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 ~~July 17, 2020~~April 16, 2021 the registrant had ~~388,283,695~~390,643,228 shares of common stock, par value $0.01 per share, outstanding.

	June 30,			December 31,			March 31,			December 31,
	2020			2019			2021			2020
ASSETS
Current assets:
Cash and cash equivalents	$	1,447		$	1,171		$	1,607		$	1,692
Receivables, net		1,502			1,855			1,265			1,274
Inventories, net		1,929			2,197			1,357			1,408
Contract assets		508			643
Contract assets, net								577			611
Prepaid and other current assets		204			247			190			224
Total current assets		5,590			6,113			4,996			5,209
Property, plant and equipment, net		2,010			2,354			1,894			1,927
Lease right-of-use assets, operating		398			444			356			371
Lease right-of-use assets, financing		207			230			187			195
Goodwill		1,493			2,807			1,495			1,493
Intangibles, net		525			852			516			527
Investment in unconsolidated affiliates		66			282			47			51
Other assets		158			67			181			156
Total assets	$	10,447		$	13,149		$	9,672		$	9,929
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	556		$	715		$	467		$	489
Accrued liabilities		815			949			792			863
Contract liabilities		408			427			349			354
Current portion of lease liabilities		115			114			106			110
Current portion of long-term debt								182			—
Accrued income taxes		60			42			38			51
Total current liabilities		1,954			2,247			1,934			1,867
Lease liabilities		637			674			590			612
Long-term debt		2,029			1,989			1,669			1,834
Deferred income taxes		71			140			77			78
Other liabilities		223			253			252			259
Total liabilities		4,914			5,303			4,522			4,650
Commitments and contingencies
Stockholders’ equity:
Common stock - par value $.01; 1 billion shares authorized; 388,265,636 and 385,886,682 shares issued and outstanding at June 30, 2020 and December 31, 2019		4			4
Common stock - par value $.01; 1 billion shares authorized; 390,653,325 and 388,255,374 shares issued and outstanding at March 31, 2021 and December 31, 2020								4			4
Additional paid-in capital		8,543			8,507			8,598			8,591
Accumulated other comprehensive loss		(1,613	)		(1,423	)		(1,530	)		(1,509	)
Retained earnings (deficit)		(1,474	)		690
Retained earnings								(1,991	)		(1,876	)
Total Company stockholders' equity		5,460			7,778			5,081			5,210
Noncontrolling interests		73			68			69			69
Total stockholders’ equity		5,533			7,846			5,150			5,279
Total liabilities and stockholders’ equity	$	10,447		$	13,149		$	9,672		$	9,929

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
	2020			2019			2020			2019			2021			2020
Revenue	$	1,496		$	2,132		$	3,379		$	4,072		$	1,249		$	1,883
Cost of revenue		1,359			2,070			3,018			3,754			1,093			1,659
Gross profit		137			62			361			318			156			224
Selling, general and administrative		237			417			520			721			244			283
Goodwill and indefinite-lived intangible asset impairment		—			3,186			1,378			3,186			—			1,378
Long-lived asset impairment		—			2,187			513			2,187			—			513
Operating loss		(100	)		(5,728	)		(2,050	)		(5,776	)		(88	)		(1,950	)
Interest and financial costs		(22	)		(25	)		(44	)		(50	)		(20	)		(22	)
Interest income		2			6			5			12			2			3
Equity loss in unconsolidated affiliates		(6	)		(2	)		(239	)		(2	)		(4	)		(233	)
Other income (expense), net		(8	)		(8	)		(11	)		(26	)		(10	)		(3	)
Loss before income taxes		(134	)		(5,757	)		(2,339	)		(5,842	)		(120	)		(2,205	)
Provision (benefit) for income taxes		(47	)		(373	)		(203	)		(383	)		(6	)		(156	)
Net loss		(87	)		(5,384	)		(2,136	)		(5,459	)		(114	)		(2,049	)
Net loss attributable to noncontrolling interests		6			5			4			7
Net income attributable to noncontrolling interests														1			(2	)
Net loss attributable to Company	$	(93	)	$	(5,389	)	$	(2,140	)	$	(5,466	)	$	(115	)	$	(2,047	)

Net loss attributable to Company per share:
Basic	$	(0.24	)	$	(14.11	)	$	(5.57	)	$	(14.35	)	$	(0.30	)	$	(5.34	)
Diluted	$	(0.24	)	$	(14.11	)	$	(5.57	)	$	(14.35	)	$	(0.30	)	$	(5.34	)

Cash dividends per share	$	-		$	0.05		$	0.05		$	0.10		$	-		$	0.05

Weighted average shares outstanding:
Basic		385			382			384			381			385			383
Diluted		385			382			384			381			385			383

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
	2020			2019			2020			2019			2021			2020
Net loss	$	(87	)	$	(5,384	)	$	(2,136	)	$	(5,459	)	$	(114	)	$	(2,049	)
Currency translation adjustments		9			18			(171	)		38			(19	)		(180	)
Changes in derivative financial instruments, net of tax		33			3			(19	)		7			(2	)		(52	)
Comprehensive loss		(45	)		(5,363	)		(2,326	)		(5,414	)		(135	)		(2,281	)
Comprehensive income attributable to noncontrolling interest		6			5			4			7			1			(2	)
Comprehensive loss attributable to Company	$	(51	)	$	(5,368	)	$	(2,330	)	$	(5,421	)	$	(136	)	$	(2,279	)

