Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 17, 2020 | |
Document And Enity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2020 | |
Entity File Number | 001-03492 | |
Entity Registrant Name | HALLIBURTON COMPANY | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 75-2677995 | |
Entity Address, Address Line One | 3000 North Sam Houston Parkway East | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77032 | |
City Area Code | 281 | |
Local Phone Number | 871-2699 | |
Title of 12(b) Security | Common Stock, par value $2.50 per share | |
Trading Symbol | HAL | |
Security Exchange Name | NYSE | |
Entity Central Index Key | 0000045012 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 877,277,670 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | |||
Revenue: | ||||
Revenue | $ 5,037 | $ 5,737 | ||
Operating costs and expenses: | ||||
Impairments and other charges | [1] | 1,073 | 61 | |
General and administrative | 54 | 59 | ||
Total operating costs and expenses | 5,608 | 5,372 | ||
Operating income | (571) | 365 | ||
Interest expense, net of interest income | (134) | (143) | ||
Interest income | 10 | 8 | ||
Loss on early extinguishment of debt | (168) | [2] | 0 | |
Other, net | (23) | (30) | ||
Income (loss) from continuing operations before income taxes | (896) | 192 | ||
Income tax (provision) benefit | (119) | (40) | ||
Net income (loss) | (1,015) | 152 | ||
Net (income) loss attributable to noncontrolling interest | (2) | 0 | ||
Net income (loss) attributable to company | $ (1,017) | $ 152 | ||
Basic and diluted net income per share | $ (1.16) | $ 0.17 | ||
Weighted Average Number of Shares Outstanding, Basic and Diluted | 878 | 873 | ||
Services [Member] | ||||
Revenue: | ||||
Revenue | $ 3,684 | $ 4,352 | ||
Operating costs and expenses: | ||||
Cost of services and sales | 3,393 | 4,156 | ||
Product sales [Member] | ||||
Revenue: | ||||
Revenue | 1,353 | 1,385 | ||
Operating costs and expenses: | ||||
Cost of services and sales | $ 1,088 | $ 1,096 | ||
[1] | For the three months ended March 31, 2020, amount includes approximately $780 million attributable to Completion and Production, $277 million attributable to Drilling and Evaluation, and $16 million attributable to Corporate and other. See Note 2 for further discussion on these impairments and other charges. | |||
[2] | During the three months ended March 31, 2020, we recognized a $168 million loss on extinguishment of debt related to the early repurchase of $1.5 billion aggregate principal amount of senior notes. See Note 6 for further discussion on this charge. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net income (loss) | $ (1,015) | $ 152 |
Other comprehensive income (loss), net of income taxes | 11 | 1 |
Comprehensive income (loss) | (1,004) | 153 |
Comprehensive (income) loss attributable to noncontrolling interest | (2) | 0 |
Comprehensive income (loss) attributable to company shareholders | $ (1,006) | $ 153 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) shares in Millions, $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and equivalents | $ 2,268 | |
Cash and equivalents | $ 1,385 | |
Receivables net of allowances for bad debts | 4,850 | 4,577 |
Allowance for bad debts | 769 | 776 |
Inventories | 3,220 | 3,139 |
Other current assets | 1,200 | 1,228 |
Total current assets | 10,655 | 11,212 |
Property, plant, and equipment, net of accumulated depreciation | 6,223 | 7,310 |
Accumulated depreciation | 12,978 | 12,630 |
Goodwill | 2,812 | 2,812 |
Deferred income taxes | 1,595 | 1,683 |
Operating lease right-of-use assets | 897 | 931 |
Other assets | 1,440 | 1,429 |
Total assets | 23,622 | 25,377 |
Current liabilities: | ||
Accounts payable | 2,640 | 2,432 |
Accrued employee compensation and benefits | 547 | 604 |
Current portion of operating lease liabilities | 222 | 208 |
Current maturities of long-term debt | 193 | 11 |
Other current liabilities | 1,451 | 1,623 |
Total current liabilities | 5,053 | 4,878 |
Long-term debt | 9,633 | 10,316 |
Operating lease liabilities | 803 | 825 |
Employee compensation and benefits | 477 | 525 |
Other liabilities | 813 | 808 |
Total liabilities | 16,779 | 17,352 |
Shareholders' equity: | ||
Common stock, par value $2.50 per share | $ 2,669 | $ 2,669 |
Common stock, par value (in dollars per share) | $ 2.50 | $ 2.50 |
Common stock, shares authorized (in shares) | 2,000 | 2,000 |
Common stock, shares issued (in shares) | 1,068 | 1,068 |
Paid-in capital in excess of par value | $ 110 | $ 143 |
Accumulated other comprehensive loss | (351) | (362) |
Retained earnings | 10,814 | 11,989 |
Treasury stock, at cost | $ (6,412) | $ (6,427) |
Treasury shares (in shares) | 194 | 190 |
Company shareholders' equity | $ 6,830 | $ 8,012 |
Noncontrolling interest in consolidated subsidiaries | 13 | 13 |
Total shareholders' equity | 6,843 | 8,025 |
Total liabilities and shareholders' equity | $ 23,622 | $ 25,377 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (1,015) | $ 152 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | ||
Depreciation, depletion and amortization | 348 | 416 |
Impairments and other charges | 1,073 | 61 |
Changes in assets and liabilities: | ||
Receivables | (371) | (339) |
Accounts payable | 250 | 60 |
Inventories | (79) | (236) |
Other operating activities | 19 | (158) |
Total cash flows provided by operating activities | 225 | (44) |
Cash flows from investing activities: | ||
Capital expenditures | (213) | (437) |
Proceeds from sales of property, plant and equipment | 69 | 43 |
Other investing activities | (21) | (17) |
Total cash flows used in investing activities | (165) | (411) |
Cash flows from financing activities: | ||
Payments on long-term borrowings | (1,651) | (8) |
Proceeds from issuance of long-term debt, net | 994 | 0 |
Dividends to shareholders | (158) | (157) |
