HALLIBURTON CO

Nine Months Ended September 30, 2024 Compared with Nine Months Ended September 30, 2023

Operating Segments

Completion and Production

Completion and Production revenue in the first nine months of 2024 was $10.1 billion, a decrease of $299 million, or 3%, compared to the first nine months of 2023. Operating income for the segment in the first nine months of 2024 was $2.1 billion, a decrease of $39 million, or 2%, compared to the first nine months of 2023. These results were largely driven by lower pressure pumping services in U.S. land and declined well intervention services in North America. Partially offsetting these declines were increased pressure pumping services in Canada, the Gulf of Mexico, Argentina, Europe and the Middle East, higher completion tool sales in the Gulf of Mexico, Europe/Africa and Saudi Arabia, and improved artificial lift activity globally.

Drilling and Evaluation

Drilling and Evaluation revenue in the first nine months of 2024 was $7.3 billion, an increase of $354 million, or 5%, compared to the first nine months of 2023. Operating income for the segment in the first nine months of 2024 was $1.2 billion, an increase of $84 million, or 7%, compared to the first nine months of 2023. These results were primarily driven by increased drilling services in the Western Hemisphere and the Middle East, improved activity across multiple product service lines in Mexico, increased testing services in Latin America and the Middle East, and higher project management activity in Kuwait. These improvements were partially offset by lower wireline activity in North America, reduced drilling services in Europe/Africa, and decreased fluid services in Brazil, Africa, and Asia.

Geographic Regions

North America

North America revenue in the first nine months of 2024 was $7.4 billion, an 8% decrease compared to the first nine months of 2023, resulting primarily from lower pressure pumping services in U.S. land, decreased well intervention services and lower wireline activity in U.S. land and the Gulf of Mexico, and decreased fluid services in the region. Partially offsetting these declines were increased pressure pumping services in Canada and the Gulf of Mexico and improved drilling services and completion tool sales in the region.

Latin America

Latin America revenue in the first nine months of 2024 was $3.3 billion, a 10% increase compared to the first nine months of 2023, resulting primarily from improved activity across multiple product service lines in Mexico, increased pressure pumping and drilling-related services in Argentina, improved project management activity in Ecuador, and higher testing services and wireline activity in the region. Partially offsetting these improvements were lower completion tool sales in Brazil and reduced project management activity in Colombia.

Europe/Africa/CIS

Europe/Africa/CIS revenue in the first nine months of 2024 was $2.2 billion, a 5% increase compared to the first nine months of 2023, resulting primarily from increased pressure pumping services and higher project management activity in Europe, improved completion tool sales in the region, and improved fluid services in the North Sea and the Caspian Area. Partially offsetting these increases were decreased activity across multiple product service lines in Africa, as well as lower drilling services in the region.

Middle East/Asia

Middle East/Asia revenue in the first nine months of 2024 was $4.5 billion, a 7% increase compared to the first nine months of 2023, resulting primarily from increased drilling services, pressure pumping services, and testing services in the Middle East, higher completion tool sales in Saudi Arabia, and higher project management activity in Kuwait. These improvements were partially offset by lower project management and fluids activity 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 now expect to complete in the first half of 2026. During the nine months ended September 30, 2024, we recognized $91 million of expense on our SAP S4 migration. During the nine months ended September 30, 2023, we recognized $36 million of expense on our SAP S4 migration.

Impairments and Other Charges. During the nine months ended September 30, 2024, we recognized a pre-tax charge of $116 million, primarily related to severance costs, an impairment of assets held for sale, expenses related to a cybersecurity incident, a gain on a fair value adjustment of an equity investment, and other items. See Notes to Condensed Consolidated Financial Statements, Note 2. Impairments and Other Charges for further discussion of these charges.

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 nine months ended September 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 nine months ended September 30, 2024, due to the devaluation of the currency in Egypt.

Argentina Blue Chip Swap. 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 nine months ended September 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 nine months ended September 30, 2024, we recorded a total income tax provision of $539 million on a pre-tax income of $2.4 billion, resulting in an effective tax rate of 22.1%. We recorded a tax benefit of $41 million during the nine months ended September 30, 2024, due to a partial release of a valuation allowance on our deferred tax assets based on market conditions. During the nine months ended September 30, 2023, we recorded a total income tax provision of $533 million on pre-tax income of $2.5 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 nine months ended September 30, 2024.