Delaware |
001-03492 | 75-2677995 | ||||||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
3000 North Sam Houston Parkway East, | Houston, | Texas | 77032 | ||||||||
(Address of principal executive offices) | (Zip Code) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Common Stock, par value $2.50 per share | HAL | New York Stock Exchange |
Emerging growth company | ☐ |
HALLIBURTON COMPANY | |||||||||||
Date: | July 19, 2024 | By: | /s/ Charles E. Geer, Jr. | ||||||||
Charles E. Geer, Jr. | |||||||||||
Senior Vice President and Chief | |||||||||||
Accounting Officer |
(1) | Free cash flow is a non-GAAP financial measure; please see reconciliation of Cash Flows from Operating Activities to Free Cash Flow in Footnote Table 3. | |||||||
(2) | Adjusted net income is a non-GAAP financial measure; please see reconciliation of Net Income to Adjusted Net Income in Footnote Table 1. |
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Three Months Ended | |||||||||||||||||||||||
June 30, | March 31, | ||||||||||||||||||||||
2024 | 2023 | 2024 | |||||||||||||||||||||
Revenue: |
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Completion and Production | $ | 3,401 | $ | 3,476 | $ | 3,373 | |||||||||||||||||
Drilling and Evaluation | 2,432 | 2,322 | 2,431 | ||||||||||||||||||||
Total revenue | $ | 5,833 | $ | 5,798 | $ | 5,804 | |||||||||||||||||
Operating income: |
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Completion and Production | $ | 723 | $ | 707 | $ | 688 | |||||||||||||||||
Drilling and Evaluation | 403 | 376 | 398 | ||||||||||||||||||||
Corporate and other | (65) | (59) | (65) | ||||||||||||||||||||
SAP S4 upgrade expense | (29) | (13) | (34) | ||||||||||||||||||||
Total operating income |
1,032 | 1,011 | 987 | ||||||||||||||||||||
Interest expense, net | (92) | (102) | (92) | ||||||||||||||||||||
Loss on Blue Chip Swap transactions (a) | — | (104) | — | ||||||||||||||||||||
Other, net (b) | (20) | (22) | (108) | ||||||||||||||||||||
Income before income taxes |
920 | 783 | 787 | ||||||||||||||||||||
Income tax provision (c) |
(207) | (167) | (178) | ||||||||||||||||||||
Net income |
$ | 713 | $ | 616 | $ | 609 | |||||||||||||||||
Net income attributable to noncontrolling interest |
(4) | (6) | (3) | ||||||||||||||||||||
Net income attributable to company |
$ | 709 | $ | 610 | $ | 606 | |||||||||||||||||
Basic and diluted net income per share |
$ | 0.80 | $ | 0.68 | $ | 0.68 | |||||||||||||||||
Basic weighted average common shares outstanding | 884 | 901 | 889 | ||||||||||||||||||||
Diluted weighted average common shares outstanding | 886 | 903 | 891 | ||||||||||||||||||||
(a) | The Central Bank of Argentina maintains currency controls that limit our ability to access U.S. dollars in Argentina and remit cash from our Argentine operations. The execution of certain trades known as Blue Chip Swaps, effectively results in a parallel U.S. dollar exchange rate. During the three months ended June 30, 2023, Halliburton entered into Blue Chip Swap transactions which resulted in a $104 million pre-tax loss. |
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(b) | During the three months ended March 31, 2024, Halliburton incurred a charge of $82 million primarily due to the impairment of an investment in Argentina and currency devaluation in Egypt. |
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(c) | The tax provision during the three months ended March 31, 2024 includes the tax effect on the impairment of an investment in Argentina and Egypt currency impact. During the three months ended June 30, 2023, the tax provision includes the tax effect of the loss on Blue Chip Swap transactions. |
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See Footnote Table 1 for Reconciliation of Net Income to Adjusted Net Income. |
Six Months Ended | |||||||||||||||||
June 30, | |||||||||||||||||
2024 | 2023 | ||||||||||||||||
Revenue: |
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Completion and Production | $ | 6,774 | $ | 6,885 | |||||||||||||
Drilling and Evaluation | 4,863 | 4,590 | |||||||||||||||
Total revenue | $ | 11,637 | $ | 11,475 | |||||||||||||
Operating income: |
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Completion and Production | $ | 1,411 | $ | 1,373 | |||||||||||||
Drilling and Evaluation | 801 | 745 | |||||||||||||||
Corporate and other | (130) | (117) | |||||||||||||||
SAP S4 upgrade expense | (63) | (13) | |||||||||||||||
Total operating income |
2,019 | 1,988 | |||||||||||||||
Interest expense, net | (184) | (203) | |||||||||||||||
Loss on Blue Chip Swap transactions (a) | — | (104) | |||||||||||||||
Other, net (b) | (128) | (69) | |||||||||||||||
Income before income taxes |
