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): July 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
July
21, 2005 registrant issued a press release entitled “Halliburton Announces
Second Quarter Results.”
The
text
of the Press Release is as follows:
HALLIBURTON
ANNOUNCES SECOND QUARTER RESULTS
76
cents earnings per diluted share
Halliburton
achieves record operating income of $607 million
HOUSTON,
Texas
-
Halliburton (NYSE:HAL) announced today that second quarter of 2005 income
from
continuing operations was $391 million or $0.76 per diluted share. This compares
to a loss from continuing operations of $58 million or $0.13 per diluted
share
in the second quarter of 2004, which included a $200 million after-tax loss
from
the Barracuda-Caratinga offshore engineering, procurement, installation,
and
commissioning (EPIC) project.
Consolidated
revenue in the second quarter of 2005 was $5.2 billion, up 4% from the second
quarter of 2004. This increase was largely attributable to higher activity
in
the Energy Services Group (ESG), approximately half of which was derived
from
international growth. This was partially offset by lower revenue in KBR on
government services projects in the Middle East as well as a reduction in
work
on offshore EPIC and other oil and gas projects nearing completion in the
Energy
and Chemicals segment.
Consolidated
operating income was $607 million in the second quarter of 2005 compared
to a
loss of $26 million in the second quarter of 2004. ESG experienced strong
performance reflecting increased customer exploration and production spending,
higher utilization of assets, and increased pricing. KBR received favorable
award fees from its government services work in the Middle East and experienced
improved project performance in the Energy and Chemicals segment. The second
quarter of 2004 operating loss included a $310 million pretax charge on the
Barracuda-Caratinga project.
“We
are
extremely pleased with our second quarter performance, both for ESG and KBR,”
said Dave Lesar, chairman, president, and chief executive officer of
Halliburton. “ESG posted a 44% incremental margin over the second quarter of
2004 on strong international growth. KBR continues to improve earnings, build
backlog, and make progress in resolving government contract
issues.”
-more-
Halliburton/Page
2
2005
Second Quarter Segment Results
Energy
Services Group
ESG
posted second quarter of 2005 revenue of $2.5 billion, a $567 million or
30%
increase over the second quarter of 2004, and operating income of $522 million,
up $251 million or 93% from the same period in the prior year.
Production
Optimization operating income for the second quarter of 2005 was $245 million,
an increase of $124 million or 102% over the second quarter of 2004. Production
enhancement services operating income increased 110%, primarily on increased
demand for well stimulation services for natural gas applications, increased
utilization of crews and assets, and improved pricing in the United States.
West
Africa and the North Sea also posted strong results. Completion tools operating
income increased 49%, and operating margins increased by over four percentage
points due to a change in mix to higher margin product sales and manufacturing
efficiencies.
Fluid
Systems operating income for the second quarter of 2005 was $135 million,
a $58
million or 75% increase over the second quarter of 2004. Cementing services
operating income increased 74% due to higher global drilling activity and
improved pricing and asset utilization in the United States. Baroid Fluid
Services operating income increased 78% on improved performance in Africa,
increased deepwater work in the Gulf of Mexico, and strong growth in higher
margin completion fluids and surface solutions product lines.
Drilling
and Formation Evaluation operating income was $126 million, a $67 million
or
114% increase over the prior year second quarter. All regions showed earnings
growth, with international operations driving 76% of the increase. Sperry
Drilling Services operating income increased 116%, benefiting from improved
operating results in West Africa and increased activity in the United States
and
the North Sea. Logging services operating income increased 83% due to
improvement in the United States and West Africa and strong growth in the
Middle
East. Security DBS drill bits operating income tripled reflecting efficiencies
related to facility consolidations, higher activity, and the continued strength
of fixed cutter bit volumes.
Digital
and Consulting Solutions second quarter of 2005 operating income was $16
million, a $2 million or 14% increase as compared to the prior year period.
Landmark’s operating income increased by $14 million, primarily driven by higher
revenue across all regions. The increase was offset by a $15 million charge
for
two integrated solutions projects in southern Mexico.
-more-
Halliburton/Page
3
KBR
KBR
revenue for the second quarter of 2005 was $2.7 billion, a 12% decrease compared
to the second quarter of 2004. Operating income for the second quarter of
2005
was $122 million compared to an operating loss of $277 million in the second
quarter of 2004.
