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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

or

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______to_______

Commission File Number 001-03492

HALLIBURTON COMPANY

(Exact name of registrant as specified in its charter)

Delaware			75-2677995
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

3000 North Sam Houston Parkway East,			Houston,			Texas			77032
(Address of principal executive offices)									(Zip Code)

(281) 871-2699

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol			Name of each exchange on which registered
Common Stock, par value $2.50 per share			HAL			New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                    ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).                                ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

As of October 15, 2021, there were 895,116,136 shares of Halliburton Company common stock, $2.50 par value per share, outstanding.

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HALLIBURTON COMPANY

Index

						Page No.
PART I.			FINANCIAL INFORMATION			1
Item 1.			Financial Statements			1
			Condensed Consolidated Statements of Operations			1
			Condensed Consolidated Statements of Comprehensive Income (Loss)			2
			Condensed Consolidated Balance Sheets			3
			Condensed Consolidated Statements of Cash Flows			4
			Notes to Condensed Consolidated Financial Statements			5
			Note 1. Basis of Presentation			5
			Note 2. Impairments and Other Charges			5
			Note 3. Business Segment Information			6
			Note 4. Revenue			7
			Note 5. Inventories			8
			Note 6. Debt			8
			Note 7. Shareholders' Equity			9
			Note 8. Commitments and Contingencies			11
			Note 9. Income per Share			11
			Note 10. Fair Value of Financial Instruments			11
Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations			13
			Executive Overview			13
			Liquidity and Capital Resources			16
			Business Environment and Results of Operations			18
			Results of Operations in 2021 Compared to 2020 (QTD)			20
			Results of Operations in 2021 Compared to 2020 (YTD)			23
			Forward-Looking Information			26
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			26
Item 4.			Controls and Procedures			26
PART II.			OTHER INFORMATION			27
Item 1.			Legal Proceedings			27
Item 1(a).			Risk Factors			27
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			27
Item 3.			Defaults Upon Senior Securities			27
Item 4.			Mine Safety Disclosures			27
Item 5.			Other Information			27
Item 6.			Exhibits			28
SIGNATURES						29

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Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

HALLIBURTON COMPANY

Condensed Consolidated Statements of Operations

(Unaudited)

						Three Months Ended September 30						Nine Months Ended September 30
Millions of dollars and shares except per share data						2021			2020			2021			2020
Revenue:
Services						$	2,802		$	2,068		$	7,948		$	7,940
Product sales						1,058			907			3,070			3,268
Total revenue						3,860			2,975			11,018			11,208
Operating costs and expenses:
Cost of services						2,467			1,904			7,088			7,394
Cost of sales						889			755			2,523			2,663
Impairments and other charges						12			133			12			3,353
General and administrative						46			41			145			138
Total operating costs and expenses						3,414			2,833			9,768			13,548
Operating income (loss)						446			142			1,250			(2,340)
Interest expense, net of interest income of $15, $11, $39, and $28						(116)			(122)			(361)			(380)
Loss on early extinguishment of debt						—			—			—			(168)
Other, net						(14)			(21)			(55)			(92)
Income (loss) before income taxes						316			(1)			834			(2,980)
Income tax benefit (provision)						(76)			(18)			(193)			265
Net income (loss)						$	240		$	(19)		$	641		$	(2,715)
Net (income) loss attributable to noncontrolling interest						(4)			2			(8)			5
Net income (loss) attributable to company						$	236		$	(17)		$	633		$	(2,710)
Basic and diluted net income (loss) per share						$	0.26		$	(0.02)		$	0.71		$	(3.08)
Basic and diluted weighted average common shares outstanding						894			882			891			879
			See notes to condensed consolidated financial statements.

