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): October 20,
2008
HALLIBURTON
COMPANY
(Exact
Name of Registrant as Specified in Its Charter)
Delaware
(State or Other
Jurisdiction of Incorporation)
|
001-03492
|
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
October 20, 2008, registrant issued a press release entitled “Halliburton
Announces Third Quarter earnings of $0.76 Per Diluted Share Excluding
Non-Recurring Items.”
The text
of the Press Release is as follows:
HALLIBURTON ANNOUNCES THIRD
QUARTER EARNINGS
OF $0.76 PER DILUTED SHARE
EXCLUDING NON-RECURRING ITEMS
|
·
|
Total
revenues grew 24% over prior year led by Latin America growing
42%
|
|
·
|
Quarterly
operating income exceeds $1 billion for the first
time
|
|
·
|
Results
include a $0.04 per diluted share negative impact from hurricane
disruptions
|
|
·
|
Non-recurring
items only include convertible debt redemption loss of $693 million and
acquisition charges for WellDynamics of $15 million, both after
tax
|
HOUSTON, Texas – Halliburton
(NYSE:HAL) announced today that third quarter net income excluding non-recurring
items was $687 million, or $0.76 per diluted share. Hurricanes in the
Gulf of Mexico negatively impacted results by $33 million net of tax, or $0.04
per diluted share. This compares to net income for the third quarter of 2007 of
$727 million, or $0.79 per diluted share. Third quarter 2007 results
were favorably impacted by a $133 million, or $0.15 per diluted share, income
tax impact from the ability to recognize United States foreign tax credits that
were previously assumed not to be fully utilizable.
Net loss
for the third quarter of 2008 was $21 million, or $0.02 per diluted
share. This included a non-tax deductible loss of $693 million, or
$0.79 per diluted share, related to the portion of the 3.125% convertible senior
notes premium settled in cash. In addition, a WellDynamics
acquisition-related charge of $15 million, after tax and minority interest, is
reflected in the third quarter 2008 results.
Halliburton’s
consolidated revenue in the third quarter of 2008 was $4.9 billion, up 24% from
the third quarter of 2007. All product service lines contributed to
this increase, driven by both increased international activity and higher demand
in the United States. The hurricanes in the Gulf of Mexico negatively
impacted third quarter 2008 revenue by approximately $74 million.
Consolidated
operating income was $1 billion in the third quarter of 2008 compared to $910
million in the third quarter of 2007. Both segments contributed to
the increase primarily driven by Latin America. The hurricanes in the
Gulf of Mexico negatively impacted third quarter 2008 operating income by
approximately $52 million.
“A very
successful quarter from an operating standpoint for Halliburton has been
overshadowed by a severe downturn in global stock markets,” said Dave Lesar,
chairman, president, and chief executive officer.
-more-
Halliburton/Page 2
“The
North American market experienced revenue growth of 22% year-over-year, as
unconventional activity throughout the United States and Canada
accelerated. Natural gas prices have fallen from the levels seen
during the early parts of the summer to levels in line with where they were a
year ago but above levels seen in 2006. The announced reduction in some
customers’ capital spending will result in a decline in rig counts below those
previously anticipated, but should bring gas storage levels into a more
favorable long-term position, similar to the situation we experienced in the
first half of 2007.
“Sequentially,
revenue in North America grew 13% and operating income grew 12% as pricing
stabilized and cost recoveries began to be realized.
“Internationally,
while energy prices have declined from the levels experienced during the second
and third quarters of 2008, current prices still support most projects
underway. We are cognizant that a worldwide recession would have
negative short-term implications for demand. However, we are and will
remain focused on our customers’ long-term technology and service requirements
as underlying trends toward smaller and more complex accumulations and
increasing depletion rates should drive long-term growth.
“Outside
North America revenue grew 25% year-over-year, again exceeding our international
target of 20%, from investments in infrastructure, technology, and people made
in the past year. This robust growth was led by Latin America with
year-over-year revenue growth of 42%. While Mexico remains the
largest market in this region, growth of 70% in Brazil is indicative of the
overall strength occurring throughout the region.
“In the
Middle East/Asia region, revenue grew 19% and operating income increased 23%, as
a number of markets in the Arabian Gulf and Southeast Asia experienced strong
growth.
“Growth
of approximately 50% across Northern Africa, along with above average growth in
Saudi Arabia, has been the catalyst for the continued expansion of the franchise
in the Eastern Hemisphere.
“Year-over-year,
revenue in the Europe/Africa/CIS region grew 21%, but operating income was
essentially flat as revenue increases were offset by an unfavorable mix and
increased operational costs in West Africa, along with contracts ending in the
North Sea where we are in the process of redeploying assets and people to other
areas of greater demand and profitability.”
