Halliburton Co. (NYSE:HAL)

Current Income Taxes

The current income tax expense exhibited notable volatility over the five-year period. Starting at a substantial positive value of 1,729 million USD in 2014, it plummeted to a negative figure of -50 million USD in 2015, and further declined to -357 million USD in 2016, indicating income tax benefits or refunds during those years. This negative trend reversed in 2017, with current income taxes rebounding to 397 million USD and slightly increasing to 424 million USD in 2018. The overall pattern suggests significant fluctuations in reported taxable income or tax payments, with benefits recorded in the middle years and a return to positive tax payments thereafter.

Deferred Income Taxes

Deferred income tax figures experienced considerable swings throughout the period. The year 2014 began with a negative deferred tax balance of -454 million USD, which improved to -224 million USD in 2015. However, in 2016, there was a sharp increase in deferred tax liabilities or reversals, reaching -1,501 million USD, a marked deviation from previous years. The year 2017 saw a reversal to a positive deferred tax value of 734 million USD, indicating a substantial deferred tax benefit or reduction in deferred tax liabilities. In 2018, the deferred tax balance again moved into negative territory at -267 million USD. These fluctuations suggest large timing differences in recognizing income and expenses for tax purposes, potentially influenced by changes in tax laws, asset valuations, or other accounting considerations.

Income Tax Provision (Benefit)

The total income tax provision, combining current and deferred components, showed extreme variability during the period analyzed. Starting with a positive provision of 1,275 million USD in 2014, the figure shifted to a negative provision of -274 million USD in 2015 and further decreased to -1,858 million USD in 2016, indicating an overall tax benefit during these years. This was followed by a strong positive provision of 1,131 million USD in 2017, reflecting renewed tax expenses, but decreased sharply in 2018 to 157 million USD. The pattern highlights significant swings in overall tax expense, likely driven by the volatile movements in both current and deferred taxes, reflective of underlying earnings variability, tax credits, adjustments, or episodic events affecting the company's tax position.

The financial data reveals various fluctuations and notable trends over the period from 2014 to 2018. The United States statutory tax rate remained steady at 35% through 2017 and then decreased to 21% in 2018, reflecting a significant tax policy change. Meanwhile, the valuation allowance against tax assets showed an overall downward trend from -3.6% in 2014 to -16.2% in 2018, with an irregular pattern characterized by decreases and slight recoveries over the years.

Specific adjustments related to Venezuela exhibited volatility: there was a negative adjustment of -7.5% in 2015, a significant positive adjustment of 36.6% in 2017, and a smaller positive adjustment of 5.7% in 2018. The impact of foreign income taxed at different rates was inconsistent, swinging from a negative 5.7% in 2014 to a positive 17% in 2015, followed by negative adjustments in subsequent years, reaching -3% in 2018.

Adjustments of prior year taxes fluctuated mildly, showing small positive values except in 2017 when there was a negative adjustment of -2.3%. State income taxes gradually increased from 0.8% in 2014 to 1.9% in 2018, indicating a slow but steady rise.

Other tax adjustment items such as undistributed foreign earnings and domestic manufacturing deductions showed irregular patterns with missing data in some years, preventing a definitive trend. Non-deductible acquisition costs had a notable negative effect in 2015 (-4.5%) but were otherwise minimal or absent. Other items, net, oscillated across the years, starting positively in 2014, turning negative in 2015 and 2016, then slightly positive and near neutral in 2017 and 2018.

The effective tax rate on continuing operations before the impact of U.S. tax reform showed substantial volatility, ranging from a low of 11.3% in 2018 to a high spike of 52.8% in 2017. The impact of U.S. tax reform was not recorded until 2017, presenting a substantial effect of 113%, which drastically increased the effective tax rate on continuing operations to 165.8% for that year. In 2018, the impact of the reform slightly decreased the rate by 2.6%, resulting in a significantly lower effective tax rate of 8.7%.

