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): April 21,
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 Results
of Operations and Financial Condition
On April
21, 2005 registrant issued a press release entitled “Halliburton Announces First
Quarter Results.”
The text
of the Press Release is as follows:
HALLIBURTON
ANNOUNCES FIRST QUARTER RESULTS
72
cents earnings per share
Results
include 14 cents per share gain on sale of Subsea 7, Inc.
HOUSTON,
Texas -
Halliburton (NYSE:HAL) announced today that first quarter of 2005 income from
continuing operations was $367 million or $0.72 per diluted share. Income from
continuing operations was $76 million or $0.17 per diluted share in the first
quarter of 2004.
Net
income for the quarter was $365 million or $0.72 per diluted share and included
a loss from discontinued operations, net of tax, of $2 million.
Consolidated
revenue was $4.9 billion in the first quarter of 2005, down 11% from the first
quarter of 2004. This decrease was largely attributable to lower activity on
government services projects in the Middle East and the winding down of lump-sum
offshore engineering, procurement, installation, and commissioning contracts.
This was partially offset by a 20% revenue increase in the Energy Services Group
(ESG).
Consolidated
operating income was $586 million in the first quarter of 2005 compared to $175
million in the first quarter of 2004. Impacting first quarter of 2005 operating
income was a previously announced $110 million gain on the sale of a 50%
interest in Subsea 7, Inc. Results from the first quarter of 2004 included a $97
million loss on the Barracuda-Caratinga project and a $13 million gain related
to the Anglo-Dutch lawsuit.
“We are
pleased with our first quarter performance, both for ESG and KBR,” said Dave
Lesar, chairman, president, and chief executive officer of Halliburton. “ESG’s
record performance benefited from increased oilfield activity and price
increases we implemented during 2004. KBR’s restructuring efforts have resulted
in a more efficient operation, which is evidenced by the profitable results we
have posted this quarter. In addition, KBR continues to make progress on
resolving issues with our customer related to our work in Iraq, resulting in a
settlement of the Dining Facilities matters.”
2005
First Quarter Segment Results
Energy
Services Group
ESG
posted first quarter of 2005 revenue of $2.2 billion, a $368 million or 20%
increase over the first quarter of 2004, and operating income of $513 million,
up $299 million or 140% from the same period in the prior year.
Production
Optimization operating income for the first quarter of 2005 was $291 million, an
increase of $209 million over the first quarter of 2004. First quarter of 2005
results included a gain of $110 million on the sale of the company’s equity
interest in the Subsea 7, Inc. joint venture. Excluding the Subsea 7, Inc. gain,
Production Optimization quarterly operating income increased 121%
year-over-year. Production enhancement services operating income increased 76%
in the first quarter of 2005, primarily on increased demand for well stimulation
services, especially in natural gas applications in the United States, higher
equipment utilization, and improved pricing in North America. Completion tools
operating income increased 93% in the first quarter of 2005 compared to the
first quarter of 2004. Improvements were made in each of the four geographical
regions as a result of increased well completion, sand control, and reservoir
performance activities. First quarter of 2004 results included an operating loss
of $17 million for Subsea 7, Inc.
Fluid
Systems operating income for the first quarter of 2005 was $113 million, a $53
million or 88% increase over the first quarter of 2004. Cementing services
operating income increased 60% due to higher drilling activity worldwide and
improved pricing and asset utilization in North America. Baroid Fluids Services
operating income increased 230% on higher margins in Africa and Asia Pacific and
increases in both price and volume in the Gulf of Mexico. Baroid Fluids Services
results from the Gulf of Mexico also benefited from cost efficiencies realized
from the restructuring efforts initiated last year.
Drilling
and Formation Evaluation operating income of $80 million was up $37 million or
86% over the prior year first quarter. Sperry Drilling Services operating income
increased 71%, benefiting from increased U.S. activity, improved pricing,
deepwater contracts in Brazil that utilize GeoPilot® and GeoTap® technologies,
and $9 million in lower depreciation expense due to the extension of the useful
life of drilling tools beginning in the second quarter of 2004. Logging services
operating income increased 65% due to improved activity and pricing in North
America. In addition, logging services operating income improved in the Middle
East/Asia region. Drill bits operating income improved 300% primarily due to
strong fixed cutter bit sales in North America.
