HALLIBURTON CO

As of December 31, 2025, we had$2.2 billion of cash and equivalents, compared to$2.6 billion of cash and

equivalents at December 31, 2024.

Significant sources and uses of cash in 2025

Sources of cash:

•Cash flows from operating activities were$2.9 billion. Working capital, which consists of receivables, inventories,

and accounts payable, collectively hada positive impact of$196 million.

•We received$444 million on the sale of investment securities.

•We received$185 million on the sale of property, plant, and equipment.

•We received$120 million on the sale of an equity investment.

Uses of cash:

•Capital expenditures were$1.3 billion.

•We repurchased 42.4 million shares of our common stock for$1.0 billion, which includes excise tax payment due

on 2024 share repurchases.

•We paid$579 million of dividends to our shareholders.

•Weretired $382 millionof our 3.8% senior notes due November 2025.

•We paid$363 million related to a purchase of an equity investment.

•We purchased$202 million of investment securities.

•We paid$185 million to acquire businesses.

Future sources and uses ofcash

We manufacture most of our own equipment, which provides us with some flexibility to increase or decrease our

capital expenditures based on market conditions. We currently expect capital spending for 2026 to be approximately $1.1

billion. Despite this reduction from 2025, we believe this level of spending will enable continued investment in our core

strategic technologies and businesses, including the international expansion of our artificial lift, well intervention,

unconventionals, and drilling technologies. We will continue to maintain capital discipline and monitor the rapidly changing

market dynamics, and we may adjust our capital spend accordingly.

In 2026, we expect to pay approximately$505 million for contractual purchase obligations, with another$315 million

due through 2028,$378 million of interest on debt, and $418 million under our leasing arrangements. Payments for interest on

our debt are expected to remain relatively flat for the foreseeable future. See Notes to Consolidated Financial Statements, Note

6 and Note 10 for additional information on expected future payments under our leasing arrangements and debt maturities.

We are not able to reasonably estimate the timing of cash outflows associated with our uncertain tax positions, in part

because we are unable to predict the timing of potential tax settlements with applicable taxing authorities. As of December 31,

2025, we had$170 million of gross unrecognized tax benefits, excluding penalties and interest, of which we estimate$155

million may require us to make a cash payment. We estimate that approximately$131 million of the cash payment will not be

settled within the next 12 months.

While we maintain focus on liquidity, we are also focused on providing cash returns to our shareholders. In 2023, our

Board approved a capital return framework with a goal of returning at least 50% of our annual free cash flow to shareholders

through dividends and share repurchases. We returned $1.6 billion of capital to shareholders in 2025 through dividends and

share repurchases. During 2025, our quarterly dividend rate was$0.17 per common share, or approximately$145 million in

aggregate.

We may utilize share repurchases as part of our capital return framework. Our Board of Directors has authorized a

program to repurchase our common stock from time to time. We repurchased 42.4 million shares of common stock during the

year ended December 31, 2025 under this program. Approximately$2.0 billion remained authorized for repurchases as of

December 31, 2025 and may be used for open market and other share purchases.

During 2023, we began our migration to SAP S4 which we expect to complete in the fourth quarter of 2026. During

theyear ended December 31, 2025, we incurred$154 million in expense on our SAP S4 migration. Due to the extension of the

project we announced in the second quarter of 2025, we expect the estimated total cost will be approximately $45 million per

quarter going forward. We believe the new system will provide important efficiency benefits, cost savings, enhanced visibility

to our operations, and advanced analytics that will benefit us and our customers.

We may, from time to time, redeem, repurchase, or otherwise acquire our outstanding debt through privately

negotiated transactions, open market purchases, redemptions, tender offers or otherwise, but we are under no obligation to do

so.

Other factors affecting liquidity

Financial condition in current market. As of December 31, 2025, we had$2.2 billion of cash and equivalents and$3.5

billion of available committed bank credit under a new revolving credit facility executed on August 18, 2025, with an

expiration date of August 16, 2030. We believe we have a manageable debt maturity profile, with approximately$90 million

due February 2027. Furthermore, we have no financial covenants or material adverse change provisions in our bank

agreements, and our debt maturities extend over a long period of time. We believe our cash on hand, cash flows generated from

operations, and our available credit facility will provide sufficient liquidity to address the challenges and opportunities of the

current market and our expected global cash needs, including capital expenditures, working capital investments, shareholder

returns, if any, debt repurchases, if any, and scheduled interest and principal payments, in the short term and long term.

Guarantee agreements. In the normal course of business, we have agreements with financial institutions under which

approximately $3.1 billion of letters of credit, bank guarantees, or surety bonds were outstanding as of December 31, 2025.

Some of the outstanding letters of credit have triggering events that would entitle a bank to require cash collateralization;

however, none of these triggering events have occurred. As of December 31, 2025, we had no material off-balance sheet

liabilities and were not required to make any material cash distributions to our unconsolidated subsidiaries.

We have entered into credit default swaps(CDSs) with third-party financial institutions that have an aggregate

notional amount outstanding as of December 31, 2025 of$592 million, compared to an aggregate notional amount outstanding

as of December 31, 2024 of$739 million, related to borrowings provided by the financial institutions to one of our primary

customers in Mexico, of which portions of the proceeds were utilized by this customer to pay certain of our outstanding

receivables. Approximately $455 million of the outstanding amount of the CDSs reduces monthly over its remaining 9-month

term and$75 million reduces monthly over its remaining 6-month term. The remaining$62 million outstanding amount reduces

monthly over its remaining 2-month term.

Credit ratings. Our credit ratings with Standard & Poor’sremain BBB+ for our long-term debt and A-2 for our short-

term debt, with a stable outlook. Our credit ratings with Moody's Investors Service remain A3 for our long-term debt and P-2

for our short-term debt, with a stable outlook.

Customer receivables. In line with industry practice, we bill our customers for our services in arrears and are,

therefore, subject to our customers delaying or failing to pay our invoices. In weak economic environments, we may experience

increased delays and failures to pay our invoices due to, among other reasons, a reduction in our customers’ cash flow from

operations and their access to the credit markets, as well as unsettled political conditions.

Receivables from our primary customer in Mexico accounted for approximately 7% of our total receivables as of

December 31, 2025. While we have experienced payment delays from our primary customer in Mexico, the amounts are not in

dispute and we have not historically had, and we do not expect, any material write-offs due to collectability of receivables from

this customer.