FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1994
OR
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from _____ to _____
Commission File Number 1-3492
HALLIBURTON COMPANY
(a Delaware Corporation)
73-0271280
3600 Lincoln Plaza
500 N. Akard
Dallas, Texas 75201
Telephone Number - Area Code (214) 978-2600
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common stock, par value $2.50 per share:
Outstanding at May 2, 1994 114,157,078
<PAGE>
<TABLE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
HALLIBURTON COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
March 31 December 31
1994 1993
--------- ---------
Millions of dollars
and shares
ASSETS
<S> <C> <C>
Cash and equivalents $ 82.3 $ 48.8
Investments:
Available-for-sale 184.6 182.5
Held-to-maturity 466.8 474.0
--------- ---------
Total investments 651.4 656.5
Receivables:
Notes and accounts receivable 1,322.0 1,304.2
Unbilled work on uncompleted contracts 168.3 180.4
Refundable Federal income taxes 72.5 71.5
--------- ---------
Total receivables 1,562.8 1,556.1
Inventories 376.6 369.0
Reinsurance recoverables 662.8 653.5
Property, plant and equipment,
less accumulated depreciation
of $2,581.2 and $2,523.1 1,138.8 1,152.8
Equity in and advances to related companies 86.8 86.0
Excess of cost over net assets acquired 217.7 219.2
Deferred income taxes 146.0 199.5
Assets held for sale 29.1 219.7
Other assets 250.9 242.0
--------- ---------
Total assets $ 5,205.2 $ 5,403.1
========= =========
<FN>
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
HALLIBURTON COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
<CAPTION>
March 31 December 31
1994 1993
--------- ---------
Millions of dollars
and shares
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Accounts payable $ 310.7 $ 297.4
Accrued employee compensation and benefits 404.7 437.0
Advance billings on uncompleted contracts 131.5 153.9
Income taxes payable 23.4 60.1
Short-term notes payable 12.5 92.0
Unearned insurance premiums 50.1 53.5
Reserves for insurance losses and claims 1,123.3 1,131.7
Long-term debt 668.5 623.9
Other liabilities 605.3 662.4
Minority interest in consolidated subsidiaries 4.8 3.5
--------- ---------
Total liabilities 3,334.8 3,515.4
--------- ---------
Commitments and contingencies
Shareholders' equity:
Common stock, par value $2.50 per share -
authorized 200.0 shares,
issued 119.2 shares 298.0 298.0
Paid-in capital in excess of par value 197.2 199.8
Cumulative translation adjustment (27.1) (24.8)
Net unrealized gains on investments 3.8 9.3
Retained earnings 1,562.8 1,573.5
--------- ---------
2,034.7 2,055.8
Less 5.0 and 5.1 shares of
treasury stock, at cost 164.3 168.1
--------- ---------
Total shareholders' equity 1,870.4 1,887.7
--------- ---------
Total liabilities and shareholders' equity $ 5,205.2 $ 5,403.1
========= =========
<FN>
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
HALLIBURTON COMPANY
CONDENSED CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
Three Months
Ended March 31
--------------------
1994 1993
--------- ---------
Millions of dollars
except per
share data
<S> <C> <C>
Revenues $ 1,376.3 $ 1,559.5
Operating costs and expenses:
Cost of revenues 1,285.2 1,462.6
General and administrative 50.9 54.1
--------- ---------
Total operating costs and expenses 1,336.1 1,516.7
--------- ---------
Operating income 40.2 42.8
Interest expense (10.0) (9.6)
Interest income 2.8 3.7
Foreign currency losses (3.3) (4.3)
Other nonoperating income, net 0.5 -
--------- ---------
Income before income taxes and minority interest 30.2 32.6
Provision for income taxes (12.1) (14.0)
Minority interest in net income (loss) of subsidiaries (0.3) 0.2
--------- ---------
Net income $ 17.8 $ 18.8
========= =========
Average number of common and common share
equivalents outstanding 114.2 107.4
Income per share $ 0.16 $ 0.18