HAL Q3 2021 FORM 10-Q | 1

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Table of Contents

HALLIBURTON COMPANY

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

						Three Months Ended September 30						Nine Months Ended September 30
Millions of dollars						2021			2020			2021			2020
Net income (loss)						$	240		$	(19)		$	641		$	(2,715)
Other comprehensive income, net of income taxes						—			2			2			22
Comprehensive income (loss)						$	240		$	(17)		$	643		$	(2,693)
Comprehensive (income) loss attributable to noncontrolling interest						(4)			1			(8)			4
Comprehensive income (loss) attributable to company shareholders						$	236		$	(16)		$	635		$	(2,689)
			See notes to condensed consolidated financial statements.

HAL Q3 2021 FORM 10-Q | 2

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Table of Contents

HALLIBURTON COMPANY

Condensed Consolidated Balance Sheets

(Unaudited)

Millions of dollars and shares except per share data						September 30, 2021			December 31, 2020
Assets
Current assets:
Cash and equivalents						$	2,632		$	2,563
Receivables (net of allowances for credit losses of $765 and $824)						3,525			3,071
Inventories						2,354			2,349
Other current assets						920			1,492
Total current assets						9,431			9,475
Property, plant, and equipment (net of accumulated depreciation of $11,377 and $11,039)						4,235			4,325
Goodwill						2,841			2,804
Deferred income taxes						2,149			2,166
Operating lease right-of-use assets						984			786
Other assets						1,385			1,124
Total assets						$	21,025		$	20,680
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable						$	2,011		$	1,573
Accrued employee compensation and benefits						583			517
Current portion of operating lease liabilities						258			251
Current maturities of long-term debt						11			695
Other current liabilities						1,083			1,385
Total current liabilities						3,946			4,421
Long-term debt						9,125			9,132
Operating lease liabilities						907			758
Employee compensation and benefits						547			562
Other liabilities						807			824
Total liabilities						15,332			15,697
Shareholders’ equity:
Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,066 and 1,066 shares)						2,666			2,666
Paid-in capital in excess of par value						24			—
Accumulated other comprehensive loss						(360)			(362)
Retained earnings						8,927			8,691
Treasury stock, at cost (172 and 181 shares)						(5,576)			(6,021)
Company shareholders’ equity						5,681			4,974
Noncontrolling interest in consolidated subsidiaries						12			9
Total shareholders’ equity						5,693			4,983
Total liabilities and shareholders’ equity						$	21,025		$	20,680
			See notes to condensed consolidated financial statements.

HAL Q3 2021 FORM 10-Q | 3

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Table of Contents

HALLIBURTON COMPANY

Condensed Consolidated Statements of Cash Flows

(Unaudited)

						Nine Months Ended September 30
Millions of dollars						2021			2020
Cash flows from operating activities:
Net income (loss)						$	641		$	(2,715)
Adjustments to reconcile net income (loss) to cash flows from operating activities:
Depreciation, depletion, and amortization						673			829
Accrued employee benefits						22			(494)
Impairments and other charges						12			3,353
Deferred income tax benefit						11			(380)
Changes in assets and liabilities:
Accounts payable						448			(933)
Receivables						(364)			1,294
Inventories						(3)			115
Other operating activities						(211)			174
Total cash flows provided by operating activities						1,229			1,243
Cash flows from investing activities:
Capital expenditures						(483)			(510)
Proceeds from sales of property, plant, and equipment						145			199
Proceeds from a structured real estate transaction						87			—
Other investing activities						(57)			(33)
Total cash flows used in investing activities						(308)			(344)
Cash flows from financing activities:
Payments on long-term borrowings						(696)			(1,653)
Dividends to shareholders						(121)			(238)
Proceeds from issuance of long-term debt, net						—			994
Stock repurchase program						—			(100)
Other financing activities						7			25
Total cash flows used in financing activities						(810)			(972)
Effect of exchange rate changes on cash						(42)			(80)
Increase (decrease) in cash and equivalents						69			(153)
Cash and equivalents at beginning of period						2,563			2,268
Cash and equivalents at end of period						$	2,632		$	2,115
Supplemental disclosure of cash flow information:
Cash payments during the period for:
Interest						$	402		$	396
Income taxes						$	157		$	256
			See notes to condensed consolidated financial statements.

