What changed in this filing

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Item 1. Financial Statements

2025-04-29 compared with 2024-10-25 · 147 added, 162 removed, 356 unchanged (46% of the section changed)

2 unchanged sentences

(In millions, except share data)

September 30,

Current assets:

29 unchanged sentences

1 billion shares authorized;

389,084,160 and 393,945,659 shares issued and outstanding at September 30, 2024 and December 31, 2023

378,080,553 and 381,549,541 shares issued and outstanding at March 31, 2025 and December 31, 2024

Additional paid-in capital

9 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Cost of revenue

7 unchanged sentences

Provision for income taxes

Net loss attributable to noncontrolling interests

Net income attributable to noncontrolling interests

Net income attributable to Company

6 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Currency translation adjustments

2 unchanged sentences

Comprehensive income

Comprehensive loss attributable to noncontrolling interest

Comprehensive income attributable to noncontrolling interest

Comprehensive income attributable to Company

2 unchanged sentences

(In millions)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

2 unchanged sentences

Depreciation and amortization

Provision for inventory losses

Deferred income taxes

Equity income in unconsolidated affiliates

Dividend from unconsolidated affiliate

Stock-based compensation

Gain on business divestiture

Impairment and loss on assets held for sale

Change in operating assets and liabilities, net of acquisitions:

10 unchanged sentences

Business acquisitions, net of cash acquired

Business divestitures, net of cash disposed

Net cash used in investing activities

5 unchanged sentences

Financing leases

Net cash used in financing activities

Net cash provided by (used in) financing activities

Effect of exchange rates on cash

Increase (decrease) in cash and cash equivalents

Decrease in cash and cash equivalents

Cash and cash equivalents, beginning of period

11 unchanged sentences

Balance at December 31, 2024

Other comprehensive loss

Other comprehensive income, net

Cash dividends, $ 0.075 per common share

Transactions with non-controlling interests

Stock-based compensation

1 unchanged sentence

Withholding taxes

Balance at March 31, 2024

Other comprehensive loss

Cash dividends, $ 0.075 per common share

Transactions with non-controlling interests

Stock-based compensation

Share repurchases

Balance at June 30, 2024

Other comprehensive income, net

Cash dividends, $ 0.075 per common share

Transactions with non-controlling interests

Stock-based compensation

Share repurchases

Balance at September 30, 2024

Balance at March 31, 2025

Shares Issued

4 unchanged sentences

Balance at December 31, 2023

Other comprehensive income, net

Other comprehensive loss

Cash dividends, $ 0.05 per common share

4 unchanged sentences

Balance at March 31, 2024

Other comprehensive income, net

Cash dividends, $ 0.05 per common share

Stock-based compensation

Balance at June 30, 2023

Other comprehensive loss, net

Cash dividends, $ 0.05 per common share

Transactions with non-controlling interest

Stock-based compensation

Withholding taxes

Balance at September 30, 2023

See notes to unaudited consolidated financial statements.

6 unchanged sentences

In our opinion, the consolidated financial statements include all adjustments, which are of a normal recurring nature unless otherwise disclosed, necessary for a fair presentation of the results for the interim periods.

The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the full year.

The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the full year.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported and contingent amounts of assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reporting period.

4 unchanged sentences

Inventories consist of (in millions):

September 30,

Raw materials and supplies

4 unchanged sentences

Accrued liabilities consist of (in millions):

September 30,

Taxes (non-income)

3 unchanged sentences

Balance at December 31, 2024

Accumulated other comprehensive loss before

Accumulated other comprehensive income before

reclassifications

Amounts reclassified from accumulated other comprehensive

Balance at September 30, 2024

Balance at March 31, 2025

The components of amounts reclassified from accumulated other comprehensive loss are as follows (in millions):

Three Months Ended September 30,

Cost of revenue

Other expense

Selling, general and administrative

Nine Months Ended September 30,

Three Months Ended March 31,

Cost of revenue

Other expense

Selling, general and administrative

2 unchanged sentences

As a result, currency translation adjustments resulting from the process of translating the entities’ financial statements into the reporting currency are reported in other comprehensive income (loss).

The effect of changes in the fair values of derivatives designated as cash flow hedges are accumulated in other comprehensive income (loss), net of tax, until the underlying transactions are realized.

