HALLIBURTON CO

Note 1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements were prepared using United States

generally accepted accounting principles (U.S. GAAP) for interim financial information and the instructions to Form 10-Q and

Regulation S-X. Accordingly, these financial statements do not include all information or notes required by U.S. GAAP for

annual financial statements and should be read together with our 2025 Annual Report on Form 10-K.

Our accounting policies are in accordance with U.S. GAAP. The preparation of financial statements in conformity with

these accounting principles requires us to make estimates and assumptions that affect:

•the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the

financial statements; and

•the reported amounts of revenue and expenses during the reporting period.

Ultimate results could differ from our estimates.

In our opinion, thecondensed consolidated financial statements included herein contain all adjustments necessary to

present fairly our financial position as of September 30, 2026, the results of our operations for the three and nine months ended

September 30, 2026 and 2025, and our cash flows for thenine months ended September 30, 2026 and 2025. Such adjustments

are of a normal recurring nature. In addition, certain reclassifications of prior period balances have been made to conform to the

current period presentation.

The results of our operations for thethree and nine months ended September 30, 2026 may not be indicative of results

for the full year.

Note 2. Impairments and Other Charges

The following table presents various pre-tax charges we recorded during thethree and nine months ended

September 30, 2026 and 2025, which are reflected within “Impairments and other charges” on our Condensed Consolidated

Statements of Operations.

During thethree months ended September 30, 2026, we recorded a pre-taxcharge of$107 million, primarily related to

$107 million of severance costs associated with the rationalization of our global headcount,$25 million of inventory costs and

write-downs, and$14 million of fixed and other assets write-offs. These charges were partially offset by a$36 million gain

resulting from the sale of a portion of our shares in an equity investment.

During the nine months ended September 30, 2026, we recorded a pre-tax charge of$12 million. The charge primarily

reflected$107 million in severance costs,$25 million of inventory costs and write-downs, and$14 million offixed and other

assets write-offs. These charges were substantially offset by gains of$100 million, primarily related to a$54 million gain

resulting from changes in our ownership interest in an equity investment and a$36 million gain resulting from the sale of a

portion of our shares in an equity investment, and$51 million of other gains, primarily due to a government refund recovery.

During the three months ended September 30, 2025, we recorded a pre-tax charge of$392 million primarily related to

$169 million of severance costs,$115 million offixed and other assets write-offs primarily related to our North America Land

operations, and$96 million in impairment of assets held for sale related to our chemical business, partially offset by a$10

million release of cybersecurity related accruals and a$6 million gain on an equity investment.

For thenine months ended September 30, 2025, we recorded a pre-tax charge of$748 million, which included$276

million of severance costs, a$200 million impairment of assets held for sale related to our chemical business,$115 million of

fixed and other assets write-offs, a$53 million impairment associated with facility closures and lease terminations, and$120

million of other charges, primarily related to increases in legacy environmental remediation cost estimates.

Note 3. Business Segment Information

We operate undertwo divisions, which form the basis for thetwo operating segments we report: the Completion and

Production segment and the Drilling and Evaluation segment. Our equity in earnings and losses of unconsolidated affiliates that

are accounted for using the equity method of accounting is included within cost of services and cost of sales on our statements

of operations, which is part of operating income of the applicable segment.

Our company’schief operating decision maker (CODM) is Jeffrey Miller, Chairman of the Board, President and Chief

Executive Officer. Throughout the year, our CODM assesses the performance of thetwo segments based on segment revenue

and operating income, in comparison with forecast and plan and overall results, to make capital and resource allocation

decisions.

The following table presents information on our business segments.

The following table presents significant segment expenses, which represent the difference between segment revenue

and segment operating income and are regularly reviewed by our CODM.

Other segment operating expenses primarily consist of maintenance, overhead allocations, facilities cost, and other

miscellaneous costs.

The following table presents total assets by segment.

Note 4. Revenue

Revenue is recognized based on the transfer of control or our customers’ ability to benefit from our services and

products in an amount that reflects the consideration we expect to receive in exchange for those services and products. Mostof

our service and product contracts are short-term in nature. In recognizing revenue for our services and products, we determine

the transaction price of purchase orders or contracts with our customers, which may consist of fixed and variable consideration.

