# EDGAR Filing Document

**Accession Number:** 0001021860
**File Stem:** 0000950170-25-099476
**Filing Date:** 2025-7
**Character Count:** 210489
**Document Hash:** e27a77cff5613f0da1708a1621d5c9d0
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000950170-25-099476.hdr.sgml**: 20250729

**ACCESSION NUMBER**: 0000950170-25-099476

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 80

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250729

**DATE AS OF CHANGE**: 20250729

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NOV Inc.
- **CENTRAL INDEX KEY:** 0001021860
- **STANDARD INDUSTRIAL CLASSIFICATION:** OIL & GAS FILED MACHINERY & EQUIPMENT [3533]
- **ORGANIZATION NAME:** 01 Energy & Transportation
- **EIN:** 760475815
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-12317
- **FILM NUMBER:** 251159748

**BUSINESS ADDRESS:**
- **STREET 1:** 10353 RICHMOND AVE.
- **CITY:** HOUSTON
- **STATE:** TX
- **ZIP:** 77042
- **BUSINESS PHONE:** 346-223-3000

**MAIL ADDRESS:**
- **STREET 1:** 10353 RICHMOND AVE.
- **CITY:** HOUSTON
- **STATE:** TX
- **ZIP:** 77042

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** NATIONAL OILWELL VARCO INC
- **DATE OF NAME CHANGE:** 20050311

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** NATIONAL OILWELL INC
- **DATE OF NAME CHANGE:** 19960829

?xml version='1.0' encoding='ASCII'? 10-Q

------

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

------

**FORM** 10-Q

------

**(Mark one)**

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**FOR THE QUARTERLY PERIOD ENDED** **JUNE 30,** 2025

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**Commission File Number** 1-12317

NOV INC.

**(Exact name of registrant as specified in its charter)**

---

| | | |
|:---|:---|:---|
| Delaware | ![img81389404_0.jpg](img81389404_0.jpg) | 76-0475815 |
| **(State or other jurisdiction**<br>**of incorporation or organization)** | ![img81389404_0.jpg](img81389404_0.jpg) | **(IRS Employer**<br>**Identification No.)** |

---

10353 Richmond AvenueHouston**,** Texas

77042-4103

**(Address of principal executive offices)**

**(**346**)** 223-3000

**(Registrant's telephone number, including area code)**

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, par value $.01 per share | NOV | New York Stock Exchange |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑ Accelerated filer ☐ Non-accelerated filer ☐ <br> Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of July 25, 2025 the registrant had 371,364,737 shares of common stock, par value $0.01 per share, outstanding.

------

**<u>PART I - FINANCIAL INFORMATION</u>**

**Item 1. Financial Statements**

**NOV INC.**

**CONSOLIDATED BALANCE SHEETS**

**(In millions, except share data)**

---

| | | |
|:---|:---|:---|
|  | **June 30,** | **December 31,** |
|  | **2025** | **2024** |
| **ASSETS** | **(Unaudited)** |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $1080 | $1230 |
| &nbsp;&nbsp;&nbsp;&nbsp;Receivables, net | 1902 | 1819 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories, net | 1929 | 1932 |
| &nbsp;&nbsp;&nbsp;&nbsp;Contract assets | 655 | 577 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid and other current assets | 215 | 212 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 5781 | 5770 |
| Property, plant and equipment, net | 1990 | 1922 |
| Lease right-of-use assets, operating | 346 | 353 |
| Lease right-of-use assets, financing | 195 | 196 |
| Deferred income taxes | 415 | 413 |
| Goodwill | 1623 | 1630 |
| Intangibles, net | 496 | 508 |
| Investment in unconsolidated affiliates | 178 | 163 |
| Other assets | 339 | 406 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $11363 | $11361 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $823 | $837 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | 742 | 861 |
| &nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities | 513 | 492 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current portion of lease liabilities | 103 | 102 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current portion of long-term debt | 38 | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued income taxes | 20 | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 2239 | 2347 |
| Long-term debt | 1690 | 1703 |
| Lease liabilities | 540 | 544 |
| Deferred income taxes | 71 | 56 |
| Other liabilities | 265 | 283 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 4805 | 4933 |
| Commitments and contingencies |  |  |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock - par value $.01; 1 billion shares authorized; 372,736,059 and 381,549,541 shares issued and outstanding at June 30, 2025 and December 31, 2024 | 4 | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 8493 | 8625 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (1411) | (1625) |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained deficit | (582) | (628) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Company stockholders' equity | 6504 | 6376 |
| &nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling interests | 54 | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 6558 | 6428 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $11363 | $11361 |

---

See notes to unaudited consolidated financial statements.

------

**NOV INC.**

**CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)**

**(In millions, except per share data)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** | **June 30,** | **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Revenue | $2188 | $2216 | $4291 | $4371 |
| Cost of revenue | 1742 | 1626 | 3398 | 3323 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 446 | 590 | 893 | 1048 |
| Selling, general and administrative | 303 | 277 | 598 | 573 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating profit | 143 | 313 | 295 | 475 |
| Interest and financial costs | (22) | (22) | (44) | (46) |
| Interest income | 10 | 8 | 21 | 16 |
| Equity income in unconsolidated affiliates | 1 | 8 | 1 | 37 |
| Other expense, net | (17) | (14) | (37) | (24) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income before income taxes | 115 | 293 | 236 | 458 |
| Provision for income taxes | 1 | 70 | 48 | 114 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income | 114 | 223 | 188 | 344 |
| Net income (loss) attributable to noncontrolling interests | 6 | (3) | 7 | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income attributable to Company | $108 | $226 | $181 | $345 |
| Net income attributable to Company per share: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | $0.29 | $0.57 | $0.48 | $0.88 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | $0.29 | $0.57 | $0.48 | $0.87 |
| Cash dividends per share | $0.285 | $0.075 | $0.360 | $0.125 |
| Weighted average shares outstanding: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | 375 | 395 | 378 | 394 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | 376 | 397 | 380 | 398 |

---

See notes to unaudited consolidated financial statements.

------

**NOV INC.**

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)**

**(In millions)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** | **June 30,** | **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Net income | $114 | $223 | $188 | $344 |
| Currency translation adjustments | 104 | (31) | 193 | (57) |
| Changes in derivative financial instruments, net of tax | 11 | 2 | 20 | 2 |
| Changes in defined benefit plans, net of tax | 1 |  | 1 | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;Comprehensive income | 230 | 194 | 402 | 288 |
| Comprehensive income (loss) attributable to noncontrolling interests | 6 | (3) | 7 | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;Comprehensive income attributable to Company | $224 | $197 | $395 | $289 |

---

See notes to unaudited consolidated financial statements.

------

**NOV INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)**

**(In millions)**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| Cash flows from operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income | $188 | $344 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash provided by<br>operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 176 | 169 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | 14 | 76 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity income in unconsolidated affiliates | (1) | (37) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividend from unconsolidated affiliate |  | 84 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 33 | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on business divestiture |  | (131) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other, net | 51 | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in operating assets and liabilities, net of acquisitions: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receivables | 24 | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (18) | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract assets | (78) | (33) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid and other current assets | (3) | (5) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (14) | (113) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | (120) | (112) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities | 21 | (26) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable | 2 | (3) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets/liabilities, net | 51 | (54) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | $326 | 354 |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of property, plant and equipment | (167) | (151) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Business acquisitions, net of cash acquired |  | (252) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Business divestitures, net of cash disposed |  | 176 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 5 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | $(162) | $(226) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrowings against lines of credit and other debt |  | 419 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments against lines of credit and other debt | (13) | (422) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash dividends paid | (135) | (50) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share repurchases | (150) | (37) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financing leases | (14) | (13) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | (21) | (10) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities | (333) | (113) |
| Effect of exchange rates on cash | 19 | (4) |
| Increase (decrease) in cash and cash equivalents | (150) | 11 |
| Cash and cash equivalents, beginning of period | 1230 | 816 |
| Cash and cash equivalents, end of period | $1080 | $827 |
| Supplemental disclosures of cash flow information: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash payments during the period for: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest | $42 | $45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes | $86 | $77 |

---

See notes to unaudited consolidated financial statements.

------

**NOV INC.**

**CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)**

**(In millions)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Shares Issued<br> and <br>Outstanding** | **Common<br>Stock** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Other<br>Comprehensive<br>Loss** | **Retained<br>Deficit** | **Total<br>Company<br>Stockholders'<br>Equity** | **Noncontrolling<br>Interests** | **Total<br>Stockholders'<br>Equity** |
| Balance at December 31, 2024 | 382 | $4 | $8625 | $(1625) | $(628) | $6376 | $52 | $6428 |
| Net income |  |  |  |  | 73 | 73 | 1 | 74 |
| Other comprehensive income |  |  |  | 98 |  | 98 |  | 98 |
| Cash dividends, $0.075 per common share |  |  |  |  | (28) | (28) |  | (28) |
| Stock-based compensation |  |  | 16 |  |  | 16 |  | 16 |
| Common stock issued | 3 |  |  |  |  |  |  |  |
| Withholding taxes | (1) |  | (13) |  |  | (13) |  | (13) |
| Share repurchases | (5) |  | (81) |  |  | (81) |  | (81) |
| Other | (1) |  | (1) |  |  | (1) | 1 |  |
| Balance at March 31, 2025 | 378 | $4 | $8546 | $(1527) | $(583) | $6440 | $54 | $6494 |
| Net income |  |  |  |  | 108 | 108 | 6 | 114 |
| Other comprehensive income |  |  |  | 116 |  | 116 |  | 116 |
| Cash dividends, $0.285 per common share |  |  |  |  | (107) | (107) |  | (107) |
| Transactions with non-controlling interests |  |  |  |  |  |  | (5) | (5) |
| Stock-based compensation |  |  | 17 |  |  | 17 |  | 17 |
| Share repurchases | (6) |  | (69) |  |  | (69) |  | (69) |
| Other | 1 |  | (1) |  |  | (1) | (1) | (2) |
| Balance at June 30, 2025 | 373 | $4 | $8493 | $(1411) | $(582) | $6504 | $54 | $6558 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Shares Issued<br> and <br>Outstanding** | **Common<br>Stock** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Other<br>Comprehensive<br>Loss** | **Retained<br>Deficit** | **Total<br>Company<br>Stockholders'<br>Equity** | **Noncontrolling<br>Interests** | **Total<br>Stockholders'<br>Equity** |
| Balance at December 31, 2023 | 394 | $4 | $8812 | $(1493) | $(1155) | $6168 | $74 | $6242 |
| Net income |  |  |  |  | 119 | 119 | 2 | 121 |
| Other comprehensive loss |  |  |  | (27) |  | (27) |  | (27) |
| Cash dividends, $0.05 per common share |  |  |  |  | (20) | (20) |  | (20) |
| Transactions with non-controlling interests |  |  | 1 |  |  | 1 | (1) |  |
| Stock-based compensation |  |  | 19 |  |  | 19 |  | 19 |
| Common stock issued | 3 |  |  |  |  |  |  |  |
| Withholding taxes | (1) |  | (15) |  |  | (15) |  | (15) |
| Other |  |  | 1 |  |  | 1 |  | 1 |
| Balance at March 31, 2024 | 396 | $4 | $8818 | $(1520) | $(1056) | $6246 | $75 | $6321 |
| Net income |  |  |  |  | 226 | 226 | (3) | 223 |
| Other comprehensive loss |  |  |  | (29) |  | (29) |  | (29) |
| Cash dividends, $0.075 per common share |  |  |  |  | (30) | (30) |  | (30) |
| Transactions with non-controlling interests |  |  | (17) |  |  | (17) | (19) | (36) |
| Stock-based compensation |  |  | 17 |  |  | 17 |  | 17 |
| Share repurchases | (2) |  | (37) |  |  | (37) |  | (37) |
| Other |  |  | 3 |  |  | 3 |  | 3 |
| Balance at June 30, 2024 | 394 | $4 | $8784 | $(1549) | $(860) | $6379 | $53 | $6432 |

---

See notes to unaudited consolidated financial statements.

------

**NOV INC.**

**Notes to Consolidated Financial Statements (Unaudited)**

**1. Basis of Presentation**

The accompanying unaudited consolidated financial statements of NOV Inc. ("NOV" or the "Company") present information in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and the instructions to Form 10-Q and applicable rules of Regulation S-X. They do not include all information or footnotes required by GAAP for complete consolidated financial statements and should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company's 2024 Annual Report on Form 10-K. Certain reclassifications have been made to prior period financial information in order to conform with current period presentation.

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 six months ended June 30, 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. Actual results could differ from those estimates.

The fair values of cash and cash equivalents, receivables and payables were approximately the same as their presented carrying values because of the short maturities of these instruments. The fair value of long-term debt is provided in Note 8, and the fair values of derivative financial instruments are provided in Note 11.