Digital
and Consulting Solutions operating income was flat compared to the prior year
period. Operating income for Landmark Graphics increased 33% in the first
quarter of 2005 compared to the first quarter of 2004 mainly driven by sales of
the company's real-time drilling applications as well as increased revenue from
data bank projects.
KBR
KBR
revenue for the first quarter of 2005 was $2.8 billion, a 26% decrease compared
to the first quarter of 2004. Operating income for the first quarter of 2005 was
$105 million compared to an operating loss of $15 million in the first quarter
of 2004.
Government
and Infrastructure (G&I) operating income for the first quarter of 2005 was
$53 million compared to $62 million in the first quarter of 2004, a 15%
decrease. Most of this decrease was attributable to the completion of the RIO
contract. Operating income in the first quarter of 2005 was positively affected
by a settlement with KBR’s customer for its Iraq-related work under the LogCAP
III contract.
Energy
and Chemicals (E&C) operating income totaled $52 million in the first
quarter of 2005 compared to a $77 million loss in the first quarter of 2004,
which included a $97 million loss on the Barracuda-Caratinga project. The first
quarter of 2005 results were positively impacted by stronger results on many
projects, including offshore engineering and management projects in the Caspian
and Angola and offshore production services projects in the United
Kingdom.
KBR’s
backlog at March 31, 2005 was $9.4 billion, up approximately $1.0 billion from
December 31, 2004, primarily due to a recent LNG award. Of the total backlog,
$4.8 billion is for G&I projects, and $4.6 billion is for E&C projects.
Halliburton’s
Iraq-related work contributed approximately $1.5 billion in revenue in the first
quarter of 2005 and $38 million of operating income, or a 2.6%
margin.
Technology
and Significant Achievements
Halliburton
had a number of advances in technology and new contract awards.
Energy
Services Group new technologies:
| · |
Halliburton's
Sperry Drilling Services continues to lead the industry with its GeoTap®
while-drilling formation pressure tester, an integral part of its Stellar®
formation evaluation suite. The GeoTap formation pressure tester allows
drilling engineers, reservoir engineers, and petrophysicists to acquire
fast and accurate pressure measurements to make timely decisions. The
6¾-inch GeoTap logging-while-drilling sensor was the first commercially
available pad/probe while-drilling formation pressure tester for 8½-inch
to 10 5/8-inch hole sizes. In addition, the 8-inch GeoTap sensor has now
successfully performed pressure tests in 12 ¼-inch hole sizes in Norway,
the Gulf of Mexico, the Caspian, and offshore
Brazil. |
| · |
Halliburton’s
Sperry Drilling Services successfully completed its field trials of its
third-generation Geo-Pilot® 5200 Series system and is now providing
commercial services to its customers. With the addition of the 5200 Series
system to the FullDrift® drilling suite, Sperry offers a slim hole
point-the-bit rotary steerable solution capable of significantly extending
horizontal production sections and reaching small targets from existing
structures. |
| · |
Halliburton’s
Digital and Consulting Solutions group has acquired the smartSECTION®
geologic software business from A2D Technologies, a TGS-NOPEC Company.
SmartSECTION software provides the industry's leading raster image
cross-section application and pioneered the use of depth-calibrated well
log images for a faster, more affordable approach to high volume well log
correlation and geologic interpretation. |
| · |
Halliburton's
Landmark Graphics achieved global certification for the third consecutive
year under the prestigious Support Center Practices (SCP) program that
establishes the service quality benchmark for all information technology
service support centers and help desks. SCP certification is an
internationally recognized standard that defines best practices for
delivering world-class technology support. |
KBR new
contract awards:
| · |
KBR
and joint venture partners Snamprogetti of Italy and JGC of Japan have
been awarded a $1.7 billion engineering, procurement, and construction
(EPC) contract for the Chevron Nigeria Ltd./Nigeria National Petroleum
Corporation gas to liquids (GTL) facility. The facility is located
approximately 100 kilometers southeast of Lagos in Escravos, Nigeria. This
award marks KBR’s first GTL EPC contract. The Escravos GTL facility will
provide environmental benefits by converting natural gas to ultra clean
GTL diesel. The facility will produce 34,000 barrels per day of GTL
diesel, naphtha, and liquefied petroleum gas for export.
