Halliburton Company
10/23/2026 | Press release | Distributed by Public on 10/23/2026 08:59
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations.
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, Pipeline and Process Services, Production Enhancement, and Production Solutions. We completed the sale
of a portion of our chemical business in the second quarter of 2026.
•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 46,000
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 strive 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: Consistently increase international growth in our directional drilling, unconventionals, well
intervention, and artificial lift businesses. Develop behind-the-meter power generation, independently or through
collaboration with VoltaGrid.
- North America: Maximize value by, among other things, utilizing our Zeus IQ electric fracturing platform, our
iCruise rotary steerable systems and LOGIX automation.
- 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 about $1.1 billion, while leveraging technology and targeted
process improvements to enhance utilization of existing 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, grow our low carbon energy business, and support Halliburton Labs early-stage
company participants.
HAL Q3 2026 FORM 10-Q | 16
|
Part I. Item 2 | Executive Overview
|
Market conditions
During the third quarter of 2026, oil and natural gas markets remained volatile due to geopolitical developments and
global economic uncertainty. These factors continued to disrupt global oil supply and contribute to supply constraints.
Oil prices decreased in the third quarter of 2026 compared to the second quarter of 2026. The West Texas Intermediate
(WTI) crude oil price averaged approximately $87 per barrel during the third quarter of 2026, compared to approximately $96
per barrel during the second quarter of 2026, or a 9% decrease. The Brent crude oil price averaged approximately $96 per barrel
during the third quarter of 2026, compared to approximately $103 per barrel during the second quarter, or a 7% decrease.
Higher commodity prices generally support customer activity and capital spending in the markets we serve, as operator
investment decisions are often influenced by expectations regarding future commodity prices.
Trade tensions and tariffs continue to influence the global demand outlook, with varying impacts across end markets.
We continue to monitor and evaluate the effects of these on goods imported into the United States, developments related to
trade policy and the potential effects of future tariff actions on our business, financial position, results of operations, and cash
flows.
Globally, we continue to be impacted by inflationary cost increases, primarily related to logistics, chemicals, and
cement, which we expect to persist for sometime. We manage these pressures through global procurement strategies,
technology modifications, and sourcing efficiencies. As a standard practice, we generally seek to pass a portion of these cost
increases on to our customers and believe we have effective solutions in place to minimize their operational impact.
Customers remained focused on capital discipline, production optimization, operating efficiency, and expected returns
on investment. Customer activity and spending decisions were influenced by the geopolitical conflict in the Middle East, higher
commodity prices, uncertainty related to global trade policies and tariffs, and inflationary cost pressures. As a result, customers
continued to evaluate investment opportunities while balancing growth objectives, operating priorities, and return expectations.
HAL Q3 2026 FORM 10-Q | 17
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Part I. Item 2 | Executive Overview
|
Financial results
The following graph illustrates our revenue and operating margins for each operating segment for the third quarter of
2025 and 2026.
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, 2026.
During the third quarter of 2026, we generated total company revenue of $5.7 billion, an increase of 2% as compared
to the third quarter of 2025. We reported operating income of $624 million, including a pre-tax charge for impairments and
other charges of $107 million, in the third quarter of 2026, as compared to operating income of $356 million in the third quarter
of 2025, including impairments and other charges of $392 million.
Our Completion and Production segment revenue decreased 4% in the third quarter of 2026 as compared to the third
quarter of 2025. This decrease was primarily driven by decreased stimulation activity in North America and lower completion
tool sales in Middle East/Asia.
Our Drilling and Evaluation segment revenue increased 10% in the third quarter of 2026 as compared to the third
quarter of 2025. This increase was primarily driven by improved drilling related services in North America and Europe and
higher activity across multiple product service lines in Latin America.
Our North America revenue decreased 9% in the third quarter of 2026 as compared to the third quarter of 2025. This
decrease was primarily driven by lower stimulation activity in the region and reduced specialty chemicals in U.S. Land as a
result of the sale of a portion of our chemical business.
Internationally, revenue increased 9% in the third quarter of 2026 as compared to the third quarter of 2025, largely
driven by multiple product service lines in Europe/Africa/CIS and Latin America.
Our operating performance and liquidity are described in more detail in "Liquidity and Capital Resources" and
"Business Environment and Results of Operations."
