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 20,
2009
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 July
20, 2009, registrant issued a press release entitled “Halliburton Announces
Second Quarter Earnings of $0.30 Per Share Excluding Employee Separation
Costs.”
The text
of the Press Release is as follows:
HALLIBURTON ANNOUNCES SECOND
QUARTER EARNINGS
OF $0.30 PER SHARE EXCLUDING
EMPLOYEE SEPARATION COSTS
Reported
net income of $0.29 per diluted share
HOUSTON, Texas – Halliburton
(NYSE:HAL) announced today that net income for the second quarter of 2009 was
$274 million, or $0.30 per diluted share excluding employee separation costs of
$12 million, after tax, or $0.01 per diluted share. Reported net
income for the second quarter of 2009 was $262 million, or $0.29 per diluted
share. This compares to net income for the second quarter of 2008 of $504
million, or $0.55 per diluted share. The second quarter of 2009 results were
negatively impacted by the steep continued downturn in North America drilling
activity. The second quarter of 2008 results were negatively impacted by a $30
million charge related to a patent settlement partially offset by a $25 million
gain related to the sale of two investments in the United States.
Halliburton’s
consolidated revenue in the second quarter of 2009 was $3.5 billion, compared to
$3.9 billion in the first quarter of 2009. Revenue for most product service
lines fell, with the exception of completion tools and software and asset
solutions, primarily based on a reduction in North America rig count leading to
lower pricing and demand for products and services. Consolidated
operating income was $476 million in the second quarter of 2009 compared to $616
million in the first quarter of 2009.
“Weak
global demand and volatility in the commodity markets continue to weigh on the
oilfield services industry. The worldwide average rig count decreased 25%
sequentially, further weakening industry fundamentals during the second
quarter,” said Dave Lesar, chairman, president and chief executive officer.
“North
America continued to experience steep declines in drilling activity leading to
increased overcapacity. North America average rig count declined in the second
quarter by 39%. Activity in the United States has progressively shifted to
unconventional plays, where horizontal drilling now accounts for 43% of the
current rig count. This shift increases the demand for complex solutions,
creating the opportunity for a packaged-services commercial approach helping to
partially mitigate pricing erosion and protect market share.
“Due to
the continued weakness in natural gas demand, reflected in the high injection
rates for working gas storage, we believe it is unlikely that there will be a
meaningful recovery in natural gas prices and, consequently, drilling activity
for the remainder of the year.
Halliburton/Page
2
“The
downturn in international markets has not been as pronounced due to the
strengthening commodity prices, deflationary cost environment, and stabilizing
financial markets which are improving our customers’ overall project economics.
The strength of international markets will ultimately be dependent on the health
of commodity pricing, financial markets, and robustness of global
demand.
“Operating
margins outside of North America remained at 20%. We rationalized our costs to
offset pricing pressures; however, customers have continued to focus on
aggressively lowering their project costs.
“We
believe that the long term economic fundamentals of our industry are bright.
While we have taken prudent steps to control costs and improve financial
flexibility, we continue to execute our strategy of maintaining disciplined
investments in technology, capital equipment, and global infrastructure to
ensure that we are well positioned at the other side of this cycle. The
successful execution of this strategy has been validated by approximately $3.5
billion of recent contract awards.
“Although
the depth and duration of the cycle remains uncertain, we believe the market
will benefit companies with broad, integrated offerings, and a strong capital
structure such as ours, allowing them to customize solutions across global
markets,” concluded Lesar.
-more-
Halliburton/Page
3
2009
Second Quarter Results
Completion
and Production (C&P) operating income in the second quarter of 2009 was $243
million compared to $363 million in the first quarter of 2009. North
America C&P operating income decreased $114 million, primarily due to the
decline in US land activity, volume reductions, and pricing declines across all
product service lines in the United States. Latin America C&P
operating income was flat as increased activity in Brazil and Mexico offset
declines in Argentina and Colombia. Europe/Africa/CIS C&P
operating income decreased $8 million as higher activity in Norway and Russia
was outweighed by declines in Africa and the United Kingdom. Middle
East/Asia C&P operating income increased due to a better mix of completion
tools sales and increased activity in Australasia and the Northern
Gulf.
Drilling
and Evaluation (D&E) operating income in the second quarter of 2009 was $284
million compared to $304 million in the first quarter of 2009. North
America D&E operating income declined by $36 million due to lower volumes
and pricing declines across all product service lines except software and asset
solutions. Latin America D&E operating income was flat as higher
activity in Mexico offset sequential reductions in
Colombia. Europe/Africa/CIS D&E operating income decreased as
declines in Egypt and Angola offset higher activity in Russia and
Norway. Middle East/Asia D&E operating income increased $22
million with higher activity in Asia outweighing activity declines in certain
countries in the Middle East.
