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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark one)

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

 

FOR THE QUARTERLY PERIOD ENDED June 30, 2022

OR

 

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

 

Commission File Number 1-12317

 

NOV INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

img78618841_0.jpg 

76-0475815

(State or other jurisdiction

of incorporation or organization)

(IRS Employer

Identification No.)

 

7909 Parkwood Circle Drive

Houston, Texas

77036-6565

(Address of principal executive offices)

(713) 341-4802

(Registrant’s telephone number, including area code)

 

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

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $.01 per share

NOV

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, 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 15, 2022 the registrant had 392,801,775 shares of common stock, par value $0.01 per share, outstanding.

 

 


 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

NOV INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

ASSETS

 

(Unaudited)

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,218

 

 

$

1,591

 

Receivables, net

 

 

1,582

 

 

 

1,321

 

Inventories, net

 

 

1,591

 

 

 

1,331

 

Contract assets

 

 

476

 

 

 

461

 

Prepaid and other current assets

 

 

226

 

 

 

198

 

Total current assets

 

 

5,093

 

 

 

4,902

 

Property, plant and equipment, net

 

 

1,761

 

 

 

1,823

 

Lease right-of-use assets, operating

 

 

351

 

 

 

361

 

Lease right-of-use assets, financing

 

 

170

 

 

 

176

 

Goodwill

 

 

1,498

 

 

 

1,527

 

Intangibles, net

 

 

516

 

 

 

503

 

Investment in unconsolidated affiliates

 

 

72

 

 

 

50

 

Other assets

 

 

239

 

 

 

208

 

Total assets

 

$

9,700

 

 

$

9,550

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

754

 

 

$

612

 

Accrued liabilities

 

 

831

 

 

 

778

 

Contract liabilities

 

 

455

 

 

 

392

 

Current portion of lease liabilities

 

 

92

 

 

 

99

 

Current portion of long-term debt

 

 

10

 

 

 

5

 

Accrued income taxes

 

 

29

 

 

 

24

 

Total current liabilities

 

 

2,171

 

 

 

1,910

 

Lease liabilities

 

 

563

 

 

 

576

 

Long-term debt

 

 

1,714

 

 

 

1,708

 

Deferred income taxes

 

 

48

 

 

 

66

 

Other liabilities

 

 

232

 

 

 

226

 

Total liabilities

 

 

4,728

 

 

 

4,486

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock - par value $.01; 1 billion shares authorized; 392,801,775 and
   
392,673,077 shares issued and outstanding at June 30, 2022 and
  December 31, 2021

 

 

4

 

 

 

4

 

Additional paid-in capital

 

 

8,700

 

 

 

8,685

 

Accumulated other comprehensive loss

 

 

(1,629

)

 

 

(1,546

)

Retained deficit

 

 

(2,166

)

 

 

(2,146

)

Total Company stockholders' equity

 

 

4,909

 

 

 

4,997

 

Noncontrolling interests

 

 

63

 

 

 

67

 

Total stockholders’ equity

 

 

4,972

 

 

 

5,064

 

Total liabilities and stockholders’ equity

 

$

9,700

 

 

$

9,550

 

 

See notes to unaudited consolidated financial statements.

2


 

NOV INC.

CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)

(In millions, except per share data)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

 

$

1,727

 

 

$

1,417

 

 

$

3,275

 

 

$

2,666

 

Cost of revenue

 

 

1,418

 

 

 

1,186

 

 

 

2,752

 

 

 

2,279

 

Gross profit

 

 

309

 

 

 

231

 

 

 

523

 

 

 

387

 

Selling, general and administrative

 

 

241

 

 

 

219

 

 

 

476

 

 

 

463

 

Operating profit (loss)

 

 

68

 

 

 

12

 

 

 

47

 

 

 

(76

)

Interest and financial costs

 

 

(19

)

 

 

(19

)

 

 

(38

)

 

 

(39

)

Interest income

 

 

5

 

 

 

2

 

 

 

6

 

 

 

4

 

Equity income (loss) in unconsolidated affiliates

 

 

14

 

 

 

 

 

 

20

 

 

 

(4

)

Other income (expense), net

 

 

 

 

 

(16

)

 

 

(2

)

 

 

(26

)

Net income (loss) before income taxes

 

 

68

 

 

 

(21

)

 

 

33

 

 

 

(141

)

Provision (benefit) for income taxes

 

 

(2

)

 

 

2

 

 

 

12

 

 

 

(4

)

Net income (loss)

 

 

70

 

 

 

(23

)

 

 

21

 

 

 

(137

)

Net income attributable to noncontrolling interests

 

 

1

 

 

 

3

 

 

 

2

 

 

 

4

 

Net income (loss) attributable to Company

 

$

69

 

 

$

(26

)

 

$

19

 

 

$

(141

)

Net income (loss) attributable to Company per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.18

 

 

$

(0.07

)

 

$

0.05

 

 

$

(0.37

)

Diluted

 

$

0.18

 

 

$

(0.07

)

 

$

0.05

 

 

$

(0.37

)

Cash dividends per share

 

$

0.05

 

 

$

-

 

 

$

0.10

 

 

$

-

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

390

 

 

 

386

 

 

 

389

 

 

 

386

 

Diluted

 

 

393

 

 

 

386

 

 

 

392

 

 

 

386

 

 

 

See notes to unaudited consolidated financial statements.