Cash dividends paid per share 0.25 0.25
<FN>
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
HALLIBURTON COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Three Months
Ended March 31
--------------------
1994 1993
--------- ---------
Millions of dollars
<S> <C> <C>
Cash flows from operating activities:
Net income $ 17.8 $ 18.8
Adjustments to reconcile net income
to net cash from operating activities:
Depreciation and amortization 66.2 74.7
Provision for deferred income taxes 34.1 16.8
Other non-cash items (1.9) 0.8
Other changes, net of non-cash items:
Receivables 14.1 18.0
Inventories (11.9) 6.7
Insurance losses and claims net of
reinsurance recoverables (17.7) (39.4)
Accounts payable and other (78.5) (94.2)
--------- ---------
Total cash flows from operating activities 22.2 2.2
--------- ---------
Cash flows from investing activities:
Capital expenditures (53.8) (60.5)
Sales of property, plant and equipment 15.8 7.8
Sales (purchases) of subsidiary companies 201.4 (10.3)
Sales or maturities of
available-for-sale investments 18.6 -
Payments for available-for-sale investments (27.1) -
Sales or maturities of held-to-maturity investments 10.1 -
Payments for held-to-maturity investments (2.5) -
Sales or maturities of marketable investments - 59.3
Payments for marketable investments - (43.8)
Other investing activities (5.1) (22.7)
--------- ---------
Total cash flows from investing activities 157.4 (70.2)
--------- ---------
<FN>
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
HALLIBURTON COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Three Months
Ended March 31
--------------------
1994 1993
--------- ---------
Millions of dollars
<S> <C> <C>
Cash flows from financing activities:
Payments on long-term borrowings (34.5) (20.1)
Net borrowings (payments) of short-term debt (81.4) 9.8
Payments of dividends to shareholders (28.5) (26.6)
Other financing activities - (0.2)
--------- ---------
Total cash flows from financing activities (144.4) (37.1)
--------- ---------
Effect of exchange rate changes on cash (1.7) (1.1)
--------- ---------
Increase (decrease) in cash and equivalents 33.5 (106.2)
Cash and equivalents at beginning of year 48.8 233.3
--------- ---------
Cash and equivalents at end of period $ 82.3 $ 127.1
========= =========
Cash payments (refunds) during the period for:
Interest $ 11.0 $ 10.3
Income taxes (11.7) 23.0
<FN>
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
HALLIBURTON COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Management Representation
In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements include all adjustments necessary to present
fairly the Company's financial position as of March 31, 1994, and the results
of its operations and its cash flows for the three months ended March 31, 1994
and 1993. The results of operations for the three months ended March 31, 1994
and 1993 may not be indicative of results for the full year. Certain prior
year amounts including cost of revenues and general and administrative
expenses have been reclassified to conform with the current organizational
structure of the Company.
Note 2. Inventories
Consolidated inventories consisted of the following:
<TABLE>
<CAPTION>
March 31 December 31
1994 1993
------- -------
Millions of dollars
<S> <C> <C>
Sales items $ 102.2 $ 91.3
Supplies and parts 203.7 199.4
Work in process 42.4 41.1
Raw materials 28.3 37.2
------- -------
Total $ 376.6 $ 369.0
======= =======
</TABLE>
About one-half of all sales items (including related work in process and
raw materials) are valued using the last-in, first-out (LIFO) method. If
the average cost method had been in use for inventories on the LIFO basis,
total inventories would have been about $35.7 million and $37.0 million
higher than reported at March 31, 1994, and December 31, 1993,
respectively.
