Halliburton Co. (NYSE:HAL)

The financial data reveals notable fluctuations in the company’s debt levels and shareholders’ equity over the analyzed period from 2005 to 2018. A detailed examination of short-term notes payable and long-term debt alongside shareholders’ equity and the debt to equity ratio gives insight into the company’s evolving financial structure.

Short-term notes payable and long-term debt

There is a general upward trend in total debt across the years, with significant increases observed particularly after 2008. Initial values show a gradual decrease from $3,196 million in 2005 to $2,612 million in 2008. However, from 2009 onward, debt levels exhibit notable growth, peaking at $15,346 million in 2015, more than six times the lowest point in 2008. Subsequent years show some reduction, but debt remains elevated relative to the beginning of the period, ending at $10,457 million in 2018.

Company shareholders’ equity

Shareholders’ equity displays a generally positive growth pattern until 2014, increasing steadily from $6,372 million in 2005 to a peak of $16,267 million in 2014. This upward trajectory highlights robust equity growth primarily through the early to mid-period. However, starting in 2015, equity declines sharply to $9,409 million and remains at lower levels through 2018, ending at $9,522 million. This shift indicates possible challenges affecting retained earnings or capital structure, reducing the equity base substantially from its peak.

Debt to equity ratio

The debt to equity ratio fluctuates considerably throughout the period, reflecting the variations in both debt and equity components. Initially, the ratio trends downward from 0.50 in 2005 to a low point of 0.31 in 2012, suggesting a strengthening equity base relative to debt during these years. This trend reverses sharply starting in 2013, with the ratio rising to nearly 1.32 in 2016, indicating that debt levels grew substantially faster than equity, which weakened the company’s financial leverage ratio. The ratio decreases slightly thereafter but remains elevated at 1.10 in 2018 compared to the early years.

Overall, the data suggests the company experienced a phase of strong equity growth and controlled debt levels until about 2012. Post-2012, there is a distinct shift characterized by increased borrowing and diminished equity, leading to higher leverage. This change may indicate increased financial risk or strategic shifts involving greater reliance on debt financing amidst declining equity values. The sharp rise in debt and consequent higher debt to equity ratios signal the need for cautious monitoring of the company's debt management and capital structure going forward.