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.

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 ~~April 17,~~October 16, 2020 the registrant had ~~388,223,024~~388,264,052 shares of common stock, par value $0.01 per share, outstanding.

							September 30,			December 31,
	March 31,			December 31,			2020			2019
	2020			2019			(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,115		$	1,171		$	1,485		$	1,171
Receivables, net		1,879			1,855			1,382			1,855
Inventories, net		2,032			2,197			1,745			2,197
Contract assets, net		639			643
Contract assets								555			643
Prepaid and other current assets		237			247			209			247
Total current assets		5,902			6,113			5,376			6,113
Property, plant and equipment, net		2,003			2,354			1,994			2,354
Lease right-of-use assets, operating		399			444			376			444
Lease right-of-use assets, financing		211			230			199			230
Goodwill		1,515			2,807			1,493			2,807
Intangibles, net		534			852			516			852
Investment in unconsolidated affiliates		57			282			59			282
Other assets		69			67			155			67
Total assets	$	10,690		$	13,149		$	10,168		$	13,149
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	662		$	715		$	476		$	715
Accrued liabilities		888			949			852			949
Contract liabilities		470			427			371			427
Current portion of lease liabilities		115			114			111			114
Accrued income taxes		28			42			74			42
Total current liabilities		2,163			2,247			1,884			2,247
Lease liabilities		646			674			619			674
Long-term debt		2,002			1,989			1,824			1,989
Deferred income taxes		69			140			70			140
Other liabilities		256			253			231			253
Total liabilities		5,136			5,303			4,628			5,303
Commitments and contingencies
Stockholders’ equity:
Common stock - par value $.01; 1 billion shares authorized; 388,222,777 and 385,886,682 shares issued and outstanding at March 31, 2020 and December 31, 2019		4			4
Common stock - par value $.01; 1 billion shares authorized; 388,268,680 and 385,886,682 shares issued and outstanding at September 30, 2020 and December 31, 2019								4			4
Additional paid-in capital		8,518			8,507			8,567			8,507
Accumulated other comprehensive loss		(1,655	)		(1,423	)		(1,577	)		(1,423	)
Retained earnings		(1,381	)		690
Retained earnings (deficit)								(1,529	)		690
Total Company stockholders' equity		5,486			7,778			5,465			7,778
Noncontrolling interests		68			68			75			68
Total stockholders’ equity		5,554			7,846			5,540			7,846
Total liabilities and stockholders’ equity	$	10,690		$	13,149		$	10,168		$	13,149

	Three Months Ended						Three Months Ended						Nine Months Ended
	March 31,						September 30,						September 30,
	2020			2019			2020			2019			2020			2019
Revenue	$	1,883		$	1,940		$	1,384		$	2,126		$	4,763		$	6,198
Cost of revenue		1,659			1,684			1,245			1,975			4,263			5,729
Gross profit		224			256			139			151			500			469
Selling, general and administrative		283			304			213			293			733			1,014
Goodwill and indefinite-lived intangible asset impairment		1,378			—			—			—			1,378			3,186
Long-lived asset impairment		513			—			—			12			513			2,199
Operating loss		(1,950	)		(48	)		(74	)		(154	)		(2,124	)		(5,930	)
Interest and financial costs		(22	)		(25	)		(21	)		(25	)		(65	)		(75	)
Interest income		3			6			—			4			5			16
Equity loss in unconsolidated affiliates		(233	)		—			(11	)		(4	)		(250	)		(6	)
Other income (expense), net		(3	)		(18	)		(8	)		(10	)		(19	)		(36	)
Loss before income taxes		(2,205	)		(85	)		(114	)		(189	)		(2,453	)		(6,031	)
Provision (benefit) for income taxes		(156	)		(10	)		(61	)		60			(264	)		(323	)
Net loss		(2,049	)		(75	)		(53	)		(249	)		(2,189	)		(5,708	)
Net income attributable to noncontrolling interests		(2	)		2
Net income (loss) attributable to noncontrolling interests								2			(5	)		6			2
Net loss attributable to Company	$	(2,047	)	$	(77	)	$	(55	)	$	(244	)	$	(2,195	)	$	(5,710	)

Net loss attributable to Company per share:
Basic	$	(5.34	)	$	(0.20	)	$	(0.14	)	$	(0.64	)	$	(5.72	)	$	(14.95	)
Diluted	$	(5.34	)	$	(0.20	)	$	(0.14	)	$	(0.64	)	$	(5.72	)	$	(14.95	)

Cash dividends per share	$	0.05		$	0.05		$	-		$	0.05		$	0.05		$	0.15

Weighted average shares outstanding:
Basic		383			380			385			382			384			382
Diluted		383			380			385			382			384			382

	Three Months Ended						Three Months Ended						Nine Months Ended
	March 31,						September 30,						September 30,
	2020			2019			2020			2019			2020			2019
Net loss	$	(2,049	)	$	(75	)	$	(53	)	$	(249	)	$	(2,189	)	$	(5,708	)
Currency translation adjustments		(180	)		20			20			(118	)		(151	)		(80	)
Changes in derivative financial instruments, net of tax		(52	)		4			16			(14	)		(3	)		(7	)
Comprehensive loss		(2,281	)		(51	)		(17	)		(381	)		(2,343	)		(5,795	)
Comprehensive income attributable to noncontrolling interest		(2	)		2
Comprehensive income (loss) attributable to noncontrolling interest								2			(5	)		6			2
Comprehensive loss attributable to Company	$	(2,279	)	$	(53	)	$	(19	)	$	(376	)	$	(2,349	)	$	(5,797	)

	Three Months Ended							Nine Months Ended
	March 31,							September 30,
	2020			2019				2020			2019
Cash flows from operating activities:
Net loss	$	(2,049	)	$	(75	)		$	(2,189	)	$	(5,708	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		105			177				270			433
Provision for inventory losses		125			14				171			592
Deferred income taxes		(62	)		(9	)			(72	)		(367	)
Loss on extinguishment of debt									8			—
Equity loss in unconsolidated affiliates		233			—				250			6
Goodwill and indefinite-lived intangible asset impairment		1,378			—				1,378			3,186
Long-lived asset impairment		513			—				513			2,199
Other, net		45			21				93			119
Change in operating assets and liabilities, net of acquisitions:
Receivables		(27	)		326				469			338
Inventories		47			(152	)			288			(169	)
Contract assets		(5	)		26				86			(42	)
Prepaid and other current assets		9			(4	)			38			(49	)
Accounts payable		(54	)		(49	)			(240	)		(20	)
Accrued liabilities		(142	)		(234	)			(127	)		(182	)
Contract liabilities		43			(46	)			(56	)		(7	)
Income taxes payable		(15	)		(45	)			32			(58	)
Other assets/liabilities, net		(105	)		12				(172	)		(30	)
Net cash provided by (used by) operating activities		39		$	(38	)
Net cash provided by operating activities									740			241

Cash flows from investing activities:							��
Purchases of property, plant and equipment		(68	)		(43	)			(173	)		(166	)
Business acquisitions, net of cash acquired		—			(65	)			—			(180	)
Other		15			1				13			78
Net cash used in investing activities	$	(53	)	$	(107	)		$	(160	)	$	(268	)

Cash flows from financing activities:
Payments against lines of credit and other debt									(217	)		—
Borrowings against lines of credit and other debt									36			—
Cash dividends paid		(19	)		(19	)			(19	)		(58	)
Debt extinguishment costs									(8	)		—
Other		(24	)		(1	)			(48	)		(15	)
Net cash used in financing activities		(43	)		(20	)			(256	)		(73	)
Effect of exchange rates on cash		1			8				(10	)		(14	)
Increase (decrease) in cash and cash equivalents		(56	)		(157	)			314			(114	)
Cash and cash equivalents, beginning of period		1,171			1,427				1,171			1,427
Cash and cash equivalents, end of period	$	1,115		$	1,270			$	1,485		$	1,313

Supplemental disclosures of cash flow information:
Cash payments during the period for:
Cash payments (refunds) during the period for:
Interest	$	3		$	5			$	47		$	53
Income taxes	$	14		$	29			$	(38	)	$	81

	Shares Outstanding		Common Stock		Additional Paid in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Loss)			Total Company Stockholders' Equity			Noncontrolling Interests			Total Stockholders' Equity			Common Stock		Additional Paid in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Loss)			Total Company Stockholders' Equity			Noncontrolling Interests			Total Stockholders' Equity
Balance at December 31, 2019		386	$	4	$	8,507		$	(1,423	)	$	690		$	7,778		$	68		$	7,846		$	4	$	8,507		$	(1,423	)	$	690		$	7,778		$	68		$	7,846
Net income (loss)		—		—		—			—			(2,047	)		(2,047	)		(2	)		(2,049	)
Other comprehensive income (loss), net		—		—		—			(232	)		—			(232	)		—			(232	)
Net loss																								—		—			—			(2,047	)		(2,047	)		(2	)		(2,049	)
Other comprehensive loss																								—		—			(232	)		—			(232	)		—			(232	)
Cash dividends, $0.05 per common share		—		—		—			—			(19	)		(19	)		—			(19	)		—		—			—			(19	)		(19	)		—			(19	)
Adoption of new accounting standard		—		—		—			—			(5	)		(5	)		—			(5	)		—		—			—			(5	)		(5	)		—			(5	)
Noncontrolling interest		—		—		—			—			—			—			2			2			—		—			—			—			—			2			2
Stock-based compensation		—		—		27			—			—			27			—			27			—		27			—			—			27			—			27
Common stock issued		2		—		1			—			—			1			—			1
Withholding taxes		—		—		(17	)		—			—			(17	)		—			(17	)		—		(18	)		—			—			(18	)		—			(18	)
Balance at March 31, 2020		388	$	4	$	8,518		$	(1,655	)	$	(1,381	)	$	5,486		$	68		$	5,554		$	4	$	8,516		$	(1,655	)	$	(1,381	)	$	5,484		$	68		$	5,552
Net loss																								—		—			—			(93	)		(93	)		6			(87	)
Other comprehensive income																								—		—			42			—			42			—			42
Noncontrolling interest																								—		—			—			—			—			(1	)		(1	)
Stock-based compensation																								—		27			—			—			27			—			27
Balance at June 30, 2020																							$	4	$	8,543		$	(1,613	)	$	(1,474	)	$	5,460		$	73		$	5,533
Net loss																								—		—			—			(55	)		(55	)		2			(53	)
Other comprehensive loss																								—		—			36			—			36			—			36
Noncontrolling interest																								—		—			—			—			—			—			—
Stock-based compensation																								—		24			—			—			24			—			24
Balance at September 30, 2020																							$	4	$	8,567		$	(1,577	)	$	(1,529	)	$	5,465		$	75		$	5,540

