- Reported income from continuing
operations of $0.05 per diluted share
- Adjusted income from continuing
operations of $0.41 per diluted share, excluding a write-down in
Venezuela
Halliburton Company (NYSE:HAL) announced today income from
continuing operations of $46 million, or $0.05 per diluted share,
for the first quarter of 2018. This compares to a loss from
continuing operations for the first quarter of 2017 of $32 million,
or $0.04 per diluted share. Adjusted income from continuing
operations for the first quarter of 2018, excluding impairments and
other charges related to a write-down of all of the Company’s
remaining investment in Venezuela, was $358 million, or $0.41 per
diluted share. This compares to adjusted income from continuing
operations for the first quarter of 2017, excluding costs related
to an early extinguishment of debt, of $34 million, or $0.04 per
diluted share. Reported operating income was $354 million during
the first quarter of 2018, compared to operating income of $203
million in the first quarter of 2017. Excluding impairments and
other charges, adjusted operating income for the first quarter of
2018 was $619 million.
“We achieved total company revenue of $5.7 billion, representing
a 34% increase compared to the first quarter of 2017. Adjusted
operating income was $619 million, primarily driven by robust
market conditions in North America,” remarked Jeff Miller,
President and CEO.
“Our Completions and Production division was negatively impacted
by delays in sand delivery, due to weather related rail
interruptions during the quarter, but achieved a strong March exit
with margins in the mid-upper teens. Our Drilling and Evaluations
division had strong year over year revenue growth of 15% while
operating income grew 54%.
“I am very pleased with the way our North America business
exited the quarter. Activity in U.S. land remains resilient as our
customers have a large portfolio of economically viable projects in
today’s commodity price environment. As a result of the improved
activity in U.S. land, in March we achieved a new record for stages
per spread as the pressure pumping market remains tight. Our North
America business exited the quarter in a strong position and I am
confident in our ability to reach normalized margins in North
America this year.
“Turning to the international markets, Halliburton has never
been better positioned for a recovery than it is today. I am
confident in the strength and performance our business will
demonstrate as the international recovery unfolds.
“Overall, I am optimistic about Halliburton’s relative
performance for the remainder of the year, and our ability to grow
our North America margins and to maximize the value of our global
footprint. We are executing our strategy, it is working well and it
resonates with our customers. Our strategy is delivering industry
leading returns and I am confident that it will continue to do so,”
concluded Miller.
Operating Segments
Completion and Production
Completion and Production revenue in the first quarter of 2018
was $3.8 billion, an increase of $1.2 billion, or 46%, from the
first quarter of 2017, while operating income tripled to $500
million. Improvements were led by increased activity in the United
States land sector. Additionally, results improved due to increased
well completion services in Europe/Africa/CIS and higher
stimulation activity in the Middle East.
Drilling and Evaluation
Drilling and Evaluation revenue in the first quarter of 2018 was
$1.9 billion, an increase of $258 million, or 15%, from the first
quarter of 2017, while operating income was $188 million, an
increase of $66 million, or 54% year over year. These increases
were primarily due to increased drilling activity in North America
and the Eastern Hemisphere, specifically in the North Sea. Results
were partially offset by activity declines across multiple product
service lines in Latin America.
Corporate and Other Events
As a result of recent changes in the foreign currency exchange
system in Venezuela and continued devaluation of the local
currency, combined with U.S. sanctions and ongoing political and
economic challenges, Halliburton wrote down all of its remaining
investment in the country during the first quarter of 2018. This
resulted in a charge of $312 million, net of tax, consisting of
$151 million of receivables, $53 million of fixed assets, $48
million of inventory, $13 million of other assets and liabilities,
and $47 million of accrued taxes. The Company is maintaining its
presence in Venezuela and is carefully managing its go-forward
exposure.
Geographic Regions
North America
North America revenue in the first quarter of 2018 was $3.5
billion, a 58% increase year over year. This improvement was driven
by increased activity throughout the United States land sector in
the majority of Halliburton’s product service lines, primarily
pressure pumping, as well as higher drilling and artificial lift
activity.
International
International revenue in the first quarter of 2018 was $2.2
billion, a 9% increase year over year, resulting primarily from
increased drilling activity and pressure pumping services in the
Eastern Hemisphere, as well as pressure pumping activity in
Argentina. These increases were partially offset by reduced
drilling activity in Latin America.
Latin America revenue in the first quarter of 2018 was $457
million, a 1% decrease year over year, resulting primarily from
activity declines across multiple product service lines in
Venezuela, as well as decreases in pressure pumping and project
management activity in Mexico. These results were partially offset
by increases in pressure pumping services and drilling activity in
Argentina.
