2016-01-26 18:55:00
HALLIBURTON NET LOSS $671 MLN
HOUSTON--Jan. 25, 2016-- Halliburton Company (NYSE:HAL) announced today that income from continuing operations for the fourth quarter of 2015 was $270 million, or $0.31 per diluted share, excluding special items. This compares to income from continuing operations for the third quarter of 2015 of $265 million, or $0.31 per diluted share, excluding special items. Adjusted operating income was $473 million in the fourth quarter of 2015, compared to adjusted operating income of $506 million in the third quarter of 2015. Halliburton's total revenue in the fourth quarter of 2015 was $5.1 billion, compared to $5.6 billion in the third quarter of 2015.
As a result of the downturn in the energy market and its corresponding impact on the company's business outlook, Halliburton recorded company-wide charges related primarily to asset write-offs and severance costs of approximately $192 million, after-tax, or $0.22 per diluted share, in the fourth quarter of 2015, compared to $257 million, after-tax, or $0.30 per diluted share, in the third quarter of 2015. Halliburton recorded Baker Hughes acquisition-related costs of $79 million, after-tax, or $0.09 per diluted share, in the fourth quarter of 2015, compared to $62 million, after-tax, or $0.07 per diluted share, in the third quarter of 2015. Halliburton also incurred $27 million, after-tax, or $0.03 per diluted share, of interest expense associated with the $7.5 billion debt issuance in the fourth quarter of 2015.
Reported loss from continuing operations was $28 million, or $0.03 per diluted share, in the fourth quarter of 2015, compared to reported loss from continuing operations of $54 million, or $0.06 per diluted share, in the third quarter of 2015. Reported operating income was $86 million for the fourth quarter of 2015, compared to reported operating income of $43 million for the third quarter of 2015.
Total revenue for the full year of 2015 was $23.6 billion, a decrease of $9.2 billion, or 28%, from 2014. Reported operating loss for 2015 was $165 million, compared to reported operating income of $5.1 billion for 2014. Both revenue and operating income declines resulted from the impact of reduced commodity prices creating widespread pricing pressure and activity reductions on a global basis. Adjusted income from continuing operations for 2015 was $1.3 billion, or $1.56 per diluted share, compared to adjusted income from continuing operations for 2014 of $3.4 billion, or $4.02 per diluted share. Reported loss from continuing operations for 2015 was $666 million, or $0.78 per diluted share, compared to reported income from continuing operations for 2014 of $3.4 billion, or $4.03 per diluted share.
"We are pleased with our fourth quarter and full-year results in this challenging environment, as once again we outperformed our peer group in North America and international revenue, both sequentially and on a full-year basis," said Jeff Miller, President.
"Total company annual revenue of $23.6 billion declined 28% year-over-year, outperforming a 35% decline in both the average worldwide rig count and global drilling and completions spend.
"Our international business was resilient during 2015. Annual revenue declined 16% from the prior year, outperforming our largest peer sequentially and on a full-year basis for both revenue and margins. Despite pricing and activity headwinds, we were able to improve 2015 operating margins due to a focus on cost management. North America revenue declined 39% compared to 2014, as a result of unprecedented declines in activity, with the U.S. land rig count ending the year down 64% from the 2014 peak.
"Fourth quarter total company revenue of $5.1 billion declined 9% sequentially, while adjusted operating income declined by 7% to $473 million.
"For our international business, fourth quarter revenue and operating income declined sequentially by 5% and 10%, respectively, as a result of price concessions and activity declines. In addition, due to customer budget constraints, we did not see the typical benefit from year-end equipment and software sales.
"In the Middle East / Asia region, revenue declined by 5% sequentially, with a similar decline in operating income of 6%. Lower activity levels in Saudi Arabia and Iraq were partially offset by modestly higher sales in China and increased activity in Kuwait and Oman.
"In Europe/Africa/CIS, revenue declined 6% sequentially with a decrease in operating income of 18%. The decline was primarily driven by activity reductions in the North Sea, partially offset by increased activity levels in Angola and Algeria.
"Latin America revenue and operating income declined sequentially by 6% and 9%, respectively, driven by reduced activity across most of the region. Partially offsetting this decline was improved activity levels in Mexico.