|
| · |
KBR,
along with joint venture partners JGC of Japan and PT Pertafenikki
Engineering of Indonesia, has been awarded a $1.8 billion engineering,
procurement, and construction contract for the Tangguh LNG Project of BP
and partners in Indonesia. The scope of the project includes the
construction of a two-train LNG processing plant and associated support
facilities. Each train will have a capacity of 3.8 million tonnes per
annum (MTPA). The project is expected to begin producing LNG in
2008. |
| · |
KBR
has been appointed by the United Kingdom Ministry of Defence (MoD) to be
the preferred Physical Integrator for the Future Aircraft Carrier
Programme, under which two new aircraft carriers are to be delivered to
the MoD with target in-service dates of 2012 and 2015. As preferred
Physical Integrator, KBR will be responsible for developing and proposing
the optimum build strategy for approval by the alliance participants,
creating and maintaining the program master schedule, providing support to
the MoD, and negotiating the alliance
contracts. |
| · |
KBR
is one of four contractors awarded a United States Navy Multiple Award
Construction Contract (MACC) by the Southern Division Naval Facilities
Engineering Command to repair northwest Florida Navy facilities damaged by
Hurricane Ivan. KBR was also selected as the contractor for the initial
task order on this project. Under the MACC, KBR and the three other
contractors will compete for each task order on an individual basis, with
the anticipated value of each task order ranging from $3 million to $15
million. The initial task order awarded to KBR is valued at approximately
$3 million and covers work that will be carried out at the Naval Air
Station in Pensacola, Florida. |
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 KBR. 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, risks 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 for the year ended December 31,
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 |
|||||||||
|
March
31 |
December
31 |
|||||||||
|
2005 |
2004 |
2004 |
||||||||
Revenue: |
||||||||||
Production
Optimization |
$ |
900 |
$ |
708 |
$ |
912 |
||||
Fluid
Systems |
631 |
535 |
617 |
|||||||
Drilling
and Formation Evaluation |
489 |
444 |
465 |
|||||||
|
Digital
and Consulting Solutions |
164 |
129 |
176 |
|||||||
|
Total
Energy Services Group |
2,184 |
1,816 |
2,170 |
|||||||
Government
and Infrastructure |
2,091 |
2,868 |
2,295 |
|||||||
|
Energy
and Chemicals |
663 |
835 |
736 |
|||||||
|
Total
KBR |
2,754 |
3,703 |
3,031 |
|||||||
|
Total
revenue |
$ |
4,938 |
$ |
5,519 |
$ |
5,201 |
||||
Operating
income (loss): |
||||||||||
Production
Optimization |
$ |
291 |
$ |
82 |
$ |
208 |
||||
Fluid
Systems |
113 |
60 |
98 |
|||||||
Drilling
and Formation Evaluation |
80 |
43 |
61 |
|||||||
|
Digital
and Consulting Solutions |
29 |
29 |
- |
|||||||
|
Total
Energy Services Group |
513 |
214 |
367 |
|||||||
Government
and Infrastructure |
53 |
62 |
9 |
|||||||
|
Energy
and Chemicals |
52 |
(77 |
) |
(9 |
) | |||||
|
Total
KBR |
105 |
(15 |
) |
- |
||||||
|
General
corporate |
(32 |
) |
(24 |
) |
(21 |
) | ||||
|
Total
operating income |
586 |
175 |
346 |
|||||||
Interest
expense |
(52 |
) |
(56 |
) |
(69 |
) | ||||
Interest
income |
12 |
10 |
14 |
|||||||
Foreign
currency, net |
- |
(3 |
) |
6 |
||||||
|
Other,
net |
(2 |
) |
5 |
- |
||||||
Income
from continuing operations before income taxes |
||||||||||
and
minority interest |
544 |
131 |
297 |
|||||||
Provision
for income taxes |
(169 |
) |
(49 |
) |
(110 |
) | ||||
|
Minority
interest in net income of subsidiaries |
(8 |
) |
(6 |
) |
(6 |
) | ||||
Income
from continuing operations |
367 |
76 |
181 |
|||||||
Loss
from discontinued operations, net |
(2 |
) |
(141 |
) |
(384 |
) | ||||
|
Net income (loss) |
$ |
365 |
$ |
(65 |
) |
$ |
(203 |
) | ||
Basic
income (loss) per share: |
||||||||||
Income
from continuing operations |
$ |
0.73 |
$ |
0.17 |
$ |
0.41 |
||||
Loss
from discontinued operations, net |
- |
(0.32 |
) |
(0.88 |
) | |||||
|
Net income (loss) |
$ |
0.73 |
$ |
(0.15 |
) |
$ |
(0.47 |
) | ||
Diluted
income (loss) per share: |
||||||||||
Income
from continuing operations |
$ |
0.72 |
$ |
0.17 |
$ |
0.40 |
||||
Loss
from discontinued operations, net |
- |
(0.32 |
) |
(0.86 |
) | |||||
|
Net income (loss) |
$ |
0.72 |
$ |
(0.15 |
) |
$ |
(0.46 |
) | ||
Basic
weighted average common shares outstanding |
501 |
436 |
439 |
|||||||
Diluted
weighted average common shares outstanding |
510 |
440 |
444 |
|||||||
See
Footnote Table 1 for a list of significant items included in operating
income.
