Inventory Disclosure
Adjustment to Inventory: Conversion from LIFO to FIFO
Adjusted Financial Ratios: LIFO vs. FIFO (Summary)
Adjusted Current Ratio
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Halliburton Co., balance sheet: inventory

US$ in millions

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
Finished products and parts	1,947)	1,547)	1,388)	1,747)	2,606)
Raw materials and supplies	934)	703)	778)	548)	754)
Work in process	147)	146)	109)	122)	211)
Inventories	3,028)	2,396)	2,275)	2,417)	3,571)

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

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Item	Description	The company
Inventories	Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer.	Halliburton Co. inventories increased from 2016 to 2017 and from 2017 to 2018.

Adjusting LIFO Inventory to FIFO (Current) Cost

US$ in millions

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
Adjustment to Inventories
Inventories at LIFO (as reported)	3,028)	2,396)	2,275)	2,417)	3,571)
Add: Inventory LIFO reserve	24)	31)	16)	—)	38)
Inventories at FIFO (adjusted)	3,052)	2,427)	2,291)	2,417)	3,609)
Adjustment to Current Assets
Current assets (as reported)	11,151)	10,777)	11,677)	21,609)	15,068)
Add: Inventory LIFO reserve	24)	31)	16)	—)	38)
Current assets (adjusted)	11,175)	10,808)	11,693)	21,609)	15,106)
Adjustment to Total Assets
Total assets (as reported)	25,982)	25,085)	27,000)	36,942)	32,240)
Add: Inventory LIFO reserve	24)	31)	16)	—)	38)
Total assets (adjusted)	26,006)	25,116)	27,016)	36,942)	32,278)
Adjustment to Company Shareholders’ Equity
Company shareholders’ equity (as reported)	9,522)	8,322)	9,409)	15,462)	16,267)
Add: Inventory LIFO reserve	24)	31)	16)	—)	38)
Company shareholders’ equity (adjusted)	9,546)	8,353)	9,425)	15,462)	16,305)
Adjustment to Net Income (loss) Attributable To Company
Net income (loss) attributable to company (as reported)	1,656)	(463)	(5,763)	(671)	3,500)
Add: Increase (decrease) in inventory LIFO reserve	(7)	15)	(2)	(38)	3)
Net income (loss) attributable to company (adjusted)	1,649)	(448)	(5,765)	(709)	3,503)

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

Halliburton Co. inventory value on Dec 31, 2018 would be $3,052) (in millions) if the FIFO inventory method was used instead of LIFO. Halliburton Co. inventories, valued on a LIFO basis, on Dec 31, 2018 were $3,028). Halliburton Co. inventories would have been $24) higher than reported on Dec 31, 2018 if the FIFO method had been used instead.

Halliburton Co., Financial Data: Reported vs. Adjusted

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Halliburton Co., adjusted financial ratios

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
Current Ratio
Reported current ratio (LIFO)	2.32	2.22	2.90	4.03	2.56
Adjusted current ratio (FIFO)	2.33	2.22	2.91	4.03	2.57
Net Profit Margin
Reported net profit margin (LIFO)	6.90%	-2.25%	-36.27%	-2.84%	10.65%
Adjusted net profit margin (FIFO)	6.87%	-2.17%	-36.29%	-3.00%	10.66%
Total Asset Turnover
Reported total asset turnover (LIFO)	0.92	0.82	0.59	0.64	1.02
Adjusted total asset turnover (FIFO)	0.92	0.82	0.59	0.64	1.02
Financial Leverage
Reported financial leverage (LIFO)	2.73	3.01	2.87	2.39	1.98
Adjusted financial leverage (FIFO)	2.72	3.01	2.87	2.39	1.98
Return on Equity (ROE)
Reported ROE (LIFO)	17.39%	-5.56%	-61.25%	-4.34%	21.52%
Adjusted ROE (FIFO)	17.27%	-5.36%	-61.17%	-4.59%	21.48%
Return on Assets (ROA)
Reported ROA (LIFO)	6.37%	-1.85%	-21.34%	-1.82%	10.86%
Adjusted ROA (FIFO)	6.34%	-1.78%	-21.34%	-1.92%	10.85%

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

Financial ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by current liabilities.	Halliburton Co. adjusted current ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Halliburton Co. adjusted net profit margin ratio improved from 2016 to 2017 and from 2017 to 2018.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Halliburton Co. adjusted total asset turnover ratio improved from 2016 to 2017 and from 2017 to 2018.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Halliburton Co. adjusted financial leverage ratio increased from 2016 to 2017 but then decreased significantly from 2017 to 2018.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Halliburton Co. adjusted ROE improved from 2016 to 2017 and from 2017 to 2018.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Halliburton Co. adjusted ROA improved from 2016 to 2017 and from 2017 to 2018.

