HAL 10-K & 10-Q changes, risk factors and insider trading

When considering an investment in Halliburton Company, all of the risk factors described below and other information included and incorporated by reference in this annual report should be carefully considered. Any of these risk factors could have a significant or material adverse effect on our business, results of operations, financial condition, or cash flows. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also adversely affect our business, financial condition, results of operations, financial condition, or cash flows.

- the-the level of supply and demand for oil and natural gas;

- the-the ability or willingness of the Organization of Petroleum Exporting Countries and the expanded alliance collectively known as OPEC+ to set and maintain oil production levels;

- the-the level of oil production in the U.S. and by other non-OPEC+ countries;

- oil-oil refining capacity and shifts in end-customer preferences toward fuel efficiency and the use of natural gas;

- the-the cost of, and constraints associated with, producing and delivering oil and natural gas;

- governmental-governmental regulations and other actions, or proposed changes in respect thereof, including tariffs, economic sanctions and policies of governments regarding the exploration for and production and development of their oil and natural gas reserves;

- weather-weather conditions, natural disasters, and health or similar issues, such as COVID-19 and other pandemics or epidemics;

- worldwide-worldwide political and military actions, and economic conditions, including potential recessions; and - increased-increased demand for alternative energy and use of electric vehicles, increased emphasis on decarbonization (including government initiatives, such as tax credits and government subsidies to promote the use of renewable energy sources), and public sentiment around alternatives to oil and natural gas.

- oil-oil and natural gas prices, which are impacted by the factors described in the preceding risk factor;

- the-the inability of our customers to access capital on economically advantageous terms, which may be impacted by, among other things, a decrease of investors’ interest in hydrocarbon producers because of environmental and sustainability initiatives;

- changes-changes in customers’ capital allocation, including increased cash returns to shareholders or an increased allocation to the production of renewable energy or other sustainability efforts, leading to less focus on oil and natural gas production growth;

- restrictions-restrictions on our customers’ ability to get their produced oil and natural gas to market due to infrastructure limitations or other governmental limitations on transportation of produced oil and natural gas;

- consolidation-consolidation of our customers;

- customer-customer personnel changes; and - adverse-adverse developments in the business or operations of our customers, including write-downs of oil and natural gas reserves and borrowing base reductions under customers’ credit facilities.

Events can occur at sites where our products and equipment are produced, stored, transported, or installed, or where we conduct our operations or provide our services, or at chemical blending or manufacturing facilities, including well blowouts and equipment or materials failures, which could result in explosions, fires, personal injuries, property damage (including surface and subsurface damage), pollution, and potential legal responsibility. Generally, we rely on contractual indemnities, releases, and limitations of liability with our customers and on liability insurance coverage to mitigate our potential liability related to such occurrences. However, we do not have these contractual provisions in all contracts, and even where we do, it is possible that the respective customer or insurer could seek to avoid or be financially unable to meet its obligations, or a court may decline to enforce such provisions. Damages that are not indemnified or released may not be insured or could greatly exceed available insurance coverage and could have a material adverse effect on our business, consolidated results of operations, and consolidated financial condition.

Our business could be materially and adversely affected by severe weather, particularly in Canada, the Gulf of Mexico,America, and the North Sea. Many experts believe global climate change could increase the frequency and severity of extreme weather conditions.conditions, including coastal storm surges, inland flooding from intense rainfall, hurricane-strength winds, and extreme temperature. Repercussions of severe or unseasonable weather conditions may include:

- evacuation-evacuation of personnel and inoperability of equipment resulting in curtailment of services;

- damage-damage to offshore drilling rigs resulting in suspension of operations;

- damage-damage to our facilities and project work sites;

- inability-inability to deliver materials to job sites in accordance with contract schedules;

- fluctuations-fluctuations in demand for oil and natural gas, including possible decreases during unseasonably warm winters; and - loss of productivity.

WeFurther, relyour onapplication afor variety ofcertain intellectual property rights that we use in our services and products. We may not be ablegranted entirely, as to successfullykey preserve these intellectual property rights in the future, and these rights could be invalidated, circumvented,features, or challenged.at all. In addition, the laws of some foreign countries in which our services and products may be sold do not protect intellectual property rights to the same extent as the laws of the United States. Courts could find that others infringe our patent or other intellectual property rights or that our products and services may infringe the intellectual property rights of others. Our failure to protect our proprietary information and any successful intellectual property challenges or infringement proceedings against us could materially and adversely affect us.

If we are not able to design, develop and produce commercially competitive products and to implement commercially competitive services in a timely manner in response to changes in the market, customer requirements, competitive pressures, developments associated with climate change concerns and energy mix transition,concerns, and technology trends, our business and consolidated results of operations could be materially and adversely affected, and the value of our intellectual property may be reduced.

