•Positive impact of $0.06 due to depreciation
cessation for assets held for sale
Halliburton Company (NYSE:HAL) announced today that income from
continuing operations for the second quarter of 2015 was $380
million, or $0.44 per diluted share, excluding special items. This
compares to income from continuing operations for the first quarter
of 2015 of $418 million, or $0.49 per diluted share, excluding
special items. Adjusted operating income was $643 million in the
second quarter of 2015, compared to adjusted operating income of
$699 million in the first quarter of 2015. Halliburton's total
revenue in the second quarter of 2015 was $5.9 billion, compared to
$7.1 billion in the first quarter of 2015.
Primarily as a result of the recent downturn in the energy
market and its corresponding impact on the company’s business
outlook, Halliburton recorded approximately $258 million,
after-tax, or $0.30 per diluted share, in the second quarter of
2015, as compared to $823 million, after-tax, or $0.97 per diluted
share, in the first quarter of 2015, in company-wide charges
related primarily to severance costs and asset write-offs.
Halliburton recorded Baker Hughes acquisition-related costs of $67
million, after-tax, or $0.08 per diluted share, in the second
quarter of 2015, as compared to $35 million, after-tax, or $0.04
per diluted share, in the first quarter of 2015. Reported income
from continuing operations was $55 million, or $0.06 per diluted
share, in the second quarter of 2015, as compared to reported loss
from continuing operations of $639 million, or $0.75 per diluted
share, in the first quarter of 2015. Reported operating income was
$254 million for the second quarter of 2015, as compared to
reported operating loss of $548 million for the first quarter of
2015.
In April 2015, Halliburton announced a decision to market for
sale the Fixed Cutter and Roller Cone Drill Bits, Directional
Drilling, and Logging-While-Drilling/Measurement-While-Drilling
businesses as part of the regulatory review of the pending Baker
Hughes acquisition. These assets were classified as held for sale
at that time and, therefore, the corresponding depreciation and
amortization expense was ceased during the second quarter of 2015,
in accordance with Generally Accepted Accounting Principles. This
resulted in a positive impact to reported results of $53 million,
after-tax, or $0.06 per diluted share.
“We are pleased with our second quarter results, considering the
headwinds facing the industry,” said Jeff Miller, President.
“Total company revenue of $5.9 billion declined 16%
sequentially, outperforming a 26% drop in the worldwide rig count.
Operating income declined as a result of lower activity levels for
all product lines, exacerbated by pricing declines, primarily in
North America.
“In the Eastern Hemisphere, revenues declined modestly compared
to the first quarter of 2015, but we saw a meaningful step up in
profitability in our Europe/Africa/CIS region, due to activity
improvements in Eurasia and Norway, along with higher stimulation
activity and completion tools sales in both Algeria and Angola.
Projects in the Middle East are moving forward, although Russia and
the offshore markets remain challenged.
“In Latin America, we experienced sequential revenue and
operating income declines driven by Venezuela, primarily due to the
negative currency impact of the new exchange rate, as well as
budget cuts throughout the region as customers are focused on cash
flows.
“In North America, revenue declined 25% sequentially;
significantly outperforming the 40% decline in average rig count.
Pricing erosion continued during the quarter, but decremental
margins were less severe than previous downturns, demonstrating
that our cost reduction initiatives are helping to offset the
current market challenges.
“We expect the global markets will remain transitional, and in
these times, operational execution is an even more critical source
of differentiation. Our financial results reflect our strong
execution culture, and we remain focused on delivering reliable,
best-in-class service quality for our customers,” said Miller.
“We are pleased with the progress of the proposed Baker Hughes
acquisition, as evidenced by our recently announced timing
agreement with the U.S. Department of Justice,” added Dave Lesar,
Chairman and CEO.
“We recently received the initial round of bids on our
previously announced divestitures, and are pleased with the prices
and level of interest. Baker Hughes has certified compliance with
the U.S. Department of Justice’s second request, and we expect to
do so shortly.