Halliburton Co., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Current assets	11,151)	10,777)	11,677)	21,609)	15,068)
Current liabilities	4,802)	4,862)	4,023)	5,359)	5,883)
Liquidity Ratio
Current ratio¹	2.32	2.22	2.90	4.03	2.56
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted current assets	11,175)	10,808)	11,693)	21,609)	15,106)
Current liabilities	4,802)	4,862)	4,023)	5,359)	5,883)
Liquidity Ratio
Adjusted current ratio²	2.33	2.22	2.91	4.03	2.57

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

2018 Calculations

¹ Current ratio = Current assets ÷ Current liabilities
= 11,151 ÷ 4,802 = 2.32

² Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= 11,175 ÷ 4,802 = 2.33

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Liquidity ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by current liabilities.	Halliburton Co. adjusted current ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to company	1,656)	(463)	(5,763)	(671)	3,500)
Revenue	23,995)	20,620)	15,887)	23,633)	32,870)
Profitability Ratio
Net profit margin¹	6.90%	-2.25%	-36.27%	-2.84%	10.65%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to company	1,649)	(448)	(5,765)	(709)	3,503)
Revenue	23,995)	20,620)	15,887)	23,633)	32,870)
Profitability Ratio
Adjusted net profit margin²	6.87%	-2.17%	-36.29%	-3.00%	10.66%

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

2018 Calculations

¹ Net profit margin = 100 × Net income (loss) attributable to company ÷ Revenue
= 100 × 1,656 ÷ 23,995 = 6.90%

² Adjusted net profit margin = 100 × Adjusted net income (loss) attributable to company ÷ Revenue
= 100 × 1,649 ÷ 23,995 = 6.87%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Halliburton Co. adjusted net profit margin ratio improved from 2016 to 2017 and from 2017 to 2018.

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Revenue	23,995)	20,620)	15,887)	23,633)	32,870)
Total assets	25,982)	25,085)	27,000)	36,942)	32,240)
Activity Ratio
Total asset turnover¹	0.92	0.82	0.59	0.64	1.02
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Revenue	23,995)	20,620)	15,887)	23,633)	32,870)
Adjusted total assets	26,006)	25,116)	27,016)	36,942)	32,278)
Activity Ratio
Adjusted total asset turnover²	0.92	0.82	0.59	0.64	1.02

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

2018 Calculations

¹ Total asset turnover = Revenue ÷ Total assets
= 23,995 ÷ 25,982 = 0.92

² Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 23,995 ÷ 26,006 = 0.92

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Halliburton Co. adjusted total asset turnover ratio improved from 2016 to 2017 and from 2017 to 2018.

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Total assets	25,982)	25,085)	27,000)	36,942)	32,240)
Company shareholders’ equity	9,522)	8,322)	9,409)	15,462)	16,267)
Solvency Ratio
Financial leverage¹	2.73	3.01	2.87	2.39	1.98
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted total assets	26,006)	25,116)	27,016)	36,942)	32,278)
Adjusted company shareholders’ equity	9,546)	8,353)	9,425)	15,462)	16,305)
Solvency Ratio
Adjusted financial leverage²	2.72	3.01	2.87	2.39	1.98

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

2018 Calculations

¹ Financial leverage = Total assets ÷ Company shareholders’ equity
= 25,982 ÷ 9,522 = 2.73

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted company shareholders’ equity
= 26,006 ÷ 9,546 = 2.72

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Halliburton Co. adjusted financial leverage ratio increased from 2016 to 2017 but then decreased significantly from 2017 to 2018.

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to company	1,656)	(463)	(5,763)	(671)	3,500)
Company shareholders’ equity	9,522)	8,322)	9,409)	15,462)	16,267)
Profitability Ratio
ROE¹	17.39%	-5.56%	-61.25%	-4.34%	21.52%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to company	1,649)	(448)	(5,765)	(709)	3,503)
Adjusted company shareholders’ equity	9,546)	8,353)	9,425)	15,462)	16,305)
Profitability Ratio
Adjusted ROE²	17.27%	-5.36%	-61.17%	-4.59%	21.48%

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

2018 Calculations

¹ ROE = 100 × Net income (loss) attributable to company ÷ Company shareholders’ equity
= 100 × 1,656 ÷ 9,522 = 17.39%

² Adjusted ROE = 100 × Adjusted net income (loss) attributable to company ÷ Adjusted company shareholders’ equity
= 100 × 1,649 ÷ 9,546 = 17.27%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Halliburton Co. adjusted ROE improved from 2016 to 2017 and from 2017 to 2018.

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to company	1,656)	(463)	(5,763)	(671)	3,500)
Total assets	25,982)	25,085)	27,000)	36,942)	32,240)
Profitability Ratio
ROA¹	6.37%	-1.85%	-21.34%	-1.82%	10.86%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to company	1,649)	(448)	(5,765)	(709)	3,503)
Adjusted total assets	26,006)	25,116)	27,016)	36,942)	32,278)
Profitability Ratio
Adjusted ROA²	6.34%	-1.78%	-21.34%	-1.92%	10.85%

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

2018 Calculations

¹ ROA = 100 × Net income (loss) attributable to company ÷ Total assets
= 100 × 1,656 ÷ 25,982 = 6.37%

² Adjusted ROA = 100 × Adjusted net income (loss) attributable to company ÷ Adjusted total assets
= 100 × 1,649 ÷ 26,006 = 6.34%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Halliburton Co. adjusted ROA improved from 2016 to 2017 and from 2017 to 2018.

Halliburton Co. (NYSE:HAL)

Analysis of Inventory

Inventory Disclosure

Adjustment to Inventory: Conversion from LIFO to FIFO

Halliburton Co., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: LIFO vs. FIFO (Summary)

Halliburton Co., Financial Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)