1,707 | 1,612 | |||||||||||||||
Income tax provision (c) |
(385) | (341) | |||||||||||||||
Net Income |
$ | 1,322 | $ | 1,271 | |||||||||||||
Net Income attributable to noncontrolling interest |
(7) | (10) | |||||||||||||||
Net Income attributable to company |
$ | 1,315 | $ | 1,261 | |||||||||||||
Basic net income per share |
$ | 1.48 | $ | 1.40 | |||||||||||||
Diluted net income per share |
$ | 1.48 | $ | 1.39 | |||||||||||||
Basic weighted average common shares outstanding | 886 | 902 | |||||||||||||||
Diluted weighted average common shares outstanding | 888 | 905 | |||||||||||||||
(a) | The Central Bank of Argentina maintains currency controls that limit our ability to access U.S. dollars in Argentina and remit cash from our Argentine operations. The execution of certain trades known as Blue Chip Swaps, effectively results in a parallel U.S. dollar exchange rate. During the six months ended June 30, 2023, Halliburton entered into Blue Chip Swap transactions which resulted in a $104 million pre-tax loss. |
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(b) | During the six months ended June 30, 2024, Halliburton incurred a charge of $82 million in March 2024, primarily due to the impairment of an investment in Argentina and currency devaluation in Egypt. |
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(c) | The tax provision during the six months ended June 30, 2024 includes the tax effect on the impairment of an investment in Argentina and Egypt currency impact. During the six months ended June 30, 2023, the tax provision includes the tax effect on the loss on Blue Chip Swap transactions. |
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See Footnote Table 2 for Reconciliation of Net Income to Adjusted Net Income. |
June 30, | December 31, | |||||||||||||
2024 | 2023 | |||||||||||||
Assets | ||||||||||||||
Current assets: | ||||||||||||||
Cash and equivalents | $ | 2,138 | $ | 2,264 | ||||||||||
Receivables, net | 5,327 | 4,860 | ||||||||||||
Inventories | 3,282 | 3,226 | ||||||||||||
Other current assets | 1,131 | 1,193 | ||||||||||||
Total current assets | 11,878 | 11,543 | ||||||||||||
Property, plant, and equipment, net | 5,073 | 4,900 | ||||||||||||
Goodwill | 2,858 | 2,850 | ||||||||||||
Deferred income taxes | 2,420 | 2,505 | ||||||||||||
Operating lease right-of-use assets | 1,026 | 1,088 | ||||||||||||
Other assets | 1,897 | 1,797 | ||||||||||||
Total assets | $ | 25,152 | $ | 24,683 | ||||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 3,295 | $ | 3,147 | ||||||||||
Accrued employee compensation and benefits | 619 | 689 | ||||||||||||
Current portion of operating lease liabilities | 258 | 262 | ||||||||||||
Other current liabilities | 1,404 | 1,510 | ||||||||||||
Total current liabilities | 5,576 | 5,608 | ||||||||||||
Long-term debt | 7,638 | 7,636 | ||||||||||||
Operating lease liabilities | 832 | 911 | ||||||||||||
Employee compensation and benefits | 375 | 408 | ||||||||||||
Other liabilities | 685 | 687 | ||||||||||||
Total liabilities | 15,106 | 15,250 | ||||||||||||
Company shareholders’ equity | 10,000 | 9,391 | ||||||||||||
Noncontrolling interest in consolidated subsidiaries | 46 | 42 | ||||||||||||
Total shareholders’ equity | 10,046 | 9,433 | ||||||||||||
Total liabilities and shareholders’ equity | $ | 25,152 | $ | 24,683 |
Six Months Ended | Three Months Ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2024 | 2023 | 2024 | ||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net income |
$ | 1,322 | $ | 1,271 | $ | 713 | ||||||||||||||
Adjustments to reconcile net income to cash flows from operating activities: |
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Depreciation, depletion, and amortization | 534 | 486 | 271 | |||||||||||||||||
Working capital (a) | (365) | (589) | (24) | |||||||||||||||||
Other operating activities | 77 | 6 | 121 | |||||||||||||||||
Total cash flows provided by operating activities |
1,568 | 1,174 | 1,081 | |||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Capital expenditures | (677) | (571) | (347) | |||||||||||||||||
Proceeds from sales of property, plant, and equipment | 108 | 90 | 59 | |||||||||||||||||
Other investing activities | (205) | (215) | (105) | |||||||||||||||||
Total cash flows used in investing activities | (774) | (696) | (393) | |||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Stock repurchase program | (500) | (348) | (250) | |||||||||||||||||
Dividends to shareholders | (302) | (289) | (151) | |||||||||||||||||
Other financing activities | (36) | (7) | (15) | |||||||||||||||||
Total cash flows used in financing activities | (838) | (644) | (416) | |||||||||||||||||