Overall, the data indicates a high degree of variability in tax-related adjustments and effective tax rates over the five-year period, strongly influenced by changes in statutory rates, the U.S. tax reform, and country-specific factors such as Venezuela adjustments. The effective tax rate particularly reflects the substantial impact of these factors, peaking dramatically in 2017 before a marked reduction in 2018.

The data reveals several key trends in the company’s deferred tax assets and liabilities over the five-year period ending December 31, 2018.

Net Operating Loss Carryforwards

There is a notable increase from 462 million in 2014 to a peak of 1647 million in 2016, followed by a slight decline and stabilization around 1370 to 1466 million in the subsequent years.

Foreign Tax Credit Carryforwards

This item shows consistent growth from 79 million in 2014 to 828 million in 2017, with a slight decrease to 728 million in 2018, indicating an increase in foreign tax credits available for future use up to 2017.

Employee Compensation and Benefits

Expenses in this category decline steadily from 395 million in 2014 to 242 million in 2018, reflecting possible changes in compensation structures or workforce size.

Accrued Liabilities

There is a consistent decrease from 494 million in 2014 to a low of 97 million in 2017, with a minor uptick to 101 million in 2018, suggesting a reduction in obligations accrued over the period.

Other Deferred Tax Assets

Values fluctuate, increasing from 236 million in 2014 to 536 million in 2016, then declining and stabilizing around 400 million in the last two years, indicating variable components classified under 'Other.'

Gross Deferred Tax Assets

This figure climbs steeply from 1666 million in 2014 to 3508 million in 2016, followed by a decline to around 2941 million by 2018, mirroring trends seen in the underlying asset categories.

Valuation Allowances

The valuation allowances grow more negative each year, from -184 million in 2014 to a substantial -1173 million in 2017, before reducing slightly to -913 million in 2018, indicating increased uncertainty regarding the realizability of deferred tax assets especially in 2017.

Deferred Tax Assets

Net deferred tax assets (gross deferred tax assets less valuation allowances) rise from 1482 million in 2014 to a peak of 3055 million in 2016 but decline sharply to 1801 million in 2017 before recovering to 2028 million in 2018.

Depreciation and Amortization

This liability-related item decreases in magnitude from -1005 million in 2014 to -315 million in 2017 but then increases again to -635 million in 2018, indicating variable deferred tax liabilities linked to fixed assets over the years.

Undistributed Foreign Earnings

The data shows a shift from no balance reported in 2014 to moderate negative values until 2017, returning close to zero by 2018, suggesting changes in the treatment or presence of foreign earnings liabilities.

Other Deferred Tax Liabilities

These liabilities remain relatively stable with minor fluctuations between -111 million and -56 million, indicating less volatility in this category.

Deferred Tax Liabilities

A declining trend is notable from -1116 million in 2014 to -613 million in 2017, followed by a slight increase to -701 million in 2018, indicating variability in obligations related to deferred tax liabilities during the period.

Net Deferred Income Tax Asset (Liability)

There is overall growth from 366 million in 2014 to a high of 1919 million in 2016, followed by a reduction to 1188 million in 2017, and a recovery to 1327 million in 2018. This net position reflects the combined effect of the trends in deferred tax assets and liabilities, showing increased net assets but with some volatility especially around 2017.

In summary, the period shows overall growth in deferred tax assets driven largely by increased net operating loss and foreign tax credit carryforwards, offset in part by rising valuation allowances and fluctuating deferred tax liabilities. The peak in 2016 followed by declines in 2017, with partial recovery in 2018, suggests periods of reassessment regarding the realization of deferred tax assets and tax planning strategies. Expense-related categories such as employee compensation and accrued liabilities show downward trends, potentially reflecting changes in operations or cost management initiatives.

Over the five-year period analyzed, several key financial trends emerge from the adjusted data, reflecting fluctuations in asset levels, shareholder equity, and profitability for the company.

Adjusted Current Assets

The value of adjusted current assets remained relatively stable from 2015 through 2018, ranging between approximately US$10.7 billion to US$21.6 billion, with a notable peak in 2015 at US$21.6 billion. The initial high level in 2014 (US$14.6 billion) increased significantly to 2015 before declining sharply to 2016, and then stabilized around US$10.7-11.1 billion through 2017 and 2018.

