Reported loss from continuing operations of
$2.81 per diluted share
Halliburton Company (NYSE:HAL) announced today that income from
continuing operations for the first quarter of 2016 was $64
million, or $0.07 per diluted share, excluding special items. This
compares to income from continuing operations for the fourth
quarter of 2015 of $270 million, or $0.31 per diluted share,
excluding special items. Adjusted operating income was $225 million
in the first quarter of 2016, compared to adjusted operating income
of $473 million in the fourth quarter of 2015. Halliburton's total
revenue in the first quarter of 2016 was $4.2 billion, compared to
$5.1 billion in the fourth quarter of 2015.
Market conditions continued to negatively impact Halliburton's
business in the first quarter of 2016. The rig count declined to
historic lows during the quarter, in the face of continued
depressed commodity prices, which created further widespread
pricing pressure and activity reductions for the company's products
and services on a global basis. As a result of these conditions and
their corresponding impact on the company’s business outlook,
Halliburton recorded company-wide charges related primarily to
asset impairments and severance costs of approximately $2.1
billion, after-tax, or $2.39 per diluted share, in the first
quarter of 2016, compared to $192 million, after-tax, or $0.22 per
diluted share, in the fourth quarter of 2015.
In accordance with Generally Accepted Accounting Principles, and
in conjunction with the termination of its merger agreement with
Baker Hughes, Halliburton determined that its proposed businesses
to be divested no longer meet the assets held for sale criteria as
of March 31, 2016. As a result, the company recorded corresponding
charges representing the associated depreciation and amortization
expense previously suspended for these businesses, along with other
divestiture-related costs, within "Baker Hughes acquisition-related
costs." In total, Halliburton recorded Baker Hughes
acquisition-related costs of $378 million, after-tax, or $0.44 per
diluted share, in the first quarter of 2016, compared to $79
million, after-tax, or $0.09 per diluted share, in the fourth
quarter of 2015. Halliburton also incurred $45 million, after-tax,
or $0.05 per diluted share, of interest expense in the first
quarter of 2016 associated with the $7.5 billion of debt issued in
late 2015, compared to $27 million, after-tax, or $0.03 per diluted
share, in the fourth quarter of 2015.
Reported loss from continuing operations was $2.4 billion, or
$2.81 per diluted share, in the first quarter of 2016, compared to
reported loss from continuing operations of $28 million, or $0.03
per diluted share, in the fourth quarter of 2015. Reported
operating loss was $3.1 billion for the first quarter of 2016,
compared to reported operating income of $86 million for the fourth
quarter of 2015.
This press release should be read in conjunction with
Halliburton's operational update press release issued on April 22,
2016.
About Halliburton
Founded in 1919, Halliburton is one of the world's largest
providers of products and services to the energy industry. With
over 55,000 employees, representing 140 nationalities and
operations in approximately 70 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, 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: 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, 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.
HALLIBURTON COMPANY
Condensed Consolidated Statements of
Operations
(Millions of dollars and shares except per
share data)
(Unaudited)
Three Months Ended March 31 December 31
2016 2015 2015
Revenue:
Completion and Production $ 2,324 $ 4,246 $ 2,831 Drilling and
Evaluation 1,874 2,804 2,251
Total revenue $ 4,198 $ 7,050
$ 5,082
Operating income (loss):
Completion and Production $ 30 $ 462 $ 144 Drilling and Evaluation
241 306 399 Corporate and other (46 ) (69 ) (70 ) Impairments and
other charges (a) (2,766 ) (1,208 ) (282 ) Baker Hughes
acquisition-related costs (b) (538 ) (39 )
(105 )
Total operating income (loss) (3,079 )
(548 ) 86 Interest expense, net (c) (165 ) (106 )
(136 ) Other, net (d) (47 ) (224 ) (43 )
Loss from continuing operations before income taxes (3,291 )
(878 ) (93 ) Income tax benefit 875 241
67
Loss from continuing operations (2,416 )
(637 ) (26 ) Loss from discontinued operations, net (2 )
(4 )
-
Net loss $ (2,418 ) $ (641 ) $
(26 ) Net (income) loss attributable to noncontrolling interest
6 (2 ) (2 )
Net loss attributable to
company $ (2,412 ) $ (643 ) $ (28 )
Amounts attributable to company shareholders: Loss from
continuing operations $ (2,410 ) $ (639 ) $ (28 ) Loss from
discontinued operations, net (2 ) (4 )
-
Net loss attributable to company $ (2,412 )
$ (643 ) $ (28 )
Basic loss per share attributable
to company shareholders: Loss from continuing operations $
(2.81 ) $ (0.75 ) $ (0.03 ) Loss from discontinued operations, net
-
(0.01 )
-
Net loss per share $ (2.81 ) $ (0.76 )
$ (0.03 )
Diluted loss per share attributable to company
shareholders: Loss from continuing operations $ (2.81 ) $ (0.75
) $ (0.03 ) Loss from discontinued operations, net
-
(0.01 )
-
Net loss per share $ (2.81 ) $ (0.76 )
$ (0.03 ) Basic weighted average common shares outstanding
858 850 856 Diluted weighted average common shares outstanding
858 850 856 (a)
For further details of impairments and other charges for all
periods presented, see Footnote Table 1.
