Yes
|
[X]
|
No
|
[ ]
|
Yes
|
[X]
|
No
|
[ ]
|
Large
accelerated filer [X]
Non-accelerated
filer[ ]
|
Accelerated
filer [ ]
Smaller
reporting company[ ]
|
Yes
|
[ ]
|
No
|
[X]
|
Page No.
|
||
PART
I.
|
FINANCIAL
INFORMATION
|
3
|
Item
1.
|
Financial
Statements
|
3
|
- Condensed
Consolidated Statements of Operations
|
3
|
|
- Condensed
Consolidated Balance Sheets
|
4
|
|
- Condensed
Consolidated Statements of Cash Flows
|
5
|
|
- Notes
to Condensed Consolidated Financial Statements
|
6
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and
|
|
Results
of Operations
|
15
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
30
|
Item
4.
|
Controls
and Procedures
|
30
|
PART
II.
|
OTHER
INFORMATION
|
31
|
Item
1.
|
Legal
Proceedings
|
31
|
Item
1(a).
|
Risk
Factors
|
31
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
31
|
Item
3.
|
Defaults
Upon Senior Securities
|
31
|
Item
4.
|
[Removed
and Reserved]
|
31
|
Item
5.
|
Other
Information
|
31
|
Item
6.
|
Exhibits
|
32
|
Signatures
|
33
|
Three
Months Ended
|
||||||||
March
31
|
||||||||
Millions
of dollars and shares except per share data
|
2010
|
2009
|
||||||
Revenue:
|
||||||||
Services
|
$ | 2,845 | $ | 2,950 | ||||
Product
sales
|
916 | 957 | ||||||
Total
revenue
|
3,761 | 3,907 | ||||||
Operating
costs and expenses:
|
||||||||
Cost
of services
|
2,473 | 2,411 | ||||||
Cost
of sales
|
786 | 828 | ||||||
General
and administrative
|
58 | 52 | ||||||
Gain
on sale of assets, net
|
(5 | ) | − | |||||
Total
operating costs and expenses
|
3,312 | 3,291 | ||||||
Operating
income
|
449 | 616 | ||||||
Interest
expense
|
(79 | ) | (53 | ) | ||||
Interest
income
|
3 | 2 | ||||||
Other,
net
|
(40 | ) | (5 | ) | ||||
Income
from continuing operations before income taxes
|
333 | 560 | ||||||
Provision
for income taxes
|
(121 | ) | (179 | ) | ||||
Income
from continuing operations
|
212 | 381 | ||||||
Loss
from discontinued operations, net of income
|
||||||||
tax benefit of $3 and
$0
|
(5 | ) | (1 | ) | ||||
Net
income
|
$ | 207 | $ | 380 | ||||
Noncontrolling
interest in net income of subsidiaries
|
(1 | ) | (2 | ) | ||||
Net
income attributable to company
|
$ | 206 | $ | 378 | ||||
Amounts
attributable to company shareholders:
|
||||||||
Income
from continuing operations
|
$ | 211 | $ | 379 | ||||
Loss
from discontinued operations, net
|
(5 | ) | (1 | ) | ||||
Net
income attributable to company
|
$ | 206 | $ | 378 | ||||
Basic
income per share attributable to company
|
||||||||
shareholders:
|
||||||||
Income
from continuing operations
|
$ | 0.23 | $ | 0.42 | ||||
Loss
from discontinued operations, net
|
− | − | ||||||
Net
income per share
|
$ | 0.23 | $ | 0.42 | ||||
Diluted
income per share attributable to company
|
||||||||
shareholders:
|
||||||||
Income
from continuing operations
|
$ | 0.23 | $ | 0.42 | ||||
Loss
from discontinued operations, net
|
− | − | ||||||
Net
income per share
|
$ | 0.23 | $ | 0.42 | ||||
Cash
dividends per share
|
$ | 0.09 | $ | 0.09 | ||||
Basic
weighted average common shares outstanding
|
905 | 897 | ||||||
Diluted
weighted average common shares outstanding
|
908 | 899 |
March
31,
|
December
31,
|
|||||||
Millions
of dollars and shares except per share data
|
2010
|
2009
|
||||||
Assets
|
||||||||
Current
assets:
|
||||||||
Cash
and equivalents
|
$ | 1,383 | $ | 2,082 | ||||
Receivables
(less allowance for bad debts of $88 and $90)
|
3,176 | 2,964 | ||||||
Inventories
|
1,658 | 1,598 | ||||||
Investments
in marketable securities
|
1,808 | 1,312 | ||||||
Current
deferred income taxes
|
248 | 210 | ||||||
Other
current assets
|
541 | 472 | ||||||
Total
current assets
|
8,814 | 8,638 | ||||||
Property,
plant, and equipment, net of accumulated depreciation
|
||||||||
of $5,406 and
$5,230
|
5,980 | 5,759 | ||||||
Goodwill
|
1,138 | 1,100 | ||||||
Other
assets
|
1,048 | 1,041 | ||||||
Total
assets
|
$ | 16,980 | $ | 16,538 | ||||
Liabilities
and Shareholders’ Equity
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 964 | $ | 787 | ||||
Current
maturities of long-term debt
|
750 | 750 | ||||||
Accrued
employee compensation and benefits
|
520 | 514 | ||||||
Deferred
revenue
|
282 | 215 | ||||||
Department
of Justice (DOJ) and Securities and Exchange Commission
(SEC)
|
||||||||
settlement and
indemnity
|
95 | 142 | ||||||
Other
current liabilities
|
534 | 481 | ||||||
Total
current liabilities
|
3,145 | 2,889 | ||||||
Long-term
debt
|
3,824 | 3,824 | ||||||
Employee
compensation and benefits
|
425 | 462 | ||||||
Other
liabilities
|
626 | 606 | ||||||
Total
liabilities
|
8,020 | 7,781 | ||||||
Shareholders’
equity:
|
||||||||
Common
shares, par value $2.50 per share – authorized 2,000 shares,
issued
|
||||||||
1,068 and 1,067
shares
|
2,669 | 2,669 | ||||||
Paid-in
capital in excess of par value
|
395 | 411 | ||||||
Accumulated
other comprehensive loss
|
(206 | ) | (213 | ) | ||||
Retained
earnings
|
10,988 | 10,863 | ||||||
Treasury
stock, at cost – 162 and 165 shares
|
(4,915 | ) | (5,002 | ) | ||||
Company
shareholders’ equity
|
8,931 | 8,728 | ||||||
Noncontrolling
interest in consolidated subsidiaries
|
29 | 29 | ||||||
Total
shareholders’ equity
|
8,960 | 8,757 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 16,980 | $ | 16,538 |
Three
Months Ended
|
||||||||
March
31
|
||||||||
Millions
of dollars
|
2010
|
2009
|
||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ | 207 | $ | 380 | ||||
Adjustments
to reconcile net income to net cash from operations:
|
||||||||
Depreciation,
depletion, and amortization
|
261 | 215 | ||||||
Payments
of DOJ and SEC settlement and indemnity
|
(47 | ) | (274 | ) | ||||
Other
changes:
|
||||||||
Receivables
|
(264 | ) | 372 | |||||
Accounts
payable
|
187 | (18 | ) | |||||
Inventories
|
(54 | ) | (65 | ) | ||||
Other
|
27 | (229 | ) | |||||
Total
cash flows from operating activities
|
317 | 381 | ||||||
Cash
flows from investing activities:
|
||||||||
Purchases
of investments in marketable securities
|
(500 | ) | − | |||||
Capital
expenditures
|
(404 | ) | (518 | ) | ||||
Acquisitions
of business assets, net of cash acquired
|
(113 | ) | − | |||||
Other
investing activities
|
47 | 53 | ||||||
Total
cash flows from investing activities
|
(970 | ) | (465 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from long-term borrowings, net of offering costs
|
− | 1,976 | ||||||
Payments
of dividends to shareholders
|
(81 | ) | (81 | ) | ||||
Other
financing activities
|
44 | 42 | ||||||
Total
cash flows from financing activities
|
(37 | ) | 1,937 | |||||
Effect
of exchange rate changes on cash
|
(9 | ) | (10 | ) | ||||
Increase
(decrease) in cash and equivalents
|
(699 | ) | 1,843 | |||||
Cash
and equivalents at beginning of period
|
2,082 | 1,124 | ||||||
Cash
and equivalents at end of period
|
$ | 1,383 | $ | 2,967 | ||||
Supplemental
disclosure of cash flow information:
|
||||||||
Cash
payments during the period for:
|
||||||||
Interest
|
$ | 133 | $ | 66 | ||||
Income
taxes
|
$ | 96 | $ | 128 |
-
|
the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements;
and
|
-
|
the
reported amounts of revenue and expenses during the reporting
period.
|
Three
Months Ended March 31
|
||||||||
Millions
of dollars
|
2010
|
2009
|
||||||
Revenue:
|
||||||||
Completion
and Production
|
$ | 1,964 | $ | 2,028 | ||||
Drilling
and Evaluation
|
1,797 | 1,879 | ||||||
Total
revenue
|
$ | 3,761 | $ | 3,907 | ||||
Operating
income:
|
||||||||
Completion
and Production
|
$ | 238 | $ | 363 | ||||
Drilling
and Evaluation
|
270 | 304 | ||||||
Total
operations
|
508 | 667 | ||||||
Corporate
and other
|
(59 | ) | (51 | ) | ||||
Total
operating income
|
$ | 449 | $ | 616 | ||||
Interest
expense
|
(79 | ) | (53 | ) | ||||
Interest
income
|
3 | 2 | ||||||
Other,
net
|
(40 | ) | (5 | ) | ||||
Income
from continuing operations before income taxes
|
$ | 333 | $ | 560 |
March
31,
|
December
31,
|
|||||||
Millions
of dollars
|
2010
|
2009
|
||||||
Finished
products and parts
|
$ | 1,128 | $ | 1,090 | ||||
Raw
materials and supplies
|
489 | 480 | ||||||
Work
in process
|
41 | 28 | ||||||
Total
|
$ | 1,658 | $ | 1,598 |
Noncontrolling
|
||||||||||||
Total
|
Company
|
interest
in
|
||||||||||
shareholders’
|
shareholders’
|
consolidated
|
||||||||||
Millions
of dollars
|
equity
|
equity
|
subsidiaries
|
|||||||||
Balance
at December 31, 2009
|
$ | 8,757 | $ | 8,728 | $ | 29 | ||||||
Transactions
with shareholders
|
70 | 71 | (1 | ) | ||||||||
Comprehensive
income:
|
||||||||||||
Net income
|
207 | 206 | 1 | |||||||||
Other comprehensive
income
|
7 | 7 | – | |||||||||
Total
comprehensive income
|
214 | 213 | 1 | |||||||||
Dividends
paid on common stock
|
(81 | ) | (81 | ) | – | |||||||
Balance
at March 31, 2010
|
$ | 8,960 | $ | 8,931 | $ | 29 |
Noncontrolling
|
||||||||||||
Total
|
Company
|
interest
in
|
||||||||||
shareholders’
|
shareholders’
|
consolidated
|
||||||||||
Millions
of dollars
|
equity
|
equity
|
subsidiaries
|
|||||||||
Balance
at December 31, 2008
|
$ | 7,744 | $ | 7,725 | $ | 19 | ||||||
Transactions
with shareholders
|
61 | 61 | – | |||||||||
Comprehensive
income:
|
||||||||||||
Net income
|
380 | 378 | 2 | |||||||||
Other comprehensive
loss
|
(9 | ) | (9 | ) | – | |||||||
Total
comprehensive income
|
371 | 369 | 2 | |||||||||
Dividends
paid on common stock
|
(81 | ) | (81 | ) | – | |||||||
Balance
at March 31, 2009
|
$ | 8,095 | $ | 8,074 | $ | 21 |
March
31,
|
December
31,
|
|||||||
Millions
of dollars
|
2010
|
2009
|
||||||
Defined
benefit and other postretirement liability adjustments
|
$ | (142 | ) | $ | (149 | ) | ||
Cumulative
translation adjustments
|
(65 | ) | (65 | ) | ||||
Unrealized
gains on investments
|
1 | 1 | ||||||
Total
accumulated other comprehensive loss
|
$ | (206 | ) | $ | (213 | ) |
-
|
fines
or other monetary penalties or direct monetary damages, including
disgorgement, as a result of a claim made or assessed by a governmental
authority in the United States, the United Kingdom, France, Nigeria,
Switzerland, and/or Algeria, or a settlement thereof, related to alleged
or actual violations occurring prior to November 20, 2006 of the United
States Foreign Corrupt Practices Act (FCPA) or particular, analogous
applicable foreign statutes, laws, rules, and regulations in connection
with investigations pending as of that date, including with respect to the
construction and subsequent expansion by a consortium of engineering firms
comprised of Technip SA of France, Snamprogetti Netherlands B.V., JGC
Corporation of Japan, and Kellogg Brown & Root LLC (TSKJ) of a natural
gas liquefaction complex and related facilities at Bonny Island in Rivers
State, Nigeria; and
|
-
|
all
out-of-pocket cash costs and expenses, or cash settlements or cash
arbitration awards in lieu thereof, KBR may incur after the effective date
of the master separation agreement as a result of the replacement of the
subsea flowline bolts installed in connection with the Barracuda-Caratinga
project.
|
-
|
the
Comprehensive Environmental Response, Compensation, and Liability
Act;
|
-
|
the
Resource Conservation and Recovery Act;
|
-
|
the
Clean Air Act;
|
- | the Federal Water Pollution Control Act; and |
-
|
the
Toxic Substances Control Act.
|
Three
Months Ended March 31
|
||||||||
Millions
of shares
|
2010
|
2009
|
||||||
Basic
weighted average common shares outstanding
|
905 | 897 | ||||||
Dilutive
effect of stock options
|
3 | 2 | ||||||
Diluted
weighted average common shares outstanding
|
908 | 899 |
Quoted
prices
|
||||||||||||||||
in
active
|
Significant
|
|||||||||||||||
markets
for
|
observable
inputs
|
|||||||||||||||
Carrying
|
identical
assets
|
for
similar assets or
|
||||||||||||||
Millions
of dollars
|
Value
|
Fair
value
|
or
liabilities
|
liabilities
|
||||||||||||
March
31, 2010
|
||||||||||||||||
Marketable
securities
|
$ | 1,808 | $ | 1,808 | $ | 1,808 | $ | – | ||||||||
Long-term debt
|
4,574 | 5,202 | 4,013 | 1,189 (a) | ||||||||||||
December
31, 2009
|
||||||||||||||||
Marketable
securities
|
$ | 1,312 | $ | 1,312 | $ | 1,312 | $ | – | ||||||||
Long-term debt
|
4,574 | 5,301 | 4,874 | 427 (a) |
Three
Months Ended March 31
|
||||||||||||||||
2010
|
2009
|
|||||||||||||||
Millions
of dollars
|
United
States
|
International
|
United
States
|
International
|
||||||||||||
Service
cost
|
$ | – | $ | 5 | $ | – | $ | 6 | ||||||||
Interest
cost
|
1 | 12 | 2 | 10 | ||||||||||||
Expected
return on plan assets
|
(2) | (11) | (2) | (8) | ||||||||||||
Recognized
actuarial loss
|
1 | 1 | – | 1 | ||||||||||||
Net
periodic benefit cost
|
$ | – | $ | 7 | $ | – | $ | 9 |
-
|
our
Completion and Production segment delivers cementing, stimulation,
intervention, and completion services. The segment consists of
production enhancement services, completion tools and services, and
cementing services; and
|
-
|
our
Drilling and Evaluation segment provides field and reservoir modeling,
drilling, evaluation, and precise wellbore placement solutions that enable
customers to model, measure, and optimize their well construction
activities. The segment consists of fluid services, drilling
services, drill bits, wireline and perforating services, testing and
subsea, software, and integrated project management and consulting
services.
|
Three
Months Ended
|
Year
Ended
|
|||||||||||
March
31
|
December
31
|
|||||||||||
Average Oil Prices
(dollars per barrel)
|
2010
|
2009
|
2009
|
|||||||||
West
Texas Intermediate
|
$ | 78.64 | $ | 42.91 | $ | 61.65 | ||||||
United
Kingdom Brent
|
76.25 | 44.43 | 61.49 | |||||||||
Average United States Gas
Prices (dollars per thousand
|
||||||||||||
cubic feet, or
mcf)
|
||||||||||||
Henry
Hub
|
$ | 5.30 | $ | 4.71 | $ | 4.06 |
Three
Months Ended
|
Year
Ended
|
|||||||||||
March
31
|
December
31
|
|||||||||||
Land
vs. Offshore
|
2010
|
2009
|
2009
|
|||||||||
United
States:
|
||||||||||||
Land
|
1,300 | 1,270 | 1,042 | |||||||||
Offshore (incl. Gulf of
Mexico)
|
45 | 56 | 44 | |||||||||
Total
|
1,345 | 1,326 | 1,086 | |||||||||
Canada:
|
||||||||||||
Land
|
466 | 327 | 220 | |||||||||
Offshore
|
4 | 1 | 1 | |||||||||
Total
|
470 | 328 | 221 | |||||||||
International
(excluding Canada):
|
||||||||||||
Land
|
768 | 743 | 722 | |||||||||
Offshore
|
295 | 282 | 275 | |||||||||
Total
|
1,063 | 1,025 | 997 | |||||||||
Worldwide
total
|
2,878 | 2,679 | 2,304 | |||||||||
Land
total
|
2,534 | 2,340 | 1,984 | |||||||||
Offshore
total
|
344 | 339 | 320 | |||||||||
Three
Months Ended
|
Year
Ended
|
|||||||||||
March
31
|
December
31
|
|||||||||||
Oil
vs. Natural Gas
|
2010 | 2009 | 2009 | |||||||||
United
States (incl. Gulf of Mexico):
|
||||||||||||
Oil
|
456 | 281 | 282 | |||||||||
Natural gas
|
889 | 1,045 | 804 | |||||||||
Total
|
1,345 | 1,326 | 1,086 | |||||||||
Canada:
|
||||||||||||
Oil
|
256 | 125 | 102 | |||||||||
Natural gas
|
214 | 203 | 119 | |||||||||
Total
|
470 | 328 | 221 | |||||||||
International
(excluding Canada):
|
||||||||||||
Oil
|
810 | 807 | 776 | |||||||||
Natural gas
|
253 | 218 | 221 | |||||||||
Total
|
1,063 | 1,025 | 997 | |||||||||
Worldwide
total
|
2,878 | 2,679 | 2,304 | |||||||||
Oil
total
|
1,522 | 1,213 | 1,160 | |||||||||
Natural
gas total
|
1,356 | 1,466 | 1,144 |
Three
Months Ended
|
Year
Ended
|
|||||||||||
March
31
|
December
31
|
|||||||||||
Drilling
Type
|
2010
|
2009
|
2009
|
|||||||||
United
States (incl. Gulf of Mexico):
|
||||||||||||
Horizontal
|
663 | 491 | 455 | |||||||||
Vertical
|
459 | 574 | 431 | |||||||||
Directional
|
223 | 261 | 200 | |||||||||
Total
|
1,345 | 1,326 | 1,086 |
-
|
increasing
our market share in more economic, unconventional shale plays and
deepwater markets by leveraging our broad technology offerings to provide
value to our customers through integrated solutions and the ability to
more efficiently drill and complete their wells;
|
-
|
making
key investments in technology and capital to accelerate growth
opportunities;
|
-
|
improving
working capital, operating within our cash flow, and managing our balance
sheet to maximize our financial flexibility;
|
-
|
continuing
to seek ways to be one of the most cost efficient service providers in the
industry by using our scale and breadth of operations;
and
|
-
|
expanding
our business with national oil
companies.
|
-
|
an
offshore, multi-services contract in Angola valued at approximately $1.3
billion for the provision of cementing, production enhancement, completion
tools, wireline, and perforating services;
|
-
|
a
contract valued at approximately $750 million from a major exploration and
production company for stimulation services in the Williston
basin;
|
-
|
a
two-year contract, plus options, with ConocoPhillips China Inc., valued at
approximately $40 million, which includes provisions for
directional-drilling and logging-while-drilling services on the Peng Lai
Development in China's Bohai Bay; and
|
-
|
frac
pack and gravel pack completions awards in
Brazil.
|
-
|
Boots & Coots – well intervention and pressure
control services, which is still subject to approval by Boots and Coots’
stockholders, regulatory approvals, and other customary closing
conditions;
|
-
|
Tierra
Geophysical – 3D wave equation modeling and depth imaging seismic
processing solutions that enhance sub-salt and wide azimuth
imaging;
|
-
|
Wellbore
Energy Solutions – wellbore cleaning services that are critical in
completing complicated, tortuous path, deepwater
wellbores;
|
-
|
Diamond
Rotating Heads – rotating control devices utilized during underbalanced
and managed pressure drilling applications; and
|
-
|
Watertectonics
– wellsite processing of fresh water and flowback for reuse in hydraulic
fracturing applications.
|
Three
Months Ended
|
||||||||||||||||
REVENUE:
|
March
31
|
Increase
|
Percentage
|
|||||||||||||
Millions
of dollars
|
2010
|
2009
|
(Decrease)
|
Change
|
||||||||||||
Completion
and Production
|
$ | 1,964 | $ | 2,028 | $ | (64 | ) | (3 | )% | |||||||
Drilling
and Evaluation
|
1,797 | 1,879 | (82 | ) | (4 | ) | ||||||||||
Total
revenue
|
$ | 3,761 | $ | 3,907 | $ | (146 | ) | (4 | )% |
By
geographic region:
|
||||||||||||||||
Completion
and Production:
|
||||||||||||||||
North America
|
$ | 1,125 | $ | 1,071 | $ | 54 | 5 | % | ||||||||
Latin America
|
202 | 232 | (30 | ) | (13 | ) | ||||||||||
Europe/Africa/CIS
|
385 | 426 | (41 | ) | (10 | ) | ||||||||||
Middle
East/Asia
|
252 | 299 | (47 | ) | (16 | ) | ||||||||||
Total
|
1,964 | 2,028 | (64 | ) | (3 | ) | ||||||||||
Drilling
and Evaluation:
|
||||||||||||||||
North America
|
579 | 612 | (33 | ) | (5 | ) | ||||||||||
Latin America
|
293 | 324 | (31 | ) | (10 | ) | ||||||||||
Europe/Africa/CIS
|
535 | 542 | (7 | ) | (1 | ) | ||||||||||
Middle
East/Asia
|
390 | 401 | (11 | ) | (3 | ) | ||||||||||
Total
|
1,797 | 1,879 | (82 | ) | (4 | ) | ||||||||||
Total
revenue by region:
|
||||||||||||||||
North America
|
1,704 | 1,683 | 21 | 1 | ||||||||||||
Latin America
|
495 | 556 | (61 | ) | (11 | ) | ||||||||||
Europe/Africa/CIS
|
920 | 968 | (48 | ) | (5 | ) | ||||||||||
Middle
East/Asia
|
642 | 700 | (58 | ) | (8 | ) |
Three
Months Ended
|
||||||||||||||||
OPERATING
INCOME:
|
March
31
|
Increase
|
Percentage
|
|||||||||||||
Millions
of dollars
|
2010
|
2009
|
(Decrease)
|
Change
|
||||||||||||
Completion
and Production
|
$ | 238 | $ | 363 | $ | (125 | ) | (34 | )% | |||||||
Drilling
and Evaluation
|
270 | 304 | (34 | ) | (11 | ) | ||||||||||
Corporate
and other
|
(59 | ) | (51 | ) | (8 | ) | (16 | ) | ||||||||
Total
operating income
|
$ | 449 | $ | 616 | $ | (167 | ) | (27 | )% |
By
geographic region:
|
||||||||||||||
Completion
and Production:
|
||||||||||||||
North America
|
$ | 137 | $ | 166 | $ | (29 | ) | (17 | )% | |||||
Latin America
|
29 | 54 | (25 | ) | (46 | ) | ||||||||
Europe/Africa/CIS
|
39 | 77 | (38 | ) | (49 | ) | ||||||||
Middle
East/Asia
|
33 | 66 | (33 | ) | (50 | ) | ||||||||
Total
|
238 | 363 | (125 | ) | (34 | ) | ||||||||
Drilling
and Evaluation:
|
||||||||||||||
North America
|
93 | 64 | 29 | 45 | ||||||||||
Latin America
|
17 | 54 | (37 | ) | (69 | ) | ||||||||
Europe/Africa/CIS
|
91 | 91 | – | – | ||||||||||
Middle
East/Asia
|
69 | 95 | (26 | ) | (27 | ) | ||||||||
Total
|
270 | 304 | (34 | ) | (11 | ) | ||||||||
Total
operating income by region
|
||||||||||||||
(excluding Corporate and
other):
|
||||||||||||||
North America
|
230 | 230 | – | – | ||||||||||
Latin America
|
46 | 108 | (62 | ) | (57 | ) | ||||||||
Europe/Africa/CIS
|
130 | 168 | (38 | ) | (23 | ) | ||||||||
Middle
East/Asia
|
102 | 161 | (59 | ) | (37 | ) |
-
|
governmental
regulations, including the policies of governments regarding the
exploration for and production and development of their oil and natural
gas reserves;
|
-
|
global
weather conditions and natural disasters;
|
-
|
worldwide
political, military, and economic conditions;
|
-
|
the
level of oil production by non-OPEC countries and the available excess
production capacity within OPEC;
|
-
|
oil
refining capacity and shifts in end-customer preferences toward fuel
efficiency and the use of natural gas;
|
-
|
the
cost of producing and delivering oil and natural gas;
|
-
|
Potential
acceleration of development of alternative fuels; and
|
-
|
the
level of supply and demand for oil and natural gas, especially demand for
natural gas in the United States.
|
Total
Number
|
||||||||||||
of
Shares
|
||||||||||||
Purchased
as
|
||||||||||||
Total
Number
|
Average
|
Part
of Publicly
|
||||||||||
of
Shares
|
Price
Paid
|
Announced
Plans
|
||||||||||
Period
|
Purchased
(a)
|
per
Share
|
or
Programs
|
|||||||||
January
1-31
|
99,863 | $ | 31.67 | – | ||||||||
February
1-28
|
14,942 | $ | 29.52 | – | ||||||||
March
1-31
|
5,614 | $ | 31.21 | – | ||||||||
Total
|
120,419 | $ | 31.39 | – |
|
(a)
|
All
of the 120,419 shares purchased during the three-month period ended March
31, 2010 were acquired from employees in connection with the settlement of
income tax and related benefit withholding obligations arising from
vesting in restricted stock grants. These shares were not part
of a publicly announced program to purchase common
shares.
|
2.1
|
Agreement
and Plan of Merger dated April 9, 2010, by and among Halliburton
Company,
|
Gradient,
LLC, and Boots & Coots, Inc. (incorporated by reference to Exhibit 2.1
to
|
|
Halliburton’s
Form 8-K filed April 12, 2010, File No. 1-3492).
|
|
*
10.1
|
Resignation,
General Release, and Settlement Agreement (David S.
King).
|
*
12.1
|
Computation
of Ratio of Earnings to Fixed Charges
|
*
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act
|
of
2002.
|
|
*
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act
|
of
2002.
|
|
**
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act
|
of
2002.
|
|
**
32.2
|
Certification
of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act
|
of
2002.
|
|
** 101.INS
|
XBRL
Instance Document
|
** 101.SCH
|
XBRL
Taxonomy Extension Schema Document
|
** 101.CAL
|
XBRL
Taxonomy Extension Calculation Linkbase Document
|
** 101.LAB
|
XBRL
Taxonomy Extension Label Linkbase Document
|
** 101.PRE
|
XBRL
Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed
with this Form 10-Q
|
**
|
Furnished
with this Form 10-Q
|
/s/ Mark
A. McCollum
|
/s/ Evelyn
M. Angelle
|
Mark
A. McCollum
|
Evelyn
M. Angelle
|
Executive
Vice President and
|
Vice
President, Corporate Controller, and
|
Chief
Financial Officer
|
Principal
Accounting Officer
|
|
(a)
|
Employee
agrees that the terms and conditions of this Supplement and the events
(including negotiations) leading up to its execution shall remain
confidential as between the parties and he shall not disclose them to any
other person. Without limiting the generality of the foregoing,
Employee will not respond to or in any way participate in or contribute to
any public discussion, notice or other publicity concerning, or in any way
relating to, execution of this Supplement or the events (including any
negotiations) which led to its execution. Employee further
agrees that he shall not make, directly or indirectly, whether in writing,
orally or electronically, any negative, derogatory or other comment that
could reasonably be expected to be detrimental to the Halliburton
Entities, their business or operations or any of their current or former
employees, officers or directors. The foregoing
notwithstanding, Employee may disclose the terms of this Supplement to his
immediate family, attorneys and financial advisors provided he informs
them of this confidentiality provision and they agree to abide by
it.
|
|
(b)
|
Employee
agrees to an orderly transition of duties and will provide appropriate
details to Employer concerning all of his current business activities and
duties. Employee agrees this transition period will end on the
Termination Date.
|
|
c)
|
Employee
reaffirms and acknowledges his existing and continuing obligations under
the Employment Agreement, including, without limitation, the obligations
set forth in Article 4 thereof relating to ownership and protection of
intellectual property and confidential information. Except as may be
required by law, Employee also agrees to maintain in confidence any
proprietary and confidential information of customers, vendors, or other
third parties received or of which he has knowledge as a result of his
employment. The prohibitions of this subsection shall not apply, however,
to information in the public domain (but only if the
same becomes part
of the
|
|
(d)
|
Employee
agrees to leave in his office or deliver to Employer on or before the
Termination Date all correspondence, memoranda, notes, records, data or
information, analyses, drawings, photographs or other documents
(including, without limitation, any computer-generated, computer-stored or
electronically-stored materials) made, composed or received by Employee,
solely or jointly with others, and which as of the Termination Date are in
his possession, custody or control and which are related in any manner to
the past, present or anticipated business of any of the Halliburton
Entities (collectively, the “Company
Information”) without retaining any copies thereof. It is the
intent of the parties that the foregoing covenant is applicable to all
Company Information and all copies thereof, whether in writing or in
electronic format, wherever located, including Company Information located
on or in Employee’s personally-owned property. Employee hereby grants and
conveys to Employer all right, title and interest in and to, including,
without limitation, the right to possess, print, copy and sell or
otherwise dispose of, all Company Information, and copies, abstracts or
summaries thereof, which may have been prepared by Employee or under his
direction or which may have come into his possession in any way during the
term of his employment with any of the Halliburton Entities and which
relate in any manner to the past, present or anticipated business of any
of the Halliburton Entities.
|
|
(e)
|
Employee
represents and acknowledges that he has no claim or right, title or
interest in the property or assets of any of the Halliburton Entities. On
or before the Termination Date, Employee shall deliver any such property
in his possession or control, including, without limitation, any
computers, cellular telephones, any wireless devices such as a
“BlackBerry,” credit cards, telephone cards, office keys and security
badges furnished by any of the Halliburton Entities for his
use.