	Shares Outstanding		Common Stock		Additional Paid in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Loss)			Total Company Stockholders' Equity			Noncontrolling Interests		Total Stockholders' Equity			Common Stock		Additional Paid in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Loss)			Total Company Stockholders' Equity			Noncontrolling Interests			Total Stockholders' Equity
Balance at December 31, 2018		383	$	4	$	8,390		$	(1,437	)	$	6,862		$	13,819		$	70	$	13,889		$	4	$	8,390		$	(1,437	)	$	6,862		$	13,819		$	70		$	13,889
Net income (loss)		—		—		—			—			(77	)		(77	)		2		(75	)
Other comprehensive income (loss), net		—		—		—			24			—			24			—		24
Net loss																							—		—			—			(77	)		(77	)		2			(75	)
Other comprehensive income																							—		—			24			—			24			—			24
Cash dividends, $0.05 per common share		—		—		—			—			(19	)		(19	)		—		(19	)		—		—			—			(19	)		(19	)		—			(19	)
Noncontrolling interest		—		—		—			—			—			—			3		3			—		—			—			—			—			3			3
Stock-based compensation		—		—		33			—			—			33			—		33			—		33			—			—			33			—			33
Common stock issued		3		—		3			—			—			3			—		3			—		3			—			—			3			—			3
Withholding taxes		—		—		(18	)		—			—			(18	)		—		(18	)		—		(18	)		—			—			(18	)		—			(18	)
Balance at March 31, 2019		386	$	4	$	8,408		$	(1,413	)	$	6,766		$	13,765		$	75	$	13,840		$	4	$	8,408		$	(1,413	)	$	6,766		$	13,765		$	75		$	13,840
Net loss																							—		—			—			(5,389	)		(5,389	)		5			(5,384	)
Other comprehensive income																							—		—			21			—			21			—			21
Cash dividends, $0.05 per common share																							—		—			—			(19	)		(19	)		—			(19	)
Noncontrolling interest																							—		—			—			—			—			(4	)		(4	)
Stock-based compensation																							—		32			—			—			32			—			32
Common stock issued																							—		1			—			—			1			—			1
Balance at June 30, 2019																						$	4	$	8,441		$	(1,392	)	$	1,358		$	8,411		$	76		$	8,487
Net loss																							—		—			—			(244	)		(244	)	$	(5	)		(249	)
Other comprehensive loss																							—		—			(132	)		—			(132	)		—			(132	)
Cash dividends, $0.05 per common share																							—		—			—			(20	)		(20	)		—			(20	)
Noncontrolling interest																							—		—			—			—			—			1			1
Stock-based compensation																							—		41			—			—			41			—			41
Common stock issued																							—		1			—			—			1			—			1
Balance at September 30, 2019																						$	4	$	8,483		$	(1,524	)	$	1,094		$	8,057		$	72		$	8,129

The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States 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 accompanying unaudited consolidated financial statements of National Oilwell Varco, Inc. (“NOV” or ~~the “Company”~~“the Company”) present information in accordance with GAAP in the United States 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 in the United States for complete consolidated financial statements and should be read in conjunction with the Company’s 2019 Annual Report on Form 10-K.

In ~~our~~management’s opinion, the consolidated financial statements include all adjustments, which are of a normal recurring nature unless otherwise disclosed, necessary for a fair presentation of the results for the interim periods. The results of operations for the three and nine months ended ~~March 31,~~September 30, 2020, are not necessarily indicative of the results to be expected for the full year.

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.

	March 31,			December 31,			September 30,			December 31,
	2020			2019			2020			2019
Raw materials and supplies	$	531		$	577		$	434		$	577
Work in process		377			364			375			364
Finished goods and purchased products		1,983			2,099			1,556			2,099
		2,891			3,040			2,365			3,040
Less: Inventory reserve		(859	)		(843	)		(620	)		(843	)
Total	$	2,032		$	2,197		$	1,745		$	2,197

	March 31,		December 31,		September 30,		December 31,
	2020		2019		2020		2019
Compensation	$	176	$	270	$	176	$	270
Vendor costs		130		121		128		121
Taxes (non-income)						123		112
Warranties						85		90
Insurance						54		57
Fair value of derivatives		97		24		31		24
Warranties		86		90
Taxes (non-income)		74		112
Insurance		53		57
Commissions		33		31
Interest		25		8		23		8
Other		214		236		232		267
Total	$	888	$	949	$	852	$	949

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

Derivative

Defined

Currency

Financial

Benefit

Translation

Instruments,

Plans,

Adjustments

Net of Tax

Net of Tax

Total

Balance at December 31, 2019

$
(1,403
)

$
(4
)

$
(16
)

$
(1,423
)
Accumulated other comprehensive
income (loss) before reclassifications

(180
)

(56
)

—

(236
)
Amounts reclassified from accumulated
other comprehensive income (loss)

—

4

—

4

Balance at March 31, 2020

$
(1,583
)

$
(56
)

$
(16
)

$
(1,655
)

				Derivative			Defined
	Currency			Financial			Benefit
	Translation			Instruments,			Plans,
	Adjustments			Net of Tax			Net of Tax			Total
Balance at December 31, 2019	$	(1,403	)	$	(4	)	$	(16	)	$	(1,423	)
Accumulated other comprehensive income (loss) before reclassifications		(151	)		(19	)		0			(170	)
Amounts reclassified from accumulated other comprehensive income (loss)		0			16			0			16
Balance at September 30, 2020	$	(1,554	)	$	(7	)	$	(16	)	$	(1,577	)

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

	Three Months Ended March 31,																		Three Months Ended September 30,
	2020										2019								2020										2019
	Currency		Derivative			Defined					Currency		Derivative		Defined				Currency		Derivative			Defined					Currency		Derivative			Defined
	Translation		Financial			Benefit					Translation		Financial		Benefit				Translation		Financial			Benefit					Translation		Financial			Benefit
	Adjustments		Instruments			Plans		Total			Adjustments		Instruments		Plans		Total		Adjustments		Instruments			Plans		Total			Adjustments		Instruments			Plans		Total
Revenue	$	—	$	—		$	—	$	—		$	—	$	—	$	—	$	—	$	—	$	2		$	—	$	2		$	—	$	—		$	—	$	—
Cost of revenue		—		5			—		5			—		1		—		1		—		1			—		1			—		4			—		4
Tax effect		—		(1	)		—		(1	)		—		—		—		—		—		(1	)		—		(1	)		—		(1	)		—		(1	)
	$	—	$	4		$	—	$	4		$	—	$	1	$	—	$	1	$	—	$	2		$	—	$	2		$	—	$	3		$	—	$	3

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). ~~For the three months ended March 31, 2020, a majority of these local currencies weakened against the U.S. dollar, resulting in other comprehensive loss of $180 million compared to other comprehensive~~The Company recorded income of $20 million and a loss of $151 million for the three and nine months ended ~~March 31, 2019.~~ September 30, 2020, respectively, and a loss of $118 million and $80 million for the three and nine months ended September 30, 2019, respectively.

The effect of changes in the fair values of derivatives designated as cash flow hedges are accumulated in other comprehensive income (loss), net of tax, until the underlying transactions ~~they hedge~~ are realized. The movement in other comprehensive income (loss) from period to period will be the ~~result of the~~ combination of: 1) changes in fair value of ~~open~~outstanding derivatives of $14 million and ($~~-56~~19) million during the three and nine months ended ~~March 31, 2020);~~September 30, 2020; and, 2) the outflow of other comprehensive income (loss) related to cumulative changes in the fair value of derivatives that have settled in the current period ($42 million and $16 million during the three and nine months ended ~~March 31,~~September 30, 2020).

	Three Months Ended						Three Months Ended						Nine Months Ended
	March 31,						September 30,						September 30,
	2020			2019			2020			2019			2020			2019
Revenue:
Wellbore Technologies	$	691		$	807		$	361		$	793		$	1,494		$	2,450
Completion & Production Solutions		675			581			601			728			1,887			1,972
Rig Technologies		557			603			449			649			1,482			1,923
Eliminations		(40	)		(51	)		(27	)		(44	)		(100	)		(147	)
Total revenue	$	1,883		$	1,940		$	1,384		$	2,126		$	4,763		$	6,198

Operating profit (loss):
Wellbore Technologies	$	(663	)		19		$	(50	)		42		$	(780	)	$	(3,234	)
Completion & Production Solutions		(1,013	)		(35	)		25			(24	)		(946	)		(1,991	)
Rig Technologies		(202	)		31			(3	)		(110	)		(230	)		(501	)
Eliminations and corporate costs		(72	)		(63	)		(46	)		(62	)		(168	)		(204	)
Total operating profit (loss)	$	(1,950	)	$	(48	)	$	(74	)	$	(154	)	$	(2,124	)	$	(5,930	)

Operating profit (loss)%:
Wellbore Technologies		(95.9	%)		2.4	%
Completion & Production Solutions		(150.1	%)		(6.0	%)
Rig Technologies		(36.3	%)		5.1	%
Total operating profit (loss)%		(103.6	%)		(2.5	%)

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 3 reporting segments that are eliminated in consolidation. Intrasegment transactions are eliminated within each segment.

	Three Months Ended					Three Months Ended				Nine Months Ended
	March 31,					September 30,				September 30,
	2020		2019			2020		2019		2020		2019
Other items in operating profit:
Other Significant Items:
Wellbore Technologies	$	715	$	(2	)	$	26	$	41	$	803	$	3,384
Completion & Production Solutions		1,054		11			23		79		1,089		2,029
Rig Technologies		238		2			12		194		270		670
Eliminations and corporate costs		16		—			1		—		25		11
Total other items in operating profit	$	2,023	$	11

~~First quarter~~For the three months ended September 30, 2020, operating profit (loss) ~~includes~~included pre-tax charges for severance ($23 million); facility closures ($20 million); and inventory charges and other items ($19 million). For the nine months ended September 30, 2020, operating profit (loss) included pre-tax charges for impairment of goodwill, indefinite-lived and finite-lived intangible and long-lived tangible assets ($1,891 million); inventory charges ($~~114~~152 million); and, severance, facility closures and other items ($18144 million). ~~First quarter~~

For the three months ended September 30, 2019, operating profit ~~includes~~(loss) included pre-tax inventory charges ~~for inventory,~~($265 million); impairment of long-lived tangible assets ($12 million); and severance, facility closure and other items ($1137 million). For the nine months ended September 30, 2019, operating profit (loss) included pre-tax charges for impairment of goodwill, indefinite-lived and finite-lived intangible and long-lived tangible assets ($5,385 million); inventory charges ($571 million); a Voluntary Early Retirement Program ($87 million); and severance, facility closures and other items ($51 million).

The following table disaggregates the Company’s revenue by major geographic and market segment destination. In the table, North America includes the U.S. and Canada (in millions):

	Three Months Ended March 31,																						Three Months Ended September 30,
	2020											2019											2020											2019
			Completion											Completion											Completion											Completion
	Wellbore		& Production		Rig							Wellbore		& Production		Rig							Wellbore		& Production		Rig							Wellbore		& Production		Rig
	Technologies		Solutions		Technologies		Eliminations			Total		Technologies		Solutions		Technologies		Eliminations			Total		Technologies		Solutions		Technologies		Elims.			Total		Technologies		Solutions		Technologies		Elims.			Total
North America	$	361	$	225	$	77	$	—		$	663	$	460	$	269	$	141	$	—		$	870	$	132	$	168	$	54	$	—		$	354	$	422	$	295	$	113	$	—		$	830
International		313		437		470		—			1,220		331		296		443		—			1,070		217		424		389		—			1,030		355		420		521		—			1,296
Eliminations		17		13		10		(40	)		—		16		16		19		(51	)		—		12		9		6		(27	)		—		16		13		15		(44	)		—
	$	691	$	675	$	557	$	(40	)	$	1,883	$	807	$	581	$	603	$	(51	)	$	1,940	$	361	$	601	$	449	$	(27	)	$	1,384	$	793	$	728	$	649	$	(44	)	$	2,126

Land	$	529	$	416	$	151	$	—		$	1,096	$	665	$	405	$	215	$	—		$	1,285	$	226	$	346	$	103	$	—		$	675	$	616	$	479	$	151	$	—		$	1,246
Offshore		145		246		396		—			787		126		160		369		—			655		123		246		340		—			709		161		236		483		—			880
Eliminations		17		13		10		(40	)		—		16		16		19		(51	)		—		12		9		6		(27	)		—		16		13		15		(44	)		—
	$	691	$	675	$	557	$	(40	)	$	1,883	$	807	$	581	$	603	$	(51	)	$	1,940	$	361	$	601	$	449	$	(27	)	$	1,384	$	793	$	728	$	649	$	(44	)	$	2,126

	Nine Months Ended September 30,
	2020											2019
			Completion											Completion
	Wellbore		& Production		Rig							Wellbore		& Production		Rig
	Technologies		Solutions		Technologies		Elims.			Total		Technologies		Solutions		Technologies		Elims.			Total
North America	$	676	$	574	$	184	$	—		$	1,434	$	1,343	$	846	$	381	$	—		$	2,570
International		776		1,280		1,273		—			3,329		1,061		1,080		1,487		—			3,628
Eliminations		42		33		25		(100	)		—		46		46		55		(147	)		—
	$	1,494	$	1,887	$	1,482	$	(100	)	$	4,763	$	2,450	$	1,972	$	1,923	$	(147	)	$	6,198

Land	$	1,051	$	1,107	$	367	$	—		$	2,525	$	1,960	$	1,340	$	537	$	—		$	3,837
Offshore		401		747		1,090		—			2,238		444		586		1,331		—			2,361
Eliminations		42		33		25		(100	)		—		46		46		55		(147	)		—
	$	1,494	$	1,887	$	1,482	$	(100	)	$	4,763	$	2,450	$	1,972	$	1,923	$	(147	)	$	6,198

Net revenue recognized from performance obligations satisfied in previous periods was $4$15 million for the three months ended ~~March 31,~~September 30, 2020, primarily due to change orders.