“We are enthusiastic about and fully committed to closing this
compelling transaction, and are confident we can achieve cost
synergies of nearly $2 billion, regardless of market conditions or
any cost reduction actions taken by either company to date. In
anticipation of the acquisition, we continue to maintain our
superior service delivery platform and other infrastructure costs
in excess of current market needs. This cost was between 300-400
basis points for North America margins in the second quarter. We
will continue to do this until the transaction closes, which I
believe is the best decision for the long run.
“Our strategy remains consistent – we will manage costs through
the downturn, while looking beyond the cycle to ensure that we will
be positioned for growth when the industry recovers. We continue to
invest in technology, build capital equipment, and prepare for our
pending combination with Baker Hughes. Our management team has a
proven track record in navigating through cycles, and we are
confident that Halliburton will be best-positioned to outperform in
the recovery,” concluded Lesar.
Completion and
Production
Completion and Production (C&P) revenue in the second
quarter of 2015 was $3.4 billion, a decrease of $802 million, or
19%, from the first quarter of 2015, primarily driven by a decline
in pressure pumping activity and pricing declines for all product
service lines in North America, coupled with lower activity levels
in Middle East/Asia, reduced activity levels and pricing in Mexico,
and the impact of the new exchange rate in Venezuela. This was
partially offset by higher stimulation activity, higher completion
sales, and seasonal pipelines and process activity in
Europe/Africa/CIS.
C&P operating income was $313 million, which decreased $149
million, or 32%, compared to the first quarter of 2015. North
America C&P operating income declined $161 million, or 69%,
sequentially, primarily due to reduced activity levels and pricing
adjustments for stimulation services. Latin America C&P
operating income decreased $10 million, or 15%, from the first
quarter of 2015, primarily as a result of reduced activity in
pressure pumping services in Mexico and Venezuela.
Europe/Africa/CIS C&P operating income increased $35 million,
or 64%, sequentially, mainly due to increased stimulation activity
and completion tools sales in Algeria and Angola, along with
increased seasonal pipeline and process services activity and
completion tools sales in Norway. Middle East/Asia C&P
operating income fell by $13 million, or 12%, compared to the first
quarter of 2015, primarily due to a decline in stimulation activity
and completion tools sales.
Drilling and Evaluation
Drilling and Evaluation (D&E) revenue in the second quarter
of 2015 was $2.5 billion, a decrease of $329 million, or 12%, from
the first quarter of 2015. Decreased drilling activity and fluid
services in North America, the impact of the new exchange rate in
Venezuela, and a decline in wireline activity across all of our
regions, more than offset increased software sales in Latin America
and the Eastern Hemisphere.
D&E operating income was $400 million, which increased $94
million, or 31%, compared to the first quarter of 2015. All regions
benefitted from the depreciation cessation on assets held for sale.
North America D&E operating income increased $12 million, or
27%, sequentially, primarily due to cost reduction initiatives,
partially offset by reduced fluid services activity in the United
States land market. Latin America D&E operating income was
flat, sequentially, as improved profitability for drilling services
in Brazil was offset by lower drilling fluid product sales in
Venezuela. Europe/Africa/CIS D&E operating income increased $43
million, or 139%, from the first quarter of 2015, driven by
increased drilling services product sales in Russia, partially
offset by reduced drilling services activity in the United Kingdom.
Middle East/Asia D&E operating income increased $39 million, or
23%, sequentially, driven by activity growth for drilling services
throughout the region, coupled with increased project management
activity in Saudi Arabia.
Corporate and Other
During the second quarter of 2015, Halliburton incurred $67
million, after-tax, for costs related to the pending Baker Hughes
acquisition.