	Six Months Ended						Three Months Ended
	June 30,						March 31,
	2020			2019			2021			2020
Cash flows from operating activities:
Net loss	$	(2,136	)	$	(5,459	)	$	(114	)	$	(2,049	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		187			331			79			105
Provision for inventory losses		152			327			24			125
Deferred income taxes		(64	)		(369	)		(1	)		(62	)
Equity loss in unconsolidated affiliates		239			2			4			233
Goodwill and indefinite-lived intangible asset impairment		1,378			3,186			—			1,378
Long-lived asset impairment		513			2,187			—			513
Other, net		71			73			25			45
Change in operating assets and liabilities, net of acquisitions:
Receivables		356			144			(5	)		(27	)
Inventories		123			(193	)		28			47
Contract assets		127			(20	)		35			(5	)
Prepaid and other current assets		42			(29	)		33			9
Accounts payable		(160	)		(33	)		(22	)		(54	)
Accrued liabilities		(174	)		(172	)		(62	)		(142	)
Contract liabilities		(20	)		(3	)		(5	)		43
Income taxes payable		18			(66	)		(13	)		(15	)
Other assets/liabilities, net		(235	)		(17	)		(33	)		(105	)
Net cash provided by (used in) operating activities		417		$	(111	)
Net cash provided by (used by) operating activities							$	(27	)		39

Cash flows from investing activities:
Purchases of property, plant and equipment		(124	)		(97	)		(49	)		(68	)
Business acquisitions, net of cash acquired		—			(65	)
Other		13			6			(2	)		15
Net cash used in investing activities	$	(111	)	$	(156	)	$	(51	)	$	(53	)

Cash flows from financing activities:
Borrowings against lines of credit and other debt		25			—			17			—
Cash dividends paid		(19	)		(38	)		—			(19	)
Financing leases								(7	)		(8	)
Other		(33	)		(1	)		(13	)		(16	)
Net cash used in financing activities		(27	)		(39	)		(3	)		(43	)
Effect of exchange rates on cash		(3	)		—			(4	)		1
Increase (decrease) in cash and cash equivalents		276			(306	)
Decrease in cash and cash equivalents								(85	)		(56	)
Cash and cash equivalents, beginning of period		1,171			1,427			1,692			1,171
Cash and cash equivalents, end of period	$	1,447		$	1,121		$	1,607		$	1,115

Supplemental disclosures of cash flow information:
Cash payments (refunds) during the period for:
Cash payments during the period for:
Interest	$	42		$	41		$	3		$	3
Income taxes	$	(63	)	$	70		$	9		$	14

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

$
4

$
8,507

$
(1,423
)

$
690

$
7,778

$
68

$
7,846

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
)
Adoption of new accounting standard

—

—

—

(5
)

(5
)

—

(5
)
Noncontrolling interest

—

—

—

—

—

2

2

Stock-based compensation

—

27

—

—

27

—

27

Withholding taxes

—

(18
)

—

—

(18
)

—

(18
)
Balance at March 31, 2020

$
4

$
8,516

$
(1,655
)

$
(1,381
)

$
5,484

$
68

$
5,552

Net income (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

	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
Balance at December 31, 2020		388	$	4	$	8,591		$	(1,509	)	$	(1,876	)	$	5,210		$	69		$	5,279
Net loss		—		—		—			—			(115	)		(115	)		1			(114	)
Other comprehensive loss, net		—		—		—			(21	)		—			(21	)		—			(21	)
Stock-based compensation		—		—		20			—			—			20			—			20
Common stock issued		2		—		—			—			—			—			—			—
Withholding taxes		—		—		(13	)		—			—			(13	)		—			(13	)
Other		—		—		—			—			—			—			(1	)		(1	)
Balance at March 31, 2021		390	$	4	$	8,598		$	(1,530	)	$	(1,991	)	$	5,081		$	69		$	5,150

	Common Stock		Additional Paid in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Loss)			Total Company Stockholders' Equity			Noncontrolling Interests			Total Stockholders' Equity			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
Balance at December 31, 2018	$	4	$	8,390		$	(1,437	)	$	6,862		$	13,819		$	70		$	13,889
Balance at December 31, 2019																						386	$	4	$	8,507		$	(1,423	)	$	690		$	7,778		$	68		$	7,846
Net loss		—		—			—			(77	)		(77	)		2			(75	)		—		—		—			—			(2,047	)		(2,047	)		(2	)		(2,049	)
Other comprehensive income		—		—			24			—			24			—			24
Other comprehensive loss, net																						—		—		—			(232	)		—			(232	)		—			(232	)
Cash dividends, $0.05 per common share		—		—			—			(19	)		(19	)		—			(19	)		—		—		—			—			(19	)		(19	)		—			(19	)
Noncontrolling interest		—		—			—			—			—			3			3
Adoption of new accounting standards																						—		—		—			—			(5	)		(5	)		—			(5	)
Stock-based compensation		—		33			—			—			33			—			33			—		—		27			—			—			27			—			27
Common stock issued		—		3			—			—			3			—			3			2		—		1			—			—			1			—			1
Withholding taxes		—		(18	)		—			—			(18	)		—			(18	)		—		—		(17	)		—			—			(17	)		—			(17	)
Balance at March 31, 2019	$	4	$	8,408		$	(1,413	)	$	6,766		$	13,765		$	75		$	13,840
Net income		—		—			—			(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
Other																						—		—		—			—			—			—			2			2
Balance at March 31, 2020																						388	$	4	$	8,518		$	(1,655	)	$	(1,381	)	$	5,486		$	68		$	5,554

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,~~NOV 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~~2020 Annual Report on Form 10-K.

In ~~management’s~~our opinion, the consolidated financial statements include all adjustments, which are of a normal recurring nature unless otherwise disclosed, necessary for a fair presentation of the results for the interim periods. The results of operations for the three ~~and six~~ months ended ~~June 30, 2020~~March 31, 2021 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.