Effect of exchange rate changes on cash | (82) | (75) | (25) | |||||||||||||||||
Increase (decrease) in cash and equivalents |
(126) | (241) | 247 | |||||||||||||||||
Cash and equivalents at beginning of period | 2,264 | 2,346 | 1,891 | |||||||||||||||||
Cash and equivalents at end of period | $ | 2,138 | $ | 2,105 | $ | 2,138 | ||||||||||||||
(a) | Working capital includes receivables, inventories, and accounts payable. | |||||||||||||||||||
See Footnote Table 3 for Reconciliation of Cash Flows from Operating Activities to Free Cash Flow. |
Three Months Ended | |||||||||||||||||
June 30, | March 31, | ||||||||||||||||
Revenue | 2024 | 2023 | 2024 | ||||||||||||||
By operating segment: | |||||||||||||||||
Completion and Production | $ | 3,401 | $ | 3,476 | $ | 3,373 | |||||||||||
Drilling and Evaluation | 2,432 | 2,322 | 2,431 | ||||||||||||||
Total revenue | $ | 5,833 | $ | 5,798 | $ | 5,804 | |||||||||||
By geographic region: | |||||||||||||||||
North America | $ | 2,481 | $ | 2,696 | $ | 2,546 | |||||||||||
Latin America | 1,097 | 994 | 1,108 | ||||||||||||||
Europe/Africa/CIS | 757 | 698 | 729 | ||||||||||||||
Middle East/Asia | 1,498 | 1,410 | 1,421 | ||||||||||||||
Total revenue | $ | 5,833 | $ | 5,798 | $ | 5,804 | |||||||||||
Operating income |
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By operating segment: | |||||||||||||||||
Completion and Production | $ | 723 | $ | 707 | $ | 688 | |||||||||||
Drilling and Evaluation | 403 | 376 | 398 | ||||||||||||||
Total operations | 1,126 | 1,083 | 1,086 | ||||||||||||||
Corporate and other | (65) | (59) | (65) | ||||||||||||||
SAP S4 upgrade expense | (29) | (13) | (34) | ||||||||||||||
Total operating income |
$ | 1,032 | $ | 1,011 | $ | 987 | |||||||||||
Six Months Ended | |||||||||||
June 30, | |||||||||||
Revenue | 2024 | 2023 | |||||||||
By operating segment: | |||||||||||
Completion and Production | $ | 6,774 | $ | 6,885 | |||||||
Drilling and Evaluation | 4,863 | 4,590 | |||||||||
Total revenue | $ | 11,637 | $ | 11,475 | |||||||
By geographic region: | |||||||||||
North America | $ | 5,027 | $ | 5,461 | |||||||
Latin America | 2,205 | 1,909 | |||||||||
Europe/Africa/CIS | 1,486 | 1,360 | |||||||||
Middle East/Asia | 2,919 | 2,745 | |||||||||
Total revenue | $ | 11,637 | $ | 11,475 | |||||||
Operating income |
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By operating segment: | |||||||||||
Completion and Production | $ | 1,411 | $ | 1,373 | |||||||
Drilling and Evaluation | 801 | 745 | |||||||||
Total operations | 2,212 | 2,118 | |||||||||
Corporate and other | (130) | (117) | |||||||||
SAP S4 upgrade expense | (63) | (13) | |||||||||
Total operating income |
$ | 2,019 | $ | 1,988 | |||||||
Three Months Ended | ||||||||||||||||||||
June 30, | March 31, | |||||||||||||||||||
2024 | 2023 | 2024 | ||||||||||||||||||
Net income attributable to company |
$ | 709 | $ | 610 | $ | 606 | ||||||||||||||
Adjustments: | ||||||||||||||||||||
Loss on Blue Chip Swap transactions | — | 104 | — | |||||||||||||||||
Other, net (a) | — | — | 82 | |||||||||||||||||
Total adjustments, before taxes | — | 104 | 82 | |||||||||||||||||
Tax adjustment (b) | — | (23) | (9) | |||||||||||||||||
Total adjustments, net of taxes (c) | — | 81 | 73 | |||||||||||||||||
Adjusted net income attributable to company (c) |
$ | 709 | $ | 691 | $ | 679 | ||||||||||||||
Diluted weighted average common shares outstanding | 886 | 903 | 891 | |||||||||||||||||
Net income per diluted share (d) |
$ | 0.80 | $ | 0.68 | $ | 0.68 | ||||||||||||||
Adjusted net income per diluted share (d) |
$ | 0.80 | $ | 0.77 | $ | 0.76 | ||||||||||||||
(a) | During the three months ended March 31, 2024, Halliburton incurred a charge of $82 million primarily due to the impairment of an investment in Argentina and currency devaluation in Egypt. |
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(b) | The tax adjustment in the table above includes the tax effect on the impairment of an investment in Argentina and Egypt currency impact during the three months ended March 31, 2024. During the three months ended June 30, 2023, the tax adjustment includes the tax effect on the loss on Blue Chip Swap transactions. |
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(c) | Adjusted net income attributable to company is a non-GAAP financial measure which is calculated as: “Net income attributable to company” plus “Total adjustments, net of taxes” for the respective periods. Management believes net income adjusted for the Egypt currency impact, Argentina investment impairment, and the loss on the Blue Chip Swap transactions, along with the tax adjustment, is useful to investors to assess and understand operating performance, especially when comparing those results with previous and subsequent periods or forecasting performance for future periods, primarily because management views the excluded items to be outside of the company's normal operating results. Management analyzes net income without the impact of these items as an indicator of performance to identify underlying trends in the business and to establish operational goals. Total adjustments remove the effect of these items. |