Remaining performance obligations represents 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 ~~March 31,~~September 30, 2020, the aggregate amount of the transaction price allocated to remaining performance obligations was ~~$3,558~~$3,718 million. The Company expects to recognize approximately ~~$937~~$288 million in revenue for the remaining performance obligations in 2020 and ~~$2,621~~$3,430 million in 2021 and thereafter.

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 ~~net~~ contract assets and contract liabilities are as follows (in millions):

	Contract Assets			Contract Liabilities			Contract Assets			Contract Liabilities
Balance at December 31, 2019	$	643		$	427		$	643		$	427
Provision		(4	)		-			(2	)		—
Billings		(84	)		282			(692	)		924
Revenue recognized		99			(233	)		655			(946	)
Currency translation adjustments and other		(15	)		(6	)		(49	)		(34	)
Balance at March 31, 2020	$	639		$	470
Balance at September 30, 2020							$	555		$	371

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 initially intends that a lease option will be exercised 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 agreements at inception to determine if they include a lease and, when they do, uses its incremental borrowing rate to determine the present value of the future lease payments as most do not include implicit interest rates.

	March 31,		December 31,		September 30,		December 31,
	2020		2019		2020		2019
Current portion of lease liabilities:
Operating	$	83	$	84	$	82	$	84
Financing		32		30		29		30
Total	$	115	$	114	$	111	$	114

	March 31,		December 31,		September 30,		December 31,
	2020		2019		2020		2019
Long-term portion of lease liability:
Operating	$	394	$	424	$	379	$	424
Financing		252	$	250		240	$	250
Total	$	646	$	674	$	619	$	674

The Company has a $2.0 billion, five-year unsecured revolving credit facility, which expires on October 30, 2024. The Company has the right to increase the commitments under this agreement to an aggregate amount of up to $3.0 billion upon the consent of only those lenders holding any such increase. Interest under the multicurrency facility is based upon LIBOR, NIBOR or CDOR plus 1.125% subject to a ratings-based grid or the U.S. prime rate. The credit facility contains a financial covenant regarding maximum debt-to-capitalization ratio of 60%. As of ~~March 31,~~September 30, 2020, the Company was in compliance with a debt-to-capitalization ratio of ~~29.2%.~~27.4% and had 0 outstanding letters of credit issued under the facility, resulting in $2.0 billion of available funds.

Additionally, theCompany has 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 LIBOR plus 1.40%. The bank line of credit contains a financial covenant regarding maximum debt-to-equity ratio of 75%. As of ~~March 31,~~September 30, 2020, the Company was in compliance. Other debt at September 30, 2020, included $24 million on the books of consolidated joint ventures due to the minority interest partner.

On August 25, 2020, the Company completed a cash tender offer for $217.3 million of its 2.60% unsecured Senior Notes using available cash balances. The Company ~~has~~paid $226 million, which included a ~~commercial paper program under~~redemption premium of $7.6 million as well as accrued and unpaid interest of $1.3 million. As a result of the redemption, the Company recorded a loss on extinguishment of debt of $8.2 million, which ~~borrowings are classified as long-term since~~included the ~~program is supported by the $2.0 billion,~~ ~~five-year~~ ~~credit facility. At March 31, 2020, there were 0 commercial paper borrowings,~~redemption premium of $7.6 million and ~~there were 0 outstanding letters~~non-cash charges of ~~credit issued under the credit facility, resulting in $2.0 billion of funds available under this credit facility.~~$0.6 million attributable to write-off unamortized discount and debt issuance costs.

The Company had ~~$524~~$490 million of outstanding letters of credit at ~~March 31,~~September 30, 2020, primarily in the U.S. and Norway, that are under various bilateral letter of credit facilities. Letters of credit are issued as bid bonds, advanced payment bonds and performance bonds.

At ~~March 31,~~September 30, 2020, and December 31, 2019, the fair value of the Company’s unsecured Senior Notes approximated ~~$1,445~~$1,648 million and $1,947 million, respectively. The fair value of the Company’s debt is estimated using Level 2 inputs in the fair value hierarchy and is based on quoted prices for those orof similar instruments. At ~~March 31,~~September 30, 2020, and December 31, 2019, the carrying value of the Company’s unsecured Senior Notes approximated ~~$1,981~~$1,764 million and $1,980 million, respectively.

The effective tax rate for the three and nine months ended ~~March 31,~~September 30, 2020, was 53.5% and ~~2019 was 7.1%~~10.8%, respectively, compared to (31.7%) and ~~11.8%, respectively. The Company established valuation allowances on deferred tax assets~~5.4% for ~~losses and tax credits generated~~the same periods in ~~2020 and~~ 2019. The ~~change in the~~Company’s 2019 and 2020 effective tax ~~rate from 2019 to 2020 was impacted by a change in jurisdictional mix of income between the two periods and 2020 was~~rates are negatively impacted by incremental valuation allowances primarily on net operating loss and tax attributes available in those years and the impairment of nondeductible ~~goodwill partially offset by an~~goodwill. Furthermore, the Company recorded income tax ~~benefit~~benefits of ~~$123~~$106 million ~~from~~in the three months ended September 30, 2020, and $206 million in the nine months ended September 30, 2020, related to the carryback of its 2019 United States net operating loss pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that was enacted on March 27, 2020 allowing net operating losses originating in 2018, 2019 or 2020 to be carried back five years. ~~The~~In addition, the Company ~~anticipates filing a refund claim~~recorded an income tax benefit of $90.3 million in the nine months ended September 30, 2020, to ~~carryback~~reflect the Company’s decision to amend its ~~2019~~2016 United States income tax return and resulting net operating loss carryback to ~~its 2014~~2014. The Company has recorded an income tax ~~year which will result~~receivable of $112 million in ~~a cash refund~~Current Assets related to the 2019 net operating loss carryback and an income tax receivable in Other Assets of ~~$123 million.~~$90.3 million related to the 2016 net operating loss carryback.

The Company’s stock-based compensation plan, known as the National Oilwell Varco, Inc. 2018 Long-Term Incentive Plan (the “2018 Plan”), was approved by shareholders on May 11, 2018 and amended and restated on May 28, 2019. The 2018 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 2018 Plan is 20.2 million. The 2018 Plan is also subject to a fungible ratio concept, such that the issuance of stock options and stock appreciation rights reduces the number of available shares under the 2018 Plan on a 1-for-1 basis, and the issuance of other awards reduces the number of available shares under the 2018 Plan on a 2.5-for-1 basis. At March 31, 2020, 1,348,877 shares remain available for future grants under the 2018 Plan. The Company also has outstanding awards under its other stock-based compensation plan known as the National Oilwell Varco, Inc. Long-Term Incentive Plan (the “Plan”), however the Company is no longer granting awards under the Plan.

On February 25, 2020, under the 2018 Plan, the Company granted 1,650,262 stock options with a fair value of $5.83 per option and an exercise price of $20.23 per share; 2,535,174 shares of restricted stock and restricted stock units with a fair value of $20.23 per share; and performance share awards to senior management employees with potential payouts varying from 0 to 1,063,274 shares. The stock options vest over a ~~three-year~~ period from the grant date. The restricted stock and restricted stock units vest in 3 equal annual installments commencing on the first anniversary of the grant date. The 2020 performance share awards can be earned based on performance against two established goals over a three-year performance period. The performance share awards are divided into two independent parts that are subject to two separate performance metrics: 85% with a TSR (total shareholder return) goal and 15% with an internal NVA (“National Oilwell Varco Value Added”) (return on capital metric) goal.Performance against the TSR goal is determined by comparing the performance of the Company’s TSR with the TSR performance of the members of the OSX index for the three-year performance period. The TSR portion of the performance share awards is subject to vesting cap equal to 100% of Target Level if the Company’s absolute TSR is negative, regardless of relative TSR results. Conversely, if the Company’s absolute TSR is greater than 15% annualized over the three-year performance period the payout amount shall not be less than 50% of Target Level, regardless of relative TSR results.The NVA goal is based on the Company’s improvement in NVA from the beginning of the performance period until the end of the performance period. NVA shall be calculated as an amount equal to the Company’s (a) gross cash earnings less (b) average gross operating assets times an amount equal to a required return on assets.

Total ~~stock-based compensation~~expense for all stock-based compensation arrangements ~~under the Plan and the 2018 Plan~~ was ~~$27~~$23 million and ~~$33~~$78 million for the three and nine months ended ~~March 31,~~September 30, 2020, respectively, and $41 million and $104 million for the three and nine months ended September 30, 2019, respectively.

The total income tax benefit recognized in the Consolidated Statements of Income (Loss) for all stock-based compensation arrangements ~~under the Plan~~ was nil for the three and $4nine months ended September 30, 2020 and $5 million and $13 million for the three and nine months ended ~~March 31, 2020 and~~September 30, 2019, respectively.

The Company ~~is exposed~~uses forward currency contracts to ~~certain risks relating to its ongoing business operations. The primary risk managed by using derivative instruments is~~manage the foreign currency exchange rate ~~risk associated with sourcing goods and services in a currency different than the~~

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

).The fair value of these derivative financial instruments is 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.

~~The Company had the following outstanding foreign~~Forward currency ~~forward~~ contracts ~~at March 31, 2020~~consist of (in millions):

	Currency Denomination				Currency Denomination
	March 31,		December 31,		September 30,		December 31,
Foreign Currency	2020		2019		2020		2019
South Korean Won	KRW	17,600	KRW	17,600	KRW	17,600	KRW	17,600
Norwegian Krone	NOK	5,232	NOK	5,377	NOK	4,210	NOK	5,377
Russian Ruble	RUB	1,274	RUB	1,012	RUB	1,164	RUB	1,012
Danish Krone					DKK	885	DKK	21
Brazilian Real					BRL	768	BRL	—
Mexican Peso					MXN	444	MXN	115
U.S. Dollar	USD	536	USD	686	USD	411	USD	686
Mexican Peso	MXN	458	MXN	115
Japanese Yen					JPY	341	JPY	36
Euro	EUR	207	EUR	188	EUR	185	EUR	188
Japanese Yen	JPY	191	JPY	36
South African Rand	ZAR	124	ZAR	124	ZAR	124	ZAR	124
Singapore Dollar					SGD	36	SGD	42
British Pound Sterling	GBP	38	GBP	20	GBP	18	GBP	20
Danish Krone	DKK	25	DKK	21
Singapore Dollar	SGD	18	SGD	42
Canadian Dollar	CAD	1	CAD	3	CAD	1	CAD	3

To protect against the volatility of forecasted foreign currency cash flows resulting from forecasted revenues and expenses, the Company ~~has~~ instituted a cash flow hedging program. For derivative instruments that are designated and qualify as a cash flow hedge, ~~the gain~~gains or ~~loss on the derivative instrument is~~losses are recorded in accumulated other comprehensive income (loss) and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings (e.g., in “revenues” when the hedged transactions are cash flows associated with forecasted revenues). The Company includes time value in hedge relationships.