Significant Recent Events and
Achievements
- Halliburton’s Testing and Subsea
product line announced that its RezConnect™ Well Testing System
received the Offshore Technology Conference 2015 Spotlight on New
Technology Award. RezConnect is the industry’s first solution that
offers complete wireless acoustic control of drill-stem test tools.
It can provide real-time measurement and analysis during
well-testing and downhole sampling operations, allowing operators
to make informed decisions faster, which can reduce rig-time cost
and increase asset returns.
- Halliburton’s Completion Tools product
line introduced the Illusion® dissolvable frac plug as the latest
addition to Halliburton’s Unconventional Completion portfolio. This
high-performance frac plug provides zonal isolation for pumpdown
applications during wellbore stimulation and combines Halliburton's
industry-leading frac plug designs with the most advanced
dissolvable metal and rubber materials. This fully dissolvable plug
helps eliminate the risk and cost associated with conventional plug
removal and, upon complete dissolution, provides an entire wellbore
ID for future operations.
- On May 20, 2015, Halliburton announced
it had reached an agreement with BP Exploration & Production
Inc. to resolve remaining issues between the parties, including
indemnities between the parties and dismissal of all claims against
each other, relating to the April 20, 2010, Deepwater Horizon well
incident in the Gulf of Mexico.
- Halliburton opened its new Indonesian
headquarters in Jakarta, which will serve as headquarters for all
product lines in Indonesia. This new facility will increase the
efficiencies and capabilities of the company’s resources
specifically focused on the mature fields, deep water and
unconventionals markets in Indonesia. The additional synergies from
the facility include enhanced integrated services, equipment
maintenance, job preparation and execution, and a high-level of
service quality for Halliburton’s customers in Indonesia.
About Halliburton
Founded in 1919, Halliburton is one of the world's largest
providers of products and services to the energy industry. With
more than 70,000 employees, representing 140 nationalities in
approximately 80 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 website at www.halliburton.com. Connect with Halliburton on
Facebook, Twitter, LinkedIn,
Oilpro and YouTube.
NOTE: The statements in this press release that are not
historical statements, including statements regarding future
financial performance and the pending Baker Hughes transaction, 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: with respect to the
pending merger with Baker Hughes, the timing to consummate the
proposed transaction, the terms and timing of any divestitures
undertaken in order to obtain required regulatory approvals, the
conditions to closing of the proposed transaction may not be
satisfied or the closing of the proposed transaction otherwise does
not occur or is obtained subject to conditions that are not
anticipated, the risk that a regulatory approval that may be
required for the proposed transaction is not obtained or is
obtained subject to conditions that are not anticipated, and the
diversion of management time on transaction-related issues, the
combined company’s future financial condition, results of
operations, strategy and plans, and expected synergies and other
benefits from the proposed transaction and the ability of
Halliburton to realize such synergies and other benefits; with
respect to the Macondo well incident, final court approval of, and
the satisfaction of the conditions in, Halliburton's September 2014
settlement, including the results of any appeals of rulings in the
multi-district litigation; indemnification and insurance matters;
with respect to repurchases of Halliburton common stock, the
continuation or suspension of the 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 can be significantly
impacted by weakness in the worldwide economy; consequences of
audits and investigations by domestic and foreign government
agencies and legislative bodies and related publicity and potential
adverse proceedings by such agencies; protection of intellectual
property rights and against cyber attacks; compliance with
environmental laws; changes in government regulations and
regulatory requirements, particularly those related to offshore oil
and natural gas exploration, radioactive sources, explosives,
chemicals, hydraulic fracturing services, and climate-related
initiatives; 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 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 in the oil and natural gas industry; maintaining a highly
skilled workforce; availability and cost of raw materials; and
integration and success of acquired businesses and operations of
joint ventures. Halliburton's Form 10-K for the year ended December
31, 2014, Form 10-Q for the quarter ended March 31, 2015, 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.
