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 23,
2007
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
23, 2007, registrant issued a press release entitled “Halliburton Announces
Second Quarter Earnings of $1.62 Per Diluted Share, $0.63 Per
Diluted Share From Continuing Operations.”
The
text
of the Press Release is as follows:
HALLIBURTON
ANNOUNCES SECOND QUARTER EARNINGS
OF
$1.62 PER DILUTED SHARE; $0.63 PER DILUTED SHARE FROM
CONTINUING
OPERATIONS
HOUSTON,
Texas– Halliburton (NYSE:HAL) announced today that net income for the
second quarter of 2007 was $1.5 billion, or $1.62 per diluted share, which
includes a net gain of $933 million from the separation of KBR, Inc. recorded
in
discontinued operations. This compares to net income of $591 million, or
$0.55
per diluted share, in the second quarter of 2006. Income from continuing
operations in the second quarter of 2007 was $595 million, or $0.63 per diluted
share. This compares to income from continuing operations of $498 million,
or
$0.47 per diluted share, in the second quarter of 2006.
Halliburton’s
consolidated revenue in the second quarter of 2007 was $3.7 billion, up 20%
from
the second quarter of 2006. This increase was attributable to increased
worldwide activity, particularly in the Eastern Hemisphere.
Consolidated
operating income was $893 million in the second quarter of 2007 compared
to $760
million in the second quarter of 2006. The increase in operating
income was generated primarily by increased customer activity and new
international contracts. Also included in second quarter of 2007
operating income was a $49 million gain before tax ($0.03 after tax per diluted
share) from the sale of an investment.
“We
are
pleased with this quarter’s results in the Eastern Hemisphere, where we posted
14% revenue and 21% operating income growth as compared to the first quarter
of
2007. Our operating income margins in the Eastern Hemisphere increased to
nearly
22%. Our commitment to invest in high-growth Eastern Hemisphere markets is
evident in our results,” said Dave Lesar, chairman, president, and chief
executive officer. “In addition, we have seen a strong recovery in the United
States well stimulation market from the slowdown we experienced last
winter. In fact, in June we experienced the highest monthly United
States well stimulation revenue in our history. Our Canadian
operations were impacted by the significant decline in activity and the spring
breakup season. Our Drilling and Formation Evaluation segment
experienced a $21 million decline in operating income from the first quarter
due
to Canadian operations.”
-more-
Halliburton/Page
2
2007
Second Quarter Results
Production
Optimization operating income in the second quarter of 2007 was $403 million,
an
increase of $35 million or 10% from the second quarter of
2006. Production Enhancement operating income declined 2%, primarily
from reduced activity in Asia Pacific and Eurasia, while North America was
stable. Completion Tools operating income grew 58%, with non-North
American operating income increasing more than 64%. The Completion
Tools operating income increase was led by the Middle East, Malaysia, Brazil,
and Mexico.
Fluid
Systems operating income in the second quarter of 2007 was $200 million,
consistent with the results in the second quarter of 2006. Cementing
operating income increased 9% compared to the prior year second quarter with
increased activity in all regions. Baroid Fluid Services operating
income declined 22%, primarily from reduced activity in Latin America and
the
recording of an additional reserve related to an environmental
matter.
Drilling
and Formation Evaluation operating income in the second quarter of 2007 was
$235
million, an increase of $41 million or 21% over the prior year second quarter.
Sperry Drilling Services operating income increased 42%, with a 75% increase
in
the Eastern Hemisphere, benefiting from increased activity and the introduction
of new technology. Wireline and Perforating Services operating income
decreased 7%, primarily due to the Canadian breakup impact on the expanded
business in Canada. Security DBS Drill Bits operating income improved
42% over the prior year second quarter, reflecting increased rig activity
and
fixed cutter bit sales in the United States and the North Sea.
Digital
and Consulting Solutions operating income in the second quarter of 2007 was
$117
million, up $66 million, or 129%, from the prior year quarter. The second
quarter of 2007 operating income included a gain of $49 million from the
sale of
an investment. Landmark’s year over year operating income grew 49%
with increases in all four regions on improved sales of software and consulting
services.
