Item 8. Financial Statements and Supplementary Data.

Financial Statements	PAGE
Management’s Report on Internal Control Over Financial Reporting	40
Reports of Independent Registered Public Accounting Firm	41
Consolidated Statements of Operations for the years ended December 31, 2025, 2024, and 2023	44
Consolidated Statements of Comprehensive Income for the years ended December 31, 2025, 2024 and 2023	45
Consolidated Balance Sheets at December 31, 2025 and 2024	46
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023	47
Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2025, and 2024 and 2023	48
Notes to Consolidated Financial Statements
Note 1. Description of Company and Significant Accounting Policies	49
Note 2. Impairments and Other Charges	51
Note 3. Business Segment and Geographic Information	53
Note 4. Revenue	55
Note 5. Receivables	57
Note 6. Leases	57
Note 7. Inventories	59
Note 8. Accounts Payable	59
Note 9. Property, Plant, and Equipment	60
Note 10. Debt	60
Note 11. Commitments and Contingencies	61
Note 12. Income Taxes	62
Note 13. Shareholders’ Equity	67
Note 14. Stock-based Compensation	68
Note 15. Income per Share	70
Note 16. Financial Instruments and Risk Management	70
Note 17. Retirement Plans	72
Note 18. New Accounting Pronouncements	74

HAL 2025 FORM 10-K | 40

Table of Contents

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Halliburton Company is responsible for establishing and maintaining adequate internal control

over financial reporting as defined in the Securities Exchange Act Rule 13a-15(f).

Internal control over financial reporting, no matter how well designed, has inherent limitations. Therefore, even those

systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and

presentation. Further, because of changes in conditions, the effectiveness of internal control over financial reporting may vary

over time.

Under the supervision and with the participation of our management, including our chief executive officer and chief

financial officer, we conducted an evaluation to assess the effectiveness of our internal control over financial reporting as of

December 31, 2025 based upon criteria set forth in the Internal Control - Integrated Framework (2013) issued by the

Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, management concluded that, as of December 31, 2025, our internal control over financial

reporting was effective. The effectiveness of Halliburton’s internal control over financial reporting as of December 31, 2025 has

been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report that is included herein.

HALLIBURTON COMPANY

by

/s/ Jeffrey A. Miller		/s/ Eric J. Carre
Jeffrey A. Miller		Eric J. Carre
Chairman of the Board, President and		Executive Vice President and
Chief Executive Officer		Chief Financial Officer

HAL 2025 FORM 10-K | 41

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Halliburton Company:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Halliburton Company and subsidiaries (the Company) as of

December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, cash flows and

shareholders' equity for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively,

the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material

respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash

flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted

accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)

(PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in

Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway

Commission, and our report dated February 6, 2026 expressed an unqualified opinion on the effectiveness of the Company’s

internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express

an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the

PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and

the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the

audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,

whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the

consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such

procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial

statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,

as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a

reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial

statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or

disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or

complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated

financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate

opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of the Realizability of Deferred Tax Assets

As discussed in Notes 1 and 12 to the consolidated financial statements, the Company recognizes deferred tax

assets and liabilities for the expected future tax consequences of events that have been recognized in the financial

statements. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items

will not be realized, which is dependent upon the generation of future taxable income. As of December 31, 2025,

the Company had gross deferred tax assets of $3.6 billion and a related valuation allowance of $0.9 billion.

We identified the evaluation of the realizability of domestic deferred tax assets as a critical audit matter. The

evaluation of the realizability of domestic deferred tax assets, specifically related to foreign tax credits, required

subjective auditor judgment to assess the forecasts of future taxable income over the periods in which those

temporary differences become deductible. Changes in assumptions regarding forecasted taxable income,

specifically revenue growth rates, could have an impact on the Company’s evaluation of the realizability of the

domestic deferred tax assets.

HAL 2025 FORM 10-K | 42

Table of Contents

The following are the primary procedures we performed to address this critical audit matter. We evaluated the

design and tested the operating effectiveness of certain internal controls related to the critical audit matter. This

included controls related to the development of forecasts of future taxable income. We evaluated the assumptions

used in the development of forecasts of future taxable income, specifically revenue growth rates, by comparing to

historical actuals while considering current and anticipated future commodity prices or market events. We also

evaluated the Company’s history of realizing domestic deferred tax assets by evaluating the expiration of foreign

tax credits.

/s/ KPMG LLP

We have served as the Company’s auditor since 2002.

Houston, Texas

February 6, 2026

HAL 2025 FORM 10-K | 43

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Halliburton Company:

Opinion on Internal Control Over Financial Reporting

We have audited Halliburton Company and subsidiaries’ (the Company) internal control over financial reporting as of

December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee

of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects,

effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control -

Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)

(PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated

statements of operations, comprehensive income, cash flows and shareholders’ equity for each of the years in the three-year

period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements), and our report

dated February 6, 2026 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company's management is responsible for maintaining effective internal control over financial reporting and for its

assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report

on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control

over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be

independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the

audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all

material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control

over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating

effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we

considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the

reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally

accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures

that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and

dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit

preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and

expenditures of the company are being made only in accordance with authorizations of management and directors of the

company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or

disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,

projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate

because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Houston, Texas

February 6, 2026

HAL 2025 FORM 10-K | 44

Table of Contents

HALLIBURTON COMPANY

Consolidated Statements of Operations

	Year Ended December 31,
Millions of dollars and shares except per share data	2025	2024	2023
Revenue:
Services	$15,729	$16,348	$16,483
Product sales	6,455	6,596	6,535
Total revenue	22,184	22,944	23,018
Operating costs and expenses:
Cost of services	13,611	13,470	13,402
Cost of sales	5,089	5,173	5,256
Impairments and other charges	831	116	—
General and administrative	239	239	226
SAP S4 upgrade expense	154	124	51
Total operating costs and expenses	19,924	19,122	18,935
Operating income	2,260	3,822	4,083
Interest expense, net of interest income of $88, $97, and $81	(352)	(353)	(395)
Argentina currency impact	—	—	(131)
Loss on Blue Chip Swap transactions	(9)	(8)	(110)
Other, net	(128)	(227)	(84)
Income before income taxes	1,771	3,234	3,363
Income tax provision	(479)	(718)	(701)
Net income	$1,292	$2,516	$2,662
Net income attributable to noncontrolling interest	(9)	(15)	(24)
Net income attributable to company	$1,283	$2,501	$2,638
Basic net income per share	$1.50	$2.84	$2.93
Diluted net income per share	$1.50	$2.83	$2.92
Basic weighted average common shares outstanding	853	882	899
Diluted weighted average common shares outstanding	853	883	902

See Notes to Consolidated Financial Statements.

HAL 2025 FORM 10-K | 45

Table of Contents

HALLIBURTON COMPANY

Consolidated Statements of Comprehensiv****e Income

	Year Ended December 31,
Millions of dollars	2025	2024	2023
Net income	$1,292	$2,516	$2,662
Other comprehensive income (loss), net of income taxes:
Defined benefit and other post retirement plans adjustment	(11)	(26)	(106)
Other	1	5	5
Other comprehensive loss, net of income taxes	(10)	(21)	(101)
Comprehensive income	$1,282	$2,495	$2,561
Comprehensive income attributable to noncontrolling interest	(9)	(16)	(24)
Comprehensive income attributable to company shareholders	$1,273	$2,479	$2,537

See Notes to Consolidated Financial Statements.