Additional Information
This communication does not constitute an offer to buy or sell
or the solicitation of an offer to buy or sell any securities or a
solicitation of any vote or approval. This communication relates to
a proposed business combination between Halliburton and Baker
Hughes. In connection with this proposed business combination,
Halliburton has filed with the Securities and Exchange Commission
(the “SEC”) a registration statement on Form S-4, including
Amendments No. 1 and 2 thereto, and a definitive joint proxy
statement/prospectus of Halliburton and Baker Hughes and other
documents related to the proposed transaction. The registration
statement was declared effective by the SEC on February 17, 2015
and the definitive proxy statement/prospectus has been mailed to
stockholders of Halliburton and Baker Hughes. INVESTORS AND
SECURITY HOLDERS OF HALLIBURTON AND BAKER HUGHES ARE URGED TO READ
THE JOINT PROXY STATEMENT/PROSPECTUS, REGISTRATION STATEMENT AND
OTHER DOCUMENTS FILED OR THAT MAY BE FILED WITH THE SEC CAREFULLY
AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN
IMPORTANT INFORMATION. Investors and security holders may obtain
free copies of these documents and other documents filed with the
SEC by Halliburton and/or Baker Hughes through the website
maintained by the SEC at http://www.sec.gov. Copies of the
documents filed with the SEC by Halliburton are available free of
charge on Halliburton’s internet website at
http://www.halliburton.com or by contacting Halliburton’s Investor
Relations Department by email at investors@Halliburton.com or by
phone at +1-281-871-2688. Copies of the documents filed with the
SEC by Baker Hughes are available free of charge on Baker Hughes’
internet website at http://www.bakerhughes.com or by contacting
Baker Hughes’ Investor Relations Department by email at
alondra.oteyza@bakerhughes.com or by phone at +1-713-439-8822.
Participants in
Solicitation
Halliburton, Baker Hughes, their respective directors and
certain of their respective executive officers may be considered
participants in the solicitation of proxies in connection with the
proposed transaction. Information about the directors and executive
officers of Halliburton is set forth in its Annual Report on Form
10-K for the year ended December 31, 2014, which was filed with the
SEC on February 24, 2015, its proxy statement for its 2015 annual
meeting of stockholders, which was filed with the SEC on April 7,
2015, and its Quarterly Report on Form 10-Q for the quarter ended
March 31, 2015, which was filed with the SEC on April 23, 2015.
Information about the directors and executive officers of Baker
Hughes is set forth in its Annual Report on Form 10-K for the year
ended December 31, 2014, which was filed with the SEC on February
26, 2015, its proxy statement for its 2015 annual meeting of
stockholders, which was filed with the SEC on March 27, 2015, and
its Quarterly Report on Form 10-Q for the quarter ended March 31,
2015, which was filed with the SEC on April 21, 2015. These
documents can be obtained free of charge from the sources indicated
above. Additional information regarding the participants in the
proxy solicitations and a description of their direct and indirect
interests, by security holdings or otherwise, are contained in the
proxy statement/prospectus and other relevant materials filed with
the SEC.
