HALLIBURTON CO

Operating Segments

Completion and Production

Completion and Production revenue in 2025 was$12.8 billion, a decrease of$469 million, or 4%, compared to 2024.

Operating income for the segment in 2025 was$2.1 billion, a decrease of$581 million, or 21%, compared to 2024. These

results were primarily driven by decreased pressure pumping services in U.S. Land, lower completion tool sales in the Western

Hemisphere, the Middle East, and Africa, and decreased well intervention services in Middle East/Asia. Partially offsetting

these decreases were higher year-end completion tool sales in Europe, and increased well intervention services in Latin

America.

Drilling and Evaluation

Drilling and Evaluation revenue in 2025 was$9.4 billion, a decrease of$291 million, or 3%, compared to 2024.

Operating income for the segment in 2025 was$1.4 billion, a decrease of$229 million, or 14%, compared to 2024. These

results were primarily driven by lower drilling activity in the Middle East and Latin America, and lower wireline activity in

Middle East/Asia, and decreased testing services internationally. Partially offsetting these decreases were improved fluids

services and higher project management activity in Latin America, and increased drilling activity in Europe/Africa.

Geographic Regions

North America

North America revenue in 2025 was$9.1 billion, a 6% decrease compared to 2024, largely driven bylower activity

across multiple product service lines in U.S. Land and lower completion tool sales in the Gulf of America. Partially offsetting

these decreases were improved stimulation activity and increased fluids services in the Gulf of America, increased drilling

activity in U.S. Land, and higher completion tool sales in Canada.

Latin America

Latin America revenue in 2025 was$3.9 billion, a 7% decrease compared to 2024, resulting from lower activity across

multiple product service lines in Mexico and lower completion tool sales in Brazil. Partially offsetting these decreases were

improved activity across multiple product service lines in Brazil, and higher drilling related services in Argentina and the

Caribbean.

Europe/Africa/CIS

Europe/Africa/CIS revenue in 2025 was$3.4 billion, a 12% increase compared to 2024, resulting from higher activity

across multiple product service lines in Norway and Romania, increased stimulation activity in Congo, higher project

management activity in Africa, and improved well construction activity in Namibia. Partially offsetting these increases were

lower activity across multiple product service lines in Italy and Senegal, and lower completion tool sales and decreased pressure

pumping services in Angola.

Middle East/Asia

Middle East/Asia revenue in 2025 was$5.8 billion, a 4% decrease compared to 2024, resulting from lower activity

across multiple product service lines in Saudi Arabia and Malaysia. Partially offsetting these decreases were improved activity

across multiple product service lines in Kuwait, higher stimulation activity in India, higher drilling related services in Indonesia,

and increased fluids services in the United Arab Emirates.

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 the fourth quarter of 2026. During theyears ended December 31, 2025 and 2024, we recognized$154 million

and$124 million of expense on our SAP S4 migration, respectively.

Impairments and Other Charges. During theyear ended December 31, 2025, we recognized a pre-tax charge of$831

million primarily related to severance costs, an impairment of assets held for sale, fixed and other assets write-offs, an

impairment of facility closures and lease terminations, an equity in earnings loss, and other items, primarily related to legacy

environmental remediation cost estimate increases. During theyear ended December 31, 2024, we recognized a pre-tax charge

of$116 million, primarily related to severance costs, an impairment of assets held for sale, expenses related to a cybersecurity

incident, a gain on a fair value adjustment of an equity investment, and other items. See Notes to Consolidated Financial

Statements, Note 2 for further discussion of these charges.

Nonoperating Items

Argentina Impairment on Investment. In years 2022, 2023 and 2024, 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 theyear ended

December 31, 2025 and 2024, we recorded a loss of $23 million and $38 million, respectively, 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.

Argentina Blue Chip Swap. The Central Bank of Argentina maintains currency controls that limit our ability to access

U.S. dollars in Argentina and remit cash from our Argentine operations. The execution of certain trades known as Blue Chip

Swaps effectively results in a parallel U.S. dollar exchange rate. For theyears ended December 31, 2025,2024, and 2023, we

entered into Blue Chip Swap transactions, which resulted in a pre-tax loss on investment for$9 million,$8 million, and$110

million, respectively.

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$34 million during theyear ended December 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 theyear ended December 31, 2025, we recorded a total income tax provision of$479

million on a pre-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 the pre-tax$831 million of impairments and other charges, the $23 million impairment of an investment

in Argentina, the additional valuation allowance recognized in the amount of $125 million on our deferred tax assets which

resulted from the impact on the realizability of our FTC carryforward due to the “One Big Beautiful Bill Act,” and partially

offset by an $86 million discrete tax benefit from the Foreign-Derived Intangible Income (FDII) deduction attributable to a

royalty prepayment. During theyear ended December 31, 2024, we recorded a total income tax provision 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 changes

of valuation allowance on some of our deferred tax assets. We recorded a tax benefit of $41 million during theyear ended

December 31, 2024, due to a partial release of a valuation allow ance on our deferred tax assets based on market conditions.

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 theyear ended

December 31, 2025 and 2024.

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 2014. 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

2024, 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 Notice of Proposed Adjustment (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 the 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.