<PAGE>
Note 3. Business Segment Information
Revenues and operating income by business segment were the following for
the three months ended March 31, 1994 and 1993:
<TABLE>
<CAPTION>
Three Months
Ended March 31
------------------
1994 1993
-------- --------
Millions of dollars
<S> <C> <C>
Revenues
Energy services $ 599.0 $ 689.8
Engineering and construction
services 716.2 798.6
Insurance services<F1> 61.1 71.1
-------- --------
Total revenues $1,376.3 $1,559.5
======== ========
<FN>
Excludes insurance revenues received from other segments of the
Company.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Three Months
Ended March 31
-----------------
1994 1993
------- -------
Millions of dollars
<S> <C> <C>
Operating income
Energy services $ 33.5 $ 38.8
Engineering and construction
services 14.5 12.7
Insurance services (2.1) (2.5)
General corporate expenses (5.7) (6.2)
------- -------
Total operating
income $ 40.2 $ 42.8
======= =======
</TABLE>
Note 4. Income Per Share
Income per share amounts are based upon the average number of common and
common share equivalents outstanding. Common share equivalents included in
the computation represent shares issuable upon assumed exercise of stock
options which have a dilutive effect.
<PAGE>
Note 5. Insurance Subsidiaries
The condensed consolidated financial statements include property and
casualty insurance subsidiaries.
<TABLE>
COMBINED FINANCIAL POSITION
<CAPTION>
March 31 December 31
1994 1993
--------- ----------
Millions of dollars
ASSETS
<S> <C> <C>
Cash and equivalents $ 48.7 $ 41.3
Investments:
Available-for-sale 184.6 182.5
Held-to-maturity 441.8 450.6
--------- ---------
Total investments 626.4 633.1
Notes and accounts receivable<F1> 253.7 266.8
Reinsurance recoverables 662.8 653.5
Property, plant and equipment,
less accumulated depreciation of
$7.3 and $7.1 3.2 3.3
Excess of cost over net assets acquired 0.2 0.2
Other assets 15.8 15.3
--------- ---------
$ 1,610.8 $ 1,613.5
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 26.1 $ 26.0
Accrued employee compensation and benefits 3.2 4.3
Income taxes payable (14.1) (14.3)
Unearned insurance premiums 50.1 53.5
Reserves for insurance
losses and claims <F1> 1,215.7 1,210.7
Other liabilities 55.2 52.4
Halliburton Company equity, adjusted for net
unrealized gains of $3.8 and $9.3 274.6 280.9
--------- ---------
$ 1,610.8 $ 1,613.5
========= =========
<FN>
Includes $92.4 million at March 31, 1994, and $79.0 million at
December 31, 1993, relating to incurred but not reported claims on
associated company business which had no effect on Halliburton Company
equity.
</TABLE>
<PAGE>
Assets of the insurance subsidiaries, with the exception of dividend
payments to the parent company, are not available for general corporate use.
<TABLE>
COMBINED OPERATING RESULTS
<CAPTION>
Three Months
Ended March 31
--------------------
1994 1993
--------- ---------
Millions of dollars
<S> <C> <C>
Revenues:
Direct premiums $ 29.3 $ 41.0
Premiums assumed 43.4 61.6
Premiums ceded (12.7) (33.5)
--------- ---------
Net earned premiums and agency income<F1> 60.0 69.1
Investment income 11.6 12.9
--------- ---------
71.6 82.0
Operating costs and expenses:
Underwriting expenses 104.4 176.5
Reinsurance recoveries (34.3) (93.5)
Investment expenses 0.2 0.2
General and administrative 3.4 1.3
--------- ---------
73.7 84.5
--------- ---------
Operating income (loss) (2.1) (2.5)
Foreign currency losses - (0.1)
--------- ---------
Income (loss) before income taxes (2.1) (2.6)
Benefit for income taxes 1.4 3.1
--------- ---------
Net income (loss) $ (0.7) $ 0.5
========= =========
<FN>
Included in net earned premiums and agency income are premiums for
intercompany insurance coverage and services provided by the Insurance
Services Group to the remainder of Halliburton Company. Such premiums and
charges amounted to $10.5 million and $10.9 million for the three months
ended March 31, 1994 and 1993, respectively.
