HALLIBURTON CO

The preparation of financial statements requires the use of judgments and estimates. Our critical accounting policies

are described below to provide a better understanding of how we develop our assumptions and judgments about future events

and related estimates and how they can impact our financial statements. A critical accounting estimate is one that requires our

most difficult, subjective, or complex judgments and assessments and is fundamental to our results of operations. We identified

our most critical accounting estimates to be:

-forecasting our income tax (provision) benefit, including our future ability to utilize foreign tax credits and the

realizability of deferred tax assets (including net operating loss carryforwards), and providing for uncertain tax

positions;

-legal and investigation matters;

-valuations of long-lived assets, including intangible assets and goodwill; and

-allowance for credit losses.

We base our estimates on historical experience and on various other assumptions we believe to be reasonable

according to the current facts and circumstances, the results of which form the basis for making judgments about the carrying

values of assets and liabilities that are not readily apparent from other sources. We believe the following are the critical

accounting policies used in the preparation of our consolidated financial statements, as well as the significant estimates and

judgments affecting the application of these policies. This discussion and analysis should be read in conjunction with our

consolidated financial statements and related notes included in this report.

Income tax accounting

We recognize the amount of taxes payable or refundable for the current year and use an asset and liability approach in

recognizing the amount of deferred tax liabilities and assets for the future tax consequences of events that have been recognized

in our financial statements or tax returns. We apply the following basic principles in accounting for our income taxes:

-a current tax liability or asset is recognized for the estimated taxes payable or refundable on tax returns for the

current year;

-a deferred tax liability or asset is recognized for the estimated future tax effects attributable to temporary differences

and carryforwards;

-the measurement of current and deferred tax liabilities and assets is based on provisions of the enacted tax law, and

the effects of potential future changes in tax laws or rates are not considered; and

-the value of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available

evidence, are not expected to be realized.

We determine deferred taxes separately for each tax-paying component (an entity or a group of entities that is

consolidated for tax purposes) in each tax jurisdiction. That determination includes the following procedures:

-identifying the types and amounts of existing temporary differences;

-measuring the total deferred tax liability for taxable temporary differences using the applicable tax rate;

-measuring the total deferred tax asset for deductible temporary differences and operating loss carryforwards using

the applicable tax rate;

-measuring the deferred tax assets for each type of tax credit carryforward; and

-reducing the deferred tax assets by a valuation allowance if, based on available evidence, it is more likely than not

that some portion or all of the deferred tax assets will not be realized.

Our methodology for recording income taxes requires a significant amount of judgment and the use of assumptions

and estimates. Additionally, we use forecasts of certain tax elements, such as taxable income and foreign tax credit utilization,

as well as evaluate the feasibility of implementing tax planning strategies. Given the inherent uncertainty involved with the use

of such variables, there can be significant variation between anticipated and actual results that could have a material impact on

our income tax accounts related to continuing operations.

We have operations inmore than 70 countries. Consequently, we are subject to the jurisdiction of a significant number

of taxing authorities. The income earned in these various jurisdictions is taxed on differing bases, including net income actually

earned, net income deemed earned, and revenue-based tax withholding. Our tax filings are routinely examined in the normal

course of business by tax authorities. The final determination of our income tax liabilities involves the interpretation of local tax

laws, tax treaties and related authorities in each jurisdiction, as well as the significant use of estimates and assumptions

regarding the scope of future operations and results achieved, the timing and nature of income earned and expenditures

incurred. The final determination of tax audits or changes in the operating environment, including changes in tax law and

currency/repatriation controls, could impact the determination of our income tax liabilities for a tax year and have an adverse

effect on our financial statements. For example, we received a NOPA from the IRS on September 28, 2023. See Management's

Discussion and Analysis of Financial Condition and Results of Operations - Nonoperating Items, Internal Revenue Service

Notice of Proposed Adjustment and Notes to Consolidated Financial Statements, Note 12 for further information.

Tax filings of our subsidiaries, unconsolidated affiliates and related entities are routinely examined in the normal

course of business by tax authorities. These examinations may result in assessments of additional taxes, which we work to

resolve with the tax authorities and through the judicial process. Predicting the outcome of disputed assessments involves some

uncertainty. Factors such as the availability of settlement procedures, willingness of tax authorities to negotiate, and the

operation and impartiality of judicial systems vary across the different tax jurisdictions and may significantly influence the

ultimate outcome. We review the facts for each assessment, and then utilize assumptions and estimates to determine the most

likely outcome and provide taxes, interest, and penalties, as needed based on this outcome. We provide for uncertain tax

positions pursuant to current accounting standards, which prescribe a minimum recognition threshold and measurement

methodology that a tax position taken or expected to be taken in a tax return is required to meet before being recognized in the

financial statements. The standards also provide guidance for derecognition classification, interest and penalties, accounting in

interim periods, disclosure, and transition.