HALLIBURTON COMPANY
Condensed Consolidated Statements of
Operations
(Millions of dollars and shares except per
share data)
(Unaudited)
Three Months Ended June 30 March
31
2015 2014 2015
Revenue: Completion and Production
$
3,444 $ 4,942 $ 4,246 Drilling and Evaluation
2,475 3,109 2,804
Total revenue $ 5,919
$ 8,051 $ 7,050
Operating
income (loss): Completion and Production
$ 313 $
887 $ 462 Drilling and Evaluation
400 414 306 Corporate and
other
(70 ) (107 ) (69 ) Impairments and other
charges
(306 )
-
(1,208 ) Baker Hughes acquisition-related costs
(83 )
-
(39 )
Total operating income (loss)
254 1,194 (548 )
Interest expense, net
(106 ) (94 ) (106 ) Other, net
(a)
(23 ) (24 )
(224 )
Income (loss) from continuing operations before income
taxes 125 1,076 (878 ) Income tax benefit (provision)
(71 ) (299 ) 241
Income (loss) from continuing operations 54
777 (637 ) Loss from discontinued operations, net
(1 ) (2 ) (4 )
Net income
(loss) $ 53 $
775 $ (641 ) Net (income) loss attributable to
noncontrolling interest
1
(1 ) (2 )
Net income (loss) attributable to company
$ 54 $ 774
$ (643 )
Amounts attributable to company
shareholders: Income (loss) from continuing operations
$
55 $ 776 $ (639 ) Loss from discontinued operations, net
(1 ) (2 ) (4 )
Net income (loss) attributable to company
$ 54 $ 774 $ (643
)
Basic income (loss) per share attributable to company
shareholders: Income (loss) from continuing operations
$
0.06 $ 0.92 $ (0.75 ) Loss from discontinued operations, net
-
-
(0.01 )
Net income (loss) per share
$ 0.06 $ 0.92
$ (0.76 )
Diluted income (loss) per share attributable to
company shareholders: Income (loss) from continuing operations
$ 0.06 $ 0.91 $ (0.75 ) Loss from discontinued
operations, net
-
-
(0.01 )
Net income (loss) per share
$ 0.06 $ 0.91
$ (0.76 ) Basic weighted average common shares outstanding
852 846 850 Diluted weighted average common shares outstanding
854 852 850
(a) Includes a foreign currency loss of $199 million due to a
currency devaluation in Venezuela in the three months ended March
31, 2015. See Footnote Table 1 for Reconciliation of As Reported
Operating Income (Loss) to Adjusted Operating Income. See Footnote
Table 2 for Reconciliation of As Reported Income (Loss) from
Continuing Operations to Adjusted Income from Continuing
Operations.
HALLIBURTON COMPANY
Condensed Consolidated Statements of
Operations
(Millions of dollars and shares except per
share data)
(Unaudited)
Six Months Ended June 30
2015 2014
Revenue: Completion and
Production
$ 7,690 $ 9,362 Drilling and
Evaluation
5,279
6,037 Total revenue
$ 12,969 $
15,399 Operating income (loss): Completion and
Production
$ 775 $ 1,548 Drilling and
Evaluation
706 812 Corporate and other
(139
) (196 ) Impairments and other charges
(1,514 )
-
Baker Hughes acquisition-related costs
(122 )
-
Total operating income (loss)
(294 ) 2,164
Interest expense, net
(212 ) (187
) Other, net (a)
(247 ) (55 ) Income
(loss) from continuing operations before income taxes
(753 ) 1,922 Income tax benefit (provision)
170
(528 ) Income (loss) from continuing
operations (583 ) 1,394 Loss from
discontinued operations, net
(5 ) (3 ) Net income
(loss) $ (588
) $ 1,391 Net (income) loss
attributable to noncontrolling interest
(1 ) 5 Net
income (loss) attributable to company
$ (589 ) $ 1,396
Amounts attributable to company shareholders: Income
(loss) from continuing operations
$ (584 )
$ 1,399 Loss from discontinued operations, net
(5 )
(3 ) Net income (loss) attributable to company
$ (589 )
$ 1,396 Basic income (loss) per share
attributable to company shareholders: Income (loss) from
continuing operations
$ (0.69 ) $
1.65 Loss from discontinued operations, net
(0.01 )
-
Net income (loss) per share
$ (0.70 ) $ 1.65
Diluted income (loss) per share attributable to company
shareholders: Income (loss) from continuing operations
$
(0.69 ) $ 1.64 Loss from discontinued
operations, net
(0.01
)
-
Net income (loss) per share
$ (0.70 ) $ 1.64
Basic weighted average common shares outstanding
851
847 Diluted weighted average common shares outstanding
851
853 (a) Includes a foreign currency loss of $199
million due to a currency devaluation in Venezuela in the six
months ended June 30, 2015.