Government
and Infrastructure (G&I) operating income for the second quarter of 2005 was
$73 million compared to $19 million in the second quarter of 2004, a 284%
increase. The increase primarily resulted from positive developments related
to
LogCAP award fees. G&I continues to receive favorable job performance
ratings for its work supporting the troops in Iraq. As a result, G&I
recognized $29 million of income for recent awards on completed work, and
increased the award fee accrual rate for its ongoing work under the LogCAP
contract from 50% to 72% during the quarter. G&I also realized improved
performance at the DML shipyard, partially offset by the completion of the
RIO
contract in Iraq.
Energy
and Chemicals (E&C) operating income totaled $49 million in the second
quarter of 2005 compared to a $296 million loss in the second quarter of
2004.
Contributing to this increase was strong performance in engineering and project
management projects in Angola and the Caspian and income from recently awarded
liquefied natural gas (LNG) and gas-to-liquids (GTL) projects. Included in
the
second quarter of 2004 was a pretax loss of $310 million on the
Barracuda-Caratinga project in Brazil.
Halliburton’s
Iraq-related work contributed approximately $1.4 billion in revenue in the
second quarter of 2005 and $48 million of operating income, or a 3.4%
margin.
Technology
and Significant Achievements
Halliburton
had a number of advances in technology and new contract awards.
Energy
Services Group new technologies and contract awards:
|
·
|
ESG
won four Hart's
E&P
meritorious engineering achievement awards for 2005. William Pike,
Hart's
editor-in-chief, presented the awards at the Offshore Technology
Conference in Houston in May. The four winning Halliburton technologies
are: the Well Seismic Fusion™ technology for exploration; the FasTest™
system for subsurface characterization and analysis; BOREMAX™
high-performance water-based drilling fluid; and DeepReachSM
coiled tubing intervention service.
|
-more-
Halliburton/Page
4
|
·
|
Halliburton
and Intel have announced a collaborative program to identify and
promote
innovative, industry-leading solutions developed by Halliburton
that
benefit from the high performance availability and scalability
of Intel's
advanced computing technology. From wireless fracturing spreads
and
electronic field tickets to sophisticated knowledge management
solutions
and real-time operations, Intel is helping Halliburton to Unleash
the
Energy™ in the oil and gas industry today.
|
|
·
|
Halliburton's
Production Optimization segment developed the SandTrapSM
service using a formation stabilization system to assist operators
with
the economical recovery of bypassed hydrocarbons in friable or
weakly
consolidated reservoir sands. To date, Halliburton's SandTrapSM
service has been successfully deployed in reservoirs prone to sand
production problems in the Gulf of Mexico, California, Indonesia,
and
Argentina.
|
|
·
|
Halliburton's
Production Optimization segment has successfully installed the
first
PoroFlex® expandable completion system on the Arabian Peninsula for Saudi
Aramco. The sand control technique of expanding screen in an open
hole
provides a solution for slim-hole side track re-completions that
maximize
the reservoir exposure while maintaining a sufficiently large internal
diameter to allow the desired production rates. In addition, maintaining
full bore access facilitates remedial operation during the life
of the
well.
|
|
·
|
Halliburton’s
Production Optimization segment was awarded a contract to provide
its
EZ-Gauge™ technology on projects in Vietnam for Japan Vietnam Petroleum
Company Limited (JVPC), a joint venture company of Nippon Oil
Exploration
Limited (a subsidiary of Nippon Oil Group), ConocoPhillips, and
PetroVietnam Exploration and Production Company (a subsidiary
of
PetroVietnam). JVPC selected the EZ-Gauge system because it provides
a
cost-effective, accurate pressure data collection system that
is free of
downhole electronics. Reliability and longevity of the system
is
significantly greater than other monitoring
technologies.
|
-more-
Halliburton/Page
5
KBR
new
contract awards:
|
·
|
KBR
was selected to continue its services as the premier logistics
support
provider to United States forces deployed in the Balkans region
and to
provide similar contingency operations
support through the United States Army Europe’s (USAREUR) area of
responsibility. The United States Army Corps of Engineers' Transatlantic
Programs Center announced that it awarded the USAREUR Support Contract
to
KBR for a period of up to five years. The competitively awarded
indefinite
delivery/indefinite quantity contract will replace the Balkans
Support
Contract that was awarded to KBR in 1999. The contract has a two-month
phase-in period, a one-year base performance period, and four additional
options that can be awarded at the government's discretion. The
Army may
order up to $1.25 billion in services if required, which is the
contract's
maximum capacity for the five-year
period.