HAL Q3 2026 FORM 10-Q | 18
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Part I. Item 2 | Liquidity and Capital Resources
|
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2026, we had $1.8 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 nine months of 2026
Sources of cash:
•Cash flows from operating activities were $1.5 billion. Working capital, which consists of receivables, inventories,
and accounts payable, had a negative impact of $517 million.
Uses of cash:
•Capital expenditures were $693 million.
•We repurchased 15.2 million shares of our common stock for $558 million, which includes the excise tax payment
for prior year share repurchases.
•We paid $426 million of dividends to our shareholders.
•We paid $111 million on the purchase of investment securities.
•We paid $107 million to acquire businesses.
•We paid $101 million primarily in connection with the purchase of an equity investment.
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 still expect capital spending for 2026 to be approximately $1.1 billion. 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, unconventionals, production services, and drilling technologies. We will continue to
maintain capital discipline and monitor the rapidly changing market dynamics, and we may adjust our capital spending
accordingly.
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 $141 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 that framework for 2026.
Our Board of Directors has authorized a program to repurchase our common stock from time to time. We repurchased
7.3 million shares of common stock during the third quarter of 2026 under this program. Approximately $1.5 billion remained
authorized for repurchases as of September 30, 2026 and may be used for open market and other share purchases.
During 2023, we began our migration to SAP S4, which will be completed in the fourth quarter of 2026. For the nine
months ended September 30, 2026, we incurred $130 million in expense on our SAP S4 migration and expect the estimated cost
to be approximately $34 million in the fourth quarter of 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.
We may, from time to time, redeem, repurchase, or otherwise acquire our outstanding debt through privately
negotiated transactions, open market purchases, redemptions, tender offers or otherwise, but we are under no obligation to do
so.
Other factors affecting liquidity
Financial condition in current market. As of September 30, 2026, we had $1.8 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.
HAL Q3 2026 FORM 10-Q | 19
|
Part I. Item 2 | Liquidity and Capital Resources
|
Guarantee agreements. In the normal course of business, we have agreements with financial institutions under which
approximately $3.5 billion of letters of credit, bank guarantees, or surety bonds were outstanding as of September 30, 2026.
Some of the outstanding letters of credit have triggering events that would entitle a bank to require cash collateralization;
however, none of these triggering events have occurred. As of September 30, 2026, we had no material off-balance sheet
liabilities and were not required to make any material cash distributions to our unconsolidated subsidiaries.
The remaining CDSs we had previously entered into with third-party financial institutions related to borrowings
provided by the financial institutions to one of our primary customers in Mexico matured during the third quarter of 2026,
resulting in no outstanding notional amounts as of September 30, 2026, compared to $592 million as of December 31, 2025.
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 8% of our total receivables as of
September 30, 2026 and 7% as of December 31, 2025. While we have experienced payment delays from this customer in
Mexico, the amounts are not in dispute and we have not historically had, and we do not expect, any material write-offs due to
collectability of receivables from this customer.
HAL Q3 2026 FORM 10-Q | 20
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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 and provide a broad 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 numerous competitors across each of our
business segments. Based on the location of services provided and products sold, 37% and 39% of our consolidated revenue
was attributable to the United States during the nine months ended September 30, 2026 and 2025, respectively. No other
country accounted for more than 10% of our revenue for those periods.
Demand for our services and products is largely dependent on our customers' spending for the exploration,
development, and production of oil and natural gas reserves. Customer spending is influenced by a variety of factors, including
commodity prices and expectations regarding future prices, global oil and natural gas supply and demand fundamentals, the
availability of capital, government policies and regulations, geopolitical developments, and overall economic conditions.
Activity levels in certain markets may also be influenced by longer-term trends affecting energy demand, including
increasing electricity consumption associated with digital infrastructure and data center growth. These factors collectively
influence global drilling, completions, intervention, and production-related activity levels.