The market for our services and products is characterized by continual technological developments to provide better and more reliable performance and services. If we are not able to design, develop, and produce commercially competitive products and to implement commercially competitive services in a timely manner in response to changes in the market, customer requirements, competitive pressures, developments associated with climate change concerns and energy mix transition,concerns, and technology trends, including artificial intelligence and machine learning, our business and consolidated results of operations could be materially and adversely affected, and the value of our intellectual property may be reduced. Likewise, if our proprietary technologies, equipment, facilities, or work processes become obsolete, we may no longer be competitive, and our business and consolidated results of operations could be materially and adversely affected.

We sometimes provide integrated project management services outside our normal discrete business in the form of long-term, fixed price contracts. Some of these contracts are required by our customers, primarily national oil companies. These services include acting as project managers as well as service providers and may require us to assume additional risks associated with cost over-runs. These customers may provide us with inaccurate or limited information, thatwhich may result in cost over-runs, delays, and project losses. In addition, our customers often operate in countries with unsettled political conditions, war, civil unrest, or other types of community issues. These issues may also result in cost over-runs, delays, and project losses.

Our business depends on the supply and availability of raw and essential materials. Raw materials essential to our operations and manufacturing, such as sand, chemicals, metals, gels, and electronic components (circuit boards), are normally readily available. Shortage of raw materials because of high levels of demand or loss of suppliers during market challenges or tariffs can trigger constraints in the supply chain of those raw materials, particularly where we have a relationship with a single supplier for a particular resource. Many of the raw materials essential to our business require the use of rail, storage, and trucking services to transport the materials to our job sites. These services, particularly during times of high demand, may cause delays in the arrival of or otherwise constrain our supply of raw materials. In addition, as we increase the roll-out of our Zeus electric fracturing systems, we might face challenges to source sufficient electric power or there might not be adequate infrastructure to support the operation of our systems. These constraints on raw materials and electric power could have a material adverse effect on our business and consolidated results of operations. In addition, price increases imposed by our vendors for raw materials and transportation providers used in our business could have a material adverse effect on our business and consolidated results of operations if we are unable to pass these increases through to our customers.

Our operations outside the United States require us to comply with a number of United States and international regulations, violations of which could have a material adverse effect on our business, consolidated results of operations, and consolidated financial condition.

Our operations outside the United States require us to comply with a number of United States and international regulations. For example, our operations in countries outside the United States are subject to the United States Foreign Corrupt Practices Act (FCPA), which prohibits United States companies and their agents and employees from providing anything of value to a foreign official for the purposes of influencing any act or decision of these individuals in their official capacity to help obtain or retain business, direct business to any person or corporate entity, or obtain any unfair advantage. Our activities create the risk of unauthorized payments or offers of payments by our employees, agents, or joint venture partners that could be in violation of anti-corruption laws, even though some of these parties are not subject to our control. We have internal control policies and procedures and have implemented training and compliance programs for our employees and agents with respect to the FCPA. However, we cannot assure that our policies, procedures, and programs will always protect us from reckless or criminal acts committed by our employees or agents. We are also subject to the risks that our employees, joint venture partners, and agents outside of the United States may fail to comply with other applicable laws. Allegations of violations of applicable anti-corruption laws have resulted and may in the future result in internal, independent, or government investigations. Violations of anti-corruption laws may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could have a material adverse effect on our business, consolidated results of operations and consolidated financial condition.

In addition, the shipment of goods, services, and technology across international borders subjects us to extensive trade laws and regulations. Our import activities are governed by the unique customs laws and regulations in each of the countries where we operate. Moreover, many countries, including the United States, control the export, re-export, and in-country transfer of certain goods, services, and technology, impose related export recordkeeping and reporting obligations, and impose trade barriers or tariffs. Governments may also impose economic sanctions against certain countries, persons, and entities that may restrict or prohibit transactions involving such countries, persons, and entities, which may limit or prevent our conduct of business in certain jurisdictions. TheFor example, the imposition of such sanctions onby Russiathe United States, European Union or others in connectioncountries withsuch Russia’sas invasionVenezuela, ofRussia, Ukraineand ledelsewhere tohave impacted our decision to dispose of our Russian operations during the third quarter of 2022.business.

