Reported income from continuing operations of
$1.33 per diluted share
Halliburton (NYSE:HAL) announced today that income from
continuing operations for the third quarter of 2014 was $1.0
billion, or $1.19 per diluted share, excluding Macondo-related
items. This compares to income from continuing operations for the
second quarter of 2014 of $776 million, or $0.91 per diluted share.
Reported income from continuing operations for the third quarter of
2014 was $1.1 billion, or $1.33 per diluted share.
Halliburton's total revenue in the third quarter of 2014 was a
record $8.7 billion, an 8% improvement compared to $8.1 billion in
the second quarter of 2014, and a 16% improvement compared to $7.5
billion in the third quarter of 2013. Adjusted operating income was
$1.4 billion in the third quarter of 2014, a 21% improvement
compared to operating income of $1.2 billion in the second quarter
of 2014 and a 24% improvement compared to adjusted operating income
of $1.2 billion in the third quarter of 2013. Reported operating
income was $1.6 billion in the third quarter of 2014 and $1.1
billion in the third quarter of 2013.
During the third quarter of 2014, Halliburton reduced its
existing loss contingency for the Macondo well incident by $100
million and recorded $95 million for an expected insurance recovery
related to the settlement, for a total $195 million positive
adjustment to operating income.
“I am pleased with Halliburton’s third quarter results. Once
again, we delivered industry-leading revenue and operating income
growth, both sequentially and year over year, compared to our
primary peers,” commented Dave Lesar, chairman, president and chief
executive officer.
“In North America, third quarter revenue increased 9% and
operating income was up 15% compared to the second quarter of 2014,
outperforming a 3% increase in the United States land rig count.
Service intensity levels surged to unprecedented levels, as
completion volumes per well were up more than 50% compared to the
third quarter of last year, and we expect this level of activity to
continue. More importantly, our exit rate margins for North America
were in excess of 20%.
“In the Eastern Hemisphere, activity continues to steadily
expand. Sequentially, Eastern Hemisphere revenue grew 4% and
operating income grew 6%, leading our peer group. This growth was
driven by activity improvements in Saudi Arabia, Oman, Angola and
Continental Europe, as well as seasonal increases in Russia and the
Caspian. Despite geopolitical headwinds in Russia and the Middle
East, we continue to forecast full-year Eastern Hemisphere revenue
expansion in the low double-digits.
“In Latin America, revenue increased 16% sequentially, while
operating income more than doubled compared to the second quarter,
primarily as a result of increased project management, consulting
and software revenue in Mexico. We also experienced higher testing
and directional drilling activity in Brazil, as well as increased
workover and stimulation activity in Venezuela.
“Our strategy is working well and we intend to stay the course.
Our leadership in North America positions us well to take advantage
of this quickly evolving market, and we continue to realize
significant revenue and margin expansion in our international
business.
“We continue to focus on delivering higher shareholder returns.
This is evidenced by our 20% dividend increase announced today,
which means our quarterly dividend has doubled in the last two
years. Also, we repurchased an additional $300 million in stock
during the third quarter. These actions reflect our confidence in
the strength of our long-term business outlook, our commitment to
shareholder distributions, and our focus on delivering
best-in-class returns,” concluded Lesar.
2014 Third Quarter Results
Completion and Production
Completion and Production (C&P) revenue in the third quarter
of 2014 was $5.4 billion, an increase of $478 million, or 10%, from
the second quarter of 2014. This increase was primarily driven by
higher activity in North America and strong growth across the
majority of our product lines in the Europe/Africa/CIS and Latin
America regions.
C&P operating income in the third quarter of 2014 was $1.1
billion, an increase of $184 million, or 21%, from the second
quarter of 2014. North America C&P operating income improved by
$135 million, or 21%, sequentially, mainly due to higher activity
levels. Latin America C&P operating income increased $17
million, or 35%, compared to the second quarter of 2014, primarily
due to higher stimulation activity and well intervention services
in Mexico and Venezuela. Europe/Africa/CIS C&P operating income
rose $30 million, or 31%, sequentially, mainly due to higher
pressure pumping services and product sales in Angola, along with
higher direct sales and seasonal pipeline and process activity in
Europe. Middle East/Asia C&P operating income was relatively
flat compared to the second quarter of 2014, primarily due to
increased stimulation services in Saudi Arabia and higher activity
for most product lines in Oman and Indonesia, which were partially
offset by decreased pressure pumping services in Australia and
Malaysia.