	June 30,			December 31,			March 31,			December 31,
	2020			2019			2021			2020
Raw materials and supplies	$	478		$	577		$	353		$	373
Work in process		334			364			232			189
Finished goods and purchased products		1,860			2,099			1,323			1,423
		2,672			3,040			1,908			1,985
Less: Inventory reserve		(743	)		(843	)		(551	)		(577	)
Total	$	1,929		$	2,197		$	1,357		$	1,408

	June 30,		December 31,		March 31,		December 31,
	2020		2019		2021		2020
Compensation	$	158	$	270	$	195	$	196
Taxes (non-income)						111		158
Vendor costs		110		121		110		118
Taxes (non-income)		109		112
Warranties		84		90		79		87
Insurance		58		57		49		48
Interest						23		7
Commissions						21		19
Fair value of derivatives		49		24		8		15
Interest		7		8
Other		240		267		196		215
Total	$	815	$	949	$	792	$	863

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

(171
)

(33
)

—

(204
)
Amounts reclassified from accumulated other comprehensive
income (loss)

—

14

—

14

Balance at June 30, 2020

$
(1,574
)

$
(23
)

$
(16
)

$
(1,613
)

				Derivative			Defined
	Currency			Financial			Benefit
	Translation			Instruments,			Plans,
	Adjustments			Net of Tax			Net of Tax			Total
Balance at December 31, 2020	$	(1,481	)	$	19		$	(47	)	$	(1,509	)
Accumulated other comprehensive income (loss) before reclassifications		(19	)		(2	)		0			(21	)
Amounts reclassified from accumulated other comprehensive income (loss)		0			0			0			0
Balance at March 31, 2021	$	(1,500	)	$	17		$	(47	)	$	(1,530	)

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

	Six Months Ended June 30,																				Three Months Ended March 31,
	2020										2019										2021								2020
	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		$	—	$	1		$	—	$	1		$	—	$	—	$	—	$	—	$	—	$	—		$	—	$	—
Cost of revenue		—		15			—		15			—		3			—		3			—		—		—		—		—		5			—		5
Tax effect		—		(3	)		—		(3	)		—		(1	)		—		(1	)		—		—		—		—		—		(1	)		—		(1	)
	$	—	$	14		$	—	$	14		$	—	$	3		$	—	$	3		$	—	$	—	$	—	$	—	$	—	$	4		$	—	$	4

The Company’s reporting currency is the U.S. dollar. A majority of the Company’s international entities in which there is a substantial investment have the local currency as their functional currency. As a result, currency translation adjustments resulting from the process of translating the entities’ financial statements into the reporting currency are reported in other comprehensive income (loss). ~~The Company recorded income~~For the three months ended March 31, 2021, a majority of ~~$9 million and a~~these local currencies weakened against the U.S. dollar, resulting in other comprehensive loss of ~~$171~~$19 million compared to other comprehensive loss of $180 million for the three ~~and six~~ months ended ~~June 30, 2020, respectively and income of $18 million and $38 million for the three and six months ended June 30, 2019, respectively.~~March 31, 2020.

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 derivatives ~~of $23 million and ($33)~~(-$2 million during the three ~~and six~~ months ended ~~June 30, 2020;~~March 31, 2021); and, 2) the outflow of other comprehensive income (loss) related to cumulative changes in the fair value of derivatives that have settled in the current period that is reclassified into earnings in the current period ($~~10 million and $14 million~~0 during the three ~~and six~~ months ended ~~June 30, 2020)~~March 31, 2021).

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
	2020			2019			2020			2019			2021			2020
Revenue:
Wellbore Technologies	$	442		$	850		$	1,133		$	1,657		$	413		$	691
Completion & Production Solutions		611			663			1,286			1,244			439			675
Rig Technologies		476			671			1,033			1,274			431			557
Eliminations		(33	)		(52	)		(73	)		(103	)		(34	)		(40	)
Total revenue	$	1,496		$	2,132		$	3,379		$	4,072		$	1,249		$	1,883

Operating profit (loss):
Wellbore Technologies	$	(67	)		(3,295	)	$	(730	)	$	(3,276	)	$	(14	)		(663	)
Completion & Production Solutions		42			(1,932	)		(971	)		(1,967	)		(17	)		(1,013	)
Rig Technologies		(25	)		(422	)		(227	)		(391	)		(8	)		(202	)
Eliminations and corporate costs		(50	)		(79	)		(122	)		(142	)		(49	)		(72	)
Total operating profit (loss)	$	(100	)	$	(5,728	)	$	(2,050	)	$	(5,776	)	$	(88	)	$	(1,950	)

Operating profit (loss)%:
Wellbore Technologies														(3.4	%)		(95.9	%)
Completion & Production Solutions														(3.9	%)		(150.1	%)
Rig Technologies														(1.9	%)		(36.3	%)
Total operating profit (loss)%														(7.0	%)		(103.6	%)

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.

~~Second~~First quarter ~~2020~~2021 operating profit ~~(loss)~~ includes pre-tax charges for severance, ~~inventory impairments,~~ facility closures and other items ($~~102~~9 million). First quarter 2020 operating profit (loss) includes pre-tax charges for impairment of goodwill, indefinite-lived and finite-lived intangible and long-lived tangible assets ($1,891 million); inventory charges ($114 million); and, severance, facility closures and other items ($18 million).

Second quarter 2019 operating profit (loss) includes pre-tax charges for impairment of goodwill, indefinite-lived and finite-lived intangible and long-lived tangible assets ($5,373 million); inventory charges ($302 million); a Voluntary Early Retirement Program ($89 million); and, severance, facility closures and other items ($5 million). First quarter 2019 operating profit includes pre-tax charges for severance, facility closures and other items ($11 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 June 30,																						Three Months Ended March 31,
	2020											2019											2021											2020
			Completion											Completion											Completion											Completion
	Wellbore		& Production		Rig							Wellbore		& Production		Rig							Wellbore		& Production		Rig							Wellbore		& Production		Rig
	Technologies		Solutions		Technologies		Elims.			Total		Technologies		Solutions		Technologies		Elims.			Total		Technologies		Solutions		Technologies		Eliminations			Total		Technologies		Solutions		Technologies		Eliminations			Total
North America	$	183	$	181	$	53	$	—		$	417	$	461	$	282	$	127	$	—		$	870	$	188	$	162	$	55	$	—		$	405	$	361	$	225	$	77	$	—		$	663
International		246		419		414		—			1,079		375		364		523		—			1,262		211		264		369		—			844		313		437		470		—			1,220
Eliminations		13		11		9		(33	)		—		14		17		21		(52	)		—		14		13		7		(34	)		—		17		13		10		(40	)		—
	$	442	$	611	$	476	$	(33	)	$	1,496	$	850	$	663	$	671	$	(52	)	$	2,132	$	413	$	439	$	431	$	(34	)	$	1,249	$	691	$	675	$	557	$	(40	)	$	1,883