The Company expects ~~$41~~$13 million of the accumulated other comprehensive income (loss) will be reclassified into earnings within the next twelve months.

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 (loss) recognized in other income (expense), net, was ~~($43)~~$11 million and $4($27) million for the three and nine months ended ~~March 31,~~September 30, 2020, respectively, and ($7) million and ($10) million for the three and nine months ended September 30, 2019, respectively.

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

	Asset Derivatives					Liability Derivatives					Asset Derivatives					Liability Derivatives
		Fair Value					Fair Value					Fair Value					Fair Value
	Balance Sheet	March 31,		December 31,		Balance Sheet	March 31,		December 31,		Balance Sheet	September 30,		December 31,		Balance Sheet	September 30,		December 31,
	Location	2020		2019		Location	2020		2019		Location	2020		2019		Location	2020		2019
Derivatives designated as hedging instruments under ASC Topic 815

Foreign exchange contracts	Prepaid and other current assets	$	7	$	5	Accrued liabilities	$	65	$	18	Prepaid and other current assets	$	4	$	5	Accrued liabilities	$	19	$	18
Foreign exchange contracts	Other Assets		3		4	Other liabilities		21		2	Other Assets		6		4	Other liabilities		2		2

Total derivatives designated as hedging instruments under ASC Topic 815		$	10	$	9		$	86	$	20		$	10	$	9		$	21	$	20

Derivatives not designated as hedging instruments under ASC Topic 815

Foreign exchange contracts	Prepaid and other current assets	$	15	$	8	Accrued liabilities	$	32	$	6	Prepaid and other current assets	$	8	$	8	Accrued liabilities	$	12	$	6
Foreign exchange contracts	Other Assets		2		1	Other Liabilities		—		—	Other Assets		1		1	Other Liabilities		—		—

Total derivatives not designated as hedging instruments under ASC Topic 815		$	17	$	9		$	32	$	6		$	9	$	9		$	12	$	6

Total derivatives		$	27	$	18		$	118	$	26		$	19	$	18		$	33	$	26

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

	Three Months Ended						Three Months Ended						Nine Months Ended
	March 31,						September 30,						September 30,
	2020			2019			2020			2019			2020			2019
Numerator:
Net loss attributable to Company	$	(2,047	)	$	(77	)	$	(55	)	$	(244	)	$	(2,195	)	$	(5,710	)
Denominator:
Basic—weighted average common shares outstanding		383			380			385			382			384			382
Dilutive effect of employee stock options and other
unvested stock awards		—			—			—			—			—			—
Diluted outstanding shares		383			380			385			382			384			382

Net loss attributable to Company per share:
Basic	$	(5.34	)	$	(0.20	)	$	(0.14	)	$	(0.64	)	$	(5.72	)	$	(14.95	)
Diluted	$	(5.34	)	$	(0.20	)	$	(0.14	)	$	(0.64	)	$	(5.72	)	$	(14.95	)

Cash dividends per share	$	0.05		$	0.05		$	—		$	0.05		$	0.05		$	0.15

~~ASC Topic 260, “Earnings Per Share” requires companies~~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~~allocates 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 (loss) attributable to Company allocated to ~~these~~ participating securities was immaterial for each of the three and nine months ended ~~March 31,~~September 30, 2020 and 2019, ~~and therefore not excluded from net income attributable to Company per share calculation.~~respectively.

The Company had stock options outstanding that were anti-dilutive totaling ~~27 million shares and 21~~26 million shares for each of the three and nine months ended ~~March 31,~~September 30, 2020, respectively, compared to 25 million and 21 million shares for the three and nine months ended September 30, 2019, respectively.

On February 27, 2020, the Company announced that its Board of Directors declared a cash dividend of $0.05 per share. The cash dividend was paid on March 27, 2020, to each stockholder of record on March 13, 2020. Cash dividends were nil and $19 million for ~~both~~ the three and nine months ended ~~March 31,~~September 30, 2020, compared to $20 million and $58 million for the three and nine months ended September 30, 2019. 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.

The Company tests intangible assets for impairment annually, or more frequently if events or circumstances indicate they could be impaired. Potential impairment indicators include, but are not limited to: a sustained increase in worldwide inventories of oil or gas, sustained reductions in: worldwide oil and gas prices or drilling activity; the profitability or cash flow of oil and gas companies or drilling contractors; available financing or other capital for oil and gas companies or drilling contractors; the market capitalization of the Company or its customers; or, capital investments by drilling companies and oil and gas companies.

The unprecedented global oil and gas downturn that began in 2014 has repeatedly exhibited signs of recovery that subsequently faded. There have been three points when, in management’s judgement, based on the information available at the time, market factors, events and circumstances clearly indicated a fundamental shift to a more prolonged downturn and shallower recovery than had been expected. As a result, management reduced its forecasts in the third quarter of 2016, the second quarter of 2019 and the first quarter of 2020. Forecasts were based on management’s judgement of the information management had at the time the forecast was made, which often included, but was not limited to: internally developed market intelligence and sales forecasts; formal and informal communications from customers and other industry participants about their economic outlook and spending plans; 3rd party industry analysts and information compilers and the reports and forecasts they publish; and, industry-specific and general global economic statistics, outlook and forecasts from Governmental and other sources. These external sources assisted management in developing our views regarding forecasted rig counts and capital spending by our customers, among other matters.

During the first quarter of 2020 the ~~widely publicized and discussed~~ coronavirus (COVID-19) outbreak rapidly spread across the world, driving sharp demand destruction for crude oil as whole economies ordered curtailed activity. Members of the Organization of the Petroleum Exporting Countries and other producing countries (OPEC+), including Russia, ~~met in early March to discuss additional~~increased production ~~cuts to help stabilize prices, however, the group could not come to an agreement and production was instead increased~~ into the already oversupplied market, decimating oil prices. The result was the Company’s stock price reaching a new low during the quarter and its market capitalization falling below its carrying value. West Texas Intermediate (WTI), a key benchmark for the USU.S. oil market, fell more than $40 per barrel from January 1, 2020, to March 31, 2020, (losing two thirds of its value in 90 days) to its lowest level in nearly two decades. As travel restrictions and government directives to shut down businesses ~~increase,~~increased, demand iswas expected to continue declining in the second quarter of 2020. Management reduced its forecast accordingly.

In the Company’s view, falling rig count levels in the first quarter and a depressed outlook provided evidence to the equity markets that oil and gas producers were committed to reduced levels of capital investment in drilling, ~~which will~~ further ~~reduce~~reducing levels of demand for capital equipment and oilfield services that the Company sells to its customers. Also, due to ~~the~~these prolonged poor market conditions, capital availability to many of the Company’s customers became even more limited and iswas unlikely to improve near-term. In management’s judgement the facts and circumstances including those described above constituted a triggering event in the first quarter which indicated the Company’s goodwill and other long-lived assets may be impaired. The Company performed a detailed analysis under ASC 350, incorporating this ~~refined~~updated outlook, which determined that the fair values were less than the respective carrying values for all of the Company’s business units (“Reporting Units”).

The Company primarily uses the discounted cash flow method to estimate the fair value of its Reporting Units when conducting the impairment test but also considers the comparable companies and representative transaction methods to validate the test result and management’s forecast and other expectations, where possible. The valuation techniques used in the test were consistent with those used during previous testing. Fair value of the Reporting Unit is determined using significant unobservable inputs, or ~~level~~Level 3 in the fair value hierarchy. These inputs are based on internal management estimates, forecasts and judgements, using discounted cash ~~flow.~~flows. The inputs used in the test were updated to reflect management’s judgement, current market conditions and forecasts.

The discounted cash flow was based on management’s forecast of operating performance for each Reporting Unit. The two main assumptions used, which bear the risk of change and could impact the test result, include the forecast cash flow from operations from each of the Company’s Reporting Units and their respective weighted average cost of capital. The starting point for each of the Reporting Unit’s cash flow from operations was the detailed forecast, modified to incorporate our revised outlook, as appropriate. The Reporting Unit carrying values were adjusted based on the long-lived asset impairment assessment noted below. Cash flows beyond the plan or forecast were estimated using a terminal value calculation which incorporated historical and forecasted financial cyclical trends for each Reporting Unit and considered long-term earnings growth rates. Financial and credit market volatility directly impacts our fair value measurement through the weighted average cost of capital used to determine a discount rate. During times of volatility, significant judgement must be applied to determine whether credit changes are a short-term or long-term trend.

For the first quarter of 2020, the Company recorded $1,295 million in impairment charges to goodwill and $83 million in charges to indefinite-lived intangible assets.

Following the impairment charges, several Reporting Units did not have a fair value substantially in excess of their book value. Further deterioration of market conditions, in management’s judgement, beyond those incorporated into the extended forecast by management, will likely result in additional impairment charges. The remaining goodwill balance for these Reporting Units at ~~March 31,~~September 30, 2020, is as follows: Rig Equipment ($661 million), Marine Construction ($51 million), ReedHycalog ($124 million), M/D Totco ($3210 million), Wellsite Services ($174 million), XL Systems ($64 million), Fiberglass Systems ($346 million), and Process and Flow Technologies ($63 million).

~~The~~At September 30, 2020, the Company has approximately ~~$1.52 billion~~$1,493 million of goodwill, by segment, as follows (in millions):

	Wellbore Technologies			Completion & Production Solutions			Rig Technologies			Total			Wellbore Technologies			Completion & Production Solutions			Rig Technologies			Total
Balance at December 31, 2019	$	843		$	1,054		$	910		$	2,807		$	843		$	1,054		$	910		$	2,807
Impairment		(517	)		(580	)		(198	)		(1,295	)		(517	)		(580	)		(198	)		(1,295	)
Additions		4			—			—			4			4			—			—			4
Currency translation adjustments and other		—			(1	)		—			(1	)		(22	)		(1	)		—			(23	)
Balance at March 31, 2020⁽¹⁾	$	330		$	473		$	712		$	1,515
Balance at September 30, 2020													$	308		$	473		$	712		$	1,493

Impairment of Long-Lived Assets (Excluding Goodwill and Other Indefinite-Lived Intangible Assets)

Long-lived assets, which include property, plant and equipment, right of use, and ~~finite-lived~~identified intangible assets, comprise a significant amount of the Company’s total assets. The Company makes ~~judgements~~judgments and estimates in conjunction with the carrying value of these assets, including amounts to be capitalized, depreciation and amortization methods and estimated useful lives.

The Company ~~identifies~~identified its Reporting Units as individual asset groups. The carrying values of these asset groups are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. An impairment loss is recorded in the period in which it is determined that the carrying amount of the asset is not recoverable based on estimated future undiscounted cash flows. We estimate the fair value of these intangible and fixed assets using an income approach that requires the Company to make long-term forecasts of its future revenues and costs related to the assets subject to review. These forecasts require assumptions about demand for the Company’s products and services, future market conditions and technological developments. The forecasts are dependent upon assumptions including those regarding oil and gas prices, the general outlook for the global oil and gas industry, available financing for the Company’s customers, political stability in major oil and gas producing areas, and the potential obsolescence of various types of equipment we sell, among other factors. Financial and credit market volatility directly impacts our fair value measurement through our income forecast. Changes to these assumptions, including, but not limited to: sustained declines in worldwide rig counts below current analysts’ forecasts; collapse of spot and futures prices for oil and gas; significant deterioration of external financing for our customers; higher risk premiums or higher cost of ~~equity;~~capital; or any other significant adverse economic news could require a provision for impairment.

During the first quarter of 2020, the results of the Company's test for impairment of goodwill and indefinite-lived intangible assets, and the other negative market indicators described above, were a triggering event that indicated that its long-lived tangible assets and finite-lived intangible assets were impaired.

