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As Of Filer Filing For·On·As Docs:Size 7/19/22 Halliburton Co. 8-K:2 7/19/22 10:526K |
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hal-20220719 |
i Delaware | i 001-03492 | i 75-2677995 | ||||||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
i 3000 North Sam Houston Parkway East, | i Houston, | i Texas | i 77032 | ||||||||
(Address of principal executive offices) | (Zip Code) |
i ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
i ☐ | Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
i ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
i ☐ | Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
i Common Stock, par value $2.50 per share | i HAL | i New York Stock Exchange |
Emerging growth company | i ☐ |
Three Months Ended | |||||||||||||||||||||||||||||
June 30 | March 31 | ||||||||||||||||||||||||||||
2022 | 2021 | 2022 | |||||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||||
Completion and Production | $ | 2,911 | $ | 2,048 | $ | 2,353 | |||||||||||||||||||||||
Drilling and Evaluation | 2,163 | 1,659 | 1,931 | ||||||||||||||||||||||||||
Total revenue | $ | 5,074 | $ | 3,707 | $ | 4,284 | |||||||||||||||||||||||
Operating
income: | |||||||||||||||||||||||||||||
Completion and Production | $ | 499 | $ | 317 | $ | 296 | |||||||||||||||||||||||
Drilling and Evaluation | 286 | 175 | 294 | ||||||||||||||||||||||||||
Corporate and other | (67) | (58) | (57) | ||||||||||||||||||||||||||
Impairments and other charges (a) | (344) | — | (22) | ||||||||||||||||||||||||||
Total operating income | 374 | 434 | 511 | ||||||||||||||||||||||||||
Interest expense, net | (101) | (120) | (107) | ||||||||||||||||||||||||||
Loss on early extinguishment of debt (b) | — | — | (42) | ||||||||||||||||||||||||||
Other, net | (42) | (19) | (30) | ||||||||||||||||||||||||||
Income
before income taxes | 231 | 295 | 332 | ||||||||||||||||||||||||||
Income tax provision (c) | (114) | (65) | (68) | ||||||||||||||||||||||||||
Net income | $ | 117 | $ | 230 | $ | 264 | |||||||||||||||||||||||
Net
income attributable to noncontrolling interest | (8) | (3) | (1) | ||||||||||||||||||||||||||
Net income attributable to company | $ | 109 | $ | 227 | $ | 263 | |||||||||||||||||||||||
Basic
and diluted net income per share | $ | 0.12 | $ | 0.26 | $ | 0.29 | |||||||||||||||||||||||
Basic weighted average common shares outstanding | 904 | 890 | 899 | ||||||||||||||||||||||||||
Diluted weighted average common shares outstanding | 909 | 890 | 903 | ||||||||||||||||||||||||||
(a) | See Footnote Table 1 for details of the impairments and other charges recorded during the three months ended June 30, 2022 and March 31, 2022. | ||||||||||||||||||||||||||||
(b) | During
the three months ended March 31, 2022, Halliburton recognized a $42 million loss on extinguishment of debt related to the early redemption of $600 million aggregate principal amount of senior notes. | ||||||||||||||||||||||||||||
(c) | The tax provision includes the tax effect on impairments and other charges during the three months ended June 30, 2022 and March 31, 2022. Additionally, during the three months ended March 31, 2022, the tax provision includes the tax effect on the loss on early extinguishment of debt. | ||||||||||||||||||||||||||||
See Footnote Table 1 for Reconciliation of As Reported
Operating Income to Adjusted Operating Income. | |||||||||||||||||||||||||||||
See Footnote Table 3 for Reconciliation of As Reported Net Income to Adjusted Net Income. |
Six Months Ended | ||||||||||||||||||||
June 30 | ||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||
Revenue: | ||||||||||||||||||||
Completion and Production | $ | 5,264 | $ | 3,918 | ||||||||||||||||
Drilling and Evaluation | 4,094 | 3,240 | ||||||||||||||||||
Total revenue | $ | 9,358 | $ | 7,158 | ||||||||||||||||
Operating income: | ||||||||||||||||||||
