Reported loss from continuing operations of
$0.03 per diluted share
Halliburton Company (NYSE:HAL) announced today that income from
continuing operations for the fourth quarter of 2015 was $270
million, or $0.31 per diluted share, excluding special items. This
compares to income from continuing operations for the third quarter
of 2015 of $265 million, or $0.31 per diluted share, excluding
special items. Adjusted operating income was $473 million in the
fourth quarter of 2015, compared to adjusted operating income of
$506 million in the third quarter of 2015. Halliburton's total
revenue in the fourth quarter of 2015 was $5.1 billion, compared to
$5.6 billion in the third quarter of 2015.
As a result of the downturn in the energy market and its
corresponding impact on the company’s business outlook, Halliburton
recorded company-wide charges related primarily to asset write-offs
and severance costs of approximately $192 million, after-tax, or
$0.22 per diluted share, in the fourth quarter of 2015, compared to
$257 million, after-tax, or $0.30 per diluted share, in the third
quarter of 2015. Halliburton recorded Baker Hughes
acquisition-related costs of $79 million, after-tax, or $0.09 per
diluted share, in the fourth quarter of 2015, compared to $62
million, after-tax, or $0.07 per diluted share, in the third
quarter of 2015. Halliburton also incurred $27 million, after-tax,
or $0.03 per diluted share, of interest expense associated with the
$7.5 billion debt issuance in the fourth quarter of 2015.
Reported loss from continuing operations was $28 million, or
$0.03 per diluted share, in the fourth quarter of 2015, compared to
reported loss from continuing operations of $54 million, or $0.06
per diluted share, in the third quarter of 2015. Reported operating
income was $86 million for the fourth quarter of 2015, compared to
reported operating income of $43 million for the third quarter of
2015.
Total revenue for the full year of 2015 was $23.6 billion, a
decrease of $9.2 billion, or 28%, from 2014. Reported operating
loss for 2015 was $165 million, compared to reported operating
income of $5.1 billion for 2014. Both revenue and operating income
declines resulted from the impact of reduced commodity prices
creating widespread pricing pressure and activity reductions on a
global basis. Adjusted income from continuing operations for 2015
was $1.3 billion, or $1.56 per diluted share, compared to adjusted
income from continuing operations for 2014 of $3.4 billion, or
$4.02 per diluted share. Reported loss from continuing operations
for 2015 was $666 million, or $0.78 per diluted share, compared to
reported income from continuing operations for 2014 of $3.4
billion, or $4.03 per diluted share.
“We are pleased with our fourth quarter and full-year results in
this challenging environment, as once again we outperformed our
peer group in North America and international revenue, both
sequentially and on a full-year basis,” said Jeff Miller,
President.
“Total company annual revenue of $23.6 billion declined 28%
year-over-year, outperforming a 35% decline in both the average
worldwide rig count and global drilling and completions spend.
“Our international business was resilient during 2015. Annual
revenue declined 16% from the prior year, outperforming our largest
peer sequentially and on a full-year basis for both revenue and
margins. Despite pricing and activity headwinds, we were able to
improve 2015 operating margins due to a focus on cost management.
North America revenue declined 39% compared to 2014, as a result of
unprecedented declines in activity, with the U.S. land rig count
ending the year down 64% from the 2014 peak.
“Fourth quarter total company revenue of $5.1 billion declined
9% sequentially, while adjusted operating income declined by 7% to
$473 million.
“For our international business, fourth quarter revenue and
operating income declined sequentially by 5% and 10%, respectively,
as a result of price concessions and activity declines. In
addition, due to customer budget constraints, we did not see the
typical benefit from year-end equipment and software sales.
“In the Middle East / Asia region, revenue declined by 5%
sequentially, with a similar decline in operating income of 6%.
Lower activity levels in Saudi Arabia and Iraq were partially
offset by modestly higher sales in China and increased activity in
Kuwait and Oman.
“In Europe/Africa/CIS, revenue declined 6% sequentially with a
decrease in operating income of 18%. The decline was primarily
driven by activity reductions in the North Sea, partially offset by
increased activity levels in Angola and Algeria.