Changes in U.S. foreign trade policies, including as a result of the new presidential administration, could lead to the imposition of additional trade barriers and tariffs on us in foreign jurisdictions. In April 2025, the Trump Administration announced a baseline tariff of 10% on products imported from all countries and an additional individualized reciprocal tariff on the countries with which the United States has the largest trade deficits. Many of these reciprocal tariffs went into effect in August 2025. The United States Supreme Court has agreed to review lower court decisions regarding certain tariffs imposed by the Trump Administration and the Court has stayed the effect of decisions including the August 2025 decision of the U.S. Court of Appeals for the Federal Circuit finding that certain tariffs exceeded presidential authority and are therefore invalid. This ruling introduces additional uncertainty as to the scope and durability of existing and future tariff measures. Increased tariffs by the United States have led and may continue to lead to the imposition of retaliatory tariffs by foreign jurisdictions. Additionally, the Trump Administration has announced and rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions. We cannot predict the full extent of new, extended, or changed trade policies, including tariffs, that may be made by the current or a future presidential administration or Congress, including whether existing tariff policies will be maintained or modified or if changes in the U.S. trade policy result in reactions from the U.S. trading partners, including adopting responsive trade policies making it more difficult or costly for us to export or import our products from countries where we currently purchase or sell products. Such changes in U.S. trade policy or in laws and policies governing foreign trade, and any resulting negative sentiments towards the United States as a result of such changes, could materially and adversely affect our business, financial condition, results of operations and liquidity.

In the countries in which we conduct business, we are subject to multiple and, at times, inconsistent regulatory regimes, including those that govern our use of radioactive materials, explosives, and chemicals in our operations. Various national and international regulatory regimes govern the shipment of these items. Many countries, but not all, impose special controls upon the export and import of radioactive materials, explosives, and chemicals. Our ability to do business is subject to maintaining required licenses and complying with these multiple regulatory requirements applicable to these special products. In addition, the various laws governing import and export of both products and technology apply to a wide range of services and products we offer. In turn, this can affect our employment practices of hiring people of different nationalities because these laws may prohibit or limit access to some products or technology by employees of various nationalities. Changes in, compliance with, or our failure to comply with these laws may negatively impact our ability to provide services in, make sales to, and transfer personnel or equipment among some of the countries in which we operate and could have a material adverse effect on our business and consolidated results of operations.

Various federal and state legislative and regulatory initiatives, as well as actions in other countries, have been or could be undertaken that could result in additional requirements or restrictions being imposed on hydraulic fracturing operations. For example, the United States may seek to adopt federal regulations or enact federal laws that would impose additional regulatory requirements on or even prohibit hydraulic fracturing in some areas. Legislation and/or regulations have been adopted by many states in the U.S. that require additional disclosure regarding chemicals used in the hydraulic fracturing process but that generally include protections for proprietary information. Legislation, regulations, and/or policies have also been adopted at the state level that impose other types of requirements on hydraulic fracturing operationsoperations, (such as limits on operations in the event of certain levels of seismic activity).activity. Additional legislation and/or regulations have been adopted or are being considered at the state and local level that could impose further chemical disclosure or other regulatory requirementsrequirements, (such as prohibitions on hydraulic fracturing operations in certain areas)areas, that could affect our operations. Some states and some local jurisdictions have adopted ordinances that restrict or in certain cases prohibit the use of hydraulic fracturing. In addition, governmental authorities in various foreign countries where we have provided or may provide hydraulic fracturing services have imposed or are considering imposing various restrictions or conditions that may affect hydraulic fracturing operations. The adoption of any future federal, state, local, or foreign laws or regulations imposing reporting obligations on, or limiting or banning, the hydraulic fracturing process could make it more difficult to complete natural gas and oil wells and could have a material adverse effect on our business, consolidated results of operations, and consolidated financial condition.

Liability for cleanup costs, natural resource damages and other damages arising as a result of environmental laws and regulations could be substantial and could have a material adverse effect on our business, consolidated results of operations, and consolidated financial condition.

We are subject to numerous environmental laws and regulations in the United States and the other countries where we do business. We evaluate and address the environmental impact of our operations by assessing and remediating contaminated properties to avoid future liabilities and comply with legal and regulatory requirements. From time to time, claims have been made against us under environmental laws and regulations. In the United States, environmental laws and regulations typically impose strict liability. Strict liability means that in some situations we could be exposed to liability for cleanup costs, natural resource damages, and other damages as a result of our conduct that was lawful at the time it occurred or the conduct of prior operators or other third parties. We are periodically notified of potential liabilities at federal and state superfundcleanup sites. These potential liabilities may arise from both historical Halliburton operations and the historical operations of companies that we have acquired. Our exposure at these sites may be materially impacted by unforeseen adverse developments both in the final remediation costs and with respect to the final costs of remediating a site and the final allocation of those costs among the various parties involved at the sites. The relevant regulatory agency may bring suit against us for amounts in excess of what we have accrued and what we believe is our proportionate share of remediation costs at any superfundcleanup site. We also could be subject to third-party claims, including punitive damages, with respect to environmental matters for which we have been named as a potentially responsible party. Liability for damages arising as a result of environmental laws or related third-party claims could be substantial and could have a material adverse effect on our business, consolidated results of operations, and consolidated financial condition.

