- Reported net income of $0.68 per diluted share.
- Adjusted net income per diluted share1 of $0.77 increased more
than 50% year-over-year.
- Revenue of $5.8 billion, increased 14% year-over-year.
- Operating margin of 17.4%, a 329 basis points year-over-year
increase over adjusted operating margin2.
- Cash flow from operating activities of $1.1 billion and free
cash flow3 of $798 million.
Halliburton Company (NYSE: HAL) announced today net income of
$610 million, or $0.68 per diluted share, for the second quarter of
2023. This compares to net income for the first quarter of 2023 of
$651 million, or $0.72 per diluted share. Adjusted net income4 for
the second quarter of 2023, excluding the loss on transactions in
Argentina, was $691 million, or $0.77 per diluted share.
Halliburton's total revenue for the second quarter of 2023 was $5.8
billion compared to total revenue of $5.7 billion in the first
quarter of 2023. Operating income was $1.0 billion in the second
quarter of 2023 compared to operating income of $977 million in the
first quarter of 2023.
"Halliburton’s strong performance in the second quarter
demonstrates the earnings power of our business. Total company
revenue increased 14% and operating income grew 41% compared to
second quarter of 2022 adjusted operating income5. Both of our
divisions delivered strong margin performance across all regions,”
commented Jeff Miller, Chairman, President and CEO.
"Oil and gas are critical to the global economy and meeting long
term demand requires sustained capital investment. I am confident
in the strength and duration of this upcycle and Halliburton’s
ability to outperform in it.
"I am pleased with the $798 million of free cash flow generation
in the second quarter. Our strong cash flow generation gives me
confidence in our ability to return more cash back to shareholders
as evidenced by the $248 million of share repurchases this
quarter,” concluded Miller.
Operating Segments
Completion and Production
Completion and Production revenue in the second quarter of 2023
was $3.5 billion, an increase of $67 million, or 2% sequentially,
while operating income was $707 million, an increase of $41
million, or 6%. These results were driven by increased completion
tool sales globally, higher artificial lift activity in North
America, improved cementing activity and higher pipeline services
internationally, and higher stimulation activity and well
intervention services in the Gulf of Mexico.
Drilling and Evaluation
Drilling and Evaluation revenue in the second quarter of 2023
was $2.3 billion, an increase of $54 million, or 2% sequentially,
while operating income was $376 million, an increase of $7 million,
or 2%. These results were primarily due to an increase in fluid
services globally, and higher drilling activity in the Western
Hemisphere and Saudi Arabia. These increases were partially offset
by lower software sales in North America and the Eastern
Hemisphere, and decreased project management activity in Saudi
Arabia.
Geographic Regions
North America
North America revenue in the second quarter of 2023 was $2.7
billion, a 2% decrease sequentially. This decline was primarily
driven by decreased stimulation activity in U.S. land, which was
partially offset by increased artificial lift activity in U.S.
land, and higher activity across multiple product service lines in
the Gulf of Mexico.
International
International revenue in the second quarter of 2023 was $3.1
billion, a 7% increase when compared to the first quarter of
2023.
Latin America revenue in the second quarter of 2023 was $994
million, an increase of 9% sequentially resulting from increased
pressure pumping and improved wireline activity in Argentina,
higher completion tool sales in Brazil, and increased activity
across multiple product service lines in Mexico. Partially
offsetting these increases was reduced activity in the Caribbean
across multiple product service lines.
Europe/Africa revenue in the second quarter of 2023 was $698
million, an increase of 5% sequentially. This improvement was
primarily driven by increased fluid services in the region, higher
completion tool sales in Angola and Norway, and higher pipeline
services in Norway. Partially offsetting these increases was lower
software sales across the region.
Middle East/Asia revenue in the second quarter of 2023 was $1.4
billion, an increase of 6% sequentially, largely resulting from
higher completion tool sales in Saudi Arabia, improved wireline
activity and fluid services in the Middle East, and higher drilling
services in the region. These improvements were partially offset by
decreased project management activity in Saudi Arabia, and lower
software sales in the region.
Other Financial Items
During the second quarter of 2023, Halliburton repurchased $248
million of common stock.
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. This parallel rate, which cannot be used as
the basis to remeasure our net monetary assets in U.S. dollars
under U.S. GAAP, was 101% higher than Argentina’s official exchange
rate at June 30, 2023. During the second quarter of 2023,
Halliburton entered into Blue Chip Swap transactions which resulted
in a $104 million pre-tax loss.