Completion and Production | $ | 795 | $ | 569 | ||||||||||||||||
Drilling and Evaluation | 580 | 346 | ||||||||||||||||||
Corporate and other | (124) | (111) | ||||||||||||||||||
Impairments and other charges (a) | (366) | — | ||||||||||||||||||
Total operating income | 885 | 804 | ||||||||||||||||||
Interest expense, net | (208) | (245) | ||||||||||||||||||
Loss on early extinguishment of debt (b) | (42) | — | ||||||||||||||||||
Other, net | (72) | (41) | ||||||||||||||||||
Income before income taxes | 563 | 518 | ||||||||||||||||||
Income
tax provision (c) | (182) | (117) | ||||||||||||||||||
Net Income | $ | 381 | $ | 401 | ||||||||||||||||
Net Income attributable to noncontrolling interest | (9) | (4) | ||||||||||||||||||
Net
Income attributable to company | $ | 372 | $ | 397 | ||||||||||||||||
Basic
and diluted net income per share | $ | 0.41 | $ | 0.45 | ||||||||||||||||
Basic weighted average common shares outstanding | 902 | 889 | ||||||||||||||||||
Diluted weighted average common shares outstanding | 906 | 889 | ||||||||||||||||||
(a) | See
Footnote Table 2 for details of the impairments and other charges recorded during the six months ended June 30, 2022. | |||||||||||||||||||
(b) | During the six months ended June 30, 2022, Halliburton recognized a $42 million loss on extinguishment of debt related to the early redemption of $600 million aggregate principal amount of senior notes. | |||||||||||||||||||
(c) | The tax provision includes the tax effect on impairments and other charges and the loss on early extinguishment of debt during the six months ended June 30, 2022. | |||||||||||||||||||
See
Footnote Table 2 for Reconciliation of As Reported Operating Income to Adjusted Operating Income | ||||||||||||||||||||
See Footnote Table 4 for Reconciliation of As Reported Net Income to Adjusted Net Income |
June 30 | December 31 | |||||||||||||
2022 | 2021 | |||||||||||||
Assets | ||||||||||||||
Current assets: | ||||||||||||||
Cash and equivalents | $ | 2,226 | $ | 3,044 | ||||||||||
Receivables, net | 4,390 | 3,666 | ||||||||||||
Inventories | 2,654 | 2,361 | ||||||||||||
Other current assets | 992 | 872 | ||||||||||||
Total current assets | 10,262 | 9,943 | ||||||||||||
Property, plant, and equipment, net | 4,165 | 4,326 | ||||||||||||
Goodwill | 2,828 | 2,843 | ||||||||||||
Deferred income taxes | 2,703 | 2,695 | ||||||||||||
Operating lease right-of-use assets | 894 | 934 | ||||||||||||
Other assets | 1,593 | 1,580 | ||||||||||||
Total assets | $ | 22,445 | $ | 22,321 | ||||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 2,794 | $ | 2,353 | ||||||||||
Accrued employee compensation and benefits | 513 | 493 | ||||||||||||
Current portion of operating lease liabilities | 227 | 240 | ||||||||||||
Other current liabilities | 1,232 | 1,220 | ||||||||||||
Total current liabilities | 4,766 | 4,306 | ||||||||||||
Long-term debt | 8,525 | 9,127 | ||||||||||||
Operating lease liabilities | 786 | 845 | ||||||||||||
Employee compensation and benefits | 466 | 492 | ||||||||||||
Other liabilities | 754 | 823 | ||||||||||||
Total liabilities | 15,297 | 15,593 | ||||||||||||
Company shareholders’ equity | 7,130 | 6,713 | ||||||||||||
Noncontrolling interest in consolidated subsidiaries | 18 | 15 | ||||||||||||
Total shareholders’ equity | 7,148 | 6,728 | ||||||||||||
Total liabilities and shareholders’ equity | $ | 22,445 | $ | 22,321 |
Six Months Ended | Three Months Ended | ||||||||||||||||||||||
June 30 | June 30 | ||||||||||||||||||||||
2022 | 2021 | 2022 | |||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||
Net income | $ | 381 | $ | 401 | $ | 117 | |||||||||||||||||
Adjustments
to reconcile net income to cash flows from operating activities: | |||||||||||||||||||||||
Depreciation, depletion, and amortization | 470 | 449 | 238 | ||||||||||||||||||||
Impairments and other charges | 366 | — | 344 | ||||||||||||||||||||