We also assess our customers’ ability and intention to pay, which is based on a variety offactors, including our historical

payment experience with, and the financial condition of, our customers. Payment terms and conditions vary by contract type,

although terms generally include a requirement of payment within 20 to 60 days. Other judgments involved in recognizing

revenue include an assessment of progress towards completion of performance obligations for certain long-term contracts,

which involve estimating total costs to determine our progress towards contract completion and calculating the corresponding

amount of revenue to recognize.

Disaggregation of revenue

We disaggregate revenue from contracts with customers into types of services or products, consistent with ourtwo

reportable segments, in addition to geographical area. Based on the location of services providedand products sold, 37% and

39% ofour consolidated revenue was from the United States for thenine months ended September 30, 2026 and 2025,

respectively. No other country accounted for more than 10% of our revenue for those periods.

The following table presents information on our disaggregated revenue.

Contract balances

We perform our obligations under contracts with our customers by transferring services and products in exchange for

consideration. The timing of our performance often differs from the timing of our customers’ payment, which results in the

recognition of receivables and deferred revenue. Deferred revenue represents consideration received in advance from customers

for contracts where revenue will be recognized as future services are performed. Deferred revenue balances as of September 30,

2026 and December 31, 2025 were not material to our condensed consolidated financial statements. Revenue recognized during

the three and nine months ended September 30, 2026, and 2025 from amounts included in deferred revenuewas not material to

our condensed consolidated financial statements.

Transaction price allocated to remaining performance obligations

Remaining performance obligations represent firm contracts for which work has not been performed and future

revenue recognition is expected. We have elected the practical expedient permitting the exclusion of disclosing remaining

performance obligations for contracts that have an original expected duration ofone year or less. We have some long-term

contracts related to software and integrated project management services such as lump sum turnkey contracts. For software

contracts, revenue is generally recognized over the duration of the contract period when the software is considered to be a right

to access our intellectual property. For lump sum turnkey projects, we recognize revenue over time using an input method,

which requires us to exercise judgment. Revenue allocated to remaining performance obligations for these long-term contracts

was not material.

Receivables

As of September 30, 2026,28% of our net trade receivables were from customers in the United States and 10% were

from customers in Mexico. As of December 31, 2025,31% of our net trade receivables were from customers in the United

States and 8% were from customers in Mexico. Receivables from our primary customer in Mexico accounted for approximately

8% of our total receivables as of September 30, 2026 and 7% as of December 31, 2025. While we have experienced payment

delays from this 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. The credit default swaps (CDSs) that we had

previously entered into with third-party financial institutions related to borrowings provided by the financial institutions to one

of our primary customers in Mexico matured during the third quarter of 2026. Accordingly, there were nooutstanding notional

amounts under these CDSs as of September 30, 2026, compared to$592 million as of December 31, 2025. No country other

than the United States and Mexico, andno single customer, accounted for more than 10% of our net trade receivables.

We have risk of delayed customer payments and payment defaults associated with customer liquidity issues. We

routinely monitor the financial stability of our customers and employ an extensive process to evaluate the collectability of

outstanding receivables. This process, which involves judgment and estimates, includes analysis of our customers’ historical

time to pay, financial condition and various financial metrics, debt structure, credit ratings, and production profile, as well as

political and economic factors in countries of operations and other customer-specific factors.

Note 5. Inventories

Inventories consisted of the following:

Note 6. Accounts Payable

We havean agreement with a third party that allows our participating suppliers to finance payment obligations from us

with a designated third-party financial institutionthat acts as our paying agent. We have generally extended our payment terms

with suppliers to 90 days. A participating supplier may request the participating financial institution to finance one or more of

our payment obligations to such supplier prior to the scheduled due date thereof at a discounted price. We are not required to

provide collateral to the financial institution.

Our obligations to participating suppliers, including amounts due and scheduled payment dates, are not impacted by

thesuppliers’ decisions to finance amounts due under these financing arrangements. Ouroutstanding payment obligations under

this agreement were $294 million as of September 30, 2026, and$280 million as of December 31, 2025, and are included in

“Accounts payable” on the Condensed Consolidated Balance Sheets.

Note 7. Income Taxes

During thethree months ended September 30, 2026, we recorded a total income taxprovision of$94 million on a pre-

tax income of$513 million, resulting in an effective tax rate of 18.3% for the quarter. During thethree months ended

September 30, 2025, we recorded a total income taxprovision of$199 million on a pre-tax income of$219 million, resulting in

an effective tax rate of 90.9% for the quarter.