3


 

NOV INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(In millions)

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income (loss)

 

$

70

 

 

$

(23

)

 

$

21

 

 

$

(137

)

Currency translation adjustments

 

 

(84

)

 

 

37

 

 

 

(62

)

 

 

18

 

Changes in derivative financial instruments, net of tax

 

 

(13

)

 

 

(4

)

 

 

(21

)

 

 

(6

)

Comprehensive income (loss)

 

 

(27

)

 

 

10

 

 

 

(62

)

 

 

(125

)

Comprehensive income attributable to noncontrolling interest

 

 

1

 

 

 

3

 

 

 

2

 

 

 

4

 

Comprehensive income (loss) attributable to Company

 

$

(28

)

 

$

7

 

 

$

(64

)

 

$

(129

)

See notes to unaudited consolidated financial statements.

4


 

NOV INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In millions)

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

Net income (loss)

 

$

21

 

 

$

(137

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

149

 

 

 

156

 

Provision for inventory losses

 

 

5

 

 

 

22

 

Deferred income taxes

 

 

(13

)

 

 

(7

)

Loss on extinguishment of debt

 

 

 

 

 

7

 

Equity (income) loss in unconsolidated affiliates

 

 

(20

)

 

 

4

 

Other, net

 

 

94

 

 

 

44

 

Change in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

Receivables

 

 

(279

)

 

 

1

 

Inventories

 

 

(264

)

 

 

64

 

Contract assets

 

 

(17

)

 

 

77

 

Prepaid and other current assets

 

 

(31

)

 

 

4

 

Accounts payable

 

 

142

 

 

 

37

 

Accrued liabilities

 

 

11

 

 

 

(88

)

Contract liabilities

 

 

64

 

 

 

38

 

Income taxes payable

 

 

5

 

 

 

(36

)

Other assets/liabilities, net

 

 

(94

)

 

 

(36

)

Net cash provided by (used in) operating activities

 

$

(227

)

 

 

150

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(89

)

 

 

(98

)

Other

 

 

 

 

 

9

 

Net cash used in investing activities

 

$

(89

)

 

$

(89

)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Borrowings against lines of credit and other debt

 

 

10

 

 

 

34

 

Payments against lines of credit and other debt

 

 

 

 

 

(183

)

Cash dividends paid

 

 

(39

)

 

 

 

Financing leases

 

 

(12

)

 

 

(13

)

Other

 

 

(11

)

 

 

(20

)

Net cash used in financing activities

 

 

(52

)

 

 

(182

)

Effect of exchange rates on cash

 

 

(5

)

 

 

1

 

Decrease in cash and cash equivalents

 

 

(373

)

 

 

(120

)

Cash and cash equivalents, beginning of period

 

 

1,591

 

 

 

1,692

 

Cash and cash equivalents, end of period

 

$

1,218

 

 

$

1,572

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

Cash payments (refunds) during the period for:

 

 

 

 

 

 

Interest

 

$

38

 

 

$

39

 

Income taxes

 

$

79

 

 

$

(85

)

 

See notes to unaudited consolidated financial statements.

5


 

NOV INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

(In millions)

 

 

 

Shares
Outstanding

 

 

Common
Stock

 

 

Additional
Paid in
Capital

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Retained
Earnings
(Deficit)

 

 

Total
Company
Stockholders'
Equity

 

 

Noncontrolling
Interests

 

 

Total
Stockholders'
Equity

 

Balance at December 31, 2021

 

 

393

 

 

$

4

 

 

$

8,685

 

 

$

(1,546

)

 

$

(2,146

)

 

$

4,997

 

 

$

67

 

 

$

5,064

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(50

)

 

 

(50

)

 

 

1

 

 

 

(49

)

Other comprehensive income, net

 

 

 

 

 

 

 

 

 

 

 

14

 

 

 

 

 

 

14

 

 

 

 

 

 

14

 

Cash dividends, $0.05 per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20

)

 

 

(20

)

 

 

 

 

 

(20

)

Stock-based compensation

 

 

 

 

 

 

 

 

17

 

 

 

 

 

 

 

 

 

17

 

 

 

 

 

 

17

 

Withholding taxes

 

 

 

 

 

 

 

 

(12

)

 

 

 

 

 

 

 

 

(12

)

 

 

 

 

 

(12

)

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4

)

 

 

(4

)

Balance at March 31, 2022

 

 

393

 

 

$

4

 

 

$

8,690

 

 

$

(1,532

)

 

$

(2,216

)

 

$

4,946

 

 

$

64

 

 

$

5,010

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

69

 

 

 

69

 

 

 

1

 

 

 

70

 

Other comprehensive loss, net

 

 

 

 

 

 

 

 

 

 

 

(97

)

 

 

 

 

 

(97

)

 

 

 

 

 

(97

)

Cash dividends, $0.05 per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(19

)

 

 

(19

)

 

 

 

 

 

(19

)

Stock-based compensation

 

 

 

 

 

 

 

 

16

 

 

 

 

 

 

 

 

 

16

 

 

 

 

 

 

16

 

Other

 

 

 

 

 

 

 

 

(6

)