# Halliburton Co: Form 10-Q for the period ended Sep 30, 2025

- Company: [Halliburton Co](/companies/hal.md) (CIK 45012)
- Form: 10-Q
- Filed: 2025-10-24
- Accepted by EDGAR: Oct 24, 2025, 12:13 ET
- Period: 2025-09-30
- Accession: 0000045012-25-000069
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/45012/000004501225000069/hal-20250930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/45012/000004501225000069/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-07-01 to 2025-09-30 | $5.60bn | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Revenue | 9 months, 2025-01-01 to 2025-09-30 | $16.53bn | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Operating income | 3 months, 2025-07-01 to 2025-09-30 | $356.0m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2025-01-01 to 2025-09-30 | $1.51bn | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-07-01 to 2025-09-30 | $199.0m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2025-01-01 to 2025-09-30 | $433.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-07-01 to 2025-09-30 | $18.0m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2025-01-01 to 2025-09-30 | $694.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-07-01 to 2025-09-30 | $0.02 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2025-01-01 to 2025-09-30 | $0.81 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-07-01 to 2025-09-30 | $0.02 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2025-01-01 to 2025-09-30 | $0.81 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-07-01 to 2025-09-30 | 850,000,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2025-01-01 to 2025-09-30 | 858,000,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2025-01-01 to 2025-09-30 | $1.76bn | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-07-01 to 2025-09-30 | $261.0m | us-gaap:PaymentsToAcquireProductiveAssets |
| Capital expenditure | 9 months, 2025-01-01 to 2025-09-30 | $917.0m | us-gaap:PaymentsToAcquireProductiveAssets |
| Dividends paid | 9 months, 2025-01-01 to 2025-09-30 | $436.0m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 9 months, 2025-01-01 to 2025-09-30 | $757.0m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-09-30 | $2.03bn | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-09-30 | $11.64bn | us-gaap:AssetsCurrent |
| Total assets | at 2025-09-30 | $25.16bn | us-gaap:Assets |
| Current liabilities | at 2025-09-30 | $5.95bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-09-30 | $14.92bn | us-gaap:Liabilities |
| Long-term debt | at 2025-09-30 | $7.16bn | us-gaap:LongTermDebt |
| Current portion of debt | at 2025-09-30 | $382.0m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2025-09-30 | $10.20bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 44,364 characters.

Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in

conjunction with the condensed consolidated financial statements included in “Item 1. Financial Statements” contained herein.

### EXECUTIVE OVERVIEW

### Organization

We are one of the world’s largest providers of products and services to the energy industry. 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.

Activity levels within our operations are significantly impacted by spending on upstream exploration, development, and

production programs by major, national, and independent oil and natural gas companies. We report our results under two

segments, the Completion and Production segment and the Drilling and Evaluation segment.

- 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

third quarter of 2024, we made a strategic decision to market for sale a portion of our chemical business.

- Drilling and Evaluation provides field and reservoir modeling, drilling, fluids, evaluation, and precise wellbore

placement solutions that enable customers to model, measure, drill, and optimize their well construction activities.

The segment consists of Baroid, Drill Bits and Services, Halliburton Project Management, Landmark Software and

Services, Sperry Drilling, Testing and Subsea, and Wireline and Perforating.

The business operations of our segments are organized around four primary geographic regions: North America, Latin

America, Europe/Africa/CIS, and Middle East/Asia. We have manufacturing operations in various locations, the most

significant of which are in the United States, Malaysia, Singapore, and the United Kingdom. With approximately 47,000

employees, we operate in more than 70 countries around the world, and our corporate headquarters is in Houston, Texas.

Our value proposition is to collaborate and engineer solutions to maximize asset value for our customers. We work to

achieve strong cash flows and returns for our shareholders by delivering technology and services that improve efficiency,

increase recovery, and maximize production for our customers. Our strategic priorities are to:

- *International*: Increase international growth in our directional drilling, unconventionals, well intervention, and

artificial lift businesses.

- *North America*: Maximize value by, among other things, increasing the utilization by our customers of our Zeus

electric fracturing platform and our iCruise rotary steerable systems, and incorporating automation technologies in

certain of our processes.

- *Digital*: Continue to drive differentiation and efficiencies through the deployment of digital and automation

technologies, both internally and for our customers.

- *Capital efficiency*: Maintain our capital expenditures at approximately 6% of revenue while utilizing technology and

targeted process improvements to enhance the effectiveness and efficiency of our utilization of capital.

- *Shareholder returns*: Return over 50% of annual free cash flow to shareholders through dividends and share

repurchases.

