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,
2008
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, 2008, registrant issued a press release entitled “Halliburton Announces
First Quarter Earnings of $0.64 Per Diluted Share”
The text
of the Press Release is as follows:
HALLIBURTON ANNOUNCES FIRST
QUARTER EARNINGS OF $0.64 PER DILUTED SHARE
HOUSTON, Texas – Halliburton
(NYSE:HAL) announced today that net income for the first quarter of 2008 was
$584 million, or $0.64 per diluted share. This compares to net income
of $552 million, or $0.54 per diluted share, in the first quarter of
2007. The first quarter of 2008 results were unfavorably impacted by
a $14 million, or $0.02 per diluted share, after-tax charge related to the
impairment of an oil and gas property in Bangladesh, where the company has had
an interest in a producing property since 1996. The first quarter of
2008 results were favorably impacted by a $22 million, or $0.02 per diluted
share, after-tax gain related to the sale of a joint venture interest in the
United States.
Halliburton’s
consolidated revenue in the first quarter of 2008 was $4.0 billion, up 18% from
the first quarter of 2007. All product service lines contributed to
this increase, primarily due to increased international activity.
Operating
income was $847 million in the first quarter of 2008 compared to $788 million in
the first quarter of 2007. With the exception of the production
enhancement product service line, which experienced the expected pricing
declines and cost increases in its United States operations, and Landmark, which
incurred the impairment noted above, all product service lines contributed to
the increase.
“Our
first quarter results were consistent with our previously announced
expectations,” said Dave Lesar, chairman, president, and chief executive
officer. “Our international revenue growth helped offset the production
enhancement pricing pressures we knew were coming in the U.S.
market.
-more-
Halliburton/Page
2
“First
quarter revenue outside of North America grew 24% year-over-year with operating
income growth of 21%. It has been just over a year since we announced
the opening of a corporate headquarters in Dubai as a part of our international
expansion strategy, and the positive results are evident. Both growth
and profitability in our Middle East/Asia region are exceptional. The recent
offshore win for work in the Manifa field in Saudi Arabia and the Norwegian
continental shelf completion products contract evidence our customers’
confidence in our ability to execute on large, complex projects. As
expected, revenue outside of North America declined 6% sequentially due to the
large fourth quarter to first quarter fall-off of Landmark software, completion
product, and wireline sales. Also impacting the results were weakness
in the North Sea and Nigeria operations, and fracturing activity in
Russia. We expect fracturing activity in Russia will pick up during
the rest of the year, but Nigeria and the North Sea may continue to
struggle.
“Latin
America revenue grew over 25% year-over-year as the opening of two of our
completion products manufacturing facilities in this region have allowed us to
facilitate the strong growth this part of our business has
experienced. As more projects come on line during the year, this
region’s prospects continue to expand.
“The
North America region also posted double-digit, year-over-year revenue growth of
11%, confirming this market is much stronger than may have been anticipated just
a few months ago. Sequentially, revenue was flat on better results in
Canada and our Drilling and Evaluation segment, which offset the expected
decline in production enhancement revenue. Our Drilling and
Evaluation revenue increased 5% and operating income increased 7% on a
sequential basis. This limited the margin reduction in North America
to 210 basis points sequentially when excluding the gain on sale of our joint
venture interest.
“The
fundamentals of the world oil and gas market are projecting that the next leg up
in this extended cycle is near. It is evident that we have taken the
right steps in our development of technology and service quality to win the
important large-scale projects that are likely to characterize this industry for
years to come, while developing the infrastructure to deliver on the results our
customers have come to expect.”
2008
First Quarter Results
Completion
and Production (C&P) operating income in the first quarter of 2008 was $529
million, an increase of $52 million or 11% from the first quarter of
2007. Europe/Africa/CIS C&P operating income was relatively flat
with improved completion tools performance balancing out small declines in
cementing and production enhancement. Middle East/Asia C&P
operating income increased 61%, with strong performance in completion tools
activity throughout the region. North America C&P operating
income decreased 2%, as the $35 million gain on sale of the joint venture
interest related to the completion tools business largely offset both the impact
of pricing declines related to the rollover of fracturing contracts and cost
inflation in the United States. Latin America C&P operating
income increased 74%, primarily due to increased cementing work throughout the
region, increased land and offshore stimulation activity in Mexico, and
increased completions activity in Brazil.