Europe/Africa/CIS revenue in the first quarter of 2018 was $716
million, a 19% increase year over year, mainly due to higher
drilling activity and well completion services in the North Sea,
coupled with increased activity in Russia and Azerbaijan. These
results were partially offset by activity reductions in Angola.
Middle East/Asia revenue in the first quarter of 2018 was $1.1
billion, a 7% increase year over year, largely resulting from
increased drilling and stimulation activity in the Middle East and
increased drilling activity in Indonesia, offset by lower
completion tool sales and project management activity in the Middle
East.
Selective Technology &
Highlights
- Halliburton announced a multimillion
dollar software grant to the Colleges of Science and Engineering at
Sultan Qaboos University in Oman. The grant provides access to
leading industry software in geoscience, drilling and reservoir
management so that students can gain practical experience to
prepare for successful careers in the oil and gas industry.
- Halliburton announced that its Angolan
facilities, Luanda-SONILS base, which incorporates the
Cabinda-Malembo base and Soyo-Kwanda base facilities, and all of
the company's product service lines in those locations have
received the American Petroleum Institute (API) Specification Q2
Registration. The facilities are the first in Angola to receive
this registration, an advanced industry quality standard for oil
and natural gas service companies.
- Halliburton launched Quasar Trio®, the
industry's first full M/LWD service capable of operating in extreme
environments and the WiFire™ Acoustic Firing Head, a technology
that provides an alternative way of activating tubing-conveyed
perforating guns. Both offerings earned the OTC Spotlight Award for
their innovation. The Quasar Trio service surpasses the limits of
traditional LWD systems to offer a comprehensive suite of real-time
measurements to help operators enhance reservoir understanding,
make critical financial decisions earlier in the well construction
process and reduce well time.
- Halliburton's CoreVault™ RFPX
technology is the first and only wireline rotary sidewall coring
system that captures and preserves both reservoir rock and fluid
samples within a high pressure encapsulated vessel for accurate
hydrocarbon in place determination. High-pressure cores captured
using the new advanced nitrogen pressure compensated RFPX system
for a customer in West Texas confirmed a six-fold increase in
recorded pressure as compared with the previous generation tool
deployed in the same field.
About Halliburton
Founded in 1919, Halliburton is one of the world's largest
providers of products and services to the energy industry. With
over 55,000 employees, representing 140 nationalities in
approximately 70 countries, the company helps its customers
maximize value throughout the lifecycle of the reservoir – from
locating hydrocarbons and managing geological data, to drilling and
formation evaluation, well construction and completion, and
optimizing production throughout the life of the asset. Visit the
company’s website at www.halliburton.com. Connect with Halliburton on
Facebook, Twitter, LinkedIn, Instagram and YouTube.
NOTE: The statements in this press release that are not
historical statements, including statements regarding future
financial performance, are forward-looking statements within the
meaning of the federal securities laws. These statements are
subject to numerous risks and uncertainties, many of which are
beyond the company's control, which could cause actual results to
differ materially from the results expressed or implied by the
statements. These risks and uncertainties include, but are not
limited to: the continuation or suspension of our stock repurchase
program, the amount, the timing and the trading prices of
Halliburton common stock, and the availability and alternative uses
of cash; changes in the demand for or price of oil and/or natural
gas; potential catastrophic events related to our operations, and
related indemnification and insurance matters; protection of
intellectual property rights and against cyber-attacks; compliance
with environmental laws; changes in government regulations and
regulatory requirements, particularly those related to offshore oil
and natural gas exploration, radioactive sources, explosives,
chemicals, hydraulic fracturing services, and climate-related
initiatives; the impact of federal tax reform, compliance with laws
related to income taxes and assumptions regarding the generation of
future taxable income; risks of international operations, including
risks relating to unsettled political conditions, war, the effects
of terrorism, foreign exchange rates and controls, international
trade and regulatory controls and sanctions, and doing business
with national oil companies; weather-related issues, including the
effects of hurricanes and tropical storms; changes in capital
spending by customers; delays or failures by customers to make
payments owed to us; execution of long-term, fixed-price contracts;
structural changes in the oil and natural gas industry; maintaining
a highly skilled workforce; availability and cost of raw materials;
agreement with respect to and completion of potential acquisitions
