Hal Revises Fourth Quarter Earnings Downward 03-01-05 8-K


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
     

FORM 8-K
     

Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (date of earliest event reported): March 1, 2005
     

HALLIBURTON COMPANY
(Exact Name of Registrant as Specified in Its Charter)
     

Delaware
(State or Other Jurisdiction of Incorporation)

1-3492
No. 75-2677995
(Commission File Number)
(IRS Employer Identification No.)
   
1401 McKinney, Suite 2400, Houston, Texas
77010
(Address of Principal Executive Offices)
(Zip Code)

(713) 759-2600
(Registrant’s Telephone Number, Including Area Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
     

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


INFORMATION TO BE INCLUDED IN REPORT

Item 2.02 and Item 8.01.  Results of Operations and Financial Condition and Other Events.

On March 1, 2005 registrant issued a press release entitled “Halliburton Revises Fourth Quarter Pre-Tax Earnings Downward by $3 Million.”

The text of the Press Release is as follows:

 
HALLIBURTON REVISES FOURTH QUARTER PRE-TAX EARNINGS DOWNWARD BY $3 MILLION
 
Collection of receivable and change in lease accounting

HOUSTON, Texas - Halliburton (NYSE: HAL) announced today that it will make two adjustments to the previously announced fourth quarter 2004 earnings that were released on January 28, 2005. The net impact of these adjustments is $3 million pre-tax expense, or $0.004 per share.

The adjustments, detailed in the attached financial tables, are attributed to (1) a collection of a $10 million receivable in February 2005 that was previously reserved and (2) a correction of the accounting treatment for leasehold improvements. As a result of a February 7, 2005 clarification by the Chief Accountant of the Securities and Exchange Commission on lease accounting, the Company has adjusted its method for amortization of leasehold improvements and recorded a pre-tax expense of $13 million for increased depreciation, depletion and amortization. Management has determined that the impact of this matter on prior periods is immaterial. In connection with this clarification by the Chief Accountant, a large number of public companies have announced adjustments to their financial statements relating to lease accounting.


Halliburton, founded in 1919, is one of the world’s largest providers of products and services to the petroleum and energy industries. The company serves its customers with a broad range of products and services through its Energy Services and Engineering and Construction Groups. The company’s World Wide Web site can be accessed at www.halliburton.com.


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: legal risks, including the risks of audits and investigations of the company by domestic and foreign government agencies and legislative bodies and potential adverse proceedings and findings by such agencies, a delay in the receipt of additional agreed payments from insurers arising from asbestos and silica claims, the risks of judgments against the company and its subsidiaries in litigation and proceedings, including shareholder lawsuits, securities laws inquiries, contract disputes, patent infringements and environmental matters, legislation, changes in government regulations and adverse reaction to scrutiny involving the company; political risks, including the risks of unsettled political conditions, war and the effects of terrorism, foreign operations and foreign exchange rates and controls; liquidity risks, including the risks of potential reductions in debt ratings, access to credit, availability and costs of financing and ability to raise capital; weather-related risks; customer risks, including the risks of changes in capital spending and claims negotiations; industry risks, including the risks of changes that affect the demand for or price of oil and/or gas, structural changes in the industries in which the company operates, risks of fixed-fee projects and risks of complex business arrangements; systems risks, including the risks of successful development and installation of financial systems; and personnel and merger/reorganization/disposition risks, including the risks of increased competition for employees, successful integration of acquired businesses, effective restructuring efforts and successful completion of planned dispositions. Please see Halliburton's Form 10-K/A for the year ended December 31, 2003 and Form 10-Q for the quarter ended September 30, 2004 for a more complete discussion of such risk factors.




  
     

 



HALLIBURTON COMPANY
Condensed Consolidated Statements of Operations
(Millions of dollars and shares except per share data)
(Unaudited)



   
Three Months
 
Three Months
 
   
Ended
 
Ended
 
   
December 31
 
September 30
 
   
2004
 
2003
 
2004
 
Revenue
                   
Production Optimization
 
$
912
 
$
713
 
$
886
 
Fluid Systems
   
617
   
531
   
618
 
Drilling and Formation Evaluation
   
465
   
417
   
450
 
Digital and Consulting Solutions
   
176
   
138
   
154
 
Total Energy Services Group
   
2,170
   
1,799
   
2,108
 
Government and Infrastructure
   
2,295
   
2,691
   
1,993
 
Energy and Chemicals
   
736
   
974
   
689
 
Total KBR
   
3,031
   
3,665
   
2,682
 
Total revenue
 
$
5,201
 
$
5,464
 
$
4,790
 
Operating income (loss)
                   