Because a significant portion of our business supports our customers' capital spending programs, our financial
performance is closely tied to oil and natural gas prices and worldwide drilling and completions activity. Lower commodity
prices generally result in reduced customer spending and lower activity levels, while higher commodity prices typically support
increased investment and activity. Accordingly, our operating results are significantly affected by changes in commodity prices
and global 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
|
Year Ended
|
||
|
September 30,
|
December 31,
|
||
|
2026
|
2025
|
2025
|
|
|
Oil Price - WTI (1)
|
$87.22
|
$65.74
|
$65.46
|
|
Oil Price - Brent (1)
|
96.33
|
68.97
|
69.10
|
|
Natural Gas Price - Henry Hub (2)
|
2.87
|
3.03
|
3.53
|
|
(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
|
Nine Months Ended
|
Year Ended
|
|||
|
September 30,
|
September 30,
|
December 31,
|
|||
|
2026
|
2025
|
2026
|
2025
|
2025
|
|
|
US Land
|
|||||
|
US Offshore
|
|||||
|
Canada
|
|||||
|
North America
|
|||||
|
International
|
1,107
|
1,080
|
1,082
|
1,086
|
1,080
|
|
Worldwide Total
|
1,901
|
1,798
|
1,834
|
1,826
|
1,816
|
HAL Q3 2026 FORM 10-Q | 21
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Part I. Item 2 | Business Environment and Results of Operations
|
Business outlook
With the volatility of the oil and natural gas markets, we expect customer spending to remain focused on capital
discipline, production optimization, and operational efficiency across both international and North America markets. At the
same time, efforts to restore production, rebuild inventories and strengthen energy security are expected to drive growth for
oilfield services.
Outside of the Middle East, our international businesses continue to demonstrate strong performance relative to recent
years. We expect activity growth to be led by production services, drilling, unconventionals, and artificial lift. We believe these
markets will grow faster than the industry as a whole, supported by customer investment in development projects, production
capacity maintenance, and selected offshore and strategic energy projects. We remain focused on optimizing asset utilization
and generating appropriate returns on our investments. During the third quarter, we re-established our operations in Venezuela
and expect customer activity to increase as opportunities develop.
Operations in certain Middle East markets continue to be affected by ongoing geopolitical developments, including
periodic operational disruptions, persistent inflationary pressures that we expect to continue for some time, reduced activity in
some areas, and higher logistics and supply chain costs. While activity levels have shown signs of recovery in certain Middle
East markets, the pace and breadth of that recovery remain uncertain and continue to be influenced by geopolitical
developments across the region.
In North America, customer activity remains focused on maximizing returns and improving operating efficiency
within existing capital budgets. We remain focused on reducing exposure to commoditized activity and differentiating through
technology. Over the long term, we expect North America to remain critical for global energy security, which will require
performance-driven technology and greater service intensity.
While current industry fundamentals remain generally supportive of customer activity, the outlook for our business
remains subject to uncertainty. Customer spending and activity levels may be affected by volatility in oil and natural gas prices,
changes in global supply and demand balances, inflationary pressures, supply chain constraints, the availability of capital,
geopolitical developments, trade policies, sanctions, and regulatory actions. These factors may impact the timing and scope of
customer projects and demand for our services and products.
HAL Q3 2026 FORM 10-Q | 22
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Part I. Item 2 | Results of Operations in 2026 Compared to 2025 (QTD)
|
RESULTS OF OPERATIONS IN 2026 COMPARED TO 2025
Three Months Ended September 30, 2026 Compared with Three Months Ended September 30, 2025
|
Three Months Ended
|
||||
|
September 30,
|
Favorable
|
Percentage
|
||
|
Millions of dollars
|
2026
|
2025
|
(Unfavorable)
|
Change
|
|
Revenue:
|
||||
|
By operating segment:
|
||||
|
Completion and Production
|
$3,089
|
$3,223
|
$(134)
|
(4)%
|
|
Drilling and Evaluation
|
2,614
|
2,377
|
||
|
Total revenue
|
$5,703
|
$5,600
|
$103
|
2%
|
|
By geographic region:
|
||||
|
North America
|
$2,160
|
$2,364
|
$(204)
|
(9)%
|
|
Latin America
|
1,122
|
|||
|
Europe/Africa/CIS
|
1,016
|
|||
|
Middle East/Asia
|
1,405
|
1,412
|
(7)
|
-
|
|
Total revenue
|
$5,703
|
$5,600
|
$103
|
2%
|
|
Operating income:
|
||||
|
By operating segment:
|
||||
|
Completion and Production
|
$457
|
$514
|
$(57)
|
(11)%
|
|
Drilling and Evaluation
|
||||
|
Total operations
|
(14)
|
(2)
|
||
|
Corporate and other
|
(75)
|
(64)
|
(11)
|
(17)
|
|
SAP S4 upgrade expense
|
(42)
|
(50)
|
||
|
Impairments and other charges
|
(107)
|
(392)
|
n/m
|
|
|
Total operating income
|
$624
|
$356
|
$268
|
75%
|
|
n/m = not meaningful
|
||||
Operating Segments
Completion and Production
Completion and Production revenue in the third quarter of 2026 was $3.1 billion, a decrease of $134 million, or 4%,
when compared to the third quarter of 2025. Operating income in the third quarter of 2026 was $457 million, a decrease of $57
million, or 11%, when compared to the third quarter of 2025. These decreases were primarily driven by decreased stimulation
activity in North America and lower completion tool sales in Middle East/Asia. Partially offsetting these decreases were higher
completion tool sales in Europe and improved activity across multiple product service lines in Africa.