-more-
Halliburton/Page
3
Drilling
and Evaluation (D&E) operating income in the first quarter of 2008 was $384
million, an increase of $22 million or 6% over the prior year first
quarter. Europe/Africa/CIS
D&E operating income increased 32%, benefiting from increased Sperry
Drilling Services results in Russia with the successful integration of the
Burservice acquisition, a better mix of activity in Egypt, and improved Landmark
software sales in the North Sea. Middle East/Asia D&E operating
income decreased 19% over the prior year first quarter due to the $23 million
Bangladesh impairment charge offset by improved Landmark and Baroid Fluid
Services results in the region. North America D&E operating
income increased 4%, with improved performance from Security DBS Drill Bits and
increased Baroid Fluid Services land activity in the United States and market
expansion in Canada. This was partially offset by reduced wireline services in
the region. Latin America D&E operating income increased 14% on
improved wireline and Sperry Drilling Services activity, partially offset by
decreased Landmark results throughout the region and reduced Baroid Fluid
Services sales in Mexico related to the contract rollover process.
During
the first quarter of 2008, Halliburton purchased approximately 10 million shares
under the company’s share repurchase program at an average price of $37.26 for a
total cost of approximately $360 million. Since the inception of the
program, Halliburton has purchased 89 million shares for a total cost of
approximately $3.0 billion. Approximately $2.0 billion remains
available under the program.
Technology
and Significant Achievements
|
·
|
Landmark
announced that its Customer Support organization has received global
certification under the prestigious Service Capability & Performance
(SCP) Standards, an internationally recognized quality program for
technology service and support operations. This is the tenth
consecutive year that Landmark's North American support operation has
achieved SCP certification and the fifth consecutive year its global
operations have met the stringent standards. Landmark, which is
the only oilfield services company to have achieved global SCP
certification, joins the ranks of more than 200 technology service and
support organizations around the world that participate in the SCP
Standards program.
|
|
·
|
Halliburton
has been awarded a one-year contract (with four one-year extension
options) by Shell U.K. Limited for the provision of a portable modular
workover unit. The initial work contract period is for one workover and
three sidetracks on the Shell Gannet platform - operations that have the
potential to increase the field’s oil production. The project is due to
commence in the fourth quarter of
2008.
|
-more-
Halliburton/Page
4
|
·
|
Halliburton
inaugurated its sixth Eastern Hemisphere-based manufacturing center in
Johor, Malaysia, augmenting the company’s 16 existing production
facilities across North and Latin America, Europe, and Asia. The
215,000-square-foot facility, approximately 37 miles northwest of
Singapore, targets supply chain production and delivery capabilities
across Halliburton’s Completion and Production
division. Personnel in Johor perform procurement and
customer-service activities, as well as engineering, machining, and
product assembly. Approximately 100 employees work in the facility today,
and headcount is expected to exceed 250 by
year-end.
|
|
·
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StatoilHydro
has awarded Halliburton and WellDynamics nearly $900 million in contracts
to provide completion equipment and services, tubing conveyed perforating
services, and SmartWell® completion technology for numerous oil and gas
fields on the Norwegian continental shelf. Additionally, the contracts
allow for the provision of other products and services, including
multilateral completions, expandable completion systems, and zonal
isolation and control systems. Work is scheduled to begin in September
2008 and will last up to nine years if all option periods are
exercised.
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-more-
Halliburton/Page
5
Founded
in 1919, Halliburton is one of the world’s largest providers of products and
services to the energy industry. With more than 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, 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
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||||||||||||
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March
31
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December
31
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|||||||||||
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2008
|
2007
|
2007
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||||||||||
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Revenue:
|
||||||||||||
|
Completion
and Production
|
$ | 2,191 | $ | 1,844 | $ | 2,289 | ||||||
|
Drilling
and Evaluation
|
1,838 | 1,578 | 1,890 | |||||||||
|
Total
revenue
|
$ | 4,029 | $ | 3,422 | $ | 4,179 | ||||||
|
Operating
income (loss):
|
||||||||||||
|
Completion
and Production
|
$ | 529 | $ | 477 | $ | 571 | ||||||
|
Drilling
and Evaluation
|
384 | 362 |
403
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|||||||||
|
Corporate
and Other
|
(66 | ) | (51 | ) | (67 | ) | ||||||
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Total
operating income
|
847 | 788 | 907 | |||||||||
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Interest
expense
|
(38 | ) | (38 | ) | (36 | ) | ||||||
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Interest
income
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20 | 38 | 24 | |||||||||
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Other,
net
|
(1 | ) | (3 | ) | (2 | ) | ||||||
|
Income
from continuing operations before income taxes
|
||||||||||||
|
and minority
interest
|
828 | 785 | 893 | |||||||||
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Provision
for income taxes
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(238 | ) | (259 | ) | (212) | (a) | ||||||
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Minority
interest in net (income) loss of subsidiaries
|
(7 | ) | 3 | (7 | ) | |||||||
|
Income
from continuing operations
|
583 | 529 | 674 | |||||||||
|
Income
from discontinued operations, net
|
1 | 23 | 16 | |||||||||
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Net
income
|
$ | 584 | $ | 552 | $ | 690 | ||||||
|
Basic
income per share:
|
||||||||||||
|
Income
from continuing operations
|
$ | 0.67 | $ | 0.53 | $ | 0.77 | ||||||
|
Income
from discontinued operations, net
|
– | 0.02 | 0.02 | |||||||||
|
Net
income
|
$ | 0.67 | $ | 0.55 | $ | 0.79 | ||||||
|
Diluted
income per share:
|
||||||||||||
|
Income
from continuing operations
|
$ | 0.64 | $ | 0.52 | $ | 0.74 | ||||||
|
Income
from discontinued operations, net
|
– | 0.02 | 0.01 | |||||||||
|
Net
income
|
$ | 0.64 | $ | 0.54 | $ | 0.75 | ||||||
|
Basic
weighted average common shares outstanding
|
873 | 992 | 875 | |||||||||
|
Diluted
weighted average common shares outstanding
|
911 | 1,025 | 916 | |||||||||
|
(a)
|
Provision
for income taxes included a $55 million, or $0.06 per diluted share,
favorable income tax impact in the fourth quarter of 2007 from the ability
to recognize the benefit of foreign tax credits previously thought not to
be fully utilizable.
