What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-10-28 compared with 2025-07-29 · 90 added, 84 removed, 199 unchanged (47% of the section changed)

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The Company’s Energy Products and Services segment primarily designs, manufactures, rents, and sells products and equipment used in drilling, intervention, completion, and production activities.

Products include drill bits, downhole tools, premium drill pipe, drilling fluids, managed pressure drilling, integral and weld-on connectors for conductor strings and surface casing, completion tools, and artificial lift systems.

Products include drill bits, downhole tools, premium drill pipe, drilling fluids, integral and weld-on connectors for conductor strings and surface casing, completion tools, and artificial lift systems.

The segment also designs, manufactures, and delivers high-end composite pipe, tanks, and structures engineered to solve both corrosion and weight challenges in a wide variety of applications, including oil and gas, chemical, industrial, wastewater, fuel handling, marine and offshore, and rare earth mineral extraction.

In addition to product and equipment sales, the segment provides services, software, and digital solutions to improve drilling and completion operational performance.

Services include tubular inspection and coating, solids control, waste management, and managed pressure drilling.

Services include tubular inspection and coating, solids control, and waste management.

Software and digital solutions offered include drilling and completion optimization and remote monitoring (via downhole and surface instrumentation), wired drill pipe services, software controls and applications, and data management and analytics services at the edge and in the cloud.

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The segment designs, manufactures, and integrates technologies for drilling and producing oil and gas wells.

This includes equipment and technologies needed for drilling, including land rigs, offshore drilling equipment packages, drilling rig components, and software control systems that mechanize and automate the drilling process and rig functionality;

This includes equipment and technologies needed for drilling, including land rigs, offshore drilling equipment packages, drilling rig components, managed pressure drilling, and software control systems that mechanize and automate the drilling process and rig functionality;

hydraulic fracture stimulation;

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EXECUTIVE SUMMARY

For the second quarter ended June 30, 2025, the Company generated revenues of $2.19 billion, a decrease of one percent compared to the second quarter of 2024.

For the third quarter ended September 30, 2025, the Company generated revenues of $2.18 billion, a decrease of one percent compared to the third quarter of 2024.

Net income decreased 68 percent to $42 million, or $0.11 per share, and operating profit decreased 45 percent to $107 million, or 4.9 percent of sales.

The decline in net income and operating profit is primarily attributed to a pre-tax gain of approximately $130 million on the sale of a business during the second quarter of 2024.

The Company recorded $19 million within Other Items during the second quarter of 2025, primarily related to severance costs, facility closures and streamlining our business processes.

The Company recorded $65 million within Other Items during the third quarter of 2025, primarily related to a discount charge to reflect delayed timing of the expected cash collection of royalty receivables currently in litigation as discussed in Note 6, the write-down of certain long-lived assets and inventory, and severance charges associated with facility consolidations and other restructuring activities.

Adjusted EBITDA (operating profit excluding depreciation, amortization, gains and losses on sales of fixed assets and, when applicable, Other Items) decreased 10 percent year-over-year to $258 million, or 11.9 percent of sales.

Sequentially, revenue declined less than one percent, net income declined 61 percent, and Adjusted EBITDA increased two percent.

Segment Performance

Energy Products and Services

Energy Products and Services generated revenues of $1.03 billion in the second quarter of 2025, a decrease of two percent from the second quarter of 2024.

Energy Products and Services generated revenues of $971 million in the third quarter of 2025, a decrease of three percent from the third quarter of 2024.

Operating profit decreased $76 million from the prior year to $38 million, or 3.9 percent of sales, and included $41 million in Other Items.

Adjusted EBITDA decreased $37 million from the prior year to $135 million, or 13.9 percent of sales.

The decline in revenue was due to lower levels of global drilling activity affecting demand for the segment’s shorter cycle consumable products, partially offset by higher sales from the segment’s capital equipment offerings.

Profitability was impacted by a less favorable sales mix, tariffs and other inflationary pressures, and certain charges in Latin America.