</TABLE>
<PAGE>
Insurance Services written premiums are as follows:
<TABLE>
<CAPTION>
Three Months
Ended March 31
--------------------
1994 1993
--------- ---------
Millions of dollars
<S> <C> <C>
Direct premiums $ 37.5 $ 44.2
Premiums assumed 43.4 60.6
Premiums ceded (15.7) (32.4)
--------- ---------
Net written premiums and agency income $ 65.2 $ 72.4
========= =========
</TABLE>
Note 6. Long-term debt
The Company redeemed $33.8 million of its 4% notes in the first three months
of 1994 and $19.8 million principal amount of its 9.25% debentures in the
first three months of 1993.
Note 7. Commitments and Contingencies
The Company is involved as a potentially responsible party (PRP) in remedial
activities to clean up various "Superfund" sites under applicable Federal law
which imposes joint and several liability, if the harm is indivisible, on
certain persons without regard to fault, the legality of the original
disposal, or ownership of the site. Although it is very difficult to quantify
the potential impact of compliance with environmental protection laws,
management of the Company believes that any liability of the Company with
respect to all but two of such sites will not have a material adverse effect
on the results of operations of the Company. With respect to a site in
Jasper County, Missouri (Jasper County Superfund Site), and a site in Nitro,
West Virginia (Fike/Artel Chemical Superfund Site), sufficient information has
not been developed to permit management to make such a determination and
management believes the process of determining the nature and extent of
remediation at each site and the total costs thereof will be lengthy.
Brown & Root, Inc. (Brown & Root), a subsidiary of the Company, has been
named as a PRP with respect to the Jasper County Superfund Site by the
Environmental Protection Agency (EPA). The Jasper County Superfund Site
includes areas of mining activity that occurred from the 1800's through the mid
1950's in the Southwestern portion of Missouri. The site contains lead and
zinc mine tailings produced from mining activity. Brown & Root is one of nine
participating PRPs which have agreed to perform a Remedial
Investigation/Feasibility Study (RI/FS) which is not expected to be completed
until March, 1995. Although the entire Jasper County Superfund Site comprises
237 square miles, as listed on the National Priorities List, in the RI/FS scope
of work the EPA has only identified seven areas, or subsites, within this area
that need to be studied and then possibly remediated by the PRPs.
Additionally, the Administrative Order on Consent for the RI/FS only requires
Brown & Root to perform RI/FS work at one of the subsites within the site, the
Neck/Alba subsite, which only comprises 3.95 square miles. Brown & Root's
share of the cost of such a study is not expected to be material. Brown & Root
cannot determine the extent of its liability, if any, for remediation costs on
any reasonably practicable basis.
Halliburton Services Division of the Company (HSD) is one of 32 companies
that have been designated as PRPs at the Fike/Artel Chemical Superfund Site.
Five "Operable Units" have been established by the EPA in connection with
remediation activities for the site. The EPA recently instituted litigation
in the U.S. District Court for the Southern District of West Virginia (United
States v. American Cyanamid Co., Inc. et al.) against all PRPs seeking
recovery of its past response costs in Operable Unit 1. The PRPs are subject
to a Consent Decree with respect to the remediation of Operable Unit 2. In
June 1993, the EPA issued a Unilateral Administrative Order requiring all PRPs
to implement remediation of Operable Unit 3. The PRPs are negotiating an
Administrative Order on Consent that will allow them to perform a site-wide
RI/FS. Past response costs alleged by the EPA for Operable Unit 1,
remediation costs estimates for Operable Units 2 and 3 and cost estimates to
perform the RI/FS range in the aggregate from approximately $45 million to
approximately $72 million. The Company does not believe that HSD's share of
response and remediation costs for Operable Units 1, 2 and 3 and the RI/FS is
likely to be material to the Company's financial statements. There are at
present no reliable estimates of costs to remediate Operable Units 4 and 5,
because the EPA has not yet proposed any remediation methodology. Those costs
may, however, be significantly larger than the estimates thereof for the other
units. Although the liability associated with this site could possibly be
significant to the results of operations of some future reporting period,
management believes, based on current knowledge, that HSD's share of costs at
this site is unlikely to have a material adverse impact on the Company's
consolidated financial condition.