The movement in other comprehensive income (loss) from period to period will be the combination of:

1) changes in fair value of open derivatives of $ 1 million during each of the three and nine months ended September 30, 2024 ;

and, 2) the outflow of other comprehensive loss related to cumulative changes in the fair value of derivatives that have settled in the current period, which were $ 1 million and $ 3 million the three and nine months ended September 30, 2024 .

Effective January 1, 2024, NOV consolidated its reporting structure into two segments:

Energy Products and Services, and Energy Equipment.

Segment disclosures pertaining to prior periods have been restated to reflect the change in reportable segments.

Financial results by operating segment are as follows (in millions):

The effect of changes in the fair values of derivatives designated as cash flow hedges are accumulated in other comprehensive loss, net of tax, until the underlying transactions are realized.

The movement in other comprehensive loss from period to period will be the combination of:

1) changes in fair value of open derivatives of $ 5 million during the three months ended March 31, 2025 ;

and, 2) the outflow of other comprehensive loss related to cumulative changes in the fair value of derivatives that have settled in the current period, which were $ 4 million the three months ended March 31, 2025 .

The Company has two reportable segments, Energy Products and Services, and Energy Equipment, based on the products and services provided, customer base, and operating environment.

These reportable segments are determined as those businesses for which results are reviewed regularly by the Chief Operating Decision Maker, who is identified as our Chief Executive Officer , in allocating resources and assessing performance.

The following table presents financial data by business segment (in millions):

Three Months Ended

Nine Months Ended

September 30,

Energy Products and Services

Energy Equipment

Total revenue

Operating profit:

Eliminations and corporate costs (1)

Energy Products and Services

1 unchanged sentence

Eliminations and corporate costs (1)

Total operating profit

Revenue from external customers

Intersegment revenue

Total revenue

Cost of revenue (2)

Selling, general, and administrative (2)

Depreciation and amortization

Gain on sales of fixed assets

Operating profit

Reconciliation to income before income taxes:

Interest and financial costs

Interest income

Equity income (loss) in unconsolidated affiliates

Other expenses, net

Income before income taxes

Other segment information:

Capital expenditures

Investment in unconsolidated affiliates

Intangibles, net

(1) Sales from one segment to another generally are priced at estimated equivalent commercial selling prices;

however, segments originating an external sale are credited with the full profit to the Company.

Eliminations include intercompany transactions conducted between the two reporting segments that are eliminated in consolidation.

Intrasegment transactions are eliminated within each segment.

Total other items included in operating profit were an expense of $ 5 million for the three months ended September 30, 2024, primarily related to severance pay, and a credit of $ 116 million for the nine months ended September 30, 2024, primarily related to gains from divestiture of the Company's Pole Products business in the Energy Equipment segment.

For the three months ended September 30, 2023, total other items included in operating profit were an expense of $ 7 million, primarily related to a voluntary early retirement program, and a credit of $ 4 million for the nine months ended September 30, 2023, primarily related to gains on the sale of previously reserved inventory.

Acquisitions and Divestitures

During the nine months ended September 30, 2024, our Energy Products and Services segment made two strategic acquisitions to enhance and expand our existing portfolio for a total consideration of $ 245 million, net of cash acquired.

One of the two acquisitions was a company owned by White Deer Energy, a middle market private equity fund focused on energy investments.

As the transaction involved a related party at the time it was entered into (e.g., directors Ben A.

Guill and Eric L.

Mattson both had an investment interest in certain White Deer Energy funds), the acquisition was approved by the disinterested members of the Company’s Board of Directors.

As of September 30, 2024 , we provisionally recorded $ 126 million of goodwill and amortizable intangible assets;

$ 63 million of PP&E, including financing and operating lease right of use assets;

$ 89 million of net working capital;

$ 16 million of finance and operating lease liabilities, and $ 17 million in other liabilities.

The fair values of the assets acquired and liabilities assumed are preliminary and subject to change until we finalize our accounting for these acquisitions.

On April 9, 2024, NOV completed the divestiture of its Pole Products business.

Pole Products is a leading manufacturer of premium spun-cast concrete and tapered steel poles for diverse applications.