Revenue declined due to lower global drilling activity levels and delays in infrastructure projects affecting the timing of capital equipment orders.

Profitability was negatively impacted by a less favorable sales mix, as well as tariffs and other inflationary pressures.

Energy Equipment

Energy Equipment generated revenues of $1.21 billion in the second quarter of 2025, flat when compared to the second quarter of 2024.

Operating profit was $122 million, or 10.1 percent of sales, and included $9 million in Other Items.

Operating profit decreased $110 million from the prior year primarily attributed to a pre-tax gain of approximately $130 million on the sale of a business during the second quarter of 2024.

Adjusted EBITDA increased $16 million from the prior year to $158 million, or 13.1 percent of sales.

Higher revenue out of backlog offset lower sales of aftermarket parts and services.

Improved profitability was driven by strong execution on higher-margin backlog.

New orders booked during the quarter totaled $420 million, a decrease of $557 million when compared to the $977 million of new orders booked during the second quarter of 2024.

Orders shipped from backlog in the second quarter of 2025 were $632 million, representing a book-to-bill of 66 percent, compared to $553 million orders shipped and a book-to-bill of 177 percent in the second quarter of 2024.

As of June 30, 2025, backlog for capital equipment orders for Energy Equipment was $4.30 billion, a decrease of $31 million from the second quarter of 2024.

Energy Equipment generated revenues of $1,247 million in the third quarter of 2025, an increase of two percent when compared to the third quarter of 2024.

Operating profit increased $1 million from the prior year to $130 million, or 10.4 percent of sales, and included $21 million in Other Items.

Adjusted EBITDA increased $21 million from the prior year to $180 million, or 14.4 percent of sales, representing thirteen consecutive quarters of year-over-year Adjusted EBITDA margin growth.

Higher revenue from the segment’s growing backlog of offshore production-related equipment more than offset reduced demand for aftermarket spare parts and services.

Improved profitability was the result of solid execution on the segment’s backlog, cost controls and increased operational efficiencies.

New orders booked during the quarter totaled $951 million, representing a book-to-bill of 141 percent when compared to $674 million orders shipped from backlog.

As of September 30, 2025, backlog for capital equipment orders for Energy Equipment totaled $4.56 billion, an increase of $77 million from the third quarter of 2024.

Oil & Gas Equipment and Services Market and Outlook

Macroeconomic uncertainties have recently intensified due to geopolitical conflicts, rapidly evolving changes to trade policies, and the decision by OPEC+ to return larger than anticipated quantities of oil to the market.

These changes are raising concerns for both supply and demand related challenges to global commodity markets, resulting in lower oil prices, significant market volatility, and greater uncertainty.

Current market conditions present a difficult environment for making capital investment decisions, and the outlook remains uncertain, with clearer downside risk than upside.

Macroeconomic uncertainties remain elevated due to geopolitical conflicts, changes to trade policies, and the decision by OPEC+ to return larger than anticipated quantities of oil to the market.

These factors are raising concerns for both supply and demand related challenges to global commodity markets, resulting in lower oil prices, significant market volatility, and greater uncertainty.

Current market conditions present a difficult environment for making capital investment decisions, and the short-term outlook remains uncertain, with clearer downside risk than upside.

However, management does not expect near-term volatility to affect broader industry trends including:

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The Company’s results are dependent on, among other things, the level of worldwide oil and gas drilling, well remediation activity, the prices of crude oil and natural gas, capital spending by exploration and production companies and drilling contractors, worldwide oil and gas inventory levels and, to a lesser degree, the level of investment in wind and geothermal energy projects.

Key industry indicators for the second quarter of 2025 and 2024, and the first quarter of 2025 include the following:

Key industry indicators for the third quarter of 2025 and 2024, and the second quarter of 2025 include the following:

% increase (decrease)

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Management expects to see continued growth in these areas.