HAL 2025 FORM 10-K | 46

Table of Contents

HALLIBURTON COMPANY

Consolidated Balance Sheets

	December 31,
Millions of dollars and shares except per share data	2025	2024
Assets
Current assets:
Cash and equivalents	$2,206	$2,618
Receivables (net of allowances for credit losses of $805 and $754)	4,942	5,117
Inventories	2,976	3,040
Other current assets	1,274	1,607
Total current assets	11,398	12,382
Property, plant, and equipment (net of accumulated depreciation of $12,616 and $12,461)	5,261	5,113
Goodwill	2,938	2,838
Deferred income taxes	2,298	2,339
Operating lease right-of-use assets	938	1,022
Other assets	2,177	1,893
Total assets	$25,010	$25,587
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$3,133	$3,189
Accrued employee compensation and benefits	767	711
Income taxes payable	375	449
Taxes other than income	291	328
Current portion of operating lease liabilities	263	263
Current maturities of long-term debt	—	381
Other current liabilities	759	729
Total current liabilities	5,588	6,050
Long-term debt	7,158	7,160
Operating lease liabilities	712	798
Employee compensation and benefits	428	414
Other liabilities	619	617
Total liabilities	14,505	15,039
Shareholders' equity:
Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,064 and 1,065 shares)	2,659	2,662
Paid-in capital in excess of par value	112	79
Accumulated other comprehensive loss	(363)	(353)
Retained earnings	15,036	14,332
Treasury stock, at cost (229 and 197 shares)	(6,983)	(6,214)
Company shareholders' equity	10,461	10,506
Noncontrolling interest in consolidated subsidiaries	44	42
Total shareholders' equity	10,505	10,548
Total liabilities and shareholders' equity	$25,010	$25,587

See Notes to Consolidated Financial Statements.

HAL 2025 FORM 10-K | 47

Table of Contents

HALLIBURTON COMPANY

Consolidated Statements of Cash Flows

	Year Ended December 31,
Millions of dollars	2025	2024	2023
Cash flows from operating activities:
Net income	$1,292	$2,516	$2,662
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation, depletion, and amortization	1,136	1,079	998
Impairments and other charges	831	116	—
Deferred income tax provision	23	148	196
Changes in assets and liabilities:
Receivables	188	(312)	(257)
Inventories	80	147	(303)
Accounts payable	(72)	62	49
Other operating activities	(552)	109	113
Total cash flows provided by operating activities	2,926	3,865	3,458
Cash flows from investing activities:
Capital expenditures	(1,254)	(1,442)	(1,379)
Purchase of an equity investment	(363)	(139)	—
Purchase of investment securities	(202)	(438)	(492)
Payments to acquire businesses, net of cash acquired	(185)	(27)	(13)
Sales of investment securities	444	214	131
Proceeds from sales of property, plant, and equipment	185	223	195
Sale of an equity investment	120	—	—
Other investing activities	(70)	(45)	(101)
Total cash flows used in investing activities	(1,325)	(1,654)	(1,659)
Cash flows from financing activities:
Stock repurchase program	(1,007)	(1,005)	(800)
Dividends to shareholders	(579)	(600)	(576)
Payments on long-term borrowings	(389)	(100)	(305)
Proceeds from issuance of common stock	98	105	136
Other financing activities	(110)	(130)	(126)
Total cash flows used in financing activities	(1,987)	(1,730)	(1,671)
Effect of exchange rate changes on cash	(26)	(127)	(210)
Increase (decrease) in cash and cash equivalents	(412)	354	(82)
Cash and equivalents at beginning of period	2,618	2,264	2,346
Cash and equivalents at end of period	$2,206	$2,618	$2,264
Supplemental disclosure of cash flow information:
Cash payments during the period for:
Interest	$432	$441	$460
Income taxes	$639	$538	$616

See Notes to Consolidated Financial Statements.

HAL 2025 FORM 10-K | 48

Table of Contents

HALLIBURTON COMPANY

Consolidated Statements of Shareholders' Equity

	Company Shareholders’ Equity
Millions of dollars	Common Stock	Paid-in Capital in Excess of Par Value	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Loss	Noncontrolling Interest in Consolidated Subsidiaries	Total
Balance at December 31, 2022	$2,664	$50	$(5,108)	$10,572	$(230)	$29	$7,977
Comprehensive income (loss):
Net income	—	—	—	2,638	—	24	2,662
Other comprehensive loss	—	—	—	—	(101)	—	(101)
Cash dividends ($0.64 per share)	—	—	—	(576)	—	—	(576)
Stock plans	(1)	13	372	(98)	—	—	286
Stock repurchase program	—	—	(804)	—	—	—	(804)
Other	—	—	—	—	—	(11)	(11)
Balance at December 31, 2023	$2,663	$63	$(5,540)	$12,536	$(331)	$42	$9,433
Comprehensive income (loss):
Net income	—	—	—	2,501	—	15	2,516
Other comprehensive loss	—	—	—	—	(22)	1	(21)
Cash dividends ($0.68 per share)	—	—	—	(600)	—	—	(600)
Stock plans	(1)	16	333	(105)	—	—	243
Stock repurchase program	—	—	(1,007)	—	—	—	(1,007)
Other	—	—	—	—	—	(16)	(16)
Balance at December 31, 2024	$2,662	$79	$(6,214)	$14,332	$(353)	$42	$10,548
Comprehensive income (loss):
Net income	—	—	—	1,283	—	9	1,292
Other comprehensive loss	—	—	—	—	(10)	—	(10)
Cash dividends ($0.68 per share)	—	—	—	(579)	—	—	(579)
Stock plans	(3)	29	239	—	—	—	265
Stock repurchase program	—	—	(1,008)	—	—	—	(1,008)
Other	—	4	—	—	—	(7)	(3)
Balance at December 31, 2025	$2,659	$112	$(6,983)	$15,036	$(363)	$44	$10,505

See Notes to Consolidated Financial Statements.

HAL 2025 FORM 10-K | 49

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

HALLIBURTON COMPANY

Notes to Consolidated Financial Statements

Note 1**.** Description of Company and Significant Accounting Policies

Description of Company

Halliburton Company is one of the world's largest providers of products and services to the energy industry. Its

predecessor was established in 1919 and incorporated under the laws of the State of Delaware in 1924. We help our customers

maximize asset value throughout the lifecycle of the reservoir - from locating hydrocarbons and managing geological data, to

drilling and formation evaluation, well construction and completion, and optimizing production throughout the life of the asset.

We serve major, national, and independent oil and natural gas companies throughout the world and operate under two divisions,

which form the basis for the two operating segments we report, the Completion and Production segment and the Drilling and

Evaluation segment.

Use of estimates

Our financial statements are prepared in conformity with United States generally accepted accounting principles,

requiring 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.

We believe the most significant estimates and assumptions are associated with the forecasting of our income tax

(provision) benefit and the valuation of deferred taxes, legal reserves, long-lived asset valuations, and allowance for credit

losses. Ultimate results could differ from our estimates.

Basis of presentation

The consolidated financial statements include the accounts of our company and all of our subsidiaries that we control

or variable interest entities for which we have determined that we are the primary beneficiary. All material intercompany

accounts and transactions are eliminated. Investments in companies in which we do not have a controlling interest, but over

which we do exercise significant influence, are accounted for using the equity method of accounting, unless we elect the fair

value option. If we do not have significant influence and the investment has no readily determinable fair value, we elect the

measurement alternative. In addition, certain reclassifications of prior period balances have been made to conform to the current

period presentation.

Revenue recognition

Our services and products are generally sold based upon purchase orders or contracts with our customers that include

fixed or determinable prices but do not include right of return provisions or other significant post-delivery obligations. The vast

majority of our service and product contracts are short-term in nature. We recognize revenue 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. We also assess our customers' ability and intention to pay, which is based on a

variety of factors, including our historical payment experience with, and the financial condition of our customers. Rates for

services are typically priced on a per day, per meter, per man-hour, or similar basis. See Notes to Consolidated Financial

Statements, Note 4 for further information on revenue recognition.

Research and development

We maintain an active research and development program. The program improves products, processes, and

engineering standards and practices that serve the changing needs of our customers. Research and development costs are

expensed as incurred and were $411 million in 2025, $426 million in 2024, and $408 million in 2023.

Cash equivalents

We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost represents invoice or production cost for new

items and original cost. Production cost includes material, labor, and manufacturing overhead. Our inventory is recorded on the

weighted average cost method. We regularly review inventory quantities on hand and record provisions for excess or obsolete

inventory based primarily on historical usage, estimated product demand, and technological developments.

