hal-20230630

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 June 30, 2023


☐			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 July 19, 2023, there were 898,546,281 shares of Halliburton Company common stock, $2.50 par value per share, outstanding.

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	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 . Business Segment Information	5
	Note 3 . Revenue	6
	Note 4 . Inventories	8
	Note 5 . Accounts Payable	8
	Note 6 . Income Taxes	8
	Note 7 . Shareholders' Equity	9
	Note 8 . Commitments and Contingencies	10
	Note 9 . Income per Share	10
	Note 1 0 . Fair Value of Financial Instruments	11



Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	12
	Executive Overview	12
	Liquidity and Capital Resources	15
	Business Environment and Results of Operations	17
	Results of Operations in 2023 Compared to 2022 (QTD)	19
	Results of Operations in 202 3 Compared to 202 2 (YTD)	21
	Forward-Looking Information	23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23

PART II.	OTHER INFORMATION	24

Item 1.	Legal Proceedings	24
Item 1(a).	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	26

SIGNATURES		27


Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

HALLIBURTON COMPANY

Condensed Consolidated Statements of Operations

(Unaudited)


		Three Months Ended June 30				Six Months Ended June 30
Millions of dollars and shares except per share data		2023		2022		2023		2022
Revenue:
Services		$	4,181	$	3,686	$	8,347	$	6,759
Product sales		1,617		1,388		3,128		2,599
Total revenue		5,798		5,074		11,475		9,358
Operating costs and expenses:
Cost of services		3,404		3,123		6,803		5,833
Cost of sales		1,316		1,166		2,563		2,155
General and administrative		54		67		108		119
Impairments and other charges		—		344		—		366
SAP S4 upgrade expense		13		—		13		—
Total operating costs and expenses		4,787		4,700		9,487		8,473
Operating income		1,011		374		1,988		885
Interest expense, net of interest income of $28, $24, $67, and $43		(92)		(101)		(171)		(208)
Loss on Blue Chip Swap transactions		(104)		—		(104)		—
Loss on early extinguishment of debt		—		—		—		(42)
Other, net		(32)		(42)		(101)		(72)
Income before income taxes		783		231		1,612		563
Income tax provision		(167)		(114)		(341)		(182)


Net income		$	616	$	117	$	1,271	$	381
Net income attributable to noncontrolling interest		(6)		(8)		(10)		(9)
Net income attributable to company		$	610	$	109	$	1,261	$	372













Basic net income per share		$	0.68	$	0.12	$	1.40	$	0.41
Diluted net income per share		$	0.68	$	0.12	$	1.39	$	0.41
Basic weighted average common shares outstanding		901		904		902		902
Diluted weighted average common shares outstanding		903		909		905		906
	See notes to condensed consolidated financial statements.

HAL Q2 2023 FORM 10-Q | 1


Table of Contents

HALLIBURTON COMPANY

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


		Three Months Ended June 30				Six Months Ended June 30
Millions of dollars		2023		2022		2023		2022
Net income		$	616	$	117	$	1,271	$	381




Other comprehensive income (loss), net of income taxes		1		(1)		2		4
Comprehensive income		$	617	$	116	$	1,273	$	385
Comprehensive income attributable to noncontrolling interest		(6)		(8)		(10)		(9)
Comprehensive income attributable to company shareholders		$	611	$	108	$	1,263	$	376
	See notes to condensed consolidated financial statements.

HAL Q2 2023 FORM 10-Q | 2


Table of Contents

HALLIBURTON COMPANY

Condensed Consolidated Balance Sheets

(Unaudited)


Millions of dollars and shares except per share data		June 30, 2023		December 31, 2022
Assets
Current assets:
Cash and equivalents		$	2,105	$	2,346
Receivables (net of allowances for credit losses of $723 and $731)		4,946		4,627
Inventories		3,241		2,923


Other current assets		1,151		1,056
Total current assets		11,443		10,952
Property, plant, and equipment (net of accumulated depreciation of $11,768 and $11,660)		4,483		4,348
Goodwill		2,840		2,829
Deferred income taxes		2,570		2,636
Operating lease right-of-use assets		1,054		913
Other assets		1,683		1,577
Total assets		$	24,073	$	23,255
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable		$	3,188	$	3,121
Accrued employee compensation and benefits		567		634
Taxes other than income		350		349
Income tax payable		267		294
Current portion of operating lease liabilities		253		224

Other current liabilities		721		723
Total current liabilities		5,346		5,345
Long-term debt		7,931		7,928
Operating lease liabilities		892		791
Employee compensation and benefits		385		408
Other liabilities		792		806
Total liabilities		15,346		15,278
Shareholders’ equity:
Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares)		2,663		2,664
Paid-in capital in excess of par value		—		50
Accumulated other comprehensive loss		(228)		(230)
Retained earnings		11,459		10,572
Treasury stock, at cost (167 and 164 shares)		(5,201)		(5,108)
Company shareholders’ equity		8,693		7,948
Noncontrolling interest in consolidated subsidiaries		34		29
Total shareholders’ equity		8,727		7,977
Total liabilities and shareholders’ equity		$	24,073	$	23,255
	See notes to condensed consolidated financial statements.