We recorded a gain of $ 131 million, which is included as a reduction of Cost of Revenue on the Consolidated Statements of Income.

During the second quarter, the Company purchased the remaining noncontrolling interest in Keystone Tower Systems for total consideration of $ 30 million.

Eliminations and corporate costs include intercompany transactions conducted between the two reporting segments that are eliminated in consolidation, as well as corporate costs not allocated to the segments.

Intercompany transactions within each reporting segment are eliminated within each reporting segment.

Also included in the eliminations and corporate costs column are capital expenditures and total assets related to corporate.

Corporate assets consist primarily of cash and fixed assets.

(2) Included in cost of revenue and selling, general, and administrative expenses are pre-tax charges (credits) within Other Items of $ 13 million and $( 3 ) million, for the three months ended March 31, 2025, and 2024, respectively.

Other Items included in cost of revenue for the three months ended March 31, 2025 includes charges related to severance and other restructuring costs (Energy Products and Services:

and Energy Equipment:

$ 3 million);

and charges resulting from the deconsolidation of the Company ’ s Russian subsidiaries based on our determination that control over the subsidiaries was restricted following the levy of additional U.S.

sanctions on Russian operations (Corporate:

$ 1 million).

Other Items included in selling, general, and administrative expenses includes charges related to currency translation adjustment write-offs (Energy Products and Services:

$ 1 million);

and charges related to the aforementioned deconsolidation of our Russian subsidiaries (Corporate:

$ 4 million).

Other items included in cost of revenue for three months ended March 31, 2024 include credits related to gains on sales of previously reserved inventory (Energy Equipment:

$( 5 ) million);

charges related to severance and other restructuring costs (Energy Equipment:

and Corporate:

$ 1 million).

Disaggregation of Revenue

The following table disaggregates the Company’s revenue by major geographic and market segment destination.

In the table, North America includes the U.S.

and Canada (in millions):

Three Months Ended September 30,

North America

International

Nine Months Ended September 30,

The following tables disaggregate our revenue by destinations and revenue streams, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors (in millions).

In the table below, North America includes only the U.S.

Three Months Ended March 31,

North America

International

Intersegment revenue

In the table below, the revenue streams of the Energy Products and Services segment are categorized as services and rentals, sales of shorter-lived capital equipment, and sales of consumable products.

The revenue streams of Energy Equipment are categorized as long-lived capital equipment sales and aftermarket sales and services.

Three Months Ended March 31,

Energy Products and Services:

Services & rental

Capital equipment

Product sales

Intersegment revenue

Energy Equipment:

Capital equipment

Intersegment revenue

Total consolidated

Performance Obligations

Net revenue recognized from performance obligations satisfied in previous periods was immaterial for the three months ended September 30, 2024 primarily due to change orders.

Net revenue recognized from performance obligations satisfied in previous periods was $ 41 million for the three months ended March 31, 2025 primarily due to change orders.

Remaining performance obligations represent the transaction price of firm orders for all revenue streams for which work has not been performed on contracts with original expected duration of one year or more.

We do not disclose the remaining performance obligations of royalty contracts, service contracts for which there is a right to invoice, and short-term contracts that are expected to have a duration of one year or less.

As of September 30, 2024 , the aggregate amount of the transaction price allocated to remaining performance obligations was $ 4,836 million.

As of March 31, 2025 , the aggregate amount of the transaction price allocated to remaining performance obligations was $ 4,797 million.

Although numerous factors can affect timing of revenue recognized on performance obligations, such as customer change orders and supplier accelerations or delays, the Company expects to recognize approximately $ 1,329 million in revenue for the remaining performance obligations in the remainder of 2025 , $ 1,424 million in 2026 , $ 656 million in 2027 , and $ 1,388 million thereafter .

6 unchanged sentences

Currency translation adjustments and other

Balance at September 30, 2024

Balance at March 31, 2025

Royalty Revenue

The Company recognizes royalty revenue due under various licenses for the Company’s intellectual property, including for technology related to drill bits.

The Company recognized revenue for drill bit licenses of approximately $ 17 million and $ 50 million for the three and nine months ended September 30, 2024 , and $ 21 million and $ 62 million for the three and nine months ended September 30, 2023.