HAL 2025 FORM 10-K | 50

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

Allowance for credit losses

We establish an allowance for credit losses through a review of several factors, including historical collection

experience, current aging status of the customer accounts, and current financial condition of our customers. Losses are charged

against the allowance when the customer accounts are determined to be uncollectible.

Property, plant, and equipment

Other than those assets that have been written down to their fair values due to impairment, property, plant, and

equipment are reported at cost less accumulated depreciation, which is generally provided on the straight-line method over the

estimated useful lives of the assets. Accelerated depreciation methods are often used for tax purposes, when permitted. Upon

sale or retirement of an asset, the related costs and accumulated depreciation are removed from the accounts and any gain or

loss is recognized. Planned major maintenance costs are generally expensed as incurred. Expenditures for additions,

modifications, and conversions are capitalized when they increase the value or extend the useful life of the asset.

Goodwill and other intangible assets

We record as goodwill the excess purchase price over the fair value of the tangible and identifiable intangible assets

acquired in a business acquisition. Changes in the carrying amount of goodwill are detailed below by reportable segment.

Millions of dollars	Completion and Production	Drilling and Evaluation	Total
Balance at December 31, 2023:	$2,032	$818	$2,850
Current year acquisitions	8	—	8
Other	(20)	—	(20)
Balance at December 31, 2024:	$2,020	$818	$2,838
Current year acquisitions	8	76	84
Other	16	—	16
Balance at December 31, 2025:	$2,044	$894	$2,938

The reported amounts of goodwill for each reporting unit are reviewed for impairment on an annual basis, during the

third quarter, and more frequently when circumstances indicate an impairment may exist. As a result of our goodwill

impairment assessments performed in the years ended December 31, 2025, 2024, and 2023, we determined that the fair value of

each reporting unit exceeded its net book value and, therefore, no goodwill impairments were deemed necessary.

We amortize other identifiable intangible assets with a finite life on a straight-line basis over the period which the asset

is expected to contribute to our future cash flows, ranging from one year to thirty years. The components of these other

intangible assets generally consist of patents, license agreements, non-compete agreements, trademarks, and customer lists and

contracts.

Evaluating impairment of long-lived assets

When events or changes in circumstances indicate that long-lived assets other than goodwill may be impaired, an

evaluation is performed. For assets classified as held for use, 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. 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 asset group's undiscounted cash flows are less than its carrying amount, we then determine the asset group's fair value by

using a discounted cash flow analysis and recognize any resulting impairment. When an asset is classified as held for sale, the

asset’s book value is evaluated and adjusted to the lower of its carrying amount or fair value less cost to sell. In addition,

depreciation and amortization is ceased while it is classified as held for sale. See Notes to Consolidated Financial Statements,

Note 2 for further information on impairments and other charges.

Income taxes

We recognize the amount of taxes payable or refundable for the year. In addition, deferred tax assets and liabilities are

recognized for the expected future tax consequences of events that have been recognized in the financial statements or tax

returns. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will not be

realized.

HAL 2025 FORM 10-K | 51

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some

portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the

generation of future taxable income during the periods in which those temporary differences become deductible. Management

considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in

making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the

periods in which the deferred tax assets are deductible, management believes it is more likely than not that we will realize the

benefits of these deductible differences, net of the existing valuation allowances.

We recognize interest and penalties related to unrecognized tax benefits within the “Income tax provision” in our

Consolidated Statements of Operations.

Derivative instruments

At times, we enter into derivative financial transactions to hedge existing or projected exposures to changing foreign

currency exchange rates, interest rates, and credit risk. We do not enter into derivative transactions for speculative or trading

purposes. We recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges are adjusted to fair

value which are reflected within "Other, net" on our Consolidated Statements of Operations. If the derivative is designated as a

hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against:

-the change in fair value of the hedged assets, liabilities, or firm commitments through earnings; or

-recognized in other comprehensive income until the hedged item is recognized in earnings.

The ineffective portion of a derivative’s change in fair value is recognized in earnings. Recognized gains or losses on

derivatives entered into to manage foreign currency exchange risk and credit risk are included in “Other, net” on the

Consolidated Statements of Operations. Gains or losses on interest rate derivatives are included in “Interest expense, net.”

Foreign currency translation

Foreign entities whose functional currency is the U.S. dollar translate monetary assets and liabilities at year-end

exchange rates, and nonmonetary items are translated at historical rates. Revenue and expense transactions are translated at the

average rates in effect during the year, except for those expenses associated with nonmonetary balance sheet accounts, which

are translated at historical rates. Gains or losses from remeasurement of monetary assets and liabilities due to changes in

exchange rates are recognized in our Consolidated Statements of Operations in “Other, net” in the year of occurrence.

Stock-based compensation

Stock-based compensation cost is measured at the date of grant, based on the calculated fair value of the award and is

recognized as expense over the employee’s service period, which is generally the vesting period of the equity grant.

Additionally, compensation cost is recognized based on awards ultimately expected to vest, therefore, we have reduced the cost

for estimated forfeitures based on historical forfeiture rates. Forfeitures are estimated at the time of grant and revised in

subsequent periods to reflect actual forfeitures. See Notes to Consolidated Financial Statements, Note 14 for additional

information related to stock-based compensation.

Note 2**.** Impairments and Other Charges

The following table presents various pre-tax charges we recorded during the years ended December 31, 2025 and

2024, which are reflected within “Impairments and other charges” on our Consolidated Statements of Operations.

	Year Ended December 31,
Millions of dollars	2025	2024	2023
Severance costs	$299	$63	$—
Impairment of assets held for sale	224	49	—
Fixed and Other assets write-offs	115	—	—
Impairment of real estate facilities	53	—	—
Equity in earnings loss	50	—	—
Gain on investment	(6)	(43)	—
Cybersecurity incident	(10)	35	—
Other	106	12	—
Total impairments and other charges	$831	$116	$—

HAL 2025 FORM 10-K | 52

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

For the year ended December 31, 2025, the charges included $299 million of severance costs, $224 million of an

impairment of assets held for sale related to our chemical business, fixed and other asset write-offs of $115 million, a $53

million impairment associated with facility closures and lease terminations, $50 million equity in earnings loss, and $106

million of other charges, primarily related to legacy environmental remediation cost estimate increases. Offsetting these charges

were a release of accruals related to a cybersecurity incident from the third quarter of 2024 for $10 million and a gain of $6

million related to an equity investment.

For the year ended December 31, 2024, the charges included $63 million of severance costs, a $49 million impairment

of assets held for sale, $35 million in expenses related to a cybersecurity incident, and $12 million of other charges, and were

partially offset by a $43 million gain related to a fair value adjustment on an equity investment.

For the year ended December 31, 2023, there were no amounts recorded in impairment and other charges.

HAL 2025 FORM 10-K | 53

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

Note 3**.** Business Segment and Geographic Information

We operate under two divisions, which form the basis for the two 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 are 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’s chief operating decision maker (CODM) is Jeffrey Miller, Chairman of the Board, President and Chief

Executive Officer. Our CODM assesses the performance of the two segments and makes resource allocation decisions based on

segment revenue and operating income.

Operations by business segment

The following table presents information on our business segments.