In April 1991, the U.S. Customs Service initiated an investigation of a
subsidiary of the Company, Halliburton Logging Services, Inc. (HLS), and in
October 1991, as a result of its own internal inquiry, HLS provided information
to the U.S. Departments of Commerce and Justice, in each case regarding the
export and re-export of certain oil field tools. The tools were exported by
HLS and its predecessors to certain foreign affiliates and were re-exported by
them to an HLS foreign affiliate in Libya without a validated re-export
license. The shipments involved thermal multigate decay tools used in oil
field logging operations and occurred between December 1987 and June 1989.
During 1992, HLS received subpoenas to produce documents related to the
foregoing matter before a Federal grand jury. The Company believes the U.S.
Government will take the position that such shipments violated Presidential
Executive Orders imposing sanctions against Libya (the Orders) as well as
export regulations of the Department of Commerce (the Regulations).
Halliburton Geophysical Services, Inc. (HGS), a subsidiary acquired by the
Company in 1988, in an unrelated matter, advised the U.S. Departments of
Commerce and Justice in March 1992 that the United Kingdom subsidiary of HGS,
as a small part of its business, shipped to Libya, during the period from March
1987 through April 1991, United States origin spare parts, primarily for
equipment of various types, and performed certain repairs and training on the
equipment. The consignee was a Libyan-based geophysical company in which HGS
owns an indirect, minority interest. Moreover, certain items validly shipped
to this consignee in a third country were subsequently re-exported by it to
Libya without specific re-export authorization. After discovering these
matters, the U.K. subsidiary terminated all activities in support of Libyan
companies and operations. Although no communication has been received from the
U.S. Government regarding this matter, it is possible the U.S. Government will
take the position that such actions violated the Orders and the Regulations.
On July 1, 1993, HLS and HGS, as well as certain other subsidiaries of the
Company, were merged into the Company. In January 1994 the Company disposed of
its geophysical business which included substantially all of the business of
HGS.
The privilege of exporting oil field tools and other products to its
affiliates is important to the Company in order to support its worldwide
logging services. Sanctions against corporations for violations of the Orders
and the Regulations range from civil penalties, including denial of export
privileges and monetary penalties, to significant criminal fines. The Company
has no information regarding, and cannot predict, the nature or type of
sanctions, if any, which the U.S. Government may seek with respect to either of
these matters.
Prior to June 30, 1993, the Company's Highlands Insurance Company subsidiary
(Highlands) wrote property insurance (including homeowners) in Florida through
a reinsurance facility under which it ceded 93.5% of this line of business to
various reinsurance companies retaining 6.5% of the risk of such policies. In
January 1993, Highlands was notified by its reinsurers that reinsurance would
not be available for policies written or renewed after June 30, 1993.
Highlands then withdrew from its property business in Florida in accordance
with Florida's withdrawal statute and rules. In May 1993, Florida enacted a
moratorium law which the Florida Department of Insurance (DOI) has construed as
revoking Highlands' ability to non-renew homeowners policies as a means of
effecting such withdrawal. In November 1993, the Florida legislature extended
the moratorium for three years, allowed insurance companies to reduce the
number of their homeowners policies by 5% per annum and established a
catastrophe fund to reimburse insurance companies in the event of a hurricane
or other catastrophe for 75% of losses in excess of two times annual property
premiums written in the prior year. The protection offered by the catastrophe
fund significantly reduces Highlands exposure to risk of hurricane related
losses. On March 15, 1994, Highlands entered into an Agreement and Stipulation
with the DOI providing for the dismissal, with prejudice, of five proceedings
relating to Highlands' challenge of the validity of the moratorium law and a
DOI order seeking to impose penalties and sanctions for certain notices of
non-renewal issued by Highlands. Accordingly, due to the establishment of the
catastrophe fund and the settlement of the pending litigation and
administrative proceedings relating to the moratorium, this matter will not be
included in future reports.
The Company and its subsidiaries are parties to various other legal
proceedings. Although the ultimate disposition of such proceedings is not
presently determinable, in the opinion of the Company any liability that might
ensue would not be material in relation to the consolidated financial position
of the Company.