- *Advance a Sustainable Energy Future*: Continue to develop technologies and solutions to help lower our customers’

and our emissions intensity, participate in carbon capture, utilization, and storage, and geothermal projects globally,

and support Halliburton Labs early-stage company participants.

HAL Q3 2025 FORM 10-Q \| 17

The following charts depict the revenue split between our two operating segments and our four primary geographic

regions for the three months ended September 30, 2025.

### Market conditions

Oil prices declined further in the third quarter of 2025 compared to the second quarter of 2025, as ongoing supply

additions from OPEC+ and non-OPEC producers weighed on the markets. While geopolitical unrest in the Middle East and the

Russia-Ukraine conflict remain persistent sources of volatility, the more pronounced influence this quarter came from weaker

global economic activity and cautious consumer spending, which tempered expectation for near-term demand.

In the United States, the active rig count declined modestly in the third quarter of 2025 compared to the second

quarter of 2025, with activity in oil basins continuing to soften while gas basins remained relatively stable. However, despite

the rig count decline, United States total liquids production, as reported by the Energy Information Administration, reached an

all-time high in the third quarter of 2025. Internationally, rig count increased modestly in the third quarter of 2025, as declines

in Saudi Arabia were offset by rig additions elsewhere in the Middle East.

Since the end of the third quarter of 2025, the macro environment for oil and natural gas has remained volatile. Trade

tensions and tariffs continue to negatively impact the demand outlook, while the pace of supply growth has outstripped

expectations.

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. Also, while we have been impacted by

inflationary cost increases, 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.

HAL Q3 2025 FORM 10-Q \| 18

### Financial results

The following graph illustrates our revenue and operating margins for each operating segment for the third quarter of

2024 and 2025.

During the third quarter of 2025, we generated total company revenue of $5.6 billion, a 2% decrease as compared to

the third quarter of 2024. We reported operating income of $356 million, including impairments and other charges of $392

million, in the third quarter of 2025, as compared to operating income of $871 million in the third quarter of 2024, including

impairments and other charges of $116 million. The tariff impact on operating income for the third quarter of 2025 was

approximately $31 million and resulted primarily from tariffs imposed by the United States.

Our Completion and Production segment revenue decreased 2% in the third quarter of 2025 as compared to the third

quarter of 2024. These results were largely driven by lower pressure pumping services in North America and reduced

completion tool sales in Latin America and the Middle East. Partially offsetting these decreases were increased stimulation

activity in Latin America and higher completion tool sales in Norway. Operating income was further adversely impacted by

lower activity and reduced pricing for stimulation activity in US Land.

Our Drilling and Evaluation segment revenue was relatively flat in the third quarter of 2025 as compared to the third

quarter of 2024. Decreased drilling-related services in Latin America and lower activity across multiple product service lines in

Saudi Arabia were offset by increased drilling-related services in Europe. Operating income was further adversely impacted by

activity mix and mobilization costs in drilling-related services.

Our North America revenue was relatively flat in the third quarter of 2025 as compared to the third quarter of 2024.

Lower pressure pumping services, decreased fluid services, and reduced artificial lift activity in US Land were offset by higher

completion tool sales and increased fluid services in the Gulf of America and higher drilling activity in US Land.

Internationally, revenue decreased 2% in the third quarter of 2025 as compared to the third quarter of 2024, largely

driven by lower activity across multiple product service lines in Mexico and Saudi Arabia. Partially offsetting these decreases

were higher activity across multiple product service lines in Norway, improved fluid services in the Middle East and Argentina,

and higher pipeline services in Middle East/Asia.

Our operating performance and liquidity are described in more detail in “Liquidity and Capital Resources” and

“Business Environment and Results of Operations.”

### Sustainability and Energy Mix Transition

In 2021, we announced our target to achieve a 40% reduction in our Scope 1 and 2 emissions by 2035 from the 2018

baseline. We continue to execute our priorities to drive down our emissions intensity. At the same time, we support our

customers in their emissions reduction efforts by continuously developing and deploying goods and services that are accretive

to their goals as well as ours. As the energy mix transition unfolds, we seek to apply our expertise and resources in growth

sectors adjacent to our traditional oilfield services space, including carbon capture, utilization, and storage, and geothermal.

Finally, we will continue to focus on accelerating the success of clean tech start-ups via Halliburton Labs, which also allows us

to participate in the energy mix transition at relatively low risk by investing our expertise, resources, and team without a

significant outlay of capital while we learn where we can strategically engage in new markets. As of September 30, 2025,

Halliburton Labs had 40 participating companies and alumni.

HAL Q3 2025 FORM 10-Q \| 19

### LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2025, we had $2.0 billion of cash and equivalents, compared to $2.6 billion of cash and

equivalents at December 31, 2024.