Stock repurchase program | (100) | 0 |
Other financing activities | 12 | 10 |
Total cash flows used in financing activities | (903) | (155) |
Effect of exchange rate changes on cash | (40) | (18) |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect, Total | (883) | (628) |
Cash and equivalents at beginning of period | 2,268 | 2,008 |
Cash and equivalents at end of period | 1,385 | 1,380 |
Cash payments during the period for: | ||
Interest | 144 | 128 |
Income taxes | $ 116 | $ 81 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by generally accepted accounting principles for annual financial statements and should be read together with our 2019 Annual Report on Form 10-K. Our accounting policies are in accordance with United States generally accepted accounting principles. The preparation of financial statements in conformity with these accounting principles requires us to make estimates and assumptions that affect: • the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements; and • the reported amounts of revenue and expenses during the reporting period. Ultimate results could differ from our estimates. In our opinion, the condensed consolidated financial statements included herein contain all adjustments necessary to present fairly our financial position as of March 31, 2020 and the results of our operations and cash flows for the three months ended March 31, 2020 and 2019. Such adjustments are of a normal recurring nature. In addition, certain reclassifications of prior period balances have been made to conform to the current period presentation. The results of our operations for the three months ended March 31, 2020 may not be indicative of results for the full year. |
Impairments and Other Charges
Impairments and Other Charges | 3 Months Ended |
Mar. 31, 2020 | |
Impairments and Other Charges [Abstract] | |
Impairments and Other Charges | Impairments and Other Charges The oil and gas industry experienced an unprecedented disruption during the first quarter of 2020 as a result of a combination of factors, including the substantial decline in global demand for oil caused by the COVID-19 pandemic and subsequent mitigation efforts, and disagreements between the Organization of Petroleum Exporting Countries and other oil producing nations (OPEC+) in February 2020 regarding limits on production of oil. These events created a substantial surplus in the supply of oil. WTI oil spot prices decreased from a high of $63 per barrel in early January to a low of $14 per barrel in late March, a level which had not been experienced since March 1999, with physical markets showing signs of distress as spot prices were negatively impacted by the lack of available storage capacity. Activity declined in the face of depressed crude oil pricing, with the average U.S. land rig count dropping 25% in the first quarter of 2020 as compared to the first quarter of 2019. The global rig count has continued to decline into April 2020. These market conditions have significantly impacted our business and our outlook globally, with a more severe impact to our North America business in the near-term. Customers continue to revise their capital budgets in order to adjust spending levels in response to the lower commodity prices, and we have experienced significant activity reductions and pricing pressure for our products and services, which we expect to continue. In line with these rapidly changing market conditions, our market capitalization also deteriorated during the first quarter of 2020. We determined these recent events constituted a triggering event that required us to review the recoverability of our long-lived assets and perform an interim goodwill impairment assessment as of March 31, 2020. We determined the fair value of our long-lived assets based on a discounted cash flow analysis, and we determined the fair value for each reporting unit in our goodwill impairment assessment using both a discounted cash flow analysis and a multiples-based market approach for comparable companies. Given the current volatile market environment, we utilized third-party valuation advisors to assist us with these valuations. These analyses included significant judgment, including management’s short-term and long-term forecast of operating performance, discount rates based on our weighted average cost of capital, revenue growth rates, profitability margins, capital expenditures, the timing of future cash flows based on an eventual recovery of the oil and gas industry, and in the case of long-lived assets, the remaining useful life and service potential of the asset. These impairment assessments incorporate inherent uncertainties, including projected commodity pricing, supply and demand for our services and future market conditions, which are difficult to predict in volatile economic environments and could result in impairment charges in future periods if actual results materially differ from the estimated assumptions utilized in our forecasts. Based upon our impairment assessments, we determined the carrying amount of some of our long-lived assets exceeded their respective fair values. Therefore, we recorded impairments and other charges of approximately $1.1 billion during the three months ended March 31, 2020 relating to these assets. As a result of our goodwill impairment assessment, we determined that the fair value of each reporting unit exceeded its net book value and, therefore, no goodwill impairments were deemed necessary. We will continue to evaluate these reporting units for potential goodwill impairment in the second quarter of 2020 as market conditions evolve. The following table presents various pre-tax charges we recorded during the three months ended March 31, 2020 and 2019, which are reflected within "Impairments and other charges" on our condensed consolidated statements of operations. Three Months Ended Millions of dollars 2020 2019 Long-lived asset impairments $ 1,016 $ 42 Severance costs 32 19 Other 25 — Total impairments and other charges $ 1,073 $ 61 Of the $1.1 billion of impairments and other charges recorded during the three months ended March 31, 2020, approximately $780 million was attributable to our Completion and Production segment and approximately $277 million was attributable to our Drilling and Evaluation segment. The $1.0 billion of long-lived asset impairments consists of the following: $588 million attributable to hydraulic fracturing equipment, the majority of which was located in North America, $151 million related to drilling equipment, and the remaining amount is primarily associated with other fixed asset impairments. |