HAL Q2 2023 FORM 10-Q | 3


Table of Contents

HALLIBURTON COMPANY

Condensed Consolidated Statements of Cash Flows

(Unaudited)


		Six Months Ended June 30
Millions of dollars		2023		2022
Cash flows from operating activities:
Net income		$	1,271	$	381
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation, depletion, and amortization		486		470
Impairments and other charges		—		366


Changes in assets and liabilities:
Receivables		(337)		(930)
Inventories		(318)		(371)

Accounts payable		66		491
Other operating activities		6		(81)
Total cash flows provided by operating activities		1,174		326
Cash flows from investing activities:
Capital expenditures		(571)		(410)

Purchases of investment securities		(270)		(10)
Sales of investment securities		103		—
Proceeds from sales of property, plant, and equipment		90		116


Other investing activities		(48)		(44)
Total cash flows used in investing activities		(696)		(348)
Cash flows from financing activities:
Stock repurchase program		(348)		—
Dividends to shareholders		(289)		(217)

Payments on long-term borrowings		—		(642)

Other financing activities		(7)		116
Total cash flows used in financing activities		(644)		(743)
Effect of exchange rate changes on cash		(75)		(53)
Decrease in cash and equivalents		(241)		(818)
Cash and equivalents at beginning of period		2,346		3,044
Cash and equivalents at end of period		$	2,105	$	2,226
Supplemental disclosure of cash flow information:
Cash payments during the period for:
Interest		$	228	$	244
Income taxes		$	388	$	190
	See notes to condensed consolidated financial statements.

HAL Q2 2023 FORM 10-Q | 4


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 2022 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 June 30, 2023 and the results of our operations for the three and six months ended June 30, 2023 and 2022, and our cash flows for the six months ended June 30, 2023 and 2022. 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 six months ended June 30, 2023 may not be indicative of results for the full year.

Note 2. 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.

HAL Q2 2023 FORM 10-Q | 5


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

The following table presents information on our business segments.


		Three Months Ended June 30				Six Months Ended June 30
Millions of dollars		2023		2022		2023		2022
Revenue:
Completion and Production		$	3,476	$	2,911	$	6,885	$	5,264
Drilling and Evaluation		2,322		2,163		4,590		4,094
Total revenue		$	5,798	$	5,074	$	11,475	$	9,358
Operating income:
Completion and Production		$	707	$	499	$	1,373	$	795
Drilling and Evaluation		376		286		745		580
Total operations		1,083		785		2,118		1,375
Corporate and other (a)		(59)		(67)		(117)		(124)
SAP S4 upgrade expense		(13)		—		(13)		—
Impairments and other charges (b)		—		(344)		—		(366)
Total operating income		$	1,011	$	374	$	1,988	$	885
Interest expense, net of interest income		(92)		(101)		(171)		(208)
Loss on Blue Chip Swap transactions (c)		(104)		—		(104)		—
Loss on early extinguishment of debt		—		—		—		(42)
Other, net		(32)		(42)		(101)		(72)
Income before income taxes		$	783	$	231	$	1,612	$	563

(a)	Includes certain expenses not attributable to a business segment, such as costs related to support functions, corporate executives, and operating lease assets, and also includes amortization expense associated with intangible assets recorded as a result of acquisitions.
(b)	For the three and six months ended June 30, 2022 respectively, the amounts include $131 million and $136 million charges attributable to Completions and Production, and $178 million and $195 million charges attributable to Drilling and Evaluation. Both periods include a $35 million charge attributable to Corporate and other.
(c)	The Central Bank of Argentina maintains currency controls that limit our ability to access U.S. dollars in Argentina and remit cash from our Argentine operations. Our execution of certain trades, known as Blue Chip Swaps, which effectively results in a parallel U.S. dollar exchange rate, resulted in a $104 million pre-tax loss during the second quarter of 2023.

Note 3. 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, 46% and 44% of our consolidated revenue was from the United States for the six months ended June 30, 2023 and 2022, respectively. No other country accounted for more than 10% of our revenue.