-more-
Halliburton/Page
3
Technology
and Significant Achievements
Halliburton
made a number of advances in technology and growth.
|
|
·
|
Halliburton
has entered into a definitive agreement with the shareholders of
OOO
Burservice to purchase the entire share capital of this Russian
directional drilling company. This agreement is subject to regulatory
approvals.
|
|
|
·
|
Halliburton’s
Drilling and Formation Evaluation segment has acquired the intellectual
property, assets and existing business associated with Vector Magnetics
LLC’s active ranging technology for Steam-Assisted Gravity Drainage
(SAGD)
applications.
|
|
|
·
|
Halliburton
has been awarded a contract to provide completion products and
services to
a group of energy companies for operations throughout Malaysia
for a term
of five years. The group includes PETRONAS Carigali, Exxon, Shell
and
Newfield. Valued at $200 million, the contract has the potential
to extend
beyond the five-year term. This project will be aided by the
addition of Halliburton's new manufacturing facility, which is
under
construction in Malaysia.
|
|
|
·
|
Halliburton
has been awarded a major contract by Reliance Industries Limited
for the
provision of deepwater sand control completion technology in the
Dhirubhai-I and Dhirubhai-3 fields offshore India. The scope of
the work includes supplying products and installation services
for upper
completion for 18 wells and open-hole gravel packs for 15
wells.
|
|
|
·
|
Landmark
and Statoil have signed a project development agreement to jointly
create
a geoscience interpretation software system for Statoil’s basin- and
prospect-scale exploration
activities.
|
|
|
·
|
Halliburton
announced the opening of a new training center in Tyumen, Russia,
in
cooperation with the Tyumen State Oil and Gas University. Designed to
further develop the professional and technical skills of the company’s
employees in Eurasia, the Tyumen training center is Halliburton’s
twelfth such center worldwide and the first in
Russia.
|
|
|
·
|
Halliburton’s
board of directors increased the authorization of Halliburton’s common
share repurchase program by an additional $2 billion. The $2
billion increase brings the aggregate authorization to $5 billion,
with
approximately $2.8 billion currently remaining. The share
repurchase program does not require Halliburton to acquire any
specific
number of shares and may be terminated or suspended at any
time. This additional authorization may be used for open market
share purchases or to settle the conversion premium over the face
amount
of the company’s 3 ⅛% convertible senior notes, should they be
redeemed. During the second quarter of 2007, Halliburton
purchased 25,746,000 shares at an average price of $35.37 at a
total cost
of $911 million.
|
-more-
Halliburton/Page
4
Founded
in 1919, Halliburton is one of the world’s largest providers of products and
services to the energy industry. With nearly 50,000 employees in
approximately 70 countries, the company serves the upstream oil and gas industry
throughout the lifecycle of the reservoir – from locating hydrocarbons and
managing geological data, to drilling and formation evaluation, well
construction and completion, and optimizing production through the life of
the
field. Visit the company’s World Wide Web site 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: consequences of audits and
investigations by domestic and foreign government agencies and legislative
bodies and related publicity; potential adverse proceedings by such agencies;
protection of intellectual property rights; compliance with environmental
laws;
changes in government regulations and regulatory requirements, particularly
those related to radioactive sources, explosives, and chemicals; compliance
with