In addition to the numerous environmental laws and regulations that apply to our operations, weWe are subject to a variety of laws and regulations in the United States and other countries relating to environmental protection and health and safety. Among those laws and regulations are those covering hazardous materials and requiring emission performance standards for facilities. For example, our well service operations routinely involve the handling of significant amounts of waste materials, some of which are classified as hazardous substances. We also store, transport, and use radioactive and explosive materials in certain of our operations. Applicable regulatory requirements include those concerning:

- the-the containment and disposal of hazardous substances, oilfield waste, and other waste materials;

- the-the production, storage, transportationtransportation, and use of chemicals;

- the-the production, storage, transportation and use of explosive materials;

- the-the importation and use of radioactive materials;

- the-the use of underground storage tanks;

- the-the use of underground injection wells; and - the-the protection of worker safety both onshore and offshore.

- administrative,-administrative, civil, and criminal penalties;

- revocation-revocation of permits to conduct business; and - corrective-corrective action orders, including orders to investigate and/or clean up contamination.

We closely follow developments in this area, including changes in the regulatory landscape in the United States at both the federal and state levels and in the international markets in which we operate. We cannot predict, however, how or when such changes may betake effectedeffect or ultimately impact our business. For example, inIn the United States, presidents have certain powers to issue executive orders that can have the effect of the enactment of new laws. InFor example, in January 2025, President BidenTrump issuedallowed a Memorandum of Withdrawal that could have had the effect of preventingfor future leasing by the federal government (and thereforetherefore, oil and gas exploration)exploration, of the lands underlying federal waters offshore the U.S. East Coast, the eastern Gulf of Mexico,America, the Pacific Ocean off the coasts of Washington, Oregon, and California, and additional portions of the Northern Bering Sea in Alaska. AlsoThis inpresidential January 2025, President Trump in turnaction overturned President Biden’s Memorandum of WithdrawalWithdrawal. andPresident Trump issued a series of executive orders that signal a significant shift in the United States’ energy and climate change policies.policies that has resulted in the elimination or proposed elimination of some regulatory requirements. Future administrations may, however, pursue executive orderspolicies similar to, or more restrictive than, those put in place by predecessor administrations.

We could be subject to changes in our tax rates, the adoption of new tax legislation, tax audits, or exposure to additional tax liabilities that could have a material adverse effect on our business, consolidated results of operations, and consolidated financial condition.

We are subject to taxes in the U.S.United States and numerous jurisdictions where we operate and our subsidiaries are organized. Due to economic and political conditions, tax rates in the U.S.United States and other jurisdictions may be subject to significant change. Our tax returns are subject to examination by the U.S. Internal Revenue Service (IRS) and other tax authorities and governmental bodies. We regularly assess the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of our provision for taxes.

Our U.S. federal income tax filings for tax years 2016 through 20232024 are currently under review or remain open for review by the IRS. As of December 31, 2024,2025, 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 Notice of Proposed Adjustment (NOPA) from the IRS on September 28, 2023. In 2023, we initiated the IRS administrative appeals process, which is ongoing. There can be no assurance as to the outcome of the NOPA or other tax examinations and audits.

- political-political and economic instability, including:

•civil unrest, acts of terrorism, war, and other armed conflict, such as the ongoing actions in Ukraine, Israel, and the broader Middle East;

•currency fluctuations, devaluations, and conversion restrictions; and - governmental-governmental actions that may:

Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the consolidated and combined financial statements included in “Item 8. Financial Statements and Supplementary Data” contained herein.

SinceIn early2025, 2021, world-wideglobal oil and natural gas supply and demand imbalances and related volatility of oil and natural gas prices (including as a result of the COVID-19 pandemic) have resulted in dramatic fluctuations in oil and natural gas markets. The volatility continued in 2024 as markets wereremained impacted by macroeconomic uncertainty, non-OPEC supply growth, lack ofslower demand recovery in China,certain areas around the globe, OPEC+ production, ongoing geopolitical unresttensions in the Middle EastEast, and the continued impacts of the Russia-Ukraine conflict. In the U.S., oil and natural gas production in 20242025 remained elevated, despite a generally declining rig count, as a result of the industry's focus on efficiencies and higher service intensity. Lower commodity pricing and U.S. land rig counts generally contributed to softness in the market for energy products and services in North America. The international rig count wasdecreased relativelycompared flatto in 2024, as gains in Africa and the Middle East were offset by reductions in Latin America.2024.