-more-
Halliburton/Page
4
Significant
Recent Events and Achievements
|
·
|
Halliburton won
a five-year, $1.5 billion contract with an Integrated Oil Company for its
work throughout North America. The contract covers services
that range from well construction to completion and
production.
|
|
·
|
Halliburton
has been awarded over $1 billion in new contracts globally for the
provision of engineered fluid solutions including $700 million
for deepwater projects in Brazil, Gulf of Mexico, Indonesia, Angola and
other countries, and $300 million for shelf- and land-related
work.
|
|
·
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Halliburton
has been awarded a two-year contract by StatoilHydro to provide fluids
systems for multiple fields, currently including cementing services for 20
rigs and drilling and completion fluids for 16 rigs on the Norwegian
continental shelf. The contract is estimated by Halliburton to be valued
at approximately $450 million and encompasses solutions offerings across
both of Halliburton's business segments, Completion and Production and
Drilling and Evaluation.
|
|
·
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Halliburton
has been awarded a contract in Algeria for the provision of integrated
project management for a number of delineation wells initially with the
potential to expand to 120 wells for full field
development.
|
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·
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Halliburton
has added to its integrated project management backlog with the addition
of over 150 wells over the next three years in Latin
America.
|
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·
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Halliburton
has been awarded a five-year contract for more than $100 million in the
Middle East for directional/LWD services due to the success of the
previous deployment of the StrataSteer® 3D geosteering service, InSite
ADR™ azimuthal deep resistivity sensor, and Geo-Pilot® rotary steerable
system.
|
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·
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Halliburton
has entered into agreements in Brazil and Iraq for the provision of
wireline logging and formation evaluation
technologies.
|
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·
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Halliburton is
augmenting its capability in the Caspian region in the anticipation of a
significant five-year award for multiple services with the potential
value of $200 million per year.
|
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·
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Halliburton
announced the release of the GEM™ Elemental Analysis tool, which offers
rapid and precise evaluation of formations with complex
mineralogies. As the newest addition to Halliburton’s portfolio
of formation evaluation technologies, the GEM tool offers operators a
complete elemental analysis solution for complex reservoirs and
complements Halliburton’s existing cuttings evaluation service performed
while drilling. When combined with Halliburton’s real-time data
acquisition software, it offers customers onsite and remote visualization
of formation elemental data quickly and
accurately.
|
Halliburton/Page
5
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·
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Halliburton
launched a next generation stimulation vessel, the Stim Star Angola, in
response to operators’ needs for stimulation treatments on offshore West
Africa assets. The new vessel will serve as a high performance
platform for delivering technology and helping reduce rig downtime and
associated costs for operators.
|
|
·
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Halliburton
won three Hart’s E&P meritorious engineering achievement
awards. The three winning Halliburton technologies and the
categories in which they won are: the Acid-on-the-Fly blending system for
stimulation; Delta Stim® completion service for completions; and Pore
Pressure and Geomechanics Solution for intelligent systems and
components.
|
|
·
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As
of June 30, 2009, Halliburton had $3.1 billion in cash and equivalents and
short- and long-term investments in United States Treasury securities. The
Company has $1.2 billion of unused borrowing capacity available on its
revolving credit facility and continues to maintain investment-grade debt
ratings.
|
-more-
Halliburton/Page
6
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 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: changes in the demand for or
price of oil and/or natural gas which has been significantly impacted by the
worldwide financial and credit crisis; 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; delays or failures by customers to make payments
owed to us; execution of long-term, fixed-price contracts; impairment of oil and
gas properties; structural changes in the oil and natural gas industry;
