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Halliburton
As Reported Adjustment As If
Current Assets 8,886 0 8,886
Total Assets 18,297 580 18,877
Net Operating Assets (NOA) 10,727 580 11,307
Current Liabilities 2,757 120 2,877
Non-Current Liabilities 5,153 460 5,613Total Debt (Current + LT) 3,824 580 4,404
Total Liabilities 7,910 580 8,490
Equity 10,387 0 10,387
Before Tax Tax After Tax
Net Income as Reported 2,695 853 1,842
Add back operating lease payment 161 56 105
Deduct depericiation expense 67 24 44
Deduct interest at 7% 41 14 27
Net Income as if 2,748 871 1,876
Before Tax
(NOPBT) Tax
After Tax
(NOPAT)
Operating profit, as reported 3,009 957 2,035
Add back operating lease payment 161 56.35 104.65
Deduct depericiation expense 67 24 11
Operating profit, as if 3,103 990 2,129
As Reported As If
Current Ratio 3.2231 3.0882
Common Size Liabilities 0.4323 0.4498Total debt to Equity 0.3682 0.4240
ROE (annualized) 0.1924 0.1806
T e as reporte
uses average but
the as if does not.
RNOA (annualized) 0.1591 0.1883
Baker Hughes
As Reported Adjustment As If
Current Assets 8,707 0 8,707
Total Assets 22,986 1,140 24,126
Net Operating Assets (NOA) 17,921 1,140 19,061Current Liabilities 3,139 106 3,245
Non-Current Liabilities 5,561 1,034 6,595
Total Debt (Current + LT) 3,885 1,140 5,025
Total Liabilities 8,700 1,034 9,734
Equity 14,286 0 14,286
Before tax Tax After tax
Net income as reported 1,282 463 819
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Add back operating lease payment 186 65 121
Deduct depreciation expense 181 63 118
Deduct interest at 7% 80 28 52
Net income as if 1,207 437 770
Before tax (NOPBT) Tax After tax (NOPAT)
Operating profit, as reported 1,417 496 921Add back operating lease payment 186 65 121
Deduct depreciation expense 181 63 118
Operating profit, as if 1,422 498 924
As reported As if
Current ratio 2.7738 2.6832
Common size liabilities 0.3785 0.4035
Total debt/equity 0.2719 0.3517
ROE (annualized) 0.0573 0.0539
RNOA (annualized) 0.0670 0.0485
Changing the operating leases to capitalized leases will impact the financial ratios for the companies.
The current ratio drops for both companies indicating they might less liquid.
Additionally the common-size liabilties increases for both firms which means they are less solvent than reported.
Also the total debt to equity increased for both companies meaning they financing more of their operations with
ORIGINAL NOTES FROM FINANCIAL STATEMENTS
Excerpt from Halliburton
EXECUTIVE OVERVIEW
LIQUIDITY AND CAPITAL RESOURCES
We ended 2010 with cash and equivalents of $1.4 billion compared to $2.1 billion at December 31, 2009.We also held $653 million of short-ter
Significant sources of cash
Cash flows from operating activities contributed $2.2 billion to cash in 2010.
During 2010, we sold approximately $1.9 billion of short-term marketable securities.
Further available sources of cash. We have an unsecured $1.2 billion, five-year revolving credit facility to provide commercial paper support, g
Significant uses of cash
Capital expenditures were $2.1 billion in 2010 and were predominantly made in the production enhancement, drilling services, wireline and perfo
During 2010, we purchased approximately $1.3 billion in short-term marketable securities.
We paid $523 million to acquire various companies, including Boots & Coots, Inc. (Boots & Coots), during 2010 that should enhance or augment
In September 2010, we completed the acquisition of Boots & Coots in a stock and cash transaction valued at approximately $248 million, of whic
Subsequent to the acquisition, we retired approximately $40 million of Boots & Coots outstanding debt.Effective October 2010, Boots & Coots
In October 2010, we retired $750 million principal amount of our 5.5% senior notes with available cash and equivalents.
We paid $327 million in dividends to our shareholders in 2010.
We paid $177 million to United States and Nigerian authorities during 2010 related to KBR TSKJ matters.See Notes 7 and 8 to our consolidated
Future uses of cash. Capital spending for 2011 is expected to be approximately $3.0 billion.The capital expenditures plan for 2011 is primarily
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We are currently exploring opportunities for acquisitions that will enhance or augment our current portfolio of products and services, including th
Subject to Board of Directors approval, we expect to pay quarterly dividends of approximately $80 million during 2011.We also have approxim
The following table summarizes our significant contractual obligations and other long-term liabilities as of December 31, 2010:
(a) Interest on debt includes 86 years of interest on $300 million
(b) Primarily represents certain purchase orders for goods and ser
(c) Amount based on assumptions that are subject to change.Als
We are currently not able to reasonably estimate our contribut
We had $209 million of gross unrecognized tax benefits at December 31, 2010, of which we estimate $59 million may require a cash payment.
We are not able to reasonably estimate in which future periods this amount will ultimately be settled and paid.
Excerpt from Baker Hughes
ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
Contractual Obligations
In the table below, we set forth our contractual cash obligations as of December31, 2010. Certain amounts included in thi
The contractual cash obligations we will actually pay in future periods may vary from those reflected in the table because
(1) Amounts represent the expected cash payments for our total debt and do not include any una
(2) Amounts represent the expected cash payments for interest on our long-term debt.
