks, including the risks of audits and investigations of the company by domestic and foreign government agencies and legislative bodies and potential adverse proceedings and findings by such agencies, a delay in the receipt of additional agreed payments from insurers arising from asbestos and silica claims, the risks of judgments against the company and its subsidiaries in litigation and proceedings, including shareholder lawsuits, securities laws inquiries, contract disputes, patent infringements and environmental matters, legislation, changes in government regulations and adverse reaction to scrutiny involving the company; political risks, including the risks of unsettled political conditions, war and the effects of terrorism, foreign operations and foreign exchange rates and controls; liquidity risks, including the risks of potential reductions in debt ratings, access to credit, availability and costs of financing and ability to raise capital; weather-related risks; customer risks, including the risks of changes in capital spending and claims negotiations; industry risks, including the risks of changes that affect the demand for or price of oil and/or gas, structural changes in the industries in which the company operates, risk s of fixed-fee projects and risks of complex business arrangements; systems risks, including the risks of successful development and installation of financial systems; and personnel and merger/reorganization/disposition risks, including the risks of increased competition for employees, successful integration of acquired businesses, effective restructuring efforts and successful completion of planned dispositions. Please see Halliburton's Form 10-K/A for the year ended December 31, 2003 and Form 10-Q for the quarter ended September 30, 2004 for a more complete discussion of such risk factors.




  
     
 



HALLIBURTON COMPANY
Condensed Consolidated Statements of Operations
(Millions of dollars and shares except per share data)
(Unaudited)



   
Three Months
  
Three Months
  
   
Ended
  
Ended
  
   
December 31
  
September 30
  
   
2004
  
2003
  
2004
  
Revenue
                    
Production Optimization
  
$
912
  
$
713
  
$
886
  
Fluid Systems
    
617
    
531
    
618
  
Drilling and Formation Evaluation
    
465
    
417
    
450
  
Digital and Consulting Solutions
    
176
    
138
    
154
  
Total Energy Services Group
    
2,170
    
1,799
    
2,108
  
Government and Infrastructure
    
2,295
    
2,691
    
1,993
  
Energy and Chemicals
    
736
    
974
    
689
  
Total KBR
    
3,031
    
3,665
    
2,682
  
Total revenue
  
$
5,201
  
$
5,464
  
$
4,790
  
Operating income (loss)
                    
Production Optimization
  
$
208
  
$
115
  
$
222
  
Fluid Systems
    
98
    
73
    
113
  
Drilling and Formation Evaluation
    
61
    
17
    
62
  
Digital and Consulting Solutions
    
-
    
36
    
17
  
Total Energy Services Group
    
367
    
241
    
414
  
Government and Infrastructure
    
9
    
69
    
(6
)
Energy and Chemicals
    
(9
)
  
15
    
(44
)
Asbestos and silica
    
-
    
(2
)
  
-
  
   Total KBR
    
 -
    
 82
    
 (50
)
General corporate
    
(21
)
  
(20
)
  
(22
)
Total operating income
   
346
    
303
    
342
  
Interest expense
    
(69
)
  
(54
)
  
(51
)
Interest income
    
14
    
8
    
13
  
Foreign currency, net
    
6
    
4
    
1
  
Other, net
    
-
    
(1
)
  
(2
)
Income from continuing operations before income taxes
                    
and minority interest
    
297
    
260
    
303
  
Provision for income taxes
    
(110
)
  
(92
)
  
(111
)
Minority interest in net income of subsidiaries
    
(6
)
  
(22
)
  
(6
)
Income from continuing operations
    
181
    
146
    
186
  
Loss from discontinued operations, net
    
(384
)
  
(1,093
)
  
(230
)
Net loss
  
$
(203
)
$
(947
)
$
(44
)
Basic income (loss) per share:
                    
Income from continuing operations
 
$
0.41
  
$
0.34
  
$
0.43
  
Loss from discontinued operations, net
    
(0.88
)
  