(b) Includes an aggregate $464 million of
charges taken in the three months ended March 31, 2016 for the
reversal of assets held for sale accounting, representing $329
million of associated depreciation costs suspended since April 2015
for the businesses held for sale and $135 million of other
divestiture-related costs.
(c) Includes $71 million of interest
expense in the three months ended March 31, 2016 and $42 million in
the three months ended December 31, 2015 associated with the $7.5
billion debt issued in late 2015.
(d) 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 Loss from Continuing
Operations to Adjusted Income from Continuing Operations.
HALLIBURTON COMPANY
Condensed Consolidated Balance Sheets
(Millions of dollars)
(Unaudited) March 31 December 31
2016 2015
Assets Current assets:
Cash and equivalents $ 9,593 $ 10,077 Receivables, net 4,983 5,317
Inventories 2,893 2,993 Other current assets 1,636
1,683
Total current assets 19,105 20,070
Property, plant and equipment, net 9,252 12,117 Goodwill 2,383
2,385 Other assets 3,192 2,370
Total
assets $ 33,932 $ 36,942
Liabilities and Shareholders’ Equity Current
liabilities: Current maturities of long-term debt (a) $ 3,186 $
659 Accounts payable 1,844 2,019 Accrued employee compensation and
benefits 609 862 Liabilities for Macondo well incident 400 400
Other current liabilities 1,373 1,397
Total
current liabilities 7,412 5,337 Long-term debt 12,207
14,687 Employee compensation and benefits 447 479 Other liabilities
806 944
Total liabilities 20,872 21,447
Company shareholders’ equity 13,015 15,462 Noncontrolling
interest in consolidated subsidiaries 45 33
Total shareholders’ equity 13,060
15,495
Total liabilities and shareholders’ equity $
33,932 $ 36,942
(a) Includes $2.5 billion of senior notes
issued in late 2015 that were reclassified to current liabilities
as of March 31, 2016, as these notes are subject to a special
mandatory redemption.
HALLIBURTON COMPANY
Condensed Consolidated Statements of Cash
Flows
(Millions of dollars)
(Unaudited)
Three Months Ended March 31
2016 2015
Cash flows from operating
activities: Net loss $ (2,418 ) $ (641 ) Adjustments to
reconcile net income to net cash flows from operating activities:
Impairments and other charges, net of tax 2,051 823 Depreciation,
depletion and amortization 346 560 Working capital (a) 92 313 Other
(242 ) (243 )
Total cash flows from operating
activities (171 ) 812
Cash flows
from investing activities: Capital expenditures (234 ) (704 )
Proceeds from sales of property, plant and equipment 50 54 Other
investing activities (24 ) (32 )
Total cash flows
from investing activities (208 ) (682 )
Cash flows from financing activities: Dividends to
shareholders (154 ) (153 ) Other financing activities 77
51
Total cash flows from financing
activities (77 ) (102 ) Effect of exchange
rate changes on cash (28 ) (25 ) Increase (decrease)
in cash and equivalents (484 ) 3 Cash and equivalents at beginning
of period 10,077 2,291
Cash and
equivalents at end of period $ 9,593 $
2,294 (a) Working capital includes receivables,
inventories and accounts payable.