During the second quarter, Halliburton kicked off its migration
to SAP S4 which will take place over the next three years. This new
system will provide important efficiency benefits, cost savings,
visibility to our operations, and advanced analytics that will
benefit Halliburton and its customers. We expect this upgrade to
payback in three years after an investment of $250 million. For the
second quarter 2023, we spent $13 million, or about $0.01 per
diluted share, which is included in our results.
Selective Technology &
Highlights
- Vår Energi and Halliburton are entering a long-term strategic
relationship for drilling services to further improve drilling and
well performance and enhance value creation. The planned
relationship covers drilling services related to exploration and
production drilling for Vår Energi across the Norwegian Continental
Shelf (NCS). The relationship has a duration of five years with
options for an additional four years in total. Drilling activities
are focused around four strategic hubs in the Balder/Grane area,
the North Sea, the Norwegian Sea, and the Barents Sea.
- Halliburton introduced the EarthStar® X near-bit shallow and
ultra-deep resistivity service, part of the iStar® intelligent
drilling and logging platform. The EarthStar X service's near-bit,
ultra-deep reservoir mapping sensor increases well placement
accuracy - detecting geological changes early and enabling quick
well trajectory correction to remain in the most productive zones
and maximize asset value. Integrated shallow resistivity
measurements allow early reserves evaluation and accurate fluid
characterization to further improve reservoir insight while
lowering operational complexity and risks.
- Halliburton acquired Resoptima AS, a leading Norwegian
technology company that specializes in data-driven reservoir
management. This strategic acquisition will integrate the
industry-leading reservoir modeling and predictive analytics of
Resoptima into the Halliburton Landmark DecisionSpace® 365 suite.
Resoptima provides technology solutions that enhance oil and gas
operators’ ability to harness data for reservoir understanding,
driving efficiency in oil extraction, resource management, and risk
mitigation. DecisionSpace365 and Resoptima solutions provide open
architectures and interoperability with third-party software. The
combined portfolio will maintain these features, enhancing existing
and future customers’ ability to capitalize on their
investments.
- Equinor selected Halliburton Landmark DecisionSpace
Geosciences® as its standard geoscience toolbox and OpenWorks® with
Open Subsurface Data Universe (OSDU™) as its corporate database for
interpretations for its subsurface data. Equinor’s One Subsurface
community will now have a standardized subsurface toolkit, which
helps them to seamlessly introduce geoscientists into different
projects. The solution will consolidate all interpretation data
into OpenWorks to enable geological interpretation at scale, and a
smooth transition to the cloud. Equinor and Halliburton will
co-develop the DecisionSpace Geosciences exploration
workflows.
- Halliburton introduced the SpyGlass™ cloud-based,
cross-platform web application that allows operators to design,
build, and analyze electric submersible pump (ESP) performance.
With this mobile-enabled software, operators can create and access
real-time analytic data and reports on current ESP performance and
health from their devices anywhere in the world. The updated
software, provides an intuitive, customizable interface that guides
users to help ensure practical designs that deliver improved
results and performance assessments with minimal inputs. The
software allows users to define their unique production goals and
provides multi-variant input analysis to quickly model ‘what-if’
scenarios for optimal performance.
- Halliburton and Nabors Industries announced an agreement on
leading well construction automation solutions. Under the
agreement, Halliburton and Nabors will collaborate together on
their technologies including the Halliburton Well Construction 4.0
digital surface and subsurface drilling technologies, the LOGIX
Autonomous Drilling Platform®, and the Nabors SmartROS® universal
rig controls and automation platform and RigCLOUD® high-performance
digital infrastructure platform. Initially deployed in Iraq, the
companies’ technologies automate well construction services from
planning to execution across both subsurface and surface equipment
and environments. Halliburton and Nabors will engage on further
opportunities to expand projects for other customers across the
globe.
