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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 SEPTEMBER 30, 2024

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

img80468766_0.jpg

76-0475815

(State or other jurisdiction

of incorporation or organization)

(IRS Employer

Identification No.)

 

10353 Richmond Avenue
Houston, Texas

77042-4103

(Address of principal executive offices)

(346) 223-3000

(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 October 11, 2024 the registrant had 389,084,160 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)

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

ASSETS

 

(Unaudited)

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

985

 

 

$

816

 

Receivables, net

 

 

1,896

 

 

 

1,905

 

Inventories, net

 

 

2,123

 

 

 

2,151

 

Contract assets

 

 

684

 

 

 

739

 

Prepaid and other current assets

 

 

230

 

 

 

229

 

Total current assets

 

 

5,918

 

 

 

5,840

 

Property, plant and equipment, net

 

 

1,908

 

 

 

1,865

 

Lease right-of-use assets, operating

 

 

375

 

 

 

372

 

Lease right-of-use assets, financing

 

 

175

 

 

 

172

 

Deferred income taxes

 

 

407

 

 

 

488

 

Goodwill

 

 

1,612

 

 

 

1,562

 

Intangibles, net

 

 

493

 

 

 

450

 

Investment in unconsolidated affiliates

 

 

170

 

 

 

211

 

Other assets

 

 

364

 

 

 

334

 

Total assets

 

$

11,422

 

 

$

11,294

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

835

 

 

$

904

 

Accrued liabilities

 

 

819

 

 

 

870

 

Contract liabilities

 

 

495

 

 

 

532

 

Current portion of lease liabilities

 

 

101

 

 

 

94

 

Current portion of long-term debt

 

 

28

 

 

 

13

 

Accrued income taxes

 

 

22

 

 

 

22

 

Total current liabilities

 

 

2,300

 

 

 

2,435

 

Long-term debt

 

 

1,721

 

 

 

1,712

 

Lease liabilities

 

 

551

 

 

 

558

 

Deferred income taxes

 

 

44

 

 

 

70

 

Other liabilities

 

 

290

 

 

 

277

 

Total liabilities

 

 

4,906

 

 

 

5,052

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock - par value $.01; 1 billion shares authorized; 389,084,160 and 393,945,659 shares issued and outstanding at September 30, 2024 and December 31, 2023

 

 

4

 

 

 

4

 

Additional paid-in capital

 

 

8,721

 

 

 

8,812

 

Accumulated other comprehensive loss

 

 

(1,502

)

 

 

(1,493

)

Retained deficit

 

 

(759

)

 

 

(1,155

)

Total Company stockholders' equity

 

 

6,464

 

 

 

6,168

 

Noncontrolling interests

 

 

52

 

 

 

74

 

Total stockholders’ equity

 

 

6,516

 

 

 

6,242

 

Total liabilities and stockholders’ equity

 

$

11,422

 

 

$

11,294

 

 

See notes to unaudited consolidated financial statements.

2


 

NOV INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In millions, except per share data)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Revenue

 

$

2,191

 

 

$

2,185

 

 

$

6,562

 

 

$

6,240

 

Cost of revenue

 

 

1,722

 

 

 

1,717

 

 

 

5,045

 

 

 

4,904

 

Gross profit

 

 

469

 

 

 

468

 

 

 

1,517

 

 

 

1,336

 

Selling, general and administrative

 

 

275

 

 

 

285

 

 

 

848

 

 

 

846

 

Operating profit

 

 

194

 

 

 

183

 

 

 

669

 

 

 

490

 

Interest and financial costs

 

 

(21

)

 

 

(23

)

 

 

(67

)

 

 

(65

)

Interest income

 

 

11

 

 

 

5

 

 

 

27

 

 

 

21

 

Equity income in unconsolidated affiliates

 

 

 

 

 

16

 

 

 

37

 

 

 

101

 

Other expense, net

 

 

(10

)

 

 

(25

)

 

 

(34

)

 

 

(70

)

Net income before income taxes

 

 

174

 

 

 

156

 

 

 

632

 

 

 

477

 

Provision for income taxes

 

 

44

 

 

 

48

 

 

 

158

 

 

 

87

 

Net income

 

 

130

 

 

 

108

 

 

 

474

 

 

 

390

 

Net loss attributable to noncontrolling interests

 

 

 

 

 

(6

)

 

 

(1

)

 

 

(5

)

Net income attributable to Company

 

$

130

 

 

$

114

 

 

$

475

 

 

$

395

 

Net income attributable to Company per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.33

 

 

$

0.29

 

 

$

1.21

 

 

$

1.01

 

Diluted

 

$

0.33

 

 

$

0.29

 

 

$

1.20

 

 

$

1.00

 

Cash dividends per share

 

$

0.075

 

 

$

0.05

 

 

$

0.20

 

 

$

0.15

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

392

 

 

 

393

 

 

 

394

 

 

 

393

 

Diluted

 

 

395

 

 

 

396

 

 

 

397

 

 

 

396

 

 

See notes to unaudited consolidated financial statements.