The following table details the U.S., Canadian, and international rig activity and West Texas Intermediate Crude Oil prices for the past nine quarters ended June 30, 2025, on a quarterly basis:

The following table details the U.S., Canadian, and international rig activity and West Texas Intermediate Crude Oil prices for the past nine quarters ended September 30, 2025, on a quarterly basis.

During the quarter, Baker Hughes updated its methodology for calculating rig counts in the Kingdom of Saudi Arabia effective for periods beginning January 2024.

Prior-period international rig count data has been restated to reflect this change.

Baker Hughes, Inc.

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US Department of Energy, Energy Information Administration (www.eia.doe.gov).

The worldwide quarterly average rig count decreased 6 percent (from 1,708 to 1,597) in the second quarter of 2025 when compared to the first quarter of 2025.

The average per barrel price of West Texas Intermediate Crude Oil decreased 10 percent (from $71.84 per barrel to $64.63 per barrel) and natural gas prices decreased 23 percent (from $4.15 per mmbtu to $3.19 per mmbtu) in the second quarter of 2025 compared to the first quarter of 2025.

On July 25, 2025, there were 724 rigs actively drilling in North America, comprised of U.S.

and Canada, which increased when compared to the second quarter average of 700 rigs.

The price for West Texas Intermediate Crude Oil was $65.16 per barrel at July 25, 2025, an increase of 1 percent from the second quarter of 2025 average.

The price for natural gas was $3.16 per mmbtu at July 25, 2025, a decrease of 1 percent from the second quarter of 2025 average.

The worldwide quarterly average rig count increased 1 percent (from 1,778 to 1,798) in the third quarter of 2025 when compared to the second quarter of 2025.

The average per barrel price of West Texas Intermediate Crude Oil increased 2 percent (from $64.63 per barrel to $65.74 per barrel) and natural gas prices decreased 5 percent (from $3.19 per mmbtu to $3.03 per mmbtu) in the third quarter of 2025 compared to the second quarter of 2025.

On October 24, 2025, there were 749 rigs actively drilling in North America, comprised of U.S.

and Canada, which increased 4 percent from the third quarter average of 718 rigs.

The price for West Texas Intermediate Crude Oil was $61.50 per barrel at October 24, 2025, a decrease of 6 percent from the third quarter of 2025 average.

The price for natural gas was $3.30 per mmbtu at October 24, 2025, an increase of 9 percent from the third quarter of 2025 average.

Results of Operations

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Energy Products and Services

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Energy Products and Services

t hree and six months ended June 30, 2025 and 2024.

Revenue from Energy Products and Services was $1,025 million for the three months ended June 30, 2025, compared to $1,050 million for the three months ended June 30, 2024, a decrease of $25 million or 2 percent.

For the six months ended June 30, 2025, revenue from Energy Products and Services was $2,017 million compared to $2,067 million for the six months ended June 30, 2024, a decrease of $50 million or 2 percent.

t hree and nine months ended September 30, 2025 and 2024.

Revenue from Energy Products and Services was $971 million for the three months ended September 30, 2025, compared to $1,003 million for the three months ended September 30, 2024, a decrease of $32 million or 3 percent.

For the nine months ended September 30, 2025, revenue from Energy Products and Services was $2,988 million compared to $3,070 million for the nine months ended September 30, 2024, a decrease of $82 million or 3 percent.

The decline in revenue was primarily driven by lower levels of global drilling activity on a 8 percent year-over-year decrease in the worldwide rig count, which impacted demand for the segment’s shorter-cycle consumable products and led to a decline in sales by 15 percent on a quarter-to-date basis and 16 percent year-to-date.

The decrease in the quarter-to-date period was partially offset by higher sales in the segment’s capital equipment offerings, which saw a 5 percent quarter-to-date increase in sales.

Operating profit from Energy Products and Services was $83 million for the three months ended June 30, 2025, compared to an operating profit of $128 million for the three months ended June 30, 2024, a decrease of $45 million.