- Halliburton launched the Diskos 2.0 National Data Repository
(NDR), the industry’s first fully cloud-native NDR implementation,
for the Norwegian Petroleum Directorate. Diskos 2.0 stores critical
exploration and production data and is vital to drive investments
in Norway’s oil and gas industry. The upgraded system incorporates
advanced automation and artificial intelligence capabilities to
derive better insights from the data, reduce cost per byte, and
improve scalability to handle over 28 petabytes of data, including
a copy, in a multi-cloud environment. Diskos 2.0 allows members to
instantly access the full range of seismic, well, and production
data in a fully functional petrotechnical software environment,
like Halliburton Landmark DecisionSpace® 365, without moving data
from the NDR to a local network.
- Halliburton was awarded a contract to provide completions,
liners, and monitoring products and services for the carbon capture
and storage (CCS) system within the HyNet North West project in the
Liverpool Bay, U.K. The first CCS project commissioned in the U.K,
the HyNet project will apply CCS to reduce carbon emissions in the
UK by transporting carbon dioxide captured from industry and
storing it in depleted reservoirs underneath Liverpool Bay.
Halliburton will manufacture and deliver equipment from its U.K.
completion manufacturing center in Arbroath.
- Halliburton received a 2023 National Ocean Industries
Association (NOIA) Safety Practice Award. The Safety Practice Award
recognizes specific technologies, approaches, methods, or projects
with direct and demonstrable impacts on improving safety.
Halliburton was recognized for our Risk Management and 5 Checks to
Go programs, which support the Company’s Journey to ZERO vision of
achieving zero safety incidents, zero environmental incidents, and
zero non-productive time. The award-winning entry was selected by
an independent panel of judges from the U.S. Coast Guard, the
Bureau of Safety and Environmental Enforcement, the National
Academy of Science’s Transportation Research Board, and two
industry safety consultants.
- Halliburton Labs introduced Rocsole as the newest participant
in its clean energy accelerator. Rocsole will join a collaborative
ecosystem that helps early-stage companies achieve
commercialization milestones with supportive resources that expand
customer and investor prospects to enable growth. Halliburton Labs
is an open environment that includes industrial capabilities,
technical expertise, and global network connections to scale
companies’ respective businesses.
______________________________
(1)
Adjusted net income per diluted share is a
non-GAAP financial measure; please see reconciliation of Net Income
to Adjusted Net Income in Footnote Table 3.
(2)
Adjusted operating margin is a non-GAAP
financial measure; please see reconciliation of Operating Income to
Adjusted Operating Income in Footnote Table 1.
(3)
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 5.
(4)
Adjusted net income is a non-GAAP
financial measure; please see reconciliation of Net Income to
Adjusted Net Income in Footnote Table 3.
(5)
Adjusted operating income is a non-GAAP
financial measure; please see reconciliation of Operating Income to
Adjusted Operating Income in Footnote Table 1.
About Halliburton
Halliburton is one of the world’s leading providers of products
and services to the energy industry. Founded in 1919, we create
innovative technologies, products, and services that help our
customers maximize their value throughout the life cycle of an
asset and advance a sustainable energy future. Visit us at
www.halliburton.com; connect with us on Facebook, Twitter,
LinkedIn, Instagram and YouTube.
Forward-looking
Statements
The statements in this press release that are not historical
statements are forward-looking statements within the meaning of the
federal securities laws. These statements are subject to numerous
risks and uncertainties, many of which are beyond the company's
control, which could cause actual results to differ materially from
the results expressed or implied by the statements. These risks and
uncertainties include, but are not limited to: changes in the
demand for or price of oil and/or natural gas, including as a
result of development of alternative energy sources, general
economic conditions such as inflation and recession, the ability of
the OPEC+ countries to agree on and comply with production quotas,
and other causes; changes in capital spending by our customers; the
modification, continuation or suspension of our shareholder return
framework, including the payment of dividends and purchases of our
stock, which will be subject to the discretion of our Board of
Directors and may depend on a variety of factors, including our
results of operations and financial condition, growth plans,
capital requirements and other conditions existing when any payment
or purchase decision is made; potential catastrophic events related
to our operations, and related indemnification and insurance;
protection of intellectual property rights; cyber-attacks and data
security; compliance with environmental laws; changes in government
regulations and regulatory requirements, particularly those related
to oil and natural gas exploration, the environment, radioactive
sources, explosives, chemicals, hydraulic fracturing services, and
climate-related initiatives; assumptions regarding the generation
of future taxable income, and compliance with laws related to and
disputes with taxing authorities regarding income taxes; risks of
international operations, including risks relating to unsettled
political conditions, war, including the ongoing Russia and Ukraine
conflict and any expansion of that conflict, the effects of
terrorism, foreign exchange rates and controls, international trade
and regulatory controls and sanctions, and doing business with
national oil companies; weather-related issues, including the
effects of hurricanes and tropical storms; delays or failures by
customers to make payments owed to us; infrastructure issues in the
oil and natural gas industry; availability and cost of highly
skilled labor and raw materials; completion of potential
dispositions, and acquisitions and integration and success of
acquired businesses and joint ventures. Halliburton's Form 10-K for
the year ended December 31, 2022, Form 10-Q for the quarter ended
March 31, 2023, recent Current Reports on Form 8-K and other
Securities and Exchange Commission filings discuss some of the
important risk factors identified that may affect Halliburton's
business, results of operations, and financial condition.