Drilling and Evaluation
Drilling and Evaluation revenue in the third quarter of 2026 was $2.6 billion, an increase of $237 million, or 10%,
when compared to the third quarter of 2025. Operating income in the third quarter of 2026 was $391 million, an increase of $43
million, or 12%, when compared to the third quarter of 2025. These increases were primarily driven by higher activity across
multiple product service lines in Latin America and improved drilling related services in North America and Europe.
In the third quarter of 2026, results in both of our operating segments reflected continued recovery in activity
following disruptions related to the geopolitical conflict in the Middle East, partially offset by ongoing inflationary pressures on
operating costs in the region.
HAL Q3 2026 FORM 10-Q | 23
|
Part I. Item 2 | Results of Operations in 2026 Compared to 2025 (QTD)
|
Geographic Regions
North America
North America revenue in the third quarter of 2026 was $2.2 billion, a 9% decrease compared to the third quarter of
2025. This decrease was primarily driven by lower stimulation activity in the region and decreased specialty chemicals in U.S.
Land as a result of the sale of a portion of our chemical business. Partially offsetting these decreases was higher well
construction activity in U.S. Land.
Latin America
Latin America revenue in the third quarter of 2026 was $1.1 billion, a 13% increase compared to the third quarter of
2025. This increase was primarily driven by higher activity across multiple product service lines in Mexico, increased
stimulation activity in Argentina, and improved project management activity in Ecuador.
Europe/Africa/CIS
Europe/Africa/CIS revenue in the third quarter of 2026 was $1.0 billion, a 23% increase compared to the third quarter
of 2025. This increase was primarily driven by improved completion tool sales and drilling related services in Norway, higher
activity across multiple product service lines in Nigeria, and increased pipeline services and stimulation activity in Angola.
Middle East/Asia
Middle East/Asia revenue in the third quarter of 2026 was $1.4 billion, flat compared to the third quarter of 2025.
These results were primarily driven by decreased activity across multiple product service lines in Iraq and Qatar, and lower
completion tool sales in Saudi Arabia. Offsetting these decreases was higher activity across multiple product service lines in
Saudi Arabia and the United Arab Emirates (UAE).
Other Operating Items
Corporate and Other. During the three months ended September 30, 2026, Corporate and Other expense totaled $75
million, which was an increase of $11 million, or 17%, as compared to the three months ended September 30, 2025. This
increase was primarily attributable to higher executive compensation costs and increased amortization expense related to recent
acquisitions.
SAP S4 Upgrade Expense. As previously mentioned, during 2023, we began our migration to SAP S4, which will be
completed in the fourth quarter of 2026. During the third quarter of 2026 and 2025, we recognized $42 million and $50 million
of expense on our SAP S4 migration, respectively.
Impairments and Other Charges. During the three months ended September 30, 2026, we recognized a pre-tax charge
of $107 million recorded in impairments and other charges due to severance costs, inventory costs and write-downs, and fixed
and other assets write-offs, partially offset by a gain resulting from the sale of a portion of our shares in an equity investment.
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. 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 Condensed Consolidated Statements of
Operations.
Income Tax Provision. During the three months ended September 30, 2026, we recorded a total income tax provision
of $94 million on a pre-tax income of $513 million, resulting in an effective tax rate of 18.3% for the quarter. 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.
HAL Q3 2026 FORM 10-Q | 24
|
Part I. Item 2 | Results of Operations in 2026 Compared to 2025 (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 2014. The only significant operating jurisdiction that has tax filings under review or subject to
examination by the tax authorities is the United States. Our United States federal income tax filings for tax years 2016 through
2024, including carry back of 2016 net operating losses to 2014, are currently under review or remain open for review by the
Internal Revenue Service (IRS).
