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001-03492
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No. 75-2677995
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(Commission File Number)
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(IRS Employer Identification No.)
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3000 North Sam Houston Parkway East
Houston, Texas
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77032
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(Address of Principal Executive Offices)
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(Zip Code)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Halliburton has announced the establishment of a new product service line and entered into a definitive merger agreement to acquire Boot and Coots, Inc. to focus on the growing global intervention market for mature fields. Upon closing, Halliburton will combine its existing hydraulic workover and pipeline and coiled tubing services with Boots and Coots’ well intervention and pressure control capabilities. The stock and cash transaction is subject to approval by Boots & Coots’ stockholders, regulatory approvals, and other customary closing conditions.
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Halliburton continues to be active in acquiring complementary businesses with differentiated solutions that fit the company’s core technology themes. Thus far in 2010, Halliburton has signed definitive agreements on four other oilfield service acquisitions including the following:
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Tierra Geophysical – 3D wave equation modeling and depth imaging seismic processing solutions that enhance sub-salt and wide azimuth imaging.
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Wellbore Energy Solutions – wellbore cleaning services that are critical in completing complicated, tortuous path, deepwater wellbores.
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Diamond Rotating Heads – rotating control devices utilized during underbalanced and managed pressure drilling applications.
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Watertectonics – wellsite processing of fresh water and flowback for reuse in hydraulic fracturing applications.
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Halliburton has been awarded an offshore, multi-product service line contract in Angola valued at $1.3 billion for the provision of cementing, production enhancement, completion tools, wireline, and perforating services.
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Halliburton has been awarded a contract valued at approximately $750 million from a major E&P for stimulation services in the Williston basin.
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Halliburton has been awarded a two-year contract, plus options, with ConocoPhillips China Inc. The contract, valued at approximately $40 million, includes provisions for directional-drilling and logging-while-drilling services on the Peng Lai Development in China’s Bohai Bay.
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Halliburton signed an agreement with its primary customer in Mexico, Petróleos Mexicanos (Pemex), to perform a reservoir study and execute the study’s findings in the Remolino field of the Chicontepec basin. This agreement gives Halliburton the opportunity to provide Pemex the full extent of the company’s reservoir characterization, well construction, and completion technologies to meet Pemex’s production objectives.
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Halliburton and SGS SA have entered into a joint cooperation agreement combining formation fluid sample acquisition and analysis services. Halliburton will provide a comprehensive suite of solutions for acquiring fluid samples, and SGS’ oil, gas, and chemicals division will deliver a full range of fluid analysis services. Through the agreement, clients will have access to the industry’s most complete and innovative solutions, including portable laboratory services for the acquisition, analysis, and independent quality control of production and reservoir fluid samples. Customers will get timely and impartial data to help with wellbore placement, facility design, and pipeline setup decisions. Halliburton and SGS are currently providing the joint fluid sample collection and analysis service to a client in offshore Africa.
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Landmark, a brand of Halliburton, announced that in partnership with Shell it had completed the first of several critical deployments in the global rollout of R5000 versions of Landmark software. The R5000 software provides higher levels of data and application integration. Engineering and drilling disciplines are more tightly integrated with subsurface disciplines, enabling geological technical staff, interpreters, and engineers to visualize and analyze larger geographic and more complex datasets within interpretation and modeling applications.
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Three Months Ended
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March 31
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December 31
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2010
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2009
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2009
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Revenue:
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Completion and Production
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$ | 1,964 | $ | 2,028 | $ | 1,818 | ||||||
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Drilling and Evaluation
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1,797 | 1,879 | 1,868 | |||||||||
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Total revenue
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$ | 3,761 | $ | 3,907 | $ | 3,686 | ||||||
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Operating income:
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Completion and Production
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$ | 238 | $ | 363 | $ | 170 | ||||||
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Drilling and Evaluation
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270 | 304 | 312 | |||||||||
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Corporate and other
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(59 | ) | (51 | ) | (54 | ) | ||||||
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Total operating income
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449 | 616 | 428 | |||||||||
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Interest expense
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(79 | ) | (53 | ) | (82 | ) | ||||||
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Interest income
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3 | 2 | 4 | |||||||||
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Other, net
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(40 | )(a) | (5 | ) | (4 | ) | ||||||
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Income from continuing operations before income taxes
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333 | 560 | 346 | |||||||||
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Provision for income taxes
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(121 | )(b) | (179 | ) | (98 | ) | ||||||
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Income from continuing operations
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212 | 381 | 248 | |||||||||
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Loss from discontinued operations, net
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(5 | ) | (1 | ) | (4 | ) | ||||||
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Net income
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$ | 207 | $ | 380 | $ | 244 | ||||||
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Noncontrolling interest in net income of subsidiaries
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(1 | ) | (2 | ) | (1 | ) | ||||||
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Net income attributable to company
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$ | 206 | $ | 378 | $ | 243 | ||||||
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Amounts attributable to company shareholders:
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Income from continuing operations
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$ | 211 | $ | 379 | $ | 247 | ||||||
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Loss from discontinued operations, net
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(5 | ) | (1 | ) | (4 | ) | ||||||
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Net income attributable to company
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$ | 206 | $ | 378 | $ | 243 | ||||||
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Basic income per share attributable to company
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shareholders:
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Income from continuing operations
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$ | 0.23 | $ | 0.42 | $ | 0.27 | ||||||
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Loss from discontinued operations, net
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– | – | – | |||||||||
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Net income per share
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$ | 0.23 | $ | 0.42 | $ | 0.27 | ||||||
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Diluted income per share attributable to company
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shareholders:
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Income from continuing operations
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$ | 0.23 | $ | 0.42 | $ | 0.27 | ||||||
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Loss from discontinued operations, net
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– | – | – | |||||||||
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Net income per share
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$ | 0.23 | $ | 0.42 | $ | 0.27 | ||||||
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Basic weighted average common shares outstanding
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905 | 897 | 903 | |||||||||
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Diluted weighted average common shares outstanding
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908 | 899 | 906 | |||||||||
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(a)
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Includes, among other items, a $31 million non-tax deductible, foreign currency loss associated with the devaluation of the Venezuelan Bolívar Fuerte.