|
|
·
|
KBR
and its joint venture team, including JGC Corporation of Japan
and
Technip, were awarded a Front End Engineering and Design (FEED)
contract
for the Angola LNG Project, to be constructed near Soyo in Northern
Angola, approximately 300 kilometers north of Luanda. The five
million
tonnes per annum LNG facility will be operated by a new company
to be
formed by Sonangol (the Angola national oil company), Chevron,
BP,
ExxonMobil, and Total.
|
|
·
|
KBR
and its joint venture partners, including
JGC Corporation, Hatch and Clough,
have been awarded a FEED contract and option for an Engineering,
Procurement, and Construction Management (EPCM) contract for the
Greater
Gorgon Downstream LNG Project. The downstream project will include
two LNG
processing trains, each with a capacity of five million tonnes
per annum,
to be located on Barrow Island, Western Australia. The FEED contract
is
expected to be followed by the EPCM contract when the project receives
final investment decision approval, which is expected in
mid-2006.
|
|
·
|
KBR
has been awarded a contract for a Licensor Engineering Package
for
conversion of BP West Coast Products, LLC's Carson, California
refinery's
MTBE unit to the production of iso-octene. Iso-octene is subsequently
converted to iso-octane gasoline blend stock. NExOCTANE™ technology was
developed by Fortum Oil Oy in Finland and is available to United
States
refiners under direct license from
KBR.
|
-more-
Halliburton/Page
6
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, the risks of judgments against the company and its
subsidiaries in litigation and proceedings, including contract disputes,
intellectual property rights, environmental matters, legislation, changes
in
government regulations and regulatory requirements, particularly those related
to radioactive sources, explosives and chemicals; risks related to income
taxes;
political risks, including the risks of unsettled political conditions, war
and
the effects of terrorism, foreign operations and foreign exchange rates and
controls; 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. Halliburton's Form 10-K for the year ended December
31,
2004, Form 10-Q for the period ended March 31, 2005, recent Current Reports
on
Forms 8-K, and other Securities and Exchange Commission filings discuss some
of
the important risk factors identified that may affect the business, results
of
operations and financial condition. Halliburton undertakes no obligation
to
revise or update publicly any forward-looking statements for any
reason.
-more-
HALLIBURTON
COMPANY
Condensed
Consolidated Statements of Operations
(Millions
of dollars and shares except per share data)
(Unaudited)
|
Three
Months
Ended
June
30
|
Three
Months
Ended
March
31
|
|||||||||
|
2005
|
2004
|
2005
|
||||||||
|
Revenue:
|
||||||||||
|
Production
Optimization
|
$
|
1,046
|
$
|
797
|
$
|
900
|
||||
|
Fluid
Systems
|
699
|
554
|
631
|
|||||||
|
Drilling
and Formation Evaluation
|
566
|
423
|
489
|
|||||||
|
Digital
and Consulting Solutions
|
160
|
130
|
164
|
|||||||
|
Total
Energy Services Group
|
2,471
|
1,904
|
2,184
|
|||||||
|
Government
and Infrastructure
|
2,039
|
2,237
|
2,091
|
|||||||
|
Energy
and Chemicals
|
653
|
815
|
663
|