Adjusted Total Assets

Adjusted total assets show a decrement trend after peaking in 2015 at US$36.9 billion. Starting from US$31.8 billion in 2014, adjusted total assets rose to US$36.9 billion in 2015, then steadily declined to US$25.0 billion in 2016 and further decreased to the US$23.9-24.6 billion range by 2017 and 2018. This decline suggests possible asset divestitures, impairments, or other restructuring activities affecting the asset base.

Adjusted Company Shareholders’ Equity

The shareholders’ equity decreased markedly from US$15.9 billion in 2014 to US$7.5 billion in 2016. It slightly improved in 2017 and 2018 but remained significantly lower than 2014 levels, ending at approximately US$8.2 billion in 2018. This pattern indicates a substantial erosion of equity over the period, potentially driven by operating losses or other equity-reducing events.

Adjusted Net Income (Loss) Attributable to Company

Adjusted net income experienced considerable volatility. After a positive net income of about US$3.0 billion in 2014, the company recorded losses in 2015 and 2016, with a sharp decline to a loss of US$7.3 billion in 2016, the worst figure in the series. In 2017 and 2018, there was a partial recovery, with net income turning positive again, reaching US$0.3 billion in 2017 and increasing to US$1.4 billion in 2018. This trend signals a period of financial distress followed by operational improvement.

Overall, the company experienced a peak in asset levels and equity in 2015, followed by declines in subsequent years, alongside significant losses in 2015 and 2016 that undermined equity. The later part of the period demonstrated a stabilizing trend with moderate recovery in profitability and equity, suggesting efforts to restore financial health. However, asset levels remained below earlier peaks, and equity has yet to recover fully to initial values observed in 2014.

Liquidity Ratios

The reported and adjusted current ratios exhibit a peak in 2015 at 4.03, followed by a decline reaching their lowest levels in 2017 (2.22). Both reported and adjusted ratios remained relatively stable and close in value across the years, ending marginally higher in 2018 at 2.32. This suggests a period of strengthened liquidity in 2015 followed by tightening, with a modest recovery by 2018.

Profitability Margins

The net profit margin displays significant volatility. The reported margin starts strongly positive at 10.65% in 2014 but turns negative for three consecutive years (2015 to 2017), reaching a low of -36.27% in 2016, before rebounding to 6.9% in 2018. The adjusted net profit margin follows a similar pattern but shows even larger negative swings, particularly in 2016 with a low of -45.72%. Improvements are evident in 2017 and 2018, indicating a challenging profitability environment mid-period with recovery toward the end.

Asset Efficiency

The total asset turnover ratio declines sharply from above 1.0 in 2014 to a low around 0.59-0.63 in 2016, indicating reduced efficiency in asset utilization during this phase. Thereafter, it shows improvement, reaching near 1.0 by 2018. The adjusted figures, consistently close to reported ones, confirm this trend of declining efficiency peaking in 2016 and subsequent recovery.

Financial Leverage

Financial leverage progressively increased from 2014 to 2017, with adjusted leverage rising from 2.0 to a peak of 3.34 in both 2016 and 2017. In 2018, leverage ratios decreased slightly but remained elevated compared to 2014 levels. This indicates growing reliance on debt or obligations during the middle years, followed by a mild deleveraging in the final year observed.

Return on Equity (ROE)

ROE shows high volatility, with reported ROE starting at 21.52% in 2014, turning negative from 2015 through 2017, bottoming at -61.25% in 2016, and recovering to a positive 17.39% in 2018. Adjusted ROE figures demonstrate even more severe negative impact in 2016 (-96.98%) but tangibly improve in 2017 and 2018. The pattern reflects significant earnings challenges accompanied by equity value erosion during the mid-period with marked recovery signs at the end.

Return on Assets (ROA)

The ROA trends mirror ROE outcomes, with reported ROA starting positive at 10.86% in 2014, turning negative in the following years—and lowest at -21.34% in 2016—before rebounding to 6.37% in 2018. Adjusted ROA shows a similar trajectory but with deeper troughs and milder recovery. These trends suggest overall asset profitability was severely impaired during 2015-2017 with gradual restoration by 2018.