Business Segment and Geographic
Business Segment and Geographic Information | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Business Segment and Geographic Information | Business Segment and Geographic InformationWe operate under two divisions, which form the basis for the two operating segments we report: the Completion and Production segment and the Drilling and Evaluation segment. Our equity in earnings and losses of unconsolidated affiliates that are accounted for using the equity method of accounting are included within cost of services and cost of sales on our statements of operations, which is part of operating income of the applicable segment. The following table presents information on our business segments. Three Months Ended Millions of dollars 2020 2019 Revenue: Completion and Production $ 2,962 $ 3,662 Drilling and Evaluation 2,075 2,075 Total revenue $ 5,037 $ 5,737 Operating income (loss): Completion and Production $ 345 $ 368 Drilling and Evaluation 217 123 Total operations 562 491 Corporate and other (a) (60) (65) Impairments and other charges (b) (1,073) (61) Total operating income (loss) $ (571) $ 365 Interest expense, net of interest income (134) (143) Loss on early extinguishment of debt (c) (168) — Other, net (23) (30) Income (loss) before income taxes $ (896) $ 192 (a) Includes certain expenses not attributable to a particular business segment, such as costs related to support functions and corporate executives, and also includes amortization expense associated with intangible assets recorded as a result of acquisitions. (b) For the three months ended March 31, 2020, amount includes approximately $780 million attributable to Completion and Production, $277 million attributable to Drilling and Evaluation, and $16 million attributable to Corporate and other. See Note 2 for further discussion on these impairments and other charges. (c) During the three months ended March 31, 2020, we recognized a $168 million loss on extinguishment of debt related to the early repurchase of $1.5 billion aggregate principal amount of senior notes. See Note 6 for further discussion on this charge. Receivables |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2020 | |
Revenue [Abstract] | |
Revenue | Revenue Revenue is recognized based on the transfer of control or our customers' ability to benefit from our services and products in an amount that reflects the consideration we expect to receive in exchange for those services and products. The vast majority of our service and product contracts are short-term in nature. In recognizing revenue for our services and products, we determine the transaction price of purchase orders or contracts with our customers, which may consist of fixed and variable consideration. We also assess our customers' ability and intention to pay, which is based on a variety of factors, including our customers' historical payment experience and financial condition. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 20 to 60 days. Other judgments involved in recognizing revenue include an assessment of progress towards completion of performance obligations for certain long-term contracts, which involve estimating total costs to determine our progress towards contract completion and calculating the corresponding amount of revenue to recognize. Disaggregation of revenue We disaggregate revenue from contracts with customers into types of services or products, consistent with our two reportable segments, in addition to geographical area. Based on the location of services provided and products sold, 47% and 55% of our consolidated revenue was from the United States for the three months ended March 31, 2020 and 2019, respectively. No other country accounted for more than 10% of our revenue. The following table presents information on our disaggregated revenue. Millions of dollars Three Months Ended Revenue by segment: 2020 2019 Completion and Production $ 2,962 $ 3,662 Drilling and Evaluation 2,075 2,075 Total revenue $ 5,037 $ 5,737 Revenue by geographic region: North America $ 2,460 $ 3,275 Latin America 516 587 Europe/Africa/CIS 831 748 Middle East/Asia 1,230 1,127 Total revenue $ 5,037 $ 5,737 Contract balances We perform our obligations under contracts with our customers by transferring services and products in exchange for consideration. The timing of our performance often differs from the timing of our customer’s payment, which results in the recognition of receivables and deferred revenue. Deferred revenue represents advance consideration received from customers for contracts where revenue is recognized on future performance of service. Deferred revenue, as well as revenue recognized during the period relating to amounts included as deferred revenue at the beginning of the period, was not material to our condensed consolidated financial statements. Transaction price allocated to remaining performance obligations Remaining performance obligations represent firm contracts for which work has not been performed and future revenue recognition is expected. We have elected the practical expedient permitting the exclusion of disclosing remaining performance obligations for contracts that have an original expected duration of one year or less. We have some long-term contracts related to software and integrated project management services such as lump sum turnkey contracts. For software contracts, revenue is generally recognized over time throughout the license period when the software is considered to be a right to access our intellectual property. For lump sum turnkey projects, we recognize revenue over time using an input method, which requires us to exercise judgment. Revenue allocated to remaining performance obligations for these long-term contracts is not material. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following: Millions of dollars March 31, December 31, Finished products and parts $ 1,895 $ 1,865 Raw materials and supplies 1,176 1,147 Work in process 149 127 Total $ 3,220 $ 3,139 All amounts in the table above are reported net of obsolescence reserves of $139 million as of March 31, 2020 and $149 million as of December 31, 2019. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | DebtOn March 3, 2020, we issued $1.0 billion aggregate principal amount of 2.92% senior notes due March 2030. Subsequently, on March 5, 2020, we completed a tender offer to purchase $1.5 billion aggregate principal amount of senior notes using proceeds from the debt issuance and cash on hand. The tender offer consisted of $500 million of 3.50% senior notes due August 2023 and $1.0 billion of 3.80% senior notes due November 2025. This early debt repurchase resulted in a $168 million loss on extinguishment, which included a tender premium, unamortized discounts and costs on the retired notes, and other tender fees. These costs were included in "Loss on early extinguishment of debt" on our condensed consolidated statements of operations for the three months ended March 31, 2020.The $1.0 billion senior notes issued in March rank equally with our existing and future senior unsecured indebtedness, have semiannual interest payments, and have no sinking fund requirements. We may redeem some or all of the notes at any time at the applicable redemption prices, plus accrued and unpaid interest. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesDuring the three months ended March 31, 2020, we recorded a total income tax provision of $119 million on a pre-tax loss of $896 million, resulting in an effective tax rate of -13.3%. The effective tax rate for this period was primarily impacted by the COVID-19 pandemic and OPEC+ disagreements which created an unprecedented disruption in the oil and gas industry. After evaluating the negative impact that these events are expected to have on our business outlook, we determined that it was more likely than not that certain foreign tax credits would not be realized. Accordingly, we recognized a valuation allowance on our deferred tax assets in the amount of $310 million. Additionally, we recorded $1.1 billion of impairments and other charges and a $168 million loss on extinguishment of debt during the three months ended March 31, 2020, resulting in a $268 million tax benefit recognized during the period. See Note 2 for further information on these adverse market conditions and impairments and other charges recognized during the first quarter of 2020. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Shareholders’ Equity The following tables summarize our shareholders’ equity activity for the three months ended March 31, 2020 and March 31, 2019, respectively: Millions of dollars Common Stock Paid-in Capital in Excess of Par Value Treasury Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Noncontrolling Interest in Consolidated Subsidiaries Total Balance at December 31, 2019 $ 2,669 $ 143 $ (6,427) $ 11,989 $ (362) $ 13 $ 8,025 Comprehensive income (loss): Net Income (loss) — — — (1,017) — 2 (1,015) Other comprehensive income — — — — 11 — 11 Cash dividends ($0.18 per share) — — — (158) — — (158) Stock repurchase program — — (100) — — — (100) Stock plans — (33) 115 — — — 82 Other — — — — — (2) (2) Balance at March 31, 2020 $ 2,669 $ 110 $ (6,412) $ 10,814 $ (351) $ 13 $ 6,843 Millions of dollars Common Stock Paid-in Capital in Excess of Par Value Treasury Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Noncontrolling Interest in Consolidated Subsidiaries Total Balance at December 31, 2018 $ 2,671 $ 211 $ (6,744) $ 13,739 $ (355) $ 22 $ 9,544 Comprehensive income (loss): Net income — — — 152 — — 152 Other comprehensive income — — — — 1 — 1 Cash dividends ($0.18 per share) — — — (157) — — (157) Stock plans — 13 74 — — — 87 Other — — — — — (2) (2) Balance at March 31, 2019 $ 2,671 $ 224 $ (6,670) $ 13,734 $ (354) $ 20 $ 9,625 Our Board of Directors has authorized a program to repurchase our common stock from time to time. During the three months ended March 31, 2020, under that program we repurchased approximately 7.4 million shares of our common stock for a total cost of $100 million. Approximately $5.1 billion remained authorized for repurchases as of March 31, 2020. From the inception of this program in February 2006 through March 31, 2020, we repurchased approximately 224 million shares of our common stock for a total cost of approximately $9.0 billion. Accumulated other comprehensive loss consisted of the following: Millions of dollars March 31, December 31, Defined benefit and other postretirement liability adjustments $ (214) $ (214) Cumulative translation adjustments (82) (82) Other (55) (66) Total accumulated other comprehensive loss $ (351) $ (362) |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is subject to various legal or governmental proceedings, claims or investigations, including