**2. Inventories, net**

Inventories consist of (in millions):

---

| | | |
|:---|:---|:---|
|  | **June 30,** | **December 31,** |
|  | **2025** | **2024** |
| Raw materials and supplies | $450 | $394 |
| Work in process | 216 | 181 |
| Finished goods and purchased products | 1541 | 1643 |
|  | 2207 | 2218 |
| Less: Inventory reserve | (278) | (286) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $1929 | $1932 |

---

**3. Accrued Liabilities**

Accrued liabilities consist of (in millions):

---

| | | |
|:---|:---|:---|
|  | **June 30,** | **December 31,** |
|  | **2025** | **2024** |
| Compensation | $216 | $268 |
| Vendor costs | 148 | 141 |
| Taxes (non-income) | 100 | 119 |
| Warranties | 71 | 68 |
| Insurance | 45 | 43 |
| Commissions | 14 | 16 |
| Interest | 10 | 11 |
| Fair value of derivatives | 6 | 24 |
| Other | 132 | 171 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $742 | $861 |

---

------

**4. Accumulated Other Comprehensive Loss**

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

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  | **Derivative** | **Employee** |  |
|  | **Currency** | **Financial** | **Benefit** |  |
|  | **Translation** | **Instruments,** | **Plans,** |  |
|  | **Adjustments** | **Net of Tax** | **Net of Tax** | **Total** |
| Balance at December 31, 2024 | $(1569) | $(10) | $(46) | $(1625) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive income before<br> reclassifications | 188 | 16 |  | 204 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amounts reclassified from accumulated other comprehensive<br> loss | 5 | 4 | 1 | 10 |
| Balance at June 30, 2025 | $(1376) | $10 | $(45) | $(1411) |

---

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

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** |
|  | **2025** | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** | **2024** |
|  | **Currency** | **Derivative** | **Employee** |  | **Currency** | **Derivative** | **Employee** |  |
|  | **Translation** | **Financial** | **Benefit** |  | **Translation** | **Financial** | **Benefit** |  |
|  | **Adjustments** | **Instruments** | **Plans** | **Total** | **Adjustments** | **Instruments** | **Plans** | **Total** |
| Revenue | $— | $— | $— | $— | $— | $— | $— | $— |
| Cost of revenue |  |  |  |  |  |  |  |  |
| Selling, general and administrative |  |  | 1 | 1 |  |  |  |  |
| Tax effect |  |  |  |  |  |  |  |  |
|  | $— | $— | $1 | $1 | $— | $— | $— | $— |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** |
|  | **2025** | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** | **2024** |
|  | **Currency** | **Derivative** | **Employee** |  | **Currency** | **Derivative** | **Employee** |  |
|  | **Translation** | **Financial** | **Benefit** |  | **Translation** | **Financial** | **Benefit** |  |
|  | **Adjustments** | **Instruments** | **Plans** | **Total** | **Adjustments** | **Instruments** | **Plans** | **Total** |
| Revenue | $— | $2 | $— | $2 | $— | $1 | $— | $1 |
| Cost of revenue |  | 3 |  | 3 |  | 1 |  | 1 |
| Selling, general and administrative | 5 |  | 1 | 6 |  |  |  |  |
| Tax effect |  | (1) |  | (1) |  |  |  |  |
|  | $5 | $4 | $1 | $10 | $— | $2 | $— | $2 |

---

The Company's reporting currency is the U.S. dollar. A majority of the Company's international entities in which there is a substantial investment have the local currency as their functional currency. 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 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 $11 million and $16 million during the three and six months ended June 30, 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 zero and $4 million for the three and six months ended June 30, 2025.

**5. Segments**

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 our Chief Executive Officer, who is identified as the Chief Operating Decision Maker, in allocating resources and assessing performance.

------

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

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** |
|  | **2025** | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** | **2024** |
|  | **Energy Products and Services** | **Energy Equipment** | **Eliminations and corporate costs (1)** | **Total** | **Energy Products and Services** | **Energy Equipment** | **Eliminations and corporate costs (1)** | **Total** |
| Revenue from external customers | $998 | $1190 | $— | $2188 | $1027 | $1189 | $— | $2216 |
| Intersegment revenue | 27 | 17 | (44) |  | 23 | 15 | (38) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total revenue | 1025 | 1207 | (44) | 2188 | 1050 | 1204 | (38) | 2216 |
| Less: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of revenue (2) | 759 | 927 | (22) | 1664 | 740 | 823 | (16) | 1547 |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling, general, and administrative (2) | 126 | 131 | 34 | 291 | 127 | 120 | 23 | 270 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 57 | 28 | 2 | 87 | 55 | 29 | 2 | 86 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on sales of fixed assets |  | (1) | 4 | 3 | - |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating profit | $83 | $122 | $(62) | $143 | $128 | $232 | $(47) | $313 |
| Reconciliation to income before income taxes: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest and financial costs |  |  | (22) | (22) |  |  | (22) | (22) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income |  |  | 10 | 10 |  |  | 8 | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity income (loss) in unconsolidated affiliates | 2 | (1) |  | 1 | 6 | 2 |  | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other expenses, net |  |  | (17) | (17) |  |  | (14) | (14) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income before income taxes | $85 | $121 | $(91) | $115 | $134 | $234 | $(75) | $293 |
| Other segment information: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital expenditures | $48 | $33 | $2 | $83 | $68 | $11 | $3 | $82 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** |
|  | **2025** | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** | **2024** |
|  | **Energy Products and Services** | **Energy Equipment** | **Eliminations and corporate costs (1)** | **Total** | **Energy Products and Services** | **Energy Equipment** | **Eliminations and corporate costs (1)** | **Total** |
| Revenue from external customers | $1969 | $2322 | $— | $4291 | $2020 | $2351 | $— | $4371 |
| Intersegment revenue | 48 | 31 | (79) |  | 47 | 31 | (78) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total revenue | 2017 | 2353 | (79) | 4291 | 2067 | 2382 | (78) | 4371 |
| Less: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of revenue (2) | 1485 | 1791 | (36) | 3240 | 1452 | 1747 | (31) | 3168 |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling, general, and administrative (2) | 252 | 251 | 76 | 579 | 258 | 251 | 51 | 560 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 116 | 56 | 4 | 176 | 109 | 57 | 3 | 169 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on sales of fixed assets | (2) | (1) | 4 | 1 | (1) |  |  | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating profit | $166 | $256 | $(127) | $295 | $249 | $327 | $(101) | $475 |
| Reconciliation to income before income taxes: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest and financial costs |  |  | (44) | (44) |  |  | (46) | (46) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income |  |  | 21 | 21 |  |  | 16 | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity income (loss) in unconsolidated affiliates | (2) | 3 |  | 1 | 35 | 2 |  | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other expenses, net |  |  | (37) | (37) |  |  | (24) | (24) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income before income taxes | $164 | $259 | $(187) | $236 | $284 | $329 | $(155) | $458 |
| Other segment information: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital expenditures | $97 | $66 | $4 | $167 | $124 | $21 | $6 | $151 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment in unconsolidated affiliates | $169 | $9 | $— | $178 | $162 | $6 | $— | $168 |
| &nbsp;&nbsp;&nbsp;&nbsp;Goodwill | $807 | $816 | $— | $1623 | $802 | $816 | $— | $1618 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangibles, net | $367 | $129 | $— | $496 | $354 | $144 | $— | $498 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $5152 | $4966 | $1245 | $11363 | $5019 | $5263 | $1015 | $11297 |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Operating profit for the three and six months ended June 30, 2025, included charges of $15 million and $23 million, respectively, reported in "Cost of Revenue," primarily related to severance and other restructuring costs. Operating profit included charges of $4 million and $9 million for the three and six months ended June 30, 2025, respectively, reported in "Selling, General, and Administrative." These charges were primarily related to streamlining our business processes during the second quarter of 2025, and the deconsolidation of the Company's Russian subsidiaries in the first quarter of 2025. Operating profit for the three and six months ended June 30, 2024, included a credit of $118 million and $121 million, respectively, reported in "Cost of Revenue," primarily attributed to a pre-tax gain on the sale of a business during the second quarter of 2024.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** |
|  | **2025** | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** | **2024** |
|  | **Energy Products and Services** | **Energy Equipment** | **Corporate** | **Total** | **Energy Products and Services** | **Energy Equipment** | **Corporate** | **Total** |
| Other Items included in: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Cost of revenue | $6 | $9 | $— | $15 | $1 | $(119) | $— | $(118) |
| &nbsp;&nbsp;Selling, general, and administrative |  |  | 4 | 4 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $6 | $9 | $4 | $19 | $1 | $(119) | $— | $(118) |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** |
|  | **2025** | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** | **2024** |
|  | **Energy Products and Services** | **Energy Equipment** | **Corporate** | **Total** | **Energy Products and Services** | **Energy Equipment** | **Corporate** | **Total** |
| Other Items included in: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Cost of revenue | $10 | $12 | $1 | $23 | $1 | $(123) | $1 | $(121) |
| &nbsp;&nbsp;Selling, general, and administrative | 1 |  | 8 | 9 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $11 | $12 | $9 | $32 | $1 | $(123) | $1 | $(121) |

---

**6. Revenue**

*Disaggregation of Revenue*

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. and Canada:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** |
|  | **2025** | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** | **2024** |
|  | **Energy** |  |  |  | **Energy** |  |  |  |
|  | **Products** | **Energy** |  |  | **Products** | **Energy** |  |  |
|  | **and Services** | **Equipment** | **Eliminations** | **Total** | **and Services** | **Equipment** | **Eliminations** | **Total** |
| North America | $570 | $271 | $— | $841 | $534 | $301 | $— | $835 |
| International | 428 | 919 |  | 1347 | 493 | 888 |  | 1381 |
| Intersegment revenue | 27 | 17 | (44) |  | 23 | 15 | (38) |  |
|  | $1025 | $1207 | $(44) | $2188 | $1050 | $1204 | $(38) | $2216 |
| Land | $737 | $418 | $— | $1155 | $777 | $460 | $— | $1237 |
| Offshore | 261 | 772 |  | 1033 | 250 | 729 |  | 979 |
| Intersegment revenue | 27 | 17 | (44) |  | 23 | 15 | (38) |  |
|  | $1025 | $1207 | $(44) | $2188 | $1050 | $1204 | $(38) | $2216 |

---

------

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** |
|  | **2025** | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** | **2024** |
|  | **Energy** |  |  |  | **Energy** |  |  |  |
|  | **Products** | **Energy** |  |  | **Products** | **Energy** |  |  |
|  | **and Services** | **Equipment** | **Elims.** | **Total** | **and Services** | **Equipment** | **Elims.** | **Total** |
| North America | $1121 | $532 | $— | $1653 | $1071 | $597 | $— | $1668 |
| International | 848 | 1790 |  | 2638 | 949 | 1754 |  | 2703 |
| Intersegment revenue | 48 | 31 | (79) |  | 47 | 31 | (78) |  |
|  | $2017 | $2353 | $(79) | $4291 | $2067 | $2382 | $(78) | $4371 |
| Land | $1492 | $819 | $— | $2311 | $1549 | $887 | $— | $2436 |
| Offshore | 477 | 1503 |  | 1980 | 471 | 1464 |  | 1935 |
| Intersegment revenue | 48 | 31 | (79) |  | 47 | 31 | (78) |  |
|  | $2017 | $2353 | $(79) | $4291 | $2067 | $2382 | $(78) | $4371 |

---

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** | **Three Months Ended** |
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| Energy Products and Services: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Services & rental | $501 | $498 |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital equipment | 335 | 326 |
| &nbsp;&nbsp;&nbsp;&nbsp;Product sales | 162 | 203 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intersegment revenue | 27 | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total | 1025 | 1050 |
| Energy Equipment: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital equipment | 733 | 641 |
| &nbsp;&nbsp;&nbsp;&nbsp;Aftermarket | 457 | 548 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intersegment revenue | 17 | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total | 1207 | 1204 |
| Eliminations | (44) | (38) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total consolidated | $2188 | $2216 |

---

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| Energy Products and Services: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Services & rental | $1008 | $984 |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital equipment | 623 | 630 |
| &nbsp;&nbsp;&nbsp;&nbsp;Product sales | 338 | 406 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intersegment revenue | 48 | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total | 2017 | 2067 |
| Energy Equipment: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital equipment | 1374 | 1250 |
| &nbsp;&nbsp;&nbsp;&nbsp;Aftermarket | 948 | 1101 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intersegment revenue | 31 | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total | 2353 | 2382 |
| Eliminations | (79) | (78) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total consolidated | $4291 | $4371 |

---

------

*Performance Obligations*

Net revenue recognized from performance obligations satisfied in previous periods was $102 million for the six months ended June 30, 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 June 30, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $4,675 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 $1,043 million in revenue for the remaining performance obligations in the remainder of 2025, $1,535 million in 2026, $665 million in 2027, and $1,432 million thereafter.

*Contract Assets and Liabilities*

Contract assets include unbilled amounts when revenue recognized exceeds the amount billed to the customer under contracts where revenue is recognized over-time. Contract liabilities consist of customer billings in excess of revenue recognized under over-time contracts, customer advance payments and deferred revenue.

The changes in the carrying amount of contract assets and contract liabilities are as follows (in millions):

---

| | | |
|:---|:---|:---|
|  | **Contract<br>Assets** | **Contract<br>Liabilities** |
| Balance at December 31, 2024 | $577 | $492 |
| &nbsp;&nbsp;&nbsp;&nbsp;Billings | (820) | 750 |
| &nbsp;&nbsp;&nbsp;&nbsp;Revenue recognized | 869 | (745) |
| &nbsp;&nbsp;&nbsp;&nbsp;Currency translation adjustments and other | 29 | 16 |
| Balance at June 30, 2025 | $655 | $513 |

---

*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 $19 million and $38 million for the three and six months ended June 30, 2025, and $17 million and $33 million for the three and six months ended June 30, 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 June 30, 2025, the receivables of $139 million, net of allowances of $44 million for credit losses and $11 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. While we continue to believe it is probable the Company will collect all or substantially all of the consideration to which it is entitled pursuant to the terms of the licensing agreements, the Company will also continue to evaluate the credit quality of the receivables. See Note 15 for discussion of the ongoing litigation.

*Allowance for Credit Losses*

The Company estimates its allowance for credit losses using information about past events, current conditions and risk characteristics of each customer, and reasonable and supportable forecasts relevant to assessing risk associated with the collectability of receivables and contract assets. 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 June 30, 2025, the allowance for credit losses totaled $68 million.

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

---

| | |
|:---|:---|
| Balance at December 31, 2024 | $67 |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for expected credit losses | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries collected | (8) |
| &nbsp;&nbsp;&nbsp;&nbsp;Reclass for long-term receivables | (18) |
| &nbsp;&nbsp;&nbsp;&nbsp;Write-offs | (3) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | (3) |
| Balance at June 30, 2025 | $68 |

---

------

**7. Leases**

The Company leases certain facilities and equipment to support its operations around the world. These leases generally require the Company to pay maintenance, insurance, taxes and other operating costs in addition to rent. Renewal options are common in longer term leases; 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 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):

---

| | | |
|:---|:---|:---|
|  | **June 30,** | **December 31,** |
|  | **2025** | **2024** |
| Current portion of lease liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating | $72 | $72 |
| &nbsp;&nbsp;&nbsp;&nbsp;Financing | 31 | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $103 | $102 |
|  | **June 30,** | **December 31,** |
|  | **2025** | **2024** |
| Long-term portion of lease liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating | $297 | $301 |
| &nbsp;&nbsp;&nbsp;&nbsp;Financing | 243 | 243 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $540 | $544 |

---

**8. Debt**

Debt consists of (in millions):

---

| | | |
|:---|:---|:---|
|  | **June 30,** | **December 31,** |
|  | **2025** | **2024** |
| &nbsp;&nbsp;&nbsp;&nbsp;$1.1 billion in Senior Notes, interest at 3.95% payable<br> semiannually, principal due on December 1, 2042 | $1091 | $1091 |
| &nbsp;&nbsp;&nbsp;&nbsp;$0.5 billion in Senior Notes, interest at 3.60% payable<br> semiannually, principal due on December 1, 2029 | 497 | 496 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other debt | 140 | 153 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total debt | 1728 | 1740 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less current portion | 38 | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt | $1690 | $1703 |

---

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. prime rate. 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 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 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 has $89 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. 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 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. Letters of credit are issued as bid bonds, advanced payment bonds and performance bonds.