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(b)
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Includes $10 million of additional tax expense for local Venezuelan income tax purposes as a result of a taxable gain created by the devaluation of the Bolívar Fuerte on Halliburton’s net United States dollar-denominated monetary assets and liabilities in Venezuela.
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March 31
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December 31
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2010
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2009
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Assets
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Current assets:
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Cash and equivalents
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$ | 1,383 | $ | 2,082 | ||||
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Receivables, net
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3,176 | 2,964 | ||||||
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Inventories, net
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1,658 | 1,598 | ||||||
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Investments in marketable securities
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1,808 | 1,312 | ||||||
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Other current assets
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789 | 682 | ||||||
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Total current assets
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8,814 | 8,638 | ||||||
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Property, plant, and equipment, net
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5,980 | 5,759 | ||||||
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Goodwill
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1,138 | 1,100 | ||||||
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Other assets
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1,048 | 1,041 | ||||||
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Total assets
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$ | 16,980 | $ | 16,538 | ||||
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Liabilities and Shareholders’ Equity
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Current liabilities:
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Accounts payable
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$ | 964 | $ | 787 | ||||
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Current maturities of long-term debt
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750 | 750 | ||||||
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Accrued employee compensation and benefits
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520 | 514 | ||||||
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Other current liabilities
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911 | 838 | ||||||
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Total current liabilities
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3,145 | 2,889 | ||||||
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Long-term debt
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3,824 | 3,824 | ||||||
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Other liabilities
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1,051 | 1,068 | ||||||
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Total liabilities
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8,020 | 7,781 | ||||||
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Company’s shareholders’ equity
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8,931 | 8,728 | ||||||
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Noncontrolling interest in consolidated subsidiaries
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29 | 29 | ||||||
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Total shareholders’ equity
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8,960 | 8,757 | ||||||
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Total liabilities and shareholders’ equity
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$ | 16,980 | $ | 16,538 | ||||
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Three Months Ended
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March 31
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2010
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2009
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Cash flows from operating activities:
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Net income
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$ | 207 | $ | 380 | ||||
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Adjustments to reconcile net income to net cash from operations:
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Depreciation, depletion, and amortization
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261 | 215 | ||||||
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Payments of Department of Justice and Securities and Exchange Commission
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settlement and indemnity
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(47 | ) | (274 | ) | ||||
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Other
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(104 | ) | 60 | |||||
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Total cash flows from operating activities
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317 | 381 | ||||||
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Cash flows from investing activities:
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Purchases of investments in marketable securities
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(500 | ) | – | |||||
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Capital expenditures
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(404 | ) | (518 | ) | ||||
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Other
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(66 | ) | 53 | |||||
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Total cash flows from investing activities
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(970 | ) | (465 | ) | ||||
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Cash flows from financing activities:
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Proceeds from long-term borrowings, net of offering costs
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– | 1,976 | ||||||
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Other
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(37 | ) | (39 | ) | ||||
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Total cash flows from financing activities
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(37 | ) | 1,937 | |||||
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Effect of exchange rate changes on cash
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(9 | ) | (10 | ) | ||||
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Increase (decrease) in cash and equivalents
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(699 | ) | 1,843 | |||||
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Cash and equivalents at beginning of period
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2,082 | 1,124 | ||||||
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Cash and equivalents at end of period
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$ | 1,383 | $ | 2,967 | ||||
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Three Months Ended
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March 31
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December 31
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Revenue by geographic region:
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2010
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2009
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2009
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Completion and Production:
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North America
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$ | 1,125 | $ | 1,071 | $ | 916 | ||||||
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Latin America
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202 | 232 | 205 | |||||||||
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Europe/Africa/CIS
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385 | 426 | 423 | |||||||||
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Middle East/Asia
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252 | 299 | 274 | |||||||||
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Total
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1,964 | 2,028 | 1,818 | |||||||||
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Drilling and Evaluation:
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North America
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579 | 612 | 519 | |||||||||
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Latin America
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293 | 324 | 334 | |||||||||
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Europe/Africa/CIS
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535 | 542 | 574 | |||||||||
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Middle East/Asia
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390 | 401 | 441 | |||||||||
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Total
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1,797 | 1,879 | 1,868 | |||||||||
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Total revenue by region:
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North America
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1,704 | 1,683 | 1,435 | |||||||||
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Latin America
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495 | 556 | 539 | |||||||||
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Europe/Africa/CIS
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920 | 968 | 997 | |||||||||
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Middle East/Asia
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642 | 700 | 715 | |||||||||
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Operating income by geographic region
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(excluding Corporate and other):
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Completion and Production:
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North America
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$ | 137 | $ | 166 | $ | 45 | ||||||
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Latin America
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29 | 54 | 20 | |||||||||
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Europe/Africa/CIS