Impairment testing performed in the first quarter resulted in the determination that certain long-lived assets associated with most of the Company’s asset groups were not recoverable. The estimated fair value of these asset groups was below the carrying value and, as a result, during the first quarter of 2020, the Company recorded impairment charges of $209 million to customer relationships, patents, trademarks, tradenames, and other finite-lived intangible assets, $262 million to property, plant and equipment, and $42 million ~~for~~to right-of-use assets. Additionally, the Company recorded a $224 million impairment on its equity investment in unconsolidated affiliates.

The Company has approximately ~~$534~~$516 million of identified intangible assets, by segment, as follows (in millions):

	Wellbore Technologies			Completion & Production Solutions			Rig Technologies			Total			Wellbore Technologies			Completion & Production Solutions			Rig Technologies			Total
Balance at December 31, 2019	$	326		$	275		$	251		$	852		$	326		$	275		$	251		$	852
Impairment		(78	)		(214	)		—			(292	)		(78	)		(214	)		—			(292	)
Additions		—			—			—			—			—			—			—			—
Amortization		(4	)		(6	)		(7	)		(17	)		(9	)		(8	)		(21	)		(38	)
Currency translation adjustments and other		(2	)		(5	)		(2	)		(9	)		(3	)		(5	)		2			(6	)
Balance at March 31, 2020	$	242		$	50		$	242		$	534
Balance at September 30, 2020													$	236		$	48		$	232		$	516

At March 31, 2020, the Company’s Wellbore Technology segment recorded $71 million, Completion and Production Solutions recorded $221 million and Rig Technology reported $12 million of the total $304 million impairment related to property, plant and equipment and right-of-use assets.

Our business is governed by laws and regulations 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, including those related to the oilfield service industry. In the United States these governmental authorities include: the U.S. Department of Labor, the Occupational Safety and Health Administration, ~~(“OSHA”),~~ the Environmental Protection Agency, the Bureau of Land Management, the Department of Treasury, Office of Foreign Asset Controls, state and international environmental agencies and many others. We are unaware of any material unreserved 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.

The Company is involved in various claims, regulatory agency audits and pending or threatened legal actions involving a variety of matters. The Company maintains insurance that covers many of the claims arising from risks associated with the business activities of the Company, including claims for premises liability, product liability and other such claims. The Company carries substantial insurance to cover such risks above a self-insured retention. The Company believes, and the Company’s experience has been, that such insurance has been enough to cover any such material risks. See Item 1A. Risk Factors.

The Company is also a party to claims, threatened and actual litigation, private arbitration, internal investigations of potential regulatory and compliance matters arising from ordinary day-to-day business activities in which parties, including government authorities, assert claims against the Company for a broad spectrum of potential claims and theories of liability, including: ~~individual~~ employment law claims, collective actions or class ~~actions~~action claims under employment laws, intellectual property claims, (such as alleged patent infringement, and/or misappropriation of trade secrets), premises liability claims, environmental, product liability claims, warranty claims, personal injury claims arising from allegedly defective products, negligence or other theories of liability, alleged regulatory violations, alleged violations of anti-corruption and anti-bribery laws and other commercial claims seeking recovery for alleged actual or exemplary damages or fines and penalties. For some contingent claims, the Company’s insurance coverage is inapplicable or an exclusion to coverage may apply. In such instances, settlement or other resolution of such contingent claims could have a material financial or reputational impact on the Company. As of ~~December 31, 2019,~~September 30, 2020, the Company recorded reserves in an amount believed to be sufficient, given the range of potential outcomes, for contingent liabilities representing all contingencies believed to be probable. These reserves include all costs expected for reclamation of a closed barite mine and product liability claims, as well as other circumstances involving material claims.

The Company has assessed the potential for additional losses above the amounts accrued as well as potential losses for matters that are not probable but are reasonably possible. The litigation process as well as the ~~final~~ outcome of regulatory oversight is inherently uncertain, and our best judgement concerning the probable outcome of litigation or regulatory enforcement matters may prove to be incorrect in some instances. The total potential loss on these matters cannot be determined; however, in our opinion, any ultimate liability, to the extent not otherwise provided for, will not materially affect our financial position, cash flow 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. Of course, because of uncertainty and risk inherent to litigation and arbitration, the actual liabilities incurred may 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 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 difficulty in predicting the ultimate outcome. Because of the importance of the Company’s intellectual property to the Company’s performance, an adverse result in such disputes could result in the loss of revenue from royalties or a decline in sales of products protected by patents, which could materially and adversely impact our financial performance.

Further, in some instances, direct or indirect consumers of our products and services, entities providing financing for purchases of our products and services or members of the supply chain for our products and services have become involved in governmental investigations, internal investigations, political or other enforcement matters. In such circumstances, such investigations may adversely impact the ability of consumers of our products, entities providing financial support to such consumers or entities in the supply 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 investigations, at substantial cost to the Company. We also are subject to trade regulations and other regulatory compliance in which the laws and regulations of different jurisdictions conflict or trade regulations may conflict with contractual terms. 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 which could lead to negative impacts on revenue or earnings.

The Company is exposed to customs and regulatory risk in the countries in which we do business or to which we transport goods. For example, the effects of the United Kingdom’s withdrawal from the European Union, known as Brexit, may have a negative impact on our results from operations. Uncertainty concerning the legal and regulatory risks of Brexit, include: (i) supply chain risks resulting from lack of trade agreements, potential changes in customs administrations or tariffs; (ii) revenue risk, loss of customers or increased costs; (iii) delays in delivery of materials to the Company or delay in delivery by the Company; and (iv) the need for renegotiation of agreements; and other business disruptions. In addition, trade regulations and laws may adversely impact our ability to do business in certain countries, e.g.: Iran, Syria, Russia, China and Venezuela. Such trade regulations can be complex and present compliance challenges which could result in future liabilities.

As a result of the recent COVID-19 pandemic, the Company may be exposed to additional liabilities and risks. “Shelter-in-Place” and other governmental orders and restrictions in response to the COVID-19 pandemic have resulted in a severe slowdown in economic activity, and a sharp reduction in oil activity and a corresponding decline in demand for oil. This has and will lead to a sharp reduction in drilling activity in North America and reduction of activity internationally. The persistence of this supply/demand imbalance ~~has~~ caused oil prices to drop precipitously, to the lowest prices in decades. The COVID-19 pandemic continues to adversely impact many jurisdictions and continues to disrupt normal economic activities. As a result, the demand for energy continues to be constrained with continued adverse consequences for our customers and for the Company.

As a result of these market conditions, demand for our products and services ~~will decline.~~has declined. Our customers may attempt to cancel or delay projects, cancel contracts or may invoke force ~~majeure~~majure clauses. Our customers may also seek to delay or may default on their payments to us. Further, we have seen, and expect to see, an increasing number of energy companies filing bankruptcy. Our collection of receivables could be materially delayed and/or impaired.

The Company also may be exposed to liabilities resulting from operational delays due to supply chain disruption and closure or limitations imposed on our facilities and work force, from “shelter in place” orders around the world. The Company’s ability to perform services could also be impaired and the Company could be exposed to liabilities resulting from interruption in its ability to perform due to limited manpower and travel restrictions. These potential operational and service delays resulting from the COVID-19 pandemic could result in contractual or other legal claims from our customers. At this time, it is not possible to quantify these risks, but the combination of these factors could have a material impact on our financial results.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments. This update improves financial reporting by requiring earlier recognition of forecast credit losses on financing receivables and other financial assets in scope. ASU 2016-13 is effective for fiscal periods beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted this update on January 1, 2020, with no material impact. The Company estimates its reserves 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 Trade Accounts Receivables, Contract Assets, Unbilled Accounts Receivables, and Long-Term Receivables. 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 ~~March 31,~~September 30, 2020, allowance for bad debts and contract assets totaled ~~$138~~$115 million.

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes.” This ASU eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of accounting for income taxes. ASU 2019-12 is effective for interim and annual reporting periods beginning after December 15, 2020, with early adoption permitted. Management is currently assessing the impact of adopting ASU 2019-12 on the Company’s financial position, results of operations and cash flows.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848)” This ASU applies only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. Management is currently assessing the impact of adopting ASU 2020-04 on the company’s financial position, results of operations and cash flows.

National Oilwell Varco, Inc. (the “Company”) is a leading independent provider of equipment and technology to the upstream oil and gas industry. The Company designs, manufactures, sells and services a comprehensive line of drilling and well servicing equipment; sells and rents drilling motors, specialized downhole tools, and rig instrumentation; performs inspection and internal coating of oilfield tubular products; provides drill cuttings separation, management and disposal systems and services; and provides expendables and spare parts used in conjunction with the Company’s large installed base of equipment. The Company also manufactures coiled tubing and high-pressure fiberglass and composite tubing, and sells and rents advanced in-line inspection equipment to makers of oil country tubular goods. The Company has a long tradition of pioneering innovations which improve the cost-effectiveness, efficiency, safety, and environmental impact of oil and gas operations.

Unless indicated otherwise, results of operations are presented in accordance with accounting principles generally accepted in the United States (“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 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.

The Company’s Wellbore Technologies segment designs, manufactures, rents, and sells a variety of equipment and technologies used to perform drilling operations, and offers services that optimize their performance, including: solids control and waste management equipment and services; portable power generation; premium drill pipe; wired pipe; drilling optimization and automation services; tubular inspection, repair and coating services; rope access inspection; instrumentation; measuring and monitoring; downhole and fishing tools; steerable technologies; hole openers; and drill bits.

Wellbore Technologies focuses on oil and gas companies and supports drilling contractors, oilfield service companies, and oilfield equipment rental companies. Demand for the segment’s products and services depends on the level of oilfield drilling activity by oil and gas companies, drilling contractors, and oilfield service companies.

The Company’s Completion & Production Solutions segment integrates technologies for well completions and oil and gas production. The segment designs, manufactures, and services equipment and technologies needed for hydraulic fracture stimulation, including downhole multistage fracturing tools, pressure pumping trucks, blenders, sanders, hydration units, injection units, flowline, and manifolds; well intervention, including coiled tubing units, coiled tubing, and wireline units and tools; well construction, including premium connections and liner hangers; onshore production, including composite pipe, surface transfer and progressive cavity pumps, and artificial lift systems, wellstream processing and sand control systems; and, offshore production, including ~~floating production~~fluid processing and sand control systems, mooring and fluid transfer systems, and subsea production technologies.

Completion & Production Solutions supports service companies and oil and gas companies. Demand for the segment’s products depends on the level of oilfield completions and workover activity by oilfield service companies and drilling contractors, and capital spending plans by oil and gas companies and oilfield service companies.

The Company’s Rig Technologies segment makes and supports the capital equipment and integrated systems needed to drill oil and gas wells on land and offshore as well as other marine-based markets, including offshore wind vessels. The segment designs, manufactures and sells land rigs, offshore drilling equipment packages, including installation and commissioning services, and drilling rig components that mechanize and automate the drilling process and rig functionality. Equipment and technologies the segment brings to customers include: substructures, derricks, and masts; cranes; jacking systems; pipe lifting, racking, rotating, and assembly systems; fluid transfer technologies, such as mud pumps; pressure control equipment, including blowout preventers; power transmission systems, including drives and generators; rig instrumentation and control systems; mooring, anchor, and deck handling machinery; and pipelay and construction systems. The segment also provides spare parts, repair, and rentals as well as comprehensive remote equipment monitoring, technical support, field service, and customer training through an extensive network of aftermarket service and repair facilities strategically located in major areas of drilling operations around the world.

Rig Technologies supports land and offshore drillers. Demand for the segment’s products depends on drilling contractors’ and oil and gas companies’ capital spending plans, specifically capital expenditures on rig construction and refurbishment; and secondarily on the overall level of oilfield drilling activity, which drives demand for spare parts, service, and repair for the segment’s large installed base of equipment.

In our annual report on Form 10-K for the year ended December 31, 2019, 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 (See Note 6);~~recognition; allowance for doubtful accounts; inventory reserves; impairment of long-lived assets ~~(excluding~~(including goodwill and other indefinite-lived intangible assets); goodwill and other indefinite-lived intangible assets; purchase price allocation of acquisitions; warranties; 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.

