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, 1995
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 3, 1995 - 114,197,046
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
HALLIBURTON COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
March 31 December 31
1995 1994
-------- --------
Millions of dollars and shares
ASSETS
<S> <C> <C>
Cash and equivalents $ 320.2 $ 428.1
Investments:
Available-for-sale 245.6 219.0
Held-to-maturity 429.8 435.8
--------- ---------
Total investments 675.4 654.8
Receivables:
Notes and accounts receivable 1,206.3 1,273.1
Unbilled work on uncompleted contracts 234.0 173.4
Refundable federal income taxes 13.4 13.4
--------- ---------
Total receivables 1,453.7 1,459.9
Inventories 283.6 268.9
Reinsurance recoverables 555.8 671.1
Property, plant and equipment,
less accumulated depreciation
of $2,298.8 and $2,341.4 1,054.4 1,076.8
Equity in and advances to related companies 105.7 94.6
Excess of cost over net assets acquired 212.0 213.4
Deferred income taxes 118.2 120.5
Assets held for sale 42.5 26.3
Other assets 282.6 253.9
--------- ---------
Total assets $ 5,104.1 $ 5,268.3
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 302.5 $ 303.5
Accrued employee compensation and benefits 341.3 406.3
Advance billings on uncompleted contracts 149.0 163.3
Income taxes payable 33.5 25.8
Short-term notes payable 21.2 30.7
Unearned insurance premiums 52.5 51.2
Reserves for insurance losses and claims 1,027.9 1,126.4
Long-term debt 643.6 643.1
Other liabilities 569.6 570.6
Minority interest in consolidated subsidiaries 0.7 5.2
--------- ---------
Total liabilities 3,141.8 3,326.1
--------- ---------
Commitments and contingencies
Shareholders' equity:
Common stock, par value $2.50 per share -
authorized 200.0 shares,
issued 119.1 shares 297.7 297.7
Paid-in capital in excess of par value 200.1 201.7
Cumulative translation adjustment (21.7) (23.1)
Net unrealized losses on investments (1.6) (7.6)
Retained earnings 1,647.9 1,637.3
--------- ---------
2,122.4 2,106.0
Less 4.9 and 5.0 shares of
treasury stock, at cost 160.1 163.8
--------- ---------
Total shareholders' equity 1,962.3 1,942.2
--------- ---------
Total liabilities and shareholders' equity $ 5,104.1 $ 5,268.3
========= =========
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
HALLIBURTON COMPANY
CONDENSED CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
Three Months
Ended March 31
-------------------
1995 1994
-------- --------
Millions of dollars except
per share data
<S> <C> <C>
Revenues $ 1,322.1 $ 1,376.3
Operating costs and expenses:
Cost of revenues 1,218.7 1,285.2
General and administrative 41.1 50.9
--------- ---------
Total operating costs
and expenses 1,259.8 1,336.1
--------- ---------
Operating income 62.3 40.2
Interest expense (12.8) (10.0)
Interest income 8.6 2.8
Foreign currency
gains (losses) 5.0 (3.3)
Other nonoperating
income, net 0.1 0.5
--------- ---------
Income before income
taxes and minority interest 63.2 30.2
Provision for
income taxes (24.0) (12.1)
Minority interest in net income
(loss) of subsidiaries (0.1) (0.3)
--------- ---------
Net income $ 39.1 $ 17.8
========= ========
Average number of common
and common share
equivalents outstanding 114.3 114.2
Income per share $ 0.34 $ 0.16
Cash dividends
paid per share 0.25 0.25
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
HALLIBURTON COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Three Months
Ended March 31
-------------------
1995 1994
-------- --------
Millions of dollars
<S> <C> <C>
Cash flows from operating activities:
Net income $ 39.1 $ 17.8
Adjustments to reconcile net income
to net cash from operating activities:
Depreciation and amortization 59.4 66.2
Provision for deferred income taxes 6.0 34.1
Other non-cash items (20.7) (1.9)
Other changes, net of non-cash items:
Receivables 7.3 14.1
Inventories (14.4) (11.9)
Insurance losses and claims net of
reinsurance recoverables 16.9 (17.7)
Accounts payable and other (108.7) (78.5)
--------- ---------
Total cash flows from operating activities (15.1) 22.2
--------- ---------
Cash flows from investing activities:
Capital expenditures (42.1) (53.8)
Sales of property, plant and equipment 12.3 15.8
Sales (purchases) of subsidiary companies (5.9) 201.4
Sales or maturities of
available-for-sale investments 3.7 18.6
Payments for available-for-sale investments (22.1) (27.1)
Calls or maturities of held-to-maturity investments 11.4 10.1
Payments for held-to-maturity investments (4.8) (2.5)
Other investing activities (1.8) (5.1)