### Significant sources and uses of cash during the first nine months of 2025

#### Sources of cash:

- Cash flows from operating activities were $1.8 billion. Working capital, which consists of receivables, inventories,

and accounts payable, had a negative impact of $111 million.

- We received $120 million on the sale of an equity investment.
- We received $228 million on the sale of investment securities.

#### Uses of cash:

- Capital expenditures were $917 million.
- We repurchased 32.9 million shares of our common stock for $757 million, which includes excise tax payment due

on 2024 share repurchases.

- We paid $436 million of dividends to our shareholders.
- We paid $343 million related to a purchase of an equity investment.
- We paid $175 million to acquire businesses.
- We paid $128 million on the purchase of investment securities.

### Future sources and uses of cash

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 2025 to be approximately 6% of

revenue. However, we intend to reduce our capital expenditures in 2026 by 30%, to approximately $1.0 billion, in response to

the market conditions we expect to encounter. Despite this reduction, we believe this level of spending will enable continued

investment in our core strategic technologies and businesses, including the international expansion of our artificial lift, well

intervention, unconventionals, and drilling technologies.

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 $144 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 repurchases and we expect our returns to shareholders will be in line with our capital return framework for

2025.

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 11.3 million shares of common stock during the

third quarter of 2025 under this program. Approximately $2.3 billion remained authorized for repurchases as of September 30,

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

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

the nine months ended September 30, 2025, we incurred $112 million in expense on our SAP S4 migration. Due to the

extension of the project, we currently expect the estimated total cost will be approximately $40 million per quarter going

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

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

### Other factors affecting liquidity

*Financial condition in current market.* As of September 30, 2025, we had $2.0 billion of cash and equivalents and $3.5

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

expiration date of August 16, 2030. We believe we have a manageable debt maturity profile, with approximately $472 million

coming due beginning in 2025 through 2027, with the majority due in 2025. Furthermore, we have no financial covenants or

material adverse change provisions in our bank agreements, and our debt maturities extend over a long period of time. We

believe our cash on hand, cash flows generated from operations, and our available credit facility will provide sufficient liquidity

to address the challenges and opportunities of the current market and our expected global cash needs, including capital

expenditures, working capital investments, shareholder returns, if any, debt repurchases, if any, and scheduled interest and

principal payments.

HAL Q3 2025 FORM 10-Q \| 20

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

approximately $2.9 billion of letters of credit, bank guarantees, or surety bonds were outstanding as of September 30, 2025.

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

however, none of these triggering events have occurred. As of September 30, 2025, we had no material off-balance sheet

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

We have entered into CDSs with third-party financial institutions that have an aggregate notional amount outstanding

as of September 30, 2025 of $750 million, compared to an aggregate notional amount outstanding as of December 31, 2024 of

$739 million, related to borrowings provided by the financial institutions to one of our primary customers in Mexico, of which,

portions of the proceeds were utilized by this customer to pay certain of our outstanding receivables. Approximately $550

million of the outstanding amount of the CDSs reduces monthly over its remaining 12-month term and $107 million reduces

monthly over its remaining 9-month term. The remaining $93 million outstanding amount reduces monthly over its remaining

5-month term.

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

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

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

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

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

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

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

Receivables from our primary customer in Mexico accounted for approximately 11% of our total receivables as of

September 30, 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.

HAL Q3 2025 FORM 10-Q \| 21

Table of Contents Part I. Item 2 \| Business Environment and Results of Operations

### BUSINESS ENVIRONMENT AND RESULTS OF OPERATIONS

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. During the first nine months of 2025, based on the location of the services provided and products sold,

39% of our consolidated revenue was from the United States, compared to 41% of our consolidated revenue from the United

States in the first nine months of 2024. No other country accounted for more than 10% of our revenue for those periods.

Activity within our business segments is significantly impacted by spending on upstream exploration, development, and

production programs by our customers. Also impacting our activity is the status of the global economy, which impacts oil and

natural gas consumption.

Some of the more significant determinants of current and future spending levels of our customers are oil and natural

gas prices, our customers’ expectations about future prices, global oil supply and demand, the impact on natural gas supply and

demand in North America of electrification and data centers power requirements, completions intensity, the world economy, the

availability of capital, government regulation, and global stability, which together drive worldwide drilling and completions

activity. We expect that many of our customers in North America will continue their strategy of operating within their cash

flows and generating returns rather than prioritizing production growth. Lower oil and natural gas prices usually translate into

lower exploration and production budgets and lower rig count, while the opposite is usually true for higher oil and natural gas

prices. Our financial performance is therefore significantly affected by oil and natural gas prices and worldwide rig activity,

which are summarized in the tables below.

