Halliburton Announces First Quarter Income From Continuing Operations of $0.73 Per Diluted Share

  Halliburton Announces First Quarter Income From Continuing Operations of   $0.73 Per Diluted Share        Repurchased $500 million of common stock during the first quarter  Business Wire  HOUSTON -- April 21, 2014  Halliburton (NYSE:HAL) announced today that income from continuing operations for the first quarter of 2014 was $623 million, or $0.73 per diluted share. This compares to income from continuing operations for the first quarter of 2013 of $624 million, or $0.67 per diluted share, excluding a $637 million charge, after-tax, or $0.68 per diluted share, to increase a reserve related to the Macondo litigation. Reported loss from continuing operations for the first quarter of 2013 was $13 million, or $0.01 per diluted share.  Halliburton's total revenue in the first quarter of 2014 was $7.3 billion, compared to $7.0 billion in the first quarter of 2013. Operating income was $970 million in the first quarter of 2014, compared to adjusted operating income of $902 million in the first quarter of 2013. Reported operating loss was $98 million for the first quarter of 2013.  “I am pleased with total company revenue of $7.3 billion, which was a record first quarter for Halliburton,” commented Dave Lesar, chairman, president and chief executive officer.  “Operating income of $970 million was 8% higher than adjusted operating income in the first quarter of 2013, and was the result of our double-digit growth in the Eastern Hemisphere.  “In the Eastern Hemisphere, we continue to successfully execute our growth strategy. Relative to the first quarter of 2013, we grew revenue by 11% and operating income by 16%. We continue to forecast that full-year Eastern Hemisphere revenue growth will be in the low double digits, and average full year margins will be in the upper teens.  “In the Middle East/Asia region, compared to the first quarter of the prior year, both revenue and operating income increased by 13%. Saudi Arabia led the improvement with growth across all product lines due to an increase in integrated project activity along with an overall higher rig count that is driving increased services.  “In Europe/Africa/CIS, relative to the first quarter of 2013, we saw revenue and operating income increase 9% and 21%, respectively. The improvement was led by higher completion tools sales and cementing activity throughout the region, and increased drilling and open hole wireline activity in Angola.  “In Latin America, revenue and operating income declined by 9% and 8%, respectively, compared to the same quarter last year, primarily due to a decline in drilling-related activity in Brazil and activity reductions in Mexico. For the full year, we expect Latin America revenue and operating income to be in line with 2013 levels.  “In North America, revenue increased 5% and operating income was flat compared to the first quarter of 2013. Results were negatively impacted by lower pressure pumping pricing and transitory issues related to weather disruption and higher logistics costs. We are optimistic about the potential for increased activity levels in the second half of the year, and expect North America margins to expand over the remainder of 2014. Service intensity levels are expanding across the United States, where we continue to see a trend to longer laterals, increased stage density, and rising volumes per stage. We continue to expect North America margins to approach 20% before the end of the year.  “Our strategy is working well and we intend to stay the course. I am optimistic about our ability to grow our North America revenue and margins, and to realize industry-leading revenue and margin growth in our international business, resulting in solid EPS growth and significantly higher cash generation. We expect earnings per share to grow approximately 25% in the second quarter, with further increases to follow. We remain focused on generating superior financial performance and providing industry-leading shareholder returns, as evidenced by our $500 million share repurchase this quarter,” concluded Lesar.  2014 First Quarter Results  Completion and Production  Completion and Production (C&P) revenue in the first quarter of 2014 was $4.4 billion, an increase of $320 million, or 8%, from the first quarter of 2013. This increase was primarily driven by stronger stimulation activity in the United States land market, as well as higher completion tools sales in all regions.  C&P operating income in the first quarter of 2014 was $661 million, an increase of $46 million, or 7%, from the first quarter of 2013. North America C&P operating income, improved by $14 million, or 3%, compared to the first quarter of 2013, due to increased stimulation activity in the United States land market, partially offset by pricing pressures associated with pressure pumping services. Latin America C&P operating income rose by $20 million, or 71%, compared to the first quarter of 2013, primarily due to improved profitability for pressure pumping in Argentina. Europe/Africa/CIS C&P operating income increased $14 million, or 22%, compared to the first quarter of 2013, driven by increased completion tools sales in Angola and Norway, and higher Boots and Coots activity in Algeria. Middle East/Asia C&P operating income was down $2 million, or 2%, compared to the first quarter of 2013, due to lower completion tools sales in Malaysia and decreased Boots and Coots activity in Australia and India, which were partially offset by increased completion tools sales in Saudi Arabia and China.  Drilling and Evaluation  Drilling and Evaluation (D&E) revenue in the first quarter of 2014 was $2.9 billion, an increase of $54 million, or 2%, from the first quarter of 2013. This increase was primarily driven by higher drilling activity in the Eastern Hemisphere and improved testing activity in all regions, which more than offset the decline in Latin America activity.  