For the six months ended June 30, 2025, operating profit from Energy Products and Services was $166 million compared to operating profit of $249 million for the six months ended June 30, 2024, a decrease of $83 million.

The decrease in profitability was impacted by a less favorable sales mix, tariffs and other inflationary pressures, and certain charges in Latin America.

Operating profit from Energy Products and Services was $38 million for the three months ended September 30, 2025, compared to an operating profit of $114 million for the three months ended September 30, 2024, a decrease of $76 million.

For the nine months ended September 30, 2025, operating profit from Energy Products and Services was $204 million compared to operating profit of $363 million for the nine months ended September 30, 2024, a decrease of $159 million.

The decrease in profitability was impacted by a less favorable sales mix, tariffs and other inflationary pressures experienced throughout the year, the impact of discounts on royalty receivables currently in litigation, charges incurred primarily during the third quarter for the write-down of certain inventory, and severance charges associated with facility consolidations.

Energy Equipment

t hree and six months ended June 30, 2025 and 2024.

Revenue from Energy Equipment was $1,207 million for the three months ended June 30, 2025, compared to $1,204 million for the three months ended June 30, 2024, an increase of $3 million.

For the six months ending June 30, 2025, revenue from Energy Equipment was $2,353 million compared to $2,382 million for the six months ending June 30, 2024, a decrease of $29 million or 1 percent.

Revenue remained relatively flat in the second quarter of 2025 compared to prior year, as a 14 percent increase in revenue out of backlog offset a 17 percent decline in sales of aftermarket parts and services.

Year-to-date, the reduced activity levels in the North American land market contributed to a 6 percent decline in sales.

Additionally, lower demand for aftermarket parts and services contributed to a 14 percent decline in sales.

Operating profit from Energy Equipment was $122 million for the three months ended June 30, 2025, compared to an operating profit of $232 million for the three months ended June 30, 2024, a decrease of $110 million.

For the six months ended June 30, 2025, operating profit from Energy Equipment was $256 million compared to operating profit of $327 million for the six months ended June 30, 2024, a decrease of $71 million.

Lower profitability is attributed to a pre-tax gain of approximately $130 million on the sale of a business during the second quarter of 2024.

Excluding this gain, the segment experienced improved profitability, which was driven by strong execution on higher-margin backlog.

t hree and nine months ended September 30, 2025 and 2024.

Revenue from Energy Equipment was $1,247 million for the three months ended September 30, 2025, compared to $1,219 million for the three months ended September 30, 2024, an increase of $28 million or 2 percent.

For the nine months ending September 30, 2025, revenue from Energy Equipment was $3,600 million compared to $3,601 million for the nine months ending September 30, 2024, a decrease of $1 million.

Revenue increased slightly in the third quarter of 2025 compared to prior year.

The improvement was primarily driven by a 20 percent increase in revenue out of backlog, which offset a 19 percent decline in sales of aftermarket parts and services.

On a year-to-date basis, revenue out of backlog increased 13 percent, offset by a 16 percent decline in aftermarket parts and services sales.

Operating profit from Energy Equipment was $130 million for the three months ended September 30, 2025, compared to an operating profit of $129 million for the three months ended September 30, 2024, an increase of $1 million.

For the nine months ended September 30, 2025, operating profit from Energy Equipment was $386 million compared to operating profit of $456 million for the nine months ended September 30, 2024, a decrease of $70 million.

Lower profitability on a year-to-date basis is attributed to a pre-tax gain of approximately $130 million on the sale of a business during the second quarter of 2024.

Excluding this gain, the segment experienced improved profitability, which was driven by strong execution on higher-margin backlog, cost controls, and increased operational efficiencies despite $33 million of write-downs of certain long-lived assets, and severance charges associated with facility consolidations.

The Energy Equipment segment monitors its capital equipment backlog to plan its business.

New orders are added to backlog only when the Company receives a firm written order for major completion and production components or a contract related to a construction project.