--------- ---------
Total cash flows from investing activities (49.3) 157.4
--------- ---------
Cash flows from financing activities:
Payments on long-term borrowings (5.1) (34.5)
Borrowings (repayments) of short-term debt (10.8) (81.4)
Payments of dividends to shareholders (28.5) (28.5)
Other financing activities 0.3 -
--------- ---------
Total cash flows from financing activities (44.1) (144.4)
--------- ---------
Effect of exchange rate changes on cash 0.6 (1.7)
--------- ---------
Increase (decrease) in cash and equivalents (107.9) 33.5
Cash and equivalents at beginning of year 428.1 48.8
--------- ---------
Cash and equivalents at end of period $ 320.2 $ 82.3
========= ========
Cash payments (refunds) during the period for:
Interest $ 11.5 $ 11.0
Income taxes 6.2 (11.7)
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, 1995, and the results of
its operations and its cash flows for the three months ended March 31, 1995 and
1994. The results of operations for the three months ended March 31, 1995 and
1994 may not be indicative of results for the full year. Certain prior year
amounts have been reclassified to conform with the current year presentation.
Note 2. Inventories
Consolidated inventories consisted of the following:
<TABLE>
<CAPTION>
March 31 December 31
1995 1994
------ ------
Millions of dollars
<S> <C> <C>
Sales items $ 104.8 $ 97.2
Supplies and parts 130.4 128.8
Work in process 28.6 23.9
Raw materials 19.8 19.0
------- -------
Total $ 283.6 $ 268.9
======= =======
</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 $21.8 million and $21.9 million higher than reported at
March 31, 1995, and December 31, 1994, respectively.
Note 3. Business Segment Information
Revenues and operating income by business segment were the following for the
three months ended March 31, 1995 and 1994:
<TABLE>
<CAPTION>
Three Months
Ended March 31
1995 1994
-------- --------
Millions of dollars
<S> <C> <C>
Revenues
Energy services $ 569.0 $ 599.0
Engineering and
construction services 704.9 716.2
Insurance services<F1> 48.2 61.1
--------- ---------
Total revenues $1,322.1 $1,376.3
========= =========
Operating income
Energy services $ 52.4 $ 33.5
Engineering and
construction services 15.8 14.5
Insurance services 0.4 (2.1)
General corporate expenses (6.3) (5.7)
--------- ---------
Total operating
income $ 62.3 $ 40.2
========= =========
<FN>
<F1>Excludes insurance revenues received from other segments of the Company.
</FN>
</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. Related Companies
The Company conducts some of its operations through various joint venture and
other partnership forms which are accounted for using the equity method.
European Marine Contractors, Limited, (EMC) which is 50% owned by the Company
and part of Engineering and Construction Services, specializes in engineering,
procurement and construction of marine pipelines. Summarized operating results
for 100% of the operations of EMC are as follows:
<TABLE>
<CAPTION>
Three Months
Ended March 31
--------------------
1995 1994
-------- --------
Millions of dollars
<S> <C> <C>
Revenues $ $58.9 $ $50.1
========= =========
Operating income $15.7 $15.1
========= =========
Net income $10.0 $9.3
========= =========
</TABLE>
Note 6. Insurance Subsidiaries
The condensed consolidated financial statements include the statements of
property and casualty subsidiaries as follows:
<TABLE>
COMBINED FINANCIAL POSITION
<CAPTION>
March 31 December 31
1995 1994
-------- --------
Millions of dollars
ASSETS
<S> <C> <C>
Cash and equivalents $ 34.2 $ 52.8
Investments:
Available-for-sale 245.6 219.0
Held-to-maturity 401.6 411.7
--------- ---------
Total investments 647.2 630.7
Notes and accounts receivable* 185.9 213.8
Reinsurance recoverables 555.8 671.1
Property, plant and equipment, at cost
less accumulated depreciation of
$6.7 and $6.5 2.0 2.0
Excess of cost over net assets acquired 0.1 0.1
Other assets 34.8 22.5
--------- ---------
$ 1,460.0 $ 1,593.0
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 48.5 $ 96.7
Income taxes payable (21.5) (20.9)
Unearned insurance premiums 52.5 51.2
Reserves for insurance
losses and claims* 1,103.3 1,197.2
Halliburton Company equity, adjusted for net
unrealized losses of $1.6 and $7.6 277.2 268.8
--------- ---------
$ 1,460.0 $ 1,593.0
========= =========
<FN>
*Includes $75.4 million at March 31, 1995, and $70.8 million at December 31,
1994, relating to incurred but not reported claims on associated company
business which had no effect on Halliburton Company equity.