-more-
Halliburton/Page 3
2008
Third Quarter Results
Completion
and Production (C&P) operating income in the third quarter of 2008 was $660
million, an increase of $64 million or 11% from the third quarter of
2007. Europe/Africa/CIS C&P operating income increased 15% with
the most significant impact coming from increased production enhancement
activity in Europe. WellDynamics also contributed to the
increase. Middle East/Asia C&P operating income was flat with
higher demand for production enhancement products and services balancing out
declines in sales of completion tools and cementing services. North
America C&P operating income increased 3%, primarily due to more favorable
pricing and product mix for production enhancement services and higher demand
for completion tools in the United States, partially offset by the hurricanes in
the Gulf of Mexico. Latin America C&P operating income more than
doubled from increased demand for completion tools in Brazil and higher vessel
utilization in Mexico.
Drilling
and Evaluation (D&E) operating income in the third quarter of 2008 was $472
million, an increase of $100 million or 27% over the third quarter of
2007. Europe/Africa/CIS D&E operating income decreased 14% as a
result of declines in activity for Sperry Drilling Services in the North Sea
during the third quarter. Middle East/Asia D&E operating income
increased 42% over the third quarter of 2007, primarily due to higher drilling
activity throughout the region, especially for Sperry Drilling
Services. North America D&E operating income increased 55%, as a
result of increased activity in all product service lines including improved
performance of Baroid Fluid Services and increased drilling activity in the
United States, partially offset by the hurricanes in the Gulf of
Mexico. Latin America D&E operating income increased 27%, with
improved results from Landmark and increased Sperry Drilling Services and
wireline services activity.
During
the third quarter of 2008, Halliburton purchased 3.5 million shares of common
stock at a cost of $122 million. Approximately $1.8 billion remains
available under the company’s share repurchase program. Since the
inception of the program, Halliburton has purchased 92 million shares for a
total cost of approximately $3.2 billion.
-more-
Technology
and Significant Achievements
Halliburton
made a number of advances in technology and growth.
|
·
|
Halliburton
acquired the assets of Pinnacle Technologies, Inc. from CARBO Ceramics
Inc., including the Pinnacle brand. Pinnacle is a leading
provider of microseismic fracture mapping services and tiltmeter mapping
services, and it has monitored more than 12,000 hydraulic fracture
treatments since its founding in
1992.
|
|
·
|
Halliburton
developed the WellLife® III cementing service, a comprehensive solution
designed to increase the economic life of wells that incorporates three
synergistic components: diagnostics tools, engineered cement systems, and
a zonal isolation assurance tool. This service is an
interventionless, react-and-respond solution designed to help address the
industry-wide challenge of the loss of zonal isolation due to changes in
the wellbore that can stress the cement sheath and lead to destabilization
at any point during the life of the
well.
|
|
·
|
Halliburton
WellDynamics introduced its HS interval control valve (HS-ICV), which is
debris tolerant and designed for high pressure, deepwater environments
characterized as severe operating conditions. Building on the company’s 11
year track record as the leading provider of intelligent completion
technology, the HS-ICV enables deployment of SmartWell® systems in more
extreme environments.
|
|
·
|
Halliburton
opened a new research and development laboratory in Stavanger, Norway to
continue delivering the next generation of innovative Swell Technology™
products. The expanded 8,000 square foot laboratory will triple
the company's capacity to design, test, and qualify new swellable
technology products.
|
|
·
|
Sperry
Drilling Services and TOTAL have signed a project development agreement to
jointly develop an ultra high temperature measurement-while-drilling
system capable of operating in temperatures of up to 450°F
(230°C). The resulting system will enable TOTAL to effectively
drill and exploit reserves in its Victoria field in the North
Sea. The two companies will be utilizing innovative,
industry-first technologies including a downhole refrigeration system,
cold-plate technology, flasking, and phase change material -- all designed
to function under the high shock and vibration encountered while drilling,
to accomplish the goals of this 450°F project. The work may lead to an
expanded suite of logging-while-drilling sensors capable of operating at
these elevated temperatures.