Summary

The analyzed financial data reveal a period of financial difficulty between 2015 and 2017, characterized by declining profitability, reduced asset efficiency, and increased financial leverage. This period is followed by a recovery phase in 2018 with improved liquidity, profitability, and returns, although leverage remains elevated compared to the initial year. The adjustments for deferred income tax generally amplify adverse effects during the downturn, indicating significant impacts of tax items on reported performance.

The analysis of the provided financial data reveals several key trends regarding current assets and liquidity ratios over the given period.

Current Assets

Reported current assets exhibited notable volatility between 2014 and 2018. The value increased significantly from 15,068 million USD in 2014 to a peak of 21,609 million USD in 2015, almost a 43% increase. However, from 2015 onwards, reported current assets declined substantially, dropping to 11,677 million USD in 2016 and slightly decreasing further to 10,777 million USD in 2017. The figure then shows a modest recovery to 11,151 million USD in 2018. Adjusted current assets follow the same pattern as the reported figures, with a small adjustment in 2014 where the adjusted value is slightly lower than the reported, but identical for subsequent years.

Current Ratios

The reported current ratio also reflects similar fluctuations. Starting at 2.56 in 2014, it rose sharply to 4.03 in 2015, indicating an improvement in short-term liquidity. In the following years, the ratio gradually decreased to 2.9 in 2016, then further declined to 2.22 in 2017, before slightly increasing to 2.32 in 2018. The adjusted current ratio closely matches the reported current ratio values for each year, showing consistent liquidity trends after tax adjustments.

Overall Observations

The substantial increase in current assets and current ratio in 2015 suggests a significant improvement in liquidity that year, possibly due to operational or financial changes. The subsequent decline in both metrics from 2016 to 2017 points to a reduction in short-term assets or an increase in current liabilities, leading to diminished liquidity. The slight recovery in 2018 indicates stabilization but at lower levels than the peak year. The close alignment between reported and adjusted figures indicates that tax-related adjustments have minimal impact on liquidity assessment in this context.

The financial data reveals significant volatility in both reported and adjusted net incomes from 2014 through 2018. Initially, in 2014, the company experienced a strong positive net income and profit margin, but this was followed by substantial declines and negative results over the next three years before partial recovery in 2018.

Reported Net Income (Loss) Trends

Reported net income displayed a positive figure of 3500 million USD in 2014, indicating a profitable year. In 2015, it sharply declined to a loss of 671 million USD. The losses deepened markedly in 2016, reaching -5763 million USD, before improving to -463 million USD in 2017. By 2018, the company returned to profitability, posting net income of 1656 million USD.

Adjusted Net Income (Loss) Trends

Adjusted net income figures followed a broadly similar pattern but reflected deeper losses in negative periods. Starting at 3046 million USD in 2014, the adjusted net income swung to a loss of 895 million USD in 2015, worsening to -7264 million USD in 2016, which is a more severe decline than the reported figure suggests. A recovery is noted in 2017 with a positive adjustment of 271 million USD, though the margin is slim, and further improvement occurred in 2018 with 1389 million USD, remaining below the 2014 level.

Reported Net Profit Margin

The reported net profit margin declined substantially from 10.65% in 2014 to negative figures in the following years: -2.84% in 2015, -36.27% in 2016, and -2.25% in 2017. The margin recovered to 6.9% in 2018, signaling improvement in profitability but still below the initial 2014 performance.

Adjusted Net Profit Margin

Adjusted net profit margin trends closely mirror those of the reported margin but exhibit greater sensitivity to company adjustments. Starting at 9.27% in 2014, the margin fell to -3.79% in 2015, sharply declining to -45.72% in 2016, reflecting substantial adjusted losses. Positive margins returned in 2017 at 1.31% and improved further to 5.79% by 2018, but these remain somewhat lower than reported margins and the initial profitability.