------

At June 30, 2025 and December 31, 2024, the fair value of the Company's unsecured Senior Notes approximated $1,308 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 June 30, 2025 and December 31, 2024, the carrying value of the Company's unsecured Senior Notes approximated $1,588 million and $1,587 million, respectively.

**9. Income Taxes**

The effective tax rate for the three and six months ended June 30, 2025 was 0.9% and 20.3%, respectively, compared to 23.9% and 24.9% for the same period in 2024. The U.S. statutory tax rate was 21% for the periods presented. 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. and state deferred tax assets.

**10. Stock-Based Compensation**

The Company's stock-based compensation plan, known as the NOV Inc. Long-Term Incentive Plan (the "NOV Plan"), was approved by shareholders on May 11, 2018 and was amended and restated on May 24, 2022 and May 20, 2025. The NOV Plan provides for the granting of stock options, restricted stock, restricted stock units, performance awards, phantom shares, stock appreciation rights, stock payments and substitute awards. The number of shares authorized under the NOV Plan is 70.9 million. At June 30, 2025, approximately 17.1 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.

On May 20, 2025, the Company granted 127,592 restricted stock units with a fair value of $12.54 per share. The awards were granted to non-employee members of the board of directors and vest on the first anniversary of the grant date.

Total expense for all stock-based compensation arrangements was $17 million and $33 million for the three and six months ended June 30, 2025, respectively, and $17 million and $36 million for the three and six months ended June 30, 2024, respectively.

The total income tax expense (benefit) recognized in the Consolidated Statements of Income for stock-based compensation arrangements was $(3) million and $6 million for the three and six months ended June 30, 2025, respectively, and $(1) million and $3 million for the three and six months ended June 30, 2024, respectively.

**11. Derivative Financial Instruments**

The Company uses forward currency contracts to manage the foreign currency exchange rate risk on forecasted revenues and expenses denominated in currencies other than the functional currency of the operating unit (cash flow hedge). The Company also executes forward currency contracts to manage the foreign currency exchange rate risk on recognized nonfunctional currency monetary accounts (non-designated hedge).

The fair values of these derivative financial instruments are determined using Level 2 inputs (inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability) in the fair value hierarchy as the fair value is based on publicly available foreign exchange and interest rates at each financial reporting date.

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Forward currency contracts consist of (in millions):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Currency Denomination** | **Currency Denomination** | **Currency Denomination** | **Currency Denomination** |
|  | **June 30,** | **June 30,** | **December 31,** | **December 31,** |
| **Currency** | **2025** | **2025** | **2024** | **2024** |
| Colombian Peso | COP | 57022 | COP | 60970 |
| South Korean Won | KRW | 31886 | KRW | 45130 |
| Norwegian Krone | NOK | 2491 | NOK | 2850 |
| Japanese Yen | JPY | 909 | JPY | 1039 |
| U.S. Dollar | USD | 887 | USD | 1031 |
| Mexican Peso | MXN | 305 | MXN | 405 |
| Euro | EUR | 120 | EUR | 95 |
| South African Rand | ZAR | 25 | ZAR | 25 |
| Singapore Dollar | SGD | 12 | SGD | 12 |
| British Pound Sterling | GBP | 4 | GBP |  |
| Danish Krone | DKK | 1 | DKK | 3 |
| Canadian Dollar | CAD |  | CAD | 1 |

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*Cash Flow Hedging Strategy*

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.

The Company expects accumulated other comprehensive income of $11 million will be reclassified into earnings within the next twelve months.

*Non-designated Hedging Strategy*

The Company enters into forward exchange contracts to hedge certain nonfunctional currency monetary accounts. 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 recognized in Other Expense, net was $13 million and $16 million for the three and six months ended June 30, 2025, respectively, and $13 million and $10 million for the three and six months ended June 30, 2024, respectively.

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

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Asset Derivatives** | **Asset Derivatives** | **Asset Derivatives** | **Liability Derivatives** | **Liability Derivatives** | **Liability Derivatives** |
|  |  | **Fair Value** | **Fair Value** |  | **Fair Value** | **Fair Value** |
|  | **Balance Sheet** | **June 30,** | **December 31,** | **Balance Sheet** | **June 30,** | **December 31,** |
|  | **Location** | **2025** | **2024** | **Location** | **2025** | **2024** |
| **Derivatives designated as hedging<br>instruments under ASC Topic 815** |  |  |  |  |  |  |
| &nbsp;&nbsp;Foreign exchange contracts | Prepaid and other current assets | $13 | $1 | Accrued liabilities | $1 | $13 |
| &nbsp;&nbsp;Foreign exchange contracts | Other assets |  |  | Other liabilities |  | 1 |
| &nbsp;&nbsp;**Designated total** |  | $13 | $1 |  | $1 | $14 |
| **Derivatives not designated as hedging<br>instruments under ASC Topic 815** |  |  |  |  |  |  |
| &nbsp;&nbsp;Foreign exchange contracts | Prepaid and other current assets | $6 | $4 | Accrued liabilities | $5 | $11 |
| &nbsp;&nbsp;Foreign exchange contracts | Other assets |  |  | Other liabilities | 1 | 1 |
| &nbsp;&nbsp;**Non-designated total** |  | $6 | $4 |  | $6 | $12 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total** |  | $19 | $5 |  | $7 | $26 |

---

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**12. Net Income Attributable to Company Per Share**

The following table sets forth the computation of weighted average basic and diluted shares outstanding (in millions, except per share data):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** | **June 30,** | **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Numerator: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income attributable to Company | $108 | $226 | $181 | $345 |
| Denominator: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic—weighted average common shares outstanding | 375 | 395 | 378 | 394 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dilutive effect of employee stock options and other <br>unvested stock awards | 1 | 2 | 2 | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted—weighted average common shares outstanding | 376 | 397 | 380 | 398 |
| Net income attributable to Company per share: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | $0.29 | $0.57 | $0.48 | $0.88 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | $0.29 | $0.57 | $0.48 | $0.87 |
| Cash dividends per share | $0.285 | $0.075 | $0.36 | $0.125 |

---

Companies with unvested participating securities are required to utilize a two-class method for the computation of net income attributable to Company per share. 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 six months ended June 30, 2025 and 2024, respectively.

The Company had stock options outstanding that were anti-dilutive totaling 19 million and 16 million shares for the three and six months ended June 30, 2025, respectively, compared to 16 million shares for each of the three and six months ended June 30, 2024, respectively.

**13. Cash Dividends**

Cash dividends were $107 million and $135 million for the three and six months ended June 30, 2025, compared to $30 million and $50 million for the three and six months ended June 30, 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.

**14. Share Repurchase Program**

On April 25, 2024, the Company established a share repurchase program for up to $1 billion of the currently outstanding shares of the Company's common stock over a period of 36 months. Under the share repurchase program, the Company may repurchase shares from time to time through open market purchases, in privately negotiated transactions or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934 (the "Exchange Act"), as amended, in accordance with applicable securities laws and other restrictions, including Rule 10b-18. The timing and total amount of any stock repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices and other considerations.

The Company intends to fund the repurchases using its available U.S. 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. As shares are repurchased, they are constructively retired and returned to an unissued state. During the three months ended June 30, 2025, the Company repurchased approximately 5.5 million shares of common stock under the 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.

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**15. Commitments and Contingencies**

Our business is governed by laws and regulations, including those directed to the oilfield service industry, promulgated by U.S. federal and state governments and regulatory agencies, as well as international governmental authorities in the many countries in which we conduct business. In the United States, these governmental authorities include the U.S. Department of Labor, the Occupational Safety and Health Administration, the Environmental Protection Agency, the Bureau of Land Management, the Department of Treasury, Office of Foreign Assets Control, state environmental agencies and many others. We are unaware of any material liabilities in connection with our compliance with such laws. New laws, regulations and enforcement policies may result in additional, presently unquantifiable, or unknown, costs or liabilities.

From time to time, the Company is involved in various claims, regulatory agency audits, investigations and legal actions involving a variety of matters. The Company maintains insurance that covers claims such as third-party personal injury or property damage claims arising from risks associated with the business activities of the Company, including premises liability, product liability, marine risk, property damage, and other insurable losses. The Company carries substantial insurance to cover insurable risks above a self-insured retention, e.g., claims for personal injury and property. The Company believes, and the Company's experience has been, that such insurance has been sufficient to cover its material risks from operations. The Company also from time to time may be a party to claims, threatened and actual litigation, arbitration, and internal investigations of potential regulatory and compliance matters which may arise from the Company's business activities, some of which may not involve insured claims. The Company believes, and the Company's experience has been, that such insurance has been sufficient to cover its material risks from operations.

The regulatory matters and disputes which the Company faces may involve private parties and/or government authorities who may assert a broad variety of potential claims against the Company, such as employment law claims, collective actions or class action claims, intellectual property claims (such as alleged patent infringement, and/or misappropriation of trade secrets by the Company), premises liability claims, environmental claims, product liability claims, warranty claims, personal injury claims arising from exposure to or use of allegedly defective products or from activities of the Company, alleged regulatory violations, alleged violations of anti-corruption and anti-bribery, trade, customs or other laws and other commercial and/or regulatory claims seeking recovery for alleged actual or exemplary damages or fines and penalties. Such claims involve various theories of liability which may include negligence, breach of contract, strict liability, product liability, and others. For some of these contingent claims and potential liabilities, the Company's insurance coverage may not apply, or exclusions to coverage or legal impediments may apply. 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 June 30, 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. The Company periodically assesses the potential for losses above the amounts accrued as well as potential losses for matters that are believed to be not probable, but which are reasonably possible. The Company sets accruals in accordance with GAAP based on its best judgment about the probable results of disputed claims, regulatory enforcement actions, tax and other governmental audits, and other contingencies.

The litigation process and the outcome of regulatory oversight is inherently uncertain, and our best judgment concerning the probable outcome of litigation or regulatory enforcement matters may prove to be incorrect. No assurance can be given as to the outcome of these matters. 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 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. Because of the uncertainty and risk inherent to litigation, arbitration, audits, governmental investigations, enforcement actions, and similar matters, the Company's actual liabilities incurred may materially exceed our estimated liabilities and reserves, which could have a material financial or reputational impact on the Company.

In many instances, the Company's products and services embody or incorporate trade secrets or patented inventions. From time to time, we are engaged in disputes concerning protection of the Company's trade secrets and confidential information, patents, and other intellectual property rights. Such disputes frequently involve complex, factual, technical and/or legal issues which result in high costs to adjudicate our rights and for which it may be difficult to predict the ultimate outcome. At any given time, the Company may be a plaintiff or defendant in disputes involving disputed intellectual property rights.

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The Company is currently pursuing litigation against several companies involving royalties due under licenses for technology related to drill bits. This technology resulted in a portfolio of patents related to leaching technology, a revolutionary technology owned by the Company that improves the performance of drill bits and other products utilizing certain synthetic diamond parts. The Company previously sued several drill bit manufacturers for patent infringement and those lawsuits were resolved by a series of licensing agreements with various drill bit manufacturers. To settle and end litigation or to avoid litigation, the licensees were provided access to the portfolio of leaching patents owned by the Company in exchange for a royalty payment, as defined in each license agreement. The companies agreed to pay the royalties for the right to use the portfolio of patents, whether they used some, all or none of the specific patented claims in any particular patent. The license agreements provide that they terminate on the date of the last to expire of the patents in the licensed portfolio. Having obtained the benefit of these licenses for more than a decade, all of the drill bit manufacturer licensees unilaterally stopped making royalty payments even though all of the patents in the portfolio have not expired. These companies have asserted, among other reasons, that they are entitled to stop making these payments because they claim to not manufacture products covered by the unexpired patents. Some of these companies stopped making payments after the expiration of what are allegedly the patents in the portfolio that they elected to use. Others paid for some period of time after that date but have since stopped making payments. The Company has sued asserting that failure to pay the royalties is a breach of the license agreements at issue. The Company is in litigation with most of the licensees seeking a judicial determination that it is entitled to be paid royalties pursuant to the terms of the licenses. 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 the following cases: Grant Prideco, Inc., et al. v. Schlumberger Technology Corp., et al., No. 4:23-cv-00730; and Halliburton Energy Services, Inc. v. Grant Prideco, Inc., et al., No. 4:23-cv-01789, both in the United States District Court for the Southern District of Texas; and Grant Prideco, Inc., et al. v. Baker Hughes Oilfield Operations Inc., No. 25-BC11A-0019 in the 11<sup>th</sup> 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. See Note 6 to the Consolidated Financial Statements for discussion of the financial impact of royalties.

The protection of intellectual property is important to the Company's performance, and as such, an adverse result in disputes related to our intellectual property could result in materially adverse financial consequences such as a decline in sales of products protected by patents, which could materially and adversely impact our financial performance.

From time to time purchasers of our products and services or members of our supply chain or sales chain become involved in litigation, governmental investigations, internal investigations, political or other enforcement matters, or other dispute proceedings. In such circumstances, such proceedings may adversely impact the ability of purchasers of our products, entities providing financial support to such consumers or entities in the supply chain or sales chain to timely perform their business plans or to timely perform under agreements with us. 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, 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. Compliance with these laws and regulations presents challenges which could result in future liabilities (for example, alleged violation of those laws or when laws conflict between countries). The Company may face increased tariffs and trade costs, loss of revenue, loss of customers, fines, penalties, increased costs, the need for renegotiation of agreements, and other business disruptions. Trade regulations, supply chain regulations, and other regulatory compliance in different jurisdictions may conflict with one another or with contractual terms with our various counterparties. In such circumstances, our compliance with U.S. laws and regulations may subject us to risk of fines, penalties, or contractual liability in other jurisdictions. Our efforts to actively manage such risks may not always be successful, and this could lead to negative impacts on revenue or earnings. In addition, trade regulations, export controls, and other laws adversely impact our ability to do business in certain countries, e.g., Iran, Syria, Russia, China and Venezuela.