“Latin America revenue and operating income declined
sequentially by 6% and 9%, respectively, driven by reduced activity
across most of the region. Partially offsetting this decline was
improved activity levels in Mexico.
“North America revenue declined 13% sequentially, led by reduced
activity and pricing concessions in US Land. Operating margins
improved by 160 basis points, driven by cost reduction efforts, and
year-end completion tool sales in the Gulf of Mexico. Our margins
continue to include an elevated cost structure in North America, in
anticipation of the pending Baker Hughes acquisition.
“Our strategy remains unchanged. We are focused on maintaining a
strong customer portfolio, investing in more efficient technology,
and delivering reliable, best-in-class service quality for our
customers. We are looking through this cycle, drawing upon our
management’s deep experience and preparing the business for growth
when the industry recovers,” said Miller.
“We remain fully committed to closing the pending acquisition of
Baker Hughes. We are continuing our discussions with competition
authorities, and recently offered an enhanced set of divestitures
in an effort to resolve competition-related concerns as soon as
possible. We are diligently focused on pending regulatory reviews,
the divestiture process, and planning for integration activities
after the closing of the deal,” added Dave Lesar, Chairman and
CEO.
“2016 is expected to be another challenging year for the
industry. We believe our customers will remain focused on cost per
barrel optimization and gaining higher levels of efficiency, both
of which bode very well for Halliburton. Ultimately, when this
market recovers we believe North America will respond the quickest
and offer the greatest upside, and that Halliburton will be
positioned to outperform,” concluded Lesar.
Completion and
Production
Completion and Production (C&P) revenue in the fourth
quarter of 2015 was $2.8 billion, a decrease of $369 million, or
12%, from the third quarter of 2015, primarily driven by activity
and pricing headwinds in all regions. Sequentially, North America
revenue declined as a result of seasonal activity reductions for
pressure pumping as well as customer budget constraints, partially
offset by higher year-end sales in the Gulf of Mexico. Latin
America revenue declined sequentially for all product lines due to
lower activity in Argentina, Mexico, Brazil and Colombia.
Sequentially, Europe/Africa/CIS revenue declined as a result of
lower cementing activity in the North Sea, and Middle East/Asia
revenue improved due to increased stimulation services in Kuwait
and Australia, as well as higher production solutions activity
across the region.
C&P operating income was $144 million, which decreased $19
million, or 12%, compared to the third quarter of 2015.
Sequentially, North America C&P operating income increased $15
million, or 31%, driven primarily by year-end sales in the Gulf of
Mexico. Latin America C&P operating income decreased $37
million, or 70%, from the third quarter of 2015, as a result of
lower completion sales in Mexico and lower stimulation activity in
Argentina and Mexico. Europe/Africa/CIS C&P operating income
fell $14 million, or 18%, sequentially, due to lower completion
product sales and cementing services in the North Sea. Middle
East/Asia C&P operating income improved by $17 million, or 21%,
compared to the third quarter of 2015, resulting from higher
stimulation services in Kuwait and Australia and higher production
solution activity throughout the region.
Drilling and Evaluation
Drilling and Evaluation (D&E) revenue in the fourth quarter
of 2015 was $2.3 billion, a decrease of $131 million, or 5%, from
the third quarter of 2015, driven primarily by decreased drilling
activity and logging services in the United States, Latin America,
and Europe/Africa/CIS, along with reduced project management
activity and drilling services in Middle East/Asia. This was
partially offset by increased fluid services and software sales in
Mexico.
D&E operating income was $399 million, which was essentially
flat compared to the third quarter of 2015. North America D&E
operating income increased $18 million, or 32%, sequentially, as a
result of increased offshore activity and software sales in the
United States. Latin America D&E operating income improved $27
million, or 49%, sequentially, primarily from increased fluid
services, software sales, and testing activity in Mexico.
Europe/Africa/CIS D&E operating income declined $13 million, or
18%, from the third quarter of 2015, mainly from reduced drilling
services in Norway and Azerbaijan. Middle East/Asia D&E
operating income fell $34 million, or 16%, sequentially, due to
reduced drilling services in Saudi Arabia and Papua New Guinea,
which coupled with lower project management services in Iraq more
than offset higher drilling sales in China.