The Company recognized revenue for drill bit licenses of approximately $ 19 million for the three months ended March 31, 2025 , and $ 16 million for the three months ended March 31, 2024.

The Company is currently pursuing litigation against certain non-paying licensees, which will impact our ability to collect the receivables timely.

As such, revenue and the related receivables are recorded at a discount to reflect the delayed timing of future cash collections.

As of September 30, 2024 , the receivables of $ 109 million, net of allowances of $ 21 million for credit losses and $ 16 million for the remaining timing related discount, are included in Other assets on the Consolidated Balance Sheets.

As of March 31, 2025 , the receivables of $ 133 million, net of allowances of $ 32 million for credit losses and $ 13 million for the remaining timing related discount, are included in Other assets on the Consolidated Balance Sheets.

These allowances do not impact the amount the Company is entitled to recover on its claims from the licensees in litigation.

4 unchanged sentences

The Company’s customer base, mostly in the oil and gas industry, have generally similar collectability risk characteristics, although larger and state-owned customers may have lower risk than smaller independent customers.

As of September 30, 2024, the allowance for credit losses totaled $ 69 million.

As of March 31, 2025, the allowance for credit losses totaled $ 66 million.

The changes in the carrying amount of the allowance for credit losses are as follows (in millions):

3 unchanged sentences

Reclass for long-term receivables

Balance at September 30, 2024

Balance at March 31, 2025

The Company leases certain facilities and equipment to support its operations around the world.

1 unchanged sentence

Renewal options are common in longer term leases;

however, it is rare that the Company initially intends that a lease option will be exercised due to the cyclical nature of the Company’s business.

however, it is rare that the Company intends to exercise a lease option at inception due to the cyclical nature of the Company’s business.

Residual value guarantees are not typically part of the Company’s leases.

Occasionally, the Company subleases excess facility space, generally at terms similar to the source lease.

The Company reviews agreements at inception to determine if they include a lease and, when they do, uses its incremental borrowing rate to determine the present value of the future lease payments as most do not include implicit interest rates.

Occasionally, the Company sub-leases excess facility space, generally at terms similar to the source lease.

The Company reviews new agreements to determine if they include a lease and, when they do, uses its incremental borrowing rate to determine the present value of the future lease payments as most do not include implicit interest rates.

Components of leases are as follows (in millions):

September 30,

Current portion of lease liabilities:

September 30,

Long-term portion of lease liabilities:

Debt consists of (in millions):

September 30,

$ 1.1 billion in Senior Notes, interest at 3.95 % payable

4 unchanged sentences

Long-term debt

On September 12, 2024, the Company entered into a new $ 1.5 billion five-year unsecured revolving credit facility.

This new credit facility replaced the Company's previous $ 2.0 billion revolving credit facility.

The Company has the right to increase the aggregate commitments under this new agreement to an aggregate amount of up to $ 2.5 billion upon the consent of only those lenders holding any such increase.

The Company has a revolving credit facility with a borrowing capacity of $ 1.5 billion through September 12, 2029.

The Company has the right to increase the aggregate commitments under this agreement to an aggregate amount of up to $ 2.5 billion upon the consent of only those lenders holding any such increase.

Interest under the multicurrency facility is based upon Secured Overnight Financing Rate (SOFR), Euro Interbank Offered Rate (EURIBOR), Sterling Overnight Index Average (SONIA), Canadian Overnight Repo Rate Average (CORRA), or Norwegian Interbank Offered Rate (NIBOR), plus 1.25 % subject to a ratings-based grid or the U.S.

The new credit facility contains a financial covenant establishing a maximum debt-to-capitalization ratio of 60 %.

As of September 30, 2024, the Company was in compliance with a debt-to-capitalization ratio of 23.4 % and had no outstanding borrowings or letters of credits issued under the facility, resulting in $ 1.5 billion of available funds.

A consolidated joint venture of the Company borrowed $ 120 million against a $ 150 million bank line of credit for the construction of a facility in Saudi Arabia.

The credit facility contains a financial covenant establishing a maximum debt-to-capitalization ratio of 60 %.

As of March 31, 2025, the Company was in compliance with a debt-to-capitalization ratio of 23.6 % and had no outstanding borrowings or letters of credits issued under the facility, resulting in $ 1.5 billion of available funds.