"North America revenue declined 13% sequentially, led by reduced activity and pricing concessions in US Land. Operating margins improved by 160 basis points, driven by cost reduction efforts, and year-end completion tool sales in the Gulf of Mexico. Our margins continue to include an elevated cost structure in North America, in anticipation of the pending Baker Hughes acquisition.
"Our strategy remains unchanged. We are focused on maintaining a strong customer portfolio, investing in more efficient technology, and delivering reliable, best-in-class service quality for our customers. We are looking through this cycle, drawing upon our management's deep experience and preparing the business for growth when the industry recovers," said Miller.
"We remain fully committed to closing the pending acquisition of Baker Hughes. We are continuing our discussions with competition authorities, and recently offered an enhanced set of divestitures in an effort to resolve competition-related concerns as soon as possible. We are diligently focused on pending regulatory reviews, the divestiture process, and planning for integration activities after the closing of the deal," added Dave Lesar, Chairman and CEO.
"2016 is expected to be another challenging year for the industry. We believe our customers will remain focused on cost per barrel optimization and gaining higher levels of efficiency, both of which bode very well for Halliburton. Ultimately, when this market recovers we believe North America will respond the quickest and offer the greatest upside, and that Halliburton will be positioned to outperform," concluded Lesar.
|
HALLIBURTON COMPANY Condensed Consolidated Statements of Operations (Millions of dollars and shares except per share data) (Unaudited) |
|||||||||
| Year Ended December 31 | |||||||||
| 2015 | 2014 | ||||||||
| Revenue: | |||||||||
| Completion and Production | $ | 13,682 | $ | 20,253 | |||||
| Drilling and Evaluation | 9,951 | 12,617 | |||||||
| Total revenue | $ | 23,633 | $ | 32,870 | |||||
| Operating income (loss): | |||||||||
| Completion and Production | $ | 1,069 | $ | 3,670 | |||||
| Drilling and Evaluation | 1,519 | 1,740 | |||||||
| Corporate and other (a) | (268 | ) | (167 | ) | |||||
| Impairments and other charges | (2,177 | ) | (129 | ) | |||||
| Baker Hughes acquisition-related costs | (308 | ) | (17 | ) | |||||
| Total operating income (loss) | (165 | ) | 5,097 | ||||||
| Interest expense, net | (447 | ) | (383 | ) | |||||
| Other, net (b) | (324 | ) | (2 | ) | |||||
| Income (loss) from continuing operations before income taxes | (936 | ) | 4,712 | ||||||
| Income tax benefit (provision) | 274 | (1,275 | ) | ||||||
| Income (loss) from continuing operations | (662 | ) | 3,437 | ||||||
| Income (loss) from discontinued operations, net | (5 | ) | 64 | ||||||
| Net income (loss) | $ | (667 | ) | $ | 3,501 | ||||
| Net income attributable to noncontrolling interest |
(4 |
) |
(1 |
) |
|||||
| Net income (loss) attributable to company | $ | (671 | ) | $ | 3,500 | ||||
| Amounts attributable to company shareholders: | |||||||||
| Income (loss) from continuing operations | $ | (666 | ) | $ | 3,436 | ||||
| Income (loss) from discontinued operations, net | (5 | ) | 64 | ||||||
| Net income (loss) attributable to company | $ | (671 | ) | $ | 3,500 | ||||
| Basic income (loss) per share attributable to company shareholders: | |||||||||
| Income (loss) from continuing operations | $ | (0.78 | ) | $ | 4.05 | ||||
| Income (loss) from discontinued operations, net | (0.01 | ) | 0.08 | ||||||
| Net income (loss) per share | $ | (0.79 | ) | $ | 4.13 | ||||
| Diluted income (loss) per share attributable to company shareholders: | |||||||||
| Income (loss) from continuing operations | $ | (0.78 | ) | $ | 4.03 | ||||
| Income (loss) from discontinued operations, net | (0.01 | ) | 0.08 | ||||||