(2.52
)
  
(0.54
)
Net loss
  
$
(0.47
)
$
(2.18
)
$
(0.11
)
Diluted income (loss) per share:
                    
Income from continuing operations
 
$
0.40
  
$
0.34
  
$
0.42
  
Loss from discontinued operations, net
    
(0.86
)
  
(2.51
)
  
(0.51
)
Net loss
  
$
(0.46
)
$
(2.17
)
$
(0.09
)
Basic weighted average common shares outstanding
    
439
    
435
    
438
  
Diluted weighted average common shares outstanding
    
444
    
438
    
442
  







 
     
 




HALLIBURTON COMPANY
Condensed Consolidated Statements of Operations
(Millions of dollars and shares except per share data)
(Unaudited)



   
Twelve Months Ended
  
   
December 31
  
   
2004
  
2003
  
Revenue
          
Production Optimization
  
$
3,303
  
$
2,758
 
Fluid Systems
    
2,324
    
2,039
  
Drilling and Formation Evaluation
    
1,782
    
1,643
  
Digital and Consulting Solutions
    
589
    
555
  
Total Energy Services Group
    
7,998
    
6,995
  
Government and Infrastructure
    
9,393
    
5,417
  
Energy and Chemicals
    
3,075
    
3,859
  
Total KBR
    
12,468
    
9,276
  
Total revenue
  
$
20,466
  
$
16,271
  
Operating income (loss)
              
Production Optimization
  
$
633
  
$
413
  
Fluid Systems
    
348
    
251
  
Drilling and Formation Evaluation
    
225
    
177
  
Digital and Consulting Solutions
    
60
    
(15
)
Total Energy Services Group
    
1,266
    
826
  
Government and Infrastructure
    
84
    
194
  
Energy and Chemicals
    
(426
)
  
(225
)
Asbestos and silica
    
-
    
(5
)
   Total KBR
    
 (342
)
  
 (36
)
General corporate
    
(87
)
  
(70
)
Total operating income
    
837
    
720
  
Interest expense
    
(229
)
  
(139
)
Interest income
    
44
    
30
  
Foreign currency, net
    
(3
)
  
-
  
Other, net
    
2
    
1
  
Income from continuing operations before income taxes,
              
minority interest and change in accounting principle
    
651
    
612
  
Provision for income taxes
    
(241
)
  
(234
)
Minority interest in net income of subsidiaries
    
(25
)
  
(39
)
Income from continuing operations before change in
              
accounting principle
    
385
    
339
  
Loss from discontinued operations, net
    
(1,364
)
  
(1,151
)
Cumulative effect of change in accounting principle, net
    
-
    
(8
)
Net loss
  
$
(979
)
$
(820
)
Basic income (loss) per share:
              
Income from continuing operations before change in
              
accounting principle
  
$
0.88
  
$
0.78
  
Loss from discontinued operations, net
    
(3.13
)
  
(2.65
)
Cumulative effect of change in accounting principle, net
    
-
    
(0.02
)
Net loss
  
$
(2.25
)
$
(1.89
)
Diluted income (loss) per share:
              
Income from continuing operations before change in
              
accounting principle
  
$
0.87
  
$
0.78
  
Loss from discontinued operations, net
    
(3.09
)
  
(2.64
)
Cumulative effect of change in accounting principle, net
    
-
    
(0.02
)
Net loss
  
$
(2.22
)
$
(1.88
)
Basic weighted average common shares outstanding
    
437
    
434
  
Diluted weighted average common shares outstanding
    
441
    
437
  






 
     
 



HALLIBURTON COMPANY
Revenue and Operating Income Comparison
By Geographic Region - Energy Services Group Only
(Millions of dollars)
(Unaudited)


           
   
Three Months Ended
  
Three Months Ended
  
   
December 31
  
September 30
  
   
2004
  
2003
  
2004
  
Revenue:
              