HALLIBURTON
COMPANY
Condensed
Consolidated Balance Sheets
(Millions
of dollars)
(Unaudited)
|
March
31, |
December
31, |
||||||
|
2005 |
2004 |
||||||
|
Assets |
|||||||
Current
assets: |
|||||||
Cash
and marketable securities |
$ |
1,812 |
$ |
2,808 |
|||
Receivables,
net |
4,778 |
4,685 |
|||||
Insurance
for asbestos- and silica-related liabilities |
96 |
1,066 |
|||||
Inventories,
net |
880 |
791 |
|||||
|
Other
current assets |
642 |
680 |
|||||
Total
current assets |
8,208 |
10,030 |
|||||
Property,
plant, and equipment, net |
2,556 |
2,553 |
|||||
Insurance
for asbestos- and silica-related liabilities |
297 |
350 |
|||||
|
Other
assets |
2,745 |
2,931 |
|||||
|
Total
assets |
$ |
13,806 |
$ |
15,864 |
|||
|
Liabilities
and Shareholders’ Equity | |||||||
Current
liabilities: |
|||||||
Asbestos-
and silica-related liabilities |
$ |
- |
$ |
2,408 |
|||
Accounts
payable |
2,357 |
2,339 |
|||||
Current
maturities of long-term debt |
862 |
347 |
|||||
|
Other
current liabilities |
1,960 |
2,038 |
|||||
Total
current liabilities |
5,179 |
7,132 |
|||||
Long-term
debt |
3,109 |
3,593 |
|||||
Asbestos-
and silica-related liabilities |
- |
37 |
|||||
|
Other
liabilities |
1,066 |
1,062 |
|||||
|
Total
liabilities |
9,354 |
11,824 |
|||||
Minority
interest in consolidated subsidiaries |
114 |
108 |
|||||
|
Shareholders’
equity |
4,338 |
3,932 |
|||||
|
Total
liabilities and shareholders’ equity |
$ |
13,806 |
$ |
15,864 |
|||
HALLIBURTON
COMPANY
Selected
Cash Flow Information
(Millions
of dollars)
(Unaudited)
|
Three
Months Ended |
Three
Months Ended |
|||||||||
|
March
31 |
December
31 |
|||||||||
|
2005 |
2004 |
2004 |
||||||||
Capital
expenditures: |
||||||||||
Energy
Services Group |
$ |
131 |
$ |
103 |
$ |
142 |
||||
|
KBR |
11 |
27 |
11 |
|||||||
|
Total
capital expenditures |
$ |
142 |
$ |
130 |
$ |
153 |
||||
Depreciation,
depletion, and amortization: |
||||||||||
Energy
Services Group |
$ |
110 |
$ |
119 |
$ |
121 |
||||
|
KBR |
15 |
13 |
14 |
|||||||
|
Total
depreciation, depletion, and amortization |
$ |
125 |
$ |
132 |
$ |
135 |
||||
HALLIBURTON
COMPANY
Revenue
and Operating Income Comparison
By
Geographic Region - Energy Services Group Only
(Millions
of dollars)
(Unaudited)
|
Three
Months Ended |
Three
Months Ended |
|||||||||
|
March
31 |
December
31 |
|||||||||
|
2005 |
2004 |
2004 |
||||||||
Revenue: |
||||||||||
North
America |
$ |
1,059 |
$ |
814 |
$ |
980 |
||||
Latin
America |
314 |
229 |
301 |
|||||||
Europe/Africa |
410 |
372 |
454 |
|||||||
|
Middle
East/Asia |
401 |
401 |
435 |
|||||||
|
Total
revenue |
$ |
2,184 |
$ |
1,816 |
$ |
2,170 |
||||
Operating
income: |
||||||||||
North
America |
$ |
353 |
$ |
118 |
$ |
224 |
||||
Latin
America |
46 |
30 |
12 |
|||||||
Europe/Africa |
67 |
19 |
62 |
|||||||
|
Middle
East/Asia |
47 |
47 |
69 |
|||||||
|
Total
operating income |
$ |
513 |
$ |
214 |
$ |
367 |
||||
See
Footnote Table 2 for a list of significant items included in operating
income.