For the ~~first~~third quarter ended ~~March 31,~~September 30, 2020, the Company generated ~~a net loss~~revenues of ~~$2,047 million,~~$1.38 billion, compared to ~~a net loss of $385 million in~~$1.50 billion for the ~~fourth~~second quarter of ~~2019~~2020 and ~~a net loss of $77 million in~~$2.13 billion for the ~~first~~third quarter of 2019. Operating loss for the ~~first~~third quarter of 2020 was ~~$1,950~~$74 million, ~~compared~~or -5.3% of sales, and net loss improved $38 million sequentially to ~~an operating~~$55 million, or -4 percent of sales. Operating loss and net loss include non-cash, pre-tax charges (“other items”, see Other Corporate Items for additional detail) of ~~$349 million in the fourth quarter of 2019 and an operating loss of $48 million in the first quarter of 2019. First quarter 2020~~$62 million. Adjusted EBITDA ~~was $178~~(operating profit excluding depreciation, amortization, and other items) decreased $13 million ~~compared~~sequentially to ~~$288~~$71 million, ~~in the fourth quarter~~or 5.1 percent of ~~2019~~sales. Other items included severance, facility closures, inventory charges and ~~$140 million in the first quarter of 2019.~~other restructuring costs.

Wellbore Technologies generated revenues of ~~$691~~$361 million in the ~~first~~third quarter of 2020, a decrease of 1018 percent from the ~~fourth~~second quarter of ~~2019~~2020 and a decrease of 1454 percent from the ~~first~~third quarter of 2019. The sequential decline in revenue was ~~primarily due to seasonality~~a result of a full quarter impact of sharp reductions in North American drilling activity that occurred during the second quarter and continued declines in international ~~markets and lower~~ drilling ~~activity levels in North America.~~activity. Operating loss was ~~$663~~$50 million, or -13.9 percent of sales, and included ~~$715~~$26 million of other items. Adjusted EBITDA was ~~$103 million.~~$21 million, or 5.8 percent of sales, as cost-savings initiatives limited decremental leverage (the change in Adjusted EBITDA divided by the change in revenue) to 26 percent.

Completion & Production Solutions generated revenues of ~~$675~~$601 million in the ~~first~~third quarter of 2020, a decrease of 16two percent from the ~~fourth~~second quarter of ~~2019~~2020 and ~~an increase~~a decrease of 1617 percent from the ~~first~~third quarter of 2019. ~~Deteriorating conditions in the North American completions market, seasonality and logistical disruptions from COVID-19 related restrictions contributed to the sequential decrease in results.~~ Operating ~~loss~~profit was ~~$1,013~~$25 million, or 4.2 percent of sales, and included ~~$1,054~~$23 million in other items. Strong execution on international and offshore project backlog partially offset declines in shorter-cycle businesses. Adjusted EBITDA ~~was $71 million.~~decreased seven percent sequentially to $63 million, or 10.5 percent of sales.

New orders booked during the quarter totaled ~~$335~~$169 million, ~~for the quarter,~~ representing a book-to-bill of 8143 percent when compared to the ~~$416~~$394 million of orders shipped from backlog. ~~Backlog~~At September 30, 2020, backlog for capital equipment orders for Completion & Production Solutions ~~at March 31, 2020~~ was ~~$1.19 billion.~~$789 million.

Rig Technologies generated revenues of ~~$557~~$449 million in the ~~first~~third quarter of 2020, a decrease of 27six percent from the ~~fourth~~second quarter of ~~2019~~2020 and a decrease of ~~eight~~31 percent from the ~~first~~third quarter of 2019. Lower sales of rig capital equipment and aftermarket parts and services were partially offset by higher project revenues in the segment’s Marine Construction business, which continues to benefit from a growing number of offshore wind construction opportunities. Operating loss was ~~$202~~$3 million, or -0.7 percent of sales, and included ~~$238~~$12 million of other items. Adjusted EBITDA ~~was $56 million. Revenues were impacted by lower sales~~increased $14 million sequentially to $28 million, or 6.2 percent of ~~capital equipment and a decrease in aftermarket revenue, due in part to COVID-19-related disruptions.~~sales.

New orders booked during the quarter totaled ~~$146~~$57 million, representing a book-to-bill of 7029 percent when compared to the ~~$208~~$199 million of orders shipped from backlog. At ~~March 31,~~September 30, 2020, backlog for capital equipment orders for Rig Technologies was ~~$2.93~~$2.66 billion.

Following approximately two and a half years of steady improvements in oil prices and global drilling activity levels, ~~commodity~~ prices declined sharply during the fourth quarter of 2018 due to stronger than expected growth in U.S. ~~oil~~ production and concerns regarding the global economy. As a result of reduced ~~2019~~ budgets, and despite a modest recovery in commodity prices, drilling activity levels in the U.S. declined throughout ~~last year~~2019 resulting in the first double digit percentage decrease in the average annual rig count since 2016. While the North American market deteriorated, the new-found capital austerity and fiscal discipline exhibited by U.S. operators along with declining production from underinvestment in overseas markets and rapidly growing demand for LNG inspired greater levels of confidence from international oil and gas companies. The industry entered 2020 anticipating higher international and offshore activity levels would mostly offset the ongoing effects of capital austerity in the North American land marketplace, where a meaningful recovery was not expected before 2021.

During the first quarter of 2020, the ~~widely publicized and discussed~~ coronavirus (COVID-19) outbreak rapidly spread across the world, driving sharp demand destruction for crude oil as whole economies ordered curtailed activity. In response to declining demand for crude oil, members of the Organization of the Petroleum Exporting Countries and other producing countries (OPEC+), including Russia, ~~met in early March to discuss additional~~increased production ~~cuts to help stabilize prices. The group failed to reach an agreement, and production was instead increased~~ into the already oversupplied market, decimating oil prices and rapidly filling worldwide ~~oil~~ storage facilities. ~~OPEC+ eventually reached an agreement in~~In April 2020, OPEC+ began to reduce production, which had a muted positive effect on oil prices due to ~~the belief~~market concerns that the cuts were significantly less than the demand destructions caused by COVID-19. As a result, companies across the industry responded with severe capital spending budget cuts, cost cuts, personnel layoffs, facility closures and bankruptcy filings. The COVID-19 virus continued to spread during the second and third quarters of 2020, extending depressed demand, uncertainty and additional spending reductions by the entire oil and gas industry as U.S. rig count fell to its lowest level since 1940 in August despite oil prices beginning to stabilize near $40 bbl.

In response to the economic destruction caused by the COVID-19 pandemic, many governments implemented stimulus programs to aid individuals and businesses. The size, method and effectiveness of these programs varies greatly and, although generally helpful to the target economies, they have not restored prior levels of demand for oil and gas.

Management expects industry activity levels and spending by customers to ~~decrease~~remain depressed throughout the remainder of 2020 and into the beginning of 2021 as ~~oil supplies continue to increase and~~ demand destruction from COVID-19 ~~remains.~~persists. NOV remains committed to streamlining operations and improving organizational efficiencies while ~~continuing to focus~~focusing on investing in innovative products and services, including environmentally friendly technologies, that are responsive to the longer-term needs of our customers. We believe this strategy will further advance the Company’s competitive position, regardless of the market environment.

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 other oilfield service companies and drilling contractors, and worldwide oil and gas inventory levels. Key industry indicators for the ~~first~~second quarter of 2020 and 2019, and the ~~fourth~~first quarter of ~~2019~~2020 include the following:

							%			%									% increase (decrease)
							1Q20			1Q20									3Q20 v			3Q20 v
	1Q20*		1Q19*		4Q19*		1Q19			4Q19			3Q20*		3Q19*		2Q20*		3Q19			2Q20
Active Drilling Rigs:
U.S.		784		1,046		821		-25.0	%		(4.5	%)		254		920		396		(72.4	%)		(35.9	%)
Canada		196		185		139		5.9	%		41.0	%		49		132		25		(62.9	%)		96.0	%
International		1,073		1,029		1,111		4.3	%		(3.4	%)		730		1,145		834		(36.2	%)		(12.5	%)
Worldwide		2,053		2,260		2,071		-9.2	%		(0.9	%)		1,033		2,197		1,255		(53.0	%)		(17.7	%)

West Texas Intermediate Crude Prices (per barrel)	$	45.99	$	54.83	$	56.92		(16.1	%)		(19.2	%)	$	41.05	$	56.37	$	27.81		(27.2	%)		47.6	%

Natural Gas Prices ($/mmbtu)	$	1.88	$	2.87	$	2.36		(34.5	%)		(20.3	%)	$	1.97	$	2.34	$	1.67		(15.8	%)		18.0	%

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 ~~March 31,~~September 30, 2020, on a quarterly basis:

Industry Trends Rig Counts and Oil Prices Total Number of Rigs 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 $140.00 $120.00 $100.00 $80.00 $60.00 $40.00 $20.00 $ West Texas Int. (Price per Barrel) 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Total Rings 2,110 2,262 2,260 2,260 2,210 2,197 2,071 2,053 1,255 Canada 105 208 177 185 83 132 139 196 25 US 1,037 1,051 1,072 1,046 989 920 821 784 396 International 968 1,003 1,011 1,029 1,138 1,145 1,111 1,073 834 W.TX Int. ($) $68.03 $69.76 $59.08 $54.83 $59.78 $56.37 $56.92 $45.99 $27.81

Source: Rig count: Baker Hughes, Inc. (www.bakerhughes.com); West Texas Intermediate Crude Oil and Natural Gas Prices: Department of Energy, Energy Information Administration (www.eia.doe.gov).

The worldwide quarterly average rig count decreased ~~one~~18 percent (from 1,255 to 1,033), and the U.S. decreased ~~five~~36 percent (from ~~821~~396 to ~~784)~~254), in the ~~first~~third quarter of 2020 compared to the ~~fourth~~second quarter of ~~2019.~~2020. The average per barrel price of West Texas Intermediate Crude Oil ~~decreased 19~~increased 48 percent (from ~~$56.92~~$27.81 per barrel to ~~$45.99~~$41.05 per barrel) and natural gas prices ~~decreased 20~~increased 18 percent (from ~~$2.36~~$1.67 per mmbtu to ~~$1.88~~$1.97 per mmbtu) in the ~~first~~third quarter of 2020 compared to the ~~fourth~~second quarter of ~~2019.~~2020.

At October 16, 2020, ~~was 529~~there were 362 rigs ~~decreasing 33~~actively drilling in North America, which increased 19 percent ~~compared to~~from the ~~first~~third quarter ~~of 2020~~ average of ~~784~~303 rigs. The price for West Texas Intermediate Crude Oil was ~~at $18.27~~$40.88 per barrel at ~~April 17,~~October 16, 2020, ~~decreasing 60 percent~~a slight decrease from the ~~first~~third quarter average of ~~2020 average.~~$41.05. The price for natural gas was ~~at $1.75~~$2.77 per mmbtu at ~~April 17,~~October 16, 2020, ~~decreasing seven~~an increase of 41 percent from the ~~first~~third quarter average of ~~2020 average.~~$1.97.