</FN>
</TABLE>
Assets of the insurance subsidiaries, with the exception of dividend payments to
the parent company, are not available for general corporate use.
<PAGE>
<TABLE>
<CAPTION>
Three Months
Ended March 31
--------------------
1995 1994
-------- --------
Millions of dollars
<S> <C> <C>
Revenues:
Direct premiums $ 45.8 $ 29.3
Premiums assumed 34.9 43.4
Premiums ceded (39.5) (12.7)
--------- ---------
Net earned premiums
and agency income* 41.2 60.0
Investment income 12.5 11.6
--------- ---------
53.7 71.6
Operating costs and expenses:
Underwriting expenses 86.9 104.4
Reinsurance recoveries (38.4) (34.3)
Investment expenses 0.6 0.2
General and administrative 4.2 3.4
--------- ---------
53.3 73.7
--------- ---------
Operating income (loss) 0.4 (2.1)
Foreign currency
gains (losses) 0.3 -
Nonoperating expense, net (0.3) -
--------- ---------
Income (loss) before
income taxes 0.4 (2.1)
Benefit for income taxes 2.1 1.4
--------- ---------
Net income (loss) $ 2.5 $ (0.7)
========= =========
<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 $5.5 million and $10.5 million for the three months ended
March 31, 1995 and 1994, respectively.
</FN>
</TABLE>
Insurance Services written premiums are as follows:
<TABLE>
<CAPTION>
Three Months
Ended March 31
-------------------
1995 1994
-------- --------
Millions of dollars
<S> <C> <C>
Direct premiums $ 48.7 $ 37.5
Premiums assumed 35.4 43.4
Premiums ceded (38.8) (15.7)
--------- ---------
Net written premiums
and agency income $ 45.3 $ 65.2
========= =========
</TABLE>
Note 7. Long-term debt
The Company redeemed $5.0 million and $33.8 million of its 4% notes in the
first three months of 1995 and 1994, respectively.
<PAGE>
Note 8. 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 the second quarter of 1996. 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.
The Company is one of 32 companies that have been designated as PRPs at the
Fike/Artel Chemical Superfund Site. Six "Operable Units" have been established
by the EPA in connection with remediation activities for the site. The EPA
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 have entered into an
Administrative Order on Consent that will allow them to perform a site-wide
RI/FS (Operable Unit 4). The Company's share of past response costs alleged by
the EPA for Operable Unit 1, remediation cost estimates for Operable Units 2 and
3, and cost estimates to perform the RI/FS (Operable Unit 4) range in the
aggregate from approximately $1.7 million to approximately $2.3 million. There
are at present no reliable estimates of costs to remediate Operable Units 5 and
6, 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 its 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
owned 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. The Company believes 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. Although the Company
<PAGE>
cannot predict the exact nature of the sanctions the U.S. Government may seek
with respect to these matters, the Company believes the U.S. Government will
seek to impose civil penalties or criminal fines or both. In the opinion of the
Company the amount of such penalties and fines would not be material to the
results of operations or the consolidated financial position of the Company.
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 9. Acquisitions and Dispositions
The Company sold its natural gas compression business unit in November 1994
for $205 million in cash. The sale resulted in a pretax gain of $102 million, or
56 cents per share after tax in 1994. The business unit sold owns and operates a
large natural gas compressor rental fleet in the United States and Canada. The
compressors are used to assist in the production, transportation, and storage of
natural gas.
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 have been 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 an international company.