Halliburton undertakes no obligation to revise or update publicly
any forward-looking statements for any reason.
HALLIBURTON COMPANY
Condensed Consolidated Statements
of Operations
(Millions of dollars and shares
except per share data)
(Unaudited)
Three Months Ended
June 30
March 31
2023
2022
2023
Revenue:
Completion and Production
$
3,476
$
2,911
$
3,409
Drilling and Evaluation
2,322
2,163
2,268
Total revenue
$
5,798
$
5,074
$
5,677
Operating income:
Completion and Production
$
707
$
499
$
666
Drilling and Evaluation
376
286
369
Corporate and other
(59
)
(67
)
(58
)
SAP S4 upgrade expense
(13
)
—
—
Impairments and other charges (a)
—
(344
)
—
Total operating income
1,011
374
977
Interest expense, net
(92
)
(101
)
(79
)
Loss on Blue Chip Swap transactions
(b)
(104
)
—
—
Other, net
(32
)
(42
)
(69
)
Income before income taxes
783
231
829
Income tax provision (c)
(167
)
(114
)
(174
)
Net income
$
616
$
117
$
655
Net income attributable to noncontrolling
interest
(6
)
(8
)
(4
)
Net income attributable to
company
$
610
$
109
$
651
Basic and diluted net income per share
$
0.68
$
0.12
$
0.72
Basic weighted average common shares
outstanding
901
904
904
Diluted weighted average common shares
outstanding
903
909
907
(a) See Footnote Table 1 for details of
the impairments and other charges recorded during the three months
ended June 30, 2022.
(b) 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.
(c) The tax provision during the three
months ended June 30, 2023 includes the loss on Blue Chip Swap
transactions. During the three months ended June 30, 2022, the tax
provision includes the tax effect on impairments and other
charges.
See Footnote Table 1 for Reconciliation of
As Reported Operating Income to Adjusted Operating Income.
See Footnote Table 3 for Reconciliation of
As Reported Net Income to Adjusted Net Income.
HALLIBURTON COMPANY
Condensed Consolidated Statements
of Operations
(Millions of dollars and shares
except per share data)
(Unaudited)
Six Months Ended
June 30
2023
2022
Revenue:
Completion and Production
$
6,885
$
5,264
Drilling and Evaluation
4,590
4,094
Total revenue
$
11,475
$
9,358
Operating income:
Completion and Production
$
1,373
$
795
Drilling and Evaluation
745
580
Corporate and other
(117
)
(124
)
SAP S4 upgrade expense
(13
)
—
Impairments and other charges (a)
—
(366
)
Total operating income
1,988
885
Interest expense, net
(171
)
(208
)
Loss on Blue Chip Swap transactions
(b)
(104
)
—
Loss on early extinguishment of debt
(c)
—
(42
)
Other, net
(101
)
(72
)
Income before income taxes
1,612
563
Income tax provision (d)
(341
)
(182
)
Net Income
$
1,271
$
381
Net Income attributable to noncontrolling
interest
(10
)
(9
)
Net Income attributable to
company
$
1,261
$
372
Basic net income per share
$
1.40
$
0.41
Diluted net income per share
$
1.39
$
0.41
Basic weighted average common shares
outstanding
902
902
Diluted weighted average common shares
outstanding
905
906
(a) See Footnote Table 2 for details of
the impairments and other charges recorded during the six months
ended June 30, 2022.
(b) 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.
(c) During the six months ended June 30,
2022, Halliburton recognized a $42 million loss on extinguishment
of debt related to the early redemption of $600 million aggregate
principal amount of senior notes.