	Three Months Ended						Three Months Ended						Nine Months Ended
	March 31,						September 30,						September 30,
	2020			2019			2020			2019			2020			2019
Revenue:
Wellbore Technologies	$	691		$	807		$	361		$	793		$	1,494		$	2,450
Completion & Production Solutions		675			581			601			728			1,887			1,972
Rig Technologies		557			603			449			649			1,482			1,923
Eliminations		(40	)		(51	)		(27	)		(44	)		(100	)		(147	)
Total revenue	$	1,883		$	1,940		$	1,384		$	2,126		$	4,763		$	6,198

Operating profit (loss):
Wellbore Technologies	$	(663	)		19		$	(50	)		42		$	(780	)	$	(3,234	)
Completion & Production Solutions		(1,013	)		(35	)		25			(24	)		(946	)		(1,991	)
Rig Technologies		(202	)		31			(3	)		(110	)		(230	)		(501	)
Eliminations and corporate costs		(72	)		(63	)		(46	)		(62	)		(168	)		(204	)
Total operating profit (loss)	$	(1,950	)	$	(48	)	$	(74	)	$	(154	)	$	(2,124	)	$	(5,930	)

Operating profit (loss)%:
Wellbore Technologies		(95.9	%)		2.4	%
Completion & Production Solutions		(150.1	%)		(6.0	%)
Rig Technologies		(36.3	%)		5.1	%
Total operating profit (loss)%		(103.6	%)		(2.5	%)

Three and nine months ended ~~March 31,~~September 30, 2020 and 2019. Revenue from Wellbore Technologies was ~~$691~~$361 million for the three months ended ~~March 31,~~September 30, 2020, compared to ~~$807~~$793 million for the three months ended ~~March 31,~~September 30, 2019, a decrease of ~~$116~~$432 million or 1454 percent. For the nine months ended September 30, 2020, revenue from Wellbore Technologies was $1,494 million compared to $2,450 million for the nine months ended September 30, 2019, a decrease of $956 million or 39 percent.

Operating loss from Wellbore Technologies was ~~$663~~$50 million for the three months ended ~~March 31,~~September 30, 2020 compared to an operating profit of ~~$19~~$42 million for the three months ended ~~March 31,~~September 30, 2019, a decrease of ~~$682~~$92 million. For the nine months ended September 30, 2020, operating loss from Wellbore Technologies was $780 million compared to $3,234 million for the nine months ended September 30, 2019, an increase of $2,454 million primarily due ~~to the~~a larger impairment of certain ~~assets.~~assets in 2019.

Three and nine months ended ~~March 31,~~September 30, 2020 and 2019. Revenue from Completion & Production Solutions was ~~$675~~$601 million for the three months ended ~~March 31,~~September 30, 2020, compared to ~~$581~~$728 million for the three months ended ~~March 31,~~September 30, 2019, a decrease of $127 million dollars or 17 percent. For the nine months ended September 30, 2020, revenue from Completion & Production Solutions was $1,887 million compared to $1,972 million for the nine months ended September 30, 2019, a decrease of $85 million or four percent.

Operating profit from Completion & Production Solutions was $25 million for the three months ended September 30, 2020 compared to an operating loss of $24 million for the three months ended September 30, 2019, an increase of ~~$94 million or 16 percent.~~

~~Operating~~$49 million. For the nine months ended September 30, 2020, operating loss from Completion & Production Solutions was ~~$1,013~~$946 million compared to $1,991 million for the ~~three~~nine months ended ~~March 31, 2020 compared to $35 million for the three months ended March 31,~~September 30, 2019, ~~a decrease~~an increase of ~~$978~~$1,045 million primarily due to ~~the~~a larger impairment of certain ~~assets.~~assets in 2019.

The Completion & Productions Solutions 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 ~~$1.19 billion~~$789 million at ~~March 31,~~September 30, 2020, ~~an increase~~a decrease of ~~fourteen~~$509 million, or 39 percent from backlog of ~~$1.04~~$1.30 billion at ~~March 31,~~September 30, 2019. Numerous factors may affect the timing of revenue out of backlog. Considering these factors, the Company reasonably expects approximately ~~$957 million of revenue out~~44 percent of backlog ~~for~~to become revenue during the ~~remainder~~rest of 2020 and ~~approximately $229 million of revenue out of backlog in 2021 and~~the remainder thereafter. At ~~March 31,~~September 30, 2020, approximately 6463 percent of the capital equipment backlog was for offshore products and approximately 8591 percent of the capital equipment backlog was destined for international markets.

Three and nine months ended ~~March 31,~~September 30, 2020 and 2019. Revenue from Rig Technologies was ~~$557~~$449 million for the three months ended ~~March 31,~~September 30, 2020, compared to ~~$603~~$649 million for the three months ended ~~March 31,~~September 30, 2019, a decrease of ~~$46~~$200 million or ~~eight~~31 percent. For the nine months ended September 30, 2020, revenue from Rig Technologies was $1,482 million compared to $1,923 million for the nine months ended September 30, 2019, a decrease of $441 million or 23 percent.

Operating loss from Rig Technologies was ~~$202~~$3 million for the three months ended ~~March 31,~~September 30, 2020 compared to ~~an operating profit of $31~~$110 million for the three months ended ~~March 31,~~September 30, 2019, ~~a decrease~~an increase of ~~$233~~$107 million. For the nine months ended September 30, 2020, operating loss from Rig Technologies was $230 million compared to $501 million for the nine months ended September 30, 2019, an increase of $271 million, primarily due to ~~the impairment of certain assets.~~larger asset impairments in 2019.

The Rig Technologies 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 drilling rig components or a signed contract related to a construction project. The capital equipment backlog was ~~$2.93~~$2.66 billion at ~~March 31,~~September 30, 2020, a decrease of ~~seven~~$483 million, or 15 percent, from backlog of $3.14 billion at ~~March 31,~~September 30, 2019. Numerous factors may affect the timing of revenue out of backlog. Considering these factors, the Company reasonably expects approximately ~~$530 million of revenue out~~seven percent of backlog ~~for~~to become revenue during the ~~remainder~~rest of 2020 and ~~approximately $2.4 billion of revenue out of backlog in 2021 and~~the remainder thereafter. At ~~March 31,~~September 30, 2020, approximately 2823 percent of the capital equipment backlog was for offshore products and approximately 93 percent of the capital equipment backlog was destined for international markets.

Eliminations and corporate costs were ~~$72~~$46 million and $168 million for the three and nine months ended ~~March 31,~~September 30, 2020, respectively, compared to ~~$63~~$62 million and $204 million for the three and nine months ended ~~March 31,~~September 30, 2019. ~~This change is primarily due to the change in intersegment eliminations.~~ 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 three reporting segments that are eliminated in consolidation. Intrasegment transactions are eliminated within each segment.

Other income (expense), net were expenses of $3$8 million and $19 million for the three and nine months ended ~~March 31,~~September 30, 2020, respectively, compared to expenses of ~~$18~~$10 million and $36 million for the three and nine months ended ~~March 31, 2019.~~September 30, 2019, respectively. The change in expense was primarily due to the fluctuations in foreign currencies.

The effective tax rate for the three and nine months ended ~~March 31,~~September 30, 2020 was 53.5% and ~~2019 was 7.1%~~10.8%, respectively, compared to (31.7%) and ~~11.8%, respectively. The Company established valuation allowances on deferred tax assets~~5.4% for ~~losses and tax credits generated~~the same periods in ~~2020 and~~ 2019. The ~~change in the~~Company’s 2019 and 2020 effective tax ~~rate from 2019 to 2020 was impacted by a change in jurisdictional mix of income between the two periods and 2020 was~~rates are negatively impacted by incremental valuation allowances primarily on net operating loss and tax attributes available in those years and the impairment of nondeductible ~~goodwill partially offset by an~~goodwill. Furthermore, the Company recorded income tax ~~benefit~~benefits of ~~$123 million from~~$106M in the three months ended September 30, 2020 and $206M in the nine months ended September 30, 2020 related to the carryback of its 2019 United States net operating loss pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that was enacted on March 27, 2020 allowing net operating losses originating in 2018, 2019 or 2020 to be carried back five years. ~~The~~In addition, the Company ~~anticipates filing a refund claim~~recorded an income tax benefit of $90.3M in the nine months ended September 30, 2020 to ~~carryback~~reflect the Company’s decision to amend its ~~2019~~2016 United States income tax return and resulting net operating loss carryback to ~~its 2014~~2014. The Company has recorded an income tax ~~year which will result~~receivable of $112 million in ~~a cash refund~~Current Assets related to the 2019 net operating loss carryback and an income tax receivable in Other Assets of ~~$123 million.~~$90.3 million related to the 2016 net operating loss carryback.

The Company discloses Adjusted EBITDA (defined as Operating Profit excluding Depreciation, Amortization 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. The Company uses Adjusted EBITDA internally to evaluate and manage the business. Adjusted EBITDA is not intended to replace GAAP financial measures such as Net Income. Other items include impairment charges for Goodwill, indefinite and finite-lived intangible assets, long-lived tangible assets, restructure costs for facility closures, inventory charges, severance ~~accruals,~~payments and ~~other restructuring costs.~~adjustments of certain reserves.

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

	Three Months Ended									Three Months Ended									Nine Months Ended
	March 31,						December 31,			September 30,						June 30,			September 30,
	2020			2019			2019			2020			2019			2020			2020			2019
Operating profit (loss):
Wellbore Technologies	$	(663	)	$	19		$	(317	)	$	(50	)	$	42		$	(67	)	$	(780	)	$	(3,234	)
Completion & Production Solutions		(1,013	)		(35	)		57			25			(24	)		42			(946	)		(1,991	)
Rig Technologies		(202	)		31			(23	)		(3	)		(110	)		(25	)		(230	)		(501	)
Eliminations and corporate costs		(72	)		(63	)		(66	)		(46	)		(62	)		(50	)		(168	)		(204	)
Total operating profit (loss)	$	(1,950	)	$	(48	)	$	(349	)
Total operating loss										$	(74	)	$	(154	)	$	(100	)	$	(2,124	)	$	(5,930	)

Other items:
Wellbore Technologies	$	715		$	(2	)	$	410		$	26		$	41		$	62		$	803		$	3,384
Completion & Production Solutions		1,054			11			13			23			79			12			1,089			2,029
Rig Technologies		238			2			114			12			194			20			270			670
Corporate		16			—			—			1			—			8			25			11
Total other items	$	2,023		$	11		$	537		$	62		$	314		$	102		$	2,187		$	6,094

Depreciation & amortization:
Wellbore Technologies	$	51		$	100		$	50		$	45		$	50		$	47		$	143		$	234
Completion & Production Solutions		30			52			26			15			27			14			59			124
Rig Technologies		20			23			21			19			21			19			58			66
Corporate		4			2			3			4			4			2			10			9
Total depreciation & amortization	$	105		$	177		$	100		$	83		$	102		$	82		$	270		$	433

Adjusted EBITDA:
Wellbore Technologies	$	103		$	117		$	143		$	21		$	133		$	42		$	166		$	384
Completion & Production Solutions		71			28			96			63			82			68			202			162
Rig Technologies		56			56			112			28			105			14			98			235
Eliminations and corporate costs		(52	)		(61	)		(63	)		(41	)		(58	)		(40	)		(133	)		(184	)
Total Adjusted EBITDA	$	178		$	140		$	288		$	71		$	262		$	84		$	333		$	597

Reconciliation of Adjusted EBITDA:
GAAP net income (loss) attributable to Company	$	(2,047	)	$	(77	)	$	(385	)
GAAP net loss attributable to Company										$	(55	)	$	(244	)	$	(93	)	$	(2,195	)	$	(5,710	)
Noncontrolling interests		(2	)		2			—			2			(5	)		6			6			2
Provision (benefit) for income taxes		(156	)		(10	)		(46	)
Benefit for income taxes											(61	)		60			(47	)		(264	)		(323	)
Interest expense		22			25			25			21			25			22			65			75
Interest income		(3	)		(6	)		(4	)		—			(4	)		(2	)		(5	)		(16	)
Equity (income) loss in unconsolidated affiliate		233			—			7
Equity loss in unconsolidated affiliate											11			4			6			250			6
Other (income) expense, net		3			18			54			8			10			8			19			36
Depreciation and amortization		105			177			100			83			102			82			270			433
Other items		2,023			11			537			62			314			102			2,187			6,094
Total Adjusted EBITDA	$	178		$	140		$	288		$	71		$	262		$	84		$	333		$	597

At ~~March 31,~~September 30, 2020, the Company had cash and cash equivalents of ~~$1,115~~$1,485 million and total debt of ~~$2,002~~$1,824 million. At December 31, 2019, cash and cash equivalents were $1,171 million and total debt was $1,989 million. As of ~~March 31,~~September 30, 2020, approximately ~~$744~~$911 million of the ~~$1,115~~$1,485 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 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 or utilize its commercial paper program.~~facility.