Drilling and Evaluation
Drilling and Evaluation (D&E) revenue in the third quarter
of 2014 was $3.3 billion, an increase of $172 million, or 6%, from
the second quarter of 2014. This increase was primarily driven by
strong growth across the majority of our product lines in Latin
America and increased consulting and fluid services in the Eastern
Hemisphere.
D&E operating income in the third quarter of 2014 was $451
million, an increase of $37 million, or 9%, from the second quarter
of 2014. North America D&E operating income decreased $19
million, or 12%, sequentially, due to reduced Gulf of Mexico
activity. Latin America D&E operating income increased $60
million, or 462%, from the second quarter of 2014, primarily due to
higher software sales and increased consulting services in Mexico.
Europe/Africa/CIS D&E operating income was flat, sequentially,
due to increased drilling activity in Azerbaijan, higher fluid
activity in Angola, and improved activity in Russia, which were
offset by decreased drilling services in Angola and lower fluid
activity in Norway. Middle East/Asia D&E operating income
decreased $4 million, or 3%, sequentially, mainly due to decreased
drilling activity across the majority of the region, which was
partially offset by increased logging activity in Saudi Arabia and
Iraq, and increased direct sales in China.
Corporate and Other
During the third quarter of 2014, Halliburton repurchased
approximately 4.4 million shares of common stock at a total cost of
$300 million. Since the inception of the stock repurchase program
in February 2006, Halliburton has purchased 201 million shares at a
total cost of approximately $8.4 billion. Approximately $5.7
billion of repurchases remain authorized under the program.
During the third quarter, Halliburton’s effective tax rate
benefited from an adjustment to reflect the recoverability of a net
operating loss carry-forward in Brazil.
As previously announced, in September of 2014, Halliburton
reached an agreement to settle a substantial portion of the
plaintiffs' claims asserted against the company as a result of the
Macondo well incident. In the days following the settlement
agreement, the United States District Court for the Eastern
District of Louisiana ruled that Halliburton was negligent in its
conduct related to the Macondo well incident with a fault
allocation of 3%. Further, the court did not find that
Halliburton's conduct constituted gross negligence.
Significant Recent Events and Achievements
- Halliburton signed long-term contracts
with Petroamazonas, Ecuador’s state-run oil company, to provide
field development and asset management for the Igapo project,
covering nine mature fields. The project is expected to run for 15
years, plus a potential five-year extension. Halliburton will
provide a full range of drilling and completions services and
technologies as part of an Integrated Asset Management project to
enhance oil recovery from existing wells and discover new
hydrocarbon reserves.
- For the fifth consecutive year, the Dow
Jones Sustainability Indices (DJSI) identified Halliburton as a
leader in corporate sustainability as the company exceeded industry
averages in the Economic, Environmental and Social Performance
categories. Halliburton’s continued commitment to advancing its
global vision and goals for corporate responsibility and
sustainability earned high rankings in several industry categories,
and the company received industry best scores for Codes of Conduct,
Compliance, Corruption and Bribery; Releases to the Environment;
and Human Capital Development. Halliburton received a perfect score
in the “Releases to the Environment” category.
- Halliburton signed an agreement with
the SPT Energy Group Inc. affiliate, Petrotech (Xinjiang)
Engineering Co., Ltd., to establish a joint venture company focused
on hydraulic fracturing and production enhancement services in
Xinjiang, China. The new company, Xinjiang HDTD Oilfield Services
Co. Ltd., will provide fracture stimulation services, including
design and analysis, data acquisition, and pumping and chemical
services in the Xinjiang Uygur Autonomous Region. This is
Halliburton’s first joint venture for hydraulic fracturing services
in China.
- Halliburton’s Baroid drilling fluids
and waste management service line received the American Petroleum
Institute (API) Specification Q2 Certification - an advanced
industry certification standard for oil and natural gas service
companies - for its work in the Gulf of Mexico. API Q2 is a new,
risk-based quality management system approach that focuses on
competency, service design, contingency planning, supply chain
controls, preventive maintenance, inspection, service quality plans
and management of change.