	Year Ended December 31,
Millions of dollars	2025	2024	2023
Revenue:
Completion and Production	$12,782	$13,251	$13,689
Drilling and Evaluation	9,402	9,693	9,329
Total revenue	$22,184	$22,944	$23,018
Operating income:
Completion and Production	$2,128	$2,709	$2,835
Drilling and Evaluation	1,379	1,608	1,543
Total operations	3,507	4,317	4,378
Corporate and other (a)	(262)	(255)	(244)
SAP S4 upgrade expense	(154)	(124)	(51)
Impairments and other charges (b)	(831)	(116)	—
Total operating income	$2,260	$3,822	$4,083
Interest expense, net of interest income	$(352)	$(353)	$(395)
Loss on Blue Chip Swap transactions	(9)	(8)	(110)
Argentina currency impact	—	—	(131)
Other, net (c)	(128)	(227)	(84)
Income before income taxes	$1,771	$3,234	$3,363
Capital expenditures:
Completion and Production	$741	$775	$765
Drilling and Evaluation	513	665	613
Corporate and other	—	2	1
Total capital expenditures	$1,254	$1,442	$1,379
Depreciation, depletion, and amortization:
Completion and Production	$618	$588	$553
Drilling and Evaluation	496	475	430
Corporate and other	22	16	15
Total depreciation, depletion, and amortization	$1,136	$1,079	$998

(a)	Includes certain expenses not attributable to a business segment, such as costs related to support functions, corporate executives, and operating lease assets, and includes amortization expense associated with intangible assets recorded as a result of acquisitions.
(b)	Impairments and other charges are as follows: –For the year ended December 31, 2025, amount includes approximately $556 million attributable to Completion and Production, $247 million attributable to Drilling and Evaluation, and $28 million attributable to Corporate and other. –For the year ended December 31, 2024, amount includes approximately $45 million attributable to Completion and Production, $34 million attributable to Drilling and Evaluation, and $37 million attributable to Corporate and other.
(c)	During the year ended December 31, 2025, Halliburton incurred a charge of $23 million due to the impairment of an investment in Argentina. During the year ended December 31, 2024, Halliburton incurred a charge of $82 million primarily due to the impairment of an investment in Argentina and currency devaluation in Egypt.

HAL 2025 FORM 10-K | 54

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

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.

	Year Ended December 31,
	2025
Millions of dollars	Completion and Production	Drilling and Evaluation
Segment operating expenses:
Cost of products, materials, and supplies	$5,361	$3,641
Compensation	1,919	1,908
Depreciation, depletion, and amortization	618	496
Other	2,756	1,978
Total segment operating expenses	$10,654	$8,023

	Year Ended December 31,
	2024
Millions of dollars	Completion and Production	Drilling and Evaluation
Segment operating expenses:
Cost of products, materials, and supplies	$5,428	$3,803
Compensation	1,922	1,865
Depreciation, depletion, and amortization	588	475
Other	2,604	1,942
Total segment operating expenses	$10,542	$8,085

	Year Ended December 31,
	2023
Millions of dollars	Completion and Production	Drilling and Evaluation
Segment operating expenses:
Cost of products, materials, and supplies	$5,906	$3,771
Compensation	1,810	1,750
Depreciation, depletion, and amortization	553	430
Other	2,585	1,835
Total segment operating expenses	$10,854	$7,786

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

miscellaneous costs.

HAL 2025 FORM 10-K | 55

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

The following table presents total assets by segment.

	December 31,
Millions of dollars	2025	2024
Total assets:
Completion and Production (a)	$10,492	$11,987
Drilling and Evaluation (a)	7,870	7,806
Corporate and other (b)	6,648	5,794
Total assets	$25,010	$25,587

(a)	Assets associated with specific segments primarily include receivables, inventories, property, plant, and equipment, operating lease right-of- use assets, equity in and advances to related companies, and goodwill.
(b)	Includes primarily cash and equivalents and deferred tax assets.

Operations by geographic region

The following tables present information by geographic area. In 2025, 2024, and 2023, based on the location of

services provided and products sold, 39%, 40%, and 44%, respectively, of our consolidated revenue was from the United States.

No other country accounted for more than 10% of our revenue or property, plant, and equipment during the periods presented.

As of December 31, 2025 and December 31, 2024, 42% and 49%, respectively, of our property, plant, and equipment was

located in the United States.

	Year Ended December 31,
Millions of dollars	2025	2024	2023
Revenue:
North America	$9,066	$9,626	$10,492
Latin America	3,935	4,211	3,987
Europe/Africa/CIS	3,351	3,003	2,861
Middle East/Asia	5,832	6,104	5,678
Total revenue	$22,184	$22,944	$23,018

	December 31,
Millions of dollars	2025	2024
Net property, plant, and equipment:
North America	$2,291	$2,595
Latin America	730	1,002
Europe/Africa/CIS	686	593
Middle East/Asia	1,554	923
Total net property, plant, and equipment	$5,261	$5,113

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. Most of

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 of factors, 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.

HAL 2025 FORM 10-K | 56

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

Disaggregation of revenue

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

reportable segments, in addition to geographical area. Based on the location of services provided and products sold, 39%, 40%

and 44% of our consolidated revenue was from the United States for the years ended December 31, 2025, 2024 and 2023,

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

The following table presents information on our disaggregated revenue.

	Year Ended December 31,
Millions of dollars	2025	2024	2023
Revenue by segment:
Completion and Production	$12,782	$13,251	$13,689
Drilling and Evaluation	9,402	9,693	9,329
Total revenue	$22,184	$22,944	$23,018
Revenue by geographic region:
North America	$9,066	$9,626	$10,492
Latin America	3,935	4,211	3,987
Europe/Africa/CIS	3,351	3,003	2,861
Middle East/Asia	5,832	6,104	5,678
Total revenue	$22,184	$22,944	$23,018

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 advance consideration received from customers

for contracts where revenue is recognized on future performance of service. Deferred revenue, as well as revenue recognized

during the period relating to amounts included as deferred revenue at the beginning of the period, was not material to our

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 of one 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

is not material.

HAL 2025 FORM 10-K | 57

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

Note 5**.** Receivables

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. As of December 31, 2024, 30% of our net trade receivables were from customers in the United

States and 11% were from customers in Mexico. Receivables from our primary customer in Mexico accounted for

approximately 7% and 8% of our total receivables as of December 31, 2025 and December 31, 2024, respectively. 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.

Furthermore, we have entered into 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. See Notes to Consolidated Financial Statements, Note 16 for further information on these CDSs. No other country

or single customer accounted for more than 10% of our receivables at those dates.

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.

The table below presents a rollforward of our allowance for credit losses for 2023, 2024 and 2025.

Millions of dollars		Balance at Beginning of Period	Provision (a)	Other (b)	Balance at End of Period (c)
Year ended December 31, 2023		$731	$22	$(11)	$742
Year ended December 31, 2024		742	17	(5)	754
Year ended December 31, 2025		754	57	(6)	805
(a)	Represents increases to allowance for credit losses charged to costs and expenses, net of recoveries.
(b)	Includes write-offs and other activity.
(c)	The allowance for credit losses in all years is primarily comprised of a full reserve against accounts receivable with our primary customer in Venezuela.

N****ote 6**.** Leases

For operating leases, lease expense for lease payments is recognized on a straight-line basis over the lease term and

accretion of the lease liability, while finance leases include both an operating expense and an interest expense component. For

all leases with a term of 12 months or less, we recognize lease expense for these short-term leases on a straight-line basis over

the lease term.

We are a lessee for numerous operating leases, primarily related to real estate, transportation, and equipment. The vast

majority of our operating leases have remaining lease terms of 10 years or less, some of which include options to extend the

leases, and some of which include options to terminate the leases. We generally do not include renewal or termination options

in our assessment of the leases unless extension or termination for certain assets is deemed to be reasonably certain. The

accounting for some of our leases may require judgment, which includes determining whether a contract contains a lease,

determining the incremental borrowing rates to utilize in our net present value calculation of lease payments for lease

agreements which do not provide an implicit rate, and assessing the likelihood of renewal or termination options. We also have

some lease agreements with lease and non-lease components, which are generally accounted for as a single lease component.

For certain equipment leases, such as offshore vessels and drilling rigs, we account for the lease and non-lease components

separately.