|||||||
|
Total
KBR
|
2,692
|
3,052
|
2,754
|
|||||||
|
Total
revenue
|
$
|
5,163
|
$
|
4,956
|
$
|
4,938
|
||||
|
Operating
income (loss):
|
||||||||||
|
Production
Optimization
|
$
|
245
|
$
|
121
|
$
|
291
|
||||
|
Fluid
Systems
|
135
|
77
|
113
|
|||||||
|
Drilling
and Formation Evaluation
|
126
|
59
|
80
|
|||||||
|
Digital
and Consulting Solutions
|
16
|
14
|
29
|
|||||||
|
Total
Energy Services Group
|
522
|
271
|
513
|
|||||||
|
Government
and Infrastructure
|
73
|
19
|
53
|
|||||||
|
Energy
and Chemicals
|
49
|
(296
|
)
|
52
|
||||||
|
Total
KBR
|
122
|
(277
|
)
|
105
|
||||||
|
General
corporate
|
(37
|
)
|
(20
|
)
|
(32
|
)
|
||||
|
Total
operating income (loss)
|
607
|
(26
|
)
|
586
|
||||||
|
Interest
expense
|
(51
|
)
|
(53
|
)
|
(52
|
)
|
||||
|
Interest
income
|
9
|
7
|
12
|
|||||||
|
Foreign
currency, net
|
(7
|
)
|
(7
|
)
|
-
|
|||||
|
Other,
net
|
(3
|
)
|
(1
|
)
|
(2
|
)
|
||||
|
Income
(loss) from continuing operations before income taxes and minority
interest
|
555
|
(80
|
)
|
544
|
||||||
|
(Provision)
benefit for income taxes
|
(154
|
)
|
29
|
(169
|
)
|
|||||
|
Minority
interest in net income of subsidiaries
|
(10
|
)
|
(7
|
)
|
(8
|
)
|
||||
|
Income
(loss) from continuing operations
|
391
|
(58
|
)
|
367
|
||||||
|
Income
(loss) from discontinued operations, net
|
1
|
(609
|
)
|
(2
|
)
|
|||||
|
Net
income (loss)
|
$
|
392
|
$
|
(667
|
)
|
$
|
365
|
|||
|
Basic
income (loss) per share:
|
||||||||||
|
Income
(loss) from continuing operations
|
$
|
0.78
|
$
|
(0.13
|
)
|
$
|
0.73
|
|||
|
Income
(loss) from discontinued operations, net
|
-
|
(1.39
|
)
|
-
|
||||||
|
Net
income (loss)
|
$
|
0.78
|
$
|
(1.52
|
)
|
$
|
0.73
|
|||
|
Diluted
income (loss) per share:
|
||||||||||
|
Income
(loss) from continuing operations
|
$
|
0.76
|
$
|
(0.13
|
)
|
$
|
0.72
|
|||
|
Income
(loss) from discontinued operations, net
|
-
|
(1.39
|
)
|
-
|
||||||
|
Net
income (loss)
|
$
|
0.76
|
$
|
(1.52
|
)
|
$
|
0.72
|
|||
|
Basic
weighted average common shares outstanding
|
503
|
437
|
501
|
|||||||
|
Diluted
weighted average common shares outstanding
|
513
|
437
|
510
|
|||||||
See
Footnote Table 1 for a list of significant items included in operating
income.
-more-
HALLIBURTON
COMPANY
Condensed
Consolidated Statements of Operations
(Millions
of dollars and shares except per share data)
(Unaudited)
|
Six
Months Ended
|
|||||||
|
June
30
|
|||||||
|
2005
|
2004
|
||||||
|
Revenue:
|
|||||||
|
Production
Optimization
|
$
|
1,946
|
$
|
1,505
|
|||
|
Fluid
Systems
|
1,330
|
1,089
|
|||||
|
Drilling
and Formation Evaluation
|
1,055
|
867
|
|||||
|
Digital
and Consulting Solutions
|
324
|
259
|
|||||
|
Total
Energy Services Group
|
4,655
|
3,720
|
|||||
|
Government
and Infrastructure
|
4,130
|
5,105
|
|||||
|
Energy
and Chemicals
|
1,316
|
1,650
|
|||||
|
Total
KBR
|
5,446
|
6,755
|
|||||
|
Total
revenue
|
$
|
10,101
|
$
|
10,475
|
|||
|
Operating
income (loss):
|
|||||||
|
Production
Optimization
|
$
|
536
|
$
|
203
|
|||
|
Fluid
Systems
|
248
|
137
|
|||||
|
Drilling
and Formation Evaluation
|
206
|
102
|
|||||
|
Digital
and Consulting Solutions
|
45
|
43
|
|||||
|
Total
Energy Services Group
|
1,035
|
485
|
|||||
|
Government
and Infrastructure
|
126
|
81
|
|||||
|
Energy