The table below shows the average prices for West Texas Intermediate (WTI) crude oil, United Kingdom Brent crude

oil, and Henry Hub natural gas.

|  | Three Months Ended September 30, 2025 | 2024 | Year Ended December 31, 2024 |
| --- | ---: | ---: | ---: |
| Oil Price - WTI (1) | $65.74 | $76.24 | $76.55 |
| Oil Price - Brent (1) | 68.97 | 79.84 | 80.53 |
| Natural Gas Price - Henry Hub (2) | 3.03 | 2.11 | 2.19 |

(1) Oil prices measured in dollars per barrel.

(2) Natural gas price measured in dollars per million British thermal units (Btu), or MMBtu.

The historical average rig counts based on the weekly Baker Hughes rig count data were as follows:

|  | Three Months Ended September 30, 2025 | 2024 | Nine Months Ended September 30, 2025 | 2024 | Year Ended December 31, 2024 |
| --- | ---: | ---: | ---: | ---: | ---: |
| US Land | 526 | 566 | 552 | 584 | 580 |
| US Offshore | 14 | 20 | 14 | 20 | 19 |
| Canada | 178 | 210 | 174 | 184 | 187 |
| North America | 718 | 796 | 740 | 788 | 786 |
| International (1) | 1,080 | 1,150 | 1,086 | 1,171 | 1,162 |
| Worldwide Total | 1,798 | 1,946 | 1,826 | 1,959 | 1,948 |

(1) Historical average rig counts shown are based on data provided by Baker Hughes, which included retroactive changes to international rig counts previously reported.

HAL Q3 2025 FORM 10-Q \| 22

Table of Contents Part I. Item 2 \| Business Environment and Results of Operations

### Business outlook

Geopolitical tensions in the Middle East and the Russia-Ukraine conflict continue to cause high volatility in oil

markets. Additionally, the unwinding of OPEC+ supply cuts and tempered demand growth expectations due to trade tensions

contributed to decreases in the average WTI and United Kingdom Brent crude oil prices. As of October 21, 2025, WTI crude oil

prices had decreased by approximately 12% since the end of the second quarter of 2025. In response to these factors, we have

seen customers reduce their expected spend on oil and gas exploration and production activities and engage in other cost-cutting

activities, which has caused us to lower our expectations of activity over the short to medium term.

We expect our full year 2025 international revenue to decrease year over year primarily driven by further activity

reductions in Saudi Arabia and Mexico. We continue to expect revenue growth in Brazil and Norway, as well as offshore

frontier basins, to partially offset these reductions. We also expect North America full year 2025 revenue to decline year over

year driven by lower drilling and completion activity and pricing pressure. While increases in gas activity are likely to absorb

some service capacity in North America this year, it is unlikely to offset the decreases in oil-directed activity. To address the

softness in the market, in the third quarter of 2025, we reduced our variable and fixed cash costs to size our business

accordingly, which we expect will save us approximately $100 million per quarter going forward. Furthermore, we will

continue to idle, relocate, or retire equipment that does not meet our return thresholds and will remain focused on generating

free cash flow and returns, and capital discipline.

Despite the softening market described above, we believe the combination of long-cycle international investment and

emerging structural demand for natural gas driven by data centers, electrification, and power reliability, positions our business

for durable growth over the medium and long term. Additionally, we believe increased investment in existing and new sources

of oil and natural gas production is needed to address future demand. This will necessitate production from conventional and

unconventional, deep-water and shallow-water, and short and long-cycle projects. We expect that increased oil and natural gas

production requirements will in turn create demand for our products and services.

HAL Q3 2025 FORM 10-Q \| 23

Table of Contents Part I. Item 2 \| Results of Operations in 2025 compared to 2024 (QTD)

### RESULTS OF OPERATIONS IN 2025 COMPARED TO 2024

### Three Months Ended September 30, 2025 Compared with Three Months Ended September 30, 2024

| Millions of dollars Revenue: By operating segment: | Three Months Ended September 30, 2025 | 2024 | Favorable (Unfavorable) | Percentage Change |
| --- | ---: | ---: | ---: | ---: |
| Completion and Production | $3,223 | $3,299 | $(76) | (2)% |
| Drilling and Evaluation | 2,377 | 2,398 | (21) | (1) |
| Total revenue | $5,600 | $5,697 | $(97) | (2)% |
| By geographic region: |  |  |  |  |
| North America | $2,364 | $2,386 | $(22) | (1)% |
| Latin America | 996 | 1,053 | (57) | (5) |
| Europe/Africa/CIS | 828 | 722 | 106 | 15 |
| Middle East/Asia | 1,412 | 1,536 | (124) | (8) |
| Total revenue | $5,600 | $5,697 | $(97) | (2)% |
| **Operating income:** |  |  |  |  |
| By operating segment: |  |  |  |  |
| Completion and Production | $514 | $669 | $(155) | (23)% |
| Drilling and Evaluation | 348 | 406 | (58) | (14) |
| Total operations | 862 | 1,075 | (213) | (20) |
| Corporate and other | (64) | (60) | (4) | (7) |
| SAP S4 upgrade expense | (50) | (28) | (22) | (79) |
| Impairments and other charges | (392) | (116) | (276) | n/m |
| Total operating income | $356 | $871 | $(515) | (59)% |
| n/m = not meaningful |  |  |  |  |