FOOTNOTE
TABLE 1
HALLIBURTON
COMPANY
Items
included in Operating Income by Operating Segment
(Millions
of dollars except per share data)
(Unaudited)
|
Three
Months Ended |
Three
Months Ended |
Three
Months Ended |
|||||||||||||||||
|
March
31, 2005 |
March
31, 2004 |
December
31, 2004 |
|||||||||||||||||
|
Operating |
After
Tax |
Operating |
After
Tax |
Operating |
After
Tax |
||||||||||||||
|
Income |
per
Share |
Income |
per
Share |
Income |
per
Share |
||||||||||||||
Production
Optimization: |
|||||||||||||||||||
Subsea
7, Inc. gain |
|||||||||||||||||||
on
sale (a) |
$ |
110 |
$ |
0.14 |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
|||||||
Surface
well testing |
|||||||||||||||||||
gain
on sale |
- |
- |
- |
- |
14 |
0.02 |
|||||||||||||
Digital
and Consulting |
|||||||||||||||||||
Solutions: |
|||||||||||||||||||
Integrated
solutions |
|||||||||||||||||||
projects
in Mexico |
(8 |
) |
(0.01 |
) |
- |
- |
(33 |
) |
(0.05 |
) | |||||||||
Intellectual
property |
|||||||||||||||||||
settlement |
- |
- |
- |
- |
(11 |
) |
(0.01 |
) | |||||||||||
Anglo-Dutch
lawsuit |
- |
- |
13 |
0.02 |
- |
- |
|||||||||||||
Government
and |
|||||||||||||||||||
Infrastructure: |
|||||||||||||||||||
Restructuring
charge |
(1 |
) |
- |
- |
- |
(8 |
) |
(0.01 |
) | ||||||||||
Energy
and Chemicals: |
|||||||||||||||||||
Restructuring
charge |
(1 |
) |
- |
- |
- |
(14 |
) |
(0.02 |
) | ||||||||||
Barracuda-Caratinga |
|||||||||||||||||||
project
loss |
- |
- |
(97 |
) |
(0.14 |
) |
- |
- |
|||||||||||
|
(a)
|
The
three months ended March 31, 2004 included a $17 million equity loss, and
the three months ended December 31, 2004 included $9 million in equity
income contributed from Subsea 7, Inc. |
FOOTNOTE
TABLE 2
HALLIBURTON
COMPANY
Items
included in Operating Income
By
Geographic Region - Energy Services Group Only
(Millions
of dollars except per share data)
(Unaudited)
|
Three
Months Ended |
Three
Months Ended |
Three
Months Ended |
|||||||||||||||||
|
March
31, 2005 |
March
31, 2004 |
December
31, 2004 |
|||||||||||||||||
|
Operating |
After
Tax |
Operating |
After
Tax |
Operating |
After
Tax |
||||||||||||||
|
Income |
per
Share |
Income |
per
Share |
Income |
per
Share |
||||||||||||||
North
America: |
|||||||||||||||||||
Subsea
7, Inc. gain |
|||||||||||||||||||
on
sale |
$ |
107 |
$ |
0.14 |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
|||||||
Surface
well testing |
|||||||||||||||||||
gain
on sale |
- |
- |
- |
- |
3 |
- |
|||||||||||||
Anglo-Dutch
lawsuit |
- |
- |
13 |
0.02 |
- |
- |
|||||||||||||
Latin
America: |
|||||||||||||||||||
Integrated
solutions |
|||||||||||||||||||
projects
in Mexico |
(8 |
) |
(0.01 |
) |
- |
- |
(33 |
) |
(0.05 |
) | |||||||||
Europe/Africa: |
|||||||||||||||||||
Subsea
7, Inc. gain |
|||||||||||||||||||
on
sale |
3 |
- |
- |
- |
- |
- |
|||||||||||||
Surface
well testing |
|||||||||||||||||||
gain
on sale |
- |
- |
- |
- |
4 |
0.01 |
|||||||||||||
Intellectual
property |
|||||||||||||||||||
settlement |
- |
- |
- |
- |
(11 |
) |
(0.01 |
) | |||||||||||
Middle
East/Asia: |
|||||||||||||||||||
Surface