| Net income (loss) per share | $ | (0.79 | ) | $ | 4.11 | ||||
| Basic weighted average common shares outstanding | 853 | 848 | |||||||
| Diluted weighted average common shares outstanding | 853 | 852 | |||||||
| (a) Includes $195 million of activity in the year ended December 31, 2014 as a result of a reduction of our loss contingency liability and expected insurance recovery related to the Macondo incident. |
| (b) Includes a foreign currency loss of $199 million due to a currency devaluation in Venezuela in the year ended December 31, 2015. |
| See Footnote Table 2 for Reconciliation of As Reported Operating Income (Loss) to Adjusted Operating Income. |
| See Footnote Table 4 for Reconciliation of As Reported Income (Loss) from Continuing Operations to Adjusted Income from Continuing Operations. |
|
HALLIBURTON COMPANY Condensed Consolidated Statements of Operations (Millions of dollars and shares except per share data) (Unaudited) |
|||||||||||||
| Three Months Ended | |||||||||||||
| December 31 | September 30 | ||||||||||||
| 2015 | 2014 | 2015 | |||||||||||
| Revenue: | |||||||||||||
| Completion and Production | $ | 2,831 | $ | 5,471 | $ | 3,200 | |||||||
| Drilling and Evaluation | 2,251 | 3,299 | 2,382 | ||||||||||
| Total revenue | $ | 5,082 | $ | 8,770 | $ | 5,582 | |||||||
| Operating income: | |||||||||||||
| Completion and Production | $ | 144 | $ | 1,051 | $ | 163 | |||||||
| Drilling and Evaluation | 399 | 477 | 401 | ||||||||||
| Corporate and other | (70 | ) | (83 | ) | (58 | ) | |||||||
| Impairments and other charges | (282 | ) | (129 | ) | (381 | ) | |||||||
| Baker Hughes acquisition-related costs | (105 | ) | (17 | ) | (82 | ) | |||||||
| Total operating income | 86 | 1,299 | 43 | ||||||||||
| Interest expense, net | (136 | ) | (100 | ) | (99 | ) | |||||||
| Other, net | (43 | ) | 41 | (34 | ) | ||||||||
| Income (loss) from continuing operations before income taxes | (93 | ) | 1,240 | (90 | ) | ||||||||
| Income tax benefit (provision) | 67 | (336 | ) | 37 | |||||||||
| Income (loss) from continuing operations | (26 | ) | 904 | (53 | ) | ||||||||
| Income (loss) from discontinued operations, net |
- |
1 |
- |
||||||||||
| Net income (loss) | $ | (26 | ) | $ | 905 | $ | (53 | ) | |||||
| Net income attributable to noncontrolling interest | (2 | ) | (4 | ) | (1 | ) | |||||||
| Net income (loss) attributable to company | $ | (28 | ) | $ | 901 | $ | (54 | ) | |||||
| Amounts attributable to company shareholders: | |||||||||||||
| Income (loss) from continuing operations | $ | (28 | ) | $ | 900 | $ | (54 | ) | |||||
| Income from discontinued operations, net |
- |
1 |
- |
||||||||||
| Net income (loss) attributable to company | $ | (28 | ) | $ | 901 | $ | (54 | ) | |||||
| Basic income (loss) per share attributable to company shareholders: | |||||||||||||
| Income (loss) from continuing operations | $ | (0.03 | ) | $ | 1.06 | $ | (0.06 | ) | |||||
| Income from discontinued operations, net |
- |
- |
- |
||||||||||
| Net income (loss) per share | $ | (0.03 | ) | $ | 1.06 | $ | (0.06 | ) | |||||
| Diluted income (loss) per share attributable to company shareholders: | |||||||||||||
| Income (loss) from continuing operations | $ | (0.03 | ) | $ | 1.06 | $ | (0.06 | ) | |||||
| Income from discontinued operations, net |
- |
- |
- |
||||||||||
| Net income (loss) per share | $ | (0.03 | ) | $ | 1.06 | $ | (0.06 | ) | |||||
| Basic weighted average common shares outstanding | 856 | 848 | 855 | ||||||||||
| Diluted weighted average common shares outstanding | 856 | 850 | 855 | ||||||||||
| See Footnote Table 1 for Reconciliation of As Reported Operating Income to Adjusted Operating Income. |
| See Footnote Table 3 for Reconciliation of As Reported (Loss) from Continuing Operations to Adjusted Income from Continuing Operations. |
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