HALLIBURTON COMPANY
Condensed Consolidated Balance Sheets
(Millions of dollars)
(Unaudited)
June 30 December 31
2015 2014
Assets Current assets:
Cash and equivalents
$ 2,760 $ 2,291 Receivables, net
5,633 7,564 Inventories
2,831
3,571 Assets held for sale (a)
2,104
-
Other current assets (b)
1,896
1,642
Total current assets
15,224
15,068 Property, plant, and equipment, net
11,153
12,475 Goodwill
1,983
2,330 Other assets (c)
2,246
2,367
Total assets
$ 30,606 $ 32,240
Liabilities and
Shareholders’ Equity Current liabilities: Accounts
payable
$
2,181
$ 2,814 Accrued employee compensation and benefits
809
1,033 Loss contingency for Macondo well incident
367 367
Other current liabilities
1,648
1,669
Total current liabilities
5,005
5,883 Long-term debt
7,838 7,840 Employee
compensation and benefits
595
691 Loss contingency for Macondo well incident
439 439 Other
liabilities
1,014
1,089
Total liabilities 14,891 15,942
Company shareholders’ equity
15,685 16,267
Noncontrolling interest in consolidated subsidiaries
30 31
Total
shareholders’ equity
15,715 16,298
Total liabilities and
shareholders’ equity $
30,606 $ 32,240 (a) Assets held for sale primarily
includes inventory; property, plant, and equipment; and allocated
goodwill. (b) Includes $58 million of investments in fixed income
securities at June 30, 2015, and $56 million of investments in
fixed income securities at December 31, 2014. (c) Includes $35
million of investments in fixed income securities at June 30, 2015,
and $47 million of investments in fixed income securities at
December 31, 2014.
HALLIBURTON COMPANY
Condensed Consolidated Statements of Cash
Flows
(Millions of dollars)
(Unaudited)
Six Months Ended June 30
2015
2014
Cash flows from operating activities: Net income
(loss)
$ (588 ) $ 1,391 Adjustments to
reconcile net income to net cash flows from operating activities:
Impairments and other charges, net of tax
1,081
-
Depreciation, depletion, and amortization
1,016 1,034
Working capital (a)
866 (457 ) Other
(380
) 107
Total cash flows from
operating activities 1,995
2,075
Cash flows from investing activities:
Capital expenditures
(1,223 ) (1,375 ) Other
investing activities
(12 ) (145
)
Total cash flows from investing activities
(1,235 ) (1,520 )
Cash flows
from financing activities: Dividends to shareholders
(306 ) (254 ) Payments to reacquire common stock
-
(500 ) Other financing activities
63
230
Total cash flows from financing activities
(243 ) (524 ) Effect of
exchange rate changes on cash
(48 )
(27 ) Increase (decrease) in cash and equivalents
469
4 Cash and equivalents at beginning of period
2,291
2,356
Cash and equivalents at end of
period $ 2,760 $ 2,360 (a)
Working capital includes receivables, inventories and accounts
payable.