Note 8. Acquisitions and Dispositions
In January 1994, the Company sold substantially all of the assets of its
geophysical services and products business to Western Atlas International, Inc.
for $190.0 million in cash and notes subject to certain adjustments. The notes
of $90.0 million were sold for cash in the first quarter of 1994. In addition,
the Company issued $73.8 million in notes to Western Atlas to cover some of the
costs of reducing certain geophysical operations, including the cost of
personnel reductions, leases of geophysical marine vessels and closing of
duplicate facilities. The Company's notes to Western Atlas are payable over
two years at a rate of interest of 4%. An initial installment of $33.8 million
was made in February 1994, and quarterly installments of $5 million will be
made thereafter.
The Company retains ownership of certain assets and liabilities of the
geophysical business including some accounts receivable, real estate
properties, lease obligations, certain employee obligations, and a majority
interest in an international joint venture company. Although the disposition
of the remaining assets is uncertain, the remaining liabilities are expected to
be settled over the next several months.
In March 1993, the Company acquired the assets of Smith International, Inc.'s
Directional Drilling Systems and Services business for 6,857,000 shares of
Halliburton Company Common Stock previously held as treasury stock, valued at
approximately $247 million. The Company recorded $135.8 million as excess of
cost over net assets acquired. The excess of cost over net assets acquired
will be amortized over 40 years.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
RESULTS OF OPERATIONS
Consolidated revenues were $1,376.3 million in the first quarter of 1994
compared to $1,559.5 million in the same quarter of the prior year. Excluding
from the prior year the geophysical business which was divested in January
1994, consolidated revenues decreased by $78.4 million, or by 5%. Energy
Services revenues, excluding geophysical revenues and the revenues of the
directional drilling systems business, which was acquired at the end of the
first quarter of 1993, decreased by 4% from the same quarter of the prior
year. Engineering and Construction Services revenues declined by 10% from the
first quarter of 1993 due primarily to lower energy related construction
revenues in the Middle East, Europe and Africa. The 14% decline in Insurance
Services revenues relates primarily to reduced earned premiums on discontinued
lines of business.
Consolidated operating income was $40.2 million in the first quarter of 1994
compared to $42.8 million in the same quarter of the prior year. Energy
Services operating income decreased by 14% from the same quarter of the prior
year due primarily to lower revenues in the Middle East and decreased margins
in North America. The Company is continuing to adjust personnel levels to
better match the current and foreseeable future market requirements.
Reductions by Energy Services in the number of employees in the second quarter
of 1994 are expected to exceed twelve hundred. It is expected that the
expense of implementing these reductions will exceed the benefits during the
1994 second quarter but net cost reductions for the year will be realized.
Engineering and Construction Services operating income was 14% higher than
the same quarter of the prior year. Engineering and Construction Services
operating income in the first quarter of 1994 includes a $5.0 million
gain on the sale of an environmental remediation subsidiary. Insurance
Services operating loss in the first quarter of 1994 includes $3.5 million of
losses related to the California earthquake.
Interest expense includes the reversals of $2.5 million and $3.3 million
accruals for interest payable on income tax settlements in the first quarter
of 1994 and 1993, respectively.
Foreign currency losses were $3.3 million in the first quarter of 1994
compared to $4.3 million in the same quarter of the prior year. First quarter
1994 losses relate primarily to Brazil and Venezuela, net of $1.3 million in
gains related to the devaluation of the Central African Franc and $2.1 million
of gains realized on cumulative translation adjustments relating to the
geophysical business sold.
Net income in the first quarter of 1994 was $17.8 million, or 16 cents per
share, compared to $18.8 million, or 18 cents per share, in the same quarter
of the prior year.
LIQUIDITY AND CAPITAL RESOURCES
In January 1994, the Company sold substantially all of the assets of its
geophysical services and products business for $190.0 million in cash and
notes subject to certain adjustments. The notes received were sold in the
first quarter of 1994. In addition, the Company issued $73.8 million in notes
to the buyer of geophysical services to cover some of the costs of reducing
certain geophysical operations, including the cost of personnel reductions,
leases and geophysical marine vessels and closing duplicate facilities. The
Company paid the initial installment on the notes of $33.8 million in the
first quarter of 1994. Proceeds from the sale of geophysical services were
used to reduce debt and fund other internal cash requirements.