- Halliburton’s Wireline and Perforating
business line introduced the CoreVault™ system, a unique solution
that provides a more accurate volumetric picture of the amount of
oil and gas trapped in unconventional reservoir rocks. For the
first time, the system allows operators to contain and bring the
reservoir fluids within rock samples to the surface, allowing for
measurement of the volume of hydrocarbons-in-place. By preserving
100 percent of the fluids within the core sample, the CoreVault
system allows for an improved understanding of potential production
within the reservoir.
Founded in 1919, Halliburton is one of the world's largest
providers of products and services to the energy industry. With
more than 80,000 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, 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: final court approval of, and the satisfaction of the
conditions in, Halliburton's September 2014 settlement relating to
the Macondo well incident in the Gulf of Mexico; appeals of the
multi-district litigation District Court's September 2014 ruling
regarding Phase 1 of the trial, and future rulings of the District
Court; results of litigation, settlements, and investigations not
covered by the settlement or the District Court's rulings; actions
by third parties, including governmental agencies, relating to the
Macondo well incident; BP's April 2012 settlement relating to the
Macondo well incident, 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; 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 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, 2013, Form 10-Q for the quarter ended June 30, 2014, 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
2014 2013
2014
Revenue: Completion and Production
$
5,420 $ 4,501 $
4,942 Drilling and Evaluation
3,281 2,971
3,109
Total revenue
$ 8,701
$ 7,472 $
8,051
Operating income:
Completion and Production
$ 1,071 $ 763 $ 887
Drilling and Evaluation
451 450 414 Corporate and other (a)
112 (105 )
(107 )
Total operating income
1,634 1,108
1,194 Interest expense, net
(96
) (91 ) (94 ) Other, net
12
(12 ) (24 )
Income from continuing operations before income taxes
1,550 1,005 1,076 Provision for income taxes
(411 ) (296 )
(299 )
Income from continuing operations
1,139 709 777 Income (loss) from discontinued operations,
net (b)
66
(1 ) (2 )
Net income
$ 1,205
$ 708
$ 775 Net income attributable to
noncontrolling interest
(2 )
(2 ) (1 )
Net income
attributable to company $
1,203 $
706 $
774
Amounts attributable to company
shareholders: Income from continuing operations
$
1,137 $ 707 $ 776 Income (loss) from discontinued
operations, net (b)
66
(1 ) (2 )
Net income
attributable to company $
1,203 $
706 $
774
Basic income per share attributable to company
shareholders: Income from continuing operations
$
1.34 $ 0.79 $ 0.92 Income from discontinued operations, net
(b)
0.08
-
-
Net income per share $
1.42 $
0.79 $
0.92
Diluted income per share attributable
to company shareholders: Income from continuing operations
$ 1.33 $ 0.79 $ 0.91 Income from discontinued
operations, net (b)
0.08
-
-
Net income per share $
1.41 $
0.79 $
0.91 Basic weighted average common shares
outstanding
848 890 846 Diluted weighted average common
shares outstanding
854
894 852 (a)
Includes $195 million, pre-tax, of activity in
the three months ended September 30, 2014 as a result of a
reduction of our loss contingency liability and expected insurance
recovery related to the Macondo well incident. (b)
Includes $63 million of income in the
three months ended September 30, 2014 related to a settlement we
reached with KBR for amounts owed to us under our Tax Sharing
Agreement with KBR.
See Footnote Table 1 for certain items included in operating
income. See Footnote Table 3 for operating income adjusted
for certain items. See Footnote Table 4 for a reconciliation
of as-reported income 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) Nine Months Ended September 30
2014
2013
Revenue: Completion and Production
$
14,782 $ 12,964 Drilling and Evaluation
9,318 8,799
Total revenue $
24,100 $ 21,763
Operating income: Completion and Production
$
2,619 $ 2,110 Drilling and Evaluation
1,263 1,272
Corporate and other (a)
(84
) (1,388
)
Total operating income
3,798 1,994 Interest
expense, net
(283 ) (233 ) Other, net
(43 ) (37 )
Income from continuing operations before income taxes
3,472 1,724 Provision for income taxes
(939 ) (380 )
Income
from continuing operations 2,533 1,344 Income (loss)
from discontinued operations, net (b)
63 (4 )
Net income
$ 2,596
$ 1,340 Net (income) loss attributable to
noncontrolling interest
3
(8 )
Net income attributable to company
$ 2,599
$ 1,332
Amounts attributable to company
shareholders: Income from continuing operations
$
2,536 $ 1,336 Income (loss) from discontinued operations,
net (b)
63
(4 )
Net income attributable to company
$ 2,599 $
1,332
Basic income per share attributable to company
shareholders: Income from continuing operations
$
2.99 $ 1.46 Income from discontinued operations, net (b)
0.07
-
Net income per share
$ 3.06 $ 1.46
Diluted income per share attributable to company
shareholders: Income from continuing operations
$
2.97 $ 1.45 Income from discontinued operations, net (b)
0.08
-
Net income per share
$ 3.05 $ 1.45
Basic weighted average common shares outstanding
848 915
Diluted weighted average common shares outstanding
853 919 (a)
Includes $195 million, pre-tax, of
activity in the nine months ended September 30, 2014 as a result of
a reduction of our loss contingency liability and expected
insurance recovery related to the Macondo well incident. Includes a
$1.0 billion, pre-tax, charge related to the Macondo well incident
and a $55 million, pre-tax, charge related to a charitable
contribution to the National Fish and Wildlife Foundation in the
nine months ended September 30, 2013.