HAL Q3 2021 FORM 10-Q | 4

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Table of Contents			Part I. Item 1 | Notes to Condensed Consolidated Financial Statements

HALLIBURTON COMPANY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by generally accepted accounting principles for annual financial statements and should be read together with our 2020 Annual Report on Form 10-K.

Our accounting policies are in accordance with United States generally accepted accounting principles. The preparation of financial statements in conformity with these accounting principles requires 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.

Ultimate results could differ from our estimates.

In our opinion, the condensed consolidated financial statements included herein contain all adjustments necessary to present fairly our financial position as of September 30, 2021 and the results of our operations for the three and nine months ended September 30, 2021 and 2020, and our cash flows for the nine months ended September 30, 2021 and 2020. Such adjustments are of a normal recurring nature. In addition, certain reclassifications of prior period balances have been made to conform to the current period presentation.

The results of our operations for the three and nine months ended September 30, 2021 may not be indicative of results for the full year.

Note 2. Impairments and Other Charges

    

The following table presents various pre-tax charges we recorded during the three and nine months ended September 30, 2021 and 2020, which are reflected within "Impairments and other charges" on our condensed consolidated statements of operations.

			Three Months Ended September 30						Nine Months Ended September 30
Millions of dollars			2021			2020			2021			2020
Catch-up depreciation			$	36		$	—		$	36		$	—
Severance costs			15			83			15			356
Long-lived asset impairments			—			31			—			2,299
Inventory costs and write-downs			—			11			—			505
Gain on real estate transaction			(74)			—			(74)			—
Other			35			8			35			193
Total impairments and other charges			$	12		$	133		$	12		$	3,353

Of the $12 million net charges recorded during the three months ended September 30, 2021, a $42 million charge was attributable to our Completion and Production segment, a $9 million charge was attributable to our Drilling and Evaluation segment, and a $39 million net gain was attributable to Corporate and other.

HAL Q3 2021 FORM 10-Q | 5

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Table of Contents			Part I. Item 1 | Notes to Condensed Consolidated Financial Statements

In the third quarter of 2021, we decided to discontinue the proposed sale of our Pipeline and Process Services business and as a result recorded a $36 million charge for accumulated unrecognized depreciation and amortization expense during the period the associated assets were classified as held for sale. We have reclassified this business to assets held and used in the accompanying condensed consolidated balance sheet as of September 30, 2021. Beginning October 1, 2021, all depreciation and amortization expense associated with this business will be included in operating costs and expenses on our condensed consolidated statements of operations.

During the third quarter of 2021, we finalized a previously communicated structured transaction relating to most of our owned U.S. real estate. As a result of the transaction, we derecognized $358 million of assets previously held for sale included in Other current assets and recognized an investment in an unconsolidated subsidiary of $349 million included in Other Assets, which resulted in a gain of $74 million. We have elected to account for our investment under the fair value option using an income approach. We believe the election of the fair value option aligns the accounting treatment with our interest in the real estate held by the unconsolidated subsidiary. As part of the transaction, we completed the sale-leaseback of the same U.S. real estate which resulted in an increase of our operating right-of-use assets and operating lease liabilities of $276 million and we received gross cash proceeds of $87 million. Pursuant to a master lease agreement, the properties are subject to initial lease terms of either twelve or fifteen years and we have the option to extend the term on each property for two additional terms of five years each thereafter and the rent payments are subject to an annual rent escalator of 1.35%.

Note 3. Business Segment Information

We operate under two divisions, which form the basis for the two operating segments we report: the Completion and Production segment and the Drilling and Evaluation segment. Our equity in earnings and losses of unconsolidated affiliates that are accounted for using the equity method of accounting are included within cost of services and cost of sales on our statements of operations, which is part of operating income of the applicable segment.

The following table presents information on our business segments.