Land	$	296	$	345	$	113	$	—		$	754	$	679	$	456	$	171	$	—		$	1,306	$	294	$	265	$	91	$	—		$	650	$	529	$	416	$	151	$	—		$	1,096
Offshore		133		255		354		—			742		157		190		479		—			826		105		161		333		—			599		145		246		396		—			787
Eliminations		13		11		9		(33	)		—		14		17		21		(52	)		—		14		13		7		(34	)		—		17		13		10		(40	)		—
	$	442	$	611	$	476	$	(33	)	$	1,496	$	850	$	663	$	671	$	(52	)	$	2,132	$	413	$	439	$	431	$	(34	)	$	1,249	$	691	$	675	$	557	$	(40	)	$	1,883

Six Months Ended June 30,

2020

2019

Completion

Completion

Wellbore

& Production

Rig

Wellbore

& Production

Rig

Technologies

Solutions

Technologies

Elims.

Total

Technologies

Solutions

Technologies

Elims.

Total

North America

$
544

$
406

$
130

$
—

$
1,080

$
921

$
551

$
268

$
—

$
1,740

International

559

856

884

—

2,299

706

660

966

—

2,332

Eliminations

30

24

19

(73
)

—

30

33

40

(103
)

—

$
1,133

$
1,286

$
1,033

$
(73
)

$
3,379

$
1,657

$
1,244

$
1,274

$
(103
)

$
4,072

Land

$
825

$
761

$
264

$
—

$
1,850

$
1,344

$
861

$
386

$
—

$
2,591

Offshore

278

501

750

—

1,529

283

350

848

—

1,481

Eliminations

30

24

19

(73
)

—

30

33

40

(103
)

—

$
1,133

$
1,286

$
1,033

$
(73
)

$
3,379

$
1,657

$
1,244

$
1,274

$
(103
)

$
4,072

Net revenue recognized from performance obligations satisfied in previous periods was $8$12.5 million for the three months ended ~~June 30, 2020~~March 31, 2021, primarily due to change orders.

Remaining performance obligations ~~represents~~represent the transaction price of firm orders for all revenue streams for which work has not been performed on contracts with original expected duration of one year or more. We do not disclose the remaining performance obligations of royalty contracts, service contracts for which there is a right to invoice, and short-term contracts that are expected to have a duration of one year or less. As of ~~June 30, 2020,~~March 31, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations was ~~$3,919~~$3,632 million. The Company expects to recognize approximately ~~$591~~$707 million in revenue for the remaining performance obligations in ~~2020~~2021, and ~~$3,328~~$2,925 million in ~~2021~~2022 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
Balance at December 31, 2020							$	611		$	354
Provision		(4	)		—			(1	)		-
Billings		(373	)		598			(226	)		204
Revenue recognized		253			(609	)		214			(205	)
Currency translation adjustments and other		(11	)		(8	)		(21	)		(4	)
Balance at June 30, 2020	$	508		$	408
Balance at March 31, 2021							$	577		$	349

The Company estimates its allowance for credit losses using information about past events, current conditions and risk characteristics of each customer, and reasonable and supportable forecasts relevant to assessing risk associated with the collectability of Receivables and Contract Assets. The Company’s customer base, mostly in the oil and gas industry, have generally similar collectability risk characteristics, although larger and state-owned customers may have lower risk than smaller independent customers. As of March 31, 2021, allowance for credit losses totaled $98 million.

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~~is reasonably certain to exercise a ~~lease~~renewal option ~~will be exercised~~at the inception of a least 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.~~rate in most of the Company’s leases is not readily determinable.

	June 30,		December 31,		March 31,		December 31,
	2020		2019		2021		2020
Current portion of lease liabilities:
Operating	$	84	$	84	$	81	$	82
Financing		31		30		25		28
Total	$	115	$	114	$	106	$	110

	June 30,		December 31,		March 31,		December 31,
	2020		2019		2021		2020
Long-term portion of lease liability:
Operating	$	391	$	424	$	361	$	376
Financing		246	$	250		229	$	236
Total	$	637	$	674	$	590	$	612

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 ~~June 30, 2020,~~March 31, 2021, the Company was in compliance with a debt-to-capitalization ratio of ~~29.4%~~29.0% 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 ~~June 30, 2020,~~March 31, 2021, the Company was in compliance. Other debt at ~~June 30, 2020~~March 31, 2021 included ~~$17~~$25 million ~~on the books~~ of funding provided by a minority interest partner of an NOV consolidated joint ~~ventures due to the minority interest partner.~~venture.

The Company had ~~$524~~$444 million of outstanding letters of credit at ~~June 30, 2020,~~March 31, 2021, 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 ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the fair value of the Company’s unsecured Senior Notes approximated ~~$1,833~~$1,690 million and ~~$1,947~~$1,833 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 ofor similar instruments. At ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the carrying value of the Company’s unsecured Senior Notes approximated ~~$1,981~~$1,764 million.

On April 9, 2021, the Company repaid the entire outstanding balance ($182 million) of its 2.60% unsecured Senior Notes due December 2022 using available cash balances. Upon redemption, the Company paid $191 million, which included a redemption premium of $6.8 million as well as accrued and unpaid interest of $1.7 million. As a result of the redemption, the Company recorded a loss on extinguishment of debt of $7.1 million in the second quarter, including a make whole premium of $6.8 million and ~~$1,980~~non-cash charges of $0.3 million ~~respectively.~~to write-off unamortized discount and debt issuance costs. Following the repayment, the Company’s earliest bond maturity is in 2029.