### Operating Segments

#### Completion and Production

Completion and Production revenue in the third quarter of 2025 was $3.2 billion, a decrease of $76 million, or 2%,

when compared to the third quarter of 2024. Operating income in the third quarter of 2025 was $514 million, a decrease of $155

million, or 23%, when compared to the third quarter of 2024. These results were largely driven by lower pressure pumping

services in North America and reduced completion tool sales in Latin America and the Middle East. Partially offsetting these

decreases were increased stimulation activity in Latin America and higher completion tool sales in Norway. Operating income

was further adversely impacted by lower activity and reduced pricing for stimulation activity in US Land.

#### Drilling and Evaluation

Drilling and Evaluation revenue in the third quarter of 2025 was $2.4 billion, a decrease of $21 million, or relatively

flat, when compared to the third quarter of 2024. Operating income in the third quarter of 2025 was $348 million, a decrease of

$58 million, or 14%, when compared to the third quarter of 2024. Decreased drilling-related services in Latin America and

lower activity across multiple product service lines in Saudi Arabia were offset by increased drilling-related services in Europe.

Operating income was further adversely impacted by activity mix and mobilization costs in drilling-related services.

### Geographic Regions

#### North America

North America revenue in the third quarter of 2025 was $2.4 billion, relatively flat, as compared to the third quarter of

2024\. Lower pressure pumping services, decreased fluid services, and reduced artificial lift activity in US Land were offset by

higher completion tool sales and increased fluid services in the Gulf of America and higher drilling activity in US Land.

HAL Q3 2025 FORM 10-Q \| 24

Table of Contents Part I. Item 2 \| Results of Operations in 2025 Compared to 2024 (QTD)

#### Latin America

Latin America revenue in the third quarter of 2025 was $996 million, a 5% decrease compared to the third quarter of

2024\. This decrease was largely due to decreased activity across multiple product service lines in Mexico and lower completion

tool sales in Brazil. Partially offsetting these decreases were higher stimulation and improved drilling-related services in

Argentina and increased activity across multiple product service lines in Brazil.

#### Europe/Africa/CIS

Europe/Africa/CIS revenue in the third quarter of 2025 was $828 million, a 15% increase compared to the third quarter

of 2024. This increase was primarily driven by higher completion tool sales and improved drilling-related services in the North

Sea along with increased well construction activity in Namibia. Partially offsetting these increases was lower activity across

multiple product service lines in Senegal and Italy.

#### Middle East/Asia

Middle East/Asia revenue in the third quarter of 2025 was $1.4 billion, an 8% decrease compared to the third quarter

of 2024. This decrease was largely due to decreased activity across multiple product service lines in Saudi Arabia and Malaysia.

Partially offsetting these decreases were increased stimulation activity in Asia, improved fluid services in Saudi Arabia and

higher artificial lift activity in Kuwait.

### Other Operating Items

*SAP S4 Upgrade Expense.* As previously mentioned, during 2023, we began our migration to SAP S4, which we

expect to complete in the fourth quarter of 2026. During the third quarter of 2025, we recognized $50 million of expense on our

SAP S4 migration. During the third quarter of 2024, we recognized $28 million of expense on our SAP S4 migration.

*Impairments and Other Charges.* During the three months ended September 30, 2025, there were pre-tax charges of

$392 million recorded in impairments and other charges due to severance costs, fixed and other assets write-offs, an impairment

of assets held for sale, a reserve release related to a cybersecurity incident, a gain on an equity investment and other items.

During the three months ended September 30, 2024, we took a pre-tax charge of $116 million primarily related to severance

costs, an impairment of assets held for sale, expenses related to a cybersecurity incident, a gain on a fair value adjustment of an

equity investment, and other items. See Notes to Condensed Consolidated Financial Statements, Note 2. Impairments and Other

Charges for further discussion of these charges.

### Nonoperating Items

*Argentina Impairment on Investment.* In years 2022, 2023 and 2024, we executed a series of loans to a third party and

received notes that are to be repaid in U.S. dollars upon maturity or earlier if certain conditions are met. During the three

months ended September 30, 2025, we recorded a loss of $23 million resulting from the deterioration in the outlook of the

debtor’s liquidity and financial projections. This is included in “Other, net” on the consolidated statements of operations.

