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Description of Company and Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Use of estimates Use of estimates
Our financial statements are prepared in conformity with United States generally accepted accounting principles,
requiring us to make estimates and assumptions that affect:
-the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements; and
-the reported amounts of revenue and expenses during the reporting period.
We believe the most significant estimates and assumptions are associated with the forecasting of our income tax
(provision) benefit and the valuation of deferred taxes, legal reserves, long-lived asset valuations, and allowance for credit
losses. Ultimate results could differ from our estimates.
Basis of presentation Basis of presentation
The consolidated financial statements include the accounts of our company and all of our subsidiaries that we control
or variable interest entities for which we have determined that we are the primary beneficiary. All material intercompany
accounts and transactions are eliminated. Investments in companies in which we do not have a controlling interest, but over
which we do exercise significant influence, are accounted for using the equity method of accounting, unless we elect the fair
value option. If we do not have significant influence and the investment has no readily determinable fair value, we elect the
measurement alternative. In addition, certain reclassifications of prior period balances have been made to conform to the current
period presentation.
Revenue recognition Revenue recognition
Our services and products are generally sold based upon purchase orders or contracts with our customers that include
fixed or determinable prices but do not include right of return provisions or other significant post-delivery obligations. The vast
majority of our service and product contracts are short-term in nature. We recognize revenue based on the transfer of control or
our customers' ability to benefit from our services and products in an amount that reflects the consideration we expect to receive
in exchange for those services and products. We also assess our customers' ability and intention to pay, which is based on a
variety of factors, including our historical payment experience with, and the financial condition of our customers. Rates for
services are typically priced on a per day, per meter, per man-hour, or similar basis. See Notes to Consolidated Financial
Statements, Note 4 for further information on revenue recognition.
Revenue is recognized based on the transfer of control or our customers’ ability to benefit from our services and
products in an amount that reflects the consideration we expect to receive in exchange for those services and products. Most of
our service and product contracts are short-term in nature. In recognizing revenue for our services and products, we determine
the transaction price of purchase orders or contracts with our customers, which may consist of fixed and variable consideration.
We also assess our customers’ ability and intention to pay, which is based on a variety of factors, including our historical
payment experience with, and the financial condition of, our customers. Payment terms and conditions vary by contract type,
although terms generally include a requirement of payment within 20 to 60 days. Other judgments involved in recognizing
revenue include an assessment of progress towards completion of performance obligations for certain long-term contracts,
which involve estimating total costs to determine our progress towards contract completion and calculating the corresponding
amount of revenue to recognize
Research and development Research and development
We maintain an active research and development program. The program improves products, processes, and
engineering standards and practices that serve the changing needs of our customers. Research and development costs are
expensed as incurred and were $411 million in 2025, $426 million in 2024, and $408 million in 2023.
Cash equivalents Cash equivalents
We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents.
Inventory Inventories
Inventories are stated at the lower of cost or net realizable value. Cost represents invoice or production cost for new
items and original cost. Production cost includes material, labor, and manufacturing overhead. Our inventory is recorded on the
weighted average cost method. We regularly review inventory quantities on hand and record provisions for excess or obsolete
inventory based primarily on historical usage, estimated product demand, and technological developments.
Allowance for bad debts Allowance for credit losses
We establish an allowance for credit losses through a review of several factors, including historical collection
experience, current aging status of the customer accounts, and current financial condition of our customers. Losses are charged
against the allowance when the customer accounts are determined to be uncollectible.
Property, plant and equipment Property, plant, and equipment
Other than those assets that have been written down to their fair values due to impairment, property, plant, and
equipment are reported at cost less accumulated depreciation, which is generally provided on the straight-line method over the
estimated useful lives of the assets. Accelerated depreciation methods are often used for tax purposes, when permitted. Upon
sale or retirement of an asset, the related costs and accumulated depreciation are removed from the accounts and any gain or
loss is recognized. Planned major maintenance costs are generally expensed as incurred. Expenditures for additions,
modifications, and conversions are capitalized when they increase the value or extend the useful life of the asset.
Goodwill and other intangible assets Goodwill and other intangible assets
We record as goodwill the excess purchase price over the fair value of the tangible and identifiable intangible assets
acquired in a business acquisition. Changes in the carrying amount of goodwill are detailed below by reportable segment.