In summary, the data illustrates a period of significant financial stress marked by deep losses in the middle years of the timeframe, with recovery signs emerging towards the end of 2017 and strengthening in 2018. Adjusted figures suggest that the company faced more severe underlying issues than reported metrics alone indicate, as evidenced by the more pronounced losses and lower profit margins during the downturn. The resurgence in profitability and margin by 2018 denotes a positive turnaround, though both net income and margins have not fully returned to the peak levels observed in 2014.

Reported Total Assets

The reported total assets experienced a notable increase from 32,240 million US dollars in 2014 to a peak of 36,942 million in 2015. Subsequently, there was a significant decline in the following years, dropping to 27,000 million in 2016, followed by further decreases to 25,085 million in 2017 and a slight recovery to 25,982 million in 2018.

Adjusted Total Assets

The adjusted total assets closely followed the trend of the reported figures, starting at 31,819 million US dollars in 2014 and increasing to 36,942 million in 2015. After this peak, adjusted assets declined more sharply to 25,040 million in 2016, then decreased further to 23,855 million in 2017, before a modest increase to 24,598 million in 2018. Throughout the period, adjusted assets were consistently lower than reported assets from 2016 onwards, indicating adjustments had a reducing effect on the asset base.

Reported Total Asset Turnover

The reported total asset turnover ratio showed a declining trend from 1.02 in 2014 to a low of 0.59 in 2016, reflecting a reduced ability to generate sales from assets. This was followed by a recovery to 0.82 in 2017 and further improvement to 0.92 in 2018, suggesting enhanced operational efficiency or asset utilization in the later years.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio displayed a similar pattern to the reported ratio but consistently showed slightly higher values from 2016 onwards. Starting at 1.03 in 2014, it dropped sharply to 0.64 in 2015, then remained relatively stable around 0.63 in 2016. Following this period, there was an increase to 0.86 in 2017 and 0.98 in 2018, indicating improved efficiency in generating revenue from the adjusted asset base.

Total Assets

The reported total assets exhibited an initial increase from 32,240 million US dollars in 2014 to a peak of 36,942 million US dollars in 2015. Thereafter, a consistent decline occurred, with assets reducing to 27,000 million by 2016, further dropping to 25,085 million in 2017 before a slight recovery to 25,982 million in 2018. Adjusted total assets followed a similar trajectory but presented slightly lower figures from 2016 onwards, with values decreasing from 31,819 million in 2014 to 24,598 million in 2018.

Shareholders’ Equity

Reported shareholders’ equity demonstrated a downward trend over the period. Beginning at 16,267 million US dollars in 2014, equity decreased steadily, falling to 15,462 million in 2015, then dropping significantly to 9,409 million in 2016, continuing to reduce to 8,322 million in 2017 before a moderate increase to 9,522 million in 2018. Adjusted equity figures followed a similar pattern but were consistently lower, reflecting reductions from 15,901 million in 2014 to 8,195 million in 2018.

Financial Leverage

The reported financial leverage ratio increased from 1.98 in 2014 to a peak of 3.01 in 2017, before slightly decreasing to 2.73 in 2018, indicating a trend toward higher leverage and subsequently a partial deleveraging. The adjusted financial leverage ratio consistently showed higher values compared to the reported figures, increasing sharply from 2.00 in 2014 to 3.34 in both 2016 and 2017, followed by a decrease to 3.00 in 2018. This suggests that when accounting for deferred income tax adjustments, leverage appeared more pronounced, highlighting increased reliance on debt financing or reduced equity base during this period.

Overall Insights

Over the five-year period, total assets and shareholders’ equity both showed a declining trend, with a particularly sharp drop occurring after 2015. The financial leverage ratios increased significantly during this timeframe, implying a higher risk profile due to increased indebtedness relative to equity. Adjusted figures, which consider deferred income tax effects, reflect a more conservative view of the balance sheet, showing slightly lower asset and equity values and higher leverage ratios. The partial recovery in 2018 in both total assets and equity, alongside a reduction in leverage, could indicate early signs of financial stabilization. The trends highlight the importance of closely monitoring leverage levels and the impact of tax-related adjustments on the perceived financial strength of the company.