Cash flows from operating activities increased by $20.0 million in the first
quarter of 1994 over the first quarter of 1993.
Cash flows from investing activities were $157.4 million in the first
quarter of 1994 compared to a use of $70.2 million in the first quarter of
1993. The 1994 increase is due to proceeds from the sale of geophysical
services, the sale of two small subsidiaries, along with reduced outflows for
software development and capital expenditures and the elimination of outflows
related to geophysical speculative data.
Cash flows used for financing activities were $144.4 million in the first
quarter of 1994 compared to $37.1 million in the same quarter of the prior
year. The 1994 increase in outflows is due to the payment of short-term
indebtedness and the $33.8 million installment on the note issued by the
Company to the buyer of geophysical services.
The Company has sufficient ability to borrow additional short-term and
long-term funds for anticipated needs. The Company will redeem the remaining
$23.8 million of its 10.2% debentures in the second quarter of 1994.
ENVIRONMENTAL MATTERS
The Company is involved as a potentially responsible party in remedial
activities to clean up various "Superfund" sites under applicable Federal law
which imposes joint and several liability, if the harm is indivisible, on
certain persons without regard to fault, the legality of the original
disposal, or ownership of the site. Although it is very difficult to quantify
the potential impact of compliance with environmental protection laws,
management of the Company believes that any liability of the Company with
respect to all but two of such sites will not have a material adverse effect
on the results of operations of the Company. See Note 7 to the financial
statements for a description of these two sites and a further discussion of
the possible impact on the results of operations and the financial condition
of the Company.
EXPORT MATTERS
See Note 7 to the financial statements concerning certain export and export
related matters, including a United States government investigation of exports
and re-exports by a former subsidiary of the Company.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
3. Exhibits
11. Statement regarding computation of per share earnings.
(b) Reports on Form 8-K.
Current Report on Form 8-K dated January 11, 1994, relating
to completion of the sale of its geophysical business to Western Atlas,
International, Inc.
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 thereunto duly authorized.
HALLIBURTON COMPANY
(Registrant)
Date May 11, 1994 By (Thomas H. Cruikshank)
Thomas H. Cruikshank
Chairman of the Board and
Chief Executive Officer
Date May 11, 1994 By (Jerry H. Blurton)
Jerry H. Blurton
Vice President-Finance
Principal Financial Officer
Date May 11, 1994 By (Scott R. Willis)
Scott R. Willis
Controller
Principal Accounting Officer
Index to Exhibits
11. Statement regarding computation of earnings per share
HALLIBURTON COMPANY
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
The calculation below for earnings per share of the $2.50 par value Common
Stock of the Company on a primary and fully diluted basis for the three
months ended March 31, 1994 and 1993, is submitted in accordance with
Regulation S-K item 601 (b) (11).
<TABLE>
<CAPTION>
Three Months
Ended March 31
--------------------
1994 1993
--------- ---------
Millions of dollars
except per share data
<S> <C> <C>
Primary:
Net income $ 17.8 $ 18.8
Average number of common and common
share equivalents outstanding 114.2 107.4
Primary net income per share $ 0.16 $ 0.18
Fully Diluted:
Net income $ 17.8 $ 18.8
Add after-tax interest
expense applicable to
Zero Coupon Convertible
Subordinated Debentures
due 2006 3.1 2.8
--------- ---------
Adjusted net income $ 20.9 $ 21.6
Adjusted average number of
shares outstanding 119.1 112.4
Fully diluted earnings per share $ 0.18 $ 0.19
<FN>
The foregoing computations do not reflect any significant potentially
dilutive effect the Company's Preferred Stock Purchase Rights Plan could
have in the event such Rights become exercisable and any shares of either
Series A Junior Participating Preferred Stock or Common Stock of the Company
are issued upon the exercise of such Rights.
</TABLE>