A consolidated joint venture of the Company borrowed $ 120 million against a $ 150 million bank line of credit, payable by June 2032 , for the construction of a facility in Saudi Arabia.

Interest under the bank line of credit is based upon SOFR plus 1.40 %.

The bank line of credit contains a financial covenant regarding maximum debt-to-equity ratio of 75 %.

As of September 30, 2024 , the joint venture was in compliance.

The facility construction was completed in the fourth quarter of 2022, and the joint venture will not have future borrowings on the line of credit.

The line of credit repayment schedule began in December 2022 with final payment no later than June 2032 .

As of September 30, 2024, the Company has $ 99 million in borrowings related to this line of credit.

As of March 31, 2025, the joint venture was in compliance and will not have future borrowings on the line of credit.

As of March 31, 2025, the Company has $ 94 million in borrowings related to this line of credit.

The carrying value of debt under the Company’s consolidated joint venture approximates fair value because the interest rates are variable and reflective of current market rates.

1 unchanged sentence

The Company can repay the entire outstanding facility balance without penalty at its sole discretion.

Other debt at September 30, 2024 included $ 61 million of amounts owed to current and former minority interest partners of NOV consolidated joint ventures, of which $ 17 million is due in the next twelve months.

The Company had $ 472 million of outstanding letters of credit at September 30, 2024, primarily in Norway and the United States, that are under various bilateral letter of credit facilities.

Other debt at March 31, 2025 included $ 54 million of amounts owed to current and former minority interest partners of NOV consolidated joint ventures, of which $ 27 million is due in the next twelve months.

The Company had $ 551 million of outstanding letters of credit at March 31, 2025, primarily in Norway and the United States, that are under various bilateral letter of credit facilities.

Letters of credit are issued as bid bonds, advanced payment bonds and performance bonds.

At September 30, 2024 and December 31, 2023 , the fair value of the Company’s unsecured Senior Notes approximated $ 1,350 million and $ 1,316 million, respectively.

The fair value of the Company’s debt is estimated using Level 2 inputs in the fair value hierarchy and is based on quoted prices for those of similar instruments.

At September 30, 2024 and December 31, 2023 , the carrying value of the Company’s unsecured Senior Notes approximated $ 1,587 million and $ 1,586 million, respectively.

The effective tax rate for the three and nine months ended September 30, 2024 was 25.3 % and 25.0 %, respectively, compared to 30.8 % and 18.2 % for the same periods in 2023.

The effective tax rate for 2024 was negatively impacted by a mix of earnings in higher tax rate jurisdictions, losses in certain jurisdictions with no tax benefit, and adjustments to the carrying value of deferred tax assets, partially offset by the reduction of valuation allowances related to U.S.

At March 31, 2025 and December 31, 2024 , the fair value of the Company’s unsecured Senior Notes approximated $ 1,289 million and $ 1,285 million, respectively.

The fair value of the Company’s debt is estimated using Level 2 inputs in the GAAP fair value hierarchy and is based on quoted prices for those of similar instruments.

At March 31, 2025 and December 31, 2024 , the carrying value of the Company’s unsecured Senior Notes approximated $ 1,588 million and $ 1,587 million, respectively.

The effective tax rate was 38.8 % and 26.7 % for the three months ended March 31, 2025, and 2024 , respectively, as compared to the U.S.

statutory tax rate of 21 % for both periods.

The effective tax rate for 2025 was negatively impacted by a mix of earnings in higher tax rate jurisdictions, unfavorable adjustments related to changes in certain foreign currency exchange rates, a shortfall related to previously recognized stock compensation deductibility, and adjustments to the carrying value of deferred tax assets, partially offset by a benefit from withholding tax refunds received.

The effective tax rate for 2024 was negatively impacted by a mix of earnings in higher tax rate jurisdictions, losses in certain jurisdictions with no tax benefit, and a shortfall related to previously recognized stock compensation deductibility, partially offset by the reduction of valuation allowances related to U.S.

and state deferred tax assets.

The effective tax rate for 2023 was positively impacted by the utilization of previously unrealized loss carryforwards and tax credits as well as favorable adjustments related to changes in certain exchange rates, partially offset by current year losses in certain jurisdictions with no tax benefit.