(b)
Includes $63 million of income in the nine
months ended September 30, 2014 related to a settlement we reached
with KBR for amounts owed to us under our Tax Sharing Agreement
with KBR.
See Footnote Table 2 for certain items included in operating
income.
HALLIBURTON COMPANY Condensed Consolidated Balance Sheets (Millions
of dollars) (Unaudited)
September 30
December 31
2014
2013
Assets Current assets: Cash
and equivalents
$ 2,029 $ 2,356 Receivables, net
7,555 6,181 Inventories
3,650 3,305 Other current
assets (a)
1,613
1,862
Total current assets 14,847 13,704
Property, plant, and equipment, net
12,050 11,322
Goodwill
2,312 2,168 Other assets (b)
2,374 2,029
Total assets
$ 31,583
$ 29,223
Liabilities and Shareholders’ Equity
Current liabilities: Accounts payable
$ 3,005
$ 2,365 Accrued employee compensation and benefits
986 1,029
Loss contingency for Macondo well incident
395 278 Other
current liabilities
1,503
1,354
Total current liabilities 5,889
5,026 Long-term debt
7,816 7,816 Loss contingency for
Macondo well incident
805 1,022 Employee compensation and
benefits
580 584 Other liabilities
975 1,160
Total
liabilities 16,065 15,608 Company shareholders’
equity
15,491 13,581 Noncontrolling interest in consolidated
subsidiaries
27
34
Total shareholders’ equity
15,518 13,615
Total
liabilities and shareholders’ equity
$ 31,583 $ 29,223 (a)
Includes $131 million of investments in
fixed income securities at September 30, 2014, and $239 million of
investments in fixed income securities at December 31, 2013.
(b) Includes $149 million of investments in fixed income securities
at September 30, 2014, and $134 million of investments in fixed
income securities at December 31, 2013.
HALLIBURTON COMPANY Condensed
Consolidated Statements of Cash Flows (Millions of dollars)
(Unaudited) Nine Months Ended September 30
2014 2013
Cash
flows from operating activities: Net income
$
2,596 $ 1,340 Adjustments
to reconcile net income to net cash flows from operating
activities: Depreciation, depletion, and amortization
1,569
1,403 Deferred income tax benefit, continuing operations
(535 ) (273 ) Activity related to the Macondo well
incident
(195 ) 1,000 Payment of Barracuda-Caratinga
obligation
-
(219 ) Other, primarily working capital
(522 ) (702 )
Total cash
flows from operating activities
2,913 2,549
Cash flows from investing activities: Capital expenditures
(2,284 ) (2,075 ) Payments to acquire businesses, net
of cash acquired
(230 ) (12 ) Sales of investment
securities, net of purchases
90 126 Other investing
activities
92
94
Total cash flows from investing
activities (2,332 )
(1,867 )
Cash flows from financing
activities: Payments to reacquire common stock
(800
) (4,356 ) Dividends to shareholders
(381 )
(337 ) Proceeds from long-term borrowings, net of offering costs
-
2,968 Other financing activities
311 58
Total cash
flows from financing activities
(870 ) (1,667 ) Effect of
exchange rate changes on cash
(38 ) (8 ) Decrease in cash and
equivalents