The effective tax rate for the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 2020 was ~~35.1%~~5.0% and ~~8.7%~~7.1%, ~~respectively, compared to 6.5%~~respectively. The Company has established valuation allowances on deferred tax assets for losses and ~~6.6% for the same periods~~tax credits generated in ~~2019.~~2021 and 2020. The ~~company’s 2019 and 2020~~ effective tax ~~rates are~~rate for 2021 was negatively impacted by ~~incremental valuation allowances primarily on net operating loss~~current year losses in certain jurisdictions with no tax benefit, partially offset by favorable adjustments related to utilization of losses and tax ~~attributes available~~credits for prior year tax returns. The effective tax rate for 2020 was negatively impacted by losses in ~~those years and~~certain jurisdictions with no tax benefit as well as the impairment of nondeductible ~~goodwill. Furthermore, the Company revised its estimated~~goodwill, partially offset by an income tax benefit ~~related to~~from 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 Company recorded an income tax benefit of $123 million in the three months ended March 31, 2020 in anticipation of filing a refund claim to carryback its 2019 United States net operating loss to its 2014 tax year. The Company refined its estimated income tax benefit during the three months ended June 30, 2020, resulting in a reduction to the income tax benefit from $123 million to $100 million. The Company received a cash refund of $94 million in June 2020 and anticipates receiving an additional refund upon the filing of the final 2019 United States income tax return and final net operating loss carryback claim to 2014. The Company will complete these computations during the three months ended September 30, 2020. In addition, the effective tax rate in the three months and six months ended June 30, 2020 was favorably impacted by an income tax benefit of $90 million related to the Company’s decision to amend its 2016 United States income tax return in order to deduct foreign taxes paid rather than to claim foreign tax credits which would carryforward and be expected to expire unused in 2026. The resulting net operating loss in 2016 will be carried back to the Company’s 2014 tax return and will result in a net income tax refund of $90 million. The income tax receivable of $90 million is recorded in Other Assets on the balance sheet as the Company believes the refund will not be received within twelve months.

OnThe 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 20, ~~2020,~~2020. 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 42.7 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, 2021, approximately 13.3 million 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 new awards under the Plan.

On February 22, 2021, under the 2018 Plan, the Company granted ~~99,696 restricted~~1,678,013 stock ~~awards~~options with a fair value of ~~$13.00~~$5.75 per ~~share.~~option and an exercise price of $15.00 per share; 2,972,175 shares of restricted stock and restricted stock units with a fair value of $15.00 per share; and performance share awards (PSAs) to senior management employees with potential payouts varying from 0 to 1,434,000 shares. The ~~awards were granted to non-employee members of~~stock options vest over a three-year period from the ~~board of directors~~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 2021 PSAs can be earned based on performance against two established goals over a three-year period: 85% with a TSR (total shareholder return) goal and 15% with an internal NVA (“NOV Value Added”, a return on capital metric) goal.TSR performance is determined by comparing the Company’s TSR with the TSR of the members of the Philadelphia Stock Exchange’s Oil Services Sector Index (OSX) for the three-year performance period. The TSR portion of the performance share awards is subject to a vesting cap equal to 100% of Target Level if the Company’s absolute TSR is negative, regardless of relative TSR results. Conversely, if the Company’s absolute TSR is greater than 15% annualized over the three-year performance period the payout amount shall not be less than 50% of Target Level, regardless of relative TSR results. The NVA goal is based on the Company’s improvement in NVA from the beginning of the performance period until the end of the performance period. NVA is calculated as an amount equal to the Company’s (a) gross cash earnings less (b) average gross operating assets times an amount equal to a required return on assets, with certain adjustments.

Total ~~expense~~stock-based compensation for all stock-based compensation arrangements under the Plan and the 2018 Plan was ~~$28~~$20 million and ~~$55~~$27 million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 2020, ~~respectively and $30 million and $63 million for the three and six months ended June 30, 2019,~~ respectively.

~~The total~~There was 0 income tax benefit recognized in the Consolidated Statements of Income (Loss) for ~~all~~ stock-based compensation arrangements ~~was nil~~under the Plan for both the three ~~and six~~ months ended ~~June 30, 2020~~March 31, 2021 and ~~$4 million and $8 million for the three and six months ended June 30, 2019, respectively.~~2020.

The Company uses ~~forward~~derivative instruments to manage certain foreign currency exchange rate risks associated with sourcing goods and services in a currency different than the currency of sale. Forward currency contracts are executed to manage the foreign ~~currency~~ exchange ~~rate~~ risk on forecasted revenues and expenses denominated in currencies other than the functional currency of the operating unit (cash flow ~~hedge)~~hedges). ~~The~~In addition, the Company ~~also~~ executes forward currency contracts to manage the foreign currency ~~exchange rate~~ risk on recognized nonfunctional currency monetary accounts (non-designated ~~hedge)~~hedges).

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

~~Forward~~The Company had the following outstanding foreign currency forward contracts ~~consist of~~at March 31, 2021 (in millions):

	Currency Denomination				Currency Denomination
	June 30,		December 31,		March 31,		December 31,
Foreign Currency	2020		2019		2021		2020
South Korean Won	KRW	17,600	KRW	17,600	KRW	17,600	KRW	17,600
Norwegian Krone	NOK	4,873	NOK	5,377	NOK	3,131	NOK	3,817
Russian Ruble	RUB	1,042	RUB	1,012	RUB	1,159	RUB	1,118
Mexican Peso					MXN	421	MXN	402
Japanese Yen					JPY	390	JPY	340
U.S. Dollar	USD	419	USD	686	USD	308	USD	367
Mexican Peso	MXN	407	MXN	115
Euro	EUR	207	EUR	188	EUR	131	EUR	116
Japanese Yen	JPY	191	JPY	36
South African Rand	ZAR	124	ZAR	124	ZAR	124	ZAR	124
Singapore Dollar					SGD	31	SGD	31
British Pound Sterling	GBP	38	GBP	20	GBP	17	GBP	18
Singapore Dollar	SGD	16	SGD	42
Danish Krone	DKK	8	DKK	21	DKK	5	DKK	875
Canadian Dollar	CAD	1	CAD	3	CAD	2	CAD	1
Brazilian Real					BRL	-	BRL	768

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 or loss on the derivative instrument is recorded in accumulated other comprehensive income (loss) and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings (e.g., in “revenues” when the hedged transactions are cash flows associated with forecasted revenues). The Company includes time value in hedge relationships.