Stock-Based Compensation

3 unchanged sentences

The number of shares authorized under the NOV Plan is 55.7 million.

The NOV Plan is also subject to a fungible ratio concept, such that the issuance of stock options and stock appreciation rights reduces the number of available shares under the NOV Plan on a 1-for-1 basis, and the issuance of other awards reduces the number of available shares under the NOV Plan on a 1.5-for-1 basis.

At September 30, 2024 , approximately 7.8 million shares remained available for future grants under the NOV Plan.

At March 31, 2025 , approximately 1.9 million shares remained available for future grants under the NOV Plan.

The Company also has outstanding awards under its former stock-based compensation plan known as the National Oilwell Varco, Inc.

Long-Term Incentive Plan (the “Former Plan”), however the Company is no longer granting new awards under the Former Plan.

Total expense for all stock-based compensation arrangements was $ 17 million and $ 53 million for the three and nine months ended September 30, 2024, respectively, and $ 17 million and $ 49 million for the three and nine months ended September 30, 2023, respectively.

The total income tax expense/(benefit) recognized in the Consolidated Statements of Income for stock-based compensation arrangements was ($ 2 ) million and $ 1 million for the three and nine months ended September 30, 2024 , respectively.

There was no income tax benefit recognized in the Consolidated Statements of Income for stock-based compensation arrangements under the NOV Plan for the three and nine months ended September 30, 2023 .

Long-Term Incentive Plan (the “Former Plan”);

however, the Company is no longer granting new awards under the Former Plan.

On February 19, 2025, under the NOV Plan, the Company granted 526,425 stock options with a fair value of $ 6.67 per option and an exercise price of $ 15.28 per share, 3,214,507 restricted stock units with a fair value of $ 15.28 per share, and performance share awards (PSAs) to senior management employees with potential payouts varying from zero to 1,217,278 shares in the aggregate.

On March 20, 2025, the Company granted 82,781 restricted stock units with a fair value of $ 15.10 per share and performance share awards to senior management employees with potential payouts varying from zero to 152,316 shares in the aggregate.

The stock options vest over a three-year period from the grant date.

The restricted stock units vest in three equal annual installments commencing on the first anniversary of the grant date.

The 2025 PSAs can be earned based on performance against two established goals over a three-year period :

85 % with a TSR (total shareholder return) goal;

and 15 % with an internal NVA (“NOV Value Added”, a return on capital metric) goal.

TSR performance is determined by comparing the Company’s TSR with the TSR of the members of the Philadelphia Stock Exchange’s Oil Services Sector Index (OSX) for the three-year performance period.

The TSR portion of the performance share awards is subject to a vesting cap equal to 100% of Target Level if the Company’s absolute TSR is negative, regardless of relative TSR results.

Conversely, if the Company’s absolute TSR is greater than 15% annualized over the three-year performance period, the payout amount shall not be less than 50% of Target Level, regardless of relative TSR results.

The NVA goal is based on the Company’s improvement in NVA from the beginning of the performance period until the end of the performance period.

NVA is calculated as an amount equal to the Company’s (a) gross cash earnings less (b) average gross operating assets times an amount equal to a required return on assets, with certain adjustments.

Total expense for all stock-based compensation arrangements was $ 16 million for the three months ended March 31, 2025 and $ 19 million for the three months ended March 31, 2024.

The total income tax expense recognized in the Consolidated Statements of Income for stock-based compensation arrangements for the three months ended March 31, 2025 and 2024 was $ 9 million and $ 4 million, respectively.

Derivative Financial Instruments

4 unchanged sentences

Currency Denomination

September 30,

Colombian Peso

1 unchanged sentence

Norwegian Krone

Singapore Dollar

South African Rand

Singapore Dollar

British Pound Sterling

Canadian Dollar

Brazilian Real

Cash Flow Hedging Strategy

To protect against the volatility of forecasted foreign currency cash flows resulting from forecasted revenues and expenses, the Company instituted a cash flow hedging program.

For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss on the derivative instrument is recorded in accumulated other comprehensive income (loss) and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings (e.g., in “revenues” when the hedged transactions are cash flows associated with forecasted revenues).