(327 ) (993 ) Cash and equivalents at
beginning of period
2,356
2,484
Cash and equivalents at end of
period $
2,029 $
1,491
HALLIBURTON COMPANY Revenue and
Operating Income Comparison By Segment and Geographic Region
(Millions of dollars) (Unaudited) Three Months Ended
September 30 June
30
Revenue by geographic region:
2014 2013 2014
Completion and Production: North America
$
3,705 $ 2,925 $
3,325 Latin America
435 412 395 Europe/Africa/CIS
699 636 634 Middle East/Asia
581 528 588
Total
5,420
4,501 4,942 Drilling and
Evaluation: North America
1,019 956 1,019 Latin America
610 590 502 Europe/Africa/CIS
765 704 747 Middle
East/Asia
887
721 841 Total
3,281 2,971
3,109 Total revenue by region: North
America
4,724 3,881 4,344 Latin America
1,045 1,002
897 Europe/Africa/CIS
1,464 1,340 1,381 Middle East/Asia
1,468 1,249
1,429 Total revenue
$ 8,701
$ 7,472
$ 8,051
Operating income by geographic region:
Completion and Production: North America
$ 765 $ 489 $ 630 Latin America
65 63 48
Europe/Africa/CIS
126 119 96 Middle East/Asia
115 92
113 Total
1,071 763
887 Drilling and Evaluation: North America
141 168
160 Latin America
73 92 13 Europe/Africa/CIS
90 82 90
Middle East/Asia
147
108 151 Total
451 450
414 Total operating income by
region: North America
906 657 790 Latin America
138
155 61 Europe/Africa/CIS
216 201 186 Middle East/Asia
262 200
264 Corporate and other
112 (105 )
(107 ) Total operating income
$ 1,634 $
1,108 $
1,194 See Footnote Table 1 for certain items
included in operating income. See Footnote Table 3 for
operating income adjusted for certain items. See Footnote
Table 4 for a reconciliation of as-reported income from continuing
operations to adjusted income from continuing operations.
HALLIBURTON
COMPANY Revenue and Operating Income Comparison By Segment and
Geographic Region (Millions of dollars) (Unaudited) Nine
Months Ended September 30
Revenue by geographic region:
2014 2013
Completion and Production: North America
$ 9,957 $
8,546 Latin America
1,185 1,158 Europe/Africa/CIS
1,940 1,744 Middle East/Asia
1,700 1,516 Total
14,782
12,964 Drilling and Evaluation: North America
3,012
2,843 Latin America
1,616 1,733 Europe/Africa/CIS
2,204 2,082 Middle East/Asia
2,486 2,141 Total
9,318 8,799
Total revenue by region: North America
12,969 11,389
Latin America
2,801 2,891 Europe/Africa/CIS
4,144
3,826 Middle East/Asia
4,186
3,657 Total revenue
$ 24,100
$ 21,763
Operating income by geographic
region:
Completion and Production: North America
$ 1,841 $ 1,438 Latin America
161 139
Europe/Africa/CIS
300 257 Middle East/Asia
317 276
Total
2,619
2,110 Drilling and Evaluation: North America
457 490 Latin America
138 226 Europe/Africa/CIS
248 226 Middle East/Asia
420 330
Total
1,263
1,272 Total operating income by region: North America
2,298 1,928 Latin America
299 365 Europe/Africa/CIS
548 483 Middle East/Asia
737 606 Corporate and
other
(84 )
(1,388 ) Total operating income
$ 3,798 $ 1,994
See Footnote Table 2 for certain items included in operating
income.