HAL 2025 FORM 10-K | 58

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

The following tables illustrate the financial impact of our leases as of and for the years ended December 31, 2025,

2024, and 2023, along with other supplemental information about our existing leases:

	Year Ended December 31,
Millions of dollars	2025	2024	2023
Components of lease expense:
Finance lease cost:
Amortization of right-of-use assets	$47	$37	$30
Interest on lease liabilities	31	38	41
Operating lease cost	359	353	337
Short-term lease cost	41	42	35
Sublease income	(2)	(3)	(2)
Total lease cost	$476	$467	$441

	December 31,
Millions of dollars	2025	2024
Components of balance sheet:
Operating leases:
Operating lease right-of-use assets (non-current)	$938	$1,022
Current portion of operating lease liabilities	263	263
Operating lease liabilities (non-current)	712	798
Finance leases:
Other assets (non-current)	$161	$139
Other current liabilities	81	44
Other liabilities (non-current)	102	126

	Year Ended December 31,
Millions of dollars except years and percentages	2025	2024	2023
Other supplemental information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$394	$374	$354
Operating cash flows for finance leases	31	38	41
Financing cash flows for finance leases	48	33	37
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$281	$274	$487
Finance leases	74	57	64
Weighted-average remaining lease term:
Operating leases	7.3 years	7.9 years	8.2 years
Finance leases	3.8 years	4.6 years	5.3 years
Weighted-average discount rate for operating leases	5.4%	5.4%	5.3%

HAL 2025 FORM 10-K | 59

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

The following table summarizes the maturity of our operating and finance leases as of December 31, 2025:

Millions of dollars	Operating Leases	Finance Leases
2026	$315	$103
2027	199	59
2028	124	27
2029	99	14
2030	79	6
Thereafter	399	15
Total lease payments	1,215	224
Imputed interest	(240)	(41)
Total lease payments, net of imputed interest	$975	$183

Note 7**.** Inventories

Inventories consisted of the following:

	December 31,
Millions of dollars	2025	2024
Finished products and parts	$1,968	$1,956
Raw materials and supplies	884	952
Work in process	124	132
Total inventories	$2,976	$3,040

All amounts in the table above are reported net of obsolescence reserves of $54 million at December 31, 2025 and $62

million at December 31, 2024.

Note 8**.** Accounts Payable

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

with a designated third-party financial institution who act 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

the suppliers’ decisions to finance amounts due under these financing arrangements. Our outstanding payment obligations under

this agreement was $280 million as of December 31, 2025, and $317 million as of December 31, 2024, and are included in

“Accounts payable” on the Consolidated Balance Sheets.

The following table presents a rollforward of our supplier finance program obligations:

	December 31,
Millions of dollars	2025	2024
Confirmed obligations outstanding at the beginning of the year	$317	$322
Invoices added during the year	1,082	1,217
Confirmed invoices paid during the year	(1,119)	(1,222)
Confirmed obligations outstanding at the end of the year	$280	$317

HAL 2025 FORM 10-K | 60

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

Note 9**.** Property, Plant, and Equipment

Property, plant, and equipment were composed of the following:

	December 31,
Millions of Dollars	2025	2024
Land	$104	$119
Buildings and property improvements	1,697	1,751
Machinery, equipment, and other	16,076	15,704
Total property, plant, and equipment	17,877	17,574
Accumulated depreciation	(12,616)	(12,461)
Net property, plant, and equipment	$5,261	$5,113

Classes of assets are depreciated over the following useful lives:

	Buildings and Property Improvements
	2025	2024
1 - 10 years	17%	17%
11 - 20 years	40%	40%
21 - 30 years	26%	26%
31 - 40 years	17%	17%

	Machinery, Equipment, and Other
	2025	2024
1 - 5 years	45%	46%
6 - 10 years	46%	45%
11 - 20 years	9%	9%

Note 10**.** Debt

Our long-term total debt consisted of the following:

	December 31,
Millions of dollars	2025	2024
5.0% senior notes due November 2045	$1,887	$1,887
2.92% senior notes due March 2030	1,000	1,000
4.85% senior notes due November 2035	997	997
7.45% senior notes due September 2039	938	938
4.75% senior notes due August 2043	846	846
6.7% senior notes due September 2038	763	763
4.5% senior notes due November 2041	469	469
7.6% senior debentures due August 2096	226	226
6.75% senior notes due February 2027	90	90
Other	6	6
Unamortized debt issuance costs and discounts	(64)	(62)
Total long-term debt	$7,158	$7,160
Short-term borrowings and current maturities of long-term debt	—	381
Total debt	$7,158	$7,541

There were no short-term borrowings and current maturities of long-term debt as of December 31, 2025. There were

no short-term borrowings and $381 million of current maturities of long-term debt as of December 31, 2024.

HAL 2025 FORM 10-K | 61

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

Senior debt

We may redeem all of our senior notes from time to time or all of the notes of each series at any time at the applicable

redemption prices, plus accrued and unpaid interest. Our 6.75% senior notes due February 2027 and 7.6% senior debentures due

August 2096 may not be redeemed prior to maturity.

Repurchases of senior debt

Our total debt repurchases consisted of the following:

	December 31,
Millions of dollars	2025	2024
4.75% senior notes due August 2043	$—	$32
4.5% senior notes due November 2041	—	31
5.0% senior notes due November 2045	—	24
7.45% senior notes due September 2039	—	8
4.85% senior notes due November 2035	—	3
7.6% senior debentures due August 2096	—	2
Total Repurchases	$—	$100

For the year ended December 31, 2024, we used cash on hand to fund these repurchases, which included the principal

amount, a net premium or discount, and accrued interest. The remaining principal balance of these instruments of $5.4 billion in

the aggregate remains outstanding as of December 31, 2025.

Redemption of 3.8% senior notes due November 2025

In November 2025, we retired the remaining $382 million principal amount of our 3.8% senior notes at their scheduled

maturity using cash on hand.

Revolving credit facilities

On August 18, 2025, we entered into a new $3.5 billion five-year revolving facility, which replaced our $3.5 billion

revolving credit facility established in April 2022. The revolving credit facility is for general working capital purposes and

expires on August 16, 2030. The full amount of the revolving credit facility was available as of December 31, 2025.

Debt maturities

Our debt matures as follows: no amounts in 2026, $90 million in 2027, no amounts in 2028 and 2029, $1.0 billion in

2030, and the remainder thereafter.

Note 11**.** 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 our consolidated

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

$3.1 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. None of these off-

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

HAL 2025 FORM 10-K | 62

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

Note 12**.** Income Taxes

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

	Year Ended December 31,
Millions of dollars	2025	2024	2023
Current income taxes:
Federal	$(3)	$10	$(21)
Foreign	(448)	(571)	(472)
State	(5)	(9)	(12)
Total current income taxes	(456)	(570)	(505)
Deferred income taxes:
Federal	(66)	(167)	(123)
Foreign	10	31	(59)
State	33	(12)	(14)
Total deferred income taxes	(23)	(148)	(196)
Income tax provision	$(479)	$(718)	$(701)

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

	Year Ended December 31,
Millions of dollars	2025	2024	2023
United States	$762	$1,695	$1,666
Foreign	1,009	1,539	1,697
Total income from continuing operations before income taxes	$1,771	$3,234	$3,363

HAL 2025 FORM 10-K | 63

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

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:

	Year Ended December 31,
Millions of dollars	2025
U.S. Federal Statutory Tax Rate	$372	21.0%
State and Local Income Tax, Net of Federal Income Tax Effect (a)	(24)	(1.4)
Foreign Tax Effects
Argentina
Intercompany Withholding Tax	33	1.9
Other	15	0.8
Brazil	27	1.5
Cayman Islands
Statutory Tax Rate Difference Between Cayman Islands and United States	29	1.6
Mexico
Foreign Exchange / Inflation Adjustment	(26)	(1.5)
Other	28	1.6
Norway	23	1.3
Saudi Arabia
Intercompany Withholding Tax	32	1.8
Other	(3)	(0.2)
Singapore
Statutory Tax Rate Difference Between Singapore and United States	(35)	(2.0)
Other	25	1.4
United Arab Emirates	(19)	(1.1)
Other Foreign Jurisdictions	125	7.0
Domestic Federal Reconciling Items
Effect of Cross-Border Tax Laws
Foreign Derived Intangible Income Deduction	(135)	(7.6)
Global Intangible Low-Taxed Income	23	1.3
Other	10	0.6
Tax Credits
Foreign Tax Credit	(146)	(8.2)
Research & Development Credit	(50)	(2.8)
Changes in Valuation Allowances	176	9.9
Nontaxable or Nondeductible items	32	1.8
Other Adjustments	(5)	(0.1)
Changes in Unrecognized Tax Benefits	(28)	(1.6)
Effective Tax Rate	$479	27.0%

(a)	During the year ended December 31, 2025, state and local income taxes in Texas comprise the majority (greater than 50 percent) of the state and local income taxes, net of federal effect category.