The capital equipment backlog was $4,300 million at June 30, 2025, a decrease of $31 million from backlog of $4,331 million at June 30, 2024.

The capital equipment backlog was $4,555 million at September 30, 2025, an increase of $77 million from backlog of $4,478 million at September 30, 2024.

Although numerous factors can affect the timing of revenue out of backlog (including, but not limited to, customer change orders and supplier accelerations or delays), the Company reasonably expects approximately 14 percent of backlog to become revenue during the rest of 2025 and the remainder thereafter.

At June 30, 2025, approximately 52 percent of the capital equipment backlog was for offshore products and approximately 92 percent of the capital equipment backlog was destined for international markets.

At September 30, 2025, approximately 58 percent of the capital equipment backlog was for offshore products and approximately 94 percent of the capital equipment backlog was destined for international markets.

Eliminations and corporate costs

Eliminations and corporate costs were $62 million and $127 million for the three and six months ended June 30, 2025, compared to $47 million and $101 million for the three and six months ended June 30, 2024.

Eliminations and corporate costs were $61 million and $188 million for the three and nine months ended September 30, 2025, compared to $49 million and $150 million for the three and nine months ended September 30, 2024.

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

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Intrasegment transactions are eliminated within each segment.

Eliminations increased 11 percent when compared to the second quarter of 2024 due to higher intrasegment activity, while eliminations remained flat year-to-date.

Corporate costs increased 35 percent from the second quarter of 2024 primarily due to higher legal costs, self-insured property losses, and corporate reserves.

For the six months ended June 30, 2025, corporate costs increased 31 percent year-over-year due to the non-recurring charge of $5 million related to the deconsolidation of our Russian subsidiaries in the first quarter of 2025, higher legal costs, self-insured property losses, and corporate reserves.

Eliminations increased 30 percent when compared to the third quarter of 2024 and 8 percent year-to-date due to higher intrasegment activity.

Corporate costs increased 23 percent from the third quarter of 2024 primarily due to higher legal costs, self-insured property losses, and corporate reserves.

For the nine months ended September 30, 2025, corporate costs increased 37 percent year-over-year due to the non-recurring charge of $5 million related to the deconsolidation of our Russian subsidiaries in the first quarter of 2025, higher legal costs, self-insured property losses, and corporate reserves.

Interest and financial costs and Interest income

Interest and financial costs were $22 million and $44 million for the three and six months ended June 30, 2025, compared to $22 million and $46 million for the three and six months ended June 30, 2024.

The year-over-year decrease for the six month period was primarily due to debt borrowings on the revolving credit facility in the first half of 2024.

Interest income was $10 million and $21 million for the three and six months ended June 30, 2025, compared to $8 million and $16 million for the three and six months ended June 30, 2024.

The increase was primarily related to interest earned on larger cash balances in the current year compared to prior year.

Equity income in unconsolidated affiliates

Equity income in unconsolidated affiliates was $1 million for each of the three and six months ended June 30, 2025, compared to $8 million and $37 million for the three and six months ended June 30, 2024.

Sales for our largest investment in unconsolidated affiliates declined 21 percent for the second quarter of 2025 when compared to the second quarter of 2024.

For the six months ended June 30, 2025, sales declined 39 percent year-over-year.

Interest and financial costs were $22 million and $66 million for the three and nine months ended September 30, 2025, compared to $21 million and $67 million for the three and nine months ended September 30, 2024, remaining relatively consistent year-over-year.

Interest income was $11 million and $32 million for the three and nine months ended September 30, 2025, compared to $11 million and $27 million for the three and nine months ended September 30, 2024.

The year-to-date increase was primarily related to interest earned on larger cash balances in the current year compared to prior year.

Equity income (loss) in unconsolidated affiliates

Equity income (loss) in unconsolidated affiliates was $(11) million and $(10) million for the three and nine months ended September 30, 2025, compared to zero and $37 million for the three and nine months ended September 30, 2024.

