What changed in this filing

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Item 1A. Risk Factors

2022-07-28 compared with 2022-04-29 · 21 added, 87 removed, 43 unchanged (72% of the section changed)

1 unchanged sentence

Realization of the following risk could have a material adverse effect on our business, financial condition, cash flows and results of operations.

The risk factor below updates our risk factors previously discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Our operations outside the United States require us to comply with both United States and international regulations violations of which could have a material adverse effect on our business, consolidated results of operations, and consolidated financial condition.

In particular, our operations in Russia have subjected us to additional risks related to current political conflicts.

The shipment of goods, services, and technology across international borders subjects us to extensive trade laws and regulations.

Our import and export activities are governed by the trade, customs, and other laws and regulations in the countries in which we operate.

Moreover, many countries, including the United States, control the export, re-export, and in-country transfer of certain goods, services, and technology and impose related export recordkeeping and reporting obligations.

Governments also impose economic sanctions against certain countries, persons, and entities that can restrict or prohibit transactions involving such countries, persons, and entities.

This in turn can restrict, limit or prevent our conduct of business in certain jurisdictions.

For our operations outside the United States, we are required to comply with United States laws and other international regulations.

Because we have legal entities, facilities and citizens from many jurisdictions, our operations and people may be subject to laws and regulations issued by different sovereigns.

Sometimes these laws conflict and impose inconsistent obligations on citizens from the different jurisdictions in which we operate giving rise to complicated compliance issues.

In 2014, the United States, the European Union and other governmental bodies imposed sectoral sanctions directed at Russia’s oil and gas industry.

Among other things, these sanctions restricted the provision of certain United States and European Union goods, services, and technology in support of exploration or production for deep water, Arctic offshore, or shale projects that have the potential to produce oil in Russia.

At the time, these sanctions resulted in our winding down and ending work on certain projects in Russia and prevented us from pursuing certain other projects in Russia.

In 2017 and 2018, the U.S.

Government imposed additional sanctions against Russia, Russia’s oil and gas industry, and certain Russian companies.

In February of 2022, as a result of armed conflict in Ukraine, governments in the European Union, the United States, the United Kingdom, Switzerland, and other countries have enacted additional sanctions against Russia and Russian interests.

Among other things, these sanctions include controls on the export, re-export, and in-country transfer in Russia of certain goods, supplies, and technologies, including some that we use in our business in Russia.

They also impose restrictions on doing business with certain state-owned Russian customers, certain financial institutions and certain individuals and restrict or prohibit new investments and business activities in Russia.

The situation is complicated by actual and potential governmental and legal actions taken by the Russian Federation in response to the sanctions, which could expose our employees to adverse legal consequences in Russia, including potential criminal penalties.

Other sanctions have been enacted related to Belarus and Belarussian interests.

In response to these sanctions, we ceased new investments in Russia and have curtailed our activities in Russia.

We are actively examining our alternatives, including the potential to further curtail our activities, sell some or all of our businesses, or wind down our remaining operations in Russia and Belarus.

Further, supply chain challenges have adversely impacted and may continue to adversely impact our business in Russia and Belarus.

Litigation may result from the confluence of these events in Russia and Belarus and our response to the various sanctions as we work to comply with applicable laws and regulations.

We also may incur severance costs as a result of conditions in Russia and Belarus.

As a consequence of the conflict in Ukraine and related sanctions on activities related to Russia and Belarus, we recorded impairment and other charges of $41 million for the quarter ending March 31, 2022.

The Company has approximately $30 million in remaining assets and $67 million in currency translation losses related to Russia and Belarus recorded in accumulated other comprehensive loss as of March 31, 2022.

The continued impact of existing sanctions or the imposition of increasingly severe sanctions and the potentially broader impact of the conflict between Russia and Ukraine could result in additional impairments, write downs or charges which could have a material adverse effect on our business.

In addition to customs laws, trade regulations and sanctions, our operations in countries outside the United States are subject to anti-corruption laws.

For example, we comply with the United States Foreign Corrupt Practices Act (FCPA), which prohibits United States companies and their agents and employees from providing anything of value to a foreign official for the purposes of influencing any act or decision of these individuals in their official capacity to help obtain or retain business, direct business to any person or corporate entity, or obtain any unfair advantage.

Our activities create the risk of unauthorized payments or offers of payments by our employees, agents, or joint venture partners that could be in violation of anti-corruption laws, even though some of these parties are not subject to our control.

We have internal control policies and procedures and have implemented training and compliance programs for our employees and agents with respect to the FCPA.

However, we cannot assure that our policies, procedures, and programs will always protect us from reckless or criminal acts committed by our employees or agents.

We are also subject to the risks that our employees, joint venture partners, and agents outside of the United States may fail to comply with other applicable laws.

Allegations of violations

of applicable anti-corruption laws have resulted and may in the future result in internal, independent, or government investigations.

Violations of anti-corruption laws may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could have a material adverse effect on our business, consolidated results of operations and consolidated financial condition.

The risk factor below updates our risk factors previously discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and in our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022.