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39 | 77 | 62 | |||||||||
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Middle East/Asia
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33 | 66 | 43 | |||||||||
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Total
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238 | 363 | 170 | |||||||||
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Drilling and Evaluation:
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North America
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93 | 64 | 58 | |||||||||
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Latin America
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17 | 54 | 28 | |||||||||
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Europe/Africa/CIS
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91 | 91 | 109 | |||||||||
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Middle East/Asia
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69 | 95 | 117 | |||||||||
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Total
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270 | 304 | 312 | |||||||||
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Total operating income by region:
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North America
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230 | 230 | 103 | |||||||||
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Latin America
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46 | 108 | 48 | |||||||||
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Europe/Africa/CIS
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130 | 168 | 171 | |||||||||
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Middle East/Asia
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102 | 161 | 160 | |||||||||
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Three Months Ended
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December 31
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Excluded costs by geographic region:
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2009 (a)
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Completion and Production:
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North America
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$ | – | ||
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Latin America
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3 | |||
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Europe/Africa/CIS
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– | |||
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Middle East/Asia
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– | |||
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Total
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3 | |||
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Drilling and Evaluation:
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North America
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– | |||
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Latin America
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12 | |||
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Europe/Africa/CIS
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– | |||
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Middle East/Asia
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– | |||
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Total
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12 | |||
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Total excluded costs by region:
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North America
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– | |||
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Latin America
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15 | |||
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Europe/Africa/CIS
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– | |||
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Middle East/Asia
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– | |||
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Total
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15 | |||
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Three Months Ended
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Adjusted operating income by geographic region
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March 31
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December 31
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(excluding Corporate and other): (b)
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2010
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2009 (a)
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Completion and Production:
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North America
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$ | 137 | $ | 45 | ||||
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Latin America
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29 | 23 | ||||||
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Europe/Africa/CIS
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39 | 62 | ||||||
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Middle East/Asia
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33 | 43 | ||||||
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Total
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238 | 173 | ||||||
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Drilling and Evaluation:
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North America
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93 | 58 | ||||||
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Latin America
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17 | 40 | ||||||
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Europe/Africa/CIS
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91 | 109 | ||||||
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Middle East/Asia
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69 | 117 | ||||||
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Total
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270 | 324 | ||||||
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Total operating income by region:
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North America
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230 | 103 | ||||||
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Latin America
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46 | 63 | ||||||
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Europe/Africa/CIS
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130 | 171 | ||||||
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Middle East/Asia
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102 | 160 | ||||||
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(a)
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Management believes that operating income adjusted for the receivables settlement is useful to investors to assess and understand segment and region operating performance, especially when comparing current results with previous periods or forecasting performance for future periods, primarily because management views the excluded item to be outside of the Company’s normal operating results. Management analyzes operating income without the impact of the receivables settlement as an indicator of ongoing segment and region operating performance, to identify underlying trends in the business, and to establish segment and region operational goals. The adjustment removes the effect of this expense.
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(b)
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Adjusted operating income for each segment and region is calculated as: “Operating income” plus “Excluded costs.”
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Three Months Ended
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March 31, 2010
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As reported income from continuing operations
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$ | 211 | ||
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Venezuela devaluation
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Foreign currency loss (a)
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31 | |||
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Additional income tax expense (a)
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10 | |||
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Adjusted income from continuing operations (a)
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$ | 252 | ||
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As reported diluted weighted average common shares outstanding
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908 | |||
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As reported income from continuing operations per diluted share (b)
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$ | 0.23 | ||
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Adjusted income from continuing operations per diluted share (b)
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$ | 0.28 | ||
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(a)
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Management believes that income from continuing operations adjusted for the Venezuela devaluation is useful to investors to assess and understand operating performance, especially when comparing current results with previous 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 the Venezuela devaluation as an indicator of performance, to identify underlying trends in the business, and to establish operational goals. The adjustments remove the effect of the items. Adjusted income from continuing operations is calculated as: “As reported income from continuing operations” plus “Foreign currency loss” and “Additional income tax expense.”
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(b)
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As reported income from continuing operations per diluted share is calculated as: “As reported income from continuing operations” 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” divided by “As reported diluted weighted average common shares outstanding.”
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HALLIBURTON COMPANY
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Date: April 19, 2010
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By:
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/s/ Bruce A. Metzinger |
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Bruce A. Metzinger
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Assistant Secretary
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