Millions of dollars
Completion and
Production
Drilling and
Evaluation
Total
Balance at December 31, 2023:
$2,032
$818
$2,850
Current year acquisitions
8
—
8
Other
(20)
—
(20)
Balance at December 31, 2024:
$2,020
$818
$2,838
Current year acquisitions
8
76
84
Other
16
—
16
Balance at December 31, 2025:
$2,044
$894
$2,938
The reported amounts of goodwill for each reporting unit are reviewed for impairment on an annual basis, during the
third quarter, and more frequently when circumstances indicate an impairment may exist. As a result of our goodwill
impairment assessments performed in the years ended December 31, 2025, 2024, and 2023, we determined that the fair value of
each reporting unit exceeded its net book value and, therefore, no goodwill impairments were deemed necessary.
Finite-lived intangible assets We amortize other identifiable intangible assets with a finite life on a straight-line basis over the period which the asset
is expected to contribute to our future cash flows, ranging from one year to thirty years. The components of these other
intangible assets generally consist of patents, license agreements, non-compete agreements, trademarks, and customer lists and
contracts.
Impairment of long-lived assets Evaluating impairment of long-lived assets
When events or changes in circumstances indicate that long-lived assets other than goodwill may be impaired, an
evaluation is performed. For assets classified as held for use, we first group individual assets based on the lowest level for
which identifiable cash flows are largely independent of the cash flows from other assets. We then compare estimated future
undiscounted cash flows expected to result from the use and eventual disposition of the asset group to its carrying amount. If
the asset group's undiscounted cash flows are less than its carrying amount, we then determine the asset group's fair value by
using a discounted cash flow analysis and recognize any resulting impairment. When an asset is classified as held for sale, the
asset’s book value is evaluated and adjusted to the lower of its carrying amount or fair value less cost to sell. In addition,
depreciation and amortization is ceased while it is classified as held for sale. See Notes to Consolidated Financial Statements,
Note 2 for further information on impairments and other charges.
Income taxes Income taxes
We recognize the amount of taxes payable or refundable for the year. In addition, deferred tax assets and liabilities are
recognized for the expected future tax consequences of events that have been recognized in the financial statements or tax
returns. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will not be
realized.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary differences become deductible. Management
considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in
making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the
periods in which the deferred tax assets are deductible, management believes it is more likely than not that we will realize the
benefits of these deductible differences, net of the existing valuation allowances.
We recognize interest and penalties related to unrecognized tax benefits within the “Income tax provision” in our
Consolidated Statements of Operations.
Derivative instruments Derivative instruments
At times, we enter into derivative financial transactions to hedge existing or projected exposures to changing foreign
currency exchange rates, interest rates, and credit risk. We do not enter into derivative transactions for speculative or trading
purposes. We recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges are adjusted to fair
value which are reflected within "Other, net" on our Consolidated Statements of Operations. If the derivative is designated as a
hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against:
-the change in fair value of the hedged assets, liabilities, or firm commitments through earnings; or
-recognized in other comprehensive income until the hedged item is recognized in earnings.
The ineffective portion of a derivative’s change in fair value is recognized in earnings. Recognized gains or losses on
derivatives entered into to manage foreign currency exchange risk and credit risk are included in “Other, net” on the
Consolidated Statements of Operations. Gains or losses on interest rate derivatives are included in “Interest expense, net.”
Foreign currency translations Foreign currency translation
Foreign entities whose functional currency is the U.S. dollar translate monetary assets and liabilities at year-end
exchange rates, and nonmonetary items are translated at historical rates. Revenue and expense transactions are translated at the
average rates in effect during the year, except for those expenses associated with nonmonetary balance sheet accounts, which
are translated at historical rates. Gains or losses from remeasurement of monetary assets and liabilities due to changes in
exchange rates are recognized in our Consolidated Statements of Operations in “Other, net” in the year of occurrence.
Stock-based compensation Stock-based compensation
Stock-based compensation cost is measured at the date of grant, based on the calculated fair value of the award and is
recognized as expense over the employee’s service period, which is generally the vesting period of the equity grant.
Additionally, compensation cost is recognized based on awards ultimately expected to vest, therefore, we have reduced the cost
for estimated forfeitures based on historical forfeiture rates. Forfeitures are estimated at the time of grant and revised in
subsequent periods to reflect actual forfeitures. See Notes to Consolidated Financial Statements, Note 14 for additional
information related to stock-based compensation.