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In response to additional sanctions enacted by governments in the European Union, the United States, the United Kingdom, Switzerland, and other countries regarding the armed conflict in Ukraine, we ceased new investments in Russia and have curtailed our activities there. During the third quarter of 2022, we entered into an agreement to sell our business in Russia. The sale is subject to various government approvals in Russia, the U.S. and E.U. 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 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, tariffs, 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. Our customers may also seek to delay or may default on their payments to us. As a result, the Company may be exposed to additional costs, liabilities and risks which could materially adversely impact our financial performance and results. These potential operational and service delays could result in contractual or other legal claims from our customers. At this time, it is not possible to quantify all these risks, but the combination of these factors could have a material impact on our financial results.

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**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**

*Introduction*

NOV is a leading independent equipment and technology provider to the global energy industry. NOV and its predecessor companies have spent over 160 years helping transform oil and gas development and improving its cost-effectiveness, efficiency, safety, and environmental impact. Over the past few decades, the Company has pioneered and refined key technologies to improve the economic viability of frontier resources, including unconventional and deepwater oil and gas. More recently, by applying its deep expertise and technology, the Company has developed solutions to improve the economics of alternate energy sources.

NOV's extensive proprietary technology portfolio supports the industry's drilling, completion, and production needs. With unmatched cross-segment capabilities, scope, and scale, NOV continues to develop and introduce technologies that further enhance the economics and efficiencies of energy production, with a focus on digital solutions, including automation, predictive analytics, and condition-based maintenance.

NOV serves major-diversified, national, and independent service companies, contractors, and energy producers in 57 countries. NOV operates under two segments, Energy Products and Services and Energy Equipment.

Results of operations are presented in accordance with GAAP. Certain reclassifications have been made to prior period financial information in order to conform with current period presentation. The Company discloses Adjusted EBITDA (defined as operating profit excluding depreciation, amortization, gains and losses on sales of fixed assets and, when applicable, Other Items) in its periodic earnings press releases and other public disclosures to provide investors additional information about the results of ongoing operations. See "Non-GAAP Financial Measures and Reconciliations in Results of Operations" for an explanation of our use of non-GAAP financial measures and reconciliations to their corresponding measures calculated in accordance with GAAP.

*Energy Products and Services*

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. 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. 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.

Energy Products and Services serves oil and gas companies, drilling contractors, oilfield service companies, oilfield equipment rental companies and developers of geothermal energy. Demand for the segment's products and services primarily depends on the level of oilfield drilling activity by oil and gas companies, drilling contractors, and oilfield service companies. Demand for the segment's composite solutions serving applications outside of oil and gas are driven by industrial activity, infrastructure spend, and population growth.

*Energy Equipment*

The Company's Energy Equipment segment manufactures and supports the capital equipment and integrated systems needed for oil and gas exploration and production, both onshore and offshore, as well as for other marine-based, industrial and renewable energy markets.

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; hydraulic fracture stimulation; well intervention, including coiled tubing units, coiled tubing, and wireline units and tools; cementing products; onshore production, including fluid processing, and surface transfer as well as progressive cavity pumps; offshore production, including integrated production systems and subsea production technologies; and aftermarket support of these technologies, providing spare parts, service, and repair.

Energy Equipment primarily serves contract drillers, oilfield service companies, and oil and gas companies. Demand for the segment's products primarily depends on capital spending plans by drilling contractors, service companies, and oil and gas companies, and secondarily on the overall level of oilfield drilling, completions, and workover activity which drives demand for equipment, spare parts, service, and repair for the segment's large installed base of equipment.

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The segment also serves marine and offshore markets, where it designs and builds equipment for wind turbine installation and cable lay vessels, and offers heavy lift cranes and jacking systems; industrial markets, where the segment provides pumps and mixers for a wide breadth of industrial end markets; and other energy transition markets, where it is applying its gas processing expertise to provide solutions that aid in wind power development, hydrogen production and carbon sequestration.

**Critical Accounting Policies and Estimates**

In our annual report on Form 10-K for the year ended December 31, 2024, we identified our most critical accounting policies. In preparing the financial statements, we make assumptions, estimates and judgments that affect the amounts reported. We periodically evaluate our estimates and judgments that are most critical in nature which are related to revenue recognition under long-term construction contracts, impairment of goodwill and other indefinite-lived intangible assets, and income taxes. Our estimates are based on historical experience and on our future expectations that we believe are reasonable. The combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results are likely to differ from our current estimates and those differences may be material.

**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. Net income decreased 52 percent to $108 million, or $0.29 per share, and operating profit decreased 54 percent to $143 million, or 6.5 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. 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 $252 million, or 11.5 percent of sales.

**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. Operating profit decreased $45 million from the prior year to $83 million, or 8.1 percent of sales, and included $6 million in Other Items. Adjusted EBITDA decreased $38 million from the prior year to $146 million, or 14.2 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.

*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.

**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. However, management does not expect near-term volatility to affect broader industry trends including: (1) offshore and international resources becoming the primary source for future incremental supplies of oil to meet global demand; (2) growing focus on natural gas from deepwater and unconventional resources to meet growing global demand for power; and (3) the application of emerging technologies to drive efficiencies and productivity in energy operations.

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NOV remains focused on the development and commercialization of innovative products and services that lower the marginal cost and environmental footprint of energy production. We believe this strategy along with continued efforts to improve organizational efficiencies will further advance the Company's competitive position in any market environment.

**Operating Environment Overview**

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:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  |  | **% increase (decrease)** | **% increase (decrease)** |
|  |  |  |  | **2Q25 v** | **2Q25 v** |
|  | **2Q25\*** | **2Q24\*** | **1Q25\*** | **2Q24** | **1Q25** |
| **Active Drilling Rigs:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. | 571 | 602 | 588 | (5.1%) | (2.9%) |
| &nbsp;&nbsp;&nbsp;&nbsp;Canada | 129 | 137 | 216 | (5.8%) | (40.3%) |
| &nbsp;&nbsp;&nbsp;&nbsp;International | 897 | 956 | 904 | (6.2%) | (0.8%) |
| Worldwide | 1597 | 1695 | 1708 | (5.8%) | (6.5%) |
| **West Texas Intermediate<br> Crude Prices (per barrel)** | $64.63 | $81.71 | $71.84 | (20.9%) | (10.0%) |
| **Natural Gas Prices ($/mmbtu)** | $3.19 | $2.08 | $4.15 | 53.4% | (23.1%) |

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\* Averages for the quarters indicated. See sources below.

The Company is engaged with a variety of energy projects, including wind, geothermal, and carbon capture and sequestration. Management expects to see continued growth in these areas.

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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:

![img81389404_1.jpg](img81389404_1.jpg)

Source: Rig count: Baker Hughes, Inc. (www.bakerhughes.com); West Texas Intermediate Crude Oil and Natural Gas Prices: 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.

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**Results of Operations**

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

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** | **June 30,** | **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Revenue: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy Products and Services | $1025 | $1050 | $2017 | $2067 |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy Equipment | 1207 | 1204 | 2353 | 2382 |
| &nbsp;&nbsp;&nbsp;&nbsp;Eliminations | (44) | (38) | (79) | (78) |
| Total revenue | $2188 | $2216 | $4291 | $4371 |
| Operating profit: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy Products and Services | $83 | $128 | $166 | $249 |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy Equipment | 122 | 232 | 256 | 327 |
| &nbsp;&nbsp;&nbsp;&nbsp;Eliminations and corporate costs | (62) | (47) | (127) | (101) |
| Total operating profit | $143 | $313 | $295 | $475 |

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*Energy Products and Services*

*three 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. The decline in revenue was primarily driven by lower levels of global drilling activity on a 6 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 20 percent on a quarter-to-date basis and 17 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 3 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.

*Energy Equipment*

*three 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.

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. 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 27 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.

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*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.

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. 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.

*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. 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. Dollar.

*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. and state deferred tax assets.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S. 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.

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*Non-GAAP Financial Measures and Reconciliations*

This Form 10-Q contains certain non-GAAP financial measures that management believes are useful tools for internal use and the investment community in evaluating NOV's overall financial performance. These non-GAAP financial measures are broadly used to value and compare companies in the oilfield services and equipment industry. Not all companies define these measures in the same way. In addition, these non-GAAP financial measures are not a substitute for financial measures prepared in accordance with GAAP and should therefore be considered only as supplemental to such GAAP financial measures.

The Company defines Adjusted EBITDA as operating profit excluding depreciation, amortization, gains and losses on sales of fixed assets and, when applicable, Other Items. Adjusted EBITDA % is a ratio showing Adjusted EBITDA as a percentage of sales. Management believes this is important information to provide because it is used by management to evaluate the Company's operational performance and trends between periods and manage the business. Management also believes this information may be useful to investors and analysts to gain a better understanding of the Company's results of ongoing operations. Adjusted EBITDA and Adjusted EBITDA % are not intended to replace GAAP financial measures, such as Net Income and Operating Profit %.

Additionally, Excess Free Cash Flow is defined as cash flows from operations less capital expenditures and other investments, including acquisitions and divestitures. Excess Free Cash Flow does not represent the Company's residual cash flow available for discretionary expenditures, as the calculation of these measures does not account for certain debt service requirements or other non-discretionary expenditures.

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The following tables set forth the reconciliation of Adjusted EBITDA to its most comparable GAAP financial measure (in millions):

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** | **March 31,** | **June 30,** | **June 30,** |
|  | **2025** | **2024** | **2025** | **2025** | **2024** |
| Operating profit: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy Products and Services | $83 | $128 | $83 | $166 | $249 |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy Equipment | 122 | 232 | 134 | 256 | 327 |
| &nbsp;&nbsp;&nbsp;&nbsp;Eliminations and corporate costs | (62) | (47) | (65) | (127) | (101) |
| Total operating profit | $143 | $313 | $152 | $295 | $475 |
| Operating profit %: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy Products and Services | 8.1% | 12.2% | 8.4% | 8.2% | 12.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy Equipment | 10.1% | 19.3% | 11.7% | 10.9% | 13.7% |
| &nbsp;&nbsp;&nbsp;&nbsp;Eliminations and corporate costs |  |  |  |  |  |
| Total operating profit % | 6.5% | 14.1% | 7.2% | 6.9% | 10.9% |
| Other items, net: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy Products and Services | $6 | $1 | $5 | $11 | $1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy Equipment | 9 | (119) | 3 | 12 | (123) |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate | 4 |  | 5 | 9 | 1 |
| Total other items | $19 | $(118) | $13 | $32 | $(121) |
| (Gain) loss on sales of fixed assets: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy Products and Services | $— | $— | $(2) | $(2) | $(1) |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy Equipment | (1) |  |  | (1) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate | 4 |  |  | 4 |  |
| Total (gain) loss on sales of fixed assets | $3 | $— | $(2) | $1 | $(1) |
| Depreciation & amortization: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy Products and Services | $57 | $55 | $59 | $116 | $109 |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy Equipment | 28 | 29 | 28 | 56 | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate | 2 | 2 | 2 | 4 | 3 |
| Total depreciation & amortization | $87 | $86 | $89 | $176 | $169 |
| Adjusted EBITDA: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy Products and Services | $146 | $184 | $145 | $291 | $358 |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy Equipment | 158 | 142 | 165 | 323 | 261 |
| &nbsp;&nbsp;&nbsp;&nbsp;Eliminations and corporate costs | (52) | (45) | (58) | (110) | (97) |
| Total Adjusted EBITDA | $252 | $281 | $252 | $504 | $522 |
| Adjusted EBITDA %: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy Products and Services | 14.2% | 17.5% | 14.6% | 14.4% | 17.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy Equipment | 13.1% | 11.8% | 14.4% | 13.7% | 11.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Eliminations and corporate costs |  |  |  |  |  |
| Total Adjusted EBITDA % | 11.5% | 12.7% | 12.0% | 11.7% | 11.9% |
| Reconciliation of Adjusted EBITDA: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;GAAP net income attributable to Company | $108 | $226 | $73 | $181 | $345 |
| &nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling interests | 6 | (3) | 1 | 7 | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for income taxes | 1 | 70 | 47 | 48 | 114 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest and financial costs | 22 | 22 | 22 | 44 | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income | (10) | (8) | (11) | (21) | (16) |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity income in unconsolidated affiliates | (1) | (8) |  | (1) | (37) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other expense, net | 17 | 14 | 20 | 37 | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on sales of fixed assets | 3 |  | (2) | 1 | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 87 | 86 | 89 | 176 | 169 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other items, net | 19 | (118) | 13 | 32 | (121) |
| Total Adjusted EBITDA | $252 | $281 | $252 | $504 | $522 |

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**Liquidity and Capital Resources**

*Overview*

At June 30, 2025, the Company had cash and cash equivalents of $1,080 million and total debt of $1,728 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. taxation if transferred among countries or repatriated to the U.S. If opportunities to invest in the U.S. are greater than available cash balances that are not subject to income tax, rather than repatriating cash, the Company may choose to borrow against its revolving credit facility.

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. prime rate. 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.

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 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. 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. 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):

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| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| Net cash provided by operating activities | $326 | $354 |
| Net cash used in investing activities | (162) | (226) |
| Net cash used in financing activities | (333) | (113) |

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Cash flows provided by operating activities were $326 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).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Capital expenditures were $167 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Dividend payments to our shareholders were $135 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Share repurchases were $150 million.

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*Other*

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.

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. 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.

We may pursue additional acquisition candidates, but the timing, size or success of any acquisition effort and the related potential capital commitments cannot be predicted. We continue to expect to fund future cash acquisitions primarily with cash flow from operations and borrowings, including the unborrowed portion of the revolving credit facility or new debt issuances, but may also issue additional equity either directly or in connection with acquisitions. There can be no assurance that additional financing for acquisitions will be available at terms acceptable to us.