HAL 2025 FORM 10-K | 64

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

Year Ended December 31,
	2024	2023
United States statutory rate	21.0%	21.0%
Valuation allowance against tax assets	(2.1)	0.8
Impact of foreign income taxed at different rates	4.7	0.2
State income taxes	0.6	0.7
Impact of impairments and other charges	0.6	0.6
Adjustments of prior year taxes	(2.5)	(1.3)
Other items, net	(0.1)	(1.2)
Total effective tax rate on continuing operations	22.2%	20.8%

During the year ended December 31, 2025, we recorded a total income tax provision of $479 million on 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 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 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 valuation allowances on

some of our deferred tax assets.

During the year ended December 31, 2023, we recorded a total income tax provision 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:

	December 31,
Millions of dollars	2025	2024
Gross deferred tax assets:
Foreign tax credit carryforwards	$790	$950
Intangible assets	679	727
Operating and capital loss carryforwards	629	581
Royalty prepayment	239	—
Accrued liabilities	233	227
Employee compensation and benefits	157	170
Research and development tax credit carryforwards	86	85
Other	813	639
Total gross deferred tax assets	3,626	3,379
Gross deferred tax liabilities:
Depreciation and amortization	197	164
Operating lease right-of-use assets	133	144
Other	63	50
Total gross deferred tax liabilities	393	358
Valuation allowances	943	718
Net deferred income tax asset	$2,290	$2,303

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.

HAL 2025 FORM 10-K | 65

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

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

will expire as follows:

Millions of dollars	U.S. Net Operating Loss	Foreign Operating and Capital Loss	Foreign Tax Credits	Research and Development Credit	Total Deferred Tax Assets
2026-2030	$5	$69	$430	$—	$504
2031-2035	6	24	353	—	383
2036-2045	13	68	36	85	202
Non-Expiring	13	437	—	—	450
	$37	$598	$819	$85	$1,539

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.

Millions of dollars	Unrecognized Tax Benefits		Interest and Penalties
Balance at January 1, 2023	$311		$64
Change in prior year tax positions	(38)		(10)
Change in current year tax positions	8		1
Cash settlements with taxing authorities	(4)		(3)
Lapse of statute of limitations	(9)		(3)
Balance at December 31, 2023	$268	(a)	$49
Change in prior year tax positions	(68)		—
Change in current year tax positions	10		1
Cash settlements with taxing authorities	(1)		(1)
Lapse of statute of limitations	(13)		(4)
Balance at December 31, 2024	$196	(a)	$45
Change in prior year tax positions	40		3
Change in current year tax positions	15		2
Cash settlements with taxing authorities	(11)		—
Lapse of statute of limitations	(70)		(8)
Balance at December 31, 2025	$170	(a)(b)	$42

(a)	Includes $36 million as of December 31, 2025, $40 million as of December 31, 2024, and $43 million as of December 31, 2023 in foreign unrecognized tax benefits that would give rise to a United States tax credit. As of December 31, 2025, December 31, 2024, and December 31, 2023, a net $119 million, $137 million and $192 million after a net operating loss carryforward offset, respectively, of unrecognized tax benefits would positively impact the effective tax rate and be recognized as additional tax benefits in our statement of operations if resolved in our favor.
(b)	Includes $24 million as of December 31, 2025 that we believe could be resolved within the next 12 months.

HAL 2025 FORM 10-K | 66

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

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

	Year Ended December 31,
Million of dollars	2025
US Federal	$27
US State and Local	9
Foreign
Mexico	112
Saudi Arabia	76
Other	415
Foreign Subtotal	603
Total	$639

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.

HAL 2025 FORM 10-K | 67

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

Note 13**.** Shareholders' Equity

Shares of common s****tock

The following table summarizes total shares of common stock outstanding:

	December 31,
Millions of shares	2025	2024
Issued	1,064	1,065
In treasury	(229)	(197)
Total shares of common stock outstanding	835	868

Our Board of Directors has authorized a program to repurchase a specified dollar amount of our common stock from

time to time. The program does not require a specific number of shares to be purchased and the program may be effected

through solicited or unsolicited transactions in the market or in privately negotiated transactions. The program may be

terminated or suspended at any time. We purchased 42.4 million shares of our common stock under the program during the year

ended December 31, 2025. During the year ended December 31, 2024, we purchased 30.5 million shares of our common stock

under the program. Approximately $2.0 billion remained authorized for repurchases as of December 31, 2025. From the

inception of this program in February 2006 through December 31, 2025, we repurchased approximately 326 million shares of

our common stock for a total cost of approximately $12.1 billion.

Paid-in Capital in Excess of Par Value

During 2025, 2024 and 2023, we issued common stock from treasury shares under our employee stock purchase plan

awards and for restricted stock grants. As a result, for the years ended December 31, 2024 and 2023, additional paid in capital

would have resulted in a balance below zero; therefore, we reduced retained earnings by $105 million and $98 million,

respectively. Additional issuances from treasury shares could similarly impact additional paid in capital and retained earnings.

Preferred stock

Our preferred stock consists of 5 million total authorized shares at December 31, 2025, of which none are issued.

Accumulated other comprehensive loss

Accumulated other comprehensive loss consisted of the following:

	December 31,
Millions of dollars	2025	2024
Cumulative translation adjustments	$(81)	$(82)
Defined benefit and other postretirement liability adjustments (a)	(245)	(234)
Other	(37)	(37)
Total accumulated other comprehensive loss	$(363)	$(353)

(a)	Included net actuarial losses for our international pension plans of $243 million at December 31, 2025 and $233 million at December 31, 2024.

HAL 2025 FORM 10-K | 68

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

Note 14**.** Stock-based Compensation

The following table summarizes stock-based compensation costs for the years ended December 31, 2025, 2024, and

	Year Ended December 31,
Millions of dollars	2025	2024	2023
Stock-based compensation cost	$213	$223	$219
Tax benefit	(36)	(38)	(36)
Stock-based compensation cost, net of tax	$177	$185	$183

Our Stock and Incentive Plan, as amended (Stock Plan), provides for the grant of any or all of the following types of

stock-based awards:

-stock options, including incentive stock options and nonqualified stock options;

-restricted stock awards;

-restricted stock unit awards;

-stock appreciation rights; and

-stock value equivalent awards.

There are currently no stock appreciation rights, stock value equivalent awards, or incentive stock options outstanding.

Under the terms of the Stock Plan, approximately 284 million shares of common stock have been reserved for issuance to

employees and non-employee directors. At December 31, 2025, approximately 16 million shares were available for future

grants under the Stock Plan. The stock to be offered pursuant to the grant of an award under the Stock Plan may be authorized

but unissued common shares or treasury shares.

In addition to the provisions of the Stock Plan, we also have stock-based compensation provisions under the Restricted

Stock Plan for Non-Employee Directors and the Employee Stock Purchase Plan (ESPP).

Each of the active stock-based compensation arrangements is discussed below.

Stock options

There were no stock options granted during 2025 and there are no plans to grant stock options in 2026. All stock

options under the Stock Plan were granted at the fair market value of our common stock at the grant date. Employee stock

options generally vest ratably over a period of three years and expire ten years from the grant date. Compensation expense for

stock options is generally recognized on a straight-line basis over the entire vesting period.

The following table represents our stock options activity during 2025.

	Number of Shares (in millions)	Weighted Average Exercise Price per Share	Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in millions)
Outstanding at January 1, 2025	10.4	$41.75
Exercised	—	24.73
Forfeited/expired	(2.4)	43.71
Outstanding at December 31, 2025	8.0	$41.23	1.9	$5.8
Exercisable at December 31, 2025	8.0	$41.23	1.9	$5.8

The total intrinsic value of options exercised was $103,000 in 2025, $3 million in 2024, and $20 million in 2023. As of

December 31, 2025, there was no unrecognized compensation cost, net of estimated forfeitures, related to nonvested stock

options.