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: 2015 2014
2015 Completion and Production: North America
$ 2,062 $ 3,325 $ 2,777 Latin America
337 395
394 Europe/Africa/CIS
554 634 528 Middle East/Asia
491 588 547
Total
3,444 4,942
4,246 Drilling and Evaluation: North
America
609 1,019 765 Latin America
430 502 555
Europe/Africa/CIS
541 747 569 Middle East/Asia
895 841 915
Total
2,475 3,109
2,804 Total revenue by region: North America
2,671 4,344 3,542 Latin America
767 897 949
Europe/Africa/CIS
1,095 1,381 1,097 Middle East/Asia
1,386 1,429
1,462 Total revenue
$ 5,919
$ 8,051 $ 7,050
Operating
income by geographic region:
Completion and Production: North America
73 $ 630 $
234 Latin America
55 48 65 Europe/Africa/CIS
90 96 55
Middle East/Asia
95 113
108 Total
313
887 462 Drilling
and Evaluation: North America
57 160 45 Latin America
57 13 57 Europe/Africa/CIS
74 90 31 Middle East/Asia
212 151
173 Total
400
414 306 Total operating income
by region: North America
130 790 279 Latin America
112 61 122 Europe/Africa/CIS
164 186 86 Middle
East/Asia
307 264
281 Corporate and other
(70 )
(107 ) (69 ) Impairments and other charges
(306 )
-
(1,208 ) Baker Hughes acquisition-related costs
(83 )
-
(39 ) Total operating income (loss)
$ 254 $ 1,194 $ (548 )
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: 2015 2014 Completion and
Production: North America
$ 4,839 $ 6,252 Latin
America
731 750 Europe/Africa/CIS
1,082 1,241 Middle
East/Asia
1,038 1,119
Total
7,690 9,362
Drilling and Evaluation: North America
1,374 1,993 Latin
America
985 1,006 Europe/Africa/CIS
1,110 1,439
Middle East/Asia
1,810 1,599
Total
5,279 6,037 Total
revenue by region: North America
6,213 8,245 Latin America
1,716 1,756 Europe/Africa/CIS
2,192 2,680 Middle
East/Asia
2,848 2,718
Total revenue
$ 12,969 $
15,399
Operating income by geographic region:
Completion and
Production: North America
$ 307 $ 1,076 Latin America
120 96 Europe/Africa/CIS
145 174 Middle East/Asia
203 202 Total
775 1,548 Drilling and
Evaluation: North America
102 316 Latin America
114
65 Europe/Africa/CIS
105 158 Middle East/Asia
385 273 Total
706
812 Total operating income by region:
North America
409 1,392 Latin America
234 161
Europe/Africa/CIS
250 332 Middle East/Asia
588
475 Corporate and other
(139
) (196 ) Impairments and other charges
(1,514
)
-
Baker Hughes acquisition-related costs
(122 )
-
Total operating income (loss)
$ (294
) $ 2,164
HALLIBURTON COMPANY
Adjusted Operating Income including
Depreciation related to Assets Held for Sale
By Segment and Geographic Region
(Millions of dollars)
(Unaudited)
Three Months Ended June 30 March 31
Operating
income by geographic region: 2015
2014 2015 Completion and Production: North America
$ 73 $ 630 $ 234 Latin America
55 48 65
Europe/Africa/CIS
90 96 55 Middle East/Asia
95 113
108 Total
313
887 462
Drilling and Evaluation: (a) North America
42 160 45 Latin
America
41 13 57 Europe/Africa/CIS
55 90 31 Middle
East/Asia
190
151 173 Total
328 414
306 Total operating income by region: North
America
115 790 279 Latin America
96 61 122
Europe/Africa/CIS
145 186 86 Middle East/Asia
285 264
281 Corporate and other
(70 ) (107 )
(69 ) Impairments and other charges
(306 )
-
(1,208 ) Baker Hughes acquisition-related costs
(83 )
-
(39 ) Total operating income
182 1,194
(548 ) (a) Includes depreciation and amortization expense of
$15 million for North America, $16 million for Latin America, $19
million for Europe/Africa/CIS, and $22 million for Middle East/Asia
for the three months ended June 30, 2015, which relates to the
cessation of depreciation related to assets held for sale during
the period.
FOOTNOTE TABLE 1
HALLIBURTON COMPANY
Reconciliation of As Reported Operating
Income (Loss) to Adjusted Operating Income
(Millions of dollars)
(Unaudited)
Three Months Ended June 30, 2015
June 30, 2014 March 31, 2015 As
reported operating income (loss) $ 254 $ 1,194
$ (548 ) Impairments and other charges 306
-
1,208 Baker Hughes acquisition-related costs
83
-
39 Adjusted operating income (a)
$ 643 $ 1,194 $ 699 (a)
Management believes that operating income (loss) adjusted
for impairments and other charges and Baker Hughes
acquisition-related costs for the quarters ended June 30, 2015 and
March 31, 2015 is useful to investors to assess and understand
operating performance, especially when comparing those results with
previous and subsequent periods or forecasting performance for
future periods, primarily because management views the excluded
items to be outside of the company's normal operating results.