**Cautionary Note Regarding Forward-Looking Statements**

This document contains, or has incorporated by reference, statements that are not historical facts, including estimates, projections, and statements relating to our business plans, objectives, and expected operating results that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements often contain words such as "may," "can," "likely," "believe," "plan," "predict," "potential," "will," "intend," "think," "should," "expect," "anticipate," "estimate," "forecast," "expectation," "goal," "outlook," "projected," "projections," "target," and other similar words, although some such statements are expressed differently. Other oral or written statements we release to the public may also contain forward-looking statements. Forward-looking statements involve risk and uncertainties and reflect our best judgment based on current information. You should be aware that our actual results could differ materially from results anticipated in such forward-looking statements due to a number of factors, including but not limited to changes in oil and gas prices, customer demand for our products, potential catastrophic events related to our operations, protection of intellectual property rights, compliance with laws, and worldwide economic activity, including matters related to recent Russian sanctions and changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs and their related impacts on the economy. Given these uncertainties, current or prospective investors are cautioned not to place undue reliance on any such forward-looking statements. We undertake no obligation to update any such factors or forward-looking statements to reflect future events or developments. You should also consider carefully the statements under "Risk Factors," as disclosed in our most recent Annual Report on Form 10-K, as updated in Part II, Item 1A of our most recent Quarterly Report on Form 10-Q, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our most recent Annual Report on Form 10-K, which address additional factors that could cause our actual results to differ from those set forth in such forward-looking statements, as well as additional disclosures we make in our press releases and other securities filings. We also suggest that you listen to our quarterly earnings release conference calls with financial analysts.

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**Item 3. Quantitative and Qualitative Disclosures About Market Risk**

We are exposed to changes in foreign currency exchange rates and interest rates. Additional information concerning each of these matters follows:

*Foreign Currency Exchange Rates*

We have extensive operations in foreign countries. The net assets and liabilities of these operations are exposed to changes in foreign currency exchange rates, although such fluctuations have a muted effect on net income since the functional currency for the majority of them is the local currency. These operations also have net assets and liabilities not denominated in the functional currency, which exposes us to changes in foreign currency exchange rates that impact income. We recorded a foreign exchange loss in our income statement of $31 million in the first six months of 2025, compared to a $17 million foreign exchange loss in the same period of the prior year. Gains and losses are primarily due to exchange rate fluctuations related to monetary asset balances denominated in currencies other than the functional currency and adjustments to our hedged positions as a result of changes in foreign currency exchange rates. Currency exchange rate fluctuations may create losses in future periods to the extent we maintain net monetary assets and liabilities not denominated in the functional currency of the NOV operation.

Some of our revenues in foreign countries are denominated in U.S. dollars, and therefore, changes in foreign currency exchange rates impact our earnings to the extent that costs associated with those U.S. dollar revenues are denominated in the local currency. Similarly, some of our revenues are denominated in foreign currencies, but have associated U.S. dollar costs, which also give rise to foreign currency exchange rate exposure. In order to mitigate that risk, we may utilize foreign currency forward contracts to better match the currency of our revenues and associated costs. We do not use foreign currency forward contracts for trading or speculative purposes.

The Company had other financial market risk sensitive instruments (cash balances, overdraft facilities, accounts receivable and accounts payable) denominated in foreign currencies with transactional exposures totaling $543 million and translation exposures totaling $322 million as of June 30, 2025. The Company estimates that a hypothetical 10% movement of all applicable foreign currency exchange rates on the transactional exposures could affect net income by $43 million and the translational exposures could affect Other Comprehensive Income by $32 million.

The counterparties to forward contracts are major financial institutions. The credit ratings and concentration of risk of these financial institutions are monitored on a continuing basis. Because these contracts are net-settled the Company's credit risk with the counterparties is limited to the foreign currency rate differential at the end of the contract.

*Interest Rate Risk*

At June 30, 2025, borrowings consisted of $1,091 million in 3.95% Senior Notes, $497 million in 3.60% Senior Notes, and other debt of $140 million. At June 30, 2025, there were no outstanding letters of credit issued under the Company's revolving credit facility, resulting in $1.5 billion of available funds. Additionally, the Company's joint venture has outstanding borrowings of $89 million under a $150 million bank line of credit for the construction of a facility in Saudi Arabia. Interest under the bank line of credit is based upon SOFR plus 1.40%. Occasionally a portion of borrowings under our credit facility could be denominated in multiple currencies which could expose us to market risk with exchange rate movements. These instruments carry interest at a pre-agreed upon percentage point spread from either SOFR, EURIBOR, SONIA, CORRA, or NIBOR, or at the U.S. prime rate. Under our credit facility, we may, at our option, fix the interest rate for certain borrowings based on a spread over SOFR, EURIBOR, SONIA, CORRA or NIBOR for one month to six months. Our objective is to maintain a portion of our debt in variable rate borrowings for the flexibility obtained regarding early repayment without penalties and lower overall cost as compared with fixed-rate borrowings.

**Item 4. Controls and Procedures**

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. The Company's disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by the Company in the reports it files under the Exchange Act is accumulated and communicated to the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures and is recorded, processed, summarized and reported within the time period specified in the rules and forms of the Securities and Exchange Commission. Based upon that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective as of the end of the period covered by this report at a reasonable assurance level.

There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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**<u>PART II - OTHER INFORMATION</u>**

**Item 1A. Risk Factors**

As of the date of this filing, the Company and its operations continue to be subject to the risk factors previously disclosed in Part I, Item 1A "Risk Factors" in our 2024 Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

**Item 2. Purchases of Equity Securities by the Issuer and Affiliated Purchasers**

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| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total number<br>of shares<br>purchased** | **Average<br>price paid<br>per share** | **Total number of<br>shares purchased<br>as part of publicly<br>announced plans<br>or programs**<sup>(1)</sup> | **Approximate dollar<br>value of shares that<br>may yet be purchased<br>under the plans or<br>programs** |
| April 1 through April 30, 2025 | 2342118 | $12.65 | 2342118 | $660432440 |
| May 1 through May 31, 2025 | 1332472 | 12.50 | 1332472 | 643789329 |
| June 1 through June 30, 2025 | 1759922 | 13.12 | 1759922 | 620696132 |
| Total | 5434512 | $12.77 | 5434512 |  |

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(1) On April 25, 2024, the Company established a share repurchase program for up to $1 billion of the currently outstanding shares of the Company's common stock over a period of 36 months.

**Item 4. Mine Safety Disclosures**

Information regarding mine safety and other regulatory actions at our mines is included in Exhibit 95 to this Form 10-Q.

**Item 6. Exhibits**

Reference is hereby made to the Exhibit Index commencing on page 33.

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**INDEX TO EXHIBITS** 

(a)Exhibits

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| | |
|:---|:---|
| 3.1 | [<u>Seventh Amended and Restated Certificate of Incorporation of NOV Inc. (1)</u>](https://www.sec.gov/Archives/edgar/data/1021860/000119312523148208/d460588dex31.htm) |
| 3.2 | [<u>Amended and Restated Bylaws of NOV Inc. (2)</u>](https://www.sec.gov/Archives/edgar/data/1021860/000119312523053963/d443168dex31.htm) |
| 10.1 | [<u>NOV Inc. Long-Term Incentive Plan, as amended and restated May 20, 2025 (3)</u>](nov-ex10_1.htm) |
| 31.1 | [<u>Certification pursuant to Rule 13a-14a and Rule 15d-14(a) of the Securities and Exchange Act, as amended. (3)</u>](nov-ex31_1.htm) |
| 31.2 | [<u>Certification pursuant to Rule 13a-14a and Rule 15d-14(a) of the Securities and Exchange Act, as amended. (3)</u>](nov-ex31_2.htm) |
| 32.1 | [<u>Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (3)</u>](nov-ex32_1.htm) |
| 32.2 | [<u>Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (3)</u>](nov-ex32_2.htm) |
| 95 | [<u>Mine Safety Information pursuant to section 1503 of the Dodd-Frank Act. (3)</u>](nov-ex95.htm) |
| 101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |

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\* Compensatory plan or arrangement for management or others.

(1)Filed as Exhibit 3.1 to our Current Report on Form 8-K filed on May 18, 2023

(2)Filed as Exhibit 3.1 to our Current Report on Form 8-K filed on February 28, 2023.

(3)Filed herewith.

We hereby undertake, pursuant to Regulation S-K, Item 601(b), paragraph (4) (iii), to furnish to the U.S. Securities and Exchange Commission, upon request, all constituent instruments defining the rights of holders of our long-term debt not filed herewith.

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**SIGNATURE**

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.

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| | | |
|:---|:---|:---|
| Date: July 29, 2025 | *By:* | */s/ Christy H. Novak* |
|  | Christy H. Novak | Christy H. Novak |
|  | Vice President, Corporate Controller & Chief Accounting Officer | Vice President, Corporate Controller & Chief Accounting Officer |
|  | (Duly Authorized Officer, Principal Accounting Officer) | (Duly Authorized Officer, Principal Accounting Officer) |

---

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## Exhibit 10.1

**NOV INC. LONG-TERM INCENTIVE PLAN**

**(as amended and restated as of May 20, 2025)**

**SECTION 1. <u>Purpose of the Plan</u>.**

The NOV Inc. Long-Term Incentive Plan (the "Plan") is intended to promote the interests of NOV Inc., a Delaware corporation (the "Company"), by encouraging Employees, Consultants and Directors to acquire or increase their equity interest in the Company and to provide a means whereby they may develop a sense of proprietorship and personal involvement in the development and financial success of the Company, and to encourage them to remain with and devote their best efforts to the business of the Company, thereby advancing the interests of the Company and its stockholders. The Plan is also contemplated to enhance the ability of the Company and its Subsidiaries to attract and retain the services of individuals who are essential for the growth and profitability of the Company.

**SECTION 2. <u>Definitions</u>.**

As used in the Plan, the following terms shall have the meanings set forth below:

"Award" shall mean an Option, Restricted Stock, Performance Award, Phantom Share, Stock Payment, SAR, or Restricted Stock Unit.

"Award Agreement" shall mean any written or electronic agreement, contract, instrument or document evidencing any Award, which may, but need not, be executed or acknowledged by a Participant.

"Board" shall mean the Board of Directors of the Company, as constituted from time to time.

"Change of Control" means the occurrence of one of the following events: (a) a report is filed with the SEC on Schedule 13D or Schedule 14D-1 (or any successor schedule, form, or report), each as promulgated pursuant to the Exchange Act, disclosing that any "person" (as the term "person" is used in Section 13(d) or Section 14(d)(2) of the Exchange Act) is or has become a beneficial owner, directly or indirectly, of securities of the Company representing 35% or more of the combined voting power of the Company's then outstanding securities; (b) the Company is merged or consolidated with another corporation and, as a result thereof, securities representing less than 50% of the combined voting power of the surviving or resulting corporation's securities (or of the securities of a parent corporation in case of a merger in which the surviving or resulting corporation becomes a wholly-owned subsidiary of the parent corporation) are owned in the aggregate by holders of the Company's securities immediately before such merger or consolidation; (c) all or substantially all of the assets of the Company are sold in a single transaction or a series of related transactions to a single purchaser or a group of affiliated purchasers; or (d) during any period of 24 consecutive months, individuals who were Directors at the beginning of the period cease to constitute at least a majority of the Board unless the election, or nomination for election by the Company's shareholders, of more than one half of any new Directors was approved by a vote of at least two-thirds of the Directors then still in office who were Directors at the beginning of the 24 month period.

Notwithstanding the foregoing provisions, to the extent that any payment or acceleration hereunder is subject to Section 409A of the Code as deferred compensation, the term Change of Control shall mean an event described in the foregoing definition of Change of Control that also constitutes a change in control event as defined in Treasury Regulation Section 1.409A-3(i)(5).

"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations thereunder.

"Committee" shall mean the administrator of the Plan in accordance with Section 3, and shall include reference to the Compensation Committee of the Board (or any other committee of the Board designated, from time to time, by the Board to act as the Committee under the Plan), the Board or subcommittee, as applicable.

"Consultant" shall mean any individual who is not an Employee or a member of the Board and who provides consulting, advisory or other similar services to the Company or a Subsidiary.

------

"Director" shall mean any member of the Board who is not an Employee.

"Employee" shall mean any employee of the Company or a Subsidiary or a parent corporation.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

"Fair Market Value" shall mean, as of any applicable date, the last reported sales price for a Share on the New York Stock Exchange (or such other national securities exchange which constitutes the principal trading market for the Shares) for the applicable date as reported by such reporting service approved by the Committee; provided, however, that if Shares shall not have been quoted or traded on such applicable date, Fair Market Value shall be determined based on the next preceding date on which they were quoted or traded, or, if deemed appropriate by the Committee, in such other manner as it may determine to be appropriate. In the event the Shares are not publicly traded at the time a determination of its Fair Market Value is required to be made hereunder, the determination of Fair Market Value shall be made in good faith by the Committee.

"Incentive Stock Option" or "ISO" shall mean an option granted under Section 6(a) of the Plan that is intended to qualify as an "incentive stock option" under Section 422 of the Code or any successor provision thereto.

"Non-Qualified Stock Option" or "NQO" shall mean an option granted under Section 6(a) of the Plan that is not intended to be an Incentive Stock Option.

"Option" shall mean an Incentive Stock Option or a Non-Qualified Stock Option.

"Participant" shall mean any Employee, Consultant or Director granted an Award under the Plan.

"Performance Award" shall mean any right granted under Section 6(c) of the Plan.

"Performance Criteria" shall mean the following business criteria with respect to the Company, any Subsidiary or any division, operating unit or product line: net earnings (either before or after interest, taxes, depreciation and/or amortization), sales, revenue, net income (either before or after taxes), operating profit, cash flow (including, but not limited to, operating cash flow and free cash flow), cash flow return on capital, return on net assets, return on stockholders' equity, return on assets, return on capital, stockholder returns, return on sales, gross or net profit margin, customer or sales channel revenue or profitability, productivity, expense, margins, cost reductions, controls or savings, operating efficiency, customer satisfaction, corporate value measures (including, but not limited to, compliance, safety, environmental and personnel matters), working capital, strategic initiatives, economic value added, earnings per share, earnings per share from operations, price per share of stock, and market share, or any other performance measures and criteria as determined by the Committee, any of which may be measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group. The Committee will determine whether the foregoing criteria will be computed without recognition of (i) unusual, infrequently occurring, or nonrecurring events affecting the Company or its financial statements, or (ii) changes in applicable laws, regulations or accounting principles. Any Performance Criteria that are financial metrics, may be determined in accordance with United States Generally Accepted Accounting Principles ("GAAP") or may be adjusted when established to include or exclude any items otherwise includable or excludable under GAAP.