laws related to income taxes and assumptions regarding the generation of
future
taxable income; unsettled political conditions, war, and the effects of
terrorism, foreign operations, and foreign exchange rates and controls;
weather-related issues including the effects of hurricanes and tropical storms;
changes in capital spending by customers; changes in the demand for or price
of
oil and/or natural gas, impairment of oil and gas properties, structural
changes
in the oil and natural gas industry; increased competition for employees;
availability of raw materials; and integration of acquired businesses and
operations of joint ventures. Halliburton's Form 10-K for the year ended
December 31, 2006, Form 10-Q for the period ended March 31, 2007, recent
Current
Reports on Form 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
|
|||||||||||
|
2007
|
2006
|
2007
|
||||||||||
|
Revenue:
|
||||||||||||
|
Production
Optimization
|
$ |
1,533
|
$ |
1,292
|
$ |
1,337
|
||||||
|
Fluid
Systems
|
1,045
|
870
|
993
|
|||||||||
|
Drilling
and Formation Evaluation
|
953
|
774
|
917
|
|||||||||
|
Digital
and Consulting Solutions
|
204
|
180
|
175
|
|||||||||
|
Total
revenue
|
$ |
3,735
|
$ |
3,116
|
$ |
3,422
|
||||||
|
Operating
income (loss):
|
||||||||||||
|
Production
Optimization
|
$ |
403
|
$ |
368
|
$ |
325
|
||||||
|
Fluid
Systems
|
200
|
201
|
214
|
|||||||||
|
Drilling
and Formation Evaluation
|
235
|
194
|
256
|
|||||||||
|
Digital
and Consulting Solutions
|
117 | (a) |
51
|
50
|
||||||||
|
General
corporate
|
(62 | ) | (54 | ) | (57 | ) | ||||||
|
Total
operating income
|
893 | (a) |
760
|
788
|
||||||||
|
Interest
expense
|
(41 | ) | (42 | ) | (38 | ) | ||||||
|
Interest
income
|
36
|
35
|
38
|
|||||||||
|
Other,
net
|
(2 | ) | (1 | ) | (3 | ) | ||||||
|
Income
from continuing operations before income taxes and minority
interest
|
886 | (a) |
752
|
785
|
||||||||
|
Provision
for income taxes
|
(284 | ) | (245 | ) | (259 | ) | ||||||
|
Minority
interest in net (income) loss of subsidiaries
|
(7 | ) | (9 | ) |
3
|
|||||||
|
Income
from continuing operations
|
595 | (a) |
498
|
529
|
||||||||
|
Income
from discontinued operations, net
|
935 | (b) |
93
|
23 | (c) | |||||||
|
Net
income
|
$ | 1,530 | (a) | $ |
591
|
$ |
552
|
|||||
|
Basic
income per share:
|
||||||||||||
|
Income
from continuing operations
|
$ |
0.66
|
$ |
0.49
|
$ |
0.53
|
||||||
|
Income
from discontinued operations, net
|
1.03 | (b) |
0.09
|
0.02 | (c) | |||||||
|
Net
income
|
$ |
1.69
|
$ |
0.58
|
$ |
0.55
|
||||||
|
Diluted
income per share:
|
||||||||||||
|
Income
from continuing operations
|
$ | 0.63 | (a) | $ |
0.47
|
$ |
0.52
|
|||||
|
Income
from discontinued operations, net
|
0.99 | (b) |
0.08
|
0.02 | (c) | |||||||
|
Net
income
|
$ | 1.62 | (a) | $ |
0.55
|
$ |
0.54
|
|||||
|
Basic
weighted average common shares outstanding
|
905
|
1,026
|
992
|
|||||||||
|
Diluted
weighted average common shares outstanding
|
942
|
1,070
|
1,025
|
|||||||||
|
|
(a)
|
Second
quarter 2007 operating income included a $49 million gain on sale
of an
investment, which was recorded in Digital and Consulting Solutions
results
in North America. On an after tax basis, the gain on sale was
$31 million or $0.03 per diluted
share.
|
|
|
(b)
|
Income
from discontinued operations, net, in the second quarter of 2007
included
a $933 million net gain on the separation of KBR,
Inc.
|
|
|
(c)
|
Income
from discontinued operations, net, in the first quarter of 2007
included
Halliburton’s 81% share of KBR, Inc.’s $28 million in net income in the
first quarter of 2007.
|
All
periods presented reflect the
reclassification of KBR, Inc. to discontinued operations and the
reclassification of certain expenses that were previously allocated to the
segments and are now included in general corporate expenses.