The Company could be subject to changes in its tax rates, the adoption of new tax legislation, tax audits, or exposure to additional tax liabilities that could have a material adverse effect on our business, consolidated results of operations, and consolidated financial condition.

We are subject to taxes in the U.S.

and numerous jurisdictions where we operate and our subsidiaries are organized.

Due to economic and political conditions, tax rates in the U.S.

and other jurisdictions may be subject to significant change.

In addition, our tax returns are subject to examination by the U.S.

and other tax authorities and governmental bodies.

We regularly assess the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of our provision for taxes.

Recently, the Company received and paid a $51 million transfer pricing tax assessment in Denmark.

The Company and its advisors believe the assessment is without merit.

The Company is presently appealing and believes it will be reimbursed following a successful appeals process.

The payment has been recorded as a long term receivable.

There can be no assurance as to the outcome of the examinations.

Furthermore, an increase in tax rates, particularly in the U.S., changes in our ability to realize our deferred tax assets, or adverse outcomes resulting from examinations of our tax returns could have a material adverse effect on our business, consolidated results of operations, and consolidated financial condition.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

7 unchanged sentences

under the plans or

January 1 through January 31, 2022

February 1 through February 28, 2022

March 1 through March 31, 2022

April 1 through April 30, 2022

May 1 through May 31, 2022

June 1 through June 30, 2022

(1) The 1,329 shares listed as “purchased”

5 unchanged sentences

INDEX TO EXHIBITS

Fifth Amended and Restated Certificate of Incorporation of NOV Inc.

Sixth Amended and Restated Certificate of Incorporation of NOV Inc.

(Exhibit 3.1) (1)

1 unchanged sentence

(Exhibit 3.2) (1)

Description of Securities (13)

Credit Agreement, dated as of June 27, 2017, among National Oilwell Varco, Inc., the financial institutions signatory thereto, including Wells Fargo Bank, N.A., in its capacity, among others, as Administrative Agent, Co-Lead Arranger and Joint Book Runner (Exhibit 3.1)(2)

Amendment No.

1 to Credit Agreement, dated as of October 30, 2019 (3)

National Oilwell Varco, Inc.

2018 Long-Term Incentive Plan, as amended and restated.

Form of Employee Stock Option Agreement.

(Exhibit 10.1) (5)

Form of Non-Employee Director Stock Option Agreement.

(Exhibit 10.2) (5)

Form of Performance-Based Restricted Stock.

(18 Month) Agreement (Exhibit 10.1) (6)

Form of Performance-Based Restricted Stock.

(36 Month) Agreement (Exhibit 10.2) (6)

Form of Performance Award Agreement (Exhibit 10.1) (7)

Form of Executive Employment Agreement.

(Exhibit 10.1) (8)

Form of Executive Severance Agreement.

(Exhibit 10.2) (9)

Form of Employee Nonqualified Stock Option Grant Agreement (10)

Form of Restricted Stock Agreement (10)

Form of Performance Award Agreement (10)

Form of Employee Nonqualified Stock Option Grant Agreement (2019) (11)

Form on Restricted Stock Agreement (2019) (11)

Form of Performance Award Agreement (2019) (11)

Form of Performance Award Agreement (2020) (12)

Form of Performance Award Agreement (2021) (14)

Form of Employee Nonqualified Stock Option Grant Agreement (2022) (15)

Form of Restricted Stock Unit Agreement (2022) (15)

Form of Performance Award Agreement (2022) (15)

Form of Non-Employee Director Restricted Stock Unit Agreement (2022) (2)

Certification pursuant to Rule 13a-14a and Rule 15d-14(a) of the Securities and Exchange Act, as amended.

13 unchanged sentences

(1) Filed as an Exhibit to our Current Report on Form 8-Q filed on December 21, 2020.

(2) Filed as an Exhibit to our Current Report on Form 8-K filed on June 28, 2017.

(3) Filed as an Exhibit to our Current Report on Form 8-K filed on November 14, 2019.

(4) Filed as Appendix I to our Proxy Statement filed on April 9, 2020.

(5) Filed as an Exhibit to our Current Report on Form 8-K filed on February 23, 2006.

(6) Filed as an Exhibit to our Current Report on Form 8-K filed on March 27, 2007.

(7) Filed as an Exhibit to our Current Report on Form 8-K filed on March 27, 2013.

(8) Filed as an Exhibit to our Current Report on Form 8-K filed on December 4, 2020.

(9) Filed as an Exhibit to our Current Report on Form 8-K filed on November 21, 2014.

(10) Filed as an Exhibit to our Current Report on Form 8-K filed on February 26, 2016.

(11) Filed as an Exhibit to our Quarterly Report on Form 10-Q filed on April 26, 2019.

(12) Filed as an Exhibit to our Quarterly Report on Form 10-Q filed on April 28, 2020.

(13) Filed as an Exhibit to our Annual Report on Form 10-K filed on February 12, 2021.

(14) Filed as an Exhibit to our Quarterly Report on Form 10-Q filed on April 28, 2021.

(15) Filed as an Exhibit to our Current Report on Form 8-K filed on February 22, 2022.

(2) Filed herewith.

2 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

April 29, 2022

July 28, 2022

/s/ Christy H.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors