HALLIBURTON COMPANY (NYSE:HAL) Files An 8-K Results of Operations and Financial ConditionItem 2.02. Results of Operations and Financial Condition
On October22, 2018, registrant issued a press release entitled “Halliburton Announces Third Quarter 2018 Results."
The text of the Press Release is as follows:
HALLIBURTON ANNOUNCES THIRD QUARTER 2018 RESULTS
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Income from continuing operations of $0.50 per diluted share |
HOUSTON – October22, 2018 – Halliburton Company (NYSE:HAL) announced today income from continuing operations of $435 million, or $0.50 per diluted share, for the third quarter of 2018. This compares to income from continuing operations for the second quarter of 2018 of $511 million, or $0.58 per diluted share. Operating income was $716 million during the third quarter of 2018, compared to operating income of $789 million in the second quarter of 2018.
Halliburton released the iCruise™ Intelligent Rotary Steerable System (RSS), a breakthrough technology that delivers faster drilling, more accurate steering, and longer laterals. The iCruise System provides the highest mechanical specifications available in the market today with 400 RPM and up to 18 degrees/100 feet dogleg capabilities to drill fast and with greater accuracy.
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Halliburton unveiled Prodigi™ AB Service, a first-of-its-kind offering that introduces automation to hydraulic fracturing to achieve a lower cost per BOE. By automating the breakdown process of a fracturing treatment, Prodigi AB Service helps deliver better well performance. It also helps improve overall efficiency, maximize the performance of perforation clusters, and mitigate the risk of screen-out. |
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Halliburton announced the acquisition of GOHFER® Fracture Modeling Software, the leading fracture simulation software in the business. GOHFER Software is used globally for conventional and unconventional well completion design, analysis and optimization. |
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Halliburton released the Xaminer® Magnetic Resonance (XMR™) Service, the industry’s only high pressure rated (35,000 psi) downhole sensor that provides comprehensive nuclear magnetic resonance measurements to improve reservoir insight. The XMR Service delivers detailed formation data, including 2D and 3D fluid characterization, carbonate pore size classification, unconventional analysis, and permeability. |
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Halliburton introduced MicroScout® Plus Service, designed to take hydraulic fracturing and microfracture stimulation to the next level by reaching and effectively stimulating secondary microfractures too small to be propped using conventional frac sand. The enhanced sand suspension characteristics offered by the MicroScout Plus Service offer deeper penetration into the formation and extended conductive complexity, aimed at increasing the productivity of stimulated reservoir volume over the long term. |
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Halliburton announced that its XtremeGrip™ liner hangers have been installed to a record depth of 30,924 feet in the Gulf of Mexico Hess-operated Stampede deepwater development. Halliburton has installed a total of 37 XtremeGrip expandable liner hangers across seven wells to date, with no liner-top leaks or remedial work required. |
About Halliburton
Founded in 1919, Halliburton is one of the world's largest providers of products and services to the energy industry. With over 55,000 employees, representing 140 nationalities in more than 80 countries, the Company helps its customers maximize value 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 throughout the life of the asset. Visit the Company’s website at www.halliburton.com. Connect with Halliburton on Facebook, Twitter, LinkedIn, Instagram and YouTube.
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: the continuation or suspension of our stock repurchase program, the amount, the timing and the trading prices of Halliburton common stock, and the availability and alternative uses of cash; changes in the demand for or price of oil and/or natural gas; potential catastrophic events related to our operations, and related indemnification and insurance matters; protection of intellectual property rights and against cyber-attacks; compliance with environmental laws; changes in government regulations and regulatory requirements, particularly those related to oil and natural gas exploration, radioactive sources, explosives, chemicals, hydraulic fracturing services, and climate-related initiatives; the impact of federal tax reform, compliance with laws related to income taxes and assumptions regarding the generation of future taxable income; risks of international operations, including risks relating to unsettled political conditions, war, the effects of terrorism, foreign exchange rates and controls, international trade and regulatory controls and sanctions, and doing business with national oil companies; 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; structural changes and infrastructure issues in the oil and natural gas industry; maintaining a highly skilled workforce; availability and cost of raw materials; agreement with respect to and completion of potential acquisitions and integration and success of acquired businesses and operations of joint ventures. Halliburton's Form 10-K for the year ended December 31, 2017, Form 10-Q for the quarter ended June 30, 2018, 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.
HALLIBURTON COMPANY
Condensed Consolidated Statements of Operations
(Millions of dollars and shares except per share data)
(Unaudited)
|
Three Months Ended |
||||||
|
September 30 |
June 30 |
|||||
|
Revenue: |
||||||
|
Completion and Production |
$ |
4,170 |
$ |
3,537 |
$ |
4,164 |
|
Drilling and Evaluation |
2,002 |
1,907 |
1,983 |
|||
|
Total revenue |
$ |
6,172 |
$ |
5,444 |
$ |
6,147 |
|
Operating income: |
||||||
|
Completion and Production |
$ |
$ |
$ |
|||
|
Drilling and Evaluation |
||||||
|
Corporate and other |
(78 |
) |
(71 |
) |
(71 |
) |
|
Total operating income |
$ |
$ |
$ |
|||
|
Interest expense, net |
(140 |
) |
(115 |
) |
(137 |
) |
|
Other, net |
(42 |
) |
(31 |
) |
(19 |
) |
|
Income from continuing operations before income taxes |
$ |
$ |
$ |
|||
|
Income tax provision |
(100 |
) |
(135 |
) |
(125 |
) |
|
Net income |
$ |
$ |
$ |
|||
|
Net loss attributable to noncontrolling interest |
||||||
|
Net income attributable to company |
$ |
$ |
$ |
|||
|
Basic and diluted net income per share |
$ |
0.50 |
$ |
0.42 |
$ |
0.58 |
|
Basic weighted average common shares outstanding |
||||||
|
Diluted weighted average common shares outstanding |
||||||
HALLIBURTON COMPANY
Condensed Consolidated Statements of Operations
(Millions of dollars and shares except per share data)
(Unaudited)
|
Nine Months Ended |
||||
|
September 30 |
||||
|
Revenue: |
||||
|
Completion and Production |
$ |
12,141 |
$ |
9,273 |
|
Drilling and Evaluation |
5,918 |
5,407 |
||
|
Total revenue |
$ |
18,059 |
$ |
14,680 |
|
Operating income: |
||||
|
Completion and Production |
$ |
1,782 |
$ |
1,071 |
|
Drilling and Evaluation |
||||
|
Corporate and other |
(218 |
) |
(251 |
) |
|
Impairments and other charges (a) |
(265 |
) |
(262 |
) |
|
Total operating income |
$ |
1,859 |
$ |
|
|
Interest expense, net (b) |
(417 |
) |
(478 |
) |
|
Other, net |
(86 |
) |
(75 |
) |
|
Income from continuing operations before income taxes |
$ |
1,356 |
$ |
|
|
Income tax provision (c) |
(367 |
) |
(81 |
) |
|
Net income |
$ |
$ |
||
|
Net loss attributable to noncontrolling interest |
||||
|
Net income attributable to company |
$ |
$ |
||
|
Basic net income per share |
$ |
1.13 |
$ |
0.42 |
|
Diluted net income per share |
$ |
1.13 |
$ |
0.41 |
|
Basic weighted average common shares outstanding |
||||
|
Diluted weighted average common shares outstanding |
||||
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(a) During the nine months ended September 30, 2018, Halliburton recognized a pre-tax charge of $265 million related to a write-down of its remaining investment in Venezuela, consisting of receivables, fixed assets, inventory and other assets and liabilities. During the nine months ended September 30, 2017, Halliburton recognized a $262 million fair market value adjustment related to Venezuela. |
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(b) Includes $104 million of costs related to the early extinguishment of $1.4 billion of senior notes in the nine months ended September 30, 2017. |
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(c) Includes $47 million of accrued taxes in Venezuela for the charge taken during the nine months ended September 30, 2018. |
HALLIBURTON COMPANY
Condensed Consolidated Balance Sheets
(Millions of dollars)
(Unaudited)
|
September 30 |
December 31 |
|||
|
Assets |
||||
|
Current assets: |
||||
|
Cash and equivalents |
$ |
2,057 |
$ |
2,337 |
|
Receivables, net |
5,526 |
5,036 |
||
|
Inventories |
2,887 |
2,396 |
||
|
Other current assets |
1,008 |
|||
|
Total current assets |
11,436 |
10,777 |
||
|
Property, plant and equipment, net |
8,821 |
8,521 |
||
|
Goodwill |
2,800 |
2,693 |
||
|
Deferred income taxes |
1,128 |
1,230 |
||
|
Other assets |
1,566 |
1,864 |
||
|
Total assets |
$ |
25,751 |
$ |
25,085 |
|
Liabilities and Shareholders’ Equity |
||||
|
Current liabilities: |
||||
|
Accounts payable |
$ |
3,142 |
$ |
2,554 |
|
Accrued employee compensation and benefits |
||||
|
Short-term borrowings and current maturities of long-term debt |
||||
|
Other current liabilities |
1,054 |
1,050 |
||
|
Total current liabilities |
4,953 |
4,862 |
||
|
Long-term debt |
10,424 |
10,430 |
||
|
Employee compensation and benefits |
||||
|
Other liabilities |
||||
|
Total liabilities |
16,734 |
16,736 |
||
|
Company shareholders’ equity |
8,998 |
8,322 |
||
|
Noncontrolling interest in consolidated subsidiaries |
||||
|
Total shareholders’ equity |
9,017 |
8,349 |
||
|
Total liabilities and shareholders’ equity |
$ |
25,751 |
$ |
25,085 |
HALLIBURTON COMPANY
Condensed Consolidated Statements of Cash Flows
(Millions of dollars)
(Unaudited)
|
Nine Months Ended |
||||
|
September 30 |
||||
|
Cash flows from operating activities: |
||||
|
Net income |
$ |
$ |
||
|
Adjustments to reconcile net income to cash flows from operating activities: |
||||
|
Depreciation, depletion and amortization |
1,184 |
1,163 |
||
|
Working capital (a) |
(372 |
) |
(502 |
) |
|
Impairments and other charges |
||||
|
Other |
||||
|
Total cash flows provided by operating activities |
2,305 |
1,457 |
||
|
Cash flows from investing activities: |
||||
|
Capital expenditures |
(1,475 |
) |
(934 |
) |
|
Payments to acquire businesses |
(166 |
) |
(628 |
) |
|
Proceeds from sales of property, plant and equipment |
||||
|
Purchases of investment securities, net of sales |
||||
|
Other investing activities |
(58 |
) |
(56 |
) |
|
Total cash flows used in investing activities |
(1,439 |
) |
(1,507 |
) |
|
Cash flows from financing activities: |
||||
|
Dividends to shareholders |
(473 |
) |
(469 |
) |
|
Payments on long-term borrowings |
(436 |
) |
(1,633 |
) |
|
Stock repurchase program |
(200 |
) |
||
|
Other financing activities |
||||
|
Total cash flows used in financing activities |
(1,081 |
) |
(2,010 |
) |
|
Effect of exchange rate changes on cash |
(65 |
) |
(51 |
) |
|
Decrease in cash and equivalents |
(280 |
) |
(2,111 |
) |
|
Cash and equivalents at beginning of period |
2,337 |
4,009 |
||
|
Cash and equivalents at end of period |
$ |
2,057 |
$ |
1,898 |
|
(a) Working capital includes receivables, inventories and accounts payable. |
HALLIBURTON COMPANY
Revenue and Operating Income Comparison
By Operating Segment and Geographic Region
(Millions of dollars)
(Unaudited)
|
Three Months Ended |
||||||
|
September 30 |
June 30 |
|||||
|
Revenue |
||||||
|
By operating segment: |
||||||
|
Completion and Production |
$ |
4,170 |
$ |
3,537 |
$ |
4,164 |
|
Drilling and Evaluation |
2,002 |
1,907 |
1,983 |
|||
|
Total revenue |
$ |
6,172 |
$ |
5,444 |
$ |
6,147 |
|
By geographic region: |
||||||
|
North America |
$ |
3,739 |
$ |
3,163 |
$ |
3,834 |
|
Latin America |
||||||
|