maintaining a highly skilled workforce; 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, 2008, Form 10-Q for the
period ended March 31, 2009, 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 Halliburton’s 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
|
March
31
|
|||||||||||
|
2009
|
2008
|
2009
|
||||||||||
|
Revenue:
(a)
|
||||||||||||
|
Completion
and Production
|
$ | 1,752 | $ | 2,357 | $ | 2,028 | ||||||
|
Drilling
and Evaluation
|
1,742 | 2,130 | 1,879 | |||||||||
|
Total
revenue
|
$ | 3,494 | $ | 4,487 | $ | 3,907 | ||||||
|
Operating income:
(a)
|
||||||||||||
|
Completion
and Production
|
$ | 243 | $ | 537 | $ | 363 | ||||||
|
Drilling
and Evaluation
|
284 | 504 | 304 | |||||||||
|
Corporate
and other
|
(51 | ) | (92 | ) | (51 | ) | ||||||
|
Total
operating income
|
476 | 949 | 616 | |||||||||
|
Interest
expense
|
(82 | ) | (42 | )(b) | (53 | ) | ||||||
|
Interest
income
|
3 | 9 | 2 | |||||||||
|
Other,
net
|
(14 | ) | (2 | ) | (5 | ) | ||||||
|
Income
from continuing operations before income taxes
|
||||||||||||
|
and noncontrolling
interest
|
383 | 914 | 560 | |||||||||
|
Provision
for income taxes
|
(117 | ) | (288 | ) | (179 | ) | ||||||
|
Income
from continuing operations
|
266 | 626 | 381 | |||||||||
|
Loss
from discontinued operations, net
|
(1 | ) | (116 | )(c) | (1 | ) | ||||||
|
Net
income
|
$ | 265 | $ | 510 | $ | 380 | ||||||
|
Noncontrolling
interest in net income of subsidiaries (d)
|
(3 | ) | (6 | ) | (2 | ) | ||||||
|
Net
income attributable to company
|
$ | 262 | $ | 504 | $ | 378 | ||||||
|
Amounts
attributable to company shareholders:
|
||||||||||||
|
Income
from continuing operations
|
$ | 263 | $ | 620 | $ | 379 | ||||||
|
Loss
from discontinued operations, net
|
(1 | ) | (116 | )(c) | (1 | ) | ||||||
|
Net
income attributable to company
|
$ | 262 | $ | 504 | $ | 378 | ||||||
|
Basic
income (loss) per share attributable to company
|
||||||||||||
|
shareholders:
(e)
|
||||||||||||
|
Income
from continuing operations
|
$ | 0.29 | $ | 0.71 | $ | 0.42 | ||||||
|
Loss
from discontinued operations, net
|
– | (0.13 | )(c) | – | ||||||||
|
Net
income per share
|
$ | 0.29 | $ | 0.58 | $ | 0.42 | ||||||
|
Diluted
income (loss) per share attributable to company
|
||||||||||||
|
shareholders:
(e)
|
||||||||||||
|
Income
from continuing operations
|
$ | 0.29 | $ | 0.68 | $ | 0.42 | ||||||
|
Loss
from discontinued operations, net
|
– | (0.13 | )(c) | – | ||||||||
|
Net
income per share
|
$ | 0.29 | $ | 0.55 | $ | 0.42 | ||||||
|
Basic
weighted average common shares outstanding (e)
|
898 | 875 | 897 | |||||||||
|
Diluted
weighted average common shares outstanding (e)
|
900 | 918 | 899 | |||||||||
|
(a)
|
Prior
period segment information was reclassified to reflect the movement of
certain operations from the Completion and Production segment to the
Drilling and Evaluation segment.
|
|
(b)
|
On
January 1, 2009, Halliburton adopted Financial Accounting Standards Board
(FASB) Staff Position (FSP) Accounting Principles Board (APB) 14-1,
“Accounting for Convertible Debt Instruments That May Be Settled in Cash
upon Conversion (Including Partial Cash Settlement).” This FSP
clarifies that convertible debt instruments that may be settled in cash
upon conversion, including partial cash settlement, should separately
account for the liability and equity components in a manner that will
reflect the entity’s nonconvertible debt borrowing rate when interest cost
is recognized in subsequent periods. Upon adopting FSP APB
14-1, the provisions were retroactively applied. As a result,
$3 million of additional non-cash interest expense was recorded in the
second quarter of 2008.
|
|
(c)
|
Loss
from discontinued operations, net, in the second quarter of 2008 included
additional charges totaling $117 million, net of tax, related to
adjustments to the indemnities and guarantees provided to KBR, Inc. upon
separation.
|
|
(d)
|
On
January 1, 2009, Halliburton adopted Statement of Financial Accounting
Standards (SFAS) No. 160 “Noncontrolling Interests in Consolidated
Financial Statements – an amendment of ARB No. 51,” the provisions of
which, among others, requires the recognition of noncontrolling interest
(previously referred to as minority interest) as equity in the condensed
consolidated balance sheets and a revised presentation of the condensed
consolidated statements of operations. All periods presented
have been restated.
|
|
(e)
|
On
January 1, 2009, Halliburton adopted FSP Emerging Issues Task Force (EITF)
03-6-1, “Determining Whether Instruments Granted in Share-Based Payment
Transactions Are Participating Securities,” which provides that unvested
share-based payment awards that contain nonforfeitable rights to dividends
or dividend equivalents, whether paid or unpaid, are participating
securities and shall be included in the computation of both basic and
diluted earnings per share. All prior periods’ basic and
diluted earnings per share were restated. Upon adoption, basic
income per share for the second quarter of 2008 decreased by $0.01 for
continuing operations.
|
See
Footnote Table 1 for a list of significant items included in operating
income.