During thenine months ended September 30, 2026, we recorded a total income taxprovision of $325 million on a pre-

tax income of$1.7 billion, resulting in an effective tax rate of 18.6% for the period. The effective tax rate for this period was

primarily impacted by the release of a valuation allowance in the amount of$32 million related to changes in deferred tax asset

realizability. During thenine months ended September 30, 2025, we recorded a total income taxprovision of$433 million on a

pre-tax income of$1.1 billion, resulting in an effective tax rate of 38.1% for the period.

Note 8. Shareholders' Equity

The following tables summarize our shareholders’ equity activity for thethree and nine months ended September 30,

2026 and 2025, respectively:

Our Board of Directors has authorized a program to repurchase our common stock from time to time. We repurchased

7.3 million shares of our common stock under the program during thethree months ended September 30, 2026 for $252 million.

Approximately$1.5 billion remained authorized for repurchases under the program as of September 30, 2026. From the

inception of this program in February of 2006 through September 30, 2026, we repurchased 342 million shares of our common

stock for a total cost of approximately$12.6 billion. We repurchased 11.3 million shares of our common stock under the

program during the three months ended September 30, 2025 forapproximately$252 million.

Accumulated other comprehensive loss consisted of the following:

Note 9. Commitments and Contingencies

The Company is subject to various legal or governmental proceedings, claims or investigations, including personal

injury, property damage, environmental, intellectual property, commercial, tax, and other matters arising in the ordinary course

of business, the resolution of which, in the opinion of management, will not have a material adverse effect on ourconsolidated

results of operations or consolidated financial position. There is inherent risk in any legal or governmental proceeding, claim or

investigation, and no assurance can be given as to the outcome of these proceedings.

Guarantee arrangements

In the normal course of business, we have in place agreements with financial institutions under which approximately

$3.5 billion of letters of credit, bank guarantees, orsurety bonds were outstanding as of September 30, 2026. Some of the

outstanding letters of credit have triggering events that would entitle a bank to require cash collateralization. None of these off-

balance sheet arrangements either has, or is likely to have, a material effect on our consolidated financial statements.

Note 10. Income per Share

Basic income or loss per share is based on the weighted average number of common shares outstanding during the

period. Diluted income per share includes additional common shares that would have been outstanding if potential common

shares with a dilutive effect had been issued. Antidilutive securities represent potentially dilutive securities which are excluded

from the computation of diluted income or loss per share as their impact was antidilutive.

A reconciliation of the number of shares used for the basic and diluted income per share computations is as follows:

Note 11. Fair Value of Financial Instruments

The carrying amount of cash and equivalents, receivables, and accounts payable, as reflected in the Condensed

Consolidated Balance Sheets, approximates fair value due to the short maturities of these instruments.

The carrying amount and fair value of our total debt is as follows:

In the first nine months of 2026, the total fair value of ourdebt decreased as a result of higher yields.

Our debt categorized within level 1 on the fair value hierarchy is calculated using quoted prices in active markets for

identical liabilities with transactions occurring on the lasttwo days of period-end. Our debt categorized within level 2 on the

fair value hierarchy is calculated using significant observable inputs for similar liabilities where estimated values are

determined from observable data points on our other bonds and on other similarly rated corporate debt or from observable data

points of transactions occurring prior totwo days from period-end and adjusting for changes in market conditions. Differences

between the periods presented in our level 1 and level 2 classification of our long-term debt relate to the timing of when third-

party market transactions on our debt are executed. We haveno debt categorized within level 3 on the fair value hierarchy.

Credit risk

The remaining CDSs we had previously entered into with third-party financial institutions related to borrowings

provided by the financial institutions to one of our primary customers in Mexico matured during the third quarter of 2026.

Accordingly, there wereno outstanding notional amounts as of September 30, 2026, compared to$592 million as of

December 31, 2025.

No derivative liabilities were outstanding as of September 30, 2026, and the fair value of the derivative liabilities as of

December 31, 2025 were not material to our financial condition.

Note 12. New Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2024-03

(Subtopic 220-40), “Disaggregation of Income Statement Expenses”, which requires additional disclosure of certain expense

captions presented on the face of the Company’s income statement as well as disclosures about selling expenses. ASU 2024-03

is effective for the Company’s annual reporting periods beginning after December 15, 2026, and interim reporting periods

beginning after December 15, 2027, and should be applied on a prospective or retrospective basis, with early adoption

permitted. We continue to evaluate the effect that adoption of ASU 2024-03 will have on our disclosures.