To protect against the volatility of forecasted foreign currency cash flows resulting from forecasted revenues and expenses, the Company maintains a cash flow hedging program.

For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss on the derivative instrument is recorded in accumulated other comprehensive loss and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings (e.g., in “revenues” when the hedged transactions are cash flows associated with forecasted revenues).

The Company includes time value in hedge relationships.

3 unchanged sentences

The gain or loss on the derivative instrument is recognized in earnings in other income (expense), together with the changes in the hedged nonfunctional monetary accounts.

The amount of gain (loss) recognized in other expense, net was $ 19 million and $ 29 million for the three and nine months ended September 30, 2024, respectively, and ($ 7 ) million and ($ 17 ) million for the three and nine months ended September 30, 2023, respectively.

The amount of gain (loss) recognized in other expense, net was $ 3 million for the three months ended March 31, 2025, and $( 3 ) million for the three months ended March 31, 2024.

The Company has the following fair values of its derivative instruments and their balance sheet classifications (in millions):

2 unchanged sentences

Balance Sheet

September 30,

Balance Sheet

September 30,

Derivatives designated as hedging

20 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Net income attributable to Company

2 unchanged sentences

unvested stock awards

Diluted outstanding shares

Diluted—weighted average common shares outstanding

Net income attributable to Company per share:

2 unchanged sentences

The two-class method requires a portion of net income attributable to Company to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents if declared.

Net income attributable to the Company allocated to these participating securities was immaterial for each of the three and nine months ended September 30, 2024 and 2023 , respectively.

The Company had stock options outstanding that were anti-dilutive totaling 17 million and 16 million shares for the three and nine months ended September 30, 2024, respectively, compared to 19 million shares for both the three and nine months ended September 30, 2023 .

Net income attributable to the Company allocated to these participating securities was immaterial for each of the three months ended March 31, 2025 and 2024 , respectively.

The Company had stock options outstanding that were anti-dilutive totaling 15 million for the three months ended March 31, 2025, compared to 17 million shares for the three months ended March 31, 2024 .

Cash Dividends

Cash dividends were $ 29 million and $ 79 million for the three and nine months ended September 30, 2024 , compared to $ 20 million and $ 60 million for the three and nine months ended September 30, 2023.

Cash dividends were $ 28 million for the three months ended March 31, 2025, compared to $ 20 million for the three months ended March 31, 2024.

The declaration and payment of future dividends is at the discretion of the Company’s Board of Directors and will be dependent upon the Company’s results of operations, financial condition, capital requirements and other factors deemed relevant by the Company’s Board of Directors.

15 unchanged sentences

In such instances, settlement or other resolution of such claims, individually or collectively, could have a material financial or reputational impact on the Company.

As of September 30, 2024, in the ordinary course of business, the Company recorded reserves in an amount believed to be sufficient, given the estimated range of potential outcomes, for contingent liabilities believed to be probable.

As of March 31, 2025, in the ordinary course of business, the Company recorded reserves in an amount believed to be sufficient, given the estimated range of potential outcomes, for contingent liabilities believed to be probable.

These reserves include costs currently and reasonably estimated to be incurred for reclamation of a closed barite mine and product liability claims, as well as other circumstances involving material claims.

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The total potential loss on these matters cannot be determined;

however, in our opinion, any ultimate liability, to the extent not otherwise provided for, should not materially affect our financial position, cash flow or results of operations.

however, in our opinion, any ultimate liability, to the extent not otherwise provided for, should not materially affect our financial position, cash flows or results of operations.

These estimated liabilities are based on the Company’s assessment of the nature of these matters, their progress toward resolution, the advice of legal counsel and outside experts as well as management’s experience.

17 unchanged sentences

The licensees have responded with a number of alleged defenses and requests for declaratory judgment all focused on avoiding the payments called for under the licenses.

The parties’ legal filings to date can be found in two cases currently pending in the United States District Court for the Southern District of Texas:

The parties’ legal filings to date can be found in the following cases:

Grant Prideco, Inc., et al.

Schlumberger Tech.

Corp., et al., No.

Schlumberger Technology Corp., et al., No.