HALLIBURTON COMPANY
Revenue and Operating Income (Loss)
Comparison
By Operating Segment and Geographic
Region
(Millions of dollars)
(Unaudited)
Three Months Ended March 31 December 31
Revenue 2016 2015 2015 By operating
segment: Completion and Production $ 2,324 $ 4,246 $
2,831 Drilling and Evaluation 1,874 2,804
2,251
Total revenue $
4,198 $ 7,050
$ 5,082 By geographic region: North
America $ 1,794 $ 3,542 $ 2,155 Latin America 541 949 694
Europe/Africa/CIS 778 1,097 962 Middle East/Asia 1,085
1,462 1,271
Total revenue
$ 4,198 $ 7,050
$ 5,082 Operating
Income (Loss) By
operating segment: Completion and Production $ 30 $ 462 $ 144
Drilling and Evaluation 241 306
399 Total 271 768 543
Corporate and other (46 ) (69 ) (70 ) Impairments and other
charges (2,766 ) (1,208 ) (282 ) Baker Hughes acquisition-related
costs (538 ) (39 ) (105 )
Total operating
income (loss) $ (3,079 )
$ (548 ) $ 86
By geographic region: North America $ (39 ) $ 279 $ 41 Latin
America 48 122 98 Europe/Africa/CIS 57 86 123 Middle East/Asia
205 281 281 Total
$ 271 $ 768 $ 543 See
Footnote Table 1 for Reconciliation of As Reported Operating Income
(Loss) to Adjusted Operating Income.
FOOTNOTE TABLE 1
HALLIBURTON COMPANY
Reconciliation of As Reported Operating
Income (Loss) to Adjusted Operating Income
(Millions of dollars)
(Unaudited)
Three Months Ended March 31,
2016 March 31, 2015
December 31, 2015 As reported operating income (loss) $ (3,079 ) $
(548 ) $ 86 Impairments and other charges: Fixed asset
impairments 2,445 303 112 Severance costs 135 134 45 Intangible
asset impairments 87 165 3 Inventory write-downs 66 309 74 Country
closures 2 75
-
Other 31 222
48 Total Impairments and other charges
2,766 1,208 282 Baker Hughes acquisition-related costs 538
39 105
Adjusted operating income (a)
$ 225 $ 699
$ 473 (a) Management believes that
operating income (loss) adjusted for impairments and other charges
and Baker Hughes acquisition-related costs for the three months
ended March 31, 2016, December 31, 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 (loss) 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 three months ended March 31,
2016, December 31, 2015 and March 31, 2015.
FOOTNOTE TABLE 2
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 March
31, 2016 December 31, 2015 As reported loss
from continuing operations attributable to company $ (2,410 ) $ (28
) Impairments and other charges, net of tax (a) 2,051 192 Baker
Hughes acquisition-related costs, net of tax (a) 378 79 Interest
expense for acquisition, net of tax (a)
45 27 Adjusted income
from continuing operations attributable to company (a)
$ 64 $ 270
As reported diluted weighted average common shares outstanding (b)
858 856 Adjusted diluted weighted average common shares outstanding
859 858 As reported loss from continuing operations per
diluted share (c) $ (2.81 ) $ (0.03 ) Adjusted income from
continuing operations per diluted share (c) $
0.07 $ 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" for the three months ended March 31, 2016
and December 31, 2015. (b)
As reported diluted weighted average
common shares outstanding excludes options to purchase one million
shares of common stock as of March 31, 2016 and two million shares
of common stock as of December 31, 2015, as their impact would be
antidilutive since 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
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."
Conference Call Details
Halliburton will host a conference call on Tuesday, May 3, 2016,
to discuss the first quarter 2016 financial results. The call will
begin at 8:00 AM Central Time (9:00 AM Eastern Time).
Please visit the website to listen to the call live via webcast.
Interested parties may also participate in the call by dialing
(888) 793-5581 within North America or (973) 935-8723 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 1670065.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160503005459/en/
HalliburtonFor Investors:Lance Loeffler,
281-871-2688Investor RelationsInvestors@Halliburton.comorFor
Media:Emily Mir, 281-871-2601Public
RelationsPR@Halliburton.com
Halliburton (NYSE:HAL)
Historical Stock Chart
From Aug 2024 to Sep 2024
Halliburton (NYSE:HAL)
Historical Stock Chart
From Sep 2023 to Sep 2024