						Three Months Ended September 30						Nine Months Ended September 30
Millions of dollars						2021			2020			2021			2020
Revenue:
Completion and Production						$	2,136		$	1,574		$	6,054		$	6,029
Drilling and Evaluation						1,724			1,401			4,964			5,179
Total revenue						$	3,860		$	2,975		$	11,018		$	11,208
Operating income (loss):
Completion and Production						$	322		$	212		$	891		$	713
Drilling and Evaluation						186			105			532			452
Total operations						508			317			1,423			1,165
Corporate and other (a)						(50)			(42)			(161)			(152)
Impairments and other charges (b)						(12)			(133)			(12)			(3,353)
Total operating income (loss)						$	446		$	142		$	1,250		$	(2,340)
Interest expense, net of interest income						(116)			(122)			(361)			(380)
Loss on early extinguishment of debt (c)						—			—			—			(168)
Other, net						(14)			(21)			(55)			(92)
Income (loss) before income taxes						$	316		$	(1)		$	834		$	(2,980)
(a)			Includes certain expenses not attributable to a business segment, such as costs related to support functions and corporate executives, and also includes amortization expense associated with intangible assets recorded as a result of acquisitions.
(b)			For the three and nine months ended September 30, 2021, amount includes a $42 million charge attributable to Completions and Production, a $9 million charge attributable to Drilling and Evaluation, and a $39 million net gain attributable to Corporate and other. For the three and nine months ended September 30, 2020, amount includes $90 million and $2.1 billion attributable to Completion and Production, $40 million and $1.2 billion attributable to Drilling and Evaluation, and $3 million and $44 million attributable to Corporate and other, respectively.
(c)			For the nine months ended September 30, 2020, amount includes a $168 million loss on extinguishment of debt related to the early repurchase of senior notes.

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Table of Contents			Part I. Item 1 | Notes to Condensed Consolidated Financial Statements

Note 4. Revenue

Revenue is recognized based on the transfer of control or our customers' ability to benefit from our services and products in an amount that reflects the consideration we expect to receive in exchange for those services and products. Most of our service and product contracts are short-term in nature. In recognizing revenue for our services and products, we determine the transaction price of purchase orders or contracts with our customers, which may consist of fixed and variable consideration. We also assess our customers' ability and intention to pay, which is based on a variety of factors, including our historical payment experience with, and the financial condition of, our customers. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 20 to 60 days. Other judgments involved in recognizing revenue include an assessment of progress towards completion of performance obligations for certain long-term contracts, which involve estimating total costs to determine our progress towards contract completion and calculating the corresponding amount of revenue to recognize.

Disaggregation of revenue

We disaggregate revenue from contracts with customers into types of services or products, consistent with our two reportable segments, in addition to geographical area. Based on the location of services provided and products sold, 40% and 38% of our consolidated revenue was from the United States for the nine months ended September 30, 2021 and 2020, respectively. No other country accounted for more than 10% of our revenue.

The following table presents information on our disaggregated revenue.

Millions of dollars			Three Months Ended September 30						Nine Months Ended September 30
Revenue by segment:			2021			2020			2021			2020
Completion and Production			$	2,136		$	1,574		$	6,054		$	6,029
Drilling and Evaluation			1,724			1,401			4,964			5,179
Total revenue			$	3,860		$	2,975		$	11,018		$	11,208
Revenue by geographic region:
North America			$	1,615		$	984		$	4,588		$	4,493
Latin America			624			380			1,693			1,242
Europe/Africa/CIS			676			649			1,989			2,171
Middle East/Asia			945			962			2,748			3,302
Total revenue			$	3,860		$	2,975		$	11,018		$	11,208

Contract balances

We perform our obligations under contracts with our customers by transferring services and products in exchange for consideration. The timing of our performance often differs from the timing of our customer’s payment, which results in the recognition of receivables and deferred revenue. Deferred revenue represents advance consideration received from customers for contracts where revenue is recognized on future performance of service. Deferred revenue, as well as revenue recognized during the period relating to amounts included as deferred revenue at the beginning of the period, were not material to our condensed consolidated financial statements.