|
-more-
Halliburton/Page 5
HALLIBURTON
COMPANY
Condensed
Consolidated Statements of Operations
(Millions
of dollars and shares except per share data)
(Unaudited)
|
Three
Months Ended
|
||||||||||||
|
September
30
|
June
30
|
|||||||||||
|
2008
|
2007
|
2008
|
||||||||||
|
Revenue:
|
||||||||||||
|
Completion
and Production
|
$ | 2,664 | $ | 2,187 | $ | 2,437 | ||||||
|
Drilling
and Evaluation
|
2,189 | 1,741 | 2,050 | |||||||||
|
Total
revenue
|
$ | 4,853 | $ | 3,928 | $ | 4,487 | ||||||
|
Operating
income (loss):
|
||||||||||||
|
Completion
and Production
|
$ | 660 | $ | 596 | $ | 561 | ||||||
|
Drilling
and Evaluation
|
472 | 372 | 480 | |||||||||
|
Corporate
and other
|
(81 | ) | (58 | ) | (92 | ) | ||||||
|
Total
operating income
|
1,051 | 910 | 949 | |||||||||
|
Interest
expense
|
(35 | ) | (39 | ) | (39 | ) | ||||||
|
Interest
income
|
6 | 26 | 9 | |||||||||
|
Other,
net
|
(697 | )(a) | (1 | ) | (2 | ) | ||||||
|
Income
from continuing operations before income taxes
|
||||||||||||
|
and minority
interest
|
325 | 896 | 917 | |||||||||
|
Provision
for income taxes
|
(343 | ) | (152 | )(b) | (288 | ) | ||||||
|
Minority
interest in net income of subsidiaries
|
(3 | ) | (18 | ) | (6 | ) | ||||||
|
Income
(loss) from continuing operations
|
(21 | ) | 726 | 623 | ||||||||
|
Income
(loss) from discontinued operations, net
|
– | 1 | (116 | )(c) | ||||||||
|
Net
income (loss)
|
$ | (21 | ) | $ | 727 | $ | 507 | |||||
|
Basic
income (loss) per share:
|
||||||||||||
|
Income
(loss) from continuing operations
|
$ | (0.02 | ) | $ | 0.83 | $ | 0.72 | |||||
|
Loss
from discontinued operations, net
|
– | – | (0.14 | ) | ||||||||
|
Net
income (loss)
|
$ | (0.02 | ) | $ | 0.83 | $ | 0.58 | |||||
|
Diluted
income (loss) per share:
|
||||||||||||
|
Income
(loss) from continuing operations
|
$ | (0.02 | ) | $ | 0.79 | $ | 0.68 | |||||
|
Loss
from discontinued operations, net
|
– | – | (0.13 | ) | ||||||||
|
Net
income (loss)
|
$ | (0.02 | ) | $ | 0.79 | $ | 0.55 | |||||
|
Basic
weighted average common shares outstanding
|
876 | 880 | 869 | |||||||||
|
Diluted
weighted average common shares outstanding
|
876 | 917 | 914 | |||||||||
|
(a)
|
Other,
net in the third quarter of 2008 included a $693 million, or $0.79 per
diluted share, non-tax deductible loss on the portion of the premium on
convertible debt settled in cash.
|
|
(b)
|
Provision
for income taxes in the third quarter of 2007 included a $133 million, or
$0.15 per diluted share, favorable income tax impact from the ability to
recognize the benefit of foreign tax credits previously thought not to be
fully utilizable.
|
|
(c)
|
Loss
from discontinued operations, net, in the second quarter of 2008, included
additional net of tax charges totaling $117 million, or $0.13 per diluted
share, related to adjustments of the indemnities and guarantees provided
to KBR, Inc. upon separation.
|
See
Footnote Table 1 for a list of significant items included in operating
income.
-more-
Halliburton/Page 6
HALLIBURTON
COMPANY
Condensed
Consolidated Statements of Operations
(Millions
of dollars and shares except per share data)
(Unaudited)
|
Nine
Months Ended September 30
|
||||||||
|
2008
|
2007
|
|||||||
|
Revenue:
|
||||||||
|
Completion
and Production
|
$ | 7,292 | $ | 6,097 | ||||
|
Drilling
and Evaluation
|
6,077 | 4,988 | ||||||
|
Total
revenue
|
$ | 13,369 | $ | 11,085 | ||||
|
Operating
income (loss):
|
||||||||
|
Completion
and Production
|
$ | 1,750 | $ | 1,628 | ||||
|
Drilling
and Evaluation
|
1,336 | 1,082 | ||||||
|
Corporate
and other
|
(239 | ) | (119 | ) | ||||
|
Total
operating income
|
2,847 | 2,591 | ||||||
|
Interest
expense
|
(112 | ) | (118 | ) | ||||
|
Interest
income
|
35 | 100 | ||||||
|
Other,
net
|
(700 | )(a) | (6 | ) | ||||
|
Income
from continuing operations before income taxes
|
||||||||
|
and minority
interest
|
2,070 | 2,567 | ||||||
|
Provision
for income taxes
|
(869 | ) | (695 | )(c) | ||||
|
Minority
interest in net income of subsidiaries
|
(16 | ) | (22 | ) | ||||
|
Income
from continuing operations
|
1,185 | 1,850 | ||||||
|
Income
(loss) from discontinued operations, net
|
(115 | )(b) | 959 | (d) | ||||
|
Net
income
|
$ | 1,070 | $ | 2,809 | ||||
|
Basic
income per share:
|
||||||||
|
Income
from continuing operations
|
$ | 1.36 | $ | 2.00 | ||||
|
Income
(loss) from discontinued operations, net
|
(0.13 | ) | 1.04 | |||||
|
Net
income
|
$ | 1.23 | $ | 3.04 | ||||
|
Diluted
income per share:
|
||||||||
|
Income
from continuing operations
|
$ | 1.30 | $ | 1.93 | ||||
|
Income
(loss) from discontinued operations, net
|
(0.12 | ) | 0.99 | |||||
|
Net
income
|
$ | 1.18 | $ | 2.92 | ||||
|
Basic
weighted average common shares outstanding
|
873 | 925 | ||||||
|
Diluted
weighted average common shares outstanding
|
909 | 961 | ||||||
|
(a)
|
Other,
net in the nine months ended September 30, 2008 included a $693 million,
or $0.76 per diluted share, non-tax deductible loss on the portion of the
premium on convertible debt settled in
cash.