Corporate and Other
During the fourth quarter of 2015, Halliburton incurred $79
million, after-tax, for costs related to the pending Baker Hughes
acquisition. Halliburton also incurred $27 million, after-tax, of
interest expense associated with the $7.5 billion debt offering,
which was recorded in "Interest expense, net".
Significant Recent Events and
Achievements
- Halliburton issued $7.5 billion
aggregate principal amount of senior notes in five tranches: $1.25
billion of 5-year notes bearing interest at a fixed rate of 2.7%
per year and maturing on November 15, 2020; $1.25 billion of 7-year
notes bearing interest at a fixed rate of 3.375% per year and
maturing on November 15, 2022; $2.0 billion of 10-year notes
bearing interest at a fixed rate of 3.8% per year and maturing on
November 15, 2025; $1.0 billion of 20-year notes bearing interest
at a fixed rate of 4.85% per year and maturing on November 15,
2035; and $2.0 billion of 30-year notes bearing interest at a fixed
rate of 5.0% per year and maturing on November 15, 2045.
Halliburton intends to use the net proceeds of the offering for
general corporate purposes, including financing a portion of the
cash consideration component of Halliburton's pending acquisition
of Baker Hughes.
- Halliburton officially opened its
Elmendorf South Texas Sand Plant with a ribbon-cutting ceremony. It
is the largest Halliburton sand facility in the world and
represents a $36 million investment. The facility, with eight silos
and a laboratory, is located at the Alamo Junction Rail Park in
Elmendorf, near the company's South Texas Operations Center in
southern Bexar County. It has the capability to offload 150
railcars and load 450-500 trucks daily.
- Halliburton's Landmark business line
and CGG, a global provider of fully integrated geoscience
technology and services, announced a geosciences technology
collaboration. The collaboration will allow shared customers to
seamlessly access best-in-class interpretation and reservoir
characterization technologies and geoscience data from both
companies, using the industry's first E&P enterprise class
platform - Landmark's DecisionSpace®. The technology collaboration
will significantly enhance existing unconventional and 4D workflows
by providing full interoperability of combined capabilities across
the complete lifecycle of the reservoir. These next generation
software suites will support improved prospect generation, well
location and path definition, completion design, development
planning and reservoir management.
- Halliburton held its 22nd annual
Halliburton Charity Golf Tournament and raised a record of more
than $3 million for 43 nonprofit organizations across the U.S.,
making it one of the largest non-PGA golf tournament fundraisers in
Texas. The tournament surpassed the 2014 record of $2.4 million,
and has donated almost $14 million to charities over its 22-year
history.
About Halliburton
Founded in 1919, Halliburton is one of the world's largest
providers of products and services to the energy industry. With
approximately 65,000 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
Baker Hughes acquisition, the timing to consummate the proposed
transaction; the terms, timing and completion of divestitures
undertaken 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; the
risk a regulatory approval that may be required for the proposed
transaction is not obtained or is obtained subject to conditions
that are not anticipated; the diversion of management time on
transaction-related issues; the ultimate timing, outcome and
results of integrating the operations of Halliburton and Baker
Hughes and the ultimate outcome of Halliburton’s operating
efficiencies applied to Baker Hughes’s products and services; the
effects of the business combination of Halliburton and Baker
Hughes, including the combined company’s future financial
condition, results of operations, strategy and plans; 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 September 30, 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
September 30, 2015, which was filed with the SEC on October 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
September 30, 2015, which was filed with the SEC on October 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 December 31 September 30