Transaction price allocated to remaining performance obligations

Remaining performance obligations represent firm contracts for which work has not been performed and future revenue recognition is expected. We have elected the practical expedient permitting the exclusion of disclosing remaining performance obligations for contracts that have an original expected duration of one year or less. We have some long-term contracts related to software and integrated project management services such as lump sum turnkey contracts. For software contracts, revenue is generally recognized over time throughout the license period when the software is considered to be a right to access our intellectual property. For lump sum turnkey projects, we recognize revenue over time using an input method, which requires us to exercise judgment. Revenue allocated to remaining performance obligations for these long-term contracts is not material.

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Table of Contents			Part I. Item 1 | Notes to Condensed Consolidated Financial Statements

Receivables

As of September 30, 2021, 27% of total receivables were from customers in the United States. As of December 31, 2020, 32% of total receivables were from customers in the United States. Receivables from our primary customer in Mexico accounted for approximately 10% of our total receivables as of September 30, 2021. While we have experienced payment delays in Mexico, these 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. No other country or single customer accounted for more than 10% of our receivables at those dates.

Although the market environment has been improving, we continue to have risk of delayed customer payments and payment defaults associated with customer liquidity issues and bankruptcies. We routinely monitor the financial stability of our customers and employ an extensive process to evaluate the collectability of outstanding receivables. This process, which involves a high degree of judgment utilizing significant assumptions, includes analysis of our customers’ historical time to pay, financial condition and various financial metrics, debt structure, credit agency ratings, and production profile, as well as political and economic factors in countries of operations and other customer-specific factors.

Note 5. Inventories

Inventories consisted of the following:

Millions of dollars			September 30, 2021			December 31, 2020
Finished products and parts			$	1,398		$	1,330
Raw materials and supplies			870			952
Work in process			86			67
Total			$	2,354		$	2,349

Note 6. Debt

We repaid the $185 million principal balance of our 8.75% senior debentures when they matured in February of 2021. In August of 2021, we redeemed the entire $500 million aggregate principal amount outstanding of our 3.25% senior notes at par. The redemption price for the notes consisted of 100% of the principal amount of the notes outstanding, plus accrued and unpaid interest on the notes. We used cash on hand to fund the redemption of the debentures and notes.

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Table of Contents			Part I. Item 1 | Notes to Condensed Consolidated Financial Statements

Note 7. Shareholders’ Equity

The following tables summarize our shareholders’ equity activity for the three and nine months ended September 30, 2021 and September 30, 2020, respectively:

Millions of dollars						Common Stock			Paid-in Capital in Excess of Par Value			Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest in Consolidated Subsidiaries			Total
Balance at December 31, 2020						$	2,666		$	—		$	(6,021)		$	8,691		$	(362)		$	9		$	4,983
Comprehensive income (loss):
Net income						—			—			—			170			—			1			171
Cash dividends ($0.045 per share)						—			—			—			(40)			—			—			(40)
Stock plans (a)						—			34			144			(112)			—			—			66
Other						—			—			—			—			—			(1)			(1)
Balance at March 31, 2021						$	2,666		$	34		$	(5,877)		$	8,709		$	(362)		$	9		$	5,179
Comprehensive income (loss):
Net income						—			—			—			227			—			3			230
Other comprehensive income						—			—			—			—			2			—			2
Cash dividends ($0.045 per share)						—			—			—			(40)			—			—			(40)
Stock plans						—			(8)			69			—			—			—			61
Other						—			—			—			—			—			(3)			(3)
Balance at June 30, 2021						$	2,666		$	26		$	(5,808)		$	8,896		$	(360)		$	9		$	5,429
Comprehensive income (loss):
Net income						—			—			—			236			—			4			240
Cash dividends ($0.045 per share)						—			—			—			(41)			—			—			(41)
Stock plans (a)						—			(2)			232			(164)			—			—			66
Other						—			—			—			—			—			(1)			(1)
Balance at September 30, 2021						$	2,666		$	24		$	(5,576)		$	8,927		$	(360)		$	12		$	5,693
(a)			In January and July of 2021, we issued common stock from treasury shares for the employee stock purchase plan and for restricted stock grants. As a result, additional paid in capital in January and July of 2021 were reduced below zero, which resulted in a reduction of retained earnings by $112 million and $164 million, respectively. Additional issuances from treasury shares could similarly impact additional paid in capital and retained earnings.