Legal and investigation matters

As discussed in Notes to Consolidated Financial Statements, Note 11, we are subject to various legal and investigation

matters arising in the ordinary course of business. As of December 31,2025, we have accrued an estimate of the probable and

estimable costs for the resolution of some of our legal and investigation matters, which is not material to our consolidated

financial statements. For other matters for which the liability is not probable and reasonably estimable, we have not accrued any

amounts. Attorneys in our legal department monitor and manage all claims filed against us and review all pending

investigations. Generally, the estimate of probable costs related to these matters is developed in consultation with internal and

outside legal counsel representing us. Our estimates are based upon an analysis of potential results, assuming a combination of

litigation and settlement strategies. The accuracy of these estimates is impacted by, among other things, the complexity of the

issues and the amount of due diligence we have been able to perform. We attempt to resolve these matters through settlements,

mediation, and arbitration proceedings when possible. If the actual settlement costs, final judgments, or fines, after appeals,

differ from our estimates, there may be a material adverse effect on our future financial results. We have in the past recorded

significant adjustments to our initial estimates of these types of contingencies.

Value of long-lived assets, including intangible assets and goodwill

We carry a variety of long-lived assets on our balance sheet including property, plant, and equipment, goodwill, and

other intangibles. Impairment is the condition that exists when the carrying amount of a long-lived asset exceeds its fair value,

and any impairment charge that we record reduces our operating income. Goodwill is the excess of the cost of an acquired

entity over the net of the amounts assigned to assets acquired and liabilities assumed. We conduct impairment tests on goodwill

annually, during the third quarter, or more frequently whenever events or changes in circumstances indicate an impairment may

exist. We conduct impairment tests on long-lived assets, other than goodwill, whenever events or changes in circumstances

indicate that the carrying value may not be recoverable.

When conducting an impairment test on long-lived assets, other than goodwill, we first group individual assets based

on the lowest level for which identifiable cash flows are largely independent of the cash flows from other assets. This requires

some judgment. We then compare estimated future undiscounted cash flows expected to result from the use and eventual

disposition of the asset group to its carrying amount. If the undiscounted cash flows are less than the asset group’s carrying

amount, we then determine the asset group’s fair value by using a discounted cash flow analysis. This analysis is based on

estimates such as management’s short-term and long-term forecast of operating performance, including revenue growth rates

and expected profitability margins, estimates of the remaining useful life and service potential of the assets within the asset

group, and a discount rate based on our weighted average cost of capital. An impairment loss is measured and recorded as the

amount by which the asset group’s carrying amount exceeds its fair value. See Notes to Consolidated Financial Statements,

Note 2 for further discussion of impairments and other charges. We perform our goodwill impairment assessment for each

reporting unit, which is the same as our reportable segments, the Completion and Production division and the Drilling and

Evaluation division, comparing the estimated fair value of each reporting unit to the reporting unit’s carrying value, including

goodwill. We estimate the fair value for each reporting unit using a discounted cash flow analysis based on management’s

short-term and long-term forecast of operating performance. This analysis includes significant assumptions regarding discount

rates, revenue growth rates, expected profitability margins, forecasted capital expenditures, and the timing of expected future

cash flows based on market conditions. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of

the reporting unit is not considered impaired. If the carrying amount of a reporting unit exceeds its estimated fair value, an

impairment loss is measured and recorded.

The impairment assessments discussed above incorporate inherent uncertainties, including projected commodity

pricing, supply and demand for our services, and future market conditions, which are difficult to predict in volatile economic

environments and could result in impairment charges in future periods if actual results materially differ from the estimated

assumptions utilized in our forecasts. If market conditions deteriorate, including crude oil prices significantly declining and

remaining at low levels for a sustained period of time, we could be required to record additional impairments of the carrying

value of our long-lived assets in the future which could have a material adverse impact on our operating results. See Notes to

Consolidated Financial Statements, Note 1 for our accounting policies related to long-lived assets.

Allowance for credit losses

We evaluate our global accounts receivable through a continuous process of assessing our portfolio on an individual

customer and overall basis. This process consists of a thorough review of historical collection experience, current aging status

of the customer accounts, financial condition of our customers, and whether the receivables involve retainages. We also

consider the economic environment of our customers, both from a marketplace and geographic perspective, in evaluating the

need for an allowance. Based on our review of these factors, we establish or adjust allowances for specific customers. This

process involves judgment and estimation, and frequently involves significant dollar amounts. Accordingly, our results of

operations can be affected by adjustments to the allowance due to actual write-offs that differ from estimated amounts.

At December 31,2025, our allowance for credit losses totaled$805 million or 14.9% of notes and accounts receivable

before the allowance. At December 31,2024, our allowance for credit losses totaled$754 million, or 13.9% of notes and

accounts receivable before the allowance. The allowance for credit losses in both years is primarily comprised of accounts

receivable from our primary customer in Venezuela. A hypothetical 100 basis point change in our estimate of the collectability

of our notes and accounts receivable balance as of December 31,2025 would have resulted in a$54 million adjustment to 2025

total operating costs and expenses. See Notes to Consolidated Financial Statements, Note 5 for further information.