HALLIBURTON
COMPANY
Condensed
Consolidated Statements of Operations
(Millions
of dollars and shares except per share data)
(Unaudited)
|
Six
Months Ended June 30
|
||||||||
|
2009
|
2008
|
|||||||
|
Revenue:
(a)
|
||||||||
|
Completion
and Production
|
$ | 3,780 | $ | 4,479 | ||||
|
Drilling
and Evaluation
|
3,621 | 4,037 | ||||||
|
Total
revenue
|
$ | 7,401 | $ | 8,516 | ||||
|
Operating income:
(a)
|
||||||||
|
Completion
and Production
|
$ | 606 | $ | 1,041 | ||||
|
Drilling
and Evaluation
|
588 | 913 | ||||||
|
Corporate
and other
|
(102 | ) | (158 | ) | ||||
|
Total
operating income
|
1,092 | 1,796 | ||||||
|
Interest
expense
|
(135 | ) | (84 | )(b) | ||||
|
Interest
income
|
5 | 29 | ||||||
|
Other,
net
|
(19 | ) | (3 | ) | ||||
|
Income
from continuing operations before income taxes and
|
||||||||
|
noncontrolling
interest
|
943 | 1,738 | ||||||
|
Provision
for income taxes
|
(296 | ) | (526 | ) | ||||
|
Income
from continuing operations
|
647 | 1,212 | ||||||
|
Loss
from discontinued operations, net
|
(2 | ) | (115 | )(c) | ||||
|
Net
income
|
$ | 645 | $ | 1,097 | ||||
|
Noncontrolling
interest in net income of subsidiaries (d)
|
(5 | ) | (13 | ) | ||||
|
Net
income attributable to company
|
$ | 640 | $ | 1,084 | ||||
|
Amounts
attributable to company shareholders:
|
||||||||
|
Income
from continuing operations
|
$ | 642 | $ | 1,199 | ||||
|
Loss
from discontinued operations, net
|
(2 | ) | (115 | )(c) | ||||
|
Net
income attributable to company
|
$ | 640 | $ | 1,084 | ||||
|
Basic
income (loss) per share attributable to company
|
||||||||
|
shareholders:
(e)
|
||||||||
|
Income
from continuing operations
|
$ | 0.71 | $ | 1.37 | ||||
|
Loss
from discontinued operations, net
|
– | (0.13 | )(c) | |||||
|
Net
income per share
|
$ | 0.71 | $ | 1.24 | ||||
|
Diluted
income (loss) per share attributable to company
|
||||||||
|
shareholders:
(e)
|
||||||||
|
Income
from continuing operations
|
$ | 0.71 | $ | 1.31 | ||||
|
Loss
from discontinued operations, net
|
– | (0.13 | )(c) | |||||
|
Net
income per share
|
$ | 0.71 | $ | 1.18 | ||||
|
Basic
weighted average common shares outstanding (e)
|
898 | 877 | ||||||
|
Diluted
weighted average common shares outstanding (e)
|
899 | 916 | ||||||
|
(a)
|
Prior
period segment information was reclassified to reflect the movement of
certain operations from the Completion and Production segment to the
Drilling and Evaluation segment.
|
|
(b)
|
On
January 1, 2009, Halliburton adopted Financial Accounting Standards Board
(FASB) Staff Position (FSP) Accounting Principles Board (APB) 14-1,
“Accounting for Convertible Debt Instruments That May Be Settled in Cash
upon Conversion (Including Partial Cash Settlement).” This FSP
clarifies that convertible debt instruments that may be settled in cash
upon conversion, including partial cash settlement, should separately
account for the liability and equity components in a manner that will
reflect the entity’s nonconvertible debt borrowing rate when interest cost
is recognized in subsequent periods. Upon adopting FSP APB
14-1, the provisions were retroactively applied. As a result,
$7 million of additional non-cash interest expense was recorded in the six
months ended June 30, 2008.
|
|
(c)
|
Loss
from discontinued operations, net, in the six months ended June 30, 2008
included additional charges totaling $117 million, net of tax, related to
adjustments to the indemnities and guarantees provided to KBR, Inc. upon
separation.
|
|
(d)
|
On
January 1, 2009, Halliburton adopted Statement of Financial Accounting
Standards (SFAS) No. 160 “Noncontrolling Interests in Consolidated
Financial Statements – an amendment of ARB No. 51,” the provisions of
which, among others, requires the recognition of noncontrolling interest
(previously referred to as minority interest) as equity in the condensed
consolidated balance sheets and a revised presentation of the condensed
consolidated statements of operations. All periods presented
have been restated.
|
|
(e)
|
On
January 1, 2009, Halliburton adopted FSP Emerging Issues Task Force (EITF)
03-6-1, “Determining Whether Instruments Granted in Share-Based Payment
Transactions Are Participating Securities,” which provides that unvested
share-based payment awards that contain nonforfeitable rights to dividends
or dividend equivalents, whether paid or unpaid, are participating
securities and shall be included in the computation of both basic and
diluted earnings per share. All prior periods’ basic and
diluted earnings per share were restated. Upon adoption, both
basic and diluted income per share for the six months ended June 30, 2008
decreased by $0.01 for continuing operations and net
income.
|
See
Footnote Table 1 for a list of significant items included in operating
income.