and integration and success of acquired businesses and operations
of joint ventures. Halliburton's Form 10-K for the year ended
December 31, 2017, 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
2018 2017 2017
Revenue:
Completion and Production $ 3,807 $
2,604 $ 3,804 Drilling and Evaluation 1,933
1,675 2,136
Total revenue
$ 5,740 $ 4,279 $
5,940
Operating income: Completion and Production $
500 $ 147 $ 554 Drilling and Evaluation 188 122 293 Corporate and
other (69 ) (66 ) (79 ) Impairments and other charges (a)
(265 ) — (385 )
Total
operating income 354 203
383 Interest expense, net (b) (140 ) (242 )
(115 ) Other, net (25 ) (18 )
(24 )
Income (loss) from continuing operations before income
taxes 189 (57 ) 244 Income tax (provision) benefit (c)
(142 ) 25 (1,050 )
Income
(loss) from continuing operations 47 (32 ) (806 ) Loss from
discontinued operations, net — —
(19 )
Net income (loss) $ 47
$ (32 ) $ (825 ) Net (income) loss
attributable to noncontrolling interest (1 ) —
1
Net income (loss) attributable to
company $ 46 $ (32 )
$ (824 )
Amounts attributable to company shareholders:
Income (loss) from continuing operations $ 46 $ (32 ) $ (805 ) Loss
from discontinued operations, net — —
(19 )
Net income (loss) attributable to
company $ 46 $ (32 )
$ (824 )
Basic income (loss) per share attributable to company
shareholders: Income (loss) from continuing operations $ 0.05 $
(0.04 ) $ (0.92 ) Loss from discontinued operations, net —
— (0.02 )
Net income
(loss) per share $ 0.05 $ (0.04 )
$ (0.94 )
Diluted income (loss) per share
attributable to company shareholders: Income (loss) from
continuing operations $ 0.05 $ (0.04 ) $ (0.92 ) Loss from
discontinued operations, net — —
(0.02 )
Net income (loss) per share $
0.05 $ (0.04 ) $ (0.94 ) Basic
weighted average common shares outstanding 875 867 873 Diluted
weighted average common shares outstanding 878
867 873 (a) During the
three months ended March 31, 2018, Halliburton recognized a pre-tax
charge of $265 million related to a write-down of its remaining
investment in Venezuela, consisting of receivables, fixed assets,
inventory and other assets and liabilities. During the three months
ended December 31, 2017, Halliburton recognized an aggregate
pre-tax charge of $385 million related to receivables in Venezuela.
(b) Includes $104 million of costs related to the early
extinguishment of $1.4 billion of senior notes in the three months
ended March 31, 2017. (c) Includes $47 million of accrued taxes in
Venezuela for the charge taken during the three months ended March
31, 2018. Includes an aggregate $882 million of non-cash discrete
tax charges during the three months ended December 31, 2017,
primarily related to tax reform as well as other discrete tax
items. See Footnote Table 1 for Reconciliation of As Reported
Operating Income to Adjusted Operating Income. See Footnote Table 2
for Reconciliation of As Reported Income (Loss) from Continuing
Operations to Adjusted Income from Continuing Operations.
HALLIBURTON COMPANY
Condensed Consolidated Balance Sheets
(Millions of dollars)
(Unaudited)
March 31 December 31 2018
2017
Assets Current assets: Cash and
equivalents $ 2,332 $ 2,337 Receivables, net 5,255 5,036
Inventories 2,458 2,396 Other current assets 990
1,008
Total current assets 11,035 10,777
Property, plant and equipment, net 8,596 8,521 Goodwill
2,707 2,693 Deferred income taxes 1,227 1,230 Other assets
1,626 1,864
Total assets $
25,191 $ 25,085
Liabilities and
Shareholders’ Equity Current liabilities: Accounts
payable $ 2,830 $ 2,554 Accrued employee compensation and benefits
647 746 Short-term borrowings and current maturities of long-term
debt 466 512 Other current liabilities 1,026
1,050
Total current liabilities 4,969 4,862
Long-term debt 10,428 10,430 Employee compensation and benefits 588
609 Other liabilities 815 835
Total
liabilities 16,800 16,736 Company shareholders’ equity
8,365 8,322 Noncontrolling interest in consolidated subsidiaries
26 27
Total shareholders’ equity
8,391 8,349
Total liabilities and
shareholders’ equity $ 25,191 $
25,085
HALLIBURTON COMPANY
Condensed Consolidated Statements of Cash
Flows
(Millions of dollars)
(Unaudited)
Three Months Ended March 31
2018 2017
Cash flows
from operating activities: Net
income (loss) $ 47 $ (32 ) Adjustments to reconcile net income
(loss) to cash flows from operating activities: Depreciation,
depletion and amortization 394 383 Impairments and other charges
312 — Working capital (a) (88 ) 32 Other (93 )
(378 )
Total cash flows provided by
operating activities 572
5
Cash flows from investing
activities: Capital expenditures (501 ) (265 ) Proceeds from
sales of property, plant and equipment 47 41 Other investing
activities 80 (13
)
Total cash flows used in investing activities
(374 ) (237 )
Cash
flows from financing activities: Dividends to shareholders (158
) (156 ) Payments on long-term borrowings (9 ) (1,566 ) Other
financing activities (12 )
63
Total cash flows used in financing
activities (179 )
(1,659 ) Effect of exchange rate changes on cash
(24 ) (11 ) Decrease in cash and
equivalents (5 ) (1,902 ) Cash and equivalents at beginning of
period 2,337 4,009
Cash and equivalents at end of period $
2,332 $ 2,107 (a)
Working capital includes receivables, inventories and accounts
payable.