Production Optimization
 
$
208
 
$
115
 
$
222
 
Fluid Systems
   
98
   
73
   
113
 
Drilling and Formation Evaluation
   
61
   
17
   
62
 
Digital and Consulting Solutions
   
-
   
36
   
17
 
Total Energy Services Group
   
367
   
241
   
414
 
Government and Infrastructure
   
9
   
69
   
(6
)
Energy and Chemicals
   
(9
)
 
15
   
(44
)
Asbestos and silica
   
-
   
(2
)
 
-
 

   Total KBR
   

 -
   

 82
   

 (50
)
General corporate
   
(21
)
 
(20
)
 
(22
)
Total operating income
   
346
   
303
   
342
 
Interest expense
   
(69
)
 
(54
)
 
(51
)
Interest income
   
14
   
8
   
13
 
Foreign currency, net
   
6
   
4
   
1
 
Other, net
   
-
   
(1
)
 
(2
)
Income from continuing operations before income taxes
                   
and minority interest
   
297
   
260
   
303
 
Provision for income taxes
   
(110
)
 
(92
)
 
(111
)
Minority interest in net income of subsidiaries
   
(6
)
 
(22
)
 
(6
)
Income from continuing operations
   
181
   
146
   
186
 
Loss from discontinued operations, net
   
(384
)
 
(1,093
)
 
(230
)
Net loss
 
$
(203
)
$
(947
)
$
(44
)
Basic income (loss) per share:
                   
Income from continuing operations
 
$
0.41
 
$
0.34
 
$
0.43
 
Loss from discontinued operations, net
   
(0.88
)
 
(2.52
)
 
(0.54
)
Net loss
 
$
(0.47
)
$
(2.18
)
$
(0.11
)
Diluted income (loss) per share:
                   
Income from continuing operations
 
$
0.40
 
$
0.34
 
$
0.42
 
Loss from discontinued operations, net
   
(0.86
)
 
(2.51
)
 
(0.51
)
Net loss
 
$
(0.46
)
$
(2.17
)
$
(0.09
)
Basic weighted average common shares outstanding
   
439
   
435
   
438
 
Diluted weighted average common shares outstanding
   
444
   
438
   
442
 







 
     

 




HALLIBURTON COMPANY
Condensed Consolidated Statements of Operations
(Millions of dollars and shares except per share data)
(Unaudited)



   
Twelve Months Ended
 
   
December 31
 
   
2004
 
2003
 
Revenue
         
Production Optimization
 
$
3,303
 
$
2,758
 
Fluid Systems
   
2,324
   
2,039
 
Drilling and Formation Evaluation
   
1,782
   
1,643
 
Digital and Consulting Solutions
   
589
   
555
 
Total Energy Services Group
   
7,998
   
6,995
 
Government and Infrastructure
   
9,393
   
5,417
 
Energy and Chemicals
   
3,075
   
3,859
 
Total KBR
   
12,468
   
9,276
 
Total revenue
 
$
20,466
 
$
16,271
 
Operating income (loss)
             
Production Optimization
 
$
633
 
$
413
 
Fluid Systems
   
348
   
251
 
Drilling and Formation Evaluation
   
225
   
177
 
Digital and Consulting Solutions
   
60
   
(15
)
Total Energy Services Group
   
1,266
   
826
 
Government and Infrastructure
   
84
   
194
 
Energy and Chemicals
   
(426
)
 
(225
)
Asbestos and silica
   
-
   
(5
)

   Total KBR
   

 (342
)
 

 (36
)
General corporate
   
(87
)
 
(70
)
Total operating income
   
837
   
720
 
Interest expense
   
(229
)
 
(139
)
Interest income
   
44
   
30
 
Foreign currency, net
   
(3
)
 
-
 
Other, net
   
2
   
1
 
Income from continuing operations before income taxes,
             
minority interest and change in accounting principle
   
651
   
612
 
Provision for income taxes
   
(241
)
 
(234
)
Minority interest in net income of subsidiaries
   
(25
)
 
(39
)
Income from continuing operations before change in
             
accounting principle
   
385
   
339
 
Loss from discontinued operations, net
   
(1,364
)
 
(1,151
)
Cumulative effect of change in accounting principle, net
   
-
   
(8
)
Net loss
 
$
(979
)
$
(820
)
Basic income (loss) per share:
             
Income from continuing operations before change in
             
accounting principle
 
$
0.88
 
$
0.78
 
Loss from discontinued operations, net
   
(3.13
)
 
(2.65
)
Cumulative effect of change in accounting principle, net
   
-
   
(0.02
)
Net loss
 
$
(2.25
)
$
(1.89
)
Diluted income (loss) per share:
             
Income from continuing operations before change in
             
accounting principle
 
$
0.87
 
$
0.78
 
Loss from discontinued operations, net
   
(3.09
)
 