2015 2014 2015
Revenue:
Completion and Production
$ 2,831 $
5,471 $ 3,200 Drilling and Evaluation
2,251
3,299 2,382
Total revenue
$ 5,082 $ 8,770
$ 5,582
Operating income: Completion and
Production
$ 144 $ 1,051 $ 163 Drilling and
Evaluation
399 477 401 Corporate and other
(70
) (83 ) (58 ) Impairments and other charges
(282
) (129 ) (381 ) Baker Hughes acquisition-related costs
(105 ) (17 ) (82 )
Total operating income 86
1,299 43 Interest expense, net
(136
) (100 ) (99 ) Other, net
(43 )
41 (34 )
Income (loss) from continuing
operations before income taxes (93 ) 1,240 (90 )
Income tax benefit (provision)
67
(336 ) 37
Income (loss) from continuing
operations (26 ) 904 (53 ) Income (loss) from
discontinued operations, net
-
1
-
Net income (loss) $ (26
) $ 905 $ (53 ) Net income attributable
to noncontrolling interest
(2 )
(4 ) (1 )
Net income (loss) attributable to company
$ (28 ) $ 901
$ (54 )
Amounts attributable to company shareholders:
Income (loss) from continuing operations
$ (28
) $ 900 $ (54 ) Income from discontinued operations, net
-
1
-
Net income (loss) attributable to company
$ (28 ) $ 901 $
(54 )
Basic income (loss) per share attributable to company
shareholders: Income (loss) from continuing operations
$
(0.03 ) $ 1.06 $ (0.06 ) Income from discontinued
operations, net
-
-
-
Net income (loss) per share $
(0.03 ) $ 1.06 $ (0.06 )
Diluted income (loss) per share attributable to company
shareholders: Income (loss) from continuing operations
$
(0.03 ) $ 1.06 $ (0.06 ) Income from discontinued
operations, net
-
-
-
Net income (loss) per share $
(0.03 ) $ 1.06 $ (0.06 ) Basic
weighted average common shares outstanding 856 848 855 Diluted
weighted average common shares outstanding 856
850 855 See Footnote Table 1 for
Reconciliation of As Reported Operating Income to Adjusted
Operating Income. See Footnote Table 3 for Reconciliation of
As Reported (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)
Year Ended December 31
2015
2014
Revenue: Completion and Production
$ 13,682 $ 20,253 Drilling and Evaluation
9,951 12,617
Total
revenue $ 23,633 $
32,870
Operating income (loss): Completion and
Production
$ 1,069 $ 3,670 Drilling and Evaluation
1,519 1,740 Corporate and other (a)
(268 )
(167 ) Impairments and other charges
(2,177 ) (129 )
Baker Hughes acquisition-related costs
(308
) (17 )
Total operating income (loss)
(165 ) 5,097 Interest expense,
net
(447 ) (383 ) Other, net (b)
(324 ) (2 )
Income (loss) from continuing
operations before income taxes (936 ) 4,712
Income tax benefit (provision)
274
(1,275 )
Income (loss) from continuing operations
(662 ) 3,437 Income (loss) from discontinued
operations, net
(5 ) 64
Net income (loss) $ (667
) $ 3,501 Net income attributable to
noncontrolling interest
(4
)
(1
)
Net income (loss) attributable to company
$ (671 ) $ 3,500
Amounts
attributable to company shareholders: Income (loss) from
continuing operations
$ (666 ) $ 3,436 Income
(loss) from discontinued operations, net
(5
) 64
Net income (loss) attributable to
company $ (671 ) $
3,500
Basic income (loss) per share attributable to
company shareholders: Income (loss) from continuing operations
$ (0.78 ) $ 4.05 Income (loss) from
discontinued operations, net
(0.01 )
0.08
Net income (loss) per share
$ (0.79 ) $ 4.13
Diluted
income (loss) per share attributable to company shareholders:
Income (loss) from continuing operations
$ (0.78
) $ 4.03 Income (loss) from discontinued operations, net
(0.01 ) 0.08
Net
income (loss) per share $ (0.79
) $ 4.11 Basic weighted average common shares
outstanding
853 848 Diluted weighted average common shares
outstanding
853 852 (a)
Includes $195 million of activity in the year ended December 31,
2014 as a result of a reduction of our loss contingency liability
and expected insurance recovery related to the Macondo incident.
(b) Includes a foreign currency loss of $199 million due to a
currency devaluation in Venezuela in the year ended December 31,
2015. See Footnote Table 2 for Reconciliation of As Reported
Operating Income (Loss) to Adjusted Operating Income. See
Footnote Table 4 for Reconciliation of As Reported Income (Loss)
from Continuing Operations to Adjusted Income from Continuing
Operations.