|
|
(b)
|
Loss
from discontinued operations, net, in the nine months ended September 30,
2008, included additional net of tax charges totaling $117 million, or
$0.13 per diluted share, related to adjustments of the indemnities and
guarantees provided to KBR, Inc. upon
separation.
|
|
(c)
|
Provision
for income taxes in the nine months ended September 30, 2007 included a
$133 million, or $0.14 per diluted share, favorable income tax impact from
the ability to recognize the benefit of foreign tax credits previously
thought not to be fully utilizable.
|
|
(d)
|
Income
from discontinued operations, net, in the nine months ended September 30,
2007 included a $933 million, or $0.97 per diluted share, net gain on the
separation of KBR, Inc.
|
|
|
See
Footnote Table 1 for a list of significant items included in operating
income.
|
-more-
Halliburton/Page 7
HALLIBURTON
COMPANY
Condensed
Consolidated Balance Sheets
(Millions
of dollars)
(Unaudited)
|
September
30,
|
December
31,
|
|||||||
|
2008
|
2007
|
|||||||
|
Assets
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and investments in marketable securities
|
$ | 973 | $ | 2,235 | ||||
|
Receivables,
net
|
3,858 | 3,093 | ||||||
|
Inventories,
net
|
1,824 | 1,459 | ||||||
|
Other
current assets
|
712 | 786 | ||||||
|
Total
current assets
|
7,367 | 7,573 | ||||||
|
Property,
plant, and equipment, net
|
4,438 | 3,630 | ||||||
|
Goodwill
|
1,004 | 790 | ||||||
|
Other
assets
|
1,037 | 1,142 | ||||||
|
Total
assets
|
$ | 13,846 | $ | 13,135 | ||||
|
Liabilities
and Shareholders’ Equity
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 964 | $ | 768 | ||||
|
Accrued
employee compensation and benefits
|
607 | 575 | ||||||
|
Other
current liabilities
|
960 | 1,068 | ||||||
|
Total
current liabilities
|
2,531 | 2,411 | ||||||
|
Long-term
debt
|
2,588 | 2,627 | ||||||
|
Other
liabilities
|
1,240 | 1,137 | ||||||
|
Total
liabilities
|
6,359 | 6,175 | ||||||
|
Minority
interest in consolidated subsidiaries
|
60 | 94 | ||||||
|
Shareholders’
equity
|
7,427 | 6,866 | ||||||
|
Total
liabilities and shareholders’ equity
|
$ | 13,846 | $ | 13,135 | ||||
HALLIBURTON
COMPANY
Selected
Cash Flow Information
(Millions
of dollars)
|
|
(Unaudited)
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
September
30
|
September
30
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Capital
expenditures
|
$ | 468 | $ | 382 | $ | 1,305 | $ | 1,064 | ||||||||
|
Depreciation,
depletion, and amortization
|
$ | 193 | $ | 146 | $ | 535 | $ | 417 | ||||||||
-more-
HALLIBURTON
COMPANY
Revenue
and Operating Income Comparison
By
Segment and Geographic Region
(Millions
of dollars)
(Unaudited)
|
Three
Months Ended
|
||||||||||||
|
September
30
|
June
30
|
|||||||||||
|
Revenue
by geographic region:
|
2008
|
2007
|
2008
|
|||||||||
|
Completion
and Production:
|
||||||||||||
|
North America
|
$ | 1,462 | $ | 1,227 | $ | 1,270 | ||||||
|
Latin America
|
300 | 193 | 258 | |||||||||
|
Europe/Africa/CIS
|
554 | 439 | 545 | |||||||||
|
Middle
East/Asia
|
348 | 328 | 364 | |||||||||
|
Total
|
2,664 | 2,187 | 2,437 | |||||||||
|
Drilling
and Evaluation:
|
||||||||||||
|
North America
|
784 | 620 | 720 | |||||||||
|
Latin America