HALLIBURTON
COMPANY
Condensed
Consolidated Balance Sheets
(Millions
of dollars)
(Unaudited)
|
June
30,
|
December
31,
|
|||||||
|
2009
|
2008
|
|||||||
|
Assets
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and equivalents
|
$ | 1,568 | $ | 1,124 | ||||
|
Receivables,
net
|
3,152 | 3,795 | ||||||
|
Inventories,
net
|
1,832 | 1,828 | ||||||
|
Investments
in marketable securities
|
753 | – | ||||||
|
Other
current assets
|
703 | 664 | ||||||
|
Total
current assets
|
8,008 | 7,411 | ||||||
|
Property,
plant, and equipment, net
|
5,357 | 4,782 | ||||||
|
Goodwill
|
1,068 | 1,072 | ||||||
|
Investments
in marketable securities
|
763 | – | ||||||
|
Other
assets
|
1,019 | 1,120 | ||||||
|
Total
assets
|
$ | 16,215 | $ | 14,385 | ||||
|
Liabilities
and Shareholders’ Equity
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 755 | $ | 898 | ||||
|
Accrued
employee compensation and benefits
|
454 | 643 | ||||||
|
Other
current liabilities
|
1,011 | 1,240 | ||||||
|
Total
current liabilities
|
2,220 | 2,781 | ||||||
|
Long-term
debt
|
4,573 | 2,586 | ||||||
|
Other
liabilities
|
1,098 | 1,274 | ||||||
|
Total
liabilities
|
7,891 | 6,641 | ||||||
|
Company’s
shareholders’ equity
|
8,301 | 7,725 | ||||||
|
Noncontrolling
interest in consolidated subsidiaries (a)
|
23 | 19 | ||||||
|
Total
shareholders’ equity
|
8,324 | 7,744 | ||||||
|
Total
liabilities and shareholders’ equity
|
$ | 16,215 | $ | 14,385 | ||||
|
(a)
|
On
January 1, 2009, Halliburton adopted SFAS No. 160 “Noncontrolling
Interests in Consolidated Financial Statements – an amendment of ARB No.
51,” the provisions of which, among others, requires the recognition of
noncontrolling interest (previously referred to as minority interest) as
equity in the condensed consolidated balance sheets. All
periods presented have been
restated.
|
-more-
HALLIBURTON
COMPANY
Condensed
Consolidated Statements of Cash Flows
(Millions
of dollars)
(Unaudited)
|
Six
Months Ended
|
||||||||
|
June
30
|
||||||||
|
2009
|
2008
|
|||||||
|
Cash
flows from operating activities:
|
||||||||
|
Net
income
|
$ | 645 | $ | 1,097 | (a) | |||
|
Adjustments
to reconcile net income to net cash from operations:
|
||||||||
|
Depreciation,
depletion, and amortization
|
439 | 342 | ||||||
|
Payments
of Department of Justice and Securities and Exchange
Commission
|
||||||||
|
settlement and
indemnity
|
(322 | ) | – | |||||
|
Other
|
256 | (454 | ) | |||||
|
Total
cash flows from operating activities
|
1,018 | 985 | ||||||
|
Cash
flows from investing activities:
|
||||||||
|
Sales
(purchases) of investments in marketable securities, net
|
(1,518 | ) | 388 | |||||
|
Capital
expenditures
|
(950 | ) | (837 | ) | ||||
|
Other
|
48 | (92 | ) | |||||
|
Total
cash flows from investing activities
|
(2,420 | ) | (541 | ) | ||||
|
Cash
flows from financing activities:
|
||||||||
|
Proceeds
from long-term borrowings, net of offering costs
|
1,975 | – | ||||||
|
Payments
to reacquire common stock
|
(11 | ) | (381 | ) | ||||
|
Other
|
(104 | ) | (34 | ) | ||||
|
Total
cash flows from financing activities
|
1,860 | (415 | ) | |||||
|
Effect
of exchange rate changes on cash
|
(14 | ) | 4 | |||||
|
Increase
in cash and equivalents
|
444 | 33 | ||||||
|
Cash
and equivalents at beginning of period
|
1,124 | 1,847 | ||||||
|
Cash
and equivalents at end of period
|
$ | 1,568 | $ | 1,880 | ||||
|
(a)
|
On
January 1, 2009, Halliburton adopted FSP APB 14-1, “Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement).” This FSP clarifies that
convertible debt instruments that may be settled in cash upon conversion,
including partial cash settlement, should separately account for the
liability and equity components in a manner that will reflect the entity’s
nonconvertible debt borrowing rate when interest cost is recognized in
subsequent periods. Upon adopting FSP APB 14-1, the provisions
were retroactively applied. As a result, net income before
noncontrolling interest (minority interest) was reduced by $7 million for
additional non-cash interest expense recorded in the six months ended June
30, 2008.