Sales for our largest investment in unconsolidated affiliates declined 7 percent for the third quarter of 2025 when compared to the third quarter of 2024.

For the nine months ended September 30, 2025, sales declined 31 percent year-over-year.

The decline in sales is primarily due to pricing pressures and lower volume for oil country tubular goods, as well as higher cost for labor and materials, which led to lower profitability year-over-year.

Other expense, net

Other expense, net was $17 million and $37 million for the three and six months ended June 30, 2025, compared to $14 million and $24 million for the three and six months ended June 30, 2024, respectively.

The change in expense was primarily due to larger foreign currency fluctuations in the current year, particularly with the devaluation of the U.S.

Other expense, net was $12 million and $49 million for the three and nine months ended September 30, 2025, compared to $10 million and $34 million for the three and nine months ended September 30, 2024, respectively.

The year-to-date change in expense was primarily due to larger foreign currency fluctuations in the current year, particularly with the devaluation of the U.S.

Provision for income taxes

The effective tax rate was 0.9% and 20.3% for the three and six months ended June 30, 2025, respectively, compared to 23.9% and 24.9% for the three and six months ended June 30, 2024.

The effective tax rate for the six months ended June 30, 2025 was positively impacted by the release of previously recorded reserves for uncertain tax positions of $58 million, partially offset by an increase to reserves for uncertain tax positions of $23 million, unfavorable adjustments related to the carrying value of deferred tax assets of $14 million, changes in certain foreign currency exchange rates of $4 million, and a mix of earnings in higher tax rate jurisdictions.

The effective tax rate for the six months ended June 30, 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.

The effective tax rate for the three and nine months ended September 30, 2025 was 39.7% and 24.9%, respectively, compared to 25.3% and 25.0% for the same period in 2024.

statutory tax rate was 21% for all periods presented.

The effective tax rate for the three months ended September 30, 2025 was negatively impacted by a mix of earnings in higher tax rate jurisdictions, pre-tax charges discrete to the quarter in lower tax rate jurisdictions, and losses in certain jurisdictions with no tax benefit, partially offset by interest income related to payments made in connection with tax disputes of $11 million.

The effective tax rate for the nine months ended September 30, 2025 was negatively impacted by a mix of earnings in higher tax rate jurisdictions and losses in certain jurisdictions with no benefit, an increase to reserves for uncertain tax positions of $23 million, unfavorable adjustments related to the carrying value of deferred tax assets of $15 million, and unfavorable adjustments related to changes in certain foreign currency exchange rates of $6 million, partially offset by the release of previously recorded reserves for uncertain tax positions of $59 million as well as interest income related to payments made in connection with tax disputes of $11 million.

The effective tax rate for the three and nine months ended September 30, 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.

and state deferred tax assets.

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The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

We are currently evaluating the full effects of the legislation on our consolidated financial statements.

As the legislation was signed into law after the close of our second quarter, the impacts are not included in our operating results for the six months ended June 30, 2025.

OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The Company incorporated these provisions effective during the quarter, and they had no material impact on operational results for the three and nine months ended September 30, 2025.

Non-GAAP Financial Measures and Reconciliations

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Operating profit:

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Interest income

Equity income in unconsolidated affiliates

Equity (income) loss in unconsolidated affiliates

Other expense, net

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Liquidity and Capital Resources

At June 30, 2025, the Company had cash and cash equivalents of $1,080 million and total debt of $1,728 million.

At September 30, 2025, the Company had cash and cash equivalents of $1,207 million and total debt of $1,726 million.

At December 31, 2024, cash and cash equivalents were $1,230 million and total debt was $1,740 million.

As of June 30, 2025, approximately $594 million of the $1,080 million of cash and cash equivalents was held by our foreign subsidiaries and the earnings associated with this cash could be subject to foreign withholding taxes and incremental U.S.

As of September 30, 2025, approximately $842 million of the $1,207 million of cash and cash equivalents was held by our foreign subsidiaries and the earnings associated with this cash could be subject to foreign withholding taxes and incremental U.S.

taxation if transferred among countries or repatriated to the U.S.