On September 28, 2023, we received a Notice of Proposed Adjustment (NOPA) from the IRS covering our 2016 U.S.
tax return. The NOPA proposed an adjustment to reclassify approximately 95% of the $3.5 billion termination fee paid to Baker
Hughes in 2016 from an ordinary expense deduction to a capital loss. The termination fee was paid to Baker Hughes under the
merger agreement after antitrust regulators in multiple jurisdictions failed to approve our proposed merger. It is common
commercial practice to include a termination fee in a merger agreement to compensate the target for damages incurred when the
acquisition does not go forward. The IRS's long-understood position at the time of 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 will ultimately be resolved by the United States
federal courts.
We regularly assess the likelihood of adverse outcomes resulting from tax examinations to determine the adequacy of
our tax reserves, and we believe our income tax reserves are appropriately provided for all open tax years. We cannot assure
you that the matter will be determined in our favor or against us, and if the matter is ultimately determined unfavorably to us, it
could have a material adverse impact on our results of operations and cash flows. Based on tax attributes currently available, we
estimate that, should the IRS's position prevail through the appellate process and subsequent litigation, the proposed adjustment
could result in cash taxes due of approximately $640 million (plus interest thereon in the case of amounts due for previous tax
years). Our estimates are calculated under current tax law and on the basis of our assumptions regarding taxable income and
loss and other tax attributes over the relevant period, of which the 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 2026 FORM 10-Q | 25
|
Part I. Item 2 | Results of Operations in 2026 Compared to 2025 (YTD)
|
Nine Months Ended September 30, 2026 Compared with Nine Months Ended September 30, 2025
|
Nine Months Ended
|
||||
|
September 30,
|
Favorable
|
Percentage
|
||
|
Millions of dollars
|
2026
|
2025
|
(Unfavorable)
|
Change
|
|
Revenue:
|
||||
|
By operating segment:
|
||||
|
Completion and Production
|
$9,307
|
$9,514
|
$(207)
|
(2)%
|
|
Drilling and Evaluation
|
7,512
|
7,013
|
||
|
Total revenue
|
$16,819
|
$16,527
|
$292
|
2%
|
|
By geographic region:
|
||||
|
North America
|
$6,572
|
$6,859
|
$(287)
|
(4)%
|
|
Latin America
|
3,335
|
2,869
|
||
|
Europe/Africa/CIS
|
2,891
|
2,423
|
||
|
Middle East/Asia
|
4,021
|
4,376
|
(355)
|
(8)
|
|
Total revenue
|
$16,819
|
$16,527
|
$292
|
2%
|
|
Operating income:
|
||||
|
By operating segment:
|
||||
|
Completion and Production
|
$1,370
|
$1,558
|
$(188)
|
(12)%
|
|
Drilling and Evaluation
|
1,080
|
1,012
|
||
|
Total operations
|
2,450
|
2,570
|
(120)
|
(5)
|
|
Corporate and other
|
(227)
|
(196)
|
(31)
|
(16)
|
|
SAP S4 upgrade expense
|
(130)
|
(112)
|
(18)
|
(16)
|
|
Impairments and other charges
|
(12)
|
(748)
|
n/m
|
|
|
Total operating income
|
$2,081
|
$1,514
|
$567
|
37%
|
|
n/m = not meaningful
|
||||
Operating Segments
Completion and Production
Completion and Production revenue in the first nine months of 2026 was $9.3 billion, a decrease of $207 million, or
2%, when compared to the first nine months of 2025. Operating income for the segment in the first nine months of 2026 was
$1.4 billion, a decrease of $188 million, or 12%, when compared to the first nine months of 2025. These decreases were
primarily related to lower stimulation activity in North America and decreased activity across multiple product service lines in
the Middle East. Partially offsetting these decreases were higher completion tool sales and pressure pumping services in
Europe/Africa/CIS and increased stimulation activity in Latin America.
Drilling and Evaluation
Drilling and Evaluation revenue in the first nine months of 2026 was $7.5 billion, an increase of $499 million, or 7%,
when compared to the first nine months of 2025. Operating income for the segment in the first nine months of 2026 was $1.1
billion, an increase of $68 million, or 7%, when compared to the first nine months of 2025. These increases were primarily
driven by improved activity across multiple product service lines in Latin America and increased drilling related services in
North America and Europe. Partially offsetting these increases was decreased activity across multiple product service lines in
the Middle East.