|
|
|
-more-
|
|
|
HALLIBURTON
COMPANY
|
|
|
Revenue
and Operating Income Comparison
|
|
|
By
Segment and Geographic Region
|
|
|
(Millions
of dollars)
|
|
|
(Unaudited)
|
|
Three
Months Ended
|
||||||||||||
|
June
30
|
March
31
|
|||||||||||
|
Revenue
by geographic region:
|
2009
|
2008
|
2009
|
|||||||||
|
Completion
and Production:
|
||||||||||||
|
North America
|
$ | 795 | $ | 1,265 | $ | 1,071 | ||||||
|
Latin America
|
227 | 232 | 232 | |||||||||
|
Europe/Africa/CIS
|
439 | 509 | 426 | |||||||||
|
Middle East/Asia
|
291 | 351 | 299 | |||||||||
|
Total
|
1,752 | 2,357 | 2,028 | |||||||||
|
Drilling
and Evaluation:
|
||||||||||||
|
North America
|
464 | 725 | 612 | |||||||||
|
Latin America
|
317 | 365 | 324 | |||||||||
|
Europe/Africa/CIS
|
532 | 607 | 542 | |||||||||
|
Middle East/Asia
|
429 | 433 | 401 | |||||||||
|
Total
|
1,742 | 2,130 | 1,879 | |||||||||
|
Total
by revenue by region:
|
||||||||||||
|
North America
|
1,259 | 1,990 | 1,683 | |||||||||
|
Latin America
|
544 | 597 | 556 | |||||||||
|
Europe/Africa/CIS
|
971 | 1,116 | 968 | |||||||||
|
Middle East/Asia
|
720 | 784 | 700 | |||||||||
|
Operating
income by geographic region
|
||||||||||||
|
(excluding
Corporate and other):
|
||||||||||||
|
Completion
and Production:
|
||||||||||||
|
North America
|
$ | 52 | $ | 317 | $ | 166 | ||||||
|
Latin America
|
53 | 51 | 54 | |||||||||
|
Europe/Africa/CIS
|
69 | 93 | 77 | |||||||||
|
Middle East/Asia
|
69 | 76 | 66 | |||||||||
|
Total
|
243 | 537 | 363 | |||||||||
|
Drilling
and Evaluation:
|
||||||||||||
|
North America
|
28 | 189 | 64 | |||||||||
|
Latin America
|
53 | 77 | 54 | |||||||||
|
Europe/Africa/CIS
|
86 | 124 | 91 | |||||||||
|
Middle East/Asia
|
117 | 114 | 95 | |||||||||
|
Total
|
284 | 504 | 304 | |||||||||
|
Total
operating income by region:
|
||||||||||||
|
North America
|
80 | 506 | 230 | |||||||||
|
Latin America
|
106 | 128 | 108 | |||||||||
|
Europe/Africa/CIS
|
155 | 217 | 168 | |||||||||
|
Middle East/Asia
|
186 | 190 | 161 | |||||||||
|
|
Prior
period segment information was reclassified to reflect the movement of
certain operations from the Completion and Production segment to the
Drilling and Evaluation segment.
|
|
|
See
Footnote Table 1 and Footnote Table 2 for a list of significant items
included in operating income.
|
|
|
-more-
|
|
|
HALLIBURTON
COMPANY
|
|
|
Revenue
and Operating Income Comparison
|
|
|
By
Segment and Geographic Region
|
|
|
(Millions
of dollars)
|
|
|
(Unaudited)
|
|
Six
Months Ended June 30
|
||||||||
|
Revenue
by geographic region:
|
2009
|
2008
|
||||||
|
Completion
and Production:
|
||||||||
|
North America
|
$ | 1,866 | $ | 2,429 | ||||
|
Latin America
|
459 | 449 | ||||||
|
Europe/Africa/CIS
|
865 | 922 | ||||||
|
Middle East/Asia
|
590 | 679 | ||||||
|
Total
|
3,780 | 4,479 | ||||||
|
Drilling
and Evaluation:
|
||||||||
|
North America
|
1,076 | 1,423 | ||||||
|
Latin America
|
641 | 657 | ||||||
|
Europe/Africa/CIS
|
1,074 | 1,152 | ||||||
|
Middle East/Asia
|
830 | 805 | ||||||
|
Total
|
3,621 | 4,037 | ||||||
|
Total
by revenue by region:
|
||||||||
|
North America
|
2,942 | 3,852 | ||||||
|
Latin America
|
1,100 | 1,106 | ||||||
|
Europe/Africa/CIS
|
1,939 | 2,074 | ||||||
|
Middle East/Asia
|
1,420 | 1,484 | ||||||
|
Operating
income by geographic region
|
||||||||
|
(excluding
Corporate and other):
|
||||||||
|
Completion
and Production:
|
||||||||
|
North America
|
$ | 218 | $ | 638 | ||||
|
Latin America
|
107 | 104 | ||||||
|
Europe/Africa/CIS
|
146 | 157 | ||||||
|
Middle East/Asia
|
135 | 142 | ||||||
|
Total
|
606 | 1,041 | ||||||
|
Drilling
and Evaluation:
|
||||||||
|
North America
|
92 | 359 | ||||||
|
Latin America
|
107 | 131 | ||||||
|
Europe/Africa/CIS
|
177 | 235 | ||||||
|
Middle East/Asia
|
212 | 188 | ||||||
|
Total
|
588 | 913 | ||||||
|
Total
operating income by region:
|
||||||||
|
North America
|
310 | 997 | ||||||
|
Latin America
|
214 | 235 | ||||||
|
Europe/Africa/CIS
|
323 | 392 | ||||||
|
Middle East/Asia
|
347 | 330 | ||||||
|
|
Prior
period segment information was reclassified to reflect the movement of
certain operations from the Completion and Production segment to the
Drilling and Evaluation segment.