(3) We enter into operating leases in the normal course of business. Some lease agreements prov
Our future operating lease payments as reflected in the table above would change if we exer
(4) Purchase obligations include agreements to purchase goods or services that are enforceable a
fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions;
(5) Amounts represent other long-term liabilities, including the current portion, reflected in the
payments for deferred compensation, payouts under acquisition agreements and payments fo
Payments DueMillions of dollars 2011 2012 2013 2014 2015Long-term debt $ $ $ $ $ $Interest on debt (a) 263 263 263 263 263Operating leases 161 122 87 50 41Purchase obligations (b) 1,714 91 64 13 6Pension funding obligations (c) 41 Other long-term liabilities 9 9 9
Total $ 2,188 $ 485 $ 423 $ 326 $ 310 $
Payments Due by Perio Less Than 2 - 3
(In millions) Total 1 year Years
Total debt (1) $ 3,880 $ 330 $ 500Estimated interest payments (2) 3,621 220 416Operating leases (3) 681 186 228Purchase obligations (4) 264 246 18Other long-term liabilities (5) 168 14 70Income tax liabilities for uncertain tax
positions (6) 438 279 76
Total $ 9,052 $ 1,275 $ 1,308
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(6) The estimated income tax liabilities for uncertain tax positions will be settled as a result of e
The timing of any particular settlement will depend on the length of the tax audit and related
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Score out of 10: 9
Discount Rate = 7%
Year Operating Lease Payment Discount Factor Present Value
2011 161 0.93 150
2012 122 0.87 107
2013 87 0.82 712014 50 0.76 38
2015 41 0.71 29
>2015 149 4.51 185 This is inc
Total 580
Remaining life = 149/41 3.63
Present Value Factor for the Annuity after 2015 6.32
Discount Factor = 0.71
Year Present Value Interest Interest Expense Principal
2011 580 0.07 41 120
2012 460 0.07 32 90
2013 370 0.07 26 61
2014 309 0.07 22 28
2015 281 0.07 20 21
>2015 259 0.07 18 18
Discount Rate = 7%
Year Operating Lease Payment Discount Factor Present Value
2011 186 0.93 1742012 228 0.87 199
2013 228 0.82 186
2014 116 0.76 88
2015 116 0.71 83
>2015 151 3.54 410 This is inc
Total 1140
1.30Remaining life = 151/116
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4.96
0.71
Year Present Value Interest Interest Expense Principal
2011 1140 0.07 80 106
2012 1034 0.07 72 156
2013 879 0.07 62 1662014 712 0.07 50 66
2015 646 0.07 45 71
>2015 575 0.07 40 40
debt.
, United States Treasury securities classified as marketable securities.
eneral working capital, and credit for other corporate purposes.The facility was undrawn as of December 31, 2010.
rating, and cementing product service lines.
our current portfolio of products and services.
h approximately $143 million was paid in cash and approximately 3.4 million shares of our common stock were issued to Boots & Coot
esults of operations were included in our Completion and Production segment.
financial statements for more information.
directed toward our production enhancement, drilling services, wireline and perforating, completion tools, and cementing product servi
Present Value Factor for the Annuity after 2015
Discount Factor =
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ose with unique technologies or distribution networks in areas where we do not already have large operations.
tely $1.7 billion remaining available under our share repurchase authorization, which may be used for open market share purchases.
f debentures at 7.6% interest that become due in 2096.
vices utilized in the ordinary course of our business.
o, we may choose to make additional discretionary contributions.
ions for years after 2011.See Note 13 to the consolidated financial statements for further information regarding pension contributions.
e estimate that the total $59 million will not be settled within the next 12 months.
PERATIONS
is table are based on our estimates and assumptions about these obligations, including their duration, anticipated acti
the estimates and assumptions are subjective.
ortized discounts, deferred issuance costs or net deferred gains on terminated interest rate swap agreements.
ide us with the option to renew the lease.
ised these renewal options or if we entered into additional operating lease agreements.
nd legally binding and that specify all significant terms, including:
nd the approximate timing of the transaction. Purchase obligations exclude agreements that are cancelable at anytime without penalty.
onsolidated balance sheet where both the timing and amount of payment streams are known. Amounts include: payments for certain env
r certain asset retirement obligations. Amounts do not include: payments for pension contributions and payments for various postretirem
Thereafter Total3,824 $ 3,8245,359 6,674
149 6105 1,893 41 27
9,337 $ 13,069
d4 - 5 More than
Years 5 Years
$ $ 3,050377 2,608116 151 26 58
34 49
$553 $ 5,916
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xpiring statutes, audit activity, competent authority proceedings related to transfer pricing, or final decisions in matters that are the subje
appeals process, if any, or an expiration of a statute. If a liability is settled due to a statute expiring or a favorable audit result, the settle
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These are correctly done. The numbers are wrong but that's because $580 is wrong
rrect. Please check the book for the method to calculate this.
rrect. Please check the book for the method to calculate this.
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s stockholders.
e lines.
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ons by third parties and other factors.
ironmental remediation liabilities,
ent welfare benefit plans and postemployment benefit plans.
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ct of litigation in various taxing jurisdictions in which we operate.
ent of the tax liability would not result in a cash payment.