HAL Q2 2023 FORM 10-Q | 6


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

The following table presents information on our disaggregated revenue.


	Three Months Ended June 30				Six Months Ended June 30
Millions of dollars	2023		2022		2023		2022
Revenue by segment:
Completion and Production	$	3,476	$	2,911	$	6,885	$	5,264
Drilling and Evaluation	2,322		2,163		4,590		4,094
Total revenue	$	5,798	$	5,074	$	11,475	$	9,358
Revenue by geographic region:
North America	$	2,696	$	2,426	$	5,461	$	4,351
Latin America	994		758		1,909		1,411
Europe/Africa/CIS	698		718		1,360		1,395
Middle East/Asia	1,410		1,172		2,745		2,201
Total revenue	$	5,798	$	5,074	$	11,475	$	9,358

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, was 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.

Receivables

As of June 30, 2023, 35% of our net trade receivables were from customers in the United States and 11% were from customers in Mexico. As of December 31, 2022, 38% of our net trade receivables were from customers in the United States and 11% were from customers in Mexico. Receivables from our primary customer in Mexico accounted for approximately 9% of our total receivables as of June 30, 2023 and December 31, 2022. While we have experienced payment delays from our primary customer in Mexico, the amounts are not in dispute and we have not historically had, and we do not expect, any material write-offs due to collectability of receivables from this customer. No other country or single customer accounted for more than 10% of our net trade receivables at those dates.

We have risk of delayed customer payments and payment defaults associated with customer liquidity issues. 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 ratings, and production profile, as well as political and economic factors in countries of operations and other customer-specific factors.

HAL Q2 2023 FORM 10-Q | 7


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

Note 4. Inventories

Inventories consisted of the following:


Millions of dollars	June 30, 2023		December 31, 2022
Finished products and parts	$	2,075	$	1,859
Raw materials and supplies	1,037		953
Work in process	129		111
Total inventories	$	3,241	$	2,923

Note 5. Accounts Payable

Effective January 1, 2023, we adopted new supplier finance program disclosure requirements contained in guidance issued by the Financial Accounting Standards Board (ASU 2022-04, "Disclosure of Supplier Finance Program Obligations"), other than the roll-forward disclosure, which we will adopt at the beginning of 2024.

We have agreements with third parties that allow our participating suppliers to finance payment obligations from us with designated third-party financial institutions who act as our paying agent. We have generally extended our payment terms with suppliers to 90 days. A participating supplier may request a participating financial institution to finance one or more of our payment obligations to such supplier prior to the scheduled due date thereof at a discounted price. We are not required to provide collateral to the financial institutions.

Our obligations to participating suppliers, including amounts due and scheduled payment dates, are not impacted by the suppliers’ decisions to finance amounts due under these financing arrangements. Our outstanding payment obligations under these agreements were $324 million as of June 30, 2023, and $273 million as of December 31, 2022, and are included in accounts payable on the condensed consolidated balance sheets.

Note 6. Income Taxes

During the three months ended June 30, 2023, we recorded a total income tax provision of $167 million on a pre-tax income of $783 million, resulting in an effective tax rate of 21.3% for the quarter. During the three months ended June 30, 2022, we recorded a total income tax provision of $114 million on a pre-tax income of $231 million, resulting in an effective tax rate of 49.3% for the quarter. The effective tax rate for the three months ended June 30, 2023 was lower than the three months ended June 30, 2022 primarily due to the impact on our effective tax rate for the second quarter of 2022 of the decision to sell our Russian operations and a corresponding increase in the valuation allowance on foreign tax credits.

During the six months ended June 30, 2023, we recorded a total income tax provision of $341 million on a pre-tax income of $1.6 billion, resulting in an effective tax rate of 21.1% for the period. During the six months ended June 30, 2022, we recorded a total income tax provision of $182 million on a pre-tax income of $563 million, resulting in an effective tax rate of 32.2% for the period. The effective tax rate for the six months ended June 30, 2023 was lower than the six months ended June 30, 2022 primarily due to the impact on our effective tax rate for the first six months of 2022 of the decision to sell our Russian operations and a corresponding increase in the valuation allowance on foreign tax credits.

