Halliburton(US:HAL)2025-07-25 16:32PART I. FINANCIAL INFORMATION Item 1. Financial Statements Halliburton's H1 2025 revenue decreased to $10.9 billion and net income to $676 million, driven by lower segment revenues and a $356 million impairment charge Condensed Consolidated Statements of Operations Q2 2025 revenue decreased to $5.51 billion and net income to $472 million, with a $356 million impairment charge significantly impacting the period's results Condensed Consolidated Statements of Operations (Q2 & YTD) | Metric (in millions, except EPS) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $5,510 | $5,833 | $10,927 | $11,637 | | Operating Income | $727 | $1,032 | $1,158 | $2,019 | | Net Income Attributable to Company | $472 | $709 | $676 | $1,315 | | Diluted Net Income Per Share | $0.55 | $0.80 | $0.78 | $1.48 | - The company recorded $356 million in "Impairments and other charges" in the first six months of 2025, with no such charges in the comparable 2024 period10 Condensed Consolidated Balance Sheets As of June 30, 2025, total assets were $25.38 billion, with cash at $2.04 billion, total liabilities at $14.83 billion, and shareholders' equity stable at $10.55 billion Key Balance Sheet Items | Metric (in millions) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and equivalents | $2,038 | $2,618 | | Total current assets | $11,671 | $12,382 | | Total assets | $25,377 | $25,587 | | Total current liabilities | $5,844 | $6,050 | | Long-term debt | $7,163 | $7,160 | | Total liabilities | $14,830 | $15,039 | | Total shareholders' equity | $10,547 | $10,548 | Condensed Consolidated Statements of Cash Flows H1 2025 operating cash flow was $1.27 billion, investing activities used $1.04 billion (including a $345 million equity investment), and financing activities used $811 million, resulting in a $580 million cash decrease Six Months Ended June 30 Cash Flow Summary | Cash Flow Activity (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,273 | $1,568 | | Net cash used in investing activities | $(1,040) | $(774) | | Net cash used in financing activities | $(811) | $(838) | | Decrease in cash and equivalents | $(580) | $(126) | | Cash and equivalents at end of period | $2,038 | $2,138 | Notes to Condensed Consolidated Financial Statements Notes detail a $356 million impairment charge, segment revenue declines, geographic revenue, income tax matters, shareholder equity changes, and financial instruments including credit default swaps Impairments and Other Charges (YTD 2025) | Charge Type (in millions) | Amount | | :--- | :--- | | Severance costs | $107 | | Impairment of assets held for sale | $104 | | Impairment of real estate facilities | $53 | | Other | $92 | | Total | $356 | - The company repurchased 12 million shares for $252 million in Q2 2025, with approximately $2.5 billion remaining authorized for repurchases as of June 30, 202562 - Halliburton has entered into credit default swaps (CDSs) with a notional amount of $909 million as of June 30, 2025, related to borrowings by a primary customer in Mexico to facilitate payment of receivables7147 - A new federal tax law, the "One Big Beautiful Bill Act," signed on July 4, 2025, may affect the company's ability to use Foreign Tax Credits, with the impact currently under evaluation74 Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes Q2 2025 revenue decline to challenging market conditions, expecting full-year 2025 revenue to decrease in both international and North American markets due to activity reductions and pricing pressure Executive Overview Halliburton's Q2 2025 performance saw a 6% revenue decrease to $5.5 billion and operating income of $727 million, driven by declining oil prices and reduced activity in both segments - Strategic priorities include international growth, maximizing North American value with electric fracturing and automation, driving digital differentiation, maintaining capital efficiency (capex ~6% of revenue), and returning over 50% of annual free cash flow to shareholders78 - Market conditions in Q2 2025 were characterized by declining oil prices due to trade tensions and increased OPEC+ supply, leading to a decline in both U.S. and international rig counts compared to Q1 202581 Q2 2025 vs Q2 2024 Performance Summary | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $5.5 billion | $5.8 billion | -6% | | Operating Income | $727 million | $1.0 billion | -29% | | Completion & Production Revenue | $3.2 billion | $3.4 billion | -7% | | Drilling & Evaluation Revenue | $2.3 billion | $2.4 billion | -4% | Liquidity and Capital Resources The company maintains solid liquidity with $2.0 billion cash and a $3.5 billion credit facility, generating $1.3 billion operating cash flow in H1 2025 while using cash for capex, repurchases, and dividends Significant Sources and Uses of Cash (First Six Months 2025) | Category | Amount (in millions) | | :--- | :--- | | Sources: | | | Cash flows from operating activities | $1,300 | | Uses: | | | Capital expenditures | $656 | | Stock repurchases | $507 | | Dividends to shareholders | $292 | | Purchase of an equity investment | $345 | - The company maintains a capital return framework with a goal of returning at least 50% of annual free cash flow to shareholders through dividends and share repurchases94 - As of June 30, 2025, the company had $2.0 billion in cash and equivalents and $3.5 billion available under a revolving credit facility97 Business Environment and Results of Operations Q2 2025 saw lower commodity prices and rig counts, with WTI crude at $64.63/bbl, leading to an anticipated full-year 2025 revenue decline in both international and North American markets Average Commodity Prices & Rig Counts | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Oil Price - WTI ($/bbl) | $64.63 | $81.71 | | Worldwide Rig Count (Avg) | 1,596 | 1,702 | - Business Outlook: Management expects full-year 2025 international revenue to decrease, primarily due to activity reductions in Saudi Arabia and Mexico, with North America full-year 2025 revenue also expected to decline due to lower activity and pricing pressure111 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's market risk exposure has not materially changed since the disclosures in its 2024 Annual Report on Form 10-K - There have been no material changes in the company's market risk exposure since December 31, 2024148 Item 4. Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025149 - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025150 PART II. OTHER INFORMATION Item 1. Legal Proceedings Details on legal proceedings are cross-referenced to Note 9 of the condensed consolidated financial statements - Details on legal proceedings are located in Note 9 to the financial statements152 Item 1(a). Risk Factors No material changes to risk factors have occurred since those disclosed in the 2024 Annual Report on Form 10-K - As of June 30, 2025, there have been no material changes in risk factors from those disclosed in the 2024 Form 10-K153 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds In Q2 2025, Halliburton repurchased 12.7 million shares at an average price of $20.93 per share, with approximately $2.5 billion remaining authorized for future repurchases Share Repurchases (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 1 - 30 | 4,108,199 | $21.17 | | May 1 - 31 | 4,784,123 | $20.43 | | June 1 - 30 | 3,785,125 | $21.29 | | Total | 12,677,447 | $20.93 | - Approximately $2.5 billion remained authorized for repurchases under the program as of June 30, 2025156 Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including supplemental indentures, executive agreements, and CEO/CFO certifications