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Halliburton
2010 2009 2008
Common-size Analysis
Total liabilities / Total assets 0.4323 0.4705 0.4617
Current liabilities / Total assets 0.1507 0.1747 0.1933
Current portion of long-term debt / Total assets 0.0000 0.0454 0.0447
Current portion of long-term debt / Total long-term debt 0.0000 0.1640 0.1991
Turnover Analysis
Account payable turnover (COGS / Average AP) 15.3115 14.8119 16.8655
Net op'n working capital turnover (sales / NOWC) 3.2821 2.8292 3.6362
Liquidity Analysis
Current Ratio Current Assets / Curent Liab 3.2231 2.9900 2.6649
Quick Ratio (Cash + Sec+AR)/Curr Liab 2.1672 2.2008 1.8572
Cash from operation / Current liabilities 0.8023 0.8328 0.9615
Cash collection cycle (ART + INVT - APT) (8.2846) (8.4326) (9.3863)
Solvency Ratios
Total liabilities / Equity 0.7615 0.8885 0.8576
Total long-term debt / Equity 0.3682 0.5223 0.4170
Times interest earned - EBIT/Int Expense 9.9394 6.9018 31.0703
Average interest rate on debt 0.0777 0.0623 0.0396
Cash from operations / Cash interest paid 2.8000 77.6129 1.3057
Baker Hughes
2010 2009 2008Common-size Analysis
Total liabilities / Total assets 0.3785 0.3632 0.4261
Current liabilities / Total assets 0.1366 0.1410 0.2117
Current portion of long-term debt / Total assets 0.0144 0.0013 0.0470
Current portion of long-term debt / Total long-term debt 0.0852 0.0083 0.2392
Turnover Analysis
Account payable turnover (COGS / AP) 9.6539 8.6565 9.9925
Net op'n working capital turnover (sales / NOWC) 2.5516 2.0886 2.2851
Liquidity AnalysisCurrent Ratio - Current Assets / Current Liabilities 2.7738 3.8593 2.8455
Quick Ratio - Cash + Marketable Securities + AR / Current Liabi 1.7993 2.4340 1.8773
Cash from operation / Current liabilities 0.2727 0.7681 0.6428
Cash collection cycle (ART + INVT - APT) (2.6270) (2.2772) (2.5132)
Solvency Ratios
Total liabilities / Equity 0.6090 0.5704 0.7425
Total long-term debt / Equity 0.2719 0.2471 0.3427
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Times interest earned - EBIT/Int Expense 10.0496 5.8560 38.8065
Average interest rate on debt 0.0363 0.0694 0.0266
Cash from operations / Cash interest paid 5.5584 8.0455 18.7674
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Halliburton
ACCOUNTS RECEIVABLE RATIOS:
2010 2009 2008
Common size analysis
AR/Total Assets 0.2145 0.1792 0.2638Allowance for bad debts/Total assets 0.0050 0.0054 0.0042
Allowance for bad debts/Gross AR 0.0227 0.0295 0.0156
Turnover Analysis
Account receivable turnover (Sales/Average AR) 5.2186 4.3424 5.3075
Average collection period (365/(Sales/AR)) 69.9416 84.0557 68.7707
INVENTORY RATIOS:
2010 2009 2008
Common size analysis
Gross profit margin (Gross profit/Sales) 0.1796 0.1496 0.2314
Inventory/Total Assets 0.1060 0.0966 0.1271
Allowance for inventory obsolescence/Total Assets 0.0048 0.0057 0.0056
Allowance for inventory obsolescence/Gross Inventory 0.0454 0.0588 0.0443
Turnover analysis
Inventory turnover (COGS/Average Inventory) 1.8082 2.0369 2.1718
Average turnover period (365/(COGS/Inventory)) 201.8529 179.1920 168.0655
FIXED ASSETS RATIOS:
2010 2009 2008Common size analysis
Depreciation expense/Sales 0.0623 0.0634 0.0404
PPE/Total assets 0.3739 0.3482 0.3324
Accumulated depreciation/Total assets 0.3314 0.3162 0.3174
Turnover Analysis
PPE Turnover (Sales/Average PPE) 0.7132 0.6961 1.0865
Long-term operating asset turnover (Sales/Average LT
net operating assets) 2.2238 2.1480 3.2068
Other ratios
Estimated average useful life (Depreciable PPE/
depreciation expense) 11.4397 11.7111 9.9785
Percent used up (Accumulated depreciation/
Depreciable PPE) 0.4737 0.4797 0.4915
Asset replacement ratio (CAPEX/Depreciation expense) 1.8490 2.0021 2.4715
SALES / EMPLOYEE 0.2996 0.2446 0.3047
OPERATING EXPENSES / EMPLOYEE 0.2494 0.2114 0.2378
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Baker Hughes
ACCOUNTS RECEIVABLE RATIOS:
2010 2009 2008
Common size analysis
AR/Total Assets 0.1715 0.2038 0.2326Allowance for bad debts/Total assets 0.0070 0.0137 0.0062
Allowance for bad debts/Gross AR 0.0395 0.0631 0.0261
Turnover Analysis
Account receivable turnover (Sales/Average AR) 4.5956 3.7972 4.6145
Average collection period (365/(Sales/AR)) 79.4243 96.1222 79.0977
INVENTORY RATIOS:
2010 2009 2008
Common size analysis
Gross profit margin (Gross profit/Sales) 0.2241 0.2346 0.3296
Inventory/Total assets 0.1129 0.1605 0.1704
Allowance for inventory obsolescence/Total Assets
Allowance for inventory obsolescence/Gross Invetory
Turnover analysis