The Company expects ~~$15~~($19) 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 foreign exchange driven value changes in the hedged nonfunctional monetary accounts.

The amount of gain (loss) recognized in other income (expense), net was $5($4) million and ($~~38)~~43) million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 2020, ~~respectively, and ($7) million and ($3) million for the three and six months ended June 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	June 30,		December 31,		Balance Sheet	June 30,		December 31,		Balance Sheet	March 31,		December 31,		Balance Sheet	March 31,		December 31,
	Location	2020		2019		Location	2020		2019		Location	2021		2020		Location	2021		2020
Derivatives designated as hedging instruments under ASC Topic 815

Foreign exchange contracts	Prepaid and other current assets	$	3	$	5	Accrued liabilities	$	35	$	18	Prepaid and other current assets	$	4	$	17	Accrued liabilities	$	6	$	11
Foreign exchange contracts	Other Assets		5		4	Other liabilities		7		2	Other Assets		—		12	Other liabilities		—		-

Total derivatives designated as hedging instruments under ASC Topic 815		$	8	$	9		$	42	$	20		$	4	$	29		$	6	$	11

Derivatives not designated as hedging instruments under ASC Topic 815

Foreign exchange contracts	Prepaid and other current assets	$	6	$	8	Accrued liabilities	$	14	$	6	Prepaid and other current assets	$	20	$	17	Accrued liabilities	$	2	$	4
Foreign exchange contracts	Other Assets		1		1	Other Liabilities		—		—	Other Assets		3		—	Other Liabilities		—		—

Total derivatives not designated as hedging instruments under ASC Topic 815		$	7	$	9		$	14	$	6		$	23	$	17		$	2	$	4

Total derivatives		$	15	$	18		$	56	$	26		$	27	$	46		$	8	$	15

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

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
	2020			2019			2020			2019			2021			2020
Numerator:
Net loss attributable to Company	$	(93	)	$	(5,389	)	$	(2,140	)	$	(5,466	)	$	(115	)	$	(2,047	)
Denominator:
Basic—weighted average common shares outstanding		385			382			384			381			385			383
Dilutive effect of employee stock options and other
unvested stock awards		—			—			—			—			—			—
Diluted outstanding shares		385			382			384			381			385			383

Net loss attributable to Company per share:
Basic	$	(0.24	)	$	(14.11	)	$	(5.57	)	$	(14.35	)	$	(0.30	)	$	(5.34	)
Diluted	$	(0.24	)	$	(14.11	)	$	(5.57	)	$	(14.35	)	$	(0.30	)	$	(5.34	)

Cash dividends per share	$	—		$	0.05		$	0.05		$	0.10		$	—		$	0.05

~~Companies~~ASC Topic 260, “Earnings Per Share” requires companies with unvested participating securities ~~are required~~ to utilize a two-class method for the computation of net income attributable to Company per share. The two-class method requires a portion of net income attributable to Company to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents, if declared. Net income (loss) attributable to Company allocated to these participating securities was immaterial for ~~each of~~ the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 2020 and ~~2019, respectively.~~therefore not excluded from net income attributable to Company per share calculation.

The Company had stock options outstanding that were anti-dilutive totaling 2824 million shares ~~for the three~~ and ~~six months ended June 30, 2020, respectively, compared to 25 million and 21~~27 million shares for each of the three ~~and six~~ months ended ~~June 30, 2019,~~March 31, 2021 and 2020, respectively.

Cash dividends were ~~nil~~$0 and $19 million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and March 31, 2020, ~~compared to $19 million and $38 million for the three and six months ended June 30, 2019.~~respectively. 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.

During the first quarter of 2020 the 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, increased production 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 US 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 increased, demand was 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 levels of demand for capital equipment and oilfield services that the Company sells to its customers. Also, due to the prolonged poor market conditions, capital availability to many of the Company’s customers became even more limited and is 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 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 3 in the fair value hierarchy. These inputs are based on internal management estimates, forecasts and judgements, using discounted cash flow. 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 June 30, 2020 is as follows: Rig Equipment ($661 million), Marine Construction ($51 million), ReedHycalog ($124 million), M/D Totco ($10 million), Wellsite ($174 million), XL Systems ($64 million), Fiberglass Systems ($346 million), and Process and Flow Technologies ($63 million).

~~At June 30, 2020, the Company has approximately $1.49 billion of goodwill, by segment, as follows (in millions):~~

~~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 identified intangible assets, comprise a significant amount of the Company’s total assets. The Company makes 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 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; 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 right-of-use assets. Additionally, the Company recorded a $224 million impairment on its equity investment in unconsolidated affiliates.

~~The Company has approximately $525 million of identified intangible assets, by segment, as follows (in millions):~~

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~~which arise from legacy businesses that the Company has acquired over many years and from the Company’s current ordinary day-to-day business ~~activities in which~~activities. These regulatory matters and disputes involve private parties ~~including~~and/or government authorities, which 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 claims, product liability claims, warranty claims, personal injury claims arising from exposure to or use of 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. Such claims involve various theories of liability which include: negligence, strict liability, product liability, and other theories of liability. For some of these 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, individually or collectively, could have a material financial or reputational impact on the Company. As of ~~June 30, 2020,~~March 31, 2021, 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 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~~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~~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, supply chain regulations, and other regulatory compliance in which the laws and regulations of different jurisdictions conflict or ~~trade~~these 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, the implementation of new trade agreements, and other 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, export controls, and other 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.

