HALLIBURTON CO

Six Months Ended June 30, 2024 Compared with Six Months Ended June 30, 2023

Operating Segments

Completion and Production

Completion and Production revenue in the first six months of 2024 was $6.8 billion, a decrease of $111 million, or 2%, compared to the first six months of 2023. Operating income for the segment in the first six months of 2024 was $1.4 billion, an increase of $38 million, or 3%, compared to the first six months of 2023. The decrease in revenue was largely driven by lower pressure pumping services in U.S. land. Partially offsetting this decline were higher completion tool sales and improved artificial lift activity globally, improved cementing services internationally, and higher stimulation activity in Latin America. Operating income for the segment increased due to pressure pumping and completion tools activity growth internationally, completion tools activity growth in the Gulf of Mexico, and artificial lift activity and pricing improvements in U.S. land.

Drilling and Evaluation

Drilling and Evaluation revenue in the first six months of 2024 was $4.9 billion, an increase of $273 million, or 6%, compared to the first six months of 2023. Operating income for the segment in the first six months of 2024 was $801 million, an increase of $56 million, or 8%, compared to the first six months of 2023. These results were primarily driven by improved drilling services in the Middle East and U.S. land, higher drilling services, improved wireline activity, and increased testing services in Latin America, and improved fluid services in Europe. These improvements were partially offset by lower project management activity and decreased fluid services in Saudi Arabia, lower drilling services in Africa and Asia, and decreased wireline activity in North America.

Geographic Regions

North America

North America revenue in the first six months of 2024 was $5.0 billion, an 8% decrease compared to the first six months of 2023, resulting primarily from lower pressure pumping services in U.S. land. Partially offsetting this decline were improved completion tool sales, higher well construction activity and improved stimulation activity in the Gulf of Mexico, and increased drilling services in U.S. land.

Latin America

Latin America revenue in the first six months of 2024 was $2.2 billion, a 16% increase compared to the first six months of 2023, resulting primarily from increased activity across multiple product service lines in Argentina, Mexico, and the Caribbean, higher project management activity in Ecuador, and increased testing services in Brazil. Partially offsetting these improvements were lower pressure pumping services and decreased project management activity in Colombia and decreased drilling-related services in Brazil.

Europe/Africa/CIS

Europe/Africa/CIS revenue in the first six months of 2024 was $1.5 billion, a 9% increase compared to the first six months of 2023, resulting primarily from increased well construction activity, higher project management activity, and improved completion tool sales in Norway and higher completion tool sales in Africa. Partially offsetting these increases was drilling-related services in Africa.

Middle East/Asia

Middle East/Asia revenue in the first six months of 2024 was $2.9 billion, a 6% increase compared to the first six months of 2023, resulting primarily from increased project management activity and improved well construction activity in Kuwait, improved drilling services, higher completion tool sales, and increased cementing services in Saudi Arabia, higher well construction activity in United Arab Emirates, and improved drilling services in Qatar. Partially offsetting these improvements were lower project management activity and decreased fluid services in Saudi Arabia and Asia.

Other Operating Items

SAP S4 Upgrade Expense. As previously mentioned, during 2023 we began our migration to SAP S4, which we expect to complete by the end of 2025. During the six months ended June 30, 2024, we recognized $63 million of expense on our SAP S4 migration. During the six months ended June 30, 2023, we recognized $13 million of expense on our SAP S4 migration.

Nonoperating Items

Argentina Impairment on Investment. In 2022 and 2023, we executed a series of loans to a third party and received notes that are to be repaid in U.S. dollars upon maturity or earlier if certain conditions are met. During the six months ended June 30, 2024, we recorded a loss of $38 million in March of 2024 due to the fair value decrease in one of the notes, resulting from the deterioration in the outlook of the debtor’s liquidity and financial projections.

Egypt Currency Impact. In the first quarter of 2024, the Egyptian pound devalued by approximately 35% relative to the U.S. dollar. Consequently, we incurred a loss of $38 million in the six months ended June 30, 2024, due to the devaluation of the currency in Egypt.

Argentina Blue Chip Swap. As noted above, during the six months ended June 30, 2023, we entered into Blue Chip Swap transactions, which resulted in a $104 million pre-tax loss on investment.

Income Tax Provision. During the six months ended June 30, 2024, we recorded a total income tax provision of $385 million on a pre-tax income of $1.7 billion, resulting in an effective tax rate of 22.6%. During the six months ended June 30, 2023, we recorded a total income tax provision of $341 million on pre-tax income of $1.6 billion, resulting in an effective tax rate of 21.1%.

Pillar Two. As previously mentioned, The Organization for Economic Co-operation and Development enacted model rules for a new global minimum tax framework, also known as Pillar Two, and certain governments globally have enacted, or are in the process of enacting, legislation considering these model rules. These rules did not have a material impact on our taxes for the six months ended June 30, 2024.