FOOTNOTE TABLE 1
HALLIBURTON COMPANY Items Included in Operating Income (Millions of
dollars) (Unaudited) Three Months Ended Three Months Ended
September 30, 2014 September 30, 2013
Operating After Tax Operating After Tax
Income Per Share
Income Per Share Completion and Production:
North America Restructuring charges
-
-
(30 ) (0.02 ) Latin America Restructuring charges
-
-
(2 )
-
Europe/Africa/CIS Restructuring charges
-
-
(4 )
-
Middle East/Asia Restructuring charges
-
-
(4 ) (0.01 ) Drilling and
Evaluation: North America Restructuring charges
-
-
(4 ) (0.01 ) Latin America Restructuring charges
-
-
(2 )
-
Europe/Africa/CIS Restructuring charges
-
-
(2 )
-
Middle East/Asia Restructuring charges
-
-
(3 )
-
Corporate and other: Macondo-related activity 195 0.14
-
-
Restructuring charges
-
-
(3 )
-
FOOTNOTE
TABLE 2 HALLIBURTON COMPANY Items Included in Operating
Income (Millions of dollars) (Unaudited) Nine Months Ended
Nine Months Ended September 30, 2014 September
30, 2013 Operating
After Tax
Operating
After Tax
Income
Per Share
Income
Per Share
Completion and Production: North America Restructuring charges
-
-
(30 ) (0.02 ) Latin America Restructuring charges
-
-
(2 )
-
Europe/Africa/CIS Restructuring charges
-
-
(4 )
-
Middle East/Asia Restructuring charges
-
-
(4 ) (0.01 ) Drilling and
Evaluation: North America Restructuring charges
-
-
(4 ) (0.01 ) Latin America Restructuring charges
-
-
(2 )
-
Europe/Africa/CIS Restructuring charges
-
-
(2 )
-
Middle East/Asia Restructuring charges
-
-
(3 )
-
Corporate and other: Macondo-related activity 195 0.14
(1,000 ) (0.69 ) Charitable contribution
-
-
(55 ) (0.04 ) Restructuring charges
-
-
(3 )
-
FOOTNOTE TABLE 3 HALLIBURTON COMPANY
Adjusted Operating Income
By Segment and Geographic Region (Millions of dollars) (Unaudited)
Three Months Ended September 30
June 30
Adjusted operating income by
geographic region: (a)(b)
2014 2013 2014
Completion and Production:
North America
$ 765 $
519 $ 630 Latin America
65 65 48 Europe/Africa/CIS
126 123 96 Middle
East/Asia
115
96 113
Total
1,071
803
887 Drilling and Evaluation: North America
141
172 160 Latin America
73 94 13 Europe/Africa/CIS
90
84 90 Middle East/Asia
147
111
151 Total
451
461
414 Adjusted operating income by region: North
America
906 691 790 Latin America
138 159 61
Europe/Africa/CIS
216 207 186 Middle East/Asia
262
207
264 Corporate and other
(83
) (102 )
(107 ) Adjusted
total operating income
$
1,439 $
1,162 $
1,194 (a) Management believes
that operating income adjusted for Macondo-related activity for the
quarter ended September 30, 2014 and for the restructuring-related
charges for the quarter ended September 30, 2013 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 the respective income and expenses. (b) Adjusted
operating income for each segment and region is calculated as:
"Operating income" less "Items Included in Operating Income."
FOOTNOTE TABLE 4 HALLIBURTON COMPANY
Reconciliation of As Reported Income from Continuing Operations to
Adjusted Income from Continuing Operations (Millions of dollars)
(Unaudited) Three Months Ended
September 30 2014
2013 As reported income from continuing operations
attributable to company
$ 1,137
$ 707 Macondo-related activity, net of tax (a)
(124 )
-
Restructuring charges, net of tax (a)
-
38 Adjusted income from
continuing operations attributable to company (a)
$ 1,013 $
745 Diluted weighted average common shares outstanding
854 894 As reported income from continuing operations
per diluted share (b)
$ 1.33 $ 0.79 Adjusted income
from continuing operations per diluted share (b)
$ 1.19 $
0.83 (a) Management believes that income from
continuing operations adjusted for Macondo-related activity for the
quarter ended September 30, 2014 and for the restructuring-related
charges for the quarter ended September 30, 2013 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 from continuing operations attributable to company” less
"Macondo-related income, net of tax" for the quarter ended
September 30, 2014 and "As reported income from continuing
operations attributable to company" plus "Restructuring charges,
net of tax" for the quarter ended September 30, 2013. (b) As
reported income from continuing operations per diluted share is
calculated as: "As reported income from continuing operations
attributable to company" divided by "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
"Diluted weighted average common shares outstanding."
Conference Call
Details
Halliburton (NYSE:HAL) will host a conference call on Monday,
October 20, 2014, to discuss the third quarter 2014 financial
results. The call will begin at 8:00 AM Central Time (9:00 AM
Eastern Time).
Halliburton’s third quarter press release will be posted on the
Halliburton website at www.halliburton.com. 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 1642036.
HalliburtonFor Investors:Kelly Youngblood,
281-871-2688Investor RelationsInvestors@Halliburton.comorFor
Media:Emily Mir, 281-871-2601Public
RelationsPR@Halliburton.com
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