"Person" shall mean individual, corporation, partnership, limited liability company, association, joint-stock company, trust, unincorporated organization, government or political subdivision thereof or other entity.

"Phantom Shares" shall mean an Award of the right to receive Shares, cash equal to the Fair Market Value of such Shares or any combination thereof, in the Committee's discretion, which is granted pursuant to Section 6(d) of the Plan.

"Restricted Period" shall mean the period established by the Committee with respect to an Award during which the Award either remains subject to forfeiture, is subject to restrictions or is not exercisable by the Participant.

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"Restricted Stock" shall mean any Share, prior to the lapse of restrictions thereon, granted under Section 6(b) of the Plan.

"Restricted Stock Unit" shall mean a bookkeeping unit that represents a right to receive Shares upon the completion of a vesting period and/or the satisfaction of a designated Performance Criteria, which shall be granted to a Participant pursuant to Section 6(f) of the Plan.

"Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC under the Exchange Act, or any successor rule or regulation thereto as in effect from time to time.

"SAR" shall mean a stock appreciation right granted under Section 6(e) of the Plan that entitles the holder to receive the excess of the Fair Market Value of a Share on the relevant date over the exercise price of such SAR, with the excess paid in cash and/or in Shares in the discretion of the Committee.

"SEC" shall mean the Securities and Exchange Commission or any successor thereto.

"Shares" or "Common Shares" or "Common Stock" shall mean the common stock of the Company, $0.01 par value, and such other securities or property as may become the subject of Awards under the Plan.

"Stock Payment" means (i) a payment in the form of Shares, or (ii) an option or other right to purchase Shares, as part of any bonus, deferred compensation or other arrangement, made in lieu of all or any portion of the compensation, granted pursuant to Section 6(g) of the Plan.

"Subsidiary" shall mean any entity (whether a corporation, partnership, joint venture, limited liability company or other entity) in which the Company owns a majority of the voting power of the entity directly or indirectly, except with respect to the grant of an ISO the term Subsidiary shall mean any "subsidiary corporation" of the Company as defined in Section 424 of the Code.

**SECTION 3. <u>Administration</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>The Committee</u>. The Plan shall be administered by the Compensation Committee of the Board (or any other committee of the Board designated, from time to time, by the Board to act as the Committee under the Plan). Notwithstanding the foregoing, Awards made to Directors shall be administered by the Board. The term "Committee" as used herein shall refer to the Compensation Committee (or other Board committee), the Board, or the subcommittee (as defined in paragraph (c) of this Section 3), as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Committee Powers</u>. A majority of the Committee shall constitute a quorum, and the acts of the members of the Committee who are present at any meeting thereof at which a quorum is present, or acts unanimously approved by the members of the Committee in writing, shall be the acts of the Committee. Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to a Participant; (iii) determine the number of Shares to be covered by, or with respect to which payments, rights, or other matters are to be calculated in connection with, Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Shares, other securities, other Awards or other property, or canceled, forfeited, or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi) accelerate vesting of any Awards in connection with a Participant's death, Disability or retirement; (vii) interpret and administer the Plan and any instrument or agreement relating to an Award made under the Plan; (viii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (ix) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons, including the Company, any Subsidiary, any Participant, any holder or beneficiary of any Award, any stockholder and any other Person.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Delegation to a Subcommittee</u>. The Committee may, subject to any applicable law, regulatory, securities exchange or other similar restrictions, delegate to one or more members of the Board or officers of the Company (the "subcommittee"), the authority to administer the Plan as to Awards to Employees and Consultants who are not subject to Section 16(b) of the Exchange Act. The Committee may impose such limitations and restrictions, in addition to any required restrictions/limitations, as the Committee may determine in its sole discretion. Any grant made pursuant to such a delegation shall be subject to all of the provisions of the Plan concerning this type of Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Modification of Awards</u>. Subject to the limitation set forth at the end of Section 3(b) above, at any time after grant of an Award, the Committee may, in its sole and absolute discretion and subject to whatever terms and conditions it selects:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)accelerate the period during which the Award vests or becomes exercisable or payable; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)accelerate the time when applicable restrictions or risk of forfeiture or repurchase lapses; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) extend the period during which the Award may be exercised or paid; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) extend the term of any Award (other than the maximum 10-year term).

**SECTION 4. <u>Shares Available for Awards</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Shares Available.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Subject to adjustment as provided below, the number of Shares that may be issued with respect to Awards granted under the Plan shall be ‭70,900,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) In connection with the granting of an Option or SAR, and subject to the remaining provisions of this Section 4(a), the number of Shares available for issuance under this Plan shall be reduced by the number of Shares in respect of which the Option or SAR is granted or denominated. In connection with the granting of an Award that is not an Option or SAR, and subject to the remaining provisions of this Section 4(a), the number of Shares available for issuance under this Plan shall be reduced by a number of Shares equal to the product of (i) the number of Shares in respect of which the Award is granted and (ii) (A) with respect to Awards issued prior to May 24, 2022, 2.5, and (B) with respect to Awards issued on or after May 24, 2022, 1.5. However, Awards that by their terms do not permit settlement in Shares shall not reduce the number of Shares available for issuance under this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Any Shares that are tendered by a Participant or withheld as full or partial payment of withholding or other taxes or as payment for the exercise or conversion price of an Award under this Plan, including any Shares not delivered to a Participant upon exercise of an Option pursuant to a "net exercise" as permitted by Section 6(a)(2) below, shall not be added back to the number of Shares available for issuance under this Plan. Any calculation of the number of Shares which become available for issuance under this Plan based on this Section 4(a)(3) shall reflect the share adjustment in the second to last sentence of Section 4(a)(2) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Whenever any outstanding Option or other Award (or portion thereof) expires, is cancelled or forfeited or is otherwise terminated for any reason without having been exercised or payment having been made in the form of Shares, the number of Shares available for issuance under this Plan shall be increased by the number of Shares allocable to the expired, forfeited, cancelled or otherwise terminated Option or other Award (or portion thereof). Any calculation of the number of Shares which become available for issuance under this Plan based on the forgoing sentences of this Section 4(a)(4) shall reflect the share adjustment in the second to last sentence of Section 4(a)(2) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Shares delivered under the Plan in settlement of an Award issued or made (i) upon the assumption, substitution, conversion or replacement of outstanding awards under a plan or arrangement of an acquired entity, or (ii) as a post-transaction grant under such a plan or arrangement of an acquired entity shall not reduce or be counted against the maximum number of Shares available for delivery under the Plan, to the extent that an exemption

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from the stockholder approval requirements for equity compensation plans applies under the rules or listing standards of the principal national securities exchange on which the Shares are listed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Sources of Shares Deliverable Under Awards</u>. Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Adjustments</u>. In the event of a stock dividend or stock split with respect to Shares, the number of Shares with respect to which Awards may be granted, the number of Shares subject to outstanding Awards, the grant or exercise price with respect to outstanding Awards and the individual annual grant limits with respect to Awards (other than dollar denominated Awards) automatically shall be proportionately adjusted, without action by the Committee; provided, however, such automatic adjustment shall be evidenced by written addendums to the Plan and Award Agreements prepared by the Company and, with respect to Options, shall be in accordance with the Treasury Regulations concerning Incentive Stock Options. Further, in the event that the Committee determines that any distribution (whether in the form of cash (other than a regular cash dividend), Shares, other securities, or other property), recapitalization, reorganization, merger, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Shares (or other securities or property) with respect to which Awards may be granted, (ii) the number and type of Shares (or other securities or property) subject to outstanding Awards, and (iii) the grant or exercise price with respect to any Award or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award; provided that the number of Shares subject to any Award denominated in Shares shall always be a whole number.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Award Limits</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Subject to adjustment pursuant to Section 4(c) above, the maximum aggregate number of Shares that may be subject to Share-denominated Awards granted under the Plan to any individual during any calendar year shall not exceed 4,000,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The maximum amount of dollar-denominated Awards that may be granted to any individual during any calendar year shall not exceed $10,000,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Subject to adjustment pursuant to Section 4(c) above, the maximum dollar value of Share-denominated Awards that may be granted under the Plan to any individual Director during any calendar year shall not exceed $600,000, as determined on the date of grant for such Awards.

**SECTION 5. <u>Eligibility</u>.**

Any Employee, Consultant or Director shall be eligible to be designated a Participant by the Committee. No individual shall have any right to be granted an Award pursuant to this Plan.