Cash received from issuance of common stock for 2025, 2024, and 2023 was $98 million, $105 million, and $136

million, respectively, of which $1 million, $9 million, and $48 million, respectively, are related to proceeds from exercises of

stock options. All other cash received from issuance of common stock during 2025, 2024 and 2023 relates to cash proceeds

from the issuance of shares under our employee stock purchase plan.

HAL 2025 FORM 10-K | 69

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model. The

expected volatility of options granted was a blended rate based upon implied volatility calculated on actively traded options on

our common stock and upon the historical volatility of our common stock. The expected term of options granted was based

upon historical observation of actual time elapsed between date of grant and exercise of options for all employees. There were

no stock options granted for the years ended December 31, 2025, 2024, and 2023.

Restricted stock

Restricted shares issued under the Stock Plan are restricted as to sale or disposition. These restrictions generally lapse

periodically over a period of five years. Restrictions may also lapse for early retirement and other conditions in accordance with

our established policies. Upon termination of employment, shares on which restrictions have not lapsed must be returned to us,

resulting in restricted stock forfeitures. The fair market value of the stock on the date of grant is amortized and charged to

income on a straight-line basis over the requisite service period for the entire award.

In 2025, we also granted performance based restricted stock units, with the actual number of shares earned to be

determined at the end of a three year performance period based on our achievement of certain predefined targets. These targets

are based upon our average return on capital employed and a modifier based upon stock performance, as compared to certain

competitors. A Monte Carlo simulation that uses a probabilistic approach was performed by an actuary to measure grant date

fair value. The fair value of these performance based restricted stock units is recognized on a straight-line basis over the three

year performance cycle.

The following table represents our restricted stock awards and restricted stock units granted, vested, and forfeited

during 2025.

.

	Number of Shares (in millions)	Weighted Average Grant-Date Fair Value per Share
Nonvested shares at January 1, 2025	19.5	$31.64
Granted	7.8	22.95
Vested	(6.9)	29.18
Forfeited	(1.7)	30.84
Nonvested shares at December 31, 2025	18.7	$29.01

The weighted average grant-date fair value of shares granted was $22.95 during 2025, $36.76 during 2024, and $31.73

during 2023. The total fair value of shares vested was $162 million during 2025, $263 million during 2024, and $283 million

during 2023. As of December 31, 2025, there was $358 million of unrecognized compensation cost, net of estimated forfeitures,

related to nonvested restricted stock, which is expected to be recognized over a weighted average period of three years.

Employee Stock Purchase Plan

Under the ESPP, eligible employees may have up to 10% of their earnings withheld, subject to some limitations, to be

used to purchase shares of our common stock. The ESPP contains four three-month offering periods commencing on January 1,

April 1, July 1, and October 1 of each year. The price at which common stock may be purchased under the ESPP in 2023, 2024,

and 2025 is equal to 90% of the lower of the fair market value of the common stock on the commencement date or last trading

day of each offering period. Under the ESPP, 104 million shares of common stock have been reserved for issuance, of which 84

million shares have been sold through the ESPP since the inception of the plan through December 31, 2025 and 20 million

shares are available for future issuance. The stock to be offered may be authorized but unissued common shares or treasury

shares.

The fair value of ESPP shares was estimated using the Black-Scholes option pricing model. The expected volatility

was a one-year historical volatility of our common stock. The assumptions and resulting fair values were as follows:

	Year Ended December 31,
	2025	2024	2023
Expected volatility	35%	30%	48%
Expected dividend yield	2.78%	2.00%	1.44%
Risk-free interest rate	4.28%	5.24%	5.11%
Weighted average grant-date fair value per share	$4.17	$5.60	$7.16

HAL 2025 FORM 10-K | 70

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

Note 15**.** 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:

	Year Ended December 31,
Millions of shares	2025	2024	2023
Basic weighted average common shares outstanding	853	882	899
Dilutive effect of awards granted under our stock incentive plans	—	1	3
Diluted weighted average common shares outstanding	853	883	902
Antidilutive shares:
Weighted average options with exercise price greater than the average market price	9	10	12
Total antidilutive shares	9	10	12

Note 16**.** Financial Instruments and Risk Management

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

	December 31, 2025					December 31, 2024
Millions of dollars	Level 1	Level 2	Total fair value	Carrying value		Level 1	Level 2	Total fair value	Carrying value
Total debt	$6,722	$357	$7,079	$7,158		$4,503	$2,825	$7,328	$7,541

The total fair value of our debt decreased during 2025 primarily as a result of the retirement of the outstanding

principal of our 3.8% senior notes at their scheduled maturity, as discussed in Notes to Consolidated Financial Statements, Note

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 last two 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 to two 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 have no debt categorized within level 3 on the fair value hierarchy.

We are exposed to market risk from changes in foreign currency exchange rates, interest rates, and credit risk. We

selectively manage these exposures through the use of derivative instruments, including forward foreign exchange contracts,

foreign exchange options, interest rate swaps, and CDS’s. The objective of our risk management strategy is to minimize the

volatility from fluctuations in foreign currency and interest rates. We do not use derivative instruments for trading purposes.

The fair value of our forward contracts, options, and interest rate swaps was not material as of December 31, 2025 or

December 31, 2024. The counterparties to our derivatives are primarily global commercial and investment banks.

Foreign currency exchange risk

We have operations in many international locations and are involved in transactions denominated in currencies other

than the U.S. dollar, our functional currency, which exposes us to foreign currency exchange rate risk. Techniques in managing

foreign currency exchange risk include, but are not limited to, foreign currency borrowing and investing, and the use of

currency exchange instruments. We attempt to selectively manage significant exposures to potential foreign currency exchange

losses based on current market conditions, future operating activities, and the associated cost in relation to the perceived risk of

loss. The purpose of our foreign currency risk management activities is to minimize the risk that our cash flows from the

purchase and sale of products and services in foreign currencies will be adversely affected by changes in exchange rates.

HAL 2025 FORM 10-K | 71

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

We use forward contracts and options to manage our exposure to fluctuations in the currencies of certain countries in

which we do business internationally. These instruments are not treated as hedges for accounting purposes, generally have an

expiration date of one year or less, and are not exchange traded. While these instruments are subject to fluctuations in value, the

fluctuations are generally offset by the value of the underlying exposures being managed. The use of some of these instruments

may limit our ability to benefit from favorable fluctuations in foreign currency exchange rates.

Derivatives are not utilized to manage exposures in some currencies due primarily to the lack of available markets,

cost considerations, or immaterial exposures (non-hedged currencies). We attempt to minimize foreign currency exposure in

non-hedged currencies and recognize that pricing for the services and products offered in these countries should account for the

cost of exchange rate devaluations.

The notional amounts of open foreign exchange derivatives were $840 million at December 31, 2025 and $781 million

at December 31, 2024. The notional amounts of these instruments do not generally represent amounts exchanged by the parties,

and thus are not a measure of our exposure or of the cash requirements related to these contracts. The fair value of our foreign

exchange derivatives as of December 31, 2025 and December 31, 2024 is included in both "Other current assets" and in "Other

current liabilities" in our Consolidated Balance Sheets and was immaterial. The fair value of these instruments is categorized

within level 2 on the fair value hierarchy and was determined using a market approach with certain inputs, such as notional

amounts hedged, exchange rates, and other terms of the contracts that are observable in the market or can be derived from or

corroborated by observable data.

Interest rate risk

We are subject to interest rate risk on our debt and investment portfolios. We had fixed rate long-term debt totaling

$7.2 billion at December 31, 2025 and December 31, 2024. We maintain an interest rate management strategy that is intended

to mitigate the exposure to changes in interest rates. As of December 31, 2025 and December 31, 2024, we did not have any

interest rate swaps outstanding.

Credit risk

Financial instruments that potentially subject us to concentrations of credit risk are primarily cash equivalents and net

trade receivables. It is our practice to place our cash equivalents in high quality investments with various institutions. Our net

trade receivables are from a broad and diverse group of customers and are generally not collateralized. 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. As of

December 31, 2024, 30% of our net trade receivables were from customers in the United States and 11% were from customers

in Mexico. We maintain an allowance for credit losses based upon several factors, including historical collection experience,

current aging status of the customer accounts and financial condition of our customers. See Notes to Consolidated Financial

Statements, Note 5 for further information on receivables.