The COVID-19 pandemic continues to adversely impact many jurisdictions and disrupt normal economic activities. The demand for energy continues to be constrained with adverse consequences for our customers and for the Company. 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~~

Due 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 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 has declined. Our customers may attempt to cancel or delay projects, cancel contracts or may invoke force 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~~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 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 June 30, 2020, allowance for bad debts and contract assets totaled $117 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 Company adopted ASU 2019-12 for the ~~impact~~first quarter of ~~adopting ASU 2019-12~~2021 with no material impact 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,~~NOV Inc. ~~(the~~(“NOV” or the “Company”) is a leading independent ~~provider of~~ equipment and technology provider to the ~~upstream~~global energy industry. Originally founded in 1862, NOV and its predecessor companies have spent 159 years helping transform oil and gas ~~industry. The Company designs, manufactures, sells~~field development 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 theimproving its cost-effectiveness, efficiency, safety, and environmental ~~impact~~impact. Over the past few decades, the Company has pioneered and refined key technologies to improve the economic viability of frontier resources, including unconventional and deepwater oil and ~~gas operations.~~gas. More recently, by applying its deep expertise and technology, the company has helped advance the transition toward sustainable energy.

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

NOV serves major-diversified, national, and independent service companies, contractors, and energy producers in 61 countries, operating under three segments: Wellbore Technologies, Completion & Production Solutions, and Rig Technologies.

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; ~~drilling fluids;~~ 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 ~~fluid processing and sand control systems, mooring and fluid transfer~~floating production 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. The segment also designs and builds equipment for wind turbine installation companies, where demand is dependent on global investment into offshore wind energy developments.

In our annual report on Form 10-K for the year ended December 31, ~~2019,~~2020, 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;~~recognition (See Note 6); allowance for doubtful accounts; inventory reserves; impairment of long-lived assets (excluding 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 ~~second~~first quarter ended ~~June 30, 2020,~~March 31, 2021, the Company generated ~~revenues~~a net loss of ~~$1.50 billion,~~$115 million, compared to ~~$1.88 billion~~a net loss of $347 million in the fourth quarter of 2020 and a net loss of $2,047 million in the first quarter of 2020. Operating loss for the first quarter of ~~2020 and $2.13 billion for~~2021 was $88 million, compared to an operating loss of $301 million in the ~~second quarter of 2019. Operating loss for the second~~fourth quarter of 2020 ~~was $100~~and an operating loss of $1,950 million ~~and net loss was $93 million. Operating loss and net loss include non-cash, pre-tax charges (“other items”, see Other Corporate Items for additional detail)~~in the first quarter of ~~$102 million.~~2020. First quarter 2021 Adjusted EBITDA ~~(operating profit excluding depreciation, amortization,~~was $0 million, compared to $17 million in the fourth quarter of 2020 and ~~other items) decreased $94~~$178 million ~~sequentially to $84 million, or 5.6 percent~~in the first quarter of ~~sales. Other items included inventory charges, impairment charges, severance accruals, and restructuring costs.~~2020.

Wellbore Technologies generated revenues of ~~$442~~$413 million in the ~~second~~first quarter of ~~2020, a decrease~~2021, an increase of 3611 percent from the ~~first~~fourth quarter of 2020 and a decrease of 4840 percent from the ~~second~~first quarter of ~~2019.~~2020. The sequential ~~decline~~increase in revenue was driven ~~primarily~~ by ~~the severe fall in global~~improving drilling activity ~~particularly~~ in ~~North America and Latin America.~~the Western Hemisphere, partially offset by seasonality in the Eastern Hemisphere. Operating loss ~~was $67~~improved $64 million sequentially to $14 million, or ~~-15.2~~3.4 percent of sales, and included ~~$62~~$6 million of other items. Adjusted EBITDA ~~decreased 59 percent~~increased $22 million sequentially to ~~$42~~$34 million, or ~~9.5~~8.2 percent of sales.

Completion & Production Solutions generated revenues of ~~$611~~$439 million in the ~~second~~first quarter of ~~2020,~~2021, a decrease of ~~nine~~20 percent from the ~~first~~fourth quarter of 2020 and a decrease of ~~eight~~35 percent from the ~~second~~first quarter of ~~2019.~~2020. The sharp sequential decline in revenue was primarily the result of severe weather disruptions, certain project delays, COVID-19 shutdowns in Southeast Asia, and raw material shortages for the segment’s Fiberglass business unit. Operating ~~profit was $42~~loss improved $14 million sequentially to $17 million, or ~~6.9~~3.9 percent of sales, and included ~~$12~~-$2 million in other items. ~~Deteriorating conditions in the global completions market and logistical disruptions from COVID-19-related restrictions were partially offset by strong execution on existing backlog.~~ Adjusted EBITDA decreased ~~four percent~~$32 million sequentially to ~~$68~~-$4 million, or ~~11.1~~-0.9 percent of sales.

New orders booked during the quarter totaled ~~$196~~$338 million, representing a book-to-bill of 51127 percent when compared to the ~~$388~~$267 million of orders shipped from backlog. For 2021, the segment began including Denali brand underground fiberglass tanks in its capital equipment backlog, increasing the January 1, 2021 backlog balance by $57 million. Book-to-bill for the quarter was 115 percent excluding Denali. At ~~June 30, 2020,~~March 31, 2021, backlog for capital equipment orders for Completion & Production Solutions was ~~$1.0 billion.~~$810 million.

Rig Technologies generated revenues of ~~$476~~$431 million in the ~~second~~first quarter of ~~2020,~~2021, a decrease of 15one percent from the ~~first~~fourth quarter of 2020 and a decrease of 2923 percent from the ~~second~~first quarter of ~~2019.~~2020. Revenue declined due to soft orders and lower backlog in the segment’s rig equipment business, partially offset by growing demand for offshore wind related equipment and the initial progress on the first two rigs to be built at the Company’s new manufacturing facility in Saudi Arabia. Operating loss ~~was $25~~ improved $124 million to $8

million, or ~~-5.3~~1.9 percent of sales, and included ~~$20~~$3 million of other items. Adjusted EBITDA decreased ~~75 percent~~$6 million sequentially to ~~$14~~$13 million, or ~~2.9~~3.0 percent of sales. ~~Declining global rig activity combined with COVID-19-related logistics issues, which were particularly acute in~~Profitability was negatively impacted by the ~~aftermarket business, drove the sequential~~ decline in revenue, a less favorable product mix and ~~profitability.~~

New orders booked during the quarter totaled ~~$74~~$112 million, representing a book-to-bill of 3459 percent when compared to the ~~$219~~$190 million of orders shipped from backlog. At ~~June 30, 2020,~~March 31, 2021, backlog for capital equipment orders for Rig Technologies was ~~$2.79~~$2.59 billion.