**SECTION 6. <u>Awards</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Options</u>. Subject to the provisions of the Plan, the Committee shall have the authority to determine Participants to whom Options shall be granted, the number of Shares to be covered by each Option, the purchase price therefor and the conditions and limitations applicable to the exercise of the Option, including the following terms and conditions and such additional terms and conditions, as the Committee shall determine, that are not inconsistent with the provisions of the Plan. The Committee shall determine the term during which a Participant may exercise an Option, but in no event may a Participant exercise an Option, in whole or in part, more than 10 years from the date of grant. No dividends or dividend equivalents shall be paid on or with respect to Options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) <u>Exercise Price</u>. The purchase price per Share purchasable under an Option shall be determined by the Committee at the time the Option is granted, but shall not be less than the Fair Market Value per Share on the effective date of such grant.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) <u>Time and Method of Exercise</u>. The Committee shall determine and provide in the Award Agreement or by action subsequent to the grant the time or times at which an Option may be exercised in whole or in part, and the method or methods by which, and the form or forms (which may include, without limitation, cash, check acceptable to the Company, Shares already-owned, Shares issuable upon Option exercise, a "cashless-broker" exercise (through procedures approved by the Committee), other securities or other property, or any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price) in which payment of the exercise price and tax withholding obligation with respect thereto may be made or deemed to have been made. In addition, at the election of the Committee, any Option may be exercised by the Participant pursuant to a "net exercise" method. For purposes of this Plan, a "net exercise" means the delivery of a properly executed notice which directs the Company to pay the Exercise Price and/or any required tax withholding with respect to an Option by withholding from the delivery of the Shares as to which such Option is exercised a number of Shares having a Fair Market Value equal to the applicable Exercise Price and/or the amount of any required tax withholding. If a Participant elects to use a "net exercise" method, the Company shall cancel the withheld Shares, which shall no longer be available for exercise under the terms of the Option, and deliver the remaining Shares to the Participant. Any Shares retained and cancelled by the Company pursuant to a "net exercise" shall no longer be outstanding under the terms of the Option and shall again be available for issuance under the Plan's terms to the extent provided by Section 4(a)(3) above. Notwithstanding any other provision of the Plan to the contrary, no Participant who is a member of the Board or an "executive officer" of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to pay the exercise price of an Option in any method which would violate Section 13(k) of the Exchange Act. The Committee shall also determine the performance or other conditions, if any, that must be satisfied before all or part of an Option may vest and be exercised. No portion of an Option which is unexercisable at termination of the Participant's employment or service, as applicable, shall thereafter become exercisable, except as may be otherwise provided by the Committee either in the Award Agreement or by action following the grant of the Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) <u>Incentive Stock Options</u>. An Incentive Stock Option may be granted only to an individual who is an Employee of the Company or any parent or subsidiary corporation (as defined in Section 424 of the Code) at the time the Option is granted and must be granted within 10 years from the date the Plan was approved by the Board or the shareholders, whichever is earlier. To the extent that the aggregate Fair Market Value (determined at the time the respective Incentive Stock Option is granted) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by an individual during any calendar year under all incentive stock option plans of the Company and its parent and subsidiary corporations exceeds $100,000, such Incentive Stock Options shall be treated as a Non-Qualified Stock Option. The Committee shall determine, in accordance with applicable provisions of the Code, Treasury Regulations and other administrative pronouncements, which of a Participant's Incentive Stock Options will not constitute Incentive Stock Options because of such limitation and shall notify the Participant of such determination as soon as practicable after such determination. No Incentive Stock Option shall be granted to an individual if, at the time the Option is granted, such individual owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of its parent or subsidiary corporation, within the meaning of Section 422(b)(6) of the Code, unless (i) at the time such Option is granted the option price is at least 110% of the Fair Market Value of the Common Stock subject to the Option and (ii) such Option by its terms is not exercisable after the expiration of five years from the date of grant. An Incentive Stock Option shall not be transferable otherwise than by will or the laws of descent and distribution, and shall be exercisable during the Participant's lifetime only by such Participant or the Participant's guardian or legal representative. The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code, or any successor provision, and any regulations promulgated thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) <u>Substitution of Stock Appreciation Rights</u>. Subject to the limitations set forth in Section 7(1), the Committee, in its sole discretion, shall have to right to substitute a SAR for an Option at any time prior to or upon exercise of such Option, subject to the provisions of Section 6(e) hereof; *provided* that such SAR shall be exercisable for the same number of shares of Stock as such substituted Option would have been exercisable for.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Restricted Stock</u>. Subject to the provisions of the Plan, the Committee shall have the authority to determine the Participants to whom Restricted Stock shall be granted, the number of Shares of Restricted Stock to be granted to each such Participant, the duration of the Restricted Period during which, and the conditions, including the Performance Criteria or other specified criteria, including the passage of time, if any, under which the Restricted Stock may vest or be forfeited to the Company, and the other terms and conditions of such Awards.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) <u>Dividends</u>. Cash dividends paid on Restricted Stock Awards and any other property (other than cash) distributed as a dividend or otherwise with respect to the number of Shares covered by a Restricted Stock Award shall be accumulated (unless the applicable Award Agreement provides that no such dividends or distributions shall be accumulated) and shall be subject to restrictions and risk of forfeiture to the same extent as the underlying Shares covered by the Restricted Stock Award with respect to which such cash, Shares or other property has been distributed and shall be paid at the time such restrictions and risk of forfeiture lapse.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) <u>Registration</u>. Any Restricted Stock may be evidenced in such manner as the Committee shall deem appropriate, including, without limitation, book-entry registration or issuance of a stock certificate or certificates. In the event any stock certificate is issued in respect of Restricted Stock granted under the Plan, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) <u>Forfeiture and Restrictions Lapse</u>. Except as otherwise determined by the Committee or the terms of the Award Agreement, upon a Participant's termination of employment or service (as determined under criteria established by the Committee) for any reason during the applicable Restricted Period, all Restricted Stock shall be forfeited by the Participant and re-acquired by the Company. Unrestricted Shares, evidenced in such manner as the Committee shall deem appropriate, shall be issued to the holder of Restricted Stock promptly after the applicable restrictions have lapsed or otherwise been satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) <u>Restrictions</u>. Restricted Stock shall be subject to such restrictions on transferability and other restrictions as the Committee may impose (including, without limitation, restrictions on the right to vote Restricted Stock or the right to accumulate dividends on the Restricted Stock). These restrictions may lapse separately or in combination at such times, pursuant to such circumstances, in such installments, or otherwise, as the Committee determines at the time of the grant of the Award or thereafter. During the Restricted Period, Restricted Stock will be subject to such limitations on transfer as necessary to comply with Section 83 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Performance Awards</u>. The Committee shall have the authority to determine the Participants who shall receive a Performance Award, which shall be denominated as a cash or share amount at the time of grant and confer on the Participant the right to receive all or part of such Award upon the achievement of such performance goals (based on the Performance Criteria or any other specified criteria) during such performance periods as the Committee shall establish with respect to the Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) <u>Terms and Conditions</u>. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the performance goals to be achieved during any performance period, the Performance Criteria or other criteria upon which the performance goals are to be based, the length of any performance period and the amount of any Performance Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) <u>Payment of Performance Awards</u>. Performance Awards may be paid (in cash and/or in Shares, in the sole discretion of the Committee) in a lump sum or in installments following the close of the performance period, or at such later deferral date elected by the Participant, in accordance with procedures established by the Committee with respect to such Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) <u>Forfeiture and Restrictions Lapse</u>. Except as otherwise determined by the Committee or the terms of the Award Agreement that granted the Performance Award, upon a Participant's termination of employment or service, as applicable (as determined under criteria established by the Committee) for any reason during the applicable Restricted Period, all Performance Awards shall be forfeited by the Participant and re-acquired by the Company. Unrestricted Shares, evidenced in such manner as the Committee shall deem appropriate, shall be issued to the holder of Performance Awards promptly after the applicable restrictions have lapsed or otherwise been satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Phantom Shares</u>. The Committee shall have the authority to grant Awards of Phantom Shares to Participants upon such terms and conditions as the Committee may determine.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) <u>Terms and Conditions</u>. Each Phantom Share Award shall constitute an agreement by the Company to issue or transfer a specified number of Shares or pay an amount of cash equal to the Fair Market Value of a specified number of Shares, or a combination thereof to the Participant in the future, subject to the fulfillment during the Restricted Period of such conditions, including those linked to the Performance Criteria or other specified criteria, including the passage of time, if any, as the Committee may specify at the date of grant. During the Restricted Period, the Participant shall not have any right to transfer any rights under the subject Award, shall not have any rights of ownership in the Phantom Shares and shall not have any right to vote such shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) <u>Dividend Equivalents</u>. A Phantom Share award shall provide that any or all dividends or other distributions paid on Shares during the Restricted Period be credited in a cash bookkeeping account (with or without interest) or that equivalent additional Phantom Shares be awarded (unless the applicable Award Agreement provides that no such dividends or distributions shall be credited or that no such equivalent Phantom Shares shall be awarded), which account or Phantom Shares shall be subject to the same restrictions and risk of forfeiture as the underlying Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) <u>Forfeiture and Restrictions Lapse</u>. Except as otherwise determined by the Committee or set forth in the Award Agreement, upon a Participant's termination of employment or service (as determined under criteria established by the Committee) for any reason during the applicable Restricted Period, all Phantom Shares shall be forfeited by the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) <u>Payment of Phantom Shares.</u> Phantom Shares may be paid (in cash and/or in Shares, in the sole discretion of the Committee) in a lump sum or in installments following the close of the Restricted Period, or at such later deferral date elected by the Participant, in accordance with procedures established by the Committee with respect to such Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>SARs</u>. Subject to the provisions of the Plan, the Committee shall have the authority to determine Participants to whom SARs shall be granted, the number of Shares to be covered by each SAR, the exercise price and the conditions and limitations applicable to the exercise of the SAR, including the following terms and conditions and such additional terms and conditions, as the Committee shall determine, that are not inconsistent with the provisions of the Plan. A SAR may be granted (i) in connection and simultaneously with the grant of an Option, (ii) with respect to a previously granted Option, or (iii) independent of an Option. The Committee shall determine the term during which a Participant may exercise an SAR, but in no event may a Participant exercise an SAR, in whole or in part, more than 10 years from the date of grant. No dividends or dividend equivalents shall be paid on or with respect to SARs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) <u>Exercise Price</u>. The exercise price per SAR shall be determined by the Committee at the time the SAR is granted, but shall not be less than the Fair Market Value per Share on the effective date of such grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) <u>Time of Exercise</u>. The Committee shall determine and provide in the Award Agreement the time or times at which a SAR may be exercised in whole or in part.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) <u>Method of Payment</u>. The Committee shall determine, in its discretion, whether the SAR shall be paid in cash, shares of Common Stock or a combination of the two.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Restricted Stock Units</u>. The Committee may, subject to the limitations of the Plan and the availability of Shares reserved but not previously awarded under this Plan, grant Restricted Stock Unit Awards to eligible individuals upon such terms and conditions as it may determine to the extent such terms and conditions are consistent with the following provisions. A "Restricted Stock Unit" Award is the grant of a right to receive Shares in the future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1) <u>Settlement of Restricted Stock Unit Award</u>. A Restricted Stock Unit Award shall be settled either by the delivery of whole Shares or by the payment of cash based upon the Fair Market Value of a specified number of Shares, in the discretion of the Committee, subject to the terms of the applicable Award Agreement. Unless otherwise determined by the Committee and evidenced in an applicable Award Agreement, any stock certificate evidencing the Shares payable under a Restricted Stock Unit Award will be issued (or cash paid) within an

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administratively reasonable period after the date on which the Restricted Stock Unit vests so that the payment of Shares qualifies for the short-term deferral exception under Section 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2) <u>Terms of Restricted Stock Unit Awards</u>. The Committee shall determine the dates on which Restricted Stock Units granted to a Participant shall vest and any specific conditions or performance goals which must be satisfied prior to the vesting of any Award. Notwithstanding other paragraphs in this Section 6(f), the Committee may, in its sole discretion, accelerate the vesting of any Restricted Stock Units. The acceleration of any Restricted Stock Unit Award shall create no right, expectation or reliance on the part of any other Participant or that Participant regarding any other Restricted Stock Unit Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (3) <u>Termination of Service</u>. Unless otherwise determined by the Committee and evidenced in an applicable Award Agreement, upon a Participant's termination of employment for any reason, the Participant's unvested Restricted Stock Units as of the date of termination shall be forfeited and any rights the Participant had to such unvested Awards shall become null and void.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (4) <u>Dividends and Other Distributions</u>. Cash dividend equivalents with respect to any Restricted Stock Unit Award and any other property (other than cash) distributed as a dividend or otherwise with respect to the number of Shares covered by a Restricted Stock Unit Award that vests based on achievement of performance goals shall be accumulated ‎(unless the applicable Award Agreement provides that no such dividends or distributions shall ‎be accumulated)‎ and shall be subject to restrictions and risk of forfeiture to the same extent as the Restricted Stock Units with respect to which such cash, Shares or other property has been distributed and shall be paid at the time such restrictions and risk of forfeiture lapse.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (5) <u>Deferral</u>. Unless expressly permitted by the Committee in the Award Agreement, a Participant does not have any right to make any election regarding the time or form of any payment pursuant to a Restricted Stock Unit Award. To the extent permissible under applicable law, the Committee may permit a Participant to defer payment under a Restricted Stock Unit to a date or dates after the Restricted Stock Unit vests, provided that the terms of the Restricted Stock Unit and any deferral satisfy the requirements to avoid imposition of the "additional tax" under Section 409A(a)(1)(B) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Stock Payments</u>. Stock Payments may be awarded in such amount and may be based upon such Performance Criteria or other specific criteria, if any, determined appropriate by the Committee, determined on the date such Stock Payment is made or on any date thereafter. Cash dividends paid on Stock Payments and any other property (other than cash) distributed as a dividend or otherwise ‎with respect to the number of Shares covered by a Stock Payment shall be accumulated ‎(unless the applicable Award Agreement provides that no such dividends or distributions shall ‎be accumulated)‎ and shall be subject to restrictions ‎and risk of forfeiture to the same extent as the underlying Shares covered by the Stock Payment with respect to which such ‎cash, Shares or other property has been distributed and shall be paid at the time such restrictions and risk of forfeiture ‎lapse.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Substitute Awards</u>. Awards may be granted under the Plan in substitution of similar awards held by individuals who become Employees, Consultants or Directors as a result of a merger, consolidation or acquisition by the Company or a Subsidiary of another entity or the assets of another entity. Such substitute awards may have exercise prices less than the Fair Market Value of a Share on the date of such substitution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>General</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) <u>Awards May Be Granted Separately or Together</u>. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, any other Award granted under the Plan or any award granted under any other plan of the Company or any Subsidiary. Awards granted in addition to or in tandem with other Awards or awards granted under any other plan of the Company or any Subsidiary may be granted either at the same time as or at a different time from the grant of such other Awards or awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) <u>Limits on Transfer of Awards</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) Except as provided in paragraph (C) below, each Award, and each right under any Award, shall be exercisable only by the Participant during the Participant's lifetime, or if permissible under applicable law, by the Participant's guardian or legal representative as determined by the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) Except as provided in paragraph (C) below, no Award and no right under any such Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant otherwise than by will or by the laws of descent and distribution, and any such purported prohibited assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) To the extent specifically approved in writing by the Committee, an Award (other than an Incentive Stock Option) may be transferred for no consideration to immediate family members or related family trusts, limited partnerships or similar entities or other Persons on such terms and conditions as the Committee may establish or approve.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) <u>Terms of Awards</u>. The term of each Award shall be for such period as may be determined by the Committee; provided, that in no event shall the term of any Award exceed a period of 10 years from the date of its grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) <u>Minimum Vesting Period</u>. Each Award (or portion thereof) issued under this Plan's terms shall have a vesting period of not less than one (1) year; provided, however, that, as determined by the Committee in its sole discretion, up to five percent (5%) of the Shares listed in Section 4(a)(1) above may be issued as Awards that do not have such minimum vesting period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) <u>Share Certificate</u>. All certificates for Shares or other securities of the Company or any Subsidiary delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the SEC, any stock exchange upon which such Shares or other securities are then listed, and any applicable federal or state laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) <u>Consideration for Grants</u>. Awards may be granted for no cash consideration or for such consideration as the Committee determines including, without limitation, such minimal cash consideration as may be required by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) <u>Delivery of Shares or other Securities and Payment by Participant of Consideration</u>. No Shares or other securities shall be delivered pursuant to any Award until payment in full of any amount required to be paid pursuant to the Plan or the applicable Award Agreement (including, without limitation, any exercise price or tax withholding) is received by the Company. Such payment may be made by such method or methods and in such form or forms as the Committee shall determine, including, without limitation, cash, Shares, other securities, other Awards or other property, withholding of Shares, cashless exercise with simultaneous sale, or any combination thereof, provided that the combined value, as determined by the Committee, of all cash and cash equivalents and the Fair Market Value of any such Shares or other property so tendered to the Company, as of the date of such tender, is at least equal to the full amount required to be paid pursuant to the plan or the applicable Award Agreement to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) <u>Dividends on Performance Based Awards</u>. Notwithstanding anything herein to the contrary, distributions on the shares of Common Stock underlying Performance Awards or Awards with Performance Criteria, including dividends and dividend equivalents, shall accrue ‎(unless the applicable Award Agreement provides that no such dividends or distributions shall ‎be accrued)‎ and be held by the Company without interest until the Award with respect to which the distribution was made becomes vested or is forfeited and then paid to the Award Participant or forfeited, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Performance Based Compensation</u>. The Committee shall establish performance goals applicable to those Awards which are intended to have performance based vested based upon the attainment of such target levels

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of one or more of the Performance Criteria, over one or more periods of time, which may be of varying and overlapping durations, as the Committee may select. The Performance Criteria shall be subject to adjustment as determined by the Committee in its sole discretion. Performance Criteria may be absolute, relative to one or more other companies, or relative to one or more indexes, and may be contingent upon future performance of the Company or any Subsidiary, division, unit or product line thereof. A performance goal need not be based upon an increase or positive result under a Performance Criteria and could, for example, be based upon limiting economic losses or maintaining the status quo. Which Performance Criteria to be used with respect to any grant, and the weight to be accorded thereto if more than one factor is used, shall be determined by the Committee, in its sole discretion, at the time of grant. Following the completion of each specified performance period, the Committee shall certify in writing whether the applicable performance goals have been achieved for such performance period. In determining the amount earned by a Participant, the Committee shall have the right to increase, decrease or eliminate the amount payable at a given level of performance to take into account additional factors that the Committee may deem relevant to the assessment of individual or corporate performance for the performance period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Change of Control</u>. Notwithstanding any other provisions of the Plan, the provisions of this Section 6(k) shall apply to equity settled compensation awards in the event a Change of Control. The Committee may, in any individual Award Agreement, provide for less favorable vesting provisions with respect to an equity settled Award, including forfeiture upon closing of a Change of Control, but may not provide for accelerated vesting in the absence of termination of employment in connection with or following a Change of Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)If a Participant is employed by the Company or one of its Affiliates on the date a Change of Control occurs and such employment is, within the 24-month period commencing on the effective date of such Change of Control, either involuntarily terminated by the Company or, if the Employee has an employment agreement which permits resignation for "good reason" the Employee resigns for "good reason" as defined in such employment agreement (each referred to as a "Qualifying Termination"), then immediately prior to such termination (i) each Award granted under this Plan to the Employee shall become immediately vested and fully exercisable and any restrictions applicable to the Award shall lapse; provided that the amount payable under a Performance Award shall be determined under subparagraph (3) below; and (ii) if the Award is an Option or SAR, the Award shall remain exercisable until the expiration of the remaining term of the Award. The amount payable under clause (i) shall be paid in cash, Shares or a combination thereof as provided for under the applicable Award Agreement within thirty (30) days following the date of the Employee's Qualifying Termination (except to the extent that settlement of the Award must be made pursuant to its original schedule in order to comply with Section 409A of the Code), notwithstanding that the applicable performance period, retention period or other restrictions and conditions have not been completed or satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Notwithstanding the provisions of Section 6(k)(1), if any Award constitutes a "nonqualified deferred compensation plan" within the meaning of Section 409A of the Code, the timing of settlement of such Award pursuant to this Section 6(k) shall be in accordance with the settlement terms set forth in the applicable Award Agreement if such Change of Control fails to constitute a "change in the ownership of the corporation," a "change in effective control of the corporation" or a "change in the ownership of a substantial portion of the assets of the corporation," within the meaning of Section 409A(a)(2)(A)(v) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)The vesting and settlement of a Performance Award in connection with a Change of Control shall be made in accordance with the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)The amount payable with respect to each Performance Award shall be equal to the greater of (i) the amount payable if each of the Performance Criteria shall be deemed to be satisfied at the target payment level, provided the Award shall be prorated based on the total number of days during the Performance Period prior to date of the Employee's Qualifying Termination in relation to the total number of days during the Performance Period, or (ii) the amount payable based on the actual performance for each of the Performance Criteria through the date of the Employee's Qualifying Termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)The amount payable under subparagraph (A) shall be paid in cash, Shares or a combination thereof as provided for under the applicable Award Agreement within thirty (30) days following the date of the Employee's Qualifying Termination (except to the extent that settlement of the Award must be made pursuant

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to its original schedule in order to comply with Section 409A of the Code), notwithstanding that the applicable performance period, retention period or other restrictions and conditions have not been completed or satisfied.