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Table of Contents			Part I. Item 1 | Notes to Condensed Consolidated Financial Statements

Millions of dollars						Common Stock			Paid-in Capital in Excess of Par Value			Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest in Consolidated Subsidiaries			Total
Balance at December 31, 2019						$	2,669		$	143		$	(6,427)		$	11,989		$	(362)		$	13		$	8,025
Comprehensive income (loss):
Net income (loss)						—			—			—			(1,017)			—			2			(1,015)
Other comprehensive income						—			—			—			—			11			—			11
Cash dividends ($0.18 per share)						—			—			—			(158)			—			—			(158)
Stock repurchase program						—			—			(100)			—			—			—			(100)
Stock plans						—			(33)			115			—			—			—			82
Other						—			—			—			—			—			(2)			(2)
Balance at March 31, 2020						$	2,669		$	110		$	(6,412)		$	10,814		$	(351)		$	13		$	6,843
Comprehensive income (loss):
Net loss						—			—			—			(1,676)			—			(5)			(1,681)
Other comprehensive income						—			—			—			—			9			—			9
Cash dividends ($0.045 per share)						—			—			—			(40)			—			—			(40)
Stock plans						(3)			15			54			—			—			—			66
Other						—			—			—			—			—			(1)			(1)
Balance at June 30, 2020						$	2,666		$	125		$	(6,358)		$	9,098		$	(342)		$	7		$	5,196
Comprehensive income (loss):
Net loss						—			—			—			(17)			—			(2)			(19)
Other comprehensive income						—			—			—			—			2			—			2
Cash dividends ($0.045 per share)						—			—			—			(40)			—			—			(40)
Stock plans (a)						—			(102)			222			(54)			—			—			66
Other						—			—			—			—			—			(2)			(2)
Balance at September 30, 2020						$	2,666		$	23		$	(6,136)		$	8,987		$	(340)		$	3		$	5,203
(a)			In July of 2020, we issued common stock from treasury shares for the employee stock purchase plan and for restricted stock grants. As a result, additional paid in capital in July of 2020 was reduced below zero, which resulted in a reduction of retained earnings by $54 million. Additional issuances from treasury shares could similarly impact additional paid in capital and retained earnings.

Our Board of Directors has authorized a program to repurchase our common stock from time to time. There were no repurchases made under the program during the three and nine months ended September 30, 2021. Approximately $5.1 billion remained authorized for repurchases as of September 30, 2021. From the inception of this program in February of 2006 through September 30, 2021, we repurchased approximately 224 million shares of our common stock for a total cost of approximately $9.0 billion.

Accumulated other comprehensive loss consisted of the following:

Millions of dollars			September 30, 2021			December 31, 2020
Defined benefit and other postretirement liability adjustments			$	(224)		$	(226)
Cumulative translation adjustments			(85)			(83)
Other			(51)			(53)
Total accumulated other comprehensive loss			$	(360)		$	(362)

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Table of Contents			Part I. Item 1 | Notes to Condensed Consolidated Financial Statements

Note 8. Commitments and Contingencies

We are subject to various legal or governmental proceedings, claims or investigations, including personal injury, property damage, environmental, commercial, and tax-related matters, arising in the ordinary course of business, the resolution of which, in the opinion of management, will not have a material adverse effect on our consolidated results of operations or consolidated financial position. There is inherent risk in any litigation, claim or investigation, and no assurance can be given as to the outcome of these proceedings.

