Halliburton Company (HAL) filed Quarterly Report for the period ended 2009-09-30.
Halliburton Company provides a variety of services equipment maintenance and engineering and construction to energy industrial and governmental customers. The company is made up of the following three business segments: Energy Services Group Engineering and Construction Group and Dresser Equipment Group. Halliburton Company has a market cap of $25.83 billion; its shares were traded at around $31.41 with a P/E ratio of 12.3 and P/S ratio of 1.4. The dividend yield of Halliburton Company stocks is 1.3%. Halliburton Company had an annual average earning growth of 58.3% over the past 5 years.
Highlight of Business Operations:
During the first nine months of 2009, we produced revenue of $11 billion and operating income of $1.6 billion, reflecting an operating margin of 14%. Revenue decreased $2.4 billion or 18% from the first nine months of 2008, while operating income decreased $1.3 billion or 45% from the first nine months of 2008. These decreases were caused by a decline in our customers capital spending as a result of the global recession and its impact on commodity prices, which resulted in severe margin contraction.
In 2009, the global financial markets continue to be volatile. While this has created additional risks for our business, we believe we have invested our cash balances conservatively and secured sufficient financing to help mitigate any near- and mid-term negative impact on our operations. To provide additional liquidity and flexibility in the current environment, we issued $2 billion in senior notes during the first quarter of 2009 and invested $1.5 billion in United States Treasury securities during the second quarter of 2009. For additional information, see “Liquidity and Capital Resources,” “Risk Factors,” “Business Environment and Results of Operations,” and Notes 5 and 9 to the condensed consolidated financial statements.
In March 2009, we issued senior notes due 2039 totaling $1 billion and senior notes due 2019 totaling $1 billion.
Further available sources of cash. We have an unsecured $1.2 billion, five-year revolving credit facility to provide commercial paper support, general working capital, and credit for other corporate purposes. There were no cash drawings under the facility as of September 30, 2009. In addition, we have $1.5 billion in United States Treasury securities that will be maturing at various dates through September 2010.
Letters of credit. In the normal course of business, we have agreements with financial institutions under which approximately $2 billion of letters of credit, bank guarantees, or surety bonds were outstanding as of September 30, 2009, including $394 million of surety bonds related to Venezuela. In addition, $554 million of the total $2 billion relates to KBR letters of credit, bank guarantees, or surety bonds that are being guaranteed by us in favor of KBR s customers and lenders. KBR has agreed to compensate us for these guarantees and indemnify us if we are required to perform under any of these guarantees. Some of the outstanding letters of credit have triggering events that would entitle a bank to require cash collateralization.
Financial position in current market. Our $1.7 billion of cash and equivalents and $1.5 billion in investments in marketable securities as of September 30, 2009 provide sufficient liquidity and flexibility, given the current market environment. Our debt maturities extend over a long period of time. We currently have a total of $1.2 billion of committed bank credit under our revolving credit facility to support our operations and any commercial paper we may issue in the future. We have no financial covenants or material adverse change provisions in our bank agreements. Currently, there are no borrowings under the revolving credit facility.
HAL is in the portfolios of Richard Snow of Snow Capital Management, L.P., NWQ Managers of NWQ Investment Management Co, Sarah Ketterer of CAUSEWAY CAPITAL MANAGEMENT LLC, John Keeley of Keeley Fund Management, Dodge & Cox.
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