|
347 | 263 | 339 | |||||||||
|
Europe/Africa/CIS
|
578 | 493 | 571 | |||||||||
|
Middle
East/Asia
|
480 | 365 | 420 | |||||||||
|
Total
|
2,189 | 1,741 | 2,050 | |||||||||
|
Total
revenue by region:
|
||||||||||||
|
North America
|
2,246 | 1,847 | 1,990 | |||||||||
|
Latin America
|
647 | 456 | 597 | |||||||||
|
Europe/Africa/CIS
|
1,132 | 932 | 1,116 | |||||||||
|
Middle
East/Asia
|
828 | 693 | 784 | |||||||||
|
Operating
income by geographic region (excluding Corporate and
other):
|
||||||||||||
|
Completion
and Production:
|
||||||||||||
|
North America
|
$ | 398 | $ | 387 | $ | 312 | ||||||
|
Latin America
|
73 | 34 | 61 | |||||||||
|
Europe/Africa/CIS
|
106 | 92 | 107 | |||||||||
|
Middle
East/Asia
|
83 | 83 | 81 | |||||||||
|
Total
|
660 | 596 | 561 | |||||||||
|
Drilling
and Evaluation:
|
||||||||||||
|
North America
|
171 | 110 | 194 | |||||||||
|
Latin America
|
61 | 48 | 67 | |||||||||
|
Europe/Africa/CIS
|
99 | 115 | 110 | |||||||||
|
Middle
East/Asia
|
141 | 99 | 109 | |||||||||
|
Total
|
472 | 372 | 480 | |||||||||
|
Total
operating income by region:
|
||||||||||||
|
North America
|
569 | 497 | 506 | |||||||||
|
Latin America
|
134 | 82 | 128 | |||||||||
|
Europe/Africa/CIS
|
205 | 207 | 217 | |||||||||
|
Middle
East/Asia
|
224 | 182 | 190 | |||||||||
See
Footnote Table 1 and Footnote Table 2 for a list of significant items included
in operating income.
-more-
Halliburton/Page 9
HALLIBURTON
COMPANY
Revenue
and Operating Income Comparison
By
Segment and Geographic Region
(Millions
of dollars)
(Unaudited)
|
Nine
Months Ended September 30
|
||||||||
|
Revenue
by geographic region:
|
2008
|
2007
|
||||||
|
Completion
and Production:
|
||||||||
|
North America
|
$ | 3,901 | $ | 3,449 | ||||
|
Latin America
|
801 | 551 | ||||||
|
Europe/Africa/CIS
|
1,532 | 1,259 | ||||||
|
Middle
East/Asia
|
1,058 | 838 | ||||||
|
Total
|
7,292 | 6,097 | ||||||
|
Drilling
and Evaluation:
|
||||||||
|
North America
|
2,197 | 1,816 | ||||||
|
Latin America
|
952 | 757 | ||||||
|
Europe/Africa/CIS
|
1,674 | 1,382 | ||||||
|
Middle
East/Asia
|
1,254 | 1,033 | ||||||
|
Total
|
6,077 | 4,988 | ||||||
|
Total
revenue by region:
|
||||||||
|
North America
|
6,098 | 5,265 | ||||||
|
Latin America
|
1,753 | 1,308 | ||||||
|
Europe/Africa/CIS
|
3,206 | 2,641 | ||||||
|
Middle
East/Asia
|
2,312 | 1,871 | ||||||
|
Operating
income by geographic region (excluding Corporate and
other):
|
||||||||
|
Completion
and Production:
|
||||||||
|
North America
|
$ | 1,027 | $ | 1,069 | ||||
|
Latin America
|
200 | 122 | ||||||
|
Europe/Africa/CIS
|
285 | 240 | ||||||
|
Middle
East/Asia
|
238 | 197 | ||||||
|
Total
|
1,750 | 1,628 | ||||||
|
Drilling
and Evaluation:
|
||||||||
|
North America
|
539 | 390 | ||||||
|
Latin America
|
169 | 129 | ||||||
|
Europe/Africa/CIS
|
312 | 297 | ||||||
|
Middle
East/Asia
|
316 | 266 | ||||||
|
Total
|
1,336 | 1,082 | ||||||
|
Total
operating income by region:
|
||||||||
|
North America
|
1,566 | 1,459 | ||||||
|
Latin America
|
369 | 251 | ||||||
|
Europe/Africa/CIS
|
597 | 537 | ||||||
|
Middle
East/Asia
|
554 | 463 | ||||||
See Footnote Table 1 and Footnote Table
2 for a list of significant items included in operating income.