personal injury, property damage, environmental and tax-related matters, arising in the ordinary course of business, the resolution of which, in the opinion of management, will not have a material adverse effect on our consolidated results of operations or consolidated financial position. There is inherent risk in any litigation, claim or investigation, and no assurance can be given as to the outcome of these proceedings. Guarantee arrangements In the normal course of business, we have agreements with financial institutions under which approximately $2.0 billion of letters of credit, bank guarantees or surety bonds were outstanding as of March 31, 2020. Some of the outstanding letters of credit have triggering events that would entitle a bank to require cash collateralization. None of these off balance sheet arrangements either has, or is likely to have, a material effect on our condensed consolidated financial statements. |
Income (Loss) per Share
Income (Loss) per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Income (Loss) per Share | Income per Share Basic income per share is based on the weighted average number of common shares outstanding during the period. Diluted income per share includes additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued. Antidilutive shares represent potential common shares which are excluded from the computation of diluted income per share as their impact would be antidilutive. A reconciliation of the number of shares used for the basic and diluted income per share computations is as follows: Three Months Ended Millions of shares 2020 2019 Basic weighted average common shares outstanding 878 873 Dilutive effect of awards granted under our stock incentive plans — — Diluted weighted average common shares outstanding 878 873 Antidilutive shares: Options with exercise price greater than the average market price 27 20 Shares which are antidilutive due to net loss position 3 — Total antidilutive shares 30 20 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amount of cash and equivalents, receivables and accounts payable, as reflected in the condensed consolidated balance sheets, approximates fair value due to the short maturities of these instruments. The carrying amount and fair value of our total debt, including short-term borrowings and current maturities of long-term debt, is as follows: March 31, 2020 December 31, 2019 Millions of dollars Level 1 Level 2 Total fair value Carrying value Level 1 Level 2 Total fair value Carrying value Total debt $ 7,719 $ 608 $ 8,327 $ 9,826 $ 11,093 $ 868 $ 11,961 $ 10,327 The total fair value of our debt decreased significantly during the first quarter of 2020, primarily due to the negative impact on our business and industry associated with the COVID-19 pandemic and OPEC+ disagreements as described in Note 2. These events have collectively increased the credit spreads for all of our publicly traded bonds, thus reducing the associated fair value. Additionally, the fair value and carrying value of our debt decreased in the first quarter of 2020 due to an early repurchase of senior notes. See Note 6 for further information. Our debt categorized within level 1 on the fair value hierarchy is calculated using quoted prices in active markets for identical liabilities with transactions occurring on the last two days of period-end. Our debt categorized within level 2 on the fair value hierarchy is calculated using significant observable inputs for similar liabilities where estimated values are determined from observable data points on our other bonds and on other similarly rated corporate debt or from observable data points of transactions occurring prior to two days from period-end and adjusting for changes in market conditions. Differences between the periods presented in our level 1 and level 2 classification of our long-term debt relate to the timing of when third party market transactions on our debt are executed. We have no debt categorized within level 3 on the fair value hierarchy. |
Revenue (Policies)
Revenue (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue [Abstract] | |
Revenue Recognition, Policy | The vast majority of our service and product contracts are short-term in nature. In recognizing revenue for our services and products, we determine the transaction price of purchase orders or contracts with our customers, which may consist of fixed and variable consideration. We also assess our customers' ability and intention to pay, which is based on a variety of factors, including our customers' historical payment experience and financial condition. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 20 to 60 days. Other judgments involved in recognizing revenue include an assessment of progress towards completion of performance obligations for certain long-term contracts, which involve estimating total costs to determine our progress towards contract completion and calculating the corresponding amount of revenue to recognize. |
Impairments and Other Charges (
Impairments and Other Charges (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Impairments and Other Charges [Abstract] | |
Impairments and Other Charges | The following table presents various pre-tax charges we recorded during the three months ended March 31, 2020 and 2019, which are reflected within "Impairments and other charges" on our condensed consolidated statements of operations. Three Months Ended Millions of dollars 2020 2019 Long-lived asset impairments $ 1,016 $ 42 Severance costs 32 19 Other 25 — Total impairments and other charges $ 1,073 $ 61 |
Business Segment and Geograph_2