Trade tensions and tariffs continue to shape the demand outlook amid varying market responses. We continue to monitor and assess the impact of tariffs on goods being imported into the United States. Our global supply chain organization continuously monitors market trends and works to mitigate those and other cost increases through economies of scale in global procurement, technology modifications, and efficient sourcing practices. Globally, we continue to be impacted by extended supply chain lead times for the supply of select raw materials. We monitor market trends and work to mitigate cost impacts through economies of scale in global procurement, technology modifications, and efficient sourcing practices. Also, while we have been impacted by inflationary cost increases, primarily related to chemicals, cement, and logistics costs, we generally try to pass much of those increases on to our customers and we believe we have effective solutions to minimize their operational impact.

During 2024,2025, we generated total company revenue of $22.9$22.2 billion, flata when3% compareddecrease tofrom the $23.0$22.9 billion of revenue generated in 2023,2024 with our Completion and Production (C&P) segment revenue decreasing by 3%4% and our Drilling and Evaluation (D&E) segment revenue increasingdecreasing by 4%.3%. Total company operating income was $3.8$2.3 billionbillion, including impairments and other charges of $831 million, in 2024,2025, compared to $4.1$3.8 billionbillion, including impairment and other charges of $116 million, in 2023.2024. Due to new tariffs imposed during 2025 by the United States, the incremental expense was approximately $89 million.

Driven in large part by a decrease in the average North America rig count in 20242025 as compared to 2023,2024, our North America revenue decreased 8%6% in 2024,2025, resulting from lower pressureactivity pumpingacross servicesmultiple product service lines in U.S. land, reduced wireline activity,Land and decreasedlower fluidcompletion tool sales in the Gulf of America. Partially offsetting these decreases were improved stimulation activity and increased fluids services in the region.Gulf Theseof declinesAmerica, were partially offset by higherincreased drilling activity in theU.S. regionLand, and improvedhigher artificialcompletion lifttool activitysales in U.S. land.Canada.

WeAs of December 31, 2025, we had $2.6$2.2 billion of cash and $2.3equivalents, compared to $2.6 billion of cash and equivalents as ofat December 31, 2024 and December 31, 2023, respectively.2024.

•Cash flows from operating activities were $3.9$2.9 billion. Working capital, which consists of receivables, inventories, and accounts payable, collectively had a negativepositive impact of $103$196 million, primarily due to increased receivables.million.

•We repurchased 30.542.4 million shares of our common stock for $1.0 billion.billion, which includes excise tax payment due on 2024 share repurchases.

•We repurchasedpurchased $100$202 million aggregate principal amounts of variousinvestment series of our outstanding debt.securities.

We manufacture most of our own equipment, which provides us with some flexibility to increase or decrease our capital expenditures based on market conditions. We currently expect capital spending for 20252026 to be approximately 6%$1.1 ofbillion. revenue.Despite Wethis reduction from 2025, we believe this level of spendspending will allowenable uscontinued to investinvestment in our keycore strategic technologies and businesses, including the construction and deployment of our Zeus electric fracturing systems in North America and the international growthexpansion of our artificial lift, well intervention, unconventionals, and drilling technologies. We will continue to maintain capital discipline and monitor the rapidly changing market dynamics, and we may adjust our capital spend accordingly.

In 2025,2026, we expect to pay approximately $645$505 million for contractual purchase obligationsobligations, (with another $143$315 million due through 2027),2028, $392$378 million of interest on debt, and $395$418 million under our leasing arrangements. Payments for interest on our debt are expected to remain relatively flat for the foreseeable future. See Notes to Consolidated Financial Statements, Note 6 and Note 10 for additional information on expected future payments under our leasing arrangements and debt maturities.

While we maintain focus on liquidity and debt reduction,liquidity, we are also focused on providing cash returns to our shareholders. In 2023, our Board approved a capital return framework with a goal of returning at least 50% of our annual free cash flow to shareholders through dividends and share repurchases. We returned $1.6 billion of capital to shareholders in 20242025 through buybacksdividends and dividends.share repurchases. During 2024,2025, our quarterly dividend rate was $0.17 per common share, or approximately $150$145 million in the aggregate.

We may utilize share repurchases as part of our capital return framework. Our Board of Directors has authorized a program to repurchase our common stock from time to time. We repurchased 30.542.4 million shares of common stock during the year ended December 31, 2024.2025 under this program. Approximately $3.0$2.0 billion remained authorized for repurchases under our program as of December 31, 20242025 and may be used for open market and other share purchases.

During 2023, we began our migration to SAP S4 which we now expect to complete in the firstfourth halfquarter of 2026. We now estimateDuring the totalyear project investment to increase between $20 million and $30 million above our initial $250 million forecast, of which we have incurred $124 million throughended December 31, 2024.2025, Forwe incurred $154 million in expense on our SAP S4 migration. Due to the extension of the project we announced in the second quarter of 2025, we expect tothe spendestimated total cost will be approximately $100$45 million onper thisquarter project.going forward. We believe the new system will provide important efficiency benefits, cost savings, enhanced visibility to our operations, and advanced analytics that will benefit us and our customers.