Inventory turnover (COGS/Average Inventory) 1.9679 2.0005 2.1853
Average turnover period (365/(COGS/Inventory)) 185.4726 182.4527 167.0271
FIXED ASSETS RATIOS:
2010 2009 2008Common size analysis
Depreciation expense/Sales 0.0742 0.0736 0.0537
PPE/Total assets 0.2745 0.2763 0.2389
Accumulated depreciation/Total assets 0.1900 0.3207 0.2700
Turnover Analysis
PPE Turnover (Sales/Average PPE) 3.0438 3.2246 4.5825
Long-term operating asset turnover (Sales/Average LT
net operating assets) 1.1745 2.1683 3.0051
Other ratios
Estimated average useful life (Depreciable PPE/
depreciation expense) 9.8092 9.4909 9.3422
Percent used up (Accumulated depreciation/
Depreciable PPE) 0.4165 0.5436 0.5382
Asset replacement ratio (CAPEX/Depreciation expense) 1.3938 1.5331 2.0408
SALES / EMPLOYEES 0.2720 0.1823 0.2238
OPERATING EXPENSE / EMPLOYEES 0.2452 0.1685 0.1790
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Company name Halliburton As Stated
Year 2010 ROE
0.192 = 0.159 +
RNOA
ROE
0.192 = 0.113 1.405 +NOPM NOAT
Year 2009 ROE
0.140 = 0.121 +
RNOA
ROE
0.140 = 0.094 1.290 +
NOPM NOAT
Year 2008 ROE
0.301 = 0.269 +RNOA
ROE
0.301 = 0.151 1.783 +
NOPM NOAT
Company name Halliburton Pro Forma
Year 2010 ROE
0.191 = 0.157 +
RNOA
ROE
0.191 = 0.112 1.405 +
NOPM NOAT
Year 2009 ROE
0.139 = 0.118 +
RNOA
ROE
0.139 = 0.091 1.290 +
NOPM NOAT
Year 2008 ROE
0.339 = 0.262 +
RNOA
ROE
0.339 = 0.147 1.783 +
NOPM NOAT
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Company name Baker Hughes As Stated
Year 2010 ROE
0.0759 = 0.0670 +
RNOA
ROE0.0759 = 0.1640 0.4085 +
NOPM NOAT
Year 2009 ROE
0.0598 = 0.0547 +
RNOA
ROE
0.0598 = 0.1037 0.5278 +
NOPM NOAT
Year 2008 ROE0.2494 = 0.2009 +
RNOA
ROE
0.2494 = 0.2896 0.6938 +
NOPM NOAT
Company name Baker Hughes Pro Forma
Year 2010 ROE0.0895 = 0.0774 +
RNOA
ROE
0.0895 = 0.1896 0.4085 +
NOPM NOAT
Year 2009 ROE
0.0597 = 0.0552 +
RNOA
ROE0.0597 = 0.1047 0.5278 +
NOPM NOAT
Year 2008 ROE
0.2388 = 0.1994 +
RNOA
ROE
0.2388 = 0.2873 0.6938 +
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NOPM NOAT
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ROE
0.033
NORRNOA
1.000
0.336 0.099 FLEV Spread MISR NOPM
0.019 NOAT
NOR
1.000 NNEP
0.378 0.050
FLEV Spread MISR FLEV
0.033NOR Spread
1.000 FLEV*Spread
0.394 0.083
FLEV Spread MISR ROE Check
ROE
0.033
NORRNOA
1.000
0.336 0.099
FLEV Spread MISR NOPM
0.022 NOAT
NOR
1.000 NNEP
0.378 0.057
FLEV Spread MISR FLEV
0.077
NOR Spread
1.000 FLEV*Spread
0.394 0.196
FLEV Spread MISR ROE Check
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ROE
0.0089 RNOA
NOR
1.0000 NOPM0.2520 0.0355
FLEV Spread MISR NOAT
0.0051
NOR NNEP
1.0000
0.2933 0.0172 FLEV
FLEV Spread MISR
Spread0.0484
NOR FLEV*Spread
1.0000 ROE Check
0.2606 0.1858
FLEV Spread MISR
ROE
0.0120 RNOA
NOR
1.0000 NOPM
0.2520 0.0478
FLEV Spread MISR
NOAT
0.0045
NOR NNEP
1.00000.2933 0.0153 FLEV
FLEV Spread MISR
Spread
0.0394
NOR FLEV*Spread
1.0000 ROE Check
0.2606 0.1513
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FLEV Spread MISR
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2010 2009 2008
NI 0.1924 0.1400 0.3013
Avg Equity
NOPAT 0.1591 0.1210 0.2687
Avg NOA
NOPAT 0.1132 0.0938 0.1507
Sales
SALES 1.4054 1.2903 1.7832Avg NOA
NNE 0.0600 0.0709 0.1860
Avg NNO
Avg NNO 0.3360 0.3785 0.3942
Avg Equity
RNOA-NNEP 0.0991 0.0502 0.0827
0.0333 0.0190 0.0326
RNOA+FLEV*Spread 0.1924 0.1400 0.3013
2010 2009 2008
NI 0.1905 0.1393 0.3391
Avg Equity
NOPAT 0.157 0.118 0.262
Avg NOA
NOPAT 0.112 0.091 0.147
Sales
SALES 1.405 1.290 1.783Avg NOA
NNE 0.059 0.061 0.065
Avg NNO
Avg NNO 0.336 0.378 0.394
Avg Equity
RNOA-NNEP 0.099 0.057 0.196
0.033 0.022 0.077
RNOA+FLEV*Spread 0.191 0.139 0.339
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2010 2009 2008
NI 0.0759 0.0598 0.2494Avg Equity
NOPAT 0.067 0.0547 0.2009Avg NOA
NOPAT 0.164 0.1037 0.2896Sales
SALES 0.409 0.5278 0.6938
Avg NOA
NNE 0.032 0.0375 0.0151
Avg NNO
Avg NNO 0.252 0.2933 0.2606
Avg Equity
RNOA-NNEP 0.035 0.0172 0.1858
0.009 0.0051 0.0484
RNOA+FLEV*Spread 0.0759 0.0598 0.2494
2010 2009 2008
NI 0.0895 0.0597 0.2388
Avg Equity
NOPAT 0.0774 0.0552 0.1994Avg NOA
NOPAT 0.1896 0.1047 0.2873
Sales
SALES 0.4085 0.5278 0.6938
Avg NOA
NNE 0.0297 0.0400 0.0481
Avg NNO
Avg NNO 0.2520 0.2933 0.2606
Avg Equity
RNOA-NNEP 0.0478 0.0153 0.1513
0.0120 0.0045 0.0394
RNOA+FLEV*Spread 0.0895 0.0597 0.2388
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Halliburton Company
Consolidated Statements of Operations (USD
$)
In Millions, except Per Share data Dec. 31, 2010Dec. 31,
2009
Dec. 31,
2008
Dec.