**SECTION 7. <u>Amendment and Termination</u>.**

Except to the extent prohibited by applicable law and unless otherwise expressly provided in an Award Agreement or in the Plan:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) <u>Amendments to the Plan</u>. The Board or the Committee may amend, alter, suspend, discontinue, or terminate the Plan without the consent of any stockholder, Participant, other holder or beneficiary of an Award, or other Person; provided, however, notwithstanding any other provision of the Plan or any Award Agreement, without the approval of the stockholders of the Company no such amendment, alteration, suspension, discontinuation, or termination shall be made that would (i) increase the total number of Shares that may be issued under the Plan, except as provided in Section 4(c) of the Plan, or (ii) other than pursuant to an equitable adjustment contemplated by Section 4(c) hereof or a Change of Control, permit the exercise price of any outstanding Option or SAR to be reduced, cancel outstanding Options or SARs in exchange for Options or SARs with an exercise price that is less than the exercise price of the original Options or SARs, or cancel or replace an "underwater" Option or SAR in exchange for cash or a new Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) <u>Amendments to Awards</u>. Subject to Paragraph (1) above and Section 3(b), the Committee may waive any conditions or rights under, amend any terms of, or alter any Award theretofore granted, provided no change in any Award shall adversely affect the rights of a Participant under the Award without the consent of such Participant.

**SECTION 8. <u>General Provisions</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>No Rights to Awards</u>. No Participant or other Person shall have any claim to be granted any Award, there is no obligation for uniformity of treatment of Participants, or holders or beneficiaries of Awards and the terms and conditions of Awards need not be the same with respect to each recipient.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Tax Withholding</u>. The Company or any Subsidiary is authorized to withhold from any Award, from any payment due or transfer made under any Award or from any compensation or other amount owing to a Participant the amount (in cash, Shares, or other property) of any applicable taxes required to be withheld by the Company or Subsidiary in respect of the Award, its exercise, the lapse of restrictions thereon, or any payment or transfer under the Award and to take such other action as may be necessary in the opinion of the Company to satisfy all of its obligations for the payment of such taxes. In addition, the Committee may provide, in an Award Agreement, that the Participant may direct the Company to satisfy such Participant's tax withholding obligations through the withholding of Shares otherwise to be acquired upon the exercise or payment of such Award, but only to the extent such withholding does not cause a charge to the Company's financial earnings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>No Right to Employment or Retention</u>. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company or any Subsidiary or under any other service contract with the Company or any Subsidiary, or to remain on the Board. Further, the Company or a Subsidiary may at any time dismiss a Participant from employment or terminate any contractual agreement or relationship with any Consultant, free from any liability or any claim under the Plan, with or without cause, unless otherwise expressly provided in the Plan, in any Award Agreement or any other agreement or contract between the Company or a Subsidiary and the affected Participant. If a Participant's employer ceases to be a Subsidiary, such Participant shall be deemed to have terminated employment for purposes of the Plan, unless specifically provided otherwise in the Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Unusual Transactions or Events</u>. Subject to Section 6(k) above, in the event of any distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, reorganization, merger, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other similar corporate transaction or event or any unusual or nonrecurring transactions or events affecting the Company, any affiliate of the Company, or the financial statements of the Company or any affiliate, or of changes in applicable laws, regulations or

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accounting principles, and whenever the Committee determines that action is appropriate in order to prevent the dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles, the Committee, in its sole discretion and on such terms and conditions as it deems appropriate, either by amendment of the terms of any outstanding Awards or by action taken prior to the occurrence of such transaction or event and is hereby authorized to take any one or more of the following actions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) To provide for either (A) termination of any such Award in exchange for an amount of cash, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant's rights (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction or event described in this Section 8(d) the Committee determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant's rights, then such Award may be terminated by the Company without payment), or (B) the replacement of such Award with other rights or property selected by the Committee in its sole discretion;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) To make adjustments in the number and type of shares of common Stock (or other securities or property) subject to outstanding Awards, and in the number and kind of outstanding Awards and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards and Awards which may be granted in the future;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) To provide that such Award shall be exercisable or payable or fully vested with respect to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the applicable Award Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) To provide that the Award cannot vest, be exercised or become payable after such event.

Notwithstanding the foregoing: (i) any adjustments made pursuant to Section 4(c) and this Section 8(d) to Awards that are considered "deferred compensation" within the meaning of Section 409A of the Code shall be made in compliance with the requirements of Section 409A of the Code unless the Participant consents otherwise; (ii) any such adjustments made to Awards that are not considered "deferred compensation" subject to Section 409A of the Code shall be made in such a manner as to ensure that after such adjustment, the Awards either continue not to be subject to Section 409A of the Code or comply with the requirements of Section 409A of the Code unless the Participant consents otherwise; and (iii) the Committee shall not have the authority to make any such adjustments to the extent that the existence of such authority would cause an Award that is not intended to be subject to Section 409A of the Code to be subject thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Governing Law</u>. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of Texas and applicable federal law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Severability</u>. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Other Laws</u>. The Committee may refuse to issue or transfer any Shares or other consideration under an Award, permit the exercise of an Award and/or the satisfaction of its tax withholding obligation in the manner elected by the Participant, holder or beneficiary if, acting in its sole discretion, it determines that the issuance of transfer or such Shares or such other consideration, the manner of exercise or satisfaction of the tax withholding

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obligation might violate any applicable law or regulation, including without limitation, the Sarbanes-Oxley Act, or entitle the Company to recover the same under Section 16(b) of the Exchange Act, and any payment tendered to the Company by a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded or refused, as the case may be, to the relevant Participant, holder or beneficiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>No Trust or Fund Created</u>. Neither the Plan nor the Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Subsidiary and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Subsidiary pursuant to an Award, such right shall be no greater than the right of any general unsecured creditor of the Company or any Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>No Fractional Shares</u>. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be cancelled, terminated, or otherwise eliminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Headings</u>. Headings are given to the Section and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the plan or any provision thereof.

**SECTION 9. <u>Effective Date of Plan</u>.**

The Plan, as amended and restated, shall become effective as of the date it is approved by the stockholders of the Company. If the amendment and restatement of the Plan is not approved by the stockholders of the Company, the terms of the current plan document shall continue to apply as if such amendment and restatement had not occurred.

**SECTION 10. <u>Forfeiture in Certain Circumstances ("Clawback")</u>.**

All Awards granted under the Plan will be subject to recoupment in accordance with any Clawback policy that the Company is specifically required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company's securities are listed or as is otherwise specifically required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Committee may, at its sole discretion, terminate any Award if it determines that the recipient of the Award has engaged in material misconduct. For purposes of this Clawback provision, material misconduct includes conduct adversely affecting the Company's financial condition, results of operations, or conduct which constitutes fraud or theft of Company assets, any of which require the Company to make a restatement of its reported financial statements. The Committee may also specify other conduct requiring the Company to make a restatement of its publicly reported financial statements as constituting material misconduct in future Award Agreements. If any material misconduct results in any error in financial information used in the determination of compensation paid to the recipient of an Award and the effect of such error is to increase the payment amount pursuant to an Award, the Committee may also require the recipient to reimburse the Company for all or a portion of such increase in compensation provided in connection with any such Award. In addition, if there is a material restatement of the Company's financial statements that affects the financial information used to determine the compensation paid to the recipient of the Award, then the Committee may take whatever action it deems appropriate to adjust such compensation.

**SECTION 11. <u>Prohibition on Deferred Compensation.</u>**

It is the intention of the Company that no Award shall be "deferred compensation" subject to Section 409A of the Code unless and to the extent that the Committee specifically determines otherwise and so provides in the terms of an Award Agreement, and the Plan and the terms and conditions of all Awards shall be interpreted accordingly. The terms and conditions governing any Awards that the Committee determines will be subject to Section 409A of the Code, including any rules for elective or mandatory deferral of the delivery of cash or Shares pursuant thereto, shall be set forth in the applicable Award Agreement, and shall comply in all respects with Section 409A of the Code. Notwithstanding any provision herein to the contrary, any Award issued under the Plan that constitutes a deferral of compensation under a "nonqualified deferred compensation plan" as defined under Section 409A(d)(1) of the Code

------

and is not specifically designated as such by the Committee shall be modified or cancelled to comply with the requirements of Section 409A of the Code, including any rules for elective or mandatory deferral of the delivery of cash or Shares pursuant thereto.

**SECTION 12. <u>Term of the Plan</u>.**

No Award shall be granted under the Plan after May 20, 2030. However, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award granted prior to such termination, and the authority of the Board or the Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award or to waive any conditions or rights under such Award, shall extend beyond such termination date.

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## Exhibit 31.1

**Exhibit 31.1** 

**CERTIFICATION** 

I, Clay C. Williams, certify that:

1. I have reviewed this quarterly report on Form 10-Q of NOV Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: July 29, 2025

---

| | |
|:---|:---|
| *By:* | */s/ Clay C. Williams* |
| Clay C. Williams | Clay C. Williams |
| Chairman and Chief Executive Officer | Chairman and Chief Executive Officer |

---

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## Exhibit 31.2

**Exhibit 31.2** 

**CERTIFICATION** 

I, Rodney C. Reed, certify that:

1. I have reviewed this quarterly report on Form 10-Q of NOV Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: July 29, 2025

---

| | |
|:---|:---|
| *By:* | */s/ Rodney C. Reed* |
| Rodney C. Reed | Rodney C. Reed |
| Senior Vice President and Chief Financial Officer | Senior Vice President and Chief Financial Officer |

---

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## Exhibit 32.1

**Exhibit 32.1** 

**CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002** 

In connection with the Quarterly Report of NOV Inc. (the "Company") on Form 10-Q for the period ending June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, Clay C. Williams, Chairman and Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(i) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

The certification is given to the knowledge of the undersigned.

---

| | |
|:---|:---|
| *By:* | */s/ Clay C. Williams* |
| Name: | Clay C. Williams |
| Title: | Chairman and Chief Executive Officer |
| Date: | July 29, 2025 |

---

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## Exhibit 32.2

**Exhibit 32.2** 

**CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002** 

In connection with the Quarterly Report of NOV Inc. (the "Company") on Form 10-Q for the period ending June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, Rodney C. Reed, Senior Vice President and Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(i) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

The certification is given to the knowledge of the undersigned.

---

| | |
|:---|:---|
| *By:* | */s/ Rodney C. Reed* |
| Name: | Rodney C. Reed |
| Title: | Senior Vice President and Chief Financial Officer |
| Date: | July 29, 2025 |

---

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## Ex-95

**Exhibit 95** 

<u>Mine Safety Disclosures</u> 

Our mines are operated subject to the regulation of the Federal Mine Safety and Health Administration ("MSHA"), under the Federal Mine Safety and Health Act of 1977 (the "Mine Act"). The following mine safety data is provided pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act").

As required by the reporting requirements of the Dodd-Frank Act, as amended, the table below presents the following information for the quarter ended June 30, 2025. (in whole dollars) (Unaudited)

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  |  |  |  |  | **Received** |  |  |  |
|  |  |  |  |  |  |  |  | **Received** | **Notice of** | **Legal** |  |  |
|  |  |  |  |  |  |  |  | **Notice of** | **Potential** | **Actions** |  |  |
|  |  |  | **Section** |  |  | **Total Dollar** | **Total** | **Pattern of** | **to have** | **Pending** | **Legal** | **Legal** |
|  | **Section** |  | **104(d)** |  |  | **Value of** | **Number** | **Violations** | **Patterns** | **as of** | **Actions** | **Actions** |
|  | **104** | **Section** | **Citations** | **Section** | **Section** | **MSHA** | **of Mining** | **Under** | **Under** | **Last** | **Initiated** | **Resolved** |
|  | **S&S** | **104(b)** | **and** | **110(b)(2)** | **107(a)** | **Assessments** | **Related** | **Section** | **Section** | **Day of** | **During** | **During** |
| **Mine** | **Citations** | **Orders** | **Orders** | **Violations** | **Orders** | **Proposed** | **Fatalities** | **104(e)** | **104(e)** | **Period** | **Period** | **Period** |
| Dry Creek (26-02646) |  |  |  |  |  | $— |  | no | no |  |  |  |

---

Includes legal actions initiated during the period.

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