(d) The tax provision during the six
months ended June 30, 2023 includes the loss on Blue Chip Swap
transactions. During the six months ended June 30, 2022, the tax
provision includes the tax effect on impairments and other charges
and the loss on early extinguishment of debt.
See Footnote Table 2 for Reconciliation of
As Reported Operating Income to Adjusted Operating Income.
See Footnote Table 4 for Reconciliation of
As Reported Net Income to Adjusted Net Income.
HALLIBURTON COMPANY
Condensed Consolidated Balance
Sheets
(Millions of dollars)
(Unaudited)
June 30
December 31
2023
2022
Assets
Current assets:
Cash and equivalents
$
2,105
$
2,346
Receivables, net
4,946
4,627
Inventories
3,241
2,923
Other current assets
1,151
1,056
Total current assets
11,443
10,952
Property, plant, and equipment, net
4,483
4,348
Goodwill
2,840
2,829
Deferred income taxes
2,570
2,636
Operating lease right-of-use assets
1,054
913
Other assets
1,683
1,577
Total assets
$
24,073
$
23,255
Liabilities and Shareholders’
Equity
Current liabilities:
Accounts payable
$
3,188
$
3,121
Accrued employee compensation and
benefits
567
634
Current portion of operating lease
liabilities
253
224
Other current liabilities
1,338
1,366
Total current liabilities
5,346
5,345
Long-term debt
7,931
7,928
Operating lease liabilities
892
791
Employee compensation and benefits
385
408
Other liabilities
792
806
Total liabilities
15,346
15,278
Company shareholders’ equity
8,693
7,948
Noncontrolling interest in consolidated
subsidiaries
34
29
Total shareholders’ equity
8,727
7,977
Total liabilities and shareholders’
equity
$
24,073
$
23,255
HALLIBURTON COMPANY
Condensed Consolidated Statements
of Cash Flows
(Millions of dollars)
(Unaudited)
Six Months Ended
Three Months Ended
June 30
June 30
2023
2022
2023
Cash flows from operating
activities:
Net income
$
1,271
$
381
$
616
Adjustments to reconcile net income to
cash flows from operating activities:
Depreciation, depletion, and
amortization
486
470
245
Impairments and other charges
—
366
—
Working capital (a)
(589
)
(810
)
139
Other operating activities
6
(81
)
52
Total cash flows provided by operating
activities
1,174
326
1,052
Cash flows from investing
activities:
Capital expenditures
(571
)
(410
)
(303
)
Proceeds from sales of property, plant,
and equipment
90
116
49
Other investing activities
(215
)
(54
)
(147
)
Total cash flows used in investing
activities
(696
)
(348
)
(401
)
Cash flows from financing
activities:
Stock repurchase program
(348
)
—
(248
)
Dividends to shareholders
(289
)
(217
)
(144
)
Payments on long-term borrowings
—
(642
)
—
Other financing activities
(7
)
116
(3
)
Total cash flows used in financing
activities
(644
)
(743
)
(395
)
Effect of exchange rate changes on
cash
(75
)
(53
)
(30
)
Increase (decrease) in cash and
equivalents
(241
)
(818
)
226
Cash and equivalents at beginning of
period
2,346
3,044
1,879
Cash and equivalents at end of
period
$
2,105
$
2,226
$
2,105
(a) Working capital includes receivables,
inventories, and accounts payable.
See Footnote Table 5 for Reconciliation of
Cash Flows from Operating Activities to Free Cash Flow.
HALLIBURTON COMPANY
Revenue and Operating Income
Comparison
By Operating Segment and
Geographic Region
(Millions of dollars)
(Unaudited)
Three Months Ended
June 30
March 31
Revenue
2023
2022
2023
By operating segment:
Completion and Production
$
3,476
$
2,911
$
3,409
Drilling and Evaluation
2,322
2,163
2,268
Total revenue
$
5,798
$
5,074
$
5,677
By geographic region:
North America
$
2,696
$
2,426
$
2,765
Latin America
994
758
915
Europe/Africa/CIS
698
718
662
Middle East/Asia
1,410
1,172
1,335
Total revenue
$
5,798
$
5,074
$
5,677
Operating Income
By operating segment:
Completion and Production
$
707
$
499
$
666
Drilling and Evaluation
376
286
369
Total Operations
1,083
785
1,035
Corporate and other
(59
)
(67
)
(58
)
SAP S4 upgrade expense
(13
)
—
—
Impairments and other charges
—
(344
)
—
Total operating income
$
1,011
$
374
$
977
See Footnote Table 1 for Reconciliation of
As Reported Operating Income to Adjusted Operating Income.