4:23-cv-00730;

and Halliburton Energy Serv, Inc.

and Halliburton Energy Services, Inc.

Grant Prideco, Inc., et al., No.

4:23-cv-01789.

4:23-cv-01789, both in the United States District Court for the Southern District of Texas;

and Grant Prideco, Inc., et al.

Baker Hughes Oilfield Operations Inc., No.

25-BC11A-0019 in the 11 th Business Court, Harris County, Texas.

While the Company strongly believes that the royalties for which it has sued are due and owing pursuant to the terms of the licensing agreements, there is inherent risk with the related litigation and the Company makes no assurances as to the outcome of such litigation.

4 unchanged sentences

We may, from time to time, become involved in these proceedings at substantial cost to the Company.

The Company is exposed to customs and trade regulation risk in the countries in which we do business and countries from which, or to which, we import or export goods.

The Company is exposed to customs and trade regulation risk, including tariffs, in the countries in which we do business and countries from which, or to which, we import or export goods.

Such trade regulations can be complex and conflicting, as different countries use trade regulation to promote conflicting policy objectives.

8 unchanged sentences

During the third quarter of 2022, we sold our business in Belarus and entered into an agreement to sell our business in Russia.

The sale is subject to various government approvals in Russia and other jurisdictions.

The sale is subject to various government approvals in Russia, the U.S.

The Russian government continues to enact new laws impacting the exit of western companies from Russia, including some instances of expropriation of western businesses.

During the first quarter of 2025, the U.S.

enacted additional sanctions on Russian operations which further restricted our control of the activities within our Russian operations and resulted in the deconsolidation of our Russian subsidiaries, such that their financial results are no longer included in our consolidated financial statements.

We may incur additional costs as a result of conditions in Russia if we are unable to complete the transaction to sell our Russian business on the terms of the agreements.

Geopolitical events continue to pose supply chain and other business risks.

The Company’s ability to manufacture equipment and perform services could be impaired by such disruptions and the Company could be exposed to liabilities resulting from additional interruption or delay in its ability to perform due to factors such as materials shortages, inflationary pressures, limited manpower or otherwise.

The Company’s ability to manufacture equipment and perform services could be impaired by such disruptions and the Company could be exposed to liabilities resulting from additional interruption or delay in its ability to perform due to factors such as war, materials shortages, inflationary pressures, limited manpower or otherwise.

We may face loss of workers, labor shortages, litigation, fines and/or other adverse consequences resulting from ongoing labor impacts.

The combined impact of supply chain and labor market disruptions along with the inflationary impacts of pandemic monetary and regulatory policies could have material adverse impacts on our financial results.

Disputes may arise from a variety of causes, including weather impacts, cyber, geopolitical, regulatory or other business risks, triggering application of force majeure and other contract provisions concerning allocation of responsibility among customers, the Company, and suppliers, resulting in material added cost and/or litigation.

The combined impact of supply chain and labor market disruptions along with continuing inflationary impacts, as well as monetary and regulatory policies could have material adverse impacts on our financial results.

Disputes may arise from a variety of causes, including weather impacts, cyber, geopolitical, regulatory or other business risks.

These risks may trigger the application of force majeure and other contract provisions concerning allocation of responsibility among customers, the Company, and suppliers, resulting in material added cost and/or litigation.

Our customers may attempt to cancel or delay projects, cancel contracts, or may invoke force majeure clauses.

9 unchanged sentences

cash balances, which may involve the repatriation of foreign earnings not indefinitely reinvested.

However, depending on U.S cash balances, the Company may choose to borrow against its revolving credit facility or issue new debt to finance the repurchases.

However, depending on U.S.

cash balances, the Company may choose to borrow against its revolving credit facility or issue new debt to finance the repurchases.

As shares are repurchased, they are constructively retired and returned to an unissued state.

During the three months ended September 30, 2024 , the Company repurchased 4.6 million shares of common stock under the program for an aggregate amount of $ 80 million.

During the nine months ended September 30, 2024 , the Company repurchased 6.6 million shares of common stock under the program for an aggregate amount of $ 117 million.

During the three months ended March 31, 2025 , the Company repurchased 5.4 million shares of common stock under the program for an aggregate amount of $ 81 million.

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 1. Financial Statements