Europe/Africa/CIS |
||||||
|
Middle East/Asia |
1,154 |
1,029 |
1,108 |
|||
|
Total revenue |
$ |
6,172 |
$ |
5,444 |
$ |
6,147 |
|
Operating Income |
||||||
|
By operating segment: |
||||||
|
Completion and Production |
$ |
$ |
$ |
|||
|
Drilling and Evaluation |
||||||
|
Total |
||||||
|
Corporate and other |
(78 |
) |
(71 |
) |
(71 |
) |
|
Total operating income |
$ |
$ |
$ |
|||
HALLIBURTON COMPANY
Revenue and Operating Income Comparison
By Operating Segment and Geographic Region
(Millions of dollars)
(Unaudited)
|
Nine Months Ended |
||||
|
September 30 |
||||
|
Revenue |
||||
|
By operating segment: |
||||
|
Completion and Production |
$ |
12,141 |
$ |
9,273 |
|
Drilling and Evaluation |
5,918 |
5,407 |
||
|
Total revenue |
$ |
18,059 |
$ |
14,680 |
|
By geographic region: |
||||
|
North America |
$ |
11,090 |
$ |
8,164 |
|
Latin America |
1,458 |
1,501 |
||
|
Europe/Africa/CIS |
2,199 |
2,005 |
||
|
Middle East/Asia |
3,312 |
3,010 |
||
|
Total revenue |
$ |
18,059 |
$ |
14,680 |
|
Operating Income |
||||
|
By operating segment: |
||||
|
Completion and Production |
$ |
1,782 |
$ |
1,071 |
|
Drilling and Evaluation |
||||
|
Total |
2,342 |
1,504 |
||
|
Corporate and other |
(218 |
) |
(251 |
) |
|
Impairments and other charges |
(265 |
) |
(262 |
) |
|
Total operating income |
$ |
1,859 |
$ |
|
Conference Call Details
Halliburton will host a conference call on Monday, October22, 2018, to discuss the third quarter 2018 financial results. The call will begin at 8:00 AM Central Time (9:00 AM Eastern Time).
Please visit the website to listen to the call live via webcast. Interested parties may also participate in the call by dialing (888) 393-0263 within North America or +1 (973) 453-2259 outside of North America. A passcode is not required. Attendees should log in to the webcast or dial in approximately 15 minutes prior to the call start time.
A replay of the conference call will be available on Halliburton’s website for seven days following the call. Also, a replay may be accessed by telephone at (855) 859-2056 within North America or +1 (404) 537-3406 outside of North America, using the passcode 6352269.
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CONTACTS
For Investors:
Lance Loeffler
Halliburton, Investor Relations
281-871-2688
For Media:
Emily Mir
Halliburton, Public Relations
281-871-2601
About HALLIBURTON COMPANY (NYSE:HAL)
Halliburton Company is a provider of services and products to the upstream oil and natural gas industry. The Company operates through two segments: the Completion and Production segment, and the Drilling and Evaluation segment. The Company’s Completion and Production segment delivers cementing, stimulation, intervention, pressure control, specialty chemicals, artificial lift, and completion products and services. The Company’s Drilling and Evaluation segment provides field and reservoir modeling, drilling, evaluation and wellbore placement solutions that enable customers to model, measure, drill and manage its well construction activities. The Company’s baroid provides drilling fluid systems, performance additives, completion fluids, solids control, specialized testing equipment and waste management services for oil and natural gas drilling, completion and workover operations. The Company operates its business in approximately 80 countries.