*Income Tax Provision.* During the three months ended September 30, 2025, we recorded a total income tax provision

of $199 million on a pre-tax income of $219 million, resulting in an effective tax rate of 90.9% for the quarter. The effective tax

rate for the quarter was primarily impacted by the additional $125 million valuation allowance recorded against our deferred tax

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

pre-tax $392 million of impairments and other charges, and the $23 million impairment of an investment in Argentina. During

the three months ended September 30, 2024, we recorded a total income tax provision of $154 million on a pre-tax income of

$734 million, resulting in an effective tax rate of 21.0% for the quarter. We recorded a tax benefit of $41 million during the

three months ended September 30, 2024, due to a partial release of a valuation allowance on our deferred tax assets based on

market conditions.

*Pillar Two.* The Organization for Economic Co-operation and Development enacted model rules for a new global

minimum tax framework, also known as Pillar Two, and certain governments globally have enacted, or are in the process of

enacting, legislation considering these model rules. These rules did not have a material impact on our taxes for the three months

ended September 30, 2025 and 2024.

HAL Q3 2025 FORM 10-Q \| 25

Table of Contents Part I. Item 2 \| Results of Operations in 2025 Compared to 2024 (QTD)

*Internal Revenue Service Notice of Proposed Adjustment.* We are subject to taxes in the United States and in numerous

jurisdictions where we operate or where our subsidiaries are organized. Our tax returns are routinely subject to examination by

the taxing authorities in the jurisdictions where we file tax returns. In most cases we are no longer subject to examination by tax

authorities for years before 2013. The only significant operating jurisdiction that has tax filings under review or subject to

examination by the tax authorities is the United States. Our United States federal income tax filings for tax years 2016 through

2023, including carry back of 2016 net operating losses to 2014, are currently under review or remain open for review by the

IRS.

On September 28, 2023, we received a NOPA from the IRS covering our 2016 U.S. tax return. The NOPA proposed

an adjustment to reclassify approximately 95% of the $3.5 billion termination fee paid to Baker Hughes in 2016 from an

ordinary expense deduction to a capital loss. The termination fee was paid to Baker Hughes under the merger agreement after

antitrust regulators in multiple jurisdictions failed to approve our proposed merger. It is common commercial practice to include

a termination fee in a merger agreement to compensate the target for damages incurred when the acquisition does not go

forward. The IRS’s long-understood position at the time of the payment had been to treat such payments as an ordinary and

necessary business expense. We strongly disagree with the proposed adjustment on both a factual and legal basis, and we plan

to vigorously contest it.

We expect that resolving this dispute will take substantial time. In 2023, we initiated the IRS administrative appeals

process, which is ongoing. Failing a resolution through that process, the matter would ultimately be resolved by the United

States federal courts.

We regularly assess the likelihood of adverse outcomes resulting from tax examinations to determine the adequacy of

our tax reserves, and we believe our income tax reserves are appropriately provided for all open tax years. We cannot assure

you that the matter will be determined in our favor or against us, and if the matter is ultimately determined unfavorably to us, it

could have a material adverse impact on our results of operations and cash flows. Based on tax attributes currently available, we

estimate that, should the IRS's position prevail through its appellate process and subsequent litigation, the proposed adjustment

could result in cash taxes due of approximately $640 million (plus interest thereon in the case of amounts due for previous tax

years). Our estimates are calculated under current tax law and on the bases of our assumptions regarding taxable income and

loss and other tax attributes over the relevant period, which law could change and which assumptions could and likely will

differ materially from actual results. In any event, no payment of any additional tax is currently required, nor do we anticipate

that the proposed adjustment would materially and adversely impact our ability to meet our expected uses of cash, including

future capital expenditures, working capital investments, and scheduled debt repayments, or our ability to return cash to

shareholders, even if a final determination of the matter is reached that is adverse to us.