Business Segment and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Information on business segments | The following table presents information on our business segments. Three Months Ended Millions of dollars 2020 2019 Revenue: Completion and Production $ 2,962 $ 3,662 Drilling and Evaluation 2,075 2,075 Total revenue $ 5,037 $ 5,737 Operating income (loss): Completion and Production $ 345 $ 368 Drilling and Evaluation 217 123 Total operations 562 491 Corporate and other (a) (60) (65) Impairments and other charges (b) (1,073) (61) Total operating income (loss) $ (571) $ 365 Interest expense, net of interest income (134) (143) Loss on early extinguishment of debt (c) (168) — Other, net (23) (30) Income (loss) before income taxes $ (896) $ 192 (a) Includes certain expenses not attributable to a particular business segment, such as costs related to support functions and corporate executives, and also includes amortization expense associated with intangible assets recorded as a result of acquisitions. (b) For the three months ended March 31, 2020, amount includes approximately $780 million attributable to Completion and Production, $277 million attributable to Drilling and Evaluation, and $16 million attributable to Corporate and other. See Note 2 for further discussion on these impairments and other charges. (c) During the three months ended March 31, 2020, we recognized a $168 million loss on extinguishment of debt related to the early repurchase of $1.5 billion aggregate principal amount of senior notes. See Note 6 for further discussion on this charge. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue [Abstract] | |
Disaggregation of Revenue | The following table presents information on our disaggregated revenue. Millions of dollars Three Months Ended Revenue by segment: 2020 2019 Completion and Production $ 2,962 $ 3,662 Drilling and Evaluation 2,075 2,075 Total revenue $ 5,037 $ 5,737 Revenue by geographic region: North America $ 2,460 $ 3,275 Latin America 516 587 Europe/Africa/CIS 831 748 Middle East/Asia 1,230 1,127 Total revenue $ 5,037 $ 5,737 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consisted of the following: Millions of dollars March 31, December 31, Finished products and parts $ 1,895 $ 1,865 Raw materials and supplies 1,176 1,147 Work in process 149 127 Total $ 3,220 $ 3,139 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Summary of shareholders' equity activity | The following tables summarize our shareholders’ equity activity for the three months ended March 31, 2020 and March 31, 2019, respectively: Millions of dollars Common Stock Paid-in Capital in Excess of Par Value Treasury Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Noncontrolling Interest in Consolidated Subsidiaries Total Balance at December 31, 2019 $ 2,669 $ 143 $ (6,427) $ 11,989 $ (362) $ 13 $ 8,025 Comprehensive income (loss): Net Income (loss) — — — (1,017) — 2 (1,015) Other comprehensive income — — — — 11 — 11 Cash dividends ($0.18 per share) — — — (158) — — (158) Stock repurchase program — — (100) — — — (100) Stock plans — (33) 115 — — — 82 Other — — — — — (2) (2) Balance at March 31, 2020 $ 2,669 $ 110 $ (6,412) $ 10,814 $ (351) $ 13 $ 6,843 Millions of dollars Common Stock Paid-in Capital in Excess of Par Value Treasury Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Noncontrolling Interest in Consolidated Subsidiaries Total Balance at December 31, 2018 $ 2,671 $ 211 $ (6,744) $ 13,739 $ (355) $ 22 $ 9,544 Comprehensive income (loss): Net income — — — 152 — — 152 Other comprehensive income — — — — 1 — 1 Cash dividends ($0.18 per share) — — — (157) — — (157) Stock plans — 13 74 — — — 87 Other — — — — — (2) (2) Balance at March 31, 2019 $ 2,671 $ 224 $ (6,670) $ 13,734 $ (354) $ 20 $ 9,625 |
Schedule of comprehensive income (loss) | Accumulated other comprehensive loss consisted of the following: Millions of dollars March 31, December 31, Defined benefit and other postretirement liability adjustments $ (214) $ (214) Cumulative translation adjustments (82) (82) Other (55) (66) Total accumulated other comprehensive loss $ (351) $ (362) |
Income (Loss) per Share (Tables
Income (Loss) per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Weighted average shares outstanding and antidilutive shares | A reconciliation of the number of shares used for the basic and diluted income per share computations is as follows: Three Months Ended Millions of shares 2020 2019 Basic weighted average common shares outstanding 878 873 Dilutive effect of awards granted under our stock incentive plans — — Diluted weighted average common shares outstanding 878 873 Antidilutive shares: Options with exercise price greater than the average market price 27 20 Shares which are antidilutive due to net loss position 3 — Total antidilutive shares 30 20 |
Fair value by balance sheet gro
Fair value by balance sheet grouping table (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The carrying amount and fair value of our total debt, including short-term borrowings and current maturities of long-term debt, is as follows: March 31, 2020 December 31, 2019 Millions of dollars Level 1 Level 2 Total fair value Carrying value Level 1 Level 2 Total fair value Carrying value Total debt $ 7,719 $ 608 $ 8,327 $ 9,826 $ 11,093 $ 868 $ 11,961 $ 10,327 |
Impairments and Other Charges_2
Impairments and Other Charges (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Restructuring Cost and Reserve [Line Items] | |||
Decline in US land rig count | 25.00% | ||
Long-lived asset impairments | $ 1,016,000,000 | $ 42,000,000 | |
Severance costs | 32,000,000 | 19,000,000 | |
Other | 25,000,000 | 0 | |
Impairments and other charges | [1] | 1,073,000,000 | $ 61,000,000 |
Impairment of hydraulic fracturing equipment | 588,000,000 | ||
Impairment of drilling equipment | 151,000,000 | ||
Maximum [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
WTI oil spot price | 63 | ||
Minimum [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
WTI oil spot price | $ 14 | ||