Guarantee arrangements

In the normal course of business, we have agreements with financial institutions under which approximately $1.9 billion of letters of credit, bank guarantees, or surety bonds were outstanding as of September 30, 2021. Some of the outstanding letters of credit have triggering events that would entitle a bank to require cash collateralization. None of these off balance sheet arrangements either has, or is likely to have, a material effect on our condensed consolidated financial statements.

Note 9. Income per Share

Basic income or loss per share is based on the weighted average number of common shares outstanding during the period. Diluted income per share includes additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued. Antidilutive securities represent potentially dilutive securities which are excluded from the computation of diluted income or loss per share as their impact would be antidilutive.

A reconciliation of the number of shares used for the basic and diluted income per share computations is as follows:

			Three Months Ended September 30						Nine Months Ended September 30
Millions of shares			2021			2020			2021			2020
Basic weighted average common shares outstanding			894			882			891			879
Dilutive effect of awards granted under our stock incentive plans			—			—			—			—
Diluted weighted average common shares outstanding			894			882			891			879
Antidilutive shares:
Options with exercise price greater than the average market price			21			26			22			27
Options which are antidilutive due to net loss position			—			1			—			1
Total antidilutive shares			21			27			22			28

Note 10. Fair Value of Financial Instruments

    The carrying amount of cash and equivalents, receivables, and accounts payable, as reflected in the condensed consolidated balance sheets, approximates fair value due to the short maturities of these instruments.

The carrying amount and fair value of our total debt, including short-term borrowings and current maturities of long-term debt, is as follows:

			September 30, 2021															December 31, 2020
Millions of dollars			Level 1			Level 2			Total fair value			Carrying value						Level 1			Level 2			Total fair value			Carrying value
Total debt			$	10,896		$	147		$	11,043		$	9,136					$	10,856		$	700		$	11,556		$	9,827

In the first nine months of 2021, the fair value of our debt decreased as a result of repayment of senior debentures and notes, the effect of which was partially offset by lower debt yields. The carrying value of our debt decreased as a result of the repayment of senior debentures and notes. See Note 6 for further information.

Our debt categorized within level 1 on the fair value hierarchy is calculated using quoted prices in active markets for identical liabilities with transactions occurring on the last two days of period-end. Our debt categorized within level 2 on the fair value hierarchy is calculated using significant observable inputs for similar liabilities where estimated values are determined from observable data points on our other bonds and on other similarly rated corporate debt or from observable data points of transactions occurring prior to two days from period-end and adjusting for changes in market conditions. Differences

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Table of Contents			Part I. Item 1 | Notes to Condensed Consolidated Financial Statements

between the periods presented in our level 1 and level 2 classification of our long-term debt relate to the timing of when third party market transactions on our debt are executed. We have no debt categorized within level 3 on the fair value hierarchy.

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Table of Contents						Part I. Item 2 | Executive Overview

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) 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 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:

•our Completion and Production segment delivers cementing, stimulation, intervention, pressure control, artificial lift, and completion products and services. The segment consists of Production Enhancement, Cementing, Completion Tools, Production Solutions, Artificial Lift, and Pipeline and Process Services.

•our Drilling and Evaluation segment provides field and reservoir modeling, drilling, fluids and specialty chemicals, evaluation and precise wellbore placement solutions that enable customers to model, measure, drill, and optimize their well construction activities. The segment consists of Baroid, Sperry Drilling, Wireline and Perforating, Drill Bits and Services, Landmark Software and Services, Testing and Subsea, and Project Management.

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 40,000 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:

-deliver profitable growth in our international business;

-maximize cash flows in our North America business;

-accelerate the deployment and integration of our digital technologies, both internally and with our customers;

-improve capital efficiency by advancing our technologies and making strategic choices that lower our capital expenditure profile; and

-actively participate in advancing a sustainable energy future.

The following charts depict revenue split between our two operating segments and our four primary geographic regions for the quarter ended September 30, 2021.

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Table of Contents						Part I. Item 2 | Executive Overview

Market conditions update and COVID-19 pandemic