and Chemicals
|
101
|
(373
|
)
|
||||
|
Total
KBR
|
227
|
(292
|
)
|
||||
|
General
corporate
|
(69
|
)
|
(44
|
)
|
|||
|
Total
operating income
|
1,193
|
149
|
|||||
|
Interest
expense
|
(103
|
)
|
(109
|
)
|
|||
|
Interest
income
|
21
|
17
|
|||||
|
Foreign
currency, net
|
(7
|
)
|
(10
|
)
|
|||
|
Other,
net
|
(5
|
)
|
4
|
||||
|
Income
from continuing operations before income taxes and minority interest
|
1,099
|
51
|
|||||
|
Provision
for income taxes
|
(323
|
)
|
(20
|
)
|
|||
|
Minority
interest in net income of subsidiaries
|
(18
|
)
|
(13
|
)
|
|||
|
Income
from continuing operations
|
758
|
18
|
|||||
|
Loss
from discontinued operations, net
|
(1
|
)
|
(750
|
)
|
|||
|
Net
income (loss)
|
$
|
757
|
$
|
(732
|
)
|
||
|
Basic
income (loss) per share:
|
|||||||
|
Income
from continuing operations
|
$
|
1.51
|
$
|
0.04
|
|||
|
Loss
from discontinued operations, net
|
-
|
(1.71
|
)
|
||||
|
Net
income (loss)
|
$
|
1.51
|
$
|
(1.67
|
)
|
||
|
Diluted
income (loss) per share:
|
|||||||
|
Income
from continuing operations
|
$
|
1.48
|
$
|
0.04
|
|||
|
Loss
from discontinued operations, net
|
-
|
(1.71
|
)
|
||||
|
Net
income (loss)
|
$
|
1.48
|
$
|
(1.67
|
)
|
||
|
Basic
weighted average common shares outstanding
|
502
|
437
|
|||||
|
Diluted
weighted average common shares outstanding
|
512
|
440
|
|||||
See
Footnote Table 1 for a list of significant items included in operating
income.
-more-
HALLIBURTON
COMPANY
Condensed
Consolidated Balance Sheets
(Millions
of dollars)
(Unaudited)
|
June
30
2005
|
March
31
2005
|
December
31
2004
|
||||||||
|
Assets
|
||||||||||
|
Current
assets:
|
||||||||||
|
Cash
and marketable securities
|
$
|
1,575
|
$
|
1,812
|
$
|
2,808
|
||||
|
Receivables,
net
|
4,280
|
4,778
|
4,685
|
|||||||
|
Inventories,
net
|
931
|
880
|
791
|
|||||||
|
Insurance
for asbestos- and silica-related liabilities
|
91
|
96
|
1,066
|
|||||||
|
Other
current assets
|
1,090
|
642
|
680
|
|||||||
|
Total
current assets
|
7,967
|
8,208
|
10,030
|
|||||||
|
Property,
plant, and equipment, net
|
2,550
|
2,556
|
2,553
|
|||||||
|
Insurance
for asbestos- and silica-related liabilities
|
301
|
297
|
350
|
|||||||
|
Other
assets
|
2,398
|
2,745
|
2,931
|
|||||||
|
Total
assets
|
$
|
13,216
|
$
|
13,806
|
$
|
15,864
|
||||
|
Liabilities
and Shareholders’ Equity
|
||||||||||
|
Current
liabilities:
|
||||||||||
|
Accounts
payable
|
$
|
1,871
|
$
|
2,357
|
$
|
2,339
|
||||
|
Current
maturities of long-term debt
|
374
|
862
|
347
|
|||||||
|
Asbestos-
and silica-related liabilities
|
-
|
-
|
2,408
|
|||||||
|
Other
current liabilities
|
1,927
|
1,960
|
2,038
|
|||||||
|
Total
current liabilities
|
4,172
|
5,179
|
7,132
|
|||||||
|
Long-term
debt
|
3,103
|
3,109
|
3,593
|
|||||||
|
Asbestos-
and silica-related liabilities
|
-
|
-
|
37
|
|||||||
|
Other
liabilities
|
1,133
|
1,066
|
1,062
|
|||||||
|
Total
liabilities
|
8,408
|
9,354
|
11,824
|
|||||||
|
Minority
interest in consolidated subsidiaries
|
113
|
114
|
108
|
|||||||
|
Shareholders’
equity
|
4,695
|
4,338
|
3,932
|
|||||||
|
Total
liabilities and shareholders’ equity
|
$
|
13,216
|
$
|
13,806
|
$
|
15,864
|
||||
Note
-
Certain prior period amounts have been reclassified to be consistent with
the
current presentation.