20Revenue:Services 13,779 10,832 13,391
Product sales 4,194 3,843 4,888 Total revenue 17,973 14,675 18,279
Operating costs and expenses:Cost of services 11,237 9,224 10,079
Cost of sales 3,508 3,255 3,970
General and administrative 229 207 282
Gain on sale of assets, net (10) (5) (62) Non-Persistent
Total operating costs and expenses 14,964 12,681 14,269
O eratin income 3,009 1,994 4,010
Interest expense, net of interest income of $11,
12, and 39 (297) (285) (128)
Other, net
(57) (27) (33)
Income from continuing operations before income
taxes 2,655 1,682 3,849
Provision for income taxes (853) (518) (1,211)
Income from continuing operations 1,802 1,164 2,638
Income (loss) from discontinued operations, net of
income tax benefit of 75, 5, and 3 40 (9) (423) Non-Persistent
Net income 1,842 1,155 2,215
Noncontrolling interest in net income of
subsidiaries (7) (10) 9
Net income attributable to company 1,835 1,145 2,224
Amounts attributable to company
shareholders:Income from continuing operations 1,795 1,154 2,647
Income (loss) from discontinued operations, net 40 (9) (423)
Net income attributable to com an 1,835 1,145 2,224
Basic income per share attributable to
com an shareholders:Income from continuing operations (in dollars per
share 1.98 1.28 3
Income (loss) from discontinued operations, net (in
dollars er share 0.04 (0.01) (0.48)
Net income per share (in dollars per share) 2.02 1.27 2.52
Diluted income per share attributable to
com an shareholders:Income from continuing operations (in dollars per
share 1.97 1.28 2.91
Income (loss) from discontinued operations, net (in
dollars er share 0.04 (0.01) (0.46)Net income per share (in dollars per share) 2.01 1.27 2.45
Basic weighted average common shares
outstandin in shares 908 900 883
Diluted weighted average common shares
outstandin in shares 911 902 909
Statutory Tax Rate 0.35 0.35 0.35 Statutory Tax Rate
Tax On Operating Profit 957 618 1,256
NOPBT 3,009 1,994 4,010
NOPAT 2,035 1,376 2,754
NNE (NOPAT-Net Income) 193 221 539 NNE (NOPAT-Net Income)
12 Months Ended
NOPAT=NI+(NonOpExp*(1-
Tax Rate)
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Halliburton Company
Consolidated Balance
Sheets (USD $)
In Millions Dec. 31, 2010 Dec. 31, 2009 Dec. 31, 2008 Dec. 31, 2007
Current assets
Cash and equivalents 1398 2082 1,124 1,847
Receivables (less allowance3,924 2,964
3,795 3,093Inventories 1,940 1,598 1,828 1,459
Investments in marketable 653 1,312 246 388
Current deferred income 257 210 0 376
Other current assets 418 410
Total current assets, , 7,411 7,573
Property, plant, and
equipment (net of 6,842 5,759 4,782 3,630
Goodwill 1,315 1,100 1,072 790
Noncurrent deferred income 0 0 157 348
Other assets , , 963 794
Total assets 18,297 16,538 14,385 13,135
Current liabilities
Accounts payable 1,139 787 898 768
Current maturities of long- 0 750 643 575
Accrued employee 716 514 373 209
Deferred revenue 266 215 231 209
Department of Justice and
Securities and Exchange
Commission settlement and
indemnity, current 142 67 159Income tax payable 0 0 26 0
Other current liabilities 543 491
Total current liabilities, , 2,781 2,411
Long-term debt 3,824 3,824 2,586 2,627
Employee compensation 487 462 539 403
Other liabilities 735 734
Total liabilities , , 6,641 6,175
Shareholders' equityCommon shares, par value
$2.50 per share -
authorized 2,000 shares,
issued 1,069 shares and
1 067 shares2,674 2,669 2,666 2,657
Paid-in capital in excess of 339 411 1,114 1,741
Accumulated other (240) (213) (215) (104)
Retained earnings 12,371 10,863 9,411 8,202
Treasury stock, at cost - , , (5,251) (5,630)
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Company shareholders' 10,373 8,728 7,725 6,866
Noncontrolling interest in 19 94
Total shareholders' , , 7,744 6,960
Total liabilities and, , 14,385 13,135
Total Assets 18,297 16,538 14,385 13,135
Average Total Assets 17,418 15,462 13,760
Total Equity 10,387 8,757 7,744 6,960
Average Total Equity 9,572 8,251 7,352
Non-operating Liabilities 3,824 4,574 3,229 3,202
Non-operating Assets 653 1,312 246 388
NNO 3,171 3,262 2,983 2,814
Average NNO 3,217 3,123 2,899
Operating Assets 17,644 15,226 14,139 12,747
Operating Liabilities 4,086 3,207 3,412 2,973
NOA 13,558 12,019 10,727 9,774
Average NOA 12,789 11,373 10,251
CHECK TRUE TRUE TRUE TRUE
Avg '10-'09 Avg '09-08 Avg 08-07
9,572 8,251 7,352
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As reported Adjustment As if
1,398 0 1,398
3,924 0 3,9241,940 0 1,940653 0 653257 0 257714 0 714
8,886 0 8,886
6,842 580 7,4221,315 0 1,315
0 0 01,254 0 1,254
18,297 580 18,877
1,139 0 1,1390 120 120
716 0 716266 0 266
0 0 00 0 0
636 0 636
2,757 120 2,877
3,824 460 4,284487 0 487842 0 842
7,910 580 8,490
2,674 0 2,674339 0 339
(240) 0 (240)12,371 0 12,371(4,771) 0 (4,771)
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10,373 0 10,37314 0 14
10,387 0 10,387
18,297 0 18,877
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Halliburton CompanyConsolidated Statements of