3


 

NOV INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(In millions)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net income

 

$

130

 

 

$

108

 

 

$

474

 

 

$

390

 

Currency translation adjustments

 

 

49

 

 

 

(31

)

 

 

(8

)

 

 

51

 

Changes in derivative financial instruments, net of tax

 

 

2

 

 

 

3

 

 

 

4

 

 

 

(8

)

Changes in defined benefit plans, net of tax

 

 

(4

)

 

 

1

 

 

 

(5

)

 

 

8

 

Comprehensive income

 

 

177

 

 

 

81

 

 

 

465

 

 

 

441

 

Comprehensive loss attributable to noncontrolling interest

 

 

 

 

 

(6

)

 

 

(1

)

 

 

(5

)

Comprehensive income attributable to Company

 

$

177

 

 

$

87

 

 

$

466

 

 

$

446

 

 

See notes to unaudited consolidated financial statements.

4


 

NOV INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In millions)

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2024

 

 

2023

 

Cash flows from operating activities:

 

 

 

Net income

 

$

474

 

 

$

390

 

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

 

 

 

 

 

 

Depreciation and amortization

 

 

255

 

 

 

225

 

Provision for inventory losses

 

 

26

 

 

 

21

 

Deferred income taxes

 

 

53

 

 

 

(2

)

Equity income in unconsolidated affiliates

 

 

(37

)

 

 

(101

)

Dividend from unconsolidated affiliate

 

 

84

 

 

 

 

Stock-based compensation

 

 

53

 

 

 

49

 

Gain on business divestiture

 

 

(131

)

 

 

 

Impairment and loss on assets held for sale

 

 

 

 

 

4

 

Other, net

 

 

25

 

 

 

(36

)

Change in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

Receivables

 

 

12

 

 

 

(258

)

Inventories

 

 

81

 

 

 

(479

)

Contract assets

 

 

55

 

 

 

11

 

Prepaid and other current assets

 

 

(2

)

 

 

(22

)

Accounts payable

 

 

(87

)

 

 

17

 

Accrued liabilities

 

 

(72

)

 

 

(170

)

Contract liabilities

 

 

(38

)

 

 

38

 

Income taxes payable

 

 

(1

)

 

 

4

 

Other assets/liabilities, net

 

 

(37

)

 

 

75

 

Net cash provided by (used in) operating activities

 

$

713

 

 

$

(234

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(233

)

 

 

(207

)

Business acquisitions, net of cash acquired

 

 

(252

)

 

 

(14

)

Business divestitures, net of cash disposed

 

 

176

 

 

 

 

Other

 

 

1

 

 

 

10

 

Net cash used in investing activities

 

$

(308

)

 

$

(211

)

Cash flows from financing activities:

 

 

 

 

 

 

Borrowings against lines of credit and other debt

 

 

419

 

 

 

62

 

Payments against lines of credit and other debt

 

 

(422

)

 

 

(65

)

Cash dividends paid

 

 

(79

)

 

 

(60

)

Share repurchases

 

 

(117

)

 

 

 

Financing leases

 

 

(19

)

 

 

(17

)

Other

 

 

(17

)

 

 

(26

)

Net cash used in financing activities

 

 

(235

)

 

 

(106

)

Effect of exchange rates on cash

 

 

(1

)

 

 

(5

)

Increase (decrease) in cash and cash equivalents

 

 

169

 

 

 

(556

)

Cash and cash equivalents, beginning of period

 

 

816

 

 

 

1,069

 

Cash and cash equivalents, end of period

 

$

985

 

 

$

513

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

Cash payments during the period for:

 

 

 

 

 

 

Interest

 

$

48

 

 

$

45

 

Income taxes

 

$

124

 

 

$

83

 

 

See notes to unaudited consolidated financial statements.

5


 

NOV INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

(In millions)

 

 

Shares Issued
 and
Outstanding

 

 

Common
Stock

 

 

Additional
Paid-in
Capital

 

 

Accumulated
Other
Comprehensive
Loss

 

 

Retained
Deficit

 

 

Total
Company
Stockholders'
Equity

 

 

Noncontrolling
Interests

 

 

Total
Stockholders'
Equity

 

Balance at December 31, 2023

 

 

394

 

 

$

4

 

 

$

8,812

 

 

$

(1,493

)

 

$

(1,155

)

 

$

6,168

 

 

$

74

 

 

$

6,242

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

119

 

 

 

119

 

 

 

2

 

 

 

121

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(27

)

 

 

 

 

 

(27

)

 

 

 

 

 

(27

)

Cash dividends, $0.05 per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20

)

 

 

(20

)

 

 

 

 

 

(20

)

Transactions with non-controlling interests

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

 

 

(1

)

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

19

 

 

 

 

 

 

 

 

 

19

 

 

 