Financial positioncondition in current market. As of December 31, 2024,2025, we had $2.6$2.2 billion of cash and equivalents and $3.5 billion of available committed bank credit under a new revolving credit facility executed on August 18, 2025, with an expiration date of AprilAugust 27,16, 2027.2030. We believe we have a manageable debt maturity profile, with approximately $471$90 million coming due beginningFebruary in 2025 through 2027, with the majority coming due in 2025.2027. Furthermore, we have no financial covenants or material adverse change provisions in our bank agreements, and our debt maturities extend over a long period of time. We believe our cash on hand, cash flows generated from operations, and our available credit facility will provide sufficient liquidity to address the challenges and opportunities of the current market and our expected global cash needs for 2025,needs, including capital expenditures, working capital investments, shareholder returns, if any, and debt repurchases, if any, and scheduled interest and principal payments.payments, in the short term and long term.

Guarantee agreements. In the normal course of business, we have agreements with financial institutions under which approximately $2.8$3.1 billion of letters of credit, bank guarantees, or surety bonds were outstanding as of December 31, 2024. Some of the outstanding letters of credit have triggering events that would entitle a bank to require cash collateralization, however, none of these triggering events have occurred. As of December 31, 2024, we had no material off-balance sheet liabilities and were not required to make any material cash distributions to our unconsolidated subsidiaries.2025.

We have entered into credit default swaps (CDSs) with third-party financial institutions that hadhave 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 millionmillion, related to borrowings provided by the financial institutions to one of our primary customers in Mexico, of which a portionportions of the proceeds were then utilized by this customer to pay certain of our outstanding receivables. Approximately $186$455 million of the outstanding amount of the CDSs reduces on a monthly basis over its remaining 14-month9-month term and $203$75 million reduces on a monthly basis over its remaining 18-month6-month term. The remaining $350$62 million outstanding amount isreduces expected to increase to as much as $805 million in the first quarter of 2025 and will reducemonthly over its remaining 19-month2-month term beginning February 2025.term.

Credit ratings. Our credit ratings with Standard & Poor’s (S&P) remainedremain BBB+ for our long-term debt and A-2 for our short-term debt, with a positivestable outlook. Our credit ratings with Moody's Investors Service remain A3 for our long-term debt and P-2 for our short-term debt, with a stable outlook.

Receivables from our primary customer in Mexico accounted for approximately 8%7% of our total receivables as of December 31, 2024.2025. While we have experienced payment delays from our primary customer in Mexico, thesethe amounts are not in dispute and we have not historically had, and we do not expect to have,expect, any material write-offs due to collectability of receivables from this customer.

We operate in more than 70 countries throughout the world to provide a comprehensive range of services and products to the energy industry. Our revenue is generated from the sale of services and products to major, national, and independent oil and natural gas companies worldwide. The industry we serve is highly competitive with many substantial competitors in each segment of our business. In 2025, 2024, 2023, and 2022,2023, based on the location of the services provided and products sold, 39%, 40%, 44%, and 45%,44%, respectively, of our consolidated revenue was from the United States. No other country accounted for more than 10% of our revenue.revenue for those periods.

The statements in this section describe the known material risks to our business and should be considered carefully. As of MarchJune 31,30, 2026, there have been no material changes in risk factors previously disclosed in our Annual Report on Form 10- K10-K for the fiscal year ended December 31, 2025.

•Completion and Production delivers cementing, stimulation, specialty chemicals, intervention, pressure control, artificial lift, and completion products and services. The segment consists of Artificial Lift, Cementing, Completion Tools, Multi-Chem, Pipeline and Process Services, Production Enhancement, and Production Solutions. During the thirdsecond quarter of 2024,2026, we madecompleted a strategic decision to market forthe sale of a portion of our chemical business. We expect the sale to be completed in the second quarter of 2026.

- International: Consistently increase international growth in our directional drilling, unconventionals, well intervention, and artificial lift businesses. Develop ourbehind-the-meter strategicpower generation, independently or through collaboration with VoltaGrid around behind-the-meter power generation.Voltagrid.

The following charts depict the revenue split between our two operating segments and our four primary geographic regions for the three months ended MarchJune 31,30, 2026.

The following graph illustrates our revenue and operating margins for each operating segment for the firstsecond quarter of 2025 and 2026.