[1] | For the three months ended March 31, 2020, amount includes approximately $780 million attributable to Completion and Production, $277 million attributable to Drilling and Evaluation, and $16 million attributable to Corporate and other. See Note 2 for further discussion on these impairments and other charges. |
Business Segment and Geograph_3
Business Segment and Geographic Information (Narrative) (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020DivisionCountriesCustomers | Dec. 31, 2019CountriesCustomers | |
Concentration Risk [Line Items] | ||
Number of business segments | Division | 2 | |
Maximum Percentage Gross Trade Receivables From One Geographic Segment | 10.00% | 10.00% |
Maximum Percentage Gross Trade Receivables From One Customer | 10.00% | 10.00% |
Number of Countries Exceed Receivables Threshold | Countries | 1 | 1 |
Number of Customers Exceed Receivables Threshold | Customers | 0 | 0 |
Geographic Concentration Risk [Member] | Accounts Receivable [Member] | UNITED STATES | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 40.00% | 36.00% |
Business Segment and Geograph_4
Business Segment and Geographic Information (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | |||
Revenue: | ||||
Revenue | $ 5,037 | $ 5,737 | ||
Operating income (loss): | ||||
Impairments and other charges | [1] | (1,073) | (61) | |
Operating income | (571) | 365 | ||
Interest expense, net of interest income | (134) | (143) | ||
Other, net | (23) | (30) | ||
Income (loss) from continuing operations before income taxes | (896) | 192 | ||
Loss on early extinguishment of debt | (168) | [2] | 0 | |
Long-term Debt, Excluding Current Maturities | 1,500 | |||
Completion and Production | ||||
Revenue: | ||||
Revenue | 2,962 | 3,662 | ||
Operating income (loss): | ||||
Impairments and other charges | (780) | |||
Operating income | 345 | 368 | ||
Drilling and Evaluation | ||||
Revenue: | ||||
Revenue | 2,075 | 2,075 | ||
Operating income (loss): | ||||
Impairments and other charges | (277) | |||
Operating income | 217 | 123 | ||
Total operations | ||||
Revenue: | ||||
Revenue | 5,037 | 5,737 | ||
Operating income (loss): | ||||
Operating income | 562 | 491 | ||
Corporate and other | ||||
Operating income (loss): | ||||
Operating income | [3] | $ (60) | $ (65) | |
[1] | For the three months ended March 31, 2020, amount includes approximately $780 million attributable to Completion and Production, $277 million attributable to Drilling and Evaluation, and $16 million attributable to Corporate and other. See Note 2 for further discussion on these impairments and other charges. | |||
[2] | During the three months ended March 31, 2020, we recognized a $168 million loss on extinguishment of debt related to the early repurchase of $1.5 billion aggregate principal amount of senior notes. See Note 6 for further discussion on this charge. | |||
[3] | Includes certain expenses not attributable to a particular business segment, such as costs related to support functions and corporate executives, and also includes amortization expense associated with intangible assets recorded as a result of acquisitions. |
Revenue (Details)
Revenue (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)DivisionCountries | Mar. 31, 2019USD ($)Countries | |
Disaggregation of Revenue [Line Items] | ||
Number of business segments | Division | 2 | |
Maximum Percentage Revenue from One Geographic Segment | 10.00% | 10.00% |
Number of Countries Exceed Revenue Threshold | Countries | 1 | 1 |
Revenue | $ 5,037 | $ 5,737 |
Revenue, Performance Obligation, Description of Timing | one year | |
North America [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 2,460 | 3,275 |
Latin America [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 516 | 587 |
Europe/Africa/CIS [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 831 | 748 |
Middle East/Asia [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,230 | 1,127 |
Completion And Production [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 2,962 | 3,662 |
Drilling And Evaluation [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 2,075 | $ 2,075 |
Minimum [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, Performance Obligation, Description of Payment Terms | 20 | |
Maximum [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, Performance Obligation, Description of Payment Terms | 60 | |
Revenue Benchmark [Member] | UNITED STATES | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 47.00% | 55.00% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory, Net [Abstract] | ||
Finished products and parts | $ 1,895 | $ 1,865 |
Raw materials and supplies | 1,176 | 1,147 |
Work in process | 149 | 127 |
Inventory, net | 3,220 | 3,139 |
Obsolescence reserves | $ 139 | $ 149 |
Debt (Details)
Debt (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Debt Disclosure [Abstract] | |||
Loss on early extinguishment of debt | $ (168) | [1] | $ 0 |
Long-term Debt, Excluding Current Maturities | 1,500 | ||
Debt Instrument [Line Items] | |||
Long-term Debt, Excluding Current Maturities | 1,500 | ||
Senior Notes due March 2030 [Member] | |||
Debt Disclosure [Abstract] | |||
Long-term Debt, Excluding Current Maturities | $ 1,000 | ||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 2.92% | ||
Long-term Debt, Excluding Current Maturities | $ 1,000 | ||
Senior notes due August 2023 [Member] | |||
Debt Disclosure [Abstract] | |||
Long-term Debt, Excluding Current Maturities | $ 500 | ||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 3.50% | ||
Long-term Debt, Excluding Current Maturities | $ 500 | ||
Senior Notes due November 2025 [Member] | |||
Debt Disclosure [Abstract] | |||
Long-term Debt, Excluding Current Maturities | $ 1,000 | ||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 3.80% | ||