 

 

 

19

 

Common stock issued

 

 

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Withholding taxes

 

 

(1

)

 

 

 

 

 

(15

)

 

 

 

 

 

 

 

 

(15

)

 

 

 

 

 

(15

)

Other

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

1

 

Balance at March 31, 2024

 

 

396

 

 

$

4

 

 

$

8,818

 

 

$

(1,520

)

 

$

(1,056

)

 

$

6,246

 

 

$

75

 

 

$

6,321

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

226

 

 

 

226

 

 

 

(3

)

 

 

223

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(29

)

 

 

 

 

 

(29

)

 

 

 

 

 

(29

)

Cash dividends, $0.075 per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(30

)

 

 

(30

)

 

 

 

 

 

(30

)

Transactions with non-controlling interests

 

 

 

 

 

 

 

 

(17

)

 

 

 

 

 

 

 

 

(17

)

 

 

(19

)

 

 

(36

)

Stock-based compensation

 

 

 

 

 

 

 

 

17

 

 

 

 

 

 

 

 

 

17

 

 

 

 

 

 

17

 

Share repurchases

 

 

(2

)

 

 

 

 

 

(37

)

 

 

 

 

 

 

 

 

(37

)

 

 

 

 

 

(37

)

Other

 

 

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

3

 

 

 

 

 

 

3

 

Balance at June 30, 2024

 

 

394

 

 

$

4

 

 

$

8,784

 

 

$

(1,549

)

 

$

(860

)

 

$

6,379

 

 

$

53

 

 

$

6,432

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

130

 

 

 

130

 

 

 

 

 

 

130

 

Other comprehensive income, net

 

 

 

 

 

 

 

 

 

 

 

47

 

 

 

 

 

 

47

 

 

 

 

 

 

47

 

Cash dividends, $0.075 per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(29

)

 

 

(29

)

 

 

 

 

 

(29

)

Transactions with non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

(1

)

Stock-based compensation

 

 

 

 

 

 

 

 

17

 

 

 

 

 

 

 

 

 

17

 

 

 

 

 

 

17

 

Share repurchases

 

 

(5

)

 

 

 

 

 

(80

)

 

 

 

 

 

 

 

 

(80

)

 

 

 

 

 

(80

)

Balance at September 30, 2024

 

 

389

 

 

$

4

 

 

$

8,721

 

 

$

(1,502

)

 

$

(759

)

 

$

6,464

 

 

$

52

 

 

$

6,516

 

 

 

Shares Issued
 and
Outstanding

 

 

Common
Stock

 

 

Additional
Paid-in
Capital

 

 

Accumulated
Other
Comprehensive
Loss

 

 

Retained
Deficit

 

 

Total
Company
Stockholders'
Equity

 

 

Noncontrolling
Interests

 

 

Total
Stockholders'
Equity

 

Balance at December 31, 2022

 

 

393

 

 

$

4

 

 

$

8,754

 

 

$

(1,593

)

 

$

(2,069

)

 

$

5,096

 

 

$

38

 

 

$

5,134

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

126

 

 

 

126

 

 

 

(1

)

 

 

125

 

Other comprehensive income, net

 

 

 

 

 

 

 

 

 

 

 

39

 

 

 

 

 

 

39

 

 

 

 

 

 

39

 

Cash dividends, $0.05 per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20

)

 

 

(20

)

 

 

 

 

 

(20

)

Transactions with non-controlling interests

 

 

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

3

 

 

 

28

 

 

 

31

 

Stock-based compensation

 

 

 

 

 

 

 

 

15

 

 

 

 

 

 

 

 

 

15

 

 

 

 

 

 

15

 

Common stock issued

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Withholding taxes

 

 

(1

)

 

 

 

 

 

(17

)

 

 

 

 

 

 

 

 

(17

)

 

 

 

 

 

(17

)

Other

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

1

 

Balance at March 31, 2023

 

 

394

 

 

$

4

 

 

$

8,756

 

 

$

(1,554

)

 

$

(1,963

)

 

$

5,243

 

 

$

65

 

 

$

5,308

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

155

 

 

 

155

 

 

 

2

 

 

 

157

 

Other comprehensive income, net

 

 

 

 

 

 

 

 

 

 

 

39

 

 

 

 

 

 

39

 

 

 

 

 

 

39

 

Cash dividends, $0.05 per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20

)

 

 

(20

)

 

 

 

 

 

(20

)

Stock-based compensation

 

 

 

 

 

 

 

 

17

 

 

 

 

 

 

 

 

 

17

 

 

 

 

 

 

17

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4

)

 

 

(4

)

Balance at June 30, 2023

 

 

394

 

 

$

4

 

 

$

8,773

 

 

$

(1,515

)

 

$

(1,828

)

 

$

5,434

 

 

$

63

 

 

$

5,497

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

114

 

 

 

114

 

 

 

(6

)

 

 

108

 

Other comprehensive loss, net