|
3.
|
Obligations of
Employer. In lieu of Employer’s obligations under
Article 3 of the Employment Agreement, Employer and Employee agree as
follows:
|
|
(a)
|
Employee
shall be entitled to receive his regular salary through the Termination
Date.
|
|
(b)
|
In
consideration of Employee’s continuing obligations and promises as set
forth in the Employment Agreement and this Supplement, Employer will make
a one time severance payment to Employee equal to one year’s annual base
salary in effect on the Termination Date, in a single lump sum, less
applicable withholding taxes (the “Severance
Payment”). Employee acknowledges that the Severance
Payment exceeds and fully satisfies
any
|
|
(c)
|
Effective
with the later of the Termination Date or the Effective Date, all shares
of stock issued to Employee under the 1993 Stock and Incentive Plan as to
which restrictions have not lapsed as of the Termination Date will be
retained by Employee and all restrictions of any shares thus retained will
lapse, all pursuant to the terms of Employee’s underlying restricted stock
agreements.
|
|
(d)
|
Effective
on the later of the Termination Date or the Effective Date, Employee’s
rights to the stock options granted to him under the 1993 Stock and
Incentive Plan shall be treated in accordance with the terms of the
underlying stock option agreements applicable to approved retention of
stock options upon early retirement, after which Employee may exercise
such options, if at all, as permitted by such stock option agreements and
for the length of time permitted
thereby.
|
|
(e)
|
Upon
approval of the administrative committee appointed to administer the
Supplemental Executive Retirement Plan and Benefit Restoration Plan,
Employee will receive the aggregate balance of his accounts under such
plans, including applicable interest, in a single lump sum payment, as
soon as administratively feasible after the 2010 allocations to such
accounts have been determined. Employee recognizes that a
portion of such payments may be subject to a six month waiting period
under such plans in accordance with Internal Revenue Code Section
409A.
|
|
(f)
|
Employee
shall cease to be a participant in the Halliburton Annual Performance Pay
Plan effective as of the Termination Date. Any annual incentive
compensation earned under such Plan for the 2010 plan year shall be paid
to Employee at the time that incentive compensation amounts are paid to
the other Annual Performance Pay Plan
participants.
|
|
(g)
|
Employer
acknowledges that Employee is a participant in certain retirement and
welfare benefit plans and programs of Employer and Halliburton. Upon
termination of Employee’s employment, he shall receive the benefits to
which he is entitled in accordance with such plans’ respective terms;
provided, however, that, since the severance benefits provided under the
Employment Agreement and this Supplement are
in
|
|
(h)
|
Employer
will provide Employee with cash-in-lieu of $12,000 for outplacement
services and $7,500 for financial planning services, as well as
reimbursement or payment for an executive physical examination for
2010.
|
|
(i)
|
The
Severance Payment and the payments provided for in Section 3(h) above will be made no
earlier than the later to occur of the Termination Date or Effective Date
and will be made as soon as administratively feasible, but not later than
60 days after the relevant date. Applicable withholding taxes
will be deducted from all payments due Employee
hereunder.
|
(a)
|
Halliburton
is one of the world’s largest oilfield services companies, providing a
comprehensive range of services and products for the exploration,
development, and production of oil and gas, to major national,
international, and independent oil and gas companies throughout the
world.
|
(b)
|
Employee
acknowledges that in his role at Halliburton, he obtained, possessed and
otherwise had substantial access to significant portions of Halliburton’s
Proprietary and Confidential Information as defined herein, including
strategies and business plans; supervised and managed key employees, and
was responsible for key customer and supplier relationships on a worldwide
basis.
|
(c)
|
Employee
and Employer agree and acknowledge that the Halliburton Entities have
developed and own and will develop and own valuable Proprietary and
Confidential Information and that the Halliburton Entities have goodwill
and will continue to enjoy substantial goodwill unless disturbed by
Employee. Employee and Employer further agree and acknowledge that the
Halliburton Entities, and Employer on their behalf, have a substantial and
legitimate business interest in protecting their Proprietary and
Confidential Information and
goodwill.
|
(d)
|
Non-Competition
Period: For a 2-year period beginning on the first
business day following the later of the Termination Date or the
Effective Date of this Supplement (the “Non-Competition
Period”), Employee agrees to the following
covenants:
|
a.
|
Has
engaged in business by providing services and/or products for the
exploration, development, and production of oil and gas, to major
national, international, and independent oil and gas companies, including
both United States and international locations;
or
|
b.
|
Has
otherwise established its goodwill, business reputation or any customer or
supplier relations.