|
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)
|
March
31,
|
December
31,
|
|||||||
|
2008
|
2007
|
|||||||
|
Assets
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and investments in marketable securities
|
$ | 1,994 | $ | 2,235 | ||||
|
Receivables,
net
|
3,301 | 3,093 | ||||||
|
Inventories,
net
|
1,655 | 1,459 | ||||||
|
Other
current assets
|
746 | 786 | ||||||
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Total
current assets
|
7,696 | 7,573 | ||||||
|
Property,
plant, and equipment, net
|
3,851 | 3,630 | ||||||
|
Other
assets
|
1,781 | 1,932 | ||||||
|
Total
assets
|
$ | 13,328 | $ | 13,135 | ||||
|
Liabilities
and Shareholders’ Equity
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 907 | $ | 768 | ||||
|
Accrued
employee compensation and benefits
|
463 | 575 | ||||||
|
Other
current liabilities
|
1,112 | 1,068 | ||||||
|
Total
current liabilities
|
2,482 | 2,411 | ||||||
|
Long-term
debt
|
2,624 | 2,627 | ||||||
|
Other
liabilities
|
1,060 | 1,137 | ||||||
|
Total
liabilities
|
6,166 | 6,175 | ||||||
|
Minority
interest in consolidated subsidiaries
|
100 | 94 | ||||||
|
Shareholders’
equity
|
7,062 | 6,866 | ||||||
|
Total
liabilities and shareholders’ equity
|
$ | 13,328 | $ | 13,135 | ||||
HALLIBURTON
COMPANY
Selected
Cash Flow Information
(Millions
of dollars)
|
|
(Unaudited)
|
|
Three
Months Ended
|
||||||||
|
March
31
|
||||||||
|
2008
|
2007
|
|||||||
|
Capital
expenditures
|
$ | 392 | $ | 303 | ||||
|
Depreciation,
depletion, and amortization
|
$ | 164 | $ | 131 | ||||
-more-
HALLIBURTON
COMPANY
Revenue
and Operating Income Comparison
By
Segment and Geographic Region
(Millions
of dollars)
(Unaudited)
|
Three
Months Ended
|
||||||||||||
|
March
31
|
December
31
|
|||||||||||
|
Revenue
by geographic region:
|
2008
|
|
2007
|
2007
|
||||||||
|
Completion
and Production:
|
||||||||||||
|
North America
|
$ | 1,169 | $ | 1,062 | $ | 1,206 | ||||||
|
Latin America
|
243 | 166 | 205 | |||||||||
|
Europe/Africa/CIS
|
433 | 377 | 508 | |||||||||
|
Middle
East/Asia
|
346 | 239 | 370 | |||||||||
|
Total
|
2,191 | 1,844 | 2,289 | |||||||||
|
Drilling
and Evaluation:
|
||||||||||||
|
North America
|
693 | 610 | 662 | |||||||||
|
Latin America
|
266 | 238 | 285 | |||||||||
|
Europe/Africa/CIS
|
525 | 406 | 551 | |||||||||
|
Middle
East/Asia
|
354 | 324 | 392 | |||||||||
|
Total
|
1,838 | 1,578 | 1,890 | |||||||||
|
Total
revenue by region:
|
||||||||||||
|
North America
|
1,862 | 1,672 | 1,868 | |||||||||
|
Latin America
|
509 | 404 | 490 | |||||||||
|
Europe/Africa/CIS
|
958 | 783 | 1,059 | |||||||||
|
Middle
East/Asia
|
700 | 563 | 762 | |||||||||
|
Operating
income by geographic region (excluding
|
||||||||||||
|
Corporate and
Other):
|
||||||||||||
|
Completion
and Production:
|
||||||||||||
|
North America
|
$ | 317 | $ | 322 | $ | 335 | ||||||
|
Latin America
|
66 | 38 | 48 | |||||||||
|
Europe/Africa/CIS
|
72 | 71 | 90 | |||||||||
|
Middle
East/Asia
|
74 | 46 | 98 | |||||||||
|
Total
|
529 | 477 | 571 | |||||||||
|
Drilling
and Evaluation:
|
||||||||||||
|
North America
|
174 | 167 | 162 | |||||||||
|
Latin America
|
41 | 36 | 50 | |||||||||
|
Europe/Africa/CIS
|
103 | 78 | 117 | |||||||||
|
Middle
East/Asia
|
66 | 81 | 74 | |||||||||
|
Total
|
384 | 362 |
403
|
|||||||||
|
Total
operating income by region:
|
||||||||||||
|
North America
|
491 | 489 | 497 | |||||||||
|
Latin America
|
107 | 74 | 98 | |||||||||
|
Europe/Africa/CIS
|
175 | 149 | 207 | |||||||||
|
Middle
East/Asia
|
140 | 127 | 172 | |||||||||
See
Footnote Table 1 and Footnote Table 2 for a list of significant items included
in operating income.