We have entered into CDSs with third-party financial institutions that had 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 a

portion of the proceeds were then 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.

The fair value of the derivative liabilities was not material to our financial condition as of December 31, 2025.

We do not have any significant concentrations of credit risk with any individual counterparty to our derivative

contracts. We select counterparties to those contracts based on our belief that each counterparty’s profitability, balance sheet,

and capacity for timely payment of financial commitments is unlikely to be materially adversely affected by foreseeable events.

HAL 2025 FORM 10-K | 72

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

Note 17**.** Retirement Plans

Our company and subsidiaries have various plans that cover a significant number of our employees. These plans

include defined contribution plans, defined benefit plans, and other postretirement plans:

-Our defined contribution plans provide retirement benefits in return for services rendered. These plans provide an

individual account for each participant and have terms that specify how contributions to the participant’s account are

to be determined rather than the amount of pension benefits the participant is to receive. Contributions to these plans

are based on a percentage of pre-tax income, after-tax income, or discretionary amounts determined on an annual

basis. Our expense for the defined contribution plans totaled $206 million in 2025, $182 million in 2024, and $181

million in 2023. The increase in expense from 2024 to 2025 was primarily driven by higher discretionary employer

contributions, along with increases in employee headcount and employer contribution rates in certain foreign

locations.

-Our defined benefit plans, which include both overfunded and underfunded pension plans, define an amount of

pension benefit to be provided, usually as a function of age, years of service and/or compensation. The underfunded

obligations and net periodic benefit cost of our United States defined benefit plans were not material for the periods

presented.

-Our postretirement plans other than pensions are offered to specific eligible employees. The accumulated benefit

obligations (ABO) and net periodic benefit cost for these plans were not material for the periods presented.

- In 2024, the Trustees of the Company’s United Kingdom (U.K.) defined benefit plan executed an annuity buy-in

with a third-party insurance company with no affiliation with the Company. All pension obligations will be funded

by the insurer’s annuity payments. However, the plan retains full legal responsibility to pay the benefits to plan

participants using the insurance payments. As the plan maintains full legal responsibility, and the insurance contract

is considered an asset of the plan, accordingly, the arrangement did not meet the settlement criteria of ASC 715. The

policy is carried at fair value within plan assets and presented as a level 3 in the fair value table below. Fair value is

determined using a quote from an insurance company, reflecting prevailing market conditions for similar

transactions. Changes in the fair value of the policy are reflected in actual return on plan assets.

Funded status

For our international pension plans, at December 31, 2025, the projected benefit obligation (PBO) was $783 million

and the fair value of plan assets was $583 million, which resulted in an underfunded obligation of $200 million. At

December 31, 2024, the PBO was $773 million and the fair value of plan assets was $594 million, which resulted in an

underfunded obligation of $179 million. The ABO for our international plans was $698 million at December 31, 2025 and $694

million at December 31, 2024. Despite an increase in the Company’s weighted‑average discount rate, the localized actuarial

changes in a few countries created upward pressure on pension obligations, resulting in a net increase in PBO and ABO

compared to the prior year.

The following table presents additional information about our international pension plans.

	December 31,
Millions of dollars	2025	2024
Amounts recognized on the Consolidated Balance Sheets
Other assets	$3	$11
Accrued employee compensation and benefits	9	11
Employee compensation and benefits	193	177
Pension plans in which projected benefit obligation exceeded plan assets
Projected benefit obligation	$213	$200
Fair value of plan assets	11	12
Pension plans in which accumulated benefit obligation exceeded plan assets
Accumulated benefit obligation	$127	$122
Fair value of plan assets	11	12

Fair value measurements of plan assets

The fair value of our plan assets categorized within level 1 on the fair value hierarchy is based on quoted prices in

active markets for identical assets. The fair value of our plan assets categorized within level 2 on the fair value hierarchy is

based on significant observable inputs for similar assets. The fair value of our plan assets categorized within level 3 on the fair

value hierarchy is based on significant unobservable inputs.

HAL 2025 FORM 10-K | 73

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

The following table sets forth the fair values of assets held by our international pension plans by level within the fair

value hierarchy.

Millions of dollars	Level 1	Level 2	Level 3	Net Asset Value (a)	Total
Cash and equivalents	$4	$4	$—	$—	$8
Bond funds (b)	—	4	—	—	4
Real estate funds (c)	—	—	—	—	—
Other investments (d)	1	9	561	—	571
Fair value of plan assets at December 31, 2025	$5	$17	$561	$—	$583
Cash and equivalents	$—	$—	$—	$—	$—
Bond funds (b)	—	11	—	—	11
Real estate funds (c)	—	—	—	8	8
Other investments (d)	1	9	565	—	575
Fair value of plan assets at December 31, 2024	$1	$20	$565	$8	$594

(a)	Represents investments measured at fair value using the Net Asset Value (NAV) per share practical expedient and thus has not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the total value of our international pension plan assets.
(b)	Strategy of bond funds is to invest in diversified funds of fixed income securities of varying geographies and credit quality.
(c)	Strategy of real estate funds is to invest in diversified funds of real estate investment trusts and private real estate.
(d)	Other investments consist of insurance contracts, a buy-in annuity insurance contract, non-US equities, and government bonds. The fair value of the buy-in annuity insurance contract is determined using a quote provided by an insurance company, reflecting prevailing market conditions for similar transactions.

Level 3 Rollforward

The following presents our Level 3 Rollforward for buy-in annuity insurance contract for 2025 and 2024.

Millions of dollars	2025	2024
Balance at the beginning of the year	$565	$2
Purchase of insurance contract	—	590
Return on assets	23	(18)
Payment from the insurance policy	(27)	(9)
Balance at the end of the year	$561	$565

Risk management practices for these plans include diversification by issuer, industry, and geography, where permitted,

as well as by asset classes and investment managers. Our U.K. pension plan, which constituted 72% of our international

pension plans’ PBO at December 31, 2025, is no longer accruing service benefits and completed a pension buy-in transaction

during 2024 entering into a bulk annuity contract with an insurance company. The bulk annuity contract effectively covers all

benefit payments to members. The investments backing the contract are invested at the discretion of the insurance company,

which assumes the investment risk associated with these assets.

Net periodic benefit cost

Net periodic benefit cost for our international pension plans was $57 million in 2025, $43 million in 2024, and $32

million in 2023.

HAL 2025 FORM 10-K | 74

Table of Contents	Item 8 | Notes to Consolidated Financial Statements

Actuarial assumptions

Certain weighted-average actuarial assumptions used to determine benefit obligations of our international pension

plans at December 31 were as follows:

	2025	2024
Discount rate	5.4%	5.3%
Rate of compensation increase	5.1%	4.9%

Certain weighted-average actuarial assumptions used to determine net periodic benefit cost of our international

pension plans for the years ended December 31 were as follows:

	2025	2024	2023
Discount rate	5.3%	5.1%	5.6%
Expected long-term return on plan assets	4.9%	4.0%	3.8%
Rate of compensation increase	4.9%	2.9%	5.4%

Assumed long-term rates of return on plan assets, discount rates for estimating benefit obligations, and rates of

compensation increases vary by plan according to local economic conditions. Where possible, discount rates were determined

based on the prevailing market rates of a portfolio of high-quality debt instruments with maturities matching the expected

timing of the payment of the benefit obligations. Expected long-term rates of return on plan assets were determined based upon

an evaluation of our plan assets and historical trends and experience, taking into account current and expected market

conditions.

Other information

Contributions. Funding requirements for each plan are determined based on the local laws of the country where such

plan resides. In certain countries the funding requirements are mandatory, while in other countries they are discretionary. We

currently expect to contribute $1 million to our international pension plans in 2026.

Benefit payments. Expected benefit payments over the next 10 years for our international pension plans are as follows:

$46 million in 2026, $39 million in 2027, $42 million in 2028, $43 million in 2029, $45 million in 2030, and an aggregate $268

million in years 2031 through 2035.

Note 18**.** 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.

HAL 2025 FORM 10-K | 75

Table of Contents	Item 9 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.