HALLIBURTON CO

Three Months Ended March 31, 2025 Compared with Three Months Ended March 31, 2024

Operating Segments

Completion and Production

Completion and Production revenue in thefirst quarter of 2025 was$3.1 billion, a decrease of$253 million, or 8%,

when compared to thefirst quarter of 2024. Operating income in thefirst quarter of 2025 was$531 million, a decrease of$157

million, or 23%, when compared to thefirst quarter of 2024. These results were primarily driven by decreased pressure

pumping services and lower completion tool sales in the Western Hemisphere. Partially offsetting these decreases were

increased completion tool sales and improved stimulation activity in the Middle East.

Drilling and Evaluation

Drilling and Evaluation revenue in thefirst quarter of 2025 was$2.3 billion, a decrease of$134 million, or 6%, when

compared to thefirst quarter of 2024. Operating income in thefirst quarter of 2025 was$352 million, a decrease of$46 million,

or 12%, when compared to thefirst quarter of 2024. These results were primarily driven by decreased drilling services in

Mexico and the Middle East, reduced project management activity in Mexico, and lower wireline activity in the Middle East/

Asia. Partially offsetting these decreases was increased fluid services in the Middle East.

Geographic Regions

North America

North America revenue in thefirst quarter of 2025 was$2.2 billion, a 12% decrease compared to thefirst quarter of

2024. This decrease was primarily driven by lower stimulation activity in US Land and reduced completion tool sales in the

Gulf of America. Partially offsetting these decreases were higher artificial lift activity and improved drilling services in US

Land and increased stimulation activity in the Gulf of America.

Latin America

Latin America revenue in thefirst quarter of 2025 was$896 million, a 19% decrease compared to thefirst quarter of

2024. This decrease was primarily due to lower activity across multiple product service lines in Mexico and decreased

completion tool sales across the region. Partially offsetting these decreases were increased drilling-related services in Argentina,

Brazil, and the Caribbean.

Europe/Africa/CIS

Europe/Africa/CIS revenue in thefirst quarter of 2025 was$775 million, a 6% increase compared to thefirst quarter of

2024. This increase was primarily driven by improved activity across multiple product service lines in Norway, higher well

construction activity in Namibia, as well as improved completion tools sales in the Caspian Area. Partially offsetting these

increases was decreased activity across multiple product service lines in Senegal and Italy.

Middle East/Asia

Middle East/Asia revenue in thefirst quarter of 2025 was$1.5 billion, a 6% increase compared to thefirst quarter of

2024. This increase resulted from improved activity across multiple product service lines in Kuwait, improved stimulation

activity and increased completion tool sales in Saudi Arabia, and higher fluid services in the United Arab Emirates. Partially

offsetting these improvements were lower well construction activity in Saudi Arabia and Australia, decreased completion tool

sales in Malaysia, and declined drilling-related activity in Oman.

Other Operating Items

SAP S4 Upgrade Expense. As previously mentioned, during 2023, we began our migration to SAP S4, which we

expect to complete in thefirst half of 2026. During thefirst quarter of 2025, we recognized$30 million of expense on our SAP

S4 migration. During thefirst quarter of 2024, we recognized$34 million of expense on our SAP S4 migration.

Impairments and Other Charges. During thethree months ended March 31, 2025, we took a pre-tax charge of$356

million to adjust our cost structure to market conditions. These charges consisted primarily of severance costs, an impairment of

assets held for sale, an impairment of facility closures and lease terminations, and other items. See Notes to Condensed

Consolidated Financial Statements, Note 2. Impairments and Other Chargesfor 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 thethree months ended

March 31, 2024, we recorded a loss of $38 million due to the fair value decrease in one of the notes in March 2024, resulting

from the deterioration in the outlook of the debtor’s liquidity and financial projections. This is included in “Other, net” on the

consolidated statements of operations.

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 during thethree months ended March 31, 2024 due to the

devaluation of the currency in Egypt. This is included in “Other, net” on the consolidated statements of operations.

Income Tax Provision. During thethree months ended March 31, 2025, we recorded a total income tax provision of

$103 million on a pre-tax income of$306 million, resulting in an effective tax rate of 33.7% for the quarter. The effective tax

rate for this period was primarily impacted by the additional valuation allowance recognized on our deferred tax assets, which

resulted from the pre-tax $356 million of impairments and other charges. During thethree months ended March 31, 2024, we

recorded a total income tax provision of$178 million on a pre-tax income of$787 million, resulting in an effective tax rate of

22.6% for the quarter.

Pillar Two. 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 thethree months

ended March 31, 2025.

Internal Revenue Service Notice of Proposed Adjustment. We are subject to taxes in the United States and in numerous

jurisdictions where we operate or where our subsidiaries are organized. Our tax returns are routinely subject to examination by

the taxing authorities in the jurisdictions where we file tax returns. In most cases we are no longer subject to examination by tax

authorities for years before 2013. The only significant operating jurisdiction that has tax filings under review or subject to

examination by the tax authorities is the United States. Our United States federal income tax filings for tax years 2016 through

2023, including carry back of 2016 net operating losses to 2014, are currently under review or remain open for review by the

IRS.

On September 28, 2023, we received a NOPA from the IRS covering our 2016 U.S. tax return. The NOPA proposed

an adjustment to reclassify approximately 95% of the $3.5 billion termination fee paid to Baker Hughes in 2016 from an

ordinary expense deduction to a capital loss. The termination fee was paid to Baker Hughes under the merger agreement after

antitrust regulators in multiple jurisdictions failed to approve our proposed merger. It is common commercial practice to include

a termination fee in a merger agreement to compensate the target for damages incurred when the acquisition does not go

forward. The IRS’s long-understood position at the time of the payment had been to treat such payments as an ordinary and

necessary business expense. We strongly disagree with the proposed adjustment on both a factual and legal basis, and we plan

to vigorously contest it.

We expect that resolving this dispute will take substantial time. In 2023, we initiated the IRS administrative appeals

process, which is ongoing. Failing a resolution through that process, the matter would ultimately be resolved by the United

States federal courts.

We regularly assess the likelihood of adverse outcomes resulting from tax examinations to determine the adequacy of

our tax reserves, and we believe our income tax reserves are appropriately provided for all open tax years. We cannot assure

you that the matter will be determined in our favor or against us, and if the matter is ultimately determined unfavorably to us, it

could have a material adverse impact on our results of operations and cash flows. Based on tax attributes currently available, we

estimate that, should the IRS's position prevail through its appellate process and subsequent litigation, the proposed adjustment

could result in cash taxes due of approximately$640 million (plus interest thereon in the case of amounts due for previous tax

years). Our estimates are calculated under current tax law and on the bases of our assumptions regarding taxable income and

loss and other tax attributes over the relevant period, which law could change and which assumptions could and likely will

differ materially from actual results. In any event, no payment of any additional tax is currently required, nor do we anticipate

that the proposed adjustment would materially and adversely impact our ability to meet our expected uses of cash, including

future capital expenditures, working capital investments, and scheduled debt repayments, or our ability to return cash to

shareholders, even if a final determination of the matter is reached that is adverse to us.