HALLIBURTON COMPANY
Revenue and Operating Income
Comparison
By Operating Segment and
Geographic Region
(Millions of dollars)
(Unaudited)
Six Months Ended
June 30
Revenue
2023
2022
By operating segment:
Completion and Production
$
6,885
$
5,264
Drilling and Evaluation
4,590
4,094
Total revenue
$
11,475
$
9,358
By geographic region:
North America
$
5,461
$
4,351
Latin America
1,909
1,411
Europe/Africa/CIS
1,360
1,395
Middle East/Asia
2,745
2,201
Total revenue
$
11,475
$
9,358
Operating Income
By operating segment:
Completion and Production
$
1,373
$
795
Drilling and Evaluation
745
580
Total Operations
2,118
1,375
Corporate and other
(117
)
(124
)
SAP S4 upgrade expense
(13
)
—
Impairments and other charges
—
(366
)
Total operating income
$
1,988
$
885
See Footnote Table 2 for Reconciliation of
As Reported Operating Income to Adjusted Operating Income.
FOOTNOTE TABLE 1
HALLIBURTON COMPANY
Reconciliation of As Reported
Operating Income to Adjusted Operating Income
(Millions of dollars)
(Unaudited)
Three Months Ended
June 30
March 31
2023
2022
2023
As reported operating income
$
1,011
$
374
$
977
Impairments and other charges:
Receivables
—
186
—
Property, plant, and equipment, net
—
100
—
Inventory
—
70
—
Other
—
(12
)
—
Total impairments and other charges
(a)
—
344
—
Adjusted operating income (b) (c)
$
1,011
$
718
$
977
(a) During the three months ended June 30,
2022, Halliburton recognized a pre-tax charge of $344 million due
to our decision to market for sale the net assets of our Russia
operations.
(b) Adjusted operating income is a
non-GAAP financial measure which is calculated as: “As reported
operating income” plus “Total impairments and other charges” for
the respective periods. Management believes that operating income
adjusted for impairments and other charges 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 operating income
without the impact of these items as an indicator of performance,
to identify underlying trends in the business, and to establish
operational goals. The adjustments remove the effect of these
items.
(c) We calculate operating margin by
dividing reported operating income by reported revenue. We
calculate adjusted operating margin, a non-GAAP financial measure,
by dividing adjusted operating income by reported revenue.
Management believes adjusted operating margin is useful to
investors to assess and understand operating performance.
FOOTNOTE TABLE 2
HALLIBURTON COMPANY
Reconciliation of As Reported
Operating Income to Adjusted Operating Income
(Millions of dollars)
(Unaudited)
Six Months Ended
June 30
2023
2022
As reported operating income
$
1,988
$
885
Impairments and other charges:
Receivables
—
202
Property, plant, and equipment, net
—
100
Inventory
—
70
Other
—
(6
)
Total impairments and other charges
(a)
—
366
Adjusted operating income (b) (c)
$
1,988
$
1,251
(a) During the six months ended June 30,
2022, Halliburton recorded $366 million of impairments and other
charges, primarily due to our decision to market for sale the net
assets of our Russia operations and impairment of the assets in
Ukraine.
(b) Adjusted operating income is a
non-GAAP financial measure which is calculated as: “As reported
operating income” plus “Total impairments and other charges” for
the respective periods. Management believes that operating income
adjusted for impairments and other charges 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 operating income
without the impact of these items as an indicator of performance,
to identify underlying trends in the business, and to establish
operational goals. The adjustments remove the effect of these
items.
(c) We calculate operating margin by
dividing reported operating income by reported revenue. We
calculate adjusted operating margin, a non-GAAP financial measure,
by dividing adjusted operating income by reported revenue.
Management believes adjusted operating margin is useful to
investors to assess and understand operating performance.