HAL Q3 2025 FORM 10-Q \| 26

Table of Contents Part I. Item 2 \| Results of Operations in 2025 Compared to 2024 (YTD)

### Nine Months Ended September 30, 2025 Compared with Nine Months Ended September 30, 2024

| Millions of dollars Revenue: By operating segment: | Nine Months Ended September 30, 2025 | 2024 | Favorable (Unfavorable) | Percentage Change |
| --- | ---: | ---: | ---: | ---: |
| Completion and Production | $9,514 | $10,073 | $(559) | (6)% |
| Drilling and Evaluation | 7,013 | 7,261 | (248) | (3) |
| Total revenue | $16,527 | $17,334 | $(807) | (5)% |
| By geographic region: |  |  |  |  |
| North America | $6,859 | $7,413 | $(554) | (7)% |
| Latin America | 2,869 | 3,258 | (389) | (12) |
| Europe/Africa/CIS | 2,423 | 2,208 | 215 | 10 |
| Middle East/Asia | 4,376 | 4,455 | (79) | (2) |
| Total revenue | $16,527 | $17,334 | $(807) | (5)% |
| **Operating income:** |  |  |  |  |
| By operating segment: |  |  |  |  |
| Completion and Production | $1,558 | $2,080 | $(522) | (25)% |
| Drilling and Evaluation | 1,012 | 1,207 | (195) | (16) |
| Total operations | 2,570 | 3,287 | (717) | (22) |
| Corporate and other | (196) | (190) | (6) | (3) |
| SAP S4 upgrade expense | (112) | (91) | (21) | (23) |
| Impairments and other charges | (748) | (116) | (632) | n/m |
| Total operating income | $1,514 | $2,890 | $(1,376) | (48)% |
| n/m = not meaningful |  |  |  |  |

### Operating Segments

#### Completion and Production

Completion and Production revenue in the first nine months of 2025 was $9.5 billion, a decrease of $559 million, or

6%, compared to the first nine months of 2024. Operating income for the segment in the first nine months of 2025 was $1.6

billion, a decrease of $522 million, or 25%, compared to the first nine months of 2024. These results were largely driven by

decreased pressure pumping services in the Western Hemisphere and lower completion tool sales in the Western Hemisphere

and Africa. Partially offsetting these declines were increased completion tool sales in Europe and Canada.

#### Drilling and Evaluation

Drilling and Evaluation revenue in the first nine months of 2025 was $7.0 billion, a decrease of $248 million, or 3%,

compared to the first nine months of 2024. Operating income for the segment in the first nine months of 2025 was $1.0 billion,

a decrease of $195 million, or 16%, compared to the first nine months of 2024. These results were primarily driven by

decreased activity across multiple product service lines in Mexico and Saudi Arabia, as well as decreased testing services and

lower wireline activity internationally. Partially offsetting these decreases were improved drilling services in Europe, and higher

fluid services in Latin America and the Middle East.

### Geographic Regions

#### North America

North America revenue in the first nine months of 2025 was $6.9 billion, a 7% decrease compared to the first nine

months of 2024, largely driven by decreased pressure pumping services in US Land and lower completion tool sales in the Gulf

of America and US Land. Partially offsetting these decreases were improved stimulation activity in the Gulf of America and

higher completion tool sales in Canada.

HAL Q3 2025 FORM 10-Q \| 27

Table of Contents Part I. Item 2 \| Results of Operations in 2025 Compared to 2024 (YTD)

#### Latin America

Latin America revenue in the first nine months of 2025 was $2.9 billion, a 12% decrease compared to the first nine

months of 2024, resulting from lower activity across multiple product service lines in Mexico and decreased completion tool

sales across the region. Partially offsetting these decreases were higher drilling-related services in Argentina, Brazil and

Caribbean.

#### Europe/Africa/CIS

Europe/Africa/CIS revenue in the first nine months of 2025 was $2.4 billion, a 10% increase compared to the first nine

months of 2024, resulting from improved activity across multiple product service lines in Norway and Romania, higher well

construction activity in Namibia and improved completion tool sales in the Caspian Area. Partially offsetting these increases

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

decreased pressure pumping services in Angola.

#### Middle East/Asia

Middle East/Asia revenue in the first nine months of 2025 was $4.4 billion, a 2% decrease compared to the first nine

months of 2024, resulting primarily from decreased activities across multiple product service lines in Saudi Arabia and

Malaysia and lower project management activity and decreased testing services in the region. Partially offsetting these

decreases were increased activity across multiple product service lines in Kuwait, improved fluid services in the United Arab

Emirates and higher pressure pumping services in India.

### Other Operating Items

*SAP S4 Upgrade Expense.* As previously mentioned, during 2023 we began our migration to SAP S4, which we expect

to complete in the fourth quarter of 2026. During the nine months ended September 30, 2025, we recognized $112 million of

expense on our SAP S4 migration. During the nine months ended September 30, 2024, we recognized $91 million of expense

on our SAP S4 migration.

*Impairments and Other Charges.* During the nine months ended September 30, 2025, we recognized a pre-tax charge

of $748 million primarily related to severance costs, fixed and other assets write-offs, an impairment of assets held for sale, an

impairment of facility closures and lease terminations, a reserve release related to a cybersecurity incident, a gain on an equity

investment and other items, primarily related to legacy environmental remediation cost estimate increases. During the nine

months ended September 30, 2024, we recognized a pre-tax charge of $116 million, primarily related to severance costs, an

impairment of assets held for sale, expenses related to a cybersecurity incident, a gain on a fair value adjustment of an equity

investment, and other items. See Notes to Condensed Consolidated Financial Statements, Note 2. Impairments and Other

Charges for further discussion of these charges.

