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10-Q

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


☐	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

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.

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.

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.

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.

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			—