Although the disposition of the remaining assets is uncertain, the remaining
liabilities are expected to be settled over the next several months.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
BUSINESS ENVIRONMENT
The Company (often through foreign subsidiaries) operates in over 100
countries, including several with respect to which the United States government
has imposed varying degrees of restrictions on trade and commerce. These
countries include Iran and Libya. The Company believes the recently announced
embargo on U.S. trade with Iran will not have a material effect on current
results of operations or financial condition of the Company, although it will
prevent the Company from competing for future business in Iran. If additional
restrictions were to be established for these or other countries, such
restrictions might impair the ability of the Company to obtain the benefit of
its assets in such countries and the ability to collect amounts owed to the
Company by their government and private entities. The Company cannot predict
whether more stringent restrictions will be adopted or, if adopted, the impact
they might have on its results of operations.
RESULTS OF OPERATIONS
Revenues
Consolidated revenues decreased 4% to $1,322.1 million in the first quarter of
1995 compared to $1,376.3 million in the same quarter of the prior year. Energy
Services revenues decreased by 5% as the worldwide rotary rig count declined by
3% from the same quarter of the prior year. Most of the decrease occurred in
North America. Approximately 55% of the decrease is due to the sale of the
Company's natural gas compression and self elevating workover platform
operations in the fourth quarter of 1994. The balance of the decrease is due to
reduced activity levels associated with lower natural gas prices in the United
States. The decrease was partially offset by increased activity levels in Latin
America. Engineering and Construction Services revenues declined by 2% from the
first quarter of 1994 due primarily to lower energy related construction
revenues. The 21% decline in Insurance Services revenues relates primarily to
reduced earned premiums on discontinued lines of business and lower losses on
retrospective workers' compensation coverages.
Operating income
Consolidated operating income increased by 55% to $62.3 million in the first
quarter of 1995 compared to $40.2 million in the same quarter of the prior year.
Energy Services operating income increased by 56% over the same quarter of the
prior year due primarily to a 20% reduction in indirect costs. Higher activities
in Latin America also contributed to the increase. These increases in Energy
Services operating income were partially offset by lower activities in North
America, Asia Pacific and the Middle East. Engineering and Construction Services
operating income was slightly higher than the same quarter of the prior year.
Insurance Services operating income was higher in 1995 due to lower catastrophic
losses and lower losses from discontinued operations.
Nonoperating items
Interest expense increased $2.8 million due primarily to the benefit in the
first quarter of 1994 of a reversal of a $2.5 million accrual for interest
payable on income tax settlements.
Interest income increased in 1995 due to higher levels of invested cash at
increased interest rates.
Foreign currency gains were $5.0 million in the first quarter of 1995 compared
to a loss of $3.3 million in the same quarter of the prior year. Excluding the
$7.7 million realized gain in Nigeria from the devaluation of the Naira, the net
losses of $2.7 million are due primarily to losses in the Mexican Peso. First
quarter 1994 losses relate primarily to Brazil and Venezuela.
Net income
Net income in the first quarter of 1995 was $39.1 million, or 34 cents per
share, compared to $17.8 million, or 16 cents per share, in the same quarter of
the prior year.
LIQUIDITY AND CAPITAL RESOURCES
The Company ended the first quarter of 1995 with cash and equivalents of
$320.2 million, a decrease of $107.9 million from the end of 1994. Excluding
cash and equivalents of Insurance Services, which are restricted from general
corporate purposes unless paid to the parent as a dividend, cash and equivalents
at the end of the first quarter of 1995 were $286.0 million, a decrease of $89.3
million from the end of 1994. The decrease in cash and equivalents is due
primarily to operating activities.
<PAGE>
Operating activities
Cash flows used in operating activities in the first quarter of 1995 were
$15.1 million, down from cash flows provided of $22.2 million in the same period
of the prior year. The decrease in cash flows from operating activities is
primarily related to higher contributions to profit sharing plans and increased
advances to Engineering and Construction joint ventures, partially offset by
improved profitability.
Investing activities
Cash flows used in investing activities in the first quarter of 1995 were
$49.3 million, compared to cash flows provided of $157.4 million in the same
period last year. The first quarter of 1994 included the proceeds from the sale
of the geophysical services business and two small subsidiaries. In addition,
first quarter 1995 capital expenditures are 22% lower than the same period of
the prior year.