(2.64
)
Cumulative effect of change in accounting principle, net
   
-
   
(0.02
)
Net loss
 
$
(2.22
)
$
(1.88
)
Basic weighted average common shares outstanding
   
437
   
434
 
Diluted weighted average common shares outstanding
   
441
   
437
 






 
     

 



HALLIBURTON COMPANY
Revenue and Operating Income Comparison
By Geographic Region - Energy Services Group Only
(Millions of dollars)
(Unaudited)


           
   
Three Months Ended
 
Three Months Ended
 
   
December 31
 
September 30
 
   
2004
 
2003
 
2004
 
Revenue:
             
North America
 
$
980
 
$
787
 
$
969
 
Latin America
   
301
   
255
   
295
 
Europe/Africa
   
454
   
350
   
442
 
Middle East/Asia
   
435
   
407
   
402
 
Total revenue
 
$
2,170
 
$
1,799
 
$
2,108
 
                     
Operating income:
                   
North America
 
$
224
 
$
100
 
$
228
 
Latin America
   
12
   
48
   
52
 
Europe/Africa
   
62
   
36
   
79
 
Middle East/Asia
   
69
   
57
   
55
 
Total operating income
 
$
367
 
$
241
 
$
414
 



   
Twelve Months Ended
 
   
December 31
 
   
2004
 
2003
 
Revenue:
         
North America
 
$
3,609
 
$
3,085
 
Latin America
   
1,082
   
907
 
Europe/Africa
   
1,665
   
1,442
 
Middle East/Asia
   
1,642
   
1,561
 
Total revenue
 
$
7,998
 
$
6,995
 
               
Operating income:
             
North America
 
$
722
 
$
306
 
Latin America
   
130
   
165
 
Europe/Africa
   
186
   
147
 
Middle East/Asia
   
228
   
208
 
Total operating income
 
$
1,266
 
$
826
 
















 
     

 


 
HALLIBURTON COMPANY
Reconciliation of Previously Announced Results to Actual Results
Three and Twelve Months Ended December 31, 2004


 
Three Months Ended
 
December 31, 2004
   
Receivable
Leasehold
 
 
As Reported
Collection
Adjustment
Actual
Operating income (loss)
       
Production Optimization
$209
$2
$(3)
$208
Fluid Systems
102
4
(8)
98
Drilling and Formation Evaluation
59
4
(2)
61
Digital and Consulting Solutions
-
-
-
-
Total Energy Services Group
370
10
(13)
367
Total KBR
-
-
-
-
General corporate
(21)
-
-
(21)
Total operating income
$349
$10
$(13)
$346
         
Income from continuing operations
       
before income taxes and minority
       
Interest
$300
$10
$(13)
$297
Provision for income taxes
(111)
(4)
5
(110)
Income from continuing operations
183
6
(8)
181
Net income (loss)
(201)
6
(8)
(203)
Per share
       
Basic income from continuing
       
operations
$0.42
$0.01
$(0.02)
$0.41
Basic net income (loss)
$(0.46)
$0.01
$(0.02)
$(0.47)
Diluted income from continuing
       
operations
$0.41
$0.01
$(0.02)
$0.40
Diluted net income (loss)
$(0.45)
$0.01
$(0.02)
$(0.46)


 
Twelve Months Ended
 
December 31, 2004
   
Receivable
Leasehold
 
 
As Reported
Collection
Adjustment
Actual
Operating income (loss)
       
Production Optimization
$634
$2
$(3)
$633
Fluid Systems
352
4
(8)
348
Drilling and Formation Evaluation
223
4
(2)
225
Digital and Consulting Solutions
60
-
-
60
Total Energy Services Group
1,269
10
(13)
1,266
Total KBR
(342)
-
-
(342)
General corporate
(87)
-
-
(87)
Total operating income
$840
$10
$(13)
$837
         
Income from continuing operations
       
before income taxes and minority
       
interest
$654
$10
$(13)
$651
Provision for income taxes
(242)
(4)
5
(241)
Income from continuing operations
387
6
(8)
385
Net income (loss)
(977)
6
(8)
(979)
Per share
       
Basic income from continuing
$0.89
$0.01
$(0.02)
$0.88
operations
       
Basic net income (loss)
$(2.24)
$0.01
$(0.02)
$(2.25)
Diluted income from continuing
       
operations
$0.88
$0.01
$(0.02)
$0.87
Diluted net income (loss)
$(2.21)
$0.01
$(0.02)
$(2.22)

###
 




 
     

 



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.




   
HALLIBURTON COMPANY
     
     
Date: March 1, 2005
By:
 /s/ Margaret E. Carriere
   
Margaret E. Carriere
   
Vice President and Secretary