0;-more-
Halliburton/Page 10
FOOTNOTE
TABLE 1
HALLIBURTON
COMPANY
Items
Included in Operating Income
(Millions
of dollars except per share data)
(Unaudited)
|
Three
Months Ended
|
Three
Months Ended
|
Three
Months Ended
|
||||||||||||||||||||||
|
September
30, 2008
|
September
30, 2007
|
June
30, 2008
|
||||||||||||||||||||||
|
Operating
|
After
Tax
|
Operating
|
After
Tax
|
Operating
|
After
Tax
|
|||||||||||||||||||
|
Income
|
per
Share
|
Income
|
per
Share
|
Income
|
per
Share
|
|||||||||||||||||||
|
Drilling
and Evaluation:
|
||||||||||||||||||||||||
|
Charges for environmental
matters
|
$ | – | $ | – | $ | (24 | ) | $ | (0.02 | ) | $ | – | $ | – | ||||||||||
|
Gain on sale of
investments
|
– | – | – | – | 25 | 0.02 | ||||||||||||||||||
|
Corporate
and other:
|
||||||||||||||||||||||||
|
Charges for environmental
matters
|
– | – | (8 | ) | – | – | – | |||||||||||||||||
|
Patent
settlement
|
– | – | – | – | (30 | ) | (0.02 | ) | ||||||||||||||||
|
Acquisition-related
adjustment
|
(22 | ) | (0.02 | ) | – | – | – | – | ||||||||||||||||
|
Nine
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
September
30, 2008
|
September
30, 2007
|
|||||||||||||||
|
Operating
|
After
Tax
|
Operating
|
After
Tax
|
|||||||||||||
|
Income
|
per
Share
|
Income
|
per
Share
|
|||||||||||||
|
Completion
and Production:
|
||||||||||||||||
|
Gain on sale of
investment
|
$ | 35 | $ | 0.02 | $ | – | $ | – | ||||||||
|
Drilling
and Evaluation:
|
||||||||||||||||
|
Charges for environmental
matters
|
– | – | (24 | ) | (0.02 | ) | ||||||||||
|
Impairment of oil and gas
property
|
(23 | ) | (0.02 | ) | – | – | ||||||||||
|
Gain on sale of
investments
|
25 | 0.02 | – | – | ||||||||||||
|
Corporate
and other:
|
||||||||||||||||
|
Charges for environmental
matters
|
– | – | (8 | ) | – | |||||||||||
|
Gain on sale of
investment
|
– | – | 49 | 0.03 | ||||||||||||
|
Patent
settlement
|
(30 | ) | (0.02 | ) | – | – | ||||||||||
|
Acquisition-related
adjustment
|
(22 | ) | (0.02 | ) | – | – | ||||||||||
0;-more-
Halliburton/Page 11
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
|
Three
Months Ended
|
||||||||||||||||||||||
|
September
30, 2008
|
September
30, 2007
|
June
30, 2008
|
||||||||||||||||||||||
|
Operating
|
After
Tax
|
Operating
|
After
Tax
|
Operating
|
After
Tax
|
|||||||||||||||||||
|
Income
|
per
Share
|
Income
|
per
Share
|
Income
|
per
Share
|
|||||||||||||||||||
|
North
America:
|
||||||||||||||||||||||||
|
Charges for environmental
matters
|
$ | – | $ | – | $ | (24 | ) | $ | (0.02 | ) | $ | – | $ | – | ||||||||||
|
Gain on sale of
investments
|
– | – | – | – | 25 | 0.02 | ||||||||||||||||||
|
Corporate
and other:
|
||||||||||||||||||||||||
|
Charges for environmental
matters
|
– | – | (8 | ) | – | – | – | |||||||||||||||||
|
Patent
settlement
|
– | – | – | – | (30 | ) | (0.02 | ) | ||||||||||||||||
|
Acquisition-related
adjustment
|
(22 | ) | (0.02 | ) | – | – | – | – | ||||||||||||||||
|
Nine
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
September
30, 2008
|
September
30, 2007
|
|||||||||||||||
|
Operating
|
After
Tax
|
Operating
|
After
Tax
|
|||||||||||||
|
Income
|
per
Share
|
Income
|
per
Share
|
|||||||||||||
|
North
America:
|
||||||||||||||||
|
Charges for environmental
matters
|
$ | – | $ | – | $ | (24 | ) | $ | (0.02 | ) | ||||||
|
Gain on sale of
investments
|
60 | 0.04 | – | – | ||||||||||||
|
Middle
East/Asia:
|
||||||||||||||||
|
Impairment of oil and gas
property
|
(23 | ) | (0.02 | ) | – | – | ||||||||||
|
Corporate
and other:
|
||||||||||||||||
|
Charges for environmental
matters
|
– | – | (8 | ) | – | |||||||||||
|
Gain on sale of
investment
|
– | – | 49 | 0.03 | ||||||||||||
|
Patent
settlement
|
(30 | ) | (0.02 | ) | – | – | ||||||||||
|
Acquisition-related
adjustment
|
(22 | ) | (0.02 | ) | – | – | ||||||||||
-more-
Halliburton/Page 12
FOOTNOTE
TABLE 3
HALLIBURTON
COMPANY
Reconciliation
of As Reported Results to Adjusted Results
(Millions
of dollars)
(Unaudited)
|
Three
Months Ended
|
||||
|
September
30, 2008
|
||||
|
As
reported net loss
|
$ | (21 | ) | |
|
Extinguishment of debt
(a)
|
693 | |||
|
Acquisition-related adjustment for
WellDynamics (a)
|
15 | |||
|
Adjusted
net income
|
$ | 687 | ||
|
As
reported diluted weighted average common shares
outstanding
|
876 | |||
|
Dilutive effect of common stock
