HALLIBURTON CO

Note 12. Income Taxes

The components of theprovision for income taxes on continuing operations were as follows:

The United States and foreign components of income from continuing operations before income taxes were as follows:

Reconciliations between the actual provision for income taxes on continuing operations and that computed by applying

the United States statutory rate to income from continuing operations before income taxes were as follows:

During the year ended December 31, 2025, we recorded a total income taxprovision of$479 million onpre-tax

income of$1.8 billion, resulting in an effective tax rate of 27.0%. The effective tax rate for 2025 was primarily impacted by our

geographic mix of earnings, tax adjustments related to the reassessment of prior year tax accruals, and changes of valuation

allowance on some of our deferred tax assets, and discrete tax benefit from the Foreign-Derived Intangible Income (FDII)

deduction attributable to a royalty prepayment.

During the year ended December 31, 2024, we recorded a total income taxprovision of$718 million on pre-tax

income of$3.2 billion, resulting in an effective tax rate of 22.2%. The effective tax rate for 2024 was primarily impacted by our

geographic mix of earnings, tax adjustments related to the reassessment of prior year tax accruals, and valuation allowances on

some of our deferred tax assets.

During the year ended December 31, 2023, we recorded a total income taxprovision of$701 million on pre-tax

income of$3.4 billion, resulting in an effective tax rate of 20.8%. The effective tax rate for 2023 was primarily impacted by our

geographic mix of earnings, tax adjustments related to the reassessment of prior year tax accruals, and valuation allowances on

some of our deferred tax assets.

The primary components of our deferred tax assets and liabilities were as follows:

At December 31, 2025, we had$635 million of domestic and foreign tax-effected operating and capital loss

carryforwards, with approximately$6 million estimated to be utilized against our unrecognized tax benefits. In addition, we had

approximately$819 million of foreign tax credit carryforwards which are offset by$29 million of foreign branch deferred

activity and unrecognized tax benefits reflected in the table above. The ultimate realization of these deferred tax assets depends

on our ability to generate sufficient taxable income in the appropriate taxing jurisdiction.

Our deferred tax assets from operating and capital losses, foreign tax credits, and research and development credits

will expire as follows:

We have not recorded incremental U.S. income taxes or foreign withholding taxes on the undistributed earnings of

foreign subsidiaries subsequent to December 31, 2017. Under ASC 740, income taxes are generally not provided on such

undistributed earnings to the extent they are either not expected to be subject to tax upon repatriation or are considered to be

indefinitely reinvested.

For the year ended December 31, 2025, the “One Big Beautiful Bill Act,” was introduced which included federal tax

law revisions that affected the Company’s ability to utilize Foreign Tax Credits (FTC). Companies were required to recognize

the effects of changes in tax laws in the period in which the new legislation is enacted. As a result, the Company reassessed the

realizability of its FTC carryforwards and recorded an additional valuation allowance of $125 million against its FTC deferred

tax assets.

The following table presents a rollforward of our unrecognized tax benefits and associated interest and penalties.

Income taxes paid (net of refunds received) were as follows:

Our tax returns are subject to review 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 2014. The only significant operating

jurisdiction that has tax filings under review or subject to examination by the tax authorities is the United States. The United

States federal income tax filings for tax years 2016 through 2024 are currently under review or remain open for review by the

IRS.

As of December 31, 2025, the primary unresolved issue for the IRS audit for 2016 relates to the classification of the

$3.5 billion ordinary deduction that we claimed for the termination fee we paid to Baker Hughes in the second quarter of 2016

for which we received a NOPA from the IRS on September 28,2023. 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 do not expect a final resolution of this issue in the next 12 months.

Based on the information currently available, we do not anticipate a significant increase or decrease to our tax

contingencies within the next 12 months.