HALLIBURTON
COMPANY
Selected
Cash Flow Information
(Millions
of dollars)
(Unaudited)
|
Three
Months Ended
June
30
|
Six
Months Ended
June
30
|
||||||||||||
|
2005
|
2004
|
2005
|
2004
|
||||||||||
|
Capital
expenditures:
|
|||||||||||||
|
Energy
Services Group
|
$
|
129
|
$
|
131
|
$
|
260
|
$
|
234
|
|||||
|
KBR
|
18
|
23
|
29
|
50
|
|||||||||
|
Total
capital expenditures
|
$
|
147
|
$
|
154
|
$
|
289
|
$
|
284
|
|||||
|
Depreciation,
depletion, and amortization:
|
|||||||||||||
|
Energy
Services Group
|
$
|
112
|
$
|
111
|
$
|
222
|
$
|
230
|
|||||
|
KBR
|
15
|
13
|
30
|
26
|
|||||||||
|
Total
depreciation, depletion, and amortization
|
$
|
127
|
$
|
124
|
$
|
252
|
$
|
256
|
|||||
-more-
HALLIBURTON
COMPANY
Revenue
and Operating Income Comparison
By
Geographic Region - Energy Services Group Only
(Millions
of dollars)
(Unaudited)
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||
|
2005
|
March
31
|
June
30
|
June
30
|
|||||||
|
Revenue:
|
||||||||||
|
North
America
|
$
|
1,059
|
$
|
1,137
|
$
|
2,196
|
||||
|
Latin
America
|
314
|
333
|
647
|
|||||||
|
Europe/Africa/CIS
|
463
|
565
|
1,028
|
|||||||
|
Middle
East/Asia
|
348
|
436
|
784
|
|||||||
|
Total
revenue
|
$
|
2,184
|
$
|
2,471
|
$
|
4,655
|
||||
|
Operating
Income:
|
||||||||||
|
North
America
|
$
|
353
|
$
|
289
|
$
|
642
|
||||
|
Latin
America
|
46
|
39
|
85
|
|||||||
|
Europe/Africa/CIS
|
62
|
105
|
167
|
|||||||
|
Middle
East/Asia
|
52
|
89
|
141
|
|||||||
|
Total
operating income
|
$
|
513
|
$
|
522
|
$
|
1,035
|
||||
|
Three
Months Ended
|
Twelve
Months Ended
|
|||||||||||||||
|
2004
|
March
31
|
June
30
|
September
30
|
December
31
|
December
31
|
|||||||||||
|
Revenue:
|
||||||||||||||||
|
North
America
|
$
|
814
|
$
|
846
|
$
|
969
|
$
|
980
|
$
|
3,609
|
||||||
|
Latin
America
|
229
|
257
|
295
|
301
|
1,082
|
|||||||||||
|
Europe/Africa/CIS
|
433
|
464
|
510
|
517
|
1,924
|
|||||||||||
|
Middle
East/Asia
|
340
|
337
|
334
|
372
|
1,383
|
|||||||||||
|
Total
revenue
|
$
|
1,816
|
$
|
1,904
|
$
|
2,108
|
$
|
2,170
|
$
|
7,998
|
||||||
|
|
||||||||||||||||
|
Operating
income:
|
||||||||||||||||
|
North
America
|
$
|
118
|
$
|
152
|
$
|
228
|
$
|
224
|
$
|
722
|
||||||
|
Latin
America
|
30
|
36
|
52
|
12
|
130
|
|||||||||||
|
Europe/Africa/CIS
|
27
|
35
|
88
|
64
|
214
|
|||||||||||
|
Middle
East/Asia
|
39
|
48
|
46
|
67
|
200
|
|||||||||||
|
Total
operating income
|
$
|
214
|
$
|
271
|
$
|
414
|
$
|
367
|
$
|
1,266
|
||||||
|
|
||||||||||||||||
|
2003
|
||||||||||||||||
|
Revenue:
|
||||||||||||||||
|
North
America
|
$
|
745
|
$
|
762
|
$
|
791
|
$
|
787
|
$
|
3,085
|
||||||
|
Latin
America
|
182
|
226
|
244
|
255
|
907
|
|||||||||||
|
Europe/Africa/CIS
|
395
|
467
|
415
|
411
|
1,688
|
|||||||||||
|
Middle
East/Asia
|
289
|
325
|
355
|
346
|
1,315
|
|||||||||||
|
Total
revenue
|
$
|
1,611
|
$
|
1,780
|
$
|
1,805
|
$
|
1,799
|
$
|
6,995
|
||||||
|
Operating
income:
|
||||||||||||||||
|
North
America
|
$
|
84
|
$
|
91
|
$
|
31
|
$
|
100
|
$
|
306
|
||||||
|
Latin
America
|
23
|
43
|
51
|
48
|
165
|
|||||||||||
|
Europe/Africa/CIS
|
29
|
54
|
30
|
39
|
152
|
|||||||||||
|
Middle
East/Asia
|
44
|
47
|
58
|
54
|
203
|
|||||||||||
|
Total
operating income
|
$
|
180
|
$
|
235
|
$
|
170
|
$
|
241
|
$
|
826
|
||||||
Note
-
Region results for Commonwealth of Independent States (CIS) have been
reclassified from Middle East/Asia into Europe/Africa/CIS. All prior period
amounts have been restated.