equivalents (b)
|
27 | |||
|
Adjusted
diluted weighted average common shares outstanding
|
903 | |||
|
As
reported net loss per share (c)
|
$ | (0.02 | ) | |
|
Adjusted
net income per share (c)
|
$ | 0.76 | ||
|
(a)
|
Management
believes it is important to point out to investors that included in the
net loss in the third quarter of 2008 is a $693 million non-tax deductible
loss on the portion of the premium on convertible debt settled in cash and
a $15 million loss related to the acquisition of
WellDynamics. The adjustments remove the effect of the loss on
the portion of the premium on convertible debt settled in cash and the
loss related to the acquisition of
WellDynamics.
|
|
(b)
|
In
the third quarter of 2008, the basic and diluted weighted average common
shares outstanding were the same because the effect of the common stock
equivalents was antidilutive. The adjustment includes the
dilutive effect of the common stock equivalents in “Adjusted diluted
weighted average common shares outstanding” as the impact of the common
stock equivalents is dilutive to “Adjusted net
income.”
|
|
(c)
|
As
reported net loss per share is calculated as: “As reported net loss”
divided by “As reported diluted weighted average common shares
outstanding.” Adjusted net income per share is calculated
as: “Adjusted net income” divided by “Adjusted diluted weighted
average common shares outstanding.”
|
-more-
Halliburton/Page 13
Third
Quarter 2008
Regional
Overview
North
America
In
Canada’s Montney shale play, Halliburton completed its 50th horizontal
CobraMax® job. The CobraMax® process now averages less than eight
hours per zone from cut to cut, an improvement from over 24 hours on earlier
wells.
In
Canada’s Oil Sands, Sperry Drilling Services made its first Azimuthal Deep
Resistivity (ADR®) Canadian run for a steam assisted gravitational drainage
(SAGD) client. This enabled the operator to “see” where formation changes
occurred azimuthally and map the top and bottom relative to the borehole. In the
same formations, Sperry Drilling Services’ Triple-Combo Azimuthal
logging-while-drilling (LWD) service was also used to measure porosity and
evaluate azimuthal density images for improved reservoir characterization and
enhanced recovery.
In the
Rockies, Halliburton has set its 900th
Swellpacker® isolation system in horizontal Bakken wells in the Williston Basin.
The use of this packer system has allowed operators to compartmentalize their
wellbores for fracture completions resulting in improved production. Delta Stim®
sleeves are also used with the Swellpacker® systems greatly reducing the time
required to complete a well.
On a
recent deepwater well drilled by British Petroleum (BP) in the Gulf of Mexico,
several new records were set by Sperry Drilling Services with the 8” GeoTap® LWD
formation pressure tester. These include deepest successful test
taken at 29,898 feet (9,113 meters) measured depth/28,525 feet (8,694 meters)
true vertical depth (TVD), highest hydrostatic pressure at 22,538 psi, and
highest formation pressure at 22,008 psi. The BP drilling team used
the GeoTap® testers to measure the formation pressure as they drilled to
optimize mud weight for increased drilling efficiency. The drilling team
reported between $3 and $6 million in savings due to the information provided
with the GeoTap® testers.
0;-more-
Latin
America
Halliburton
recently performed a specialized wireline conveyed formation fluid sampling in
the deepwaters of Brazil. The Reservoir Description ToolTM was
configured with two Oval-Pad modules and an MRILab® fluid identification module.
This configuration allowed obtaining over 100 pre-test, formation-pressure
measurements, retrieving five fluid samples from different depth intervals, and
performing two mini drill-string-test evaluations.
Pluspetrol
has achieved significant cycle time savings in well completions in Argentina
using Halliburton’s CobraMax® fracturing service, a patented process that
optimizes key treatment parameters during multi-zone fracturing of wellbores to
enhance recovery. In this case, a well was completed in five days while
conventional methods in the same field average 17 days. The efficiency gain
using this method provides our customers the ability to deliver more new
producing wells in a year with the same rig fleet.