D&E operating income in the first quarter of 2014 was $398 million, a decrease of $9 million, or 2%, from the first quarter of 2013. North America D&E operating income decreased $17 million, or 10%, compared to the first quarter of 2013, due to decreased activity in Canada and decreased logging services in the United States land market, which were partially offset by increased testing services in the Gulf of Mexico. Latin America D&E operating income decreased $29 million, or 36%, compared to the first quarter of 2013, primarily due to lower drilling activity in Brazil. Europe/Africa/CIS D&E operating income improved by $11 million, or 19%, compared to the first quarter of 2013, due to increased drilling activity in the United Kingdom and Angola, which was partially offset by lower demand for fluid services in Norway. Middle East/Asia D&E operating income increased $26 million, or 27%, compared to the first quarter of 2013, due to increased drilling services in Thailand and Saudi Arabia, which were partially offset by a decline in logging sales in China.  Corporate and Other  During the first quarter of 2014, Halliburton repurchased approximately 9 million shares of common stock at a total cost of $500 million. Since the inception of the stock repurchase program in February 2006, Halliburton has purchased 197 million shares at a total cost of approximately $8.1 billion. Approximately $1.2 billion of repurchases remain authorized under the program.  Also during the first quarter, Halliburton invested an additional $15 million, pre-tax, in strategic projects aimed at strengthening Halliburton's North America service delivery model and repositioning technology, supply chain, and manufacturing infrastructure to support projected international growth. Halliburton expects the cost of these strategic projects to continue to wind down during 2014.  Significant Recent Events and Achievements    *Halliburton announced the release of the RezConnect™ Well Testing System,     a complete well testing solution for wireless control of downhole drill     stem test (DST) tools and the measurement and analysis of well-test data     in real time. The RezConnect Well Testing System uses Halliburton’s     proprietary DynaLink® Telemetry System, a fully wireless downhole sensor     and actuator network using acoustic energy in the tubing string. The     RezConnect Well Testing System integrates all the DST tools and allows     surface verification of their operational status.   *Halliburton announced the signing of a partnership agreement with Gubkin     Russian State University of Oil and Gas for the development of     unconventional resources in Russia, including the Bazhenov shale. As part     of the agreement, Halliburton will provide senior technical and management     staff to serve on Gubkin's Industry Advisory Boards, as well as provide     the foundation material for Gubkin's unconventional resources curriculum     that will become the basis for student and industry training.   *Halliburton expanded its line of DrillDOC® drilling optimization tools     with the launch of 4 3/4-inch and 9 1/2-inch collars. The addition of the     two new sizes is especially beneficial while drilling complex directional     well trajectories and horizontal or extended reach wells. The new DrillDOC     collars provide the measurements necessary to fully understand downhole     drilling dynamics.   *Halliburton announced its plans for a new Integrated Completions Center     located in New Iberia, LA. This new facility will expand Halliburton’s     resources and capabilities for deepwater completion tools while continuing     to focus on service alignment, equipment maintenance, preparation, and job     execution for Halliburton’s Gulf of Mexico customers.  Founded in 1919, Halliburton is one of the world's largest providers of products and services to the energy industry. With more than 75,000 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.  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: results of litigation, settlements, and investigations; actions by third parties, including governmental agencies; whether a settlement relating to the Macondo multi-district litigation will be reached at the amounts contemplated by our reserve or at all; settlement discussions relating to the Macondo incident do not cover all possible parties and claims, and there are additional reasonably possible losses relating to the Macondo incident that we cannot reasonably estimate at this time; 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; impairment of oil and natural gas properties; structural changes in the oil and natural gas industry; maintaining a highly skilled workforce; availability and cost of raw materials; and integration of acquired businesses and operations of joint ventures. Halliburton's Form 10-K for the year ended December 31, 2013, 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                                     2014        2013        2013 Revenue:                                                       Completion and Production              $ 4,420       $ 4,100       $  4,542 Drilling and Evaluation              2,928      2,874      3,097      Total revenue                        $ 7,348    $ 6,974    $  7,639   Operating income: Completion and Production              $ 661         $ 615         $  765 Drilling and Evaluation                398           407           498 Corporate and other (a)              (89     )   (1,120  )   (119      ) Total operating income (loss)        970        (98     )   1,144      Interest expense, net                  (93     )     (71     )     (98       ) Other, net                           (31     )   (14     )   (6        ) Income (loss) from continuing          846           (183    )     1,040 operations before income taxes Income tax (provision) benefit (b)   (229    )   172        (268      ) Income (loss) from continuing          617           (11     )     772 operations Income (loss) from discontinued      (1      )   (5      )   23         operations, net Net income (loss)                    $ 616      $ (16   )   $  795     Noncontrolling interest in net       6          (2      )   (2        ) (income) loss of subsidiaries Net income (loss) attributable to    $ 622      $ (18   )   $  793     company Amounts attributable to company shareholders: Income (loss) from continuing          $ 623         $ (13   )     $  770 operations Income (loss) from discontinued      (1      )   (5      )   23         operations, net Net income (loss) attributable to    $ 622      $ (18   )   $  793     company Basic income (loss) per share attributable to company shareholders: Income (loss) from continuing          $ 0.73        $ (0.01 )     $  0.91 operations Income (loss) from discontinued      —          (0.01   )   0.02       operations, net Net income (loss) per share          $ 0.73     $ (0.02 )   $  0.93    Diluted income (loss) per share attributable to company shareholders: Income (loss) from continuing          $ 0.73        $ (0.01 )     $  0.90 operations Income (loss) from discontinued      —          (0.01   )   0.03       operations, net Net income (loss) per share          $ 0.73     $ (0.02 )   $  0.93    Basic weighted average common          849           931           849 shares outstanding Diluted weighted average common      853        931        854        shares outstanding  (a)            Includes a $1 billion, pre-tax, charge in the three months                 ended March 31, 2013 related to the Macondo well incident. (b)             Includes $50 million in federal tax benefits in the three                 months ended March 31, 2013. See Footnote Table 1 for certain items included in operating income (loss). See Footnote Table 2 for operating income (loss) adjusted for certain items. See Footnote Table 3 for a 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                                                 2014          2013 Assets Current assets: Cash and equivalents                               $  2,123        $   2,356 Receivables, net                                   6,314           6,181 Inventories                                        3,415           3,305 Other current assets (a)                         1,634        1,862 Total current assets                               13,486          13,704                                                                     Property, plant, and equipment, net                11,463          11,322 Goodwill                                           2,193           2,168 Other assets (b)                                 2,114        2,029 Total assets                                     $  29,256    $   29,223                                                                     Liabilities and Shareholders’ Equity Current liabilities: Accounts payable                                   $  2,525        $   2,365 Accrued employee compensation and benefits         823             1,029 Loss contingency for Macondo well incident         278             278 Other current liabilities                        1,306        1,354 Total current liabilities                          4,932           5,026                                                                     Long-term debt                                     7,816           7,816 Loss contingency for Macondo well incident         1,022           1,022 Other liabilities                                1,734        1,744 Total liabilities                                  15,504          15,608                                                                     Company shareholders’ equity                       13,725          13,581 Noncontrolling interest in consolidated          27           34 subsidiaries Total shareholders’ equity                       13,752       13,615 Total liabilities and shareholders’ equity       $  29,256    $   29,223          Includes $238 million of investments in fixed income securities at (a)   March 31, 2014, and $239 million of investments in fixed income         securities at December 31, 2013.         Includes $140 million of investments in fixed income securities at (b)     March 31, 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)                                                                                                                                                                     Three Months Ended                                                        March 31                                                     2014        2013 Cash flows from operating activities:                              Net income (loss)                                      $ 616         $ (16   ) Adjustments to reconcile net income (loss) to net cash flows from operating activities: Depreciation, depletion, and amortization              510           448 Loss contingency for Macondo well incident             —             1,000 Payment of Barracuda-Caratinga obligation              —             (219    ) Other, primarily working capital                     (172    )   (864    ) Total cash flows from operating activities           954        349                                                                            Cash flows from investing activities: Capital expenditures                                   (643    )     (685    ) Purchase of investment securities                      (55     )     (28     ) Sales of investment securities                         50            9 Other                                                (26     )   53       