HAL Q2 2023 FORM 10-Q | 8


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 six months ended June 30, 2023 and June 30, 2022, 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, 2022		$	2,664	$	50	$	(5,108)	$	10,572	$	(230)	$	29	$	7,977
Comprehensive income (loss):
Net income		—		—		—		651		—		4		655
Other comprehensive income		—		—		—		—		1		—		1
Cash dividends ($0.16 per share)		—		—		—		(145)		—		—		(145)
Stock repurchase program		—		—		(100)		—		—		—		(100)
Stock plans (a)		—		(50)		113		(3)		—		—		60
Other		—		—		—		—		—		(3)		(3)
Balance at March 31, 2023		$	2,664	$	—	$	(5,095)	$	11,075	$	(229)	$	30	$	8,445
Comprehensive income (loss):
Net income		—		—		—		610		—		6		616
Other comprehensive income		—		—		—		—		1		—		1
Cash dividends ($0.16 per share)		—		—		—		(144)		—		—		(144)
Stock repurchase program		—		—		(250)		—		—		—		(250)
Stock plans (a)		(1)		—		144		(82)		—		—		61
Other		—		—		—		—		—		(2)		(2)
Balance at June 30, 2023		$	2,663	$	—	$	(5,201)	$	11,459	$	(228)	$	34	$	8,727









(a)	In the first quarter and second quarter of 2023, we issued common stock from treasury shares for stock options exercised, restricted stock grants, and purchases under our employee stock purchase plan. As a result, additional paid in capital was reduced to zero as of the end of each period, which resulted in a reduction of retained earnings by $3 million and $82 million, respectively. Future issuances from treasury shares could similarly impact additional paid in capital and retained earnings.


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, 2021		$	2,665	$	32	$	(5,511)	$	9,710	$	(183)	$	15	$	6,728
Comprehensive income (loss):
Net income		—		—		—		263		—		1		264
Other comprehensive income		—		—		—		—		5		—		5
Cash dividends ($0.12 per share)		—		—		—		(108)		—		—		(108)

Stock plans (a)		—		(32)		261		(85)		—		—		144

Balance at March 31, 2022		$	2,665	$	—	$	(5,250)	$	9,780	$	(178)	$	16	$	7,033
Comprehensive income (loss):
Net income		—		—		—		109		—		8		117
Other comprehensive loss		—		—		—		—		(1)		—		(1)
Cash dividends ($0.12 per share)		—		—		—		(109)		—		—		(109)
Stock plans (a)		—		—		277		(163)		—		—		114
Other		—		—		—		—		—		(6)		(6)
Balance at June 30, 2022		$	2,665	$	—	$	(4,973)	$	9,617	$	(179)	$	18	$	7,148









(a)	In the first and second quarter of 2022, we issued common stock from treasury shares for stock options exercised, restricted stock grants and purchases under our employee stock purchase plan. As a result, additional paid in capital was reduced to zero as of the end of each period, which resulted in a reduction of retained earnings by $85 million and $163 million, respectively. Future issuances from treasury shares could similarly impact additional paid in capital and retained earnings.

HAL Q2 2023 FORM 10-Q | 9


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

Our Board of Directors has authorized a program to repurchase our common stock from time to time. We purchased 8.1 million shares of our common stock under the program during the three months ended June 30, 2023 for approximately $250 million. Approximately $4.5 billion remained authorized for repurchases as of June 30, 2023. From the inception of this program in February of 2006 through June 30, 2023, we repurchased approximately 242 million shares of our common stock for a total cost of approximately $9.6 billion.

Accumulated other comprehensive loss consisted of the following:


Millions of dollars	June 30, 2023		December 31, 2022
Cumulative translation adjustments	$	(82)	$	(84)
Defined benefit and other postretirement liability adjustments	(102)		(101)

Other	(44)		(45)
Total accumulated other comprehensive loss	$	(228)	$	(230)

Note 8. Commitments and Contingencies

The Company is subject to various legal or governmental proceedings, claims or investigations, including personal injury, property damage, environmental, intellectual property, commercial, tax, and other 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 legal or governmental proceeding, 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 in place agreements with financial institutions under which approximately $2.2 billion of letters of credit, bank guarantees, or surety bonds were outstanding as of June 30, 2023. 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 was antidilutive.

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


	Three Months Ended June 30		Six Months Ended June 30
Millions of shares	2023	2022	2023	2022
Basic weighted average common shares outstanding	901	904	902	902
Dilutive effect of awards granted under our stock incentive plans	2	5	3	4
Diluted weighted average common shares outstanding	903	909	905	906

Antidilutive shares:
Options with exercise price greater than the average market price	13	14	14	15

Total antidilutive shares	13	14	14	15

HAL Q2 2023 FORM 10-Q | 10


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

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:


	June 30, 2023								December 31, 2022
Millions of dollars	Level 1		Level 2		Total fair value		Carrying value		Level 1		Level 2		Total fair value	Carrying value
Total debt	$	7,221	$	422	$	7,643	$	7,931	$	6,539	$	917

SEC Form 10-Q filed by Halliburton Company