Financing activities
Cash flows used for financing activities were $44.1 million in the first
quarter of 1995 compared to $144.4 million in the same quarter last year. The
decrease in outflows is due to lower repayments of short-term indebtedness and
the $33.8 million installment in the first quarter of 1994 on the note issued by
the Company to the buyer of the geophysical services operations.
The Company has the ability to borrow additional short-term and long-term
funds if necessary.
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 8 to the financial statements for additional
information on these two sites.
EXPORT MATTERS
See Note 8 to the financial statements concerning certain actions of the
United States Government concerning exports by subsidiaries of the Company.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
3. Exhibits:
11. Statement regarding computation of per share earnings.
27. Financial data schedule for the Registrant (filed electronically).
(b) Reports on Form 8-K:
Current Report on Form 8-K dated January 9, 1995 reporting on Item 5. Other
Events, relating to a press release announcing that the Company entered into
contracts to outsource substantially all of its information technology
requirements.
Current Report on Form 8-K dated January 12, 1995 reporting on Item 5. Other
Events, relating to a press release announcing the Company's completion of
the sale of the assets of its industrial services business unit.
Current Report on Form 8-K dated February 2, 1995 reporting on Item 5. Other
Events, relating to a press release announcing a business unit of Brown &
Root, Inc., recently won a multi-million dollar contract to construct a
polypropylene plant.
Current Report on Form 8-K dated February 2, 1995 reporting on Item 5. Other
Events, relating to a press release announcing the Company's earnings for the
quarter and the year ended December 31, 1994.
Current Report on Form 8-K dated February 16, 1995 reporting on Item 5. Other
Events, relating to a press release announcing the formation of a Scottish
joint venture.
Current Report on Form 8-K dated February 17, 1995 reporting on Item 5. Other
Events, relating to a press release announcing the declaration of a first
quarter dividend.
Current Report on Form 8-K dated February 27, 1995 reporting on Item 5. Other
Events, relating to a press release announcing a joint venture agreement.
<PAGE>
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 5, 1995 By /s/ Thomas H. Cruikshank
Thomas H. Cruikshank
Chairman of the Board and
Chief Executive Officer
Date May 5, 1995 By /s/ Jerry H. Blurton
Jerry H. Blurton
Vice President-Finance
Principal Financial Officer
Date May 5, 1995 By /s/ Scott R. Willis
Scott R. Willis
Controller
Principal Accounting Officer
<PAGE>
Index to Exhibits
Page No.
11. Statement regarding computation of earnings per share 14
27. Financial data schedule (filed electronically) -
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, 1995 and 1994, is submitted in accordance with Regulation S-K
item 601 (b) (11).
<TABLE>
<CAPTION>
Three Months
Ended March 31
-------- --------
1995 1994
-------- --------
Millions of dollars except
per share data
<S> <C> <C>
Primary:
Net income $ 39.1 $ 17.8
Average number of common
and common share
equivalents outstanding 114.3 114.2
Primary net
income per share $ 0.34 $ 0.16
Fully Diluted:
Net income $ 39.1 $ 17.8
Add after-tax interest
expense applicable to
Zero Coupon Convertible
Subordinated Debentures
due 2006 3.4 3.1
--------- ---------
Adjusted net income $ 42.5 $ 20.9
Adjusted average number of
shares outstanding 119.3 119.1
Fully diluted earnings
per share $ 0.36 $ 0.18
<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.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE HALLIBURTON COMPANY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 1995, AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 320
<SECURITIES> 675
<RECEIVABLES> 1,454
<ALLOWANCES> 0
<INVENTORY> 284
<CURRENT-ASSETS> 0
<PP&E> 3,353
<DEPRECIATION> 2,341
<TOTAL-ASSETS> 5,104
<CURRENT-LIABILITIES> 0
<BONDS> 644
<COMMON> 298
0
0
<OTHER-SE> 1,665
<TOTAL-LIABILITY-AND-EQUITY> 5,104
<SALES> 0
<TOTAL-REVENUES> 1,322
<CGS> 0
<TOTAL-COSTS> 1,219
<OTHER-EXPENSES> 41
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13
<INCOME-PRETAX> 63
<INCOME-TAX> 24
<INCOME-CONTINUING> 39
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39
<EPS-PRIMARY> .34
<EPS-DILUTED> 0
<FN>
Receivables are reported net of applicable allowances.
</FN>
</TABLE>