HALLIBURTON COMPANY
Condensed Consolidated Balance Sheets
(Millions of dollars)
(Unaudited)
December 31 December 31
2015 2014
Assets Current
assets: Cash and equivalents
$ 10,077 $ 2,291
Receivables, net
5,317 7,564 Inventories
2,417 3,571
Assets held for sale (a)
2,115
-
Other current assets
1,683 1,221
Total current assets 21,609 14,647 Property,
plant, and equipment, net
10,911 12,475 Goodwill
2,109 2,330 Other assets
2,313
2,713
Total assets $
36,942 $ 32,165
Liabilities and
Shareholders’ Equity Current liabilities: Accounts
payable
$ 2,019 $ 2,814 Accrued employee compensation
and benefits
838
1,033 Current maturities of long-term debt
659 14
Liabilities for Macondo well incident
400 367 Other current
liabilities
1,443
1,638
Total current liabilities 5,359
5,866 Long-term debt
14,687 7,765 Employee
compensation and benefits
457 691 Other liabilities
944 1,545
Total liabilities
21,447 15,867 Company shareholders’ equity
15,462 16,267 Noncontrolling interest in consolidated
subsidiaries
33 31
Total
shareholders’ equity 15,495
16,298
Total liabilities and shareholders’ equity
$ 36,942 $ 32,165 (a)
Assets held for sale primarily includes inventory; property, plant,
and equipment; and allocated goodwill.
HALLIBURTON COMPANY
Condensed Consolidated Statements of Cash
Flows
(Millions of dollars)
(Unaudited)
Year Ended December 31
2015
2014
Cash flows from operating activities: Net
income (loss)
$ (667 ) $ 3,501 Adjustments to
reconcile net income to net cash flows from operating activities:
Depreciation, depletion, and amortization
1,835
2,126 Impairments and other charges, net of tax
1,529 90
Working capital (a)
1,018
(1,163
) Activity related to the Macondo well incident
(333
) (569 ) Other
(476
)
77
Total cash flows from operating activities
2,906 4,062
Cash flows
from investing activities: Capital expenditures
(2,184
) (3,283 ) Other investing activities
(8 ) 145
Total cash flows from
investing activities (2,192 )
(3,138 )
Cash flows from financing activities:
Proceeds from issuance of long-term debt, net
7,440
-
Dividends to shareholders
(614 ) (533 ) Payments to
reacquire common stock
-
(800 ) Other financing activities
255
303
Total cash flows from financing
activities 7,081 (1,030 )
Effect of exchange rate changes on cash
(9 ) 41 Increase (decrease) in cash and
equivalents
7,786 (65 ) Cash and equivalents at beginning of
period
2,291 2,356
Cash and equivalents at end of period $
10,077 $ 2,291
(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 December 31
September 30
Revenue by geographic region:
2015 2014 2015 Completion and Production:
North America
$ 1,619 $ 3,731 $ 1,898
Latin America
277 448 336 Europe/Africa/CIS
491 655
518 Middle East/Asia
444 637
448 Total
2,831
5,471 3,200 Drilling and Evaluation:
North America
536 998 590 Latin America
417 626 403
Europe/Africa/CIS
471 691 503 Middle East/Asia
827 984 886 Total
2,251 3,299 2,382
Total revenue by region: North America
2,155 4,729 2,488
Latin America
694 1,074 739 Europe/Africa/CIS
962
1,346 1,021 Middle East/Asia
1,271
1,621 1,334 Total revenue
$ 5,082 $ 8,770 $ 5,582
Operating income by geographic region:
Completion and
Production: North America
$ (34 ) $ 777 $ (49
) Latin America
16 53 53 Europe/Africa/CIS
63 89 77
Middle East/Asia
99 132
82 Total
144 1,051
163 Drilling and Evaluation: North America
75 141 57 Latin America
82 79 55 Europe/Africa/CIS
60 52 73 Middle East/Asia
182
205 216 Total
399
477 401 Total operating income
by region: North America
41 918 8 Latin America
98
132 108 Europe/Africa/CIS
123 141 150 Middle East/Asia
281 337 298
Corporate and other
(70 ) (83 ) (58 ) Impairments and
other charges
(282 ) (129 ) (381 ) Baker Hughes
acquisition-related costs
(105 )
(17 ) (82 ) Total operating income
$
86 $ 1,299 $ 43 See
Footnote Table 1 for Reconciliation of As Reported Operating Income
to Adjusted Operating Income.