Working capital (a) | (810) | 11 | (424) | ||||||||||||||||||||
Other operating activities | (81) | (249) | 101 | ||||||||||||||||||||
Total
cash flows provided by operating activities | 326 | 612 | 376 | ||||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||
Capital expenditures | (410) | (295) | (221) | ||||||||||||||||||||
Proceeds from sales of property, plant, and equipment | 116 | 105 | 60 | ||||||||||||||||||||
Other investing activities | (54) | (31) | (32) | ||||||||||||||||||||
Total cash flows used in investing activities | (348) | (221) | (193) | ||||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||
Payments on long-term borrowings | (642) | (192) | (2) | ||||||||||||||||||||
Dividends to shareholders | (217) | (80) | (109) | ||||||||||||||||||||
Other financing activities | 116 | 4 | 36 | ||||||||||||||||||||
Total cash flows used in financing activities | (743) | (268) | (75) | ||||||||||||||||||||
Effect of exchange rate changes on cash | (53) | (28) | (36) | ||||||||||||||||||||
Increase (decrease) in cash and equivalents | (818) | 95 | 72 | ||||||||||||||||||||
Cash and equivalents at beginning of period | 3,044 | 2,563 | 2,154 | ||||||||||||||||||||
Cash and equivalents at end of period | $ | 2,226 | $ | 2,658 | $ | 2,226 | |||||||||||||||||
(a) | Working capital includes receivables, inventories, and accounts payable. | ||||||||||||||||||||||
See Footnote Table 5 for Reconciliation of Cash Flows from Operating Activities to Free Cash Flow |
Three Months Ended | ||||||||||||||||||||
June 30 | March 31 | |||||||||||||||||||
Revenue | 2022 | 2021 | 2022 | |||||||||||||||||
By operating segment: | ||||||||||||||||||||
Completion and Production | $ | 2,911 | $ | 2,048 | $ | 2,353 | ||||||||||||||
Drilling and Evaluation | 2,163 | 1,659 | 1,931 | |||||||||||||||||
Total revenue | $ | 5,074 | $ | 3,707 | $ | 4,284 | ||||||||||||||
By geographic region: | ||||||||||||||||||||
North America | $ | 2,426 | $ | 1,569 | $ | 1,925 | ||||||||||||||
Latin America | 758 | 534 | 653 | |||||||||||||||||
Europe/Africa/CIS | 718 | 679 | 677 | |||||||||||||||||
Middle East/Asia | 1,172 | 925 | 1,029 | |||||||||||||||||
Total revenue | $ | 5,074 | $ | 3,707 | $ | 4,284 | ||||||||||||||
Operating
Income | ||||||||||||||||||||
By operating segment: | ||||||||||||||||||||
Completion and Production | $ | 499 | $ | 317 | $ | 296 | ||||||||||||||
Drilling and Evaluation | 286 | 175 | 294 | |||||||||||||||||
Total | 785 | 492 | 590 | |||||||||||||||||
Corporate and other | (67) | (58) | (57) | |||||||||||||||||
Impairments
and other charges | (344) | — | (22) | |||||||||||||||||
Total operating income | $ | 374 | $ | 434 | $ | 511 | ||||||||||||||
See
Footnote Table 1 for Reconciliation of As Reported Operating Income to Adjusted Operating Income. |
Six Months Ended | ||||||||||||||
June 30 | ||||||||||||||
Revenue | 2022 | 2021 | ||||||||||||
By operating segment: | ||||||||||||||
Completion and Production | $ | 5,264 | $ | 3,918 | ||||||||||
Drilling and Evaluation | 4,094 | 3,240 | ||||||||||||
Total revenue | $ | 9,358 | $ | 7,158 | ||||||||||
By geographic region: | ||||||||||||||
North America | $ | 4,351 | $ | 2,973 | ||||||||||
Latin America | 1,411 | 1,069 | ||||||||||||
Europe/Africa/CIS | 1,395 | 1,313 | ||||||||||||
Middle East/Asia | 2,201 | 1,803 | ||||||||||||
Total revenue | $ | 9,358 | $ | 7,158 | ||||||||||
Operating Income | ||||||||||||||
By operating segment: | ||||||||||||||
Completion and Production | $ | 795 | $ | 569 | ||||||||||
Drilling and Evaluation | 580 | 346 | ||||||||||||
Total | 1,375 | 915 | ||||||||||||
Corporate and other | (124) | (111) | ||||||||||||
Impairments and other charges | (366) | — | ||||||||||||
Total operating income | $ | 885 | $ | 804 | ||||||||||
See
Footnote Table 2 for Reconciliation of As Reported Operating Income to Adjusted Operating Income. |
Three Months Ended | |||||||||||||||||||||||||||||