Shareholders' Equity (USD $)
Millions of dollars Common Shares Paid-in Capital in Excess of Par Value Treasury Stock
Balance at December 31, 2007 2657 1804 (5630)
Cash dividends paid
Stock plans 9 41 173
Common shares purchased (507)Tax benefit from exercise of options
and restricted stock 45
Distributions to noncontrolling interest
holders
Other transactions with shareholders
Total dividends and other transactions
with shareholders9 86 (334)
Adoption of new accounting standards
(693)
Portion of the convertible debt
premium settled in stock, at cost (713) 713
Comprehensive income (loss):
Net income
Other comprehensive income (loss):
Cumulative translation adjustment
postretirement
Actuarial net loss
Other
Tax effect on defined benefit and
postretirement plans
Defined benefit and other
postretirement
plans, net
Net unrealized losses on investments,
net of tax benefit of $4
Total comprehensive income
Balance at December 31, 2008 2666 484 (5251)
Cash dividends paid
Stock plans 3 (51) 266
Common shares purchased (17)
Tax loss from exercise of options andrestricted stock
(22)
Other
Total dividends and other transactions
with shareholders3 (73) 249
Comprehensive income (loss):
Net income
Other comprehensive income (loss):
Cumulative translation adjustment
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Defined benefit and other
postretirementplans, net
Net unrealized gains on investments,
net of tax provision of $3
Total comprehensive income
Balance at December 31, 2009 2669 411 (5002)Cash dividends paid
Stock plans 5 (37) 252
Common shares purchased (141)Tax loss from exercise of options and
restricted stock (18)
Other
Total dividends and other transactions
with shareholders5 (55) 111
Treasury shares issued for acquisition (17) 120
Comprehensive income (loss):
Net income
Other comprehensive income (loss):
Cumulative translation adjustment
Defined benefit and other
postretirement plans adjustments, net
Total comprehensive income
Balance at December 31, 2010 2674 339 (4771)
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Retained EarningsAccumulated Other
Comprehensive Income (Loss)
Noncontrolling Interest in
Consolidated SubsidiariesTotal
8146 (104) 93 6966
(319) (319)
223
(507)
45
(2) (2)
(63) (63)
(319) (65) (623)
(10)
(703)
2224 (9) 2215
1 1
(170) (170)
18 18
46
46
(106) (106)
(6) (6)
2224 (111) (9) 2104
10041 (215) 19 7744
(324) (324)
218
(17)
(22)
1 1
(323) (144)
1145 10 1155
(5) (5)
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2 2
5 5
1145 2 10 1157
10863 (213) 29 8757(327) (327)
220
(141)
(18)
(21) (21)
(327) (21) (287)
103
1835
7 1842
(1) (1)
(26) (1) (27)
1835 (27) 6 1814
12371 (240) 14 10387
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Halliburton Company
Consolidated Statements of Cash Flows (USD $)
In Millions (USD $)Dec. 31,
2010
Dec. 31,
2009
Dec. 31,
2008
Cash flows from operating activities:
Net income 1,842 1,155 2,215
Adjustments to reconcile net income to net cash
from o erations:Depreciation, depletion, and amortization 1,119 931 738
Payments related to KBR TSKJ matters(177) (417)
-
Provision for deferred income taxes, continuing operations124 274 254
(Income) loss from discontinued operations (40) 9 423
Other changes:
Receivables (902) 869 (670)
Inventories (331) 232 (368)
Accounts payable 330 (118) 161
Other 247 (529) (79)
Total cash flows from operating activities 2,212 2,406 2,674
Cash flows from investing activities:
Capital expenditures (2,069) (1,864) (1,824)
Sales of marketable securities 1,925 300 388
Purchases of marketable securities (1,282) (1,620)
-
Acquisitions of business assets, net of cash acquired (523) (55) (652)
Other investing activities 194 154 232
Total cash flows from investing activities (1,755) (3,085) (1,856)
Cash flows from financing activities:
Proceeds from long-term borrowings, net of offering costs
- 1,975 1,187
Payments on long-term borrowings (790) (31) (2,048)
Dividends to shareholders (327) (324) (319)
Payments to reacquire common stock (141) (17) (507)Other financin activities 144 67 164
Total cash flows from financing activities (1,114) 1,670 (1,523)
Effect of exchange rate changes on cash (27) (33) (18)
Increase (decrease) in cash and equivalents (684) 958 (723)
Cash and equivalents at beginning of period 2,082 1,124 1,847
Cash and equivalents at end of period 1,398 2,082 1,124
Cash payments during the period for:
Interest from continuing operations 310 251 143
Income taxes from continuing operations 804 485 1,057
12 Months Ended
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Baker Hughes, Inc. and Subsidiaries
Consolidated Statements of Operations (USD $)
In Millions, except Per Share dataDec. 31,
2010
Dec. 31,
2009
Dec. 31,
2008
Revenues:
Sales 5,516 4,809 5,734
Services8,898 4,855 6,130
Total revenues 14,414 9,664 11,864
Costs and expenses:
Cost of sales 4,359 3,858 4,081
Cost of services 6,825 3,539 3,873
Research and engineering 429 397 426
Marketing, general and administrative 1,250 1,120 1,046