-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
|
Three
Months Ended
|
|||||||||||||||
|
March
31, 2008
|
December
31, 2007
|
|||||||||||||||
|
Operating
|
After
Tax
|
Operating
|
After
Tax
|
|||||||||||||
|
Income
|
per
Share
|
Income
|
per
Share
|
|||||||||||||
|
Completion
and Production:
|
||||||||||||||||
|
Gain on sale of joint venture
interest
|
$ | 35 | $ | 0.02 | $ | – | $ | – | ||||||||
|
Drilling
and Evaluation:
|
||||||||||||||||
|
Impairment of oil and gas
property
|
(23 | ) | (0.02 | ) | (34 | ) | (0.02 | ) | ||||||||
FOOTNOTE
TABLE 2
HALLIBURTON
COMPANY
Items
Included in Operating Income by Geographic Region
(Millions
of dollars except per share data)
(Unaudited)
|
Three
Months Ended
|
Three
Months Ended
|
|||||||||||||||
|
March
31, 2008
|
December
31, 2007
|
|||||||||||||||
|
Operating
|
After
Tax
|
Operating
|
After
Tax
|
|||||||||||||
|
Income
|
per
Share
|
Income
|
per
Share
|
|||||||||||||
|
North
America:
|
||||||||||||||||
|
Gain on sale of joint venture
interest
|
$ | 35 | $ | 0.02 | $ | – | $ | – | ||||||||
|
Middle
East/Asia:
|
||||||||||||||||
|
Impairment of oil and gas
property
|
(23 | ) | (0.02 | ) | (34 | ) | (0.02 | ) | ||||||||
-more-
FOOTNOTE
TABLE 3
HALLIBURTON
COMPANY
Reconciliation
of As Reported Results to Adjusted Results
(Millions
of dollars)
(Unaudited)
|
Three
Months Ended
|
||||||||
|
North
America
|
March
31, 2008
|
December 31, 2007
|
||||||
|
Revenue
|
$ | 1,862 | $ | 1,868 | ||||
|
As
reported operating income
|
$ | 491 | $ | 497 | ||||
|
Effect of gain on sale of
joint venture interest (a)
|
(35 | ) | – | |||||
|
Adjusted
operating income
|
$ | 456 | $ | 497 | ||||
|
As
reported operating margin (b)
|
26.4 | % | 26.6 | % | ||||
|
Adjusted
operating margin (b)
|
24.5 | % |
26.6
|
% | ||||
|
Three
Months Ended
|
||||
|
Non-North
America
|
March
31, 2008
|
|||
|
Revenue
|
$ | 2,167 | ||
|
As
reported operating income
|
$ | 422 | ||
|
Effect of impairment of oil
and gas property (a)
|
23 | |||
|
Adjusted
operating income
|
$ | 445 | ||
|
As
reported operating margin (b)
|
19.5 | % | ||
|
Adjusted
operating margin (b)
|
20.5 | % | ||
|
(a)
|
Management
believes it is important to point out to investors that included in
operating income are a gain on the sale of a joint venture interest and an
impairment charge related to an oil and gas property in the first quarter
of 2008, because investors have indicated to management their desire to
understand the current drivers and future trends. The
adjustment removes the effect of the gain on sale of the joint venture
interest and the impairment of the oil and gas
property.
|
|
(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.”
|
###
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, 2008
|
By:
|
/s/ Bruce A. Metzinger |
|
Bruce
A. Metzinger
|
||
|
Assistant
Secretary
|