Total cash flows from investing activities           (674    )   (651    )                                                                       Cash flows from financing activities: Payments to reacquire common stock                     (500    )     (50     ) Dividends to shareholders                              (127    )     (116    ) Other                                                113        21       Total cash flows from financing activities           (514    )   (145    )                                                                       Effect of exchange rate changes on cash              1          (8      ) Decrease in cash and equivalents                       (233    )     (455    ) Cash and equivalents at beginning of period          2,356      2,484    Cash and equivalents at end of period                $ 2,123    $ 2,029                                                                                 HALLIBURTON COMPANY Revenue and Operating Income Comparison By Segment and Geographic Region (Millions of dollars) (Unaudited)                                                                                   Three Months Ended                          March 31                            December 31 Revenue by geographic     2014             2013             2013 region: Completion and                                               Production: North America               $  2,927           $  2,745           $  2,871 Latin America               355                355                428 Europe/Africa/CIS           607                532                647 Middle East/Asia          531             468             596        Total                     4,420           4,100           4,542      Drilling and Evaluation: North America               974                961                952 Latin America               504                590                590 Europe/Africa/CIS           692                655                752 Middle East/Asia          758             668             803        Total                     2,928           2,874           3,097      Total revenue by region: North America               3,901              3,706              3,823 Latin America               859                945                1,018 Europe/Africa/CIS           1,299              1,187              1,399 Middle East/Asia          1,289           1,136           1,399      Total revenue             $  7,348        $  6,974        $  7,639                                                                      Operating income by                                        geographic region: Completion and Production: North America               $  446             $  432             $  478 Latin America               48                 28                 72 Europe/Africa/CIS           78                 64                 99 Middle East/Asia          89              91              116        Total                     661             615             765        Drilling and Evaluation: North America               156                173                166 Latin America               52                 81                 81 Europe/Africa/CIS           68                 57                 108 Middle East/Asia          122             96              143        Total                     398             407             498        Total operating income by region: North America               602                605                644 Latin America               100                109                153 Europe/Africa/CIS           146                121                207 Middle East/Asia          211             187             259        Corporate and other       (89       )      (1,120    )      (119      ) Total operating           $  970          $  (98    )      $  1,144   income (loss)                                                                    See Footnote Table 1 for certain items included in operating income (loss). See Footnote Table 2 for operating income (loss) adjusted for certain Items. See Footnote Table 3 for a reconciliation of as-reported income (loss) from continuing operations to adjusted income from continuing operations.   FOOTNOTE TABLE 1                                                     HALLIBURTON COMPANY Items Included in Operating Income (Loss) (Millions of dollars except per share data) (Unaudited)                                                                                                                                              Three Months Ended         Three Months Ended                               March 31, 2013          December 31, 2013                               Operating    After        Operating  After Tax                                             Tax                            Income      Per       Income     Per Share                                             Share Completion and Production: North America Restructuring charges         —             —            (5    )     (0.01  ) Latin America Restructuring charges         —             —            (1    )     — Europe/Africa/CIS Restructuring charges         —             —            (1    )     — Middle East/Asia Restructuring charges       —           —         (3    )    —       Drilling and Evaluation: North America Restructuring charges         —             —            (2    )     — Latin America Restructuring charges         —             —            (3    )     — Europe/Africa/CIS Restructuring charges         —             —            (1    )     — Middle East/Asia Restructuring charges       —           —         (2    )    —       Corporate and other: Macondo-related charge        (1,000    )   (0.68  )     —           — Restructuring charges       —           —         (20   )    (0.02  )                                                                               