HALLIBURTON COMPANY
Revenue and Operating Income
Comparison
By Segment and Geographic Region
(Millions of dollars)
(Unaudited)
Year Ended December 31
Revenue by geographic region:
2015 2014 Completion and Production:
North America
$ 8,352 $ 13,688 Latin America
1,340 1,633 Europe/Africa/CIS
2,081 2,595 Middle
East/Asia
1,909 2,337 Total
13,682 20,253 Drilling and
Evaluation: North America
2,504 4,010 Latin America
1,809 2,242 Europe/Africa/CIS
2,094 2,895 Middle
East/Asia
3,544 3,470 Total
9,951 12,617 Total revenue by
region: North America
10,856 17,698 Latin America
3,149 3,875 Europe/Africa/CIS
4,175 5,490 Middle
East/Asia
5,453 5,807 Total
revenue
$ 23,633 $ 32,870
Operating income by geographic region:
Completion and Production: North
America
$ 230 $ 2,618 Latin America
186 214
Europe/Africa/CIS
280 389 Middle East/Asia
373 449 Total
1,069
3,670 Drilling and Evaluation: North America
228 598 Latin America
254 217 Europe/Africa/CIS
243 300 Middle East/Asia
794 625
Total
1,519 1,740 Total
operating income by region: North America
458 3,216 Latin
America
440 431 Europe/Africa/CIS
523 689 Middle
East/Asia
1,167 1,074 Corporate
and other
(268 ) (167 ) Impairments and other charges
(2,177 ) (129 ) Baker Hughes acquisition-related
costs
(308 ) (17 ) Total operating
income (loss)
$ (165 ) $ 5,097
See Footnote Table 2 for Reconciliation of As Reported
Operating Income (Loss) to Adjusted Operating Income.
FOOTNOTE TABLE 1
HALLIBURTON COMPANY
Reconciliation of As Reported Operating
Income to Adjusted Operating Income
(Millions of dollars)
(Unaudited)
Three Months Ended
December 31, 2015 December 31, 2014
September 30, 2015 As reported operating income
$
86 $ 1,299 $ 43
Impairments and other charges: Fixed asset impairments
112
47 154 Inventory write-downs
74 24 64 Severance costs
45 28 96 Intangible asset impairments
3 10 37 Other
48 20 30 Total
Impairments and other charges
282 129 381 Baker
Hughes acquisition-related costs
105 17 82
Adjusted
operating income (a)
$ 473
$ 1,445 $ 506 (a)
Management believes that operating income
adjusted for impairments and other charges and Baker Hughes
acquisition-related costs for the quarters ended December 31, 2015,
September 30, 2015, and December 31, 2014 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” plus "Total Impairments and other charges" and
"Baker Hughes acquisition-related costs" for the quarters ended
December 31, 2015, September 30, 2015, and December 31, 2014.
FOOTNOTE TABLE 2
HALLIBURTON COMPANY
Reconciliation of As Reported Operating
Income (Loss) to Adjusted Operating Income
(Millions of dollars)
(Unaudited)
Year Ended December 31
2015
2014 As reported operating income (loss)
$
(165 ) $ 5,097 Impairments and other charges:
Fixed asset impairments
760 47 Inventory write-downs
484 24 Severance costs
352 28 Intangible asset
impairments
212 10
Country closures
80
-
Other
289
20 Total Impairments and other charges
$ 2,177 $ 129 Baker Hughes acquisition-related
costs
308 17
Macondo-related activity
-
(195
)
Adjusted
operating income (a)
$ 2,320
$
5,048
(a)
Management believes that operating income
(loss) adjusted for impairments and other charges and Baker Hughes
acquisition-related costs for the years ended December 31, 2015 and
December 31, 2014, and Macondo-related activity for the year ended
December 31, 2014, 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
"Total Impairments and other charges" and "Baker Hughes
acquisition-related costs" for the year ended December 31, 2015 and
"As reported operating income (loss)" plus "Total Impairments and
other charges", "Baker Hughes acquisition-related costs", and
"Macondo-related activity" for the year ended December 31,
2014.