HALLIBURTON COMPANY
Revenue and Operating Income
Comparison
By Operating Segment and Geographic
Region
(Millions of dollars)
(Unaudited)
Three Months Ended March 31 December 31
Revenue 2018 2017
2017 By operating segment: Completion
and Production $ 3,807 $ 2,604 $ 3,804 Drilling and Evaluation
1,933 1,675
2,136
Total revenue $
5,740 $ 4,279
$ 5,940 By geographic
region: North America $ 3,517 $ 2,231 $ 3,400 Latin America 457 463
615 Europe/Africa/CIS 716 604 776 Middle East/Asia
1,050 981 1,149
Total revenue $ 5,740
$ 4,279 $
5,940 Operating Income
By operating
segment: Completion and Production $ 500 $ 147 $ 554 Drilling and
Evaluation 188 122
293 Total 688 269
847 Corporate and other (69 ) (66 ) (79
) Impairments and other charges (265 )
— (385 )
Total operating income
$ 354 $ 203
$ 383 See Footnote
Table 1 for Reconciliation of As Reported Operating Income 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 March 31, 2018 March 31,
2017 December 31, 2017 As reported operating income $
354 $ 203 $ 383 Impairments and
other charges 265 — 385
Adjusted operating income (a) $ 619
$ 203 $ 768 (a)
Management believes that operating income adjusted for impairments
and other charges for the three months ended March 31, 2018 and
December 31, 2017 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 effect of these items. Adjusted operating
income is calculated as: “As reported operating income” plus
"Impairments and other charges" for the three months ended March
31, 2018 and December 31, 2017. There were no such charges for the
three months ended March 31, 2017.
FOOTNOTE TABLE 2
HALLIBURTON COMPANY
Reconciliation of As Reported Income
(Loss) from Continuing Operations to
Adjusted Income from Continuing
Operations
(Millions of dollars and shares except per
share data)
(Unaudited)
Three Months Ended March 31, 2018 March 31,
2017 As reported income (loss) from continuing operations
attributable to company $ 46 $ (32 )
Adjustments: Impairments and other charges 265 — Costs related to
early extinguishment of debt — 104
Total adjustments, before taxes (a) 265 104 Tax provision (benefit)
(b) 47 (38 ) Total adjustments, net of taxes $
312 $ 66 Adjusted income from
continuing operations attributable to company $ 358
$ 34 As reported diluted weighted average
common shares outstanding (c) 878 867 Adjusted diluted weighted
average common shares outstanding (c) 878 871 As reported
income (loss) from continuing operations per diluted share (d) $
0.05 $ (0.04 ) Adjusted income from continuing operations per
diluted share (d) $ 0.41 $ 0.04
(a) Management believes that income (loss) from
continuing operations adjusted for impairments and other charges
and costs related to early extinguishment of debt 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
adjustment removes the effect 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 "Total adjustments, net of taxes" for the three
months ended March 31, 2018 and March 31, 2017. (b)
Represents $47 million of accrued taxes in Venezuela for the charge
taken during the three months ended March 31, 2018. (c) As
reported diluted weighted average common shares outstanding for the
three months ended March 31, 2017 excludes options to purchase four
million shares of common stock as their impact would be
antidilutive because Halliburton's 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 adjustments discussed
above, these shares become dilutive. (d) 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."
HALLIBURTON COMPANY
Conference Call Details
Halliburton will host a conference call on Monday, April 23,
2018, to discuss the first quarter 2018 financial results. The call
will begin at 8:00 AM Central Time (9:00 AM Eastern Time).
Please visit the website to listen to the call live via webcast.
Interested parties may also participate in the call by dialing
(888) 393-0263 within North America or (973) 453-2259 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 (855) 859-2056 within North
America or (404) 537-3406 outside of North America, using the
passcode 9999338.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180423005164/en/
For Investors:Lance Loeffler, 281-871-2688Halliburton,
Investor RelationsInvestors@Halliburton.comorFor Media:Emily
Mir, 281-871-2601Halliburton, Public
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