North America
  
$
980
  
$
787
  
$
969
  
Latin America
    
301
    
255
    
295
  
Europe/Africa
    
454
    
350
    
442
  
Middle East/Asia
    
435
    
407
    
402
  
Total revenue
  
$
2,170
  
$
1,799
  
$
2,108
  
                     
Operating income:
                    
North America
  
$
224
  
$
100
  
$
228
  
Latin America
    
12
    
48
    
52
  
Europe/Africa
    
62
    
36
    
79
  
Middle East/Asia
    
69
    
57
    
55
  
Total operating income
  
$
367
  
$
241
  
$
414
  



   
Twelve Months Ended
  
   
December 31
  
   
2004
  
2003
  
Revenue:
          
North America
  
$
3,609
 
$
3,085
  
Latin America
    
1,082
    
907
  
Europe/Africa
    
1,665
    
1,442
  
Middle East/Asia
    
1,642
    
1,561
  
Total revenue
  
$
7,998
  
$
6,995
  
               
Operating income:
              
North America
  
$
722
  
$
306
  
Latin America
    
130
    
165
  
Europe/Africa
    
186
    
147
  
Middle East/Asia
    
228
    
208
  
Total operating income
  
$
1,266
  
$
826
  
















 
     
 


 
HALLIBURTON COMPANY
Reconciliation of Previously Announced Results to Actual Results
Three and Twelve Months Ended December 31, 2004


 
Three Months Ended
 
December 31, 2004
   
Receivable
Leasehold
  
 
As Reported
Collection
Adjustment
Actual
Operating income (loss)
        
Production Optimization
$209
$2
$(3)
$208
Fluid Systems
102
4
(8)
98
Drilling and Formation Evaluation
59
4
(2)
61
Digital and Consulting Solutions
-
-
-
-
Total Energy Services Group
370
10
(13)
367
Total KBR
-
-
-
-
General corporate
(21)
-
-
(21)
Total operating income
$349
$10
$(13)
$346
         
Income from continuing operations
        
before income taxes and minority
        
Interest
$300
$10
$(13)
$297
Provision for income taxes
(111)
(4)
5
(110)
Income from continuing operations
183
6
(8)
181
Net income (loss)
(201)
6
(8)
(203)
Per share
        
Basic income from continuing
        
operations
$0.42
$0.01
$(0.02)
$0.41
Basic net income (loss)
$(0.46)
$0.01
$(0.02)
$(0.47)
Diluted income from continuing
        
operations
$0.41
$0.01
$(0.02)
$0.40
Diluted net income (loss)
$(0.45)
$0.01
$(0.02)
$(0.46)


 
Twelve Months Ended
 
December 31, 2004
   
Receivable
Leasehold
  
 
As Reported
Collection
Adjustment
Actual
Operating income (loss)
        
Production Optimization
$634
$2
$(3)
$633
Fluid Systems
352
4
(8)
348
Drilling and Formation Evaluation
223
4
(2)
225
Digital and Consulting Solutions
60
-
-
60
Total Energy Services Group
1,269
10
(13)
1,266
Total KBR
(342)
-
-
(342)
General corporate
(87)
-
-
(87)
Total operating income
$840
$10
$(13)
$837
         
Income from continuing operations
        
before income taxes and minority
        
interest
$654
$10
$(13)
$651
Provision for income taxes
(242)
(4)
5
(241)
Income from continuing operations
387
6
(8)
385
Net income (loss)
(977)
6
(8)
(979)
Per share
        
Basic income from continuing
$0.89
$0.01
$(0.02)
$0.88
operations
        
Basic net income (loss)
$(2.24)
$0.01
$(0.02)
$(2.25)
Diluted income from continuing
        
operations
$0.88
$0.01
$(0.02)
$0.87
Diluted net income (loss)
$(2.21)
$0.01
$(0.02)
$(2.22)

###
 




 
     
 



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: March 1, 2005
By:
  /s/ Margaret E. Carriere
   
Margaret E. Carriere
   
Vice President and Secretary