Europe/Africa/CIS
Halliburton
continued its improvement process in partnership with Salym Petroleum
Development (SPD) in Western Siberia, Russia, where 3,000 meter wells have
historically taken 30 days to drill. Working closely with SPD, a combination of
Halliburton Cementing Services, Baroid Fluids Services, and Sperry Drilling
Services have enabled the time to drill to drop below six days for the first
time.
In
Germany, Halliburton’s Protech™ DRB centralizers were used to allow smooth
running of liners to the bottom of a deep well with a long horizontal section of
over 1,400 meters. This critical liner was successfully rotated during cementing
operations, marking the first occasion the client was able to achieve this to
provide effective zonal isolation.
In
Equatorial Guinea, an operator conducting exploration drilling desired 30
downhole reservoir fluid samples in a single run. Halliburton’s tubing-conveyed
cased hole Armada® sampling
system was deployed and delivered 29 of 30 samples, an exceptional recovery. The
single-phase Armada sampling system allows operators to obtain representative
samples, crucial in gaining a comprehensive understanding of key reservoir
attributes as well as an assessment of the asset’s net present
value.
-more-
Halliburton/Page 15
Expedite® and SandWedge®
technologies have been successfully used in the greater Khalda area in the
Western Desert region of Egypt. Apache Corporation commented, "Using
improvements in fracture stimulation technology, we have turned a marginally
economic play into a potentially significant oil accumulation".
The
newest Halliburton Real Time Operation Center (RTOC) built by Landmark for Shell
Petroleum Development Company (SPDC) of Nigeria was commissioned in Port
Harcourt in July 2008. SPDC’s use of Sperry Drilling Services INSITE
Anywhere® and
Landmark Engineer’s Data ModelTM
technologies enables remote monitoring of its drilling operations in a
collaborative environment with the asset team with the aim of improving safety,
reducing cost, and ensuring timely, accurate decisions.
Middle
East/Asia
Halliburton
successfully completed two GeoTap® Formation pressure testing operations for
ADCO in Abu Dhabi, where reservoir pressures were uncertain due to possible
communication with a high pressure lower interval. Combined with
other downhole drilling information, drilling parameters were adjusted resulting
in an improved ROP, saving three rig days and reducing fluids costs while
drilling the 3,000 foot horizontal section.
Kuwait
Oil Company (KOC) signed a five year, open-access agreement with Halliburton.
This agreement encompasses access to all Landmark brand software technologies
and incorporates a service-level agreement governing support to the geosciences
and engineering user community of KOC. The agreement is a culmination
of the effort of both companies to avail the KOC user community unlimited access
to next generation software and make it available on the desktop of every
geoscientist and engineer to help develop some of the most complex reservoirs in
the world.
In the
remote arid desert of the Cooper Basin of Australia, Halliburton’s CobraMax®
service was employed on a well with six target zones and four marginal
zones. Working closely together with the operator on the project
economics, a program was designed allowing the customer to fracture three out of
four marginal zones, for a total of nine on a single well.
-more-
In
Australia, Halliburton successfully trialed the next generation of Subsea
Release cementing plugset (SSR II™) resulting in a drill out
completed within 17 minutes, compared to an average drill out of 1.5 hours to 2
hours using conventional systems.
Sperry
Drilling Services’ delivered two notable multilateral installations in the Asia
Pacific region. A FlexRite® Level 5 junction was installed
for Apache in its Van Gogh development in the north west Shelf of Australia, a
worldwide first for Apache and the first time a junction of this kind had been
installed anywhere outside Norway. The installation was completed with no
associated downtime. The world’s first 7” MachRite® multilateral installation
was landed at a record depth of 3,695 meters creating a TAML level 3 junction
with the ability to convert to level 5 functionality for STOS in New
Zealand.
In
Indonesia, Kodeco recently deployed EquiFlow™ ICD (Inflow Control Device) and
Swellpacker® isolation systems on three wells with varying open hole horizontal
sections of between 2,000 feet to 3,000 feet, with early results indicating
increased production and reduced water cut.
In
Brunei, a selection of Halliburton’s drilling and completion technologies,
including the first open hole and “up hill” reverse port gravel pack, were
successfully utilized to enable the operator to economically drill into offshore
reservoirs from a land location without sacrificing the preferred completion
method and deliver favorable production targets, using a “fishhook” wellbore
configuration.
-more-
Founded
in 1919, Halliburton is one of the world’s largest providers of products and
services to the energy industry. With more than 55,000 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; execution of long-term, fixed-price
contracts; 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, Form
10-Q for the period ended June 30, 2008, 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.
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: October
21, 2008
|
By:
|
/s/ Bruce A. Metzinger |
|
Bruce
A. Metzinger
|
||
|
Assistant
Secretary
|