FOOTNOTE TABLE 3
HALLIBURTON COMPANY
Reconciliation of As Reported Net
Income to Adjusted Net Income
(Millions of dollars and shares
except per share data)
(Unaudited)
Three Months Ended
June 30
March 31
2023
2022
2023
As reported net income attributable to
company
$
610
$
109
$
651
Adjustments:
Loss on Blue Chip Swap transactions
104
—
—
Impairments and other charges
—
344
—
Total adjustments, before taxes
104
344
—
Tax benefit (a)
(23
)
(11
)
—
Total adjustments, net of taxes (b)
81
333
—
Adjusted net income attributable to
company (b)
$
691
$
442
$
651
Diluted weighted average common shares
outstanding
903
909
907
As reported net income per diluted share
(c)
$
0.68
$
0.12
$
0.72
Adjusted net income per diluted share
(c)
$
0.77
$
0.49
$
0.72
(a) The tax benefit in the table above
includes the tax effect on the loss on Blue Chip Swap transactions
during the three months ended June 30, 2023. Additionally, during
the three months ended June 30, 2022, the tax benefit includes the
tax effect on the impairments and other charges.
(b) Adjusted net income attributable to
company is a non-GAAP financial measure which is calculated as: “As
reported net income attributable to company” plus “Total
adjustments, net of taxes” for the respective periods. Management
believes net income adjusted for the loss on Blue Chip Swap
transactions, and impairments and other charges, along with the tax
benefit, 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 item to be
outside of the company's normal operating results. Management
analyzes net income without the impact of this item as an indicator
of performance to identify underlying trends in the business and to
establish operational goals. Total adjustments remove the effect of
this item.
(c) As reported net income per diluted
share is calculated as: “As reported 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.
FOOTNOTE TABLE 4
HALLIBURTON COMPANY
Reconciliation of As Reported Net
Income to Adjusted Net Income
(Millions of dollars and shares
except per share data)
(Unaudited)
Six Months Ended
June 30
2023
2022
As reported net income attributable to
company
$
1,261
$
372
Adjustments:
Loss on Blue Chip Swap transactions
104
—
Impairments and other charges
—
366
Loss on early extinguishment of debt
—
42
Total adjustments, before taxes
104
408
Tax benefit (a)
(23
)
(24
)
Total adjustments, net of taxes (b)
81
384
Adjusted net income attributable to
company (b)
$
1,342
$
756
Diluted weighted average common shares
outstanding
905
906
As reported net income per diluted share
(c)
$
1.39
$
0.41
Adjusted net income per diluted share
(c)
$
1.48
$
0.83
(a) The tax benefit in the table above
includes the tax effect on the loss on Blue Chip Swap transactions
during the six months ended June 30, 2023. Additionally, during the
six months ended June 30, 2022, the tax benefit includes the tax
effect on the impairments and other charges and the loss on early
extinguishment of debt.
(b) Adjusted net income attributable to
company is a non-GAAP financial measure which is calculated as: “As
reported net income attributable to company” plus "Total
adjustments, net of taxes" for the respective periods. Management
believes net income adjusted for the loss on Blue Chip Swap
transactions, impairments and other charges, and the loss on early
extinguishment of debt, along with the tax benefit, 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.
(c) As reported net income per diluted
share is calculated as: "As reported 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.
FOOTNOTE TABLE 5
HALLIBURTON COMPANY
Reconciliation of Cash Flows from
Operating Activities to Free Cash Flow
(Millions of dollars)
(Unaudited)
Six Months Ended
Three Months Ended
June 30
June 30
2023
2022
2023
Total cash flows provided by operating
activities
$
1,174
$
326
$
1,052
Capital expenditures
(571
)
(410
)
(303
)
Proceeds from sales of property, plant,
and equipment
90
116
49
Free cash flow (a)
$
693
$
32
$
798
(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.
Conference Call Details
Halliburton Company (NYSE: HAL) will host a conference call on
Wednesday, July 19, 2023, to discuss its second quarter 2023
financial results. The call will begin at 8:30 a.m. CT (9:30 a.m.
ET).
Please visit the Halliburton website to listen to the call via
live webcast. A recorded version will be available under the same
link immediately following the conclusion of the conference call.
You can also pre-register for the conference call and obtain your
dial in number and passcode by clicking here.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230718473465/en/
Investors Relations Contact David Coleman
Investors@Halliburton.com 281-871-2688
Press Contact Brad Leone PR@Halliburton.com
281-871-2601
Halliburton (NYSE:HAL)
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