~~At March 31, 2020, there were no commercial paper borrowings,~~27.4% and ~~there were~~had no outstanding letters of credit issued under the ~~credit~~ facility, resulting in $2.0 billion of ~~funds~~ available ~~under this credit facility.~~funds.

The Company also has 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 LIBOR plus 1.40%. The bank line of credit contains a financial covenant regarding maximum debt-to-equity ratio of 75%. As of ~~March 31,~~September 30, 2020, the Company was in compliance.

On August 25, 2020, the Company completed a cash tender offer for $217.3 million of its 2.60% unsecured Senior Notes using available cash balances. The Company paid $226 million, which included a redemption premium of $7.6 million as well as accrued and unpaid interest of $1.3 million. As a result of the redemption, the Company recorded a loss on extinguishment of debt of $8.2 million, which included the redemption premium of $7.6 million and non-cash charges of $0.6 million attributable to the write-off of unamortized discount and debt issuance costs.

From time to time, we participate in factoring arrangements to sell accounts receivable to third-party financial institutions. Our factoring transactions are recognized as sales, and the proceeds are included as operating cash flows in our Condensed Consolidated Statements of Cash Flows. ~~During the quarter ended March 31, 2020 we sold accounts receivable of $45 million at a cost of approximately $0.2 million.~~

Our outstanding debt at ~~March 31,~~September 30, 2020 was ~~$2,002~~$1,824 million and consisted primarily of ~~$399~~$182 million in 2.60% Senior Notes, $1,089 million in 3.95% Senior Notes, $493 million in 3.60% Senior Notes, and ~~lease liabilities~~other debt of ~~$646~~$60 million. The Company was in compliance with all covenants at ~~March 31,~~September 30, 2020. Lease liabilities totaled $619 million at September 30, 2020.

We had ~~$524~~$490 million of outstanding letters of credit at ~~March 31,~~September 30, 2020, primarily in the U.S. and Norway, 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 continuing operating activities, continuing investing activities and continuing financing activities for the periods presented (in millions):

	Three Months Ended						Nine Months Ended
	March 31,						September 30,
	2020			2019			2020			2019
Net cash provided by (used by) operating activities	$	39		$	(38	)
Net cash provided by operating activities							$	740		$	241
Net cash used in investing activities		(53	)		(107	)		(160	)		(268	)
Net cash used in financing activities		(43	)		(20	)		(256	)		(73	)

Significant sources and uses of cash during the first ~~three~~nine months of 2020

Since the oil and gas market downturn began in late 2014, the Company has maintained a continuous process of actively managing its strategy, structure and resources to the changing market conditions and new realities. The Company has closed or realigned hundreds of facilities, reduced headcount, sharply lowered costs ~~cut capital expenditure budgets~~ and reviewed all product lines for acceptable returns in the evolved market. Additionally, the Company has proactively reduced the balances and extended the maturity profile of its debt. In the fall of 2019, the Company retired $1 billion of notes due 2022 for cash, issued $500 million of notes due 2029 and extended the maturity of its undrawn credit facility to 2024. In August 2020, the company completed a tender on $217 million of the remaining 2022 notes, further reducing its amount of debt outstanding. While aggressively matching size and spend to the market, and protecting its balance sheet, the Company has continued investing in new products and technologies that enable its customers to improve their operational efficiencies.

When the COVID-19 global pandemic and OPEC+ actions further depressed oil prices and industry activity beginning in March of 2020, the Company’s prior prudent actions helped ensure adequate available ~~liquidity~~ resources. Management intends to continue managing the business to the market realities to ensure the Company’s access to capital remains sufficient. – See Item 1A Risk Factors.

The effect of the change in exchange rates on cash flows was ~~an increase~~a decrease of $1$10 million and $8$14 million for the first ~~three~~nine months of 2020 and 2019, respectively.

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.

We ~~may~~intend to 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.

Some of the information in this document contains, or has incorporated by reference, forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements typically are identified by use of terms such as “may,” “expect,” “anticipate,” “estimate,” and similar words, although some forward-looking statements are expressed differently. All statements herein regarding expected merger synergies are forward-looking statements. You should be aware that our actual results could differ materially from results anticipated in the 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, difficulties encountered in integrating mergers and acquisitions, and worldwide economic activity. You should also consider carefully the statements under “Risk Factors,” as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019, which address additional factors that could cause our actual results to differ from those set forth in the forward-looking statements. 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.

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

We have ~~extensive~~ operations in foreign ~~countries. The net assets~~countries and ~~liabilities of these operations~~ are exposed to changes in foreign currency exchange rates, although such fluctuations generally do not affect income since their functional currency is typically 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 no foreign exchange loss in our income statement for the first three months of 2020, compared to approximately $9 million in the same period of the prior year. The 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 countries using the local currency as their functional currency.

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.~~fluctuations. In order to mitigate that risk, we may utilize foreign currency forward contracts to offset changes in nonfunctional currency assets and liabilities and 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 denominated in foreign currencies for transactional exposures totaling $234 million and translation exposures totaling $79 million as of March 31, 2020 excluding trade receivables and payables, which approximate fair value. These market risk sensitive instruments consisted of cash balances and overdraft facilities. The Company estimates that a hypothetical 10 percent movement of all applicable foreign currency exchange rates on the transactional exposures financial market risk sensitive instruments could affect net income by $18 million and the translational exposures financial market risk sensitive instruments could affect the future fair value by $8 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. In the event that the counterparties fail to meet the terms of a foreign currency contract, our exposure is limited to the foreign currency rate differential. Due to exchange rate fluctuations we recorded foreign exchange losses in our income statement of $4 million and $17 million in the first nine months of 2020 and 2019, respectively.

The Company had other financial market risk sensitive instruments denominated in foreign currencies for transactional exposures totaling $355 million and translation exposures totaling $168 million as of September 30, 2020, excluding trade receivables and payables, which approximate fair value. These market-risk sensitive instruments consisted of cash balances and overdraft facilities. The Company estimates that a hypothetical 10 percent movement of all applicable foreign currency exchange rates on the transactional exposures financial market risk sensitive instruments could affect net income by $28 million and the translational exposures financial market risk sensitive instruments could affect the future fair value by $17 million.

At ~~March 31,~~September 30, 2020, long term borrowings consisted of ~~$399~~$182 million in 2.60% Senior Notes, $1,089 million in 3.95% Senior Notes, and $493 million in 3.60% Senior Notes. At ~~March 31,~~September 30, 2020, there were ~~no commercial paper borrowings and~~ no outstanding letters of credit issued under the credit facility, resulting in $2.0 billion of ~~funds~~ available ~~under this credit facility.~~funds. 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 LIBOR, NIBOR or CDOR, 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 LIBOR, NIBOR or CDOR for 30 days 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.

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.

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 2019 Annual Report on Form 10-K. The risk factor below updates our risk factors previously discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

The recent COVID-19 pandemic and related economic repercussions have had, and are expected to continue to have, a significant impact on our business, and depending on the duration of the pandemic and its effect on the oil and gas industry, could have a material adverse effect on our business, liquidity, consolidated results of operations and consolidated financial condition.

As a result of the recent COVID-19 pandemic, the Company may be exposed to additional liabilities and risks created by this unprecedented crisis. The COVID-19 pandemic has resulted in unprecedented governmental actions ordering citizens in the United States and countries around the world to “shelter in place,” and issuing “stay at home orders,” which curtail travel and commerce. In the United States alone, over 26 million have filed for unemployment benefits during the sharp decline in economic activity resulting from governmental orders.

Oil demand has significantly deteriorated as a result of the virus outbreak and corresponding preventative measures taken around the world to mitigate the spread of the virus. At the same time, aggressive increases in production of oil by Saudi Arabia and Russia created a significant surplus in the supply of oil. ~~WTI oil spot prices decreased from a high of $63 per barrel in early January 2020 to a low of $14 per barrel in late March 2020.~~ Physical markets ~~have been~~became distressed as spot prices ~~have been~~were negatively impacted by ~~the~~a lack of available storage capacity. ~~While OPEC+ agreed~~The COVID-19 virus continued to spread during the second and third quarters of 2020, extending depressed demand, uncertainty and additional spending reductions by the entire oil and gas industry as U.S. rig count fell to its lowest level since 1940 in ~~April~~August despite oil prices beginning to ~~cut production, downward pressure on commodity prices has continued and could continue for the foreseeable future.~~stabilize near $40 bbl.

The forced shutdown of economic activity has directly affected our business and has exacerbated the potential negative impact from many of the risks described in our Form 10-K for the year ended December 31, 2019, including those relating to our customers’ capital spending and sharply reduced oil and natural gas prices. Demand for our products and services is declining as our customers continue to revise their capital budgets downwards and swiftly adjust their operations in response to lower commodity prices.

The nature, scale, and scope of the above-described events combined with the uncertain duration and extent of governmental actions prevent us from identifying all potential risks to our business. We believe that the well-known impacts described above and other potential impacts include, but are not limited to, the following:

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

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.

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.

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


Period	Total number of shares purchased*		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs		Approximate dollar value of shares that may yet be purchased(2) under the plans or programs*
January 1 through January 31, 2020		—		—		—	$	500,000
February 1 through February 29, 2020		817	$	20.50		—		500,000
March 1 through March 31, 2020		—		—		—		500,000
Total ⁽¹⁾		817	$	20.50		—

3.1		Fifth Amended and Restated Certificate of Incorporation of National Oilwell Varco, Inc. (Exhibit 3.1) (1)

3.2		Amended and Restated By-laws of National Oilwell Varco, Inc. (Exhibit 3.1) (2)

4.1		Description of Securities (12)

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

10.2		Amendment No. 1 to Credit Agreement, dated as of October 30, 2019 (4)

10.3		National Oilwell Varco, Inc. 2018 Long-Term Incentive Plan, as amended and restated. (5)*

10.4		Form of Employee Stock Option Agreement. (Exhibit 10.1) (6)

10.5		Form of Non-Employee Director Stock Option Agreement. (Exhibit 10.2) (6)

10.6		Form of Performance-Based Restricted Stock. (18 Month) Agreement (Exhibit 10.1) (7)

10.7		Form of Performance-Based Restricted Stock. (36 Month) Agreement (Exhibit 10.2) (7)

10.8		Form of Performance Award Agreement (Exhibit 10.1) (8)

10.9		Form of Executive Employment Agreement. (Exhibit 10.1) (9)

10.10		Form of Executive Severance Agreement. (Exhibit 10.2) (9)

10.11		Form of Employee Nonqualified Stock Option Grant Agreement (10)

10.12		Form of Restricted Stock Agreement (10)

10.13		Form of Performance Award Agreement (10)

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

10.15		Form on Restricted Stock Agreement (2019) (11)

10.16		Form of Performance Award Agreement (2019) (11)

10.17		Form of Performance Award Agreement (2020) (12)

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

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

32.1		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

95		Mine Safety Information pursuant to section 1503 of the Dodd-Frank Act.

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)

Date: ~~April 28,~~October 27, 2020	By:	/s/ Scott K. Duff
	Scott K. Duff
	Vice President, Corporate Controller & Chief Accounting Officer
	(Duly Authorized Officer, Principal Accounting Officer)

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


(1)		Filed as an Exhibit to our Quarterly Report on Form 10-Q filed on August 5, 2011.


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


(5)		Filed as Appendix I to our Proxy Statement filed on April ~~15, 2019.~~9, 2020.


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


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


(12)		Filed as an Exhibit to our ~~Annual~~Quarterly Report on Form ~~10-K~~10-Q filed on ~~February 13,~~April 28, 2020.