June 30 | March 31 | ||||||||||||||||||||||||||||
2022 | 2021 | 2022 | |||||||||||||||||||||||||||
As reported operating income | $ | 374 | $ | 434 | $ | 511 | |||||||||||||||||||||||
Impairments
and other charges: | |||||||||||||||||||||||||||||
Receivables | 186 | — | 16 | ||||||||||||||||||||||||||
Property, plant, and equipment, net | 100 | — | — | ||||||||||||||||||||||||||
Inventory | 70 | — | — | ||||||||||||||||||||||||||
Other | (12) | — | 6 | ||||||||||||||||||||||||||
Total
impairments and other charges (a) | 344 | — | 22 | ||||||||||||||||||||||||||
Adjusted operating income (b) | $ | 718 | $ | 434 | $ | 533 | |||||||||||||||||||||||
(a) | During
the three months ended June 30, 2022, Halliburton recognized a pre-tax charge of $344 million due to our decision to market for sale the net assets of our Russia operations. During the three months ended March 31, 2022, Halliburton recorded $22 million of impairments and other charges, primarily related to our assets in Ukraine. | ||||||||||||||||||||||||||||
(b) | Management believes that operating income adjusted for impairments and other charges for the three months ended June 30, 2022 and March 31, 2022, 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 "Total impairments and other charges" for the respective periods. |
Six Months Ended | |||||||||||||||||
June 30 | |||||||||||||||||
2022 | 2021 | ||||||||||||||||
As reported operating income | $ | 885 | $ | 804 | |||||||||||||
Impairments and other charges: | |||||||||||||||||
Receivables | 202 | — | |||||||||||||||
Property, plant, and equipment, net | 100 | — | |||||||||||||||
Inventory | 70 | — | |||||||||||||||
Other | (6) | — | |||||||||||||||
Total
impairments and other charges (a) | 366 | — | |||||||||||||||
Adjusted operating income (b) | $ | 1,251 | $ | 804 | |||||||||||||
(a) | During
the six months ended June 30, 2022, Halliburton recorded $366 million of impairments and other charges, primarily due to our decision to market for sale the net assets of our Russia operations and impairment of our assets in Ukraine. | ||||||||||||||||
(b) | Management believes that operating income adjusted for impairments and other charges for the six months ended June 30, 2022, 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 "Total impairments and other charges" for the respective periods. |
Three Months Ended | |||||||||||||||||||||||
June 30 | March 31 | ||||||||||||||||||||||
2022 | 2021 | 2022 | |||||||||||||||||||||
As reported net income attributable to company | $ | 109 | $ | 227 | $ | 263 | |||||||||||||||||
Adjustments: | |||||||||||||||||||||||
Impairments and other charges | 344 | — | 22 | ||||||||||||||||||||
Loss on early extinguishment of debt | — | — | 42 | ||||||||||||||||||||
Total adjustments, before taxes | 344 | — | 64 | ||||||||||||||||||||
Tax benefit (a) | (11) | — | (13) | ||||||||||||||||||||
Total adjustments, net of taxes (b) | 333 | — | 51 | ||||||||||||||||||||
Adjusted
net income attributable to company (b) | $ | 442 | $ | 227 | $ | 314 | |||||||||||||||||
Diluted weighted average common shares outstanding | 909 | 890 | 903 | ||||||||||||||||||||
As
reported net income per diluted share (c) | $ | 0.12 | $ | 0.26 | $ | 0.29 | |||||||||||||||||
Adjusted net income per diluted share (c) | $ | 0.49 | $ | 0.26 | $ | 0.35 | |||||||||||||||||
(a) | The
tax benefit in the table above includes the tax effect on the impairments and other charges during the three months ended June 30, 2022 and March 31, 2022. Additionally, during the three months ended March 31, 2022, the tax benefit includes the tax effect on the loss on early extinguishment of debt. | ||||||||||||||||||||||