FOOTNOTE TABLE 3
HALLIBURTON COMPANY
Reconciliation of As Reported (Loss) from
Continuing Operations to
Adjusted Income from Continuing
Operations
(Millions of dollars and shares except per
share data)
(Unaudited)
Three Months Ended
December 31, 2015
September 30, 2015 As reported (loss) from continuing operations
attributable to company
$ (28 ) $ (54 )
Impairments and other charges, net of tax (a)
192 257 Baker
Hughes acquisition-related costs, net of tax (a)
79 62
Interest expense for acquisition, net of tax (a)
27
-
Adjusted income from continuing operations attributable to
company (a)
$ 270
$ 265 As reported diluted weighted average common
shares outstanding (b)
856 855 Adjusted diluted weighted
average common shares outstanding (b)
858 857 As
reported (loss) from continuing operations per diluted share (c)
$ (0.03 ) $ (0.06 ) Adjusted income from
continuing operations per diluted share (c)
$
0.31 $ 0.31 (a)
Management believes that (loss) from continuing operations adjusted
for impairments and other charges, Baker Hughes acquisition-related
costs, and interest expense associated with the acquisition 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 (loss) 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 (loss) from continuing operations attributable to company”
plus "Impairments and other charges, net of tax", "Baker Hughes
acquisition-related costs, net of tax", and "Interest expense for
acquisition, net of tax". (b) As reported diluted weighted average
common shares outstanding for the three months ended December 31,
2015 and September 30, 2015 both exclude 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 the periods.
When adjusting income from continuing operations attributable to
company in each period for the special items discussed above, these
two million shares become dilutive. (c)
As reported (loss) from continuing
operations per diluted share is calculated as: "As reported (loss)
from continuing operations attributable to company" divided by "As
reported diluted weighted average common shares outstanding."
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."
FOOTNOTE TABLE 4
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)
Year Ended December 31 2015 2014
As reported income (loss) from continuing operations attributable
to company
$ (666 ) $
3,436 Impairments and other charges, net of tax (a)
1,529 90
Baker Hughes acquisition-related costs, net of tax (a)
243
17 Venezuela currency devaluation loss (a)
199
-
Interest expense for acquisition, net of tax (a)
27
-
Macondo-related activity, net of tax (a)
-
(124 ) Bridge loan expense for acquisition, net of tax (a)
-
2 Adjusted income from
continuing operations attributable to company (a)
$ 1,332 $ 3,421
As reported diluted weighted average common shares
outstanding (b)
853 852 Adjusted diluted weighted average
common shares outstanding (b)
855 852 As reported
income (loss) from continuing operations per diluted share (c)
$ (0.78 ) $ 4.03 Adjusted income from
continuing operations per diluted share (c)
$
1.56 $ 4.02 (a)
Management believes that income (loss) from continuing operations
adjusted for impairments and other charges, Baker Hughes
acquisition-related costs, Venezuela currency devaluation loss,
interest and bridge loan expenses associated with the acquisition,
and Macondo-related activity 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 (loss) 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", "Venezuela currency
devaluation loss", and "Interest expense for acquisition, net of
tax" for the year ended December 31, 2015, and "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", "Macondo-related activity,
net of tax", and "Bridge loan expense for acquisition, net of tax"
for the year ended December 31, 2014. (b) As reported diluted
weighted average common shares outstanding for the year ended
December 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 the period. When adjusting income
from continuing operations attributable to company in the period
for the special items discussed above, these two million shares
become dilutive. (c)
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." 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."
Conference Call
Details
Halliburton will host a conference call on Monday, January 25,
2016, to discuss the fourth 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.
Interested parties may also 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 1665267.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160125005391/en/
HalliburtonFor Investors:Kelly Youngblood,
281-871-2688Halliburton, Investor
RelationsInvestors@Halliburton.comorFor Media:Emily Mir,
281-871-2601Halliburton, Public RelationsPR@Halliburton.com
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