Management analyzes operating income without the impact of these
items as an indicator of performance, to identify underlying trends
in the business, and to establish operational goals. The
adjustments remove the effects of these items. Adjusted operating
income is calculated as: “As reported operating income (loss)” plus
"Impairments and other charges" and "Baker Hughes
acquisition-related costs."
FOOTNOTE TABLE 2
HALLIBURTON COMPANY
Reconciliation of As Reported Income
(Loss) from Continuing Operations to
Adjusted Income from Continuing
Operations
(Millions of dollars and shares except per
share data)
(Unaudited)
Three Months Ended June
30, 2015 March 31, 2015 As reported income
(loss) from continuing operations attributable to company
$
55 $ (639 ) Impairments and other charges, net of tax (a)
258 823 Baker Hughes acquisition-related costs, net of tax
(a)
67 35 Venezuela currency devaluation loss (a)
-
199 Adjusted income from
continuing operations attributable to company (a)
$ 380 $ 418
As reported diluted weighted average common shares outstanding (b)
854 850 Adjusted diluted weighted average common shares
outstanding (b)
854 852 As reported income (loss)
from continuing operations per diluted share (c)
$
0.06 $ (0.75 ) Adjusted income from continuing operations
per diluted share (c)
$ 0.44
$ 0.49 (a) Management believes
that income (loss) from continuing operations adjusted for
impairments and other charges, Baker Hughes acquisition-related
costs, and Venezuela currency devaluation loss is useful to
investors to assess and understand operating performance,
especially when comparing those results with previous and
subsequent periods or forecasting performance for future periods,
primarily because management views the excluded items to be outside
of the company's normal operating results. Management analyzes
income from continuing operations without the impact of these items
as an indicator of performance, to identify underlying trends in
the business, and to establish operational goals. The adjustments
remove the effects of these items. Adjusted income from continuing
operations attributable to company is calculated as: “As reported
income (loss) from continuing operations attributable to company”
plus "Impairments and other charges, net of tax", "Baker Hughes
acquisition-related costs, net of tax", and "Venezuela currency
devaluation loss." (b) As reported diluted weighted average common
shares outstanding for the three months ended March 31, 2015
excludes options to purchase two million shares of common stock as
their impact would be antidilutive since our reported income from
continuing operations attributable to company was in a loss
position during that period. When adjusting income from continuing
operations attributable to company for the special items discussed
above, these two million shares become dilutive. (c) Adjusted
income from continuing operations per diluted share is calculated
as: "Adjusted income from continuing operations attributable to
company" divided by "Adjusted diluted weighted average common
shares outstanding." As reported income (loss) from continuing
operations per diluted share is calculated as: "As reported income
(loss) from continuing operations attributable to company" divided
by "As reported diluted weighted average common shares
outstanding."
Conference Call
Details
Halliburton will host a conference call on Monday, July 20,
2015, to discuss the second quarter 2015 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.
In addition, you may participate in the call by dialing (866)
804-3547 within North America or (703) 639-1328 outside North
America. A passcode is not required. Attendees should log in to the
webcast or dial in approximately 15 minutes prior to the call’s
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 (888) 266-2081 within North
America or (703) 925-2533 outside of North America, using the
passcode 1656899.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150720005329/en/
Halliburton CompanyKelly Youngblood, 281-871-2688Halliburton,
Investor RelationsInvestors@Halliburton.comorEmily Mir,
281-871-2601Halliburton, Public RelationsPR@Halliburton.com
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