Acquisition-related costs 134 18 0
Litigation settlement 0 0 62
Total costs and expenses12,997 8,932 9,488
Operating income 1,417 732 2,376
Equity in income of affiliates 0 0 2
Gain on sale of product line 0 0 28
Gain (loss) on investments 6 4 (25)
Interest expense, net (141) (125) (62)
Income before income taxes 1,282 611 2,319
Income taxes (463) (190) (684)
Net income 819 421 1,635
Net income attributable to noncontrolling interest (7) 0 0Net income attributable to Baker Hughes 812 421 1,635
Basic earnings per share attributable to Baker Hughes 2.06 1.36 5.32
Diluted earnings per share attributable to Baker Hughes2.06 1.36 5.30
Statutory Tax Rate 0.3648 0.3598 0.3582
Tax On Operating Profit (512) (234) (715)
Tax Rate On Operating Profit
NOPBT 1,417 732 2,376
NOPAT 905 498 1,661
NNE (NOPAT-Net Income) 86 77 26
12 Months Ended
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Non operating item
Dec. 31, 2010 Dec. 31, 2009 Dec. 31, 2008
5,516 4,809 5,734
8,898 4,855 6,130
14,414 9,664 11,864
4,359 3,858 4,081
6,825 3,539 3,873
429 397 426
1,250 1,120 1,046
0 0 00 0 0
12,863 8,914 9,426
1,551 750 2,438
0 0 0
0 0 0
6 4 5
(133) (133) (133)
1,424 621 2,310
(459) (200) (745) 0.361154
965 421 1,565
(7) 0 0958 421 1,565
0.3648 0.3598 0.3582
(505) (247) (790)
1,551 750 2,438
1,046 503 1,648
81 83 82
Pro Forma
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0.294955
0.218703
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Baker Hughes, Inc. and Subsidiaries
Consolidated Balance Sheets
In Millions (USD $) Dec. 31, 2010 Dec. 31, 2009
Current Assets
Cash and cash equivalents 1,456 1,595
Short-term investments 250 -Accounts receivable - less allowance for doubtful accounts (2010 -
$162; 2009 - $157; 2008 - $74; 2007 - $59) 3,942 2,331
Inventories, net 2,594 1,836
Deferred income taxes 234 268
Other current assets 231 195
Total current assets 8,707 6,225
Property, plant and equipment - less accumulated depreciation
(2010 - $4,367; 2009 - $3,668; 2008 - $3,203; 2007 - $2976) 6,310 3,161
Goodwill 5,869 1,418
Intangible assets, net 1,569 195
Other assets 531 440
Total assets 22,986 11,439
Current Liabilities
Accounts payable 1,496 821
Short-term borrowings and current portion of long-term debt 331 15
Accrued employee compensation 589 448
Income taxes payable 219 95
Other accrued liabilities 504 234
Total current liabilities 3,139 1,613
Long-term debt 3,554 1,785
Deferred income taxes and other tax liabilities 1,360 309
Liabilities for pensions and other postretirement benefits 483 379
Other liabilities 164 69
Commitments and contingencies - -
Total Non-Current Liability 5,561 2,542
Total Liabilities 8,700 4,155
Stockholders' EquityCommon stoc , one o ar par vaue s ares aut orize - 750;
issued and outstanding: 2010 - 432; 2009 - 312; 2008 - 309;
2007 - 316) 432 312
Capital in excess of par value 7,005 874
Retained earnings 7,083 6,512
Accumulated other comprehensive loss (420) (414)
12 Mont
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Baker Hughes stockholders' equity 14,100 7,284
Noncontrolling interest 186 -
Total stockholders' equity 14,286 7,284
Total liabilities and stockholders' equity 22,986 11,439
Total Assets 22,986 11,439
Average Total Assets 17212.5 11650
Total Equity 14,286 7,284
Average Total Equity 10785 7045.5
Non-operating Liabilities 3,885 1,800
Non-operating Assets 250 -
NNO 3,635 1,800
Average NNO 2718 2067
Operating Assets 22,736 11,439
Operating Liabilities 4,815 2,355
NOA 17,921 9,084
Average NOA 13502.5 9112
CHECK TRUE TRUE
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Dec. 31, 2008 Dec. 31, 2007 As reported Adjustment As if
1,955 1,054 1,456 - 1,456
- - 250 - 250
2,759 2,383 3,942 - 3,942
2,021 1,714 2,594 - 2,594
231 182 234 - 234
179 122 231 - 231
7,145 5,455 8,707 - 8,707
2,833 2,345 6,310 1140 7,450
1,389 1,354 5,869 - 5,869
198 177 1,569 - 1,569
296 526 531 - 531
11,861 9,857 22,986 1,140 24,126
888 704 1,496 - 1,496
558 15 331 106 437
530 457 589 - 589
272 191 219 - 219
263 251 504 - 504
2,511 1,618 3,139 106 3,245
1,775 1,069 3,554 1,034 4,588
384 416 1,360 - 1,360
317 332 483 - 483
67 116 164 - 164
- - - - -
2,543 1,933 5,561 1,034 6,595
5,054 3,551 8,700 1034 9,734
309 316 432 - 432
745 1,216 7,005 - 7,005
6,276 4,818 7,083 - 7,083
(523) (44) (420) - (420)
s Ended Fiscal 2010
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6,807 6,306 14,100 - 14,100
- - 186 - 186
6,807 6,306 14,286 - 14,286
11,861 9,857 22,986 1,140 24,126
11,861 9,857
10859
6,807 6,306
6556.5
2,333 1,084
- -
2,333 1,084
1709
11,861 9,857
2,721 2,467
9,140 7,390
8265
TRUE TRUE
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Baker Hughes, Inc. and Subsidiaries
2008 Consolidated Statements of Stockholders'
Equity (USD $)
Common
Stock
Capital in
Excess of Par
Value
Retained
Earnings
In Millions
Balance, December 31, 2007 316 1,216 4,818Adoption of ASC 715, Compensation -
Retirement Benefits (4)
Adjusted beginning balance January 1, 2008 316 1,216 4,814