In the first nine months of 2026, results in both of our operating segments were impacted by disruptions related to the
geopolitical conflict in the Middle East and ongoing inflationary pressures on operating costs in the region.
HAL Q3 2026 FORM 10-Q | 26
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Part I. Item 2 | Results of Operations in 2026 Compared to 2025 (YTD)
|
Geographic Regions
North America
North America revenue in the first nine months of 2026 was $6.6 billion, a 4% decrease compared to the first nine
months of 2025. This decrease was primarily driven by lower stimulation activity in the region and decreased specialty
chemicals in U.S. Land as a result of the sale of a portion of our chemical business. Partially offsetting these decreases was
higher well construction activity in U.S. Land.
Latin America
Latin America revenue in the first nine months of 2026 was $3.3 billion, a 16% increase compared to the first nine
months of 2025. This increase was primarily driven by higher activity across multiple product service lines in Ecuador and the
Caribbean and increased stimulation activity in Argentina. Partially offsetting these increases was lower well construction
activity in Mexico.
Europe/Africa/CIS
Europe/Africa/CIS revenue in the first nine months of 2026 was $2.9 billion, a 19% increase compared to the first nine
months of 2025. This increase was primarily driven by higher activity across multiple product service lines in Angola and
Nigeria and increased drilling related services and completion tool sales in Norway.
Middle East/Asia
Middle East/Asia revenue in the first nine months of 2026 was $4.0 billion, an 8% decrease compared to the first nine
months of 2025. This decrease was primarily driven by lower activity across multiple product service lines in Saudi Arabia,
Qatar, and Iraq due to conflict-related disruptions. Partially offsetting these decreases was improved activity across multiple
product service lines in the UAE.
Other Operating Items
Corporate and Other. During the nine months ended September 30, 2026, Corporate and Other expense totaled $227
million, which was an increase of $31 million, or 16%, as compared to the nine months ended September 30, 2025. This
increase was primarily attributable to higher executive compensation costs and increased amortization expense related to recent
acquisitions.
SAP S4 Upgrade Expense. As previously mentioned, during 2023 we began our migration to SAP S4, which will be
completed in the fourth quarter of 2026. During the nine months ended September 30, 2026 and 2025, we recognized $130
million and $112 million of expense on our SAP S4 migration, respectively.
Impairments and Other Charges. During the nine months ended September 30, 2026, we recognized a pre-tax charge
of $12 million in impairments and other charges due to severance costs, inventory costs and write-downs, fixed and other assets
write-offs, substantially offset by gains on equity investments, and other credits primarily due to government refund recovery.
During the nine months ended September 30, 2025, we took 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. See Notes to Condensed Consolidated Financial
Statements, Note 2. Impairments and Other Charges for further discussion of these charges.
Nonoperating Items
Pension Settlement Charges from Plan Terminations. During the nine months ended September 30, 2026, the
Company entered into agreements to transfer certain defined benefit pension obligations to third-party insurers in connection
with plan terminations. As a result, the Company recognized approximately $23 million of non-cash pension settlement
charges, primarily related to the acceleration of actuarial losses previously recorded in accumulated other comprehensive
income. This is included in "Other, net" on the Condensed Consolidated Statements of Operations.
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, 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 Condensed Consolidated Statements of Operations.
HAL Q3 2026 FORM 10-Q | 27
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Part I. Item 2 | Results of Operations in 2026 Compared to 2025 (YTD)
|
Income Tax Provision. During the nine months ended September 30, 2026, we recorded a total income tax provision of
$325 million on a pre-tax income of $1.7 billion, resulting in an effective tax rate of 18.6%. The effective tax rate for this
period was primarily impacted by the release of a valuation allowance in the amount of $32 million related to changes in
deferred tax asset realizability. During the nine months ended September 30, 2025, we recorded a total income tax provision of
$433 million on 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 on our deferred tax assets, the pre-tax charge for
impairments and other charges, and an impairment of an investment in Argentina.
HAL Q3 2026 FORM 10-Q | 28
|
Part I. Item 2 | Forward-Looking Information
|
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, including those in Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations -
Business Environment and Results of Operations - Business Outlook, 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, except as required by law. 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.
Halliburton Company published this content on October 23, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on October 23, 2026 at 14:59 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]