|
|
(e)
|
Employee
represents and warrants that the time, scope and geographic area
restricted by the provisions of this Section are reasonable, that the
enforcement of the restrictions contained herein will not be unduly
burdensome on Employee, and that Employee will be able to earn a
reasonable living while abiding by the terms imposed herein. Employee
agrees that the restraints created by the covenants of this Section 9 are
no greater than necessary to protect the legitimate interests of the
Halliburton Entities, including their Proprietary and Confidential
Information and goodwill. In addition, Employee agrees that the need of
the Halliburton Entities for the protection afforded by such covenants is
not outweighed by the hardship to Employee, nor is any injury to the
public likely to result from such restraints. Employee irrevocably waives
all defenses to the strict enforcement of the covenants contained in this
Section 9 and agrees that his breach or violation of the covenants
contained in Sections 8 and/or 9, or any threatened breach or violation
thereof, shall entitle Employer, on its own behalf or on behalf of any of
the Halliburton Entities, as a matter of right, to specific performance
and injunctive relief issued by any court of competent jurisdiction,
without the requirement to post a bond, restraining any further or
continued breach or violation of any such covenants. Such remedies shall
not be deemed the exclusive remedies for breach of Sections 8 and/or 9,
but shall be in addition to all remedies available at law or in equity to
Employer, including, without limitation, recovery of damages from Employee
and his agents involved in such breach. In addition, Employee agrees that
any breach by him of any of the covenants contained in Sections
8 and 9 will entitle Employer, for and on behalf of the other Halliburton
Entities, to recover the payments or other consideration paid to Employee
under Section 10 hereof. Further, Employee agrees that the Halliburton
Entities are entitled to insist on full compliance by Employee with the
full terms, including time periods, set forth in this Section
9.
|
|
(f)
|
It
is expressly understood and agreed that Employer and Employee consider the
restrictions contained in this Section 9 to be reasonable and necessary to
protect the Proprietary and Confidential Information and/or goodwill and
that Employee’s obligations to keep such information confidential shall
survive termination of the Non-Competition Period. Nevertheless, if any of
the aforesaid restrictions are found by a court having jurisdiction to be
unreasonable, or overly broad as to geographic area or time, or otherwise
unenforceable, the parties intend for the restrictions therein set forth
to be modified by such courts so as to be reasonable and enforceable and,
as so modified by the court, to be fully enforced, it being expressly
understood and agreed by Employee that the provisions of this Section are
reasonably necessary to protect the Halliburton Entities’ legitimate
business interests and are designed particularly to protect their
Proprietary and Confidential Information and
goodwill.
|
|
(a)
|
In
consideration of Employee's covenants and promises as set forth in
Sections 8 and 9 hereof, but expressly subject to the provisions of
Section 9(e), Employer will make a cash payment to Employee for the
prorated amount earned, if any, under the Performance Unit Program for
only those performance cycles that Employee has been approved for
participation in prior to the Termination Date, which if due will be paid
on the later of (i) the date payments are made to other participants under
the Program, in accordance with the terms of such Program for the
applicable Cycle, or (ii) the end of the Non-Competition
Period. Employee shall not participate in the Performance Unit
Program for any performance cycles other than those for which he has been
approved prior to the Termination Date. Employee shall not
participate in the 2010 Cycle.
|
|
(b)
|
Payment
of the amounts set forth in Section 10(a) will be made only if Employee’s
obligations set forth in Sections 8 and 9 are fully satisfied at all times
during the Non-Competition Period and at the time such amounts are
payable. Employee understands and agrees that his right to all or any
portion of the payment provided for herein, and Company's obligation
to make payment of the entire amount or any portion thereof, are dependent
and conditioned on Employee's compliance in full with all provisions
contained in Sections 8 and 9. Any failure on the part of Employee
to comply with each such provision, including any attempt by or on behalf
of Employee to have any such provision declared unenforceable in whole or
in part by an arbitrator or court, shall excuse Employer forever from
the obligation to make the payments, in whole or in part, provided for in
Section 10(a).
|
|
(a)
|
In
return for the release contained in this Supplement, he will receive
consideration beyond that which he would have been entitled to receive but
for the Employment Agreement and this
Supplement;
|
|
(b)
|
He
was given a copy of this Supplement on April 30, 2008, and he has
twenty-one (21) days from such date to review it before accepting, and
that subsequent changes to this Supplement, whether material or
immaterial, shall not restart such 21-day review
period;
|
|
(c)
|
He
has been advised in writing by Employer to consult with an attorney before
signing this Supplement; and
|
|
(d)
|
If
he accepts this Supplement, he will have seven (7) days following the date
of execution of this Supplement to revoke this
Supplement.
|
|
(a)
|
If
Employee is a “specified
employee,” as such term is defined in Section 409A and determined
as described below in this Section 19, any payments or benefits payable or
provided as a result of Employee’s termination of employment shall not be
payable before the earlier of (i) the date that is six months after
Employee’s termination, (ii) the date of Employee’s death, or (iii) the
date that otherwise complies with the requirements of Section
409A.
|
|
(b)
|
If
any provision of this Supplement would result in the imposition of an
applicable tax under Section 409A, Employee and Employer agree that such
provision will be reformed to avoid imposition of the applicable tax in a
manner that will result in the least adverse economic impact on
Employee.
|
Three
Months
Ended
March
31
|
Year
Ended December 31
|
|||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
Earnings
available for fixed charges:
|
||||||||||||||||||||
Income from continuing
operations
|
||||||||||||||||||||
before income taxes and
noncontrolling interest
|
$ | 333 | $ | 1,682 | $ | 3,849 | $ | 3,447 | $ | 3,186 | ||||||||||
Add:
|
||||||||||||||||||||
Distributed earnings from
equity in
|
||||||||||||||||||||
unconsolidated
affiliates
|
1 | 17 | 30 | 43 | 28 |