Comprehensive income:
Net income 1,635
Foreign currency translation adjustments
Defined benefit pension plans, net of tax $67, $2,and
$5 for the year 2008, 2009 and 2010, respectively
Total comprehensive income
Issuance of common stock, pursuant to employee stock
lans2 76
Tax benefit on stock lans 11Stock-based compensation 60
Repurchase and retirement of common stock (9) (618)
Cash dividends ($0.56 per share), ($0.60 per share)
and ($0.60 per share) for the year 2008, 2009 and
2010 res ectvel
(173)
Ending Balance at Dec. 31, 2008 309 745 6,276
2009 Consolidated Statements of Stockholders'
Equity (USD $)
Common
Stock
Capital in
Excess of Par
Value
Retained
Earnings
In Millions
Comprehensive income:
Net income 421
Foreign currency translation adjustments
Defined benefit pension plans, net of tax $67, $2,and
$5 for the year 2008, 2009 and 2010, respectively
Total comprehensive income
Issuance of common stock, pursuant to employee stock
lans3 43
Tax benefit on stock plans (2)
Stock-based compensation 88
Cash dividends ($0.56 per share), ($0.60 per share)
and ($0.60 per share) for the year 2008, 2009 and
2010 res ectvel
(185)
Ending Balance at Dec. 31, 2009 312 874 6,512
2010 Consolidated Statements of Stockholders'
Equity (USD $)
Common
Stock
Capital in
Excess of Par
Value
Retained
Earnings
In Millions
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Comprehensive income:
Net income 812
Foreign currency translation adjustments
Defined benefit pension plans, net of tax $67, $2,and
$5 for the year 2008, 2009 and 2010, respectively
Total comprehensive income
Issuance of common stock, to acquire BJ Services118 5,986
Issuance of common stock, pursuant to employee stock
lans2 60
Tax benefit on stock plans (2)
Stock-based compensation 87
Cash dividends ($0.56 per share), ($0.60 per share)
and ($0.60 per share) for the year 2008, 2009 and
2010 res ectvel
(241)
Acquisition of noncontrolling interest
Ending Balance at Dec. 31, 2010 432 7,005 7,083
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Accumulated
Other
Comprehensive
Loss
Noncontrolling
InterestTotal
(44) 6,306
(4)
(44) 6,302
(354)
(125)
1,156
78
1160
(627)
(173)
(523) 0 6,807
Accumulated
Other
Comprehensive
Loss
Noncontrolling
InterestTotal
122
(13)
530
46
(2)
88
(185)
(414) 0 7,284
Accumulated
Other
Comprehensive
Loss
Noncontrolling
InterestTotal
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7
(41)
35
813
6,104
62
(2)
87
(241)
179 179
(420) 186 14,286
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Baker Hughes, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (USD $)
In MillionsDec. 31,
2010
Dec. 31,
2009
Dec. 31,
2008
Cash flows from operating activities:
Net income 819 421 1,635
Adjustments to reconcile net income to net cash
flows from o eratin activities:Depreciation and amortization 1,069 711 637
(Gain) loss on investments (6) (4) 25
Stock-based compensation 87 88 60
Benefit for deferred income taxes (188) (256) (21)
Gain on sale of product line (28)
Gain on disposal of assets (113) (64) (101)
Provision for doubtful accounts 39 94 31
Changes in operating assets and liabilities:
Accounts receivable (702) 399 (515)
Inventories (243) 240 (371)
Accounts payable 292 (89) 242
Accrued employee compensation and other accruedliabilities (182) (130) 90
Income taxes payable 23 (169) 76
Liabilities for pensions and other postretirement benefits
and other liabilities (16) 13 (38)
Other (23) (15) (108)
Net cash flows from operating activities 856 1,239 1,614
Cash flows from investing activities:
Expenditures for capital assets (1,491) (1,086) (1,303)
Proceeds from disposal of assets 208 163 222
Proceeds from sale of businesses, net of disposal costs,
and interests in affiliates 39 31
Ac uisition of businesses net of cash ac uired (888) (58) (120)
Proceeds from sale/settlement of investments 6 15
Purchase of short-term investments (250)
Net cash flows from investing activities (2,376) (966) (1,170)
Cash flows from financing activities:
Net proceeds (payments) of commercial paper and other
short-term debt 52 (16) 15
Net proceeds from issuance of long-term debt 1,479 1,235
Repayment of long-term debt
- (525)
Proceeds from issuance of common stock 74 51 87
Repurchase of common stock (627)
Dividends (241) (185) (173)
Excess tax benefits from stock-based compensation 2 4Net cash flows from financing activities 1,366 (675) 541
Effect of forei n exchan e rate chan es on cash 15 42 (84)
Decrease increase in cash and cash e uivalents (139) (360) 901
Cash and cash equivalents, beginning of year 1,595 1,955 1,054
Cash and cash equivalents, end of year 1,456 1,595 1,955
Supplemental cash flows disclosures:
Income taxes paid 637 604 621
Interest paid 154 154 86
12 Months Ended
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Supplemental disclosure of noncash investing
activities:Capital expenditures included in accounts payable 64 29 43
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