See
Footnote Table 2 for a list of significant items included in operating
income
for the three months ended June 30, 2005 and 2004 and March 31, 2005, and
for
the six months ended June 30, 2005 and 2004.
-more-
HALLIBURTON
COMPANY
Backlog
Information
(Millions
of dollars)
(Unaudited)
|
June
30
2005
|
March
31
2005
|
December
31
2004
|
||||||||
|
Firm
orders:
|
||||||||||
|
Government
& Infrastructure
|
$
|
3,556
|
$
|
4,224
|
$
|
3,968
|
||||
|
Energy
& Chemicals
|
6,182
|
(a)
|
4,653
|
3,643
|
||||||
|
Energy
Services Group segments
|
179
|
65
|
64
|
|||||||
|
Total
|
$
|
9,917
|
$
|
8,942
|
$
|
7,675
|
||||
|
Government
orders firm but not yet funded, letters of intent, and contracts
awarded but not signed:
|
||||||||||
|
Government
& Infrastructure
|
$
|
4,842
|
(b)
|
$
|
554
|
$
|
816
|
|||
|
Total
backlog
|
$
|
14,759
|
$
|
9,496
|
$
|
8,491
|
||||
|
(a)
|
Backlog
related to gas monetization projects, which include liquefied natural
gas
and gas-to-liquids projects, amounted to $3.0 billion of the $6.2
billion
of Energy and Chemicals backlog as of June 30,
2005.
|
|
(b)
|
Increase
primarily relates to Task Order No. 89 under the LogCAP
contract.
|
HALLIBURTON
COMPANY
Iraq-Related
Award Fee Information on LogCAP Contract
(Millions
of dollars)
(Unaudited)
|
Three
Months Ended
June
30, 2005
|
Six
Months Ended
June
30, 2005
|
||||||
|
Award
fee adjustment (a)
|
$
|
29
|
$
|
51
|
|||
|
Change
in estimated accrual rate of award fees (b)
|
$
|
10
|
$
|
10
|
|||
|
(a)
|
The
amounts initially accrued for award fees are adjusted to actual
amounts
earned once the award fees have been granted and the task orders
underlying the work are definitized. The actual amounts granted
were $27
million in the first quarter of 2005 and $72 million in the second
quarter
of 2005. The six months ended June 30, 2005 includes $10 million
of income
related to the settlement of dining facilities matters. Through
March 31,
2005, award fees not yet granted were accrued at 50% of the maximum
award
fee.
|
|
(b)
|
Effective
April 1, 2005, LogCAP award fees not yet granted are accrued at
72% of the
maximum award fee.