-more-
HALLIBURTON
COMPANY
Condensed
Consolidated Statements of Operations
(Millions
of dollars and shares except per share data)
(Unaudited)
|
Six
Months Ended
June
30
|
||||||||
|
2007
|
2006
|
|||||||
|
Revenue:
|
||||||||
|
Production
Optimization
|
$ |
2,870
|
$ |
2,488
|
||||
|
Fluid
Systems
|
2,038
|
1,706
|
||||||
|
Drilling
and Formation Evaluation
|
1,870
|
1,499
|
||||||
|
Digital
and Consulting Solutions
|
379
|
361
|
||||||
|
Total
revenue
|
$ |
7,157
|
$ |
6,054
|
||||
|
Operating
income (loss):
|
||||||||
|
Production
Optimization
|
$ |
728
|
$ |
701
|
||||
|
Fluid
Systems
|
414
|
390
|
||||||
|
Drilling
and Formation Evaluation
|
491
|
373
|
||||||
|
Digital
and Consulting Solutions
|
167 | (a) |
101
|
|||||
|
General
corporate
|
(119 | ) | (113 | ) | ||||
|
Total
operating income
|
1,681 | (a) |
1,452
|
|||||
|
Interest
expense
|
(79 | ) | (84 | ) | ||||
|
Interest
income
|
74
|
58
|
||||||
|
Other,
net
|
(5 | ) |
1
|
|||||
|
Income
from continuing operations before income taxes and minority
interest
|
1,671 | (a) |
1,427
|
|||||
|
Provision
for income taxes
|
(543 | ) | (468 | ) | ||||
|
Minority
interest in net income of subsidiaries
|
(4 | ) | (12 | ) | ||||
|
Income
from continuing operations
|
1,124 | (a) |
947
|
|||||
|
Income
from discontinued operations, net
|
958 | (b) |
132
|
|||||
|
Net
income
|
$ | 2,082 | (a) | $ |
1,079
|
|||
|
Basic
income per share:
|
||||||||
|
Income
from continuing operations
|
$ |
1.18
|
$ |
0.92
|
||||
|
Income
from discontinued operations, net
|
1.01 | (b) |
0.13
|
|||||
|
Net
income
|
$ |
2.19
|
$ |
1.05
|
||||
|
Diluted
income per share:
|
||||||||
|
Income
from continuing operations
|
$ | 1.14 | (a) | $ |
0.89
|
|||
|
Income
from discontinued operations, net
|
0.98 | (b) |
0.12
|
|||||
|
Net
income
|
$ | 2.12 | (a) | $ |
1.01
|
|||
|
Basic
weighted average common shares outstanding
|
949
|
1,025
|
||||||
|
Diluted
weighted average common shares outstanding
|
983
|
1,069
|
||||||
|
(a)
|
Second
quarter 2007 operating income included a $49 million gain on sale
of an
investment, which was recorded in Digital and Consulting Solutions
results
in North America. On an after tax basis, the gain on sale was
$31 million or $0.03 per diluted
share.
|
|
(b)
|
Income
from discontinued operations, net, in six months ended June 30,
2007
included a $933 million net gain on the separation of KBR, Inc.
and
Halliburton’s 81% share of KBR, Inc.’s $28 million in net income in the
first quarter of 2007.
|
All
periods presented reflect the
reclassification of KBR, Inc. to discontinued operations and the
reclassification of certain expenses that were previously allocated to the
segments and are now included in general corporate expenses.
-more-
HALLIBURTON
COMPANY
Condensed
Consolidated Balance Sheets
(Millions
of dollars)
(Unaudited)
|
June
30,
2007
|
December
31,
2006
|
|||||||
|
Assets
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and marketable investments
|
$ |
2,223
|
$ |
2,938
|
||||
|
Receivables,
net
|
2,948
|
2,629
|
||||||
|
Inventories,
net
|
1,500
|
1,235
|
||||||
|
Current
assets of discontinued operations
|
–
|
3,898
|
||||||
|
Other
current assets
|
601
|
490
|
||||||
|
Total
current assets
|
7,272
|
11,190
|
||||||
|
Property,
plant, and equipment, net
|
2,988
|
2,557
|
||||||
|
Noncurrent
assets of discontinued operations
|
–
|
1,497
|
||||||
|
Other
assets
|
1,729
|
1,616
|
||||||
|
Total
assets
|
$ |
11,989
|
$ |
16,860
|
||||
|
Liabilities
and Shareholders’ Equity
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ |
856
|
$ |
655
|
||||
|
Current
maturities of long-term debt
|
11
|
26
|
||||||
|
Current
liabilities of discontinued operations
|
–
|
2,831
|
||||||
|
Other
current liabilities
|
1,299
|
1,222
|
||||||
|
Total
current liabilities
|
2,166
|
4,734
|
||||||
|
Long-term
debt
|
2,784
|
2,783
|
||||||
|
Noncurrent
liabilities of discontinued operations
|
–
|
981
|
||||||
|
Other
liabilities
|
1,110
|
917
|
||||||
|
Total
liabilities
|
6,060
|
9,415
|
||||||
|
Minority
interest in consolidated subsidiaries
|
71
|
69
|
||||||
|
Shareholders’
equity
|
5,858
|
7,376
|
||||||
|
Total
liabilities and shareholders’ equity
|
$ |
11,989
|
$ |
16,860
|
||||
All
periods presented reflect the reclassification of KBR, Inc. to discontinued
operations.