### Nonoperating Items

*Argentina Impairment on Investment.* In years 2022, 2023 and 2024, we executed a series of loans to a third party and

received notes that are to be repaid in U.S. dollars upon maturity or earlier if certain conditions are met. During the nine months

ended September 30, 2025 and 2024, we recorded a loss of $23 million and $38 million, respectively, resulting from the

deterioration in the outlook of the debtor’s liquidity and financial projections. This is included in “Other, net” on the

consolidated statements of operations.

*Egypt Currency Impact.* In the first quarter of 2024, the Egyptian pound devalued by approximately 35% relative to

the U.S. dollar. Consequently, we incurred a loss of $38 million during the nine months ended September 30, 2024, due to the

devaluation of the currency in Egypt. This is included in “Other, net” on the consolidated statements of operations.

*Income Tax Provision*. During the nine months ended September 30, 2025, we recorded a total income tax provision of

$433 million on a pre-tax income of $1.1 billion, resulting in an effective tax rate of 38.1%. The effective tax rate for this

period was primarily impacted by the additional valuation allowance recognized in the amount of $125 million on our deferred

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

the pre-tax $748 million of impairments and other charges, and the $23 million impairment of an investment in Argentina.

During the nine months ended September 30, 2024, we recorded a total income tax provision of $539 million on pre-tax income

of $2.4 billion, resulting in an effective tax rate of 22.1%. We recorded a tax benefit of $41 million during the nine months

ended September 30, 2024, due to a partial release of a valuation allowance on our deferred tax assets based on market

conditions.

*Pillar Two.* As previously mentioned, The Organization for Economic Co-operation and Development enacted model

rules for a new global minimum tax framework, also known as Pillar Two, and certain governments globally have enacted, or

are in the process of enacting, legislation considering these model rules. These rules did not have a material impact on our taxes

for the nine months ended September 30, 2025 and 2024.

HAL Q3 2025 FORM 10-Q \| 28

### FORWARD-LOOKING INFORMATION

The Private Securities Litigation Reform Act of 1995 provides safe harbor provisions for forward-looking information.

Forward-looking information is based on projections and estimates, not historical information. Some statements in this Form

10-Q are forward-looking and use words like “may,” “may not,” “believe,” “do not believe,” “plan,” “estimate,” “intend,”

“expect,” “do not expect,” “anticipate,” “do not anticipate,” “should,” “likely,” and other expressions. We may also provide oral

or written forward-looking information in our statements and other materials we release to the public. Forward-looking

information involves risks and uncertainties and reflects our best judgment based on current information. Our results of

operations can be affected by inaccurate assumptions we make or by known or unknown risks and uncertainties. In addition,

other factors may affect the accuracy of our forward-looking information. As a result, no forward-looking information can be

guaranteed. Actual events and the results of our operations may vary materially.

We do not assume any responsibility to publicly update any of our forward-looking statements regardless of whether

factors change as a result of new information, future events, or for any other reason. You should review any additional

disclosures we make in our press releases and Forms 10-K, 10-Q, and 8-K filed with or furnished to the Securities and

Exchange Commission. We also suggest that you listen to our quarterly earnings release conference calls with financial

analysts.

## Market risk

As filed, 271 characters.

For quantitative and qualitative disclosures about market risk, see Part II, Item 7(a), “Quantitative and Qualitative

Disclosures About Market Risk,” in our 2024 Annual Report on Form 10-K. Our exposure to market risk has not changed

materially since December 31, 2024.

## Controls and procedures

As filed, 1,478 characters.

In accordance with the Securities Exchange Act of 1934 Rules 13a-15 and 15d-15, we carried out an evaluation, under

the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of

the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that

evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were

effective as of September 30, 2025 to provide reasonable assurance that information required to be disclosed in our reports filed

or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the

Securities and Exchange Commission’s rules and forms. Our disclosure controls and procedures include controls and

procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is

accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as

appropriate, to allow timely decisions regarding required disclosure.

There has been no change in our internal control over financial reporting that occurred during the quarter ended

September 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial

reporting.

HAL Q3 2025 FORM 10-Q \| 29

Filed Oct 24, 2025.
Source: SEC EDGAR, the filing index for accession 0000045012-25-000069. Last ingested by Listed: Nov 2, 2026, 13:24 ET. No prices; not investment advice.