Halliburton’s Post-4Q17 Net Debt

Between 4Q16 and 4Q17, Halliburton’s (HAL) total debt decreased 12%, while its cash and marketable securities decreased 42%. In effect, its net debt increased 3% to ~$8.6 billion. Although HAL’s total debt decreased, a steep decline in its cash and marketable securities prevented a fall in net debt. Net debt is aggregate short- and long-term debt less cash and marketable securities.

Halliburton makes up 2.4% of the iShares North American Natural Resources ETF (IGE). Since December 29, 2017, IGE has fallen 5%, while HAL has fallen 2%. December 29 was the last trading day of HAL’s fiscal 2017.

Halliburton’s net-debt-to-adjusted-TTM (trailing-12-month) EBITDA (earnings before interest, tax, depreciation, and amortization) fell from 4Q16 through 4Q17. In 4Q17, Halliburton’s net debt to adjusted EBITDA multiple (or indebtedness) was ~3.0x, or 20% lower than a year prior. Although Halliburton had marginally higher net debt, it had lower indebtedness in 4Q17, thanks to improved EBITDA. Next, we’ll discuss Halliburton’s free cash flow.