well testing |
|||||||||||||||||||
gain
on sale |
- |
- |
- |
- |
7 |
0.01 |
|||||||||||||
FOOTNOTE
TABLE 3
HALLIBURTON
COMPANY
Reconciliation
of As Reported Segment Results to Adjusted Segment Results
Energy
Services Group Only
(Millions
of dollars except operating margin percentage)
(Unaudited)
|
Drilling
and |
Digital
and |
Total
Energy |
||||||||||||||
|
Production |
Fluid |
Formation |
Consulting |
Services
|
||||||||||||
|
Optimization |
Systems |
Evaluation |
Solutions |
Group |
||||||||||||
Three
Months Ended |
||||||||||||||||
March
31, 2005 |
||||||||||||||||
Revenue |
$ |
900 |
$ |
631 |
$ |
489 |
$ |
164 |
$ |
2,184 |
||||||
As
reported operating income |
$ |
291 |
$ |
113 |
$ |
80 |
$ |
29 |
$ |
513 |
||||||
Subsea
7, Inc. gain on |
||||||||||||||||
|
sale
(a) |
(110 |
) |
- |
- |
- |
(110 |
) | |||||||||
|
Adjusted
operating income |
$ |
181 |
$ |
113 |
$ |
80 |
$ |
29 |
$ |
403 |
||||||
As
reported operating margin (b) |
32.3 |
% |
17.9 |
% |
16.4 |
% |
17.7 |
% |
23.5 |
% | ||||||
|
Adjusted
operating margin (b) |
20.1 |
% |
17.9 |
% |
16.4 |
% |
17.7 |
% |
18.5 |
% | ||||||
Three
Months Ended |
||||||||||||||||
December
31, 2004 |
||||||||||||||||
Revenue |
$ |
912 |
$ |
617 |
$ |
465 |
$ |
176 |
$ |
2,170 |
||||||
As
reported operating income |
$ |
208 |
$ |
98 |
$ |
61 |
$ |
- |
$ |
367 |
||||||
Surface
well testing gain on |
||||||||||||||||
|
sale
(a) |
(14 |
) |
- |
- |
- |
(14 |
) | |||||||||
|
Adjusted
operating income |
$ |
194 |
$ |
98 |
$ |
61 |
$ |
- |
$ |
353 |
||||||
As
reported operating margin (b) |
22.8 |
% |
15.9 |
% |
13.1 |
% |
NM
|
16.9 |
% | |||||||
|
Adjusted
operating margin (b) |
21.3 |
% |
15.9 |
% |
13.1 |
% |
NM |
16.3 |
% | |||||||
Three
Months Ended |
||||||||||||||||
March
31, 2004 |
||||||||||||||||
|
As
reported operating income (c) |
$ |
82 |
$ |
60 |
$ |
43 |
$ |
29 |
$ |
214 |
NM - Not
Meaningful
| (a) |
The
Company is reporting strong operating income from the Energy Services
Group, particularly the Production Optimization segment. Management
believes it is important to point out to investors that a portion of
operating income and operating margin growth is attributable to the gain
on the sale of the equity interest in the Subsea 7, Inc. joint venture in
the first quarter of 2005 and the gain on the sale of surface well testing
operations in the fourth quarter of 2004, because investors have indicated
to management their desire to understand the current drivers and future
trends of the operating margins. The adjustment removes the effect of the
gain on the sale of the 50% interest in Subsea 7, Inc. and the gain on the
sale of surface well testing operations. |
| (b) |
As
reported operating margin is calculated as: “As reported operating income”
divided by “Revenue.” Adjusted operating margin is calculated as:
“Adjusted operating income” divided by
“Revenue.” |
| (c) |
No
reconciling items were noted for this
quarter. |
###
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 22, 2005 |
By: |
/s/ Margaret E. Carriere |
|
Margaret
E. Carriere | ||
|
Vice
President and Secretary |