|
|
|
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
|
|
|
(Millions
of dollars except per share data)
|
|
|
(Unaudited)
|
|
Three
Months Ended
|
Three
Months Ended
|
Three
Months Ended
|
||||||||||||||||||||||
|
June
30, 2009
|
June
30, 2008
|
March
31, 2009
|
||||||||||||||||||||||
|
Operating
|
After
Tax
|
Operating
|
After
Tax
|
Operating
|
After
Tax
|
|||||||||||||||||||
|
Income
|
per Share
|
Income
|
per Share
|
Income
|
per Share
|
|||||||||||||||||||
|
Completion
and Production:
|
||||||||||||||||||||||||
|
Employee separation
costs
|
$ | (10 | ) | $ | (0.01 | ) | $ | – | $ | – | $ | (11 | ) | $ | (0.01 | ) | ||||||||
|
Drilling
and Evaluation:
|
||||||||||||||||||||||||
|
Gain on sale of
investments
|
– | – | 25 | 0.02 | – | – | ||||||||||||||||||
|
Employee separation
costs
|
(7 | ) | – | – | – | (12 | ) | (0.01 | ) | |||||||||||||||
|
Corporate
and other:
|
||||||||||||||||||||||||
|
Patent
settlement
|
– | – | (30 | ) | (0.02 | ) | – | – | ||||||||||||||||
|
Employee separation
costs
|
– | – | – | – | (5 | ) | – | |||||||||||||||||
|
Six
Months Ended
|
Six
Months Ended
|
|||||||||||||||
|
June
30, 2009
|
June
30, 2008
|
|||||||||||||||
|
Operating
|
After
Tax
|
Operating
|
After
Tax
|
|||||||||||||
|
Income
|
per
Share
|
Income
|
per
Share
|
|||||||||||||
|
Completion
and Production:
|
||||||||||||||||
|
Gain on sale of
investment
|
$ | - | $ | - | $ | 35 | $ | 0.02 | ||||||||
|
Employee separation
costs
|
(21 | ) | (0.02 | ) | - | - | ||||||||||
|
Drilling
and Evaluation:
|
||||||||||||||||
|
Impairment of oil and gas
property
|
- | - | (23 | ) | (0.02 | ) | ||||||||||
|
Gain on sale of
investments
|
- | - | 25 | 0.02 | ||||||||||||
|
Employee separation
costs
|
(19 | ) | (0.01 | ) | - | - | ||||||||||
|
Corporate
and other:
|
||||||||||||||||
|
Patent
settlement
|
- | - | (30 | ) | (0.02 | ) | ||||||||||
|
Employee separation
costs
|
(5 | ) | - | - | - | |||||||||||
|
|
-more-
|
|
|
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
|
||||||||||||||||||||||
|
June
30, 2009
|
June
30, 2008
|
March
31, 2009
|
||||||||||||||||||||||
|
Operating
|
After
Tax
|
Operating
|
After
Tax
|
Operating
|
After
Tax
|
|||||||||||||||||||
|
Income
|
per Share
|
Income
|
per Share
|
Income
|
per Share
|
|||||||||||||||||||
|
North
America:
|
||||||||||||||||||||||||
|
Gain on sale of
investments
|
$ | – | $ | – | $ | 25 | $ | 0.02 | $ | – | $ | – | ||||||||||||
|
Employee separation
costs
|
(9 | ) | (0.01 | ) | – | – | (14 | ) | (0.02 | ) | ||||||||||||||
|
Latin
America:
|
||||||||||||||||||||||||
|
Employee separation
costs
|
(6 | ) | – | – | – | (2 | ) | – | ||||||||||||||||
|
Europe/Africa/CIS:
|
||||||||||||||||||||||||
|
Employee separation
costs
|
(1 | ) | – | – | – | (4 | ) | – | ||||||||||||||||
|
Middle
East/Asia:
|
||||||||||||||||||||||||
|
Employee separation
costs
|
(1 | ) | – | – | – | (3 | ) | – | ||||||||||||||||
|
Corporate
and other:
|
||||||||||||||||||||||||
|
Patent
settlement
|
– | – | (30 | ) | (0.02 | ) | – | – | ||||||||||||||||
|
Employee separation
costs
|
– | – | – | – | (5 | ) | – | |||||||||||||||||
|
Six
Months Ended
|
Six
Months Ended
|
|||||||||||||||
|
June
30, 2009
|
June
30, 2008
|
|||||||||||||||
|
Operating
|
After
Tax
|
Operating
|
After
Tax
|
|||||||||||||
|
Income
|
per Share
|
Income
|
per Share
|
|||||||||||||
|
North
America:
|
||||||||||||||||
|
Gain on sale of
investments
|