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

As of June 30, 2025, the Company was in compliance with a debt-to-capitalization ratio of 23.4% and had no borrowings or letters of credits issued under the facility, resulting in $1.5 billion of available funds.

As of September 30, 2025, the Company was in compliance with a debt-to-capitalization ratio of 23.5% and had no 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.

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

As of June 30, 2025, the joint venture was in compliance and will not have future borrowings on the line of credit.

As of June 30, 2025, the Company had $89 million in borrowings related to this line of credit.

As of September 30, 2025, the joint venture was in compliance and will not have future borrowings on the line of credit.

As of September 30, 2025, the Company had $89 million in borrowings related to this line of credit.

The Company has $11 million in payments related to this line of credit due in the next twelve months.

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

Other debt at June 30, 2025 included $50 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’s outstanding debt at June 30, 2025 also consisted of $1,091 million in 3.95% Senior Notes, maturing on December 1, 2042, and $497 million in 3.60% Senior Notes, maturing on December 31, 2029.

The Company was in compliance with all covenants at June 30, 2025.

Long-term lease liabilities totaled $540 million at June 30, 2025.

The Company had $679 million of outstanding letters of credit at June 30, 2025, primarily in Norway and the United States, that are under various bilateral letter of credit facilities.

Other debt at September 30, 2025 included $48 million of amounts owed to current and former minority interest partners of NOV consolidated joint ventures, of which $23 million is due in the next twelve months.

The Company’s outstanding debt at September 30, 2025 also consisted of $1,091 million in 3.95% Senior Notes, maturing on December 1, 2042, and $497 million in 3.60% Senior Notes, maturing on December 31, 2029.

The Company was in compliance with all covenants at September 30, 2025.

Long-term lease liabilities totaled $528 million at September 30, 2025.

The Company had $889 million of outstanding letters of credit at September 30, 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.

The following table summarizes our net cash provided by (used in) continuing operating activities, continuing investing activities and continuing financing activities for the periods presented (in millions):

Six Months Ended

Nine Months Ended

September 30,

Net cash provided by operating activities

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Net cash used in financing activities

Significant uses and sources of cash during the first six months of 2025

Significant uses and sources of cash during the first nine months of 2025

• Cash flows provided by operating activities were $678 million, primarily driven by net income before depreciation and amortization and changes in the primary components of our working capital (receivables, inventories, accounts payable, and accrued liabilities).

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• Share repurchases were $230 million.

The effect of the change in exchange rates on cash flows was an increase of $19 million for the first six months of 2025, and a decrease of $4 million for the first six months of 2024.

The effect of the change in exchange rates on cash flows was an increase of $16 million for the first nine months of 2025, and a decrease of $1 million for the first nine months of 2024.

We believe that cash on hand, cash generated from operations and amounts available under our credit facilities and from other sources of debt will be sufficient to fund operations, lease payments, working capital needs, capital expenditure requirements, dividends and financing obligations.

During the three months ended June 30, 2025, the Company repurchased approximately 5.5 million shares of common stock under its share repurchase program for an aggregate amount of $69 million.

During the six months ended June 30, 2025, the Company repurchased 10.9 million shares of common stock under the program for an aggregate amount of $150 million.

During the three months ended September 30, 2025, the Company repurchased approximately 6.2 million shares of common stock under its share repurchase program for an aggregate amount of $80 million.

During the nine months ended September 30, 2025, the Company repurchased 17.1 million shares of common stock under the program for an aggregate amount of $230 million.

The Company expects to return at least 50% of Excess Free Cash Flow (defined as cash flow from operations less capital expenditures and other investments, including acquisitions and divestitures), through a combination of quarterly base dividends, opportunistic stock buybacks, and an annual supplemental dividend to true-up returns to shareholders on an annual basis.

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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 2. Management’s Discussion and Analysis