FOOTNOTE TABLE 2  HALLIBURTON COMPANY Adjusted Operating Income Excluding Certain Items By Segment and Geographic Region (Millions of dollars) (Unaudited)                                                                                                                                Three Months Ended                                            March 31              December 31 Adjusted operating income by             2014      2013      2013 geographic region: (a)(b) Completion and Production:                                     North America                              $ 446       $ 432       $  483 Latin America                              48          28          73 Europe/Africa/CIS                          78          64          100 Middle East/Asia                         89       91       119        Total                                    661      615      775        Drilling and Evaluation: North America                              156         173         168 Latin America                              52          81          84 Europe/Africa/CIS                          68          57          109 Middle East/Asia                         122      96       145        Total                                    398      407      506        Adjusted operating income by region: North America                              602         605         651 Latin America                              100         109         157 Europe/Africa/CIS                          146         121         209 Middle East/Asia                         211      187      264        Corporate and other                      (89   )   (120  )   (99       ) Adjusted total operating income          $ 970    $ 902    $  1,182            Management believes that operating income adjusted for the         Macondo-related charge for the quarter ended March 31, 2013 and         restructuring charges for the quarter ended December 31, 2013 is         useful to investors to assess and understand operating performance,         especially when comparing those results with previous and subsequent (a)   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         these expenses.         Adjusted operating income for each segment and region is calculated (b)     as: "Operating income (loss)" less "Items Included in Operating Income         (Loss)."           FOOTNOTE TABLE 3  HALLIBURTON COMPANY Reconciliation of As-Reported Income (Loss) from Continuing Operations to Adjusted Income from Continuing Operations (Millions of dollars except per share data) (Unaudited)                                                                                                  Three Months Ended   Three Months Ended                                        March 31, 2013      December 31, 2013 As-reported income (loss) from continuing operations attributable     $    (13      )      $       770 to company Macondo-related charge, net of tax     637                  — (a) Restructuring charges, net of tax    —                  28 (a) Adjusted income from continuing operations attributable to company   $    624           $       798 (a)                                                              As-reported diluted weighted average common shares outstanding      931                  854 (b) Adjusted diluted weighted average      935                  854 common shares outstanding (b)                                                              As-reported income (loss) from continuing operations per diluted      $    (0.01    )      $       0.90 share (c) Adjusted income from continuing      $    0.67          $       0.93 operations per diluted share (c)          Management believes that income (loss) from continuing operations         adjusted for the Macondo-related charge for the quarter ended March         31, 2013 and restructuring charges for the quarter ended December 31,         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 item to be outside of         the company's normal operating results. Management analyzes income (a)   from continuing operations without the impact of this item as an         indicator of performance, to identify underlying trends in the         business, and to establish operational goals. The adjustment removes         the effect of this expense. Adjusted income from continuing operations         attributable to company is calculated as: “As-reported income (loss)         from continuing operations attributable to company” plus         "Macondo-related charge, net of tax" for the quarter ended March 31,         2013 and "Restructuring charges, net of tax" for the quarter ended         December 31, 2013.         As-reported diluted weighted average common shares outstanding         excludes four million shares of common stock associated with awards         granted under employee stock plans for the quarter ended March 31, (b)     2013, as their impact would be antidilutive since our reported         continuing operations attributable to company was in a loss position.         When adjusting income from continuing operations attributable to         company for the Macondo-related charge, these four million shares         become dilutive.         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 (c)     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 (NYSE:HAL) will host a conference call on Monday, April 21, 2014, to discuss the first quarter 2014 financial results. The call will begin at 8:00 AM Central Time (9:00 AM Eastern Time).  Halliburton’s first 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 telephone at (703) 639-1127. 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 (703) 925-2533, passcode 1631885.  Contact:  Halliburton Investor Relations Kelly Youngblood, 281-871-2688 investors@halliburton.com Corporate Affairs Cindy Bigner, 281-871-2601 PR@halliburton.com