$ | – | $ | – | $ | 60 | $ | 0.04 | ||||||||
|
Employee separation
costs
|
(23 | ) | (0.03 | ) | – | – | ||||||||||
|
Latin
America:
|
||||||||||||||||
|
Employee separation
costs
|
(8 | ) | – | – | – | |||||||||||
|
Europe/Africa/CIS:
|
||||||||||||||||
|
Employee separation
costs
|
(5 | ) | – | – | – | |||||||||||
|
Middle
East/Asia:
|
||||||||||||||||
|
Impairment of oil and gas
property
|
– | – | (23 | ) | (0.02 | ) | ||||||||||
|
Employee separation
costs
|
(4 | ) | – | – | – | |||||||||||
|
Corporate
and other:
|
||||||||||||||||
|
Patent
settlement
|
– | – | (30 | ) | (0.02 | ) | ||||||||||
|
Employee separation
costs
|
(5 | ) | – | – | – | |||||||||||
|
|
-more-
|
FOOTNOTE
TABLE 3
HALLIBURTON
COMPANY
Reconciliation
of As Reported Results to Adjusted Results
(Millions
of dollars)
(Unaudited)
|
Three
Months Ended
|
||||
|
June
30, 2009
|
||||
|
As
reported net income attributable to company
|
$ | 262 | ||
|
Employee separation costs, net
of tax (a)
|
12 | |||
|
Adjusted
net income attributable to company (a)
|
$ | 274 | ||
|
As
reported diluted weighted average common shares
outstanding
|
900 | |||
|
As
reported net income per share (b)
|
$ | 0.29 | ||
|
Adjusted
net income per share (b)
|
$ | 0.30 | ||
|
(a)
|
Management
believes it is important to point out to investors that included in net
income attributable to company for the second quarter of 2009 is a $12
million after-tax expense related to employee separation
costs. The adjustment removes the effect of the
expense. Adjusted net income attributable to company is
calculated as: “As reported net income attributable to company” plus
“Employee separation costs, net of
tax.”
|
|
(b)
|
As
reported net income per share is calculated as: “As reported net income
attributable to company” divided by “As reported diluted weighted average
common shares outstanding.” Adjusted net income per share
is calculated as: “Adjusted net income attributable to company” divided by
“As reported diluted weighted average common shares
outstanding.”
|
FOOTNOTE
TABLE 4
HALLIBURTON
COMPANY
Reconciliation
of As Reported Results to Adjusted Results
(Millions
of dollars)
(Unaudited)
|
Three
Months Ended
|
||||
|
June
30, 2009
|
||||
|
As
reported decrease in cash and equivalents (cash flow) for the second
quarter of 2009 (b)
|
$ | (1,399 | ) | |
|
As
reported purchases of investments in marketable securities
(a)
|
(1,518 | ) | ||
|
Adjusted
increase in cash and equivalents (cash flow) for the second quarter of
2009 (a)
|
$ | 119 | ||
|
(a)
|
Management
believes it is important to point out to investors that included in
decrease in cash and equivalents for the second quarter of 2009 are $1.5
billion in purchases of investments in marketable
securities. The adjustment removes these purchases of
investments in marketable securities. Adjusted increase in cash
and equivalents (cash flow) for the second quarter of 2009 is calculated
as: “As reported decrease in cash and equivalents (cash flow) for the
second quarter of 2009” less “As reported purchases of investments in
marketable securities.”
|
|
(b)
|
As
reported decrease in cash and equivalents (cash flow) for the second
quarter of 2009 is calculated as the change in cash and equivalents from
March 31, 2009 to June 30, 2009.
|
|
|
###
|
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
23, 2009
|
By:
|
/s/ Bruce A. Metzinger |
|
Bruce
A. Metzinger
|
||
|
Assistant
Secretary
|