|
-more-
FOOTNOTE
TABLE 1
HALLIBURTON
COMPANY
Items
included in Operating Income by Operating Segment
(Millions
of dollars except per share data)
(Unaudited)
|
Three
Months Ended
June
30, 2005
|
Three
Months Ended
June
30, 2004
|
Three
Months Ended
March
31, 2005
|
|||||||||||||||||
|
Operating
Income
|
After
Tax
per
Share
|
Operating
Income
|
After
Tax
per
Share
|
Operating
Income
|
After
Tax
per
Share
|
||||||||||||||
|
Production
Optimization:
|
|||||||||||||||||||
|
Subsea
7, Inc. gain on sale (a)
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
110
|
$
|
0.14
|
|||||||
|
Energy
and Chemicals:
|
|||||||||||||||||||
|
Barracuda-Caratinga
project loss
|
-
|
-
|
(310
|
)
|
(0.46
|
)
|
-
|
-
|
|||||||||||
|
(a)
|
The
three months ended June 30, 2004 included a $2 million equity loss
contributed from Subsea 7, Inc.
|
|
Six
Months Ended
June
30, 2005
|
Six
Months Ended
June
30, 2004
|
||||||||||||
|
Operating
Income
|
After
Tax
per
Share
|
Operating
Income
|
After
Tax
per
Share
|
||||||||||
|
Production
Optimization:
|
|||||||||||||
|
Subsea
7, Inc. gain on sale (b)
|
$
|
110
|
$
|
0.15
|
$
|
-
|
$
|
-
|
|||||
|
Digital
and Consulting Solutions:
|
|||||||||||||
|
Anglo-Dutch
lawsuit
|
-
|
-
|
13
|
0.02
|
|||||||||
|
Energy
and Chemicals:
|
|||||||||||||
|
Barracuda-Caratinga
project loss
|
-
|
-
|
(407
|
)
|
(0.60
|
)
|
|||||||
|
(b)
|
The
six months ended June 30, 2004 included a $19 million equity loss
contributed from Subsea 7, Inc.
|
-more-
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 June
30, 2005 |
Three
Months Ended June 30, 2004 |
Three
Months Ended March 31, 2005 |
|||||||||||||||||
|
Operating Income |
After
Tax per Share |
Operating Income |
After
Tax per Share |
Operating
Income
|
After
Tax
per
Share
|
||||||||||||||
|
North
America:
|
|||||||||||||||||||
|
Subsea
7, Inc. gain on sale
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
107
|
$
|
0.14
|
|||||||
|
Europe/Africa/CIS:
|
|||||||||||||||||||
|
Subsea
7, Inc. gain on sale
|
-
|
-
|
-
|
-
|
3
|
-
|
|||||||||||||
|
Six
Months Ended
June
30, 2005
|
Six
Months Ended
June
30, 2004
|
||||||||||||
|
Operating
Income
|
After
Tax
per
Share
|
Operating
Income
|
After
Tax
per
Share
|
||||||||||
|
North
America:
|
|||||||||||||
|
Subsea
7, Inc. gain on sale
|
$
|
107
|
$
|
0.15
|
$
|
-
|
$
|
-
|
|||||
|
Anglo-Dutch
lawsuit
|
-
|
-
|
13
|
0.02
|
|||||||||
|
Europe/Africa/CIS:
|
|||||||||||||
|
Subsea
7, Inc. gain on sale
|
3
|
-
|
-
|
-
|
|||||||||
-more-
FOOTNOTE
TABLE 3
HALLIBURTON
COMPANY
Reconciliation
of As Reported Segment Results to Adjusted Segment Results
Energy
Services Group Only
(Millions
of dollars)
(Unaudited)
|
Production
Optimization
|
Fluid
Systems
|
Drilling
and
Formation
Evaluation
|
Digital
and
Consulting
Solutions
|
Total
Energy
Services
Group
|
||||||||||||
|
Three
Months Ended June 30, 2005
|
||||||||||||||||
|
|
||||||||||||||||
|
As
reported operating income (a)
|
$
|
245
|
$
|
135
|
$
|
126
|
$
|
16
|
$
|
522
|
||||||
|
As
reported operating margin (b)
|
23.4
|
%
|
19.3
|
%
|
22.3
|
%
|
10.0
|
%
|
21.1
|
%
|
||||||
|
|
||||||||||||||||
|
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 (c)
|
(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
|
%
|
||||||
|
(a)
|
No
reconciling items were noted for this
period.
|
|
(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)
|
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 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, 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.
|
###
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 26, 2005
|
By:
|
/s/ Bruce A. Metzinger |
|
Bruce
A. Metzinger
|
||
|
Assistant
Secretary
|