The analysis of the income and equity trends over the five-year period reveals significant fluctuations and a notable recovery towards the end of the timeframe.

Net Income Trends

There is a marked decline in reported net income from a positive figure of 3,500 million USD in 2014 to a substantial loss of 5,763 million USD in 2016. The adjusted net income similarly follows this downward trend, falling from 3,046 million USD in 2014 to a loss of 7,264 million USD in 2016. Following 2016, both reported and adjusted net income demonstrate partial recovery, with figures improving to 1,656 million USD and 1,389 million USD, respectively, by 2018. This suggests that the company faced significant challenges impacting profitability mid-period, with improvement occurring in the latter years.

Shareholders’ Equity Trends

Reported shareholders' equity decreases consistently from 16,267 million USD in 2014 to 8,322 million USD in 2017 before slightly recovering to 9,522 million USD by 2018. Adjusted shareholders’ equity follows a similar pattern but shows a steeper decline by 2016, reaching a low of 7,134 million USD in 2017, then rising slightly to 8,195 million USD in 2018. The equity reduction aligns with the net income losses, reflecting retained losses and reduced capital base.

Return on Equity (ROE) Analysis

Reported ROE exhibits a strong positive return of 21.52% in 2014, followed by a shift to negative returns in 2015, 2016, and 2017, with the poorest performance in 2016 at -61.25%. The return improves markedly in 2018 to 17.39%. The adjusted ROE shows a similar trend but with more pronounced negative values, dipping to -96.98% in 2016 and recovering to 16.95% in 2018. This volatility indicates a period of substantial financial stress, negatively impacting shareholder returns, followed by recovery in both profitability and capital efficiency.

Overall, the data points to a challenging mid-period marked by significant losses, equity depletion, and negative returns, with notable signs of financial recovery starting in 2017 and continuing into 2018. The adjustment for deferred income tax appears to amplify the severity of losses and negative returns but does not change the overall trends observed.

The analysis of the financial data reveals several notable trends in the company's reported and adjusted results over the five-year period ending December 31, 2018.

Net Income (Loss) Attributable to Company

There is a substantial fluctuation in both reported and adjusted net income figures. The reported net income starts positively at 3,500 million USD in 2014, followed by a significant decline turning into losses in 2015 (-671 million USD) and worsening drastically in 2016 (-5,763 million USD). A recovery phase appears afterward, with losses narrowing in 2017 (-463 million USD) and turning positive again in 2018 (1,656 million USD). Adjusted net income follows a similar pattern but depicts more significant losses in 2015 and 2016 (-895 million USD and -7,264 million USD respectively) and a less prominent recovery by 2018 (1,389 million USD).

Total Assets

The company experienced a peak in reported total assets in 2015 at 36,942 million USD, followed by a sharp contraction to 27,000 million USD in 2016 and continuing declines through 2018, reaching 25,982 million USD. Adjusted assets show a comparable trend but slightly lower values from 2016 onward, indicating some adjustments reducing asset values relative to the reported figures. Both measures demonstrate a shrinking asset base after 2015.

Return on Assets (ROA)

Reported ROA mirrors the income trends, beginning with a healthy 10.86% in 2014, turning negative in 2015 (-1.82%) and dropping significantly in 2016 (-21.34%), followed by a gradual improvement in 2017 (-1.85%) and a positive turn in 2018 (6.37%). Adjusted ROA also shows stronger negative deviations, with -2.42% in 2015 and a steep decline to -29.01% in 2016, but similarly improves in subsequent years, turning positive at 1.14% in 2017 and 5.65% in 2018.

Overall, the financial data indicate a period of significant operational challenges marked by large losses and asset base reductions around 2015 and 2016. The subsequent years show signs of recovery with improvement in profitability and asset stability. Adjusted figures generally reflect more pronounced negative impacts during the downturn but converge towards reported figures during the recovery phase, suggesting substantial adjustments related to income tax or other accounting treatments influencing the observed financial performance.