(b) | Management believes that net income adjusted for the impairments and other charges and loss on the 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 net income without the impact of these items as an indicator of performance to identify underlying trends in the business and to establish operational goals. Total adjustments remove the effect of these items. Adjusted net income attributable to company is calculated as: “As reported net income attributable to company” plus "Total adjustments, net of taxes" for the respective periods. | ||||||||||||||||||||||
(c) | As reported net income per diluted share is calculated as: "As reported net income attributable to company" divided by "Diluted weighted average common shares outstanding." Adjusted net
income per diluted share is calculated as: "Adjusted net income attributable to company" divided by "Diluted weighted average common shares outstanding." |
Six Months Ended | |||||||||||||||||
June 30 | |||||||||||||||||
2022 | 2021 | ||||||||||||||||
As reported net income attributable to company | $ | 372 | $ | 397 | |||||||||||||
Adjustments: | |||||||||||||||||
Impairments
and other charges | 366 | — | |||||||||||||||
Loss on early extinguishment of debt | 42 | — | |||||||||||||||
Total adjustments, before taxes | 408 | — | |||||||||||||||
Tax benefit (a) | (24) | — | |||||||||||||||
Total adjustments, net of taxes (b) | 384 | — | |||||||||||||||
Adjusted net income attributable to company (b) | $ | 756 | $ | 397 | |||||||||||||
Diluted weighted average common shares outstanding | 906 | 889 | |||||||||||||||
As reported net income per diluted share (c) | $ | 0.41 | $ | 0.45 | |||||||||||||
Adjusted net income per diluted share (c) | $ | 0.83 | $ | 0.45 | |||||||||||||
(a) | The
tax benefit in the table above includes the tax effect on impairments and other charges and the loss on early extinguishment of debt during the six months ended June 30, 2022. | ||||||||||||||||
(b) | Management believes that net income adjusted for impairments and other charges and the loss on 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 net income without the impact of these items as an indicator of performance
to identify underlying trends in the business and to establish operational goals. Total adjustments remove the effect of these items. Adjusted net income attributable to company is calculated as: “As reported net income attributable to company” plus "Total adjustments, net of taxes" for the respective periods. | ||||||||||||||||
(c) | As reported net income per diluted share is calculated as: "As reported net income attributable to company" divided by "Diluted weighted average common shares outstanding." Adjusted net income per diluted share is calculated as: "Adjusted net income attributable to company" divided by "Diluted weighted average common shares outstanding." |
Six Months Ended | Three Months Ended | ||||||||||||||||||||||
June 30 | June 30 | ||||||||||||||||||||||
2022 | 2021 | 2022 | |||||||||||||||||||||
Total cash flows provided by operating activities | $ | 326 | $ | 612 | $ | 376 | |||||||||||||||||
Capital expenditures | (410) | (295) | (221) | ||||||||||||||||||||
Proceeds from sales of property, plant, and equipment | 116 | 105 | 60 | ||||||||||||||||||||
Free cash flow (a) | $ | 32 | $ | 422 | $ | 215 | |||||||||||||||||
(a) | The
Free Cash Flow metric is a non-GAAP financial measure, which is calculated as “Total cash flows provided by operating activities” less “Capital expenditures” plus “Proceeds from sales of property, plant, and equipment.” Management believes that Free Cash Flow is a key measure to assess liquidity of the business and is consistent with the disclosures of our direct, large-cap competitors. |
HALLIBURTON COMPANY | |||||||||||
Date: | July 19, 2022 | By: | /s/ Bruce A. Metzinger | ||||||||
Bruce A. Metzinger | |||||||||||
Vice President, Public Law and | |||||||||||
Assistant Secretary |
This ‘8-K’ Filing | Date | Other Filings | ||
---|---|---|---|---|
Filed on / For Period end: | 7/19/22 | |||
6/30/22 | 4 | |||
3/31/22 | 10-Q, 4 | |||
12/31/21 | 10-K, 4, SD | |||
List all Filings |