During the firstsecond quarter of 2026, we generated total company revenue of $5.4$5.7 billion, relativelya flat4% increase as compared to the firstsecond quarter of 2025. We reported operating income of $679$778 million, including a pre-tax credit on impairments and other credits of $95 million, in the firstsecond quarter of 2026, as compared to operating income of $431$727 million in the firstsecond quarter of 2025, including impairments and other charges of $356 million.2025.

Our Completion and Production segment revenue decreasedwas 3%relatively flat in the firstsecond quarter of 2026,2026 as compared to the firstsecond quarter of 2025. TheseRevenue resultsimprovements were primarily driven by lowerincreased stimulation activity in North America, and lowerimproved completionartificial toollift sales and decreased pressure pumping servicesactivity in theLatin Middle East. Partially offsetting these decreases wereAmerica, higher completion tool sales in the Western Hemisphere,Europe/Africa, and improved pressure pumping services in Africa.

Our Drilling and Evaluation segment revenue increased 4%7% in the firstsecond quarter of 2026 as compared to the firstsecond quarter of 2025. These results were primarily driven by higher project management activity in Latin America and increased drilling-related services in North America, Europe/Africa, and theAsia, Westernand Hemisphere. Partially offsetting these increases were lowerhigher activity across multiple product service lines in theLatin MiddleAmerica. East,Partially offsetting these increases were lower drilling-related services and decreased wireline activity in the EasternMiddle Hemisphere, and decreased fluid services in the Gulf of America.East.

Internationally, revenue increased 3%6% in the firstsecond quarter of 2026 as compared to the firstsecond quarter of 2025, largely driven by improved activitystimulation across multiple product service lines in Ecuador, the Caribbean,services and Brazil, higher stimulationproject management activity in MexicoLatin America, increased well construction activity and Argentina,higher increasedproject drilling-relatedmanagement servicesactivity in Africa, and higher completion tool sales in Norway,Europe/Africa. andPartially improved pressure pumping services in Angola. Offsettingoffsetting these increases werewas lower activity across multiple product service lines in the Middle East anddue decreasedto drilling-relatedconflict-related services in Namibia.disruptions.

As of MarchJune 31,30, 2026, we had $2.0 billion of cash and equivalents, compared to $2.2 billion of cash and equivalents at December 31, 2025.

Significant sources and uses of cash during the first threesix months of 2026

•Cash flows from operating activities were $273$1.1 million.billion. Working capital, which consists of receivables, inventories, and accounts payable, collectively had a negative impact of $252$187 million.

•We repurchased 2.87.9 million shares of our common stock for $100$308 million.million, which includes the excise tax payment for prior year share repurchases.

While we maintain focus on liquidity and debt reduction, we are also focused on providing cash returns to our shareholders. Our quarterly dividend rate is $0.17 per common share, or approximately $142$143 million. In 2023, our Board approved a capital return framework with a goal of returning at least 50% of our annual free cash flow to shareholders through dividends and share repurchasesrepurchases, and we expect our returns to shareholders will be in line with our capital return framework for 2026.

We may utilize share repurchases as part of our capital return framework. Our Board of Directors has authorized a program to repurchase our common stock from time to time. We repurchased 2.85 million shares of common stock during the firstsecond quarter of 2026 under this program. Approximately $1.9$1.7 billion remained authorized for repurchases as of MarchJune 31,30, 2026 and may be used for open market and other share purchases.

During 2023, we began our migration to SAP S4 which we expect to complete in the fourth quarter of 2026. DuringFor the threesix months ended MarchJune 31,30, 2026, we incurred $42$88 million in expense on our SAP S4 migration and expect the estimated cost to be approximately $45 million perin the third quarter goingof forward.2026. We believe the new system will provide important efficiency benefits, cost savings, enhanced visibility to our operations, and advanced analytics that will benefit us and our customers.

Financial condition in current market. As of MarchJune 31,30, 2026, we had $2.0 billion of cash and equivalents and $3.5 billion of available committed bank credit under our revolving credit facility, with an expiration date of August 16, 2030. We believe we have a manageable debt maturity profile, with approximately $90 million due February 2027. Furthermore, we have no financial covenants or material adverse change provisions in our bank agreements, and our debt maturities extend over a long period of time. We believe our cash on hand, cash flows generated from operations, and our available credit facility will provide sufficient liquidity to address expected global cash needs, including capital expenditures, working capital investments, shareholder returns, if any, debt repurchases, if any, and scheduled interest and principal payments, in the short term and long term.

Guarantee agreements. In the normal course of business, we have agreements with financial institutions under which approximately $3.2$3.3 billion of letters of credit, bank guarantees, or surety bonds were outstanding as of MarchJune 31,30, 2026. Some of the outstanding letters of credit have triggering events that would entitle a bank to require cash collateralization; however, none of these triggering events have occurred. As of MarchJune 31,30, 2026, we had no material off-balance sheet liabilities and were not required to make any material cash distributions to our unconsolidated subsidiaries.