HALLIBURTON
COMPANY
Selected
Cash Flow Information
(Millions
of dollars)
(Unaudited)
|
Three
Months Ended
June
30
|
Six
Months Ended
June
30
|
|||||||||||||||
|
2007
|
2006
|
2007
|
2006
|
|||||||||||||
|
Capital
expenditures
|
$ |
379
|
$ |
201
|
$ |
682
|
$ |
339
|
||||||||
|
Depreciation,
depletion, and amortization
|
$ |
140
|
$ |
117
|
$ |
271
|
$ |
234
|
||||||||
All
periods presented reflect the reclassification of KBR, Inc. to discontinued
operations.
-more-
HALLIBURTON
COMPANY
Revenue
and Operating Income Comparison
By
Geographic Region
(Millions
of dollars)
(Unaudited)
|
Three
Months Ended
June
30
|
Three
Months
Ended
March
31,
|
|||||||||||
|
2007
|
2006
|
2007
|
||||||||||
|
Revenue:
|
||||||||||||
|
North
America
|
$ |
1,746
|
$ |
1,541
|
$ |
1,672
|
||||||
|
Latin
America
|
448
|
355
|
404
|
|||||||||
|
Europe/Africa/CIS
|
926
|
694
|
783
|
|||||||||
|
Middle
East/Asia
|
615
|
526
|
563
|
|||||||||
|
Total
revenue
|
$ |
3,735
|
$ |
3,116
|
$ |
3,422
|
||||||
|
Operating
income:
|
||||||||||||
|
North
America
|
$ | 526 | (a) | $ |
481
|
$ |
494
|
|||||
|
Latin
America
|
94
|
68
|
75
|
|||||||||
|
Europe/Africa/CIS
|
181
|
135
|
149
|
|||||||||
|
Middle
East/Asia
|
154
|
130
|
127
|
|||||||||
|
General
corporate
|
(62 | ) | (54 | ) | (57 | ) | ||||||
|
Total
operating income
|
$ |
893
|
$ |
760
|
$ |
788
|
||||||
|
Six
Months Ended
June
30
|
||||||||
|
2007
|
2006
|
|||||||
|
Revenue:
|
||||||||
|
North
America
|
$ |
3,418
|
$ |
3,054
|
||||
|
Latin
America
|
852
|
706
|
||||||
|
Europe/Africa/CIS
|
1,709
|
1,301
|
||||||
|
Middle
East/Asia
|
1,178
|
993
|
||||||
|
Total
revenue
|
$ |
7,157
|
$ |
6,054
|
||||
|
Operating
income:
|
||||||||
|
North
America
|
$ | 1,020 | (a) | $ |
974
|
|||
|
Latin
America
|
169
|
123
|
||||||
|
Europe/Africa/CIS
|
330
|
235
|
||||||
|
Middle
East/Asia
|
281
|
233
|
||||||
|
General
corporate
|
(119 | ) | (113 | ) | ||||
|
Total
operating income
|
$ |
1,681
|
$ |
1,452
|
||||
|
|
(a)
|
Second
quarter 2007 operating income included a $49 million gain on the
sale of
an investment, which was recorded in Digital and Consulting Solutions
results in North America.
|
All
periods presented reflect the reclassification of certain expenses that were
previously allocated to the segments and are now included in general corporate
expenses. Also, the results for Sakhalin have been reclassified from
Middle East/Asia to Europe/Africa/CIS.
-more-
HALLIBURTON
COMPANY
Reconciliation
of As Reported Results to Adjusted Results
(Millions
of dollars)
(Unaudited)
|
Three
Months
|
||||
|
Ended
|
||||
|
June
30, 2007
|
||||
|
Income
from continuing operations
|
$ |
595
|
||
|
After-tax
effect of gain on sale of investment
|
(31 | ) | ||
|
Adjusted
income from continuing operations
|
$ |
564
|
||
|
Management
believes it is important to point out to investors that a portion
of
income from continuing operations is attributable to the sale
of an
investment in the second quarter of 2007, because investors have
indicated
to management their desire to understand the current drivers
and future
trends. The adjustment removes the effect of the investment
sale.
|
###
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
24, 2007
|
By:
|
/s/
Sherry D. Williams
|
|
Sherry
D. Williams
|
||
|
Vice
President and Corporate Secretary
|