Long-term Debt, Excluding Current Maturities | $ 1,000 | ||
[1] | During the three months ended March 31, 2020, we recognized a $168 million loss on extinguishment of debt related to the early repurchase of $1.5 billion aggregate principal amount of senior notes. See Note 6 for further discussion on this charge. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Income Tax Disclosure [Abstract] | |||
Income Tax Expense (Benefit) | $ 119 | $ 40 | |
Income (loss) from continuing operations before income taxes | $ (896) | 192 | |
Effective tax rate | (13.30%) | ||
Impairments and other charges | [1] | $ 1,073 | $ 61 |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Impairment Losses, Amount | 268 | ||
Deferred Tax Assets, Valuation Allowance | $ 310 | ||
[1] | For the three months ended March 31, 2020, amount includes approximately $780 million attributable to Completion and Production, $277 million attributable to Drilling and Evaluation, and $16 million attributable to Corporate and other. See Note 2 for further discussion on these impairments and other charges. |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Shareholders' equity activity [Roll Forward] | ||
Beginning Balance | $ 8,025 | $ 9,544 |
Net income (loss) | (1,015) | 152 |
Other comprehensive income (loss) | 11 | 1 |
Cash dividends | (158) | (157) |
Stock repurchase program | (100) | |
Stock plans | (82) | (87) |
Other | (2) | (2) |
Ending Balance | $ 6,843 | $ 9,625 |
Common Stock, Dividends, Per Share, Declared | $ 0.18 | $ 0.18 |
Common Shares | ||
Shareholders' equity activity [Roll Forward] | ||
Beginning Balance | $ 2,669 | $ 2,671 |
Net income (loss) | 0 | 0 |
Other comprehensive income (loss) | 0 | 0 |
Cash dividends | 0 | 0 |
Stock repurchase program | 0 | |
Stock plans | 0 | 0 |
Other | 0 | 0 |
Ending Balance | 2,669 | 2,671 |
Paid-in Capital in Excess of Par Value | ||
Shareholders' equity activity [Roll Forward] | ||
Beginning Balance | 143 | 211 |
Net income (loss) | 0 | 0 |
Other comprehensive income (loss) | 0 | 0 |
Cash dividends | 0 | 0 |
Stock repurchase program | 0 | |
Stock plans | (33) | (13) |
Other | 0 | 0 |
Ending Balance | 110 | 224 |
Treasury Stock | ||
Shareholders' equity activity [Roll Forward] | ||
Beginning Balance | (6,427) | (6,744) |
Net income (loss) | 0 | 0 |
Other comprehensive income (loss) | 0 | 0 |
Cash dividends | 0 | 0 |
Stock repurchase program | 100 | |
Stock plans | (115) | (74) |
Other | 0 | 0 |
Ending Balance | (6,412) | (6,670) |
Retained Earnings | ||
Shareholders' equity activity [Roll Forward] | ||
Beginning Balance | 11,989 | 13,739 |
Net income (loss) | (1,017) | 152 |
Other comprehensive income (loss) | 0 | 0 |
Cash dividends | (158) | (157) |
Stock repurchase program | 0 | |
Stock plans | 0 | 0 |
Other | 0 | 0 |
Ending Balance | 10,814 | 13,734 |
Accumulated Other Comprehensive Income (Loss) | ||
Shareholders' equity activity [Roll Forward] | ||
Beginning Balance | (362) | (355) |
Net income (loss) | 0 | 0 |
Other comprehensive income (loss) | 11 | 1 |
Cash dividends | 0 | 0 |
Stock repurchase program | 0 | |
Stock plans | 0 | 0 |
Other | 0 | 0 |
Ending Balance | (351) | (354) |
Noncontrolling Interest in Consolidated Subsidiaries | ||
Shareholders' equity activity [Roll Forward] | ||
Beginning Balance | 13 | 22 |
Net income (loss) | 2 | 0 |
Other comprehensive income (loss) | 0 | 0 |
Cash dividends | 0 | 0 |
Stock repurchase program | 0 | |
Stock plans | 0 | 0 |
Other | (2) | (2) |
Ending Balance | $ 13 | $ 20 |
Shareholders' Equity (Schedule
Shareholders' Equity (Schedule of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Stockholders' Equity Note [Abstract] | ||
Defined benefit and other postretirement liability adjustments | $ (214) | $ (214) |
Cumulative translation adjustments | (82) | (82) |
Other | (55) | (66) |
Total accumulated other comprehensive loss | $ (351) | $ (362) |
Shareholders' Equity Repurchase
Shareholders' Equity Repurchase Activity (Details) shares in Millions, $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($)shares | |
Repurchase Activity [Abstract] | |
Stock Repurchased During Period, Shares | shares | 7.4 |
Stock Repurchased During Period, Value | $ 100 |
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | $ 5,100 |
Treasury Stock Shares Acquired From Inception | shares | 224 |
Treasury Stock Value Acquired Cost Method From Inception | $ 9,000 |
Commitments and Contingencies (
Commitments and Contingencies (Guarantee Arrangements) (Details) $ in Billions | Mar. 31, 2020USD ($) |
Financial agreements | |
Guarantee arrangements [Abstract] | |
Guarantee arrangements outstanding | $ 2 |
Income (Loss) per Share (Detail
Income (Loss) per Share (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Basic weighted average common shares outstanding (in shares) | 878 | 873 |
Dilutive effect of awards granted under our stock incentive plans | 0 | 0 |
Diluted weighted average common shares outstanding (in shares) | 878 | 873 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Options with exercise price greater than the average market price | 27 | 20 |
Shares which are antidilutive due to net loss position | 3 | 0 |
Total antidilutive shares | 30 | 20 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Number of days from period end | 2 days | |
Long-term debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, Fair Value | $ 8,327 | $ 11,961 |
Carrying value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt, Long-term and Short-term, Combined Amount | 9,826 | 10,327 |
Level 1 | Long-term debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, Fair Value | 7,719 | 11,093 |
Level 2 | Long-term debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, Fair Value | 608 | 868 |
Level 3 | Long-term debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, Fair Value | $ 0 | $ 0 |