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(d) | Net income per diluted share is calculated as: “Net income attributable to company” divided by “Diluted weighted average common shares outstanding.” Adjusted net income per diluted share is a non-GAAP financial measure which is calculated as: “Adjusted net income attributable to company” divided by “Diluted weighted average common shares outstanding.” Management believes adjusted net income per diluted share is useful to investors to assess and understand operating performance. |
Six Months Ended | ||||||||||||||
June 30, | ||||||||||||||
2024 | 2023 | |||||||||||||
Net income attributable to company |
$ | 1,315 | $ | 1,261 | ||||||||||
Adjustments: | ||||||||||||||
Loss on Blue Chip Swap transactions | — | 104 | ||||||||||||
Other, net (a) | 82 | — | ||||||||||||
Total adjustments, before taxes | 82 | 104 | ||||||||||||
Tax adjustment (b) | (9) | (23) | ||||||||||||
Total adjustments, net of taxes (c) | 73 | 81 | ||||||||||||
Adjusted net income attributable to company (c) |
$ | 1,388 | $ | 1,342 | ||||||||||
Diluted weighted average common shares outstanding | 888 | 905 | ||||||||||||
Net income per diluted share (d) |
$ | 1.48 | $ | 1.39 | ||||||||||
Adjusted net income per diluted share (d) |
$ | 1.56 | $ | 1.48 | ||||||||||
(a) | During the six months ended June 30, 2024, Halliburton incurred a charge of $82 million in March 2024, primarily due to the impairment of an investment in Argentina and currency devaluation in Egypt. |
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(b) | The tax adjustment in the table above includes the tax effect on the impairment of an investment in Argentina and Egypt currency impact during the six months ended June 30, 2024. During the six months ended June 30, 2023, the tax adjustment includes the tax effect on the loss on Blue Chip Swap transactions. |
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(c) | Adjusted net income attributable to company is a non-GAAP financial measure which is calculated as: “Net income attributable to company” plus “Total adjustments, net of taxes” for the respective periods. Management believes net income adjusted for the Egypt currency impact, Argentina investment impairment, and the loss on the Blue Chip Swap transactions, along with the tax adjustment, is useful to investors to assess and understand operating performance, especially when comparing those results with previous and subsequent periods or forecasting performance for future periods, primarily because management views the excluded items to be outside of the company's normal operating results. Management analyzes net income without the impact of these items as an indicator of performance to identify underlying trends in the business and to establish operational goals. Total adjustments remove the effect of these items. |
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(d) | Net income per diluted share is calculated as: “Net income attributable to company” divided by “Diluted weighted average common shares outstanding.” Adjusted net income per diluted share is a non-GAAP financial measure which is calculated as: “Adjusted net income attributable to company” divided by “Diluted weighted average common shares outstanding.” Management believes adjusted net income per diluted share is useful to investors to assess and understand operating performance. |
Six Months Ended | Three Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | |||||||||||||||||||||
Total cash flows provided by operating activities |
$ | 1,568 | $ | 1,174 | $ | 1,081 | |||||||||||||||||
Capital expenditures | (677) | (571) | (347) | ||||||||||||||||||||
Proceeds from sales of property, plant, and equipment | 108 | 90 | 59 | ||||||||||||||||||||
Free cash flow (a) | $ | 999 | $ | 693 | $ | 793 | |||||||||||||||||
(a) | Free Cash Flow is a non-GAAP financial measure which is calculated as “Total cash flows provided by operating activities” less “Capital expenditures” plus “Proceeds from sales of property, plant, and equipment.” Management believes that Free Cash Flow is a key measure to assess liquidity of the business and is consistent with the disclosures of Halliburton's direct, large-cap competitors. |