We have entered into credit default swaps (CDSs) with third-party financial institutions that have an aggregate notional amount outstanding as of MarchJune 31,30, 2026 of $374$217 million, compared to an aggregate notional amount outstanding as of December 31, 2025 of $592 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. ApproximatelyThe $331aggregate millionnotional of theamount outstanding amount of the CDSs reduces monthly over its remaining 6-month term and $43 million reduces monthly over its remaining 3-month term.

Receivables from our primary customer in Mexico accounted for approximately 7% of our total receivables as of both MarchJune 31,30, 2026 and December 31, 2025. While we have experienced payment delays from our primary customer in Mexico, the amounts are not in dispute and we have not historically had, and we do not expect, any material write-offs due to collectability of receivables from this customer.

We operate in more than 70 countries throughout the world toand provide a comprehensivebroad range of services and products to the energy industry. Our revenue is generated from the sale of services and products to major, national, and independent oil and natural gas companies worldwide. The industry we serve is highly competitivecompetitive, with many substantialnumerous competitors inacross each segment of our business.business segments. Based on the location of the services provided and products sold, 37% and 39% of our consolidated revenue was fromattributable to the United States forduring the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. No other country accounted for more than 10% of our revenue for those periods.

WeWhile expectcurrent broader marketindustry fundamentals remain generally supportive of customer activity, the outlook for our business remains subject to remainuncertainty. supportive, although customerCustomer spending and activity levels may be influencedaffected by volatility in oil and natural gas prices, changes in global supply‑ and‑ demand dynamics,balances, inflationary cost pressures, andsupply chain constraints, the availability of capital, geopolitical developments.developments, Thesetrade factors, including regional conflicts,policies, sanctions, and regulatory oractions. tradeThese changes,factors may affectimpact projectthe timing, supply chains,timing and accessscope toof certaincustomer markets.projects and demand for our services and products.

Three Months Ended MarchJune 31,30, 2026 Compared with Three Months Ended MarchJune 31,30, 2025

DrillingCompletion and EvaluationProduction revenue in the firstsecond quarter of 2026 was $2.4$3.2 billion, an increase of $89 million, or 4%,relatively flat, when compared to the firstsecond quarter of 2025. Operating income in the firstsecond quarter of 2026 was $351$474 million, flata decrease of $39 million, or 8%, when compared to the firstsecond quarter of 2025. TheseRevenue resultsimprovements were primarily driven by higherincreased projectstimulation managementactivity and improved artificial lift activity in Latin AmericaAmerica, higher completion tool sales in Europe/Africa, and increased drilling-relatedpressure pumping services in EuropeAfrica. and the Western Hemisphere. Partially offsettingOffsetting these increases were lower activity across multiple product service lines in the Middle East, lower wireline activity in the Eastern Hemisphere, and decreased fluidstimulation activity and lower specialty chemicals activity resulting from the completed sale of a portion of our chemical business in North America. Operating income was further adversely impacted by activity mix and reduced pricing for stimulation services in theUS GulfLand ofand Latin America.

In the firstsecond quarter of 2026,quarter, the geopolitical conflict in the Middle East affected both of our operating segments, with an impact of $0.02 to $0.03 of diluted net income per share.segments.

LatinNorth America revenue in the firstsecond quarter of 2026 was $1.1$2.3 billion, arelatively 22%flat, increaseas compared to the firstsecond quarter of 2025. ThisThese increaseresults waswere primarily driven by higherimproved well construction activity across multiple product service lines in Ecuador, the Caribbean, and Brazil, and improvedincreased stimulation activity in MexicoUS and Argentina.Land. Partially offsetting these increases were lower project managementstimulation activity in the Gulf of America and decreasedCanada, drilling-relatedand a decrease in well intervention services and lower specialty chemicals activity resulting from the completed sale of a portion of our chemical business in Mexico.US Land.

MiddleLatin East/AsiaAmerica revenue in the firstsecond quarter of 2026 was $1.3$1.1 billion, a 13%15% decreaseincrease compared to the firstsecond quarter of 2025. ThisThese decreaseresults waswere primarily driven by conflict-relatedimproved disruptionsproject thatmanagement resultedactivity and well construction activity in lowerEcuador, improved stimulation activity in Argentina, higher completion tool sales and increased stimulation activity in Mexico, increased activity across multiple product service lines in Saudithe ArabiaCaribbean and decreasedBrazil, drilling-relatedand higher testing services inand Qatar.wireline activity across the region. Partially offsetting these decreasesincreases were higherlower well construction services and decreased project management activity in Mexico, and lower completion tool sales and improved fluid services in Asia.Brazil.