Following approximately two and a half years of steady improvements in oil prices and global drilling activity levels, prices declined sharply during the fourth quarter of 2018 due to stronger than expected growth in U.S. production and concerns regarding the global economy. As a result of reduced budgets, and despite a modest recovery in commodity prices, drilling activity levels in the U.S. declined throughout 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 coronavirus (COVID-19) outbreak rapidly spread across the world, driving sharp demand destruction for crude oil as ~~whole economies ordered~~countries took measures that curtailed ~~activity. In response~~economic activity to ~~declining demand for crude oil, members~~slow the spread of the Organization of the Petroleum Exporting Countries and other producing countries (OPEC+), including Russia, increased production into the already oversupplied market, decimating oil prices and rapidly filling worldwide storage facilities. In April 2020, OPEC+ began to reduce production, which had a muted positive effect on oil prices due to market concerns that the cuts were significantly less than the demand destructions caused by COVID-19. As a result, companiesoutbreak. Companies across the industry responded with severe capital spending budget cuts, cost ~~cuts,~~reductions, personnel layoffs, facility closures and bankruptcy filings. ~~The~~ COVID-19 ~~virus~~ continued to spread ~~during the second quarter of~~throughout 2020, extending depressed demand, uncertainty and additional spending ~~constraint by~~reductions across the ~~entire~~ oil and gas industry, ~~even as oil prices recovered~~causing the U.S. rig count to fall to its lowest level since 1940 in August 2020.

During the fourth quarter of 2020 and ~~appeared~~the first quarter of 2021, rising activity levels in the U.S. drove higher revenues for NOV’s short-cycle businesses in North America. These modest improvements were more than offset by a continued decline in international drilling activity and limited demand for capital equipment, a condition management anticipates will continue through at least the first half of 2021. Accelerating distribution of COVID-19 vaccines are expected to ~~stabilize near $40 bbl.~~

~~In response to~~support the ~~economic destruction caused by~~reopening of economies around the ~~COVID-19 pandemic, many governments implemented~~world and large government economic stimulus programs ~~to aid individuals~~should hasten and ~~businesses. The size, method and effectiveness of these programs varies greatly and, although generally helpful to the target economies, they have not fully restored prior levels of~~amplify that recovery. Improving economic activity should drive higher demand for oil and ~~gas.~~gas, potentially setting the stage for a synchronized global recovery in drilling activity.

Management ~~expects industry activity levels~~is optimistic that recovering market fundamentals and ~~spending by customers~~the actions NOV has taken to ~~remain depressed throughout~~position its business for the ~~remainder of 2020 as demand destruction from COVID-19 continues.~~future will drive growth and improved profitability for the company. NOV remains committed to streamlining operations and improving organizational efficiencies while focusing on investing in innovative products and services, including environmentally friendly technologies, that are responsive to the longer-term needs of ~~our~~NOV’s 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 ~~second~~first quarter of 2021 and 2020, and ~~2019, and~~ the ~~first~~fourth quarter of 2020 include the following:

							%			%									%			%
							2Q20			2Q20									1Q21			1Q21
	2Q20*		2Q19*		1Q20*		2Q19			1Q20			1Q21*		1Q20*		4Q20*		1Q20			4Q20
Active Drilling Rigs:
U.S.		396		989		784		(60.0	%)		(49.5	%)		393		784		311		(49.9	%)		26.4	%
Canada		25		83		196		(69.9	%)		(87.2	%)		144		196		89		(26.5	%)		61.8	%
International		834		1,138		1,073		(26.7	%)		(22.3	%)		697		1,073		664		(35.0	%)		5.0	%
Worldwide		1,255		2,210		2,053		(43.2	%)		(38.9	%)		1,234		2,053		1,064		(39.9	%)		16.0	%

West Texas Intermediate Crude Prices (per barrel)	$	27.81	$	59.78	$	45.99		(53.5	%)		(39.5	%)	$	57.80	$	45.99	$	42.46		25.7	%		36.1	%

Natural Gas Prices ($/mmbtu)	$	1.67	$	2.51	$	1.88		(33.5	%)		(11.2	%)	$	3.56	$	1.88	$	2.50		89.4	%		42.4	%

The following table details the U.S., Canadian, and international rig activity and West Texas Intermediate Crude Oil prices for the past nine quarters ended ~~June 30, 2020,~~March 31, 2021, 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 39~~increased 16 percent, ~~(from 2,053 to 1,255),~~ and the U.S. ~~decreased 49~~increased 26 percent (from ~~784~~311 to ~~396)~~393), in the ~~second~~first quarter of ~~2020~~2021 compared to the ~~first~~fourth quarter of 2020. The average per barrel price of West Texas Intermediate Crude Oil ~~decreased 40~~increased 36 percent (from ~~$45.99~~$42.46 per barrel to ~~$27.81~~$57.80 per barrel) and natural gas prices ~~decreased 11~~increased 42 percent (from ~~$1.88~~$2.50 per mmbtu to ~~$1.67~~$3.56 per mmbtu) in the ~~second~~first quarter of ~~2020~~2021 compared to the fourth quarter of 2020.

U.S. rig activity at April 16, 2021 was 439 rigs, increasing 12 percent compared to the first quarter of ~~2020.~~

~~At July 17, 2020, there were 285 rigs actively drilling in North America, which decreased 32 percent from the second quarter~~2021 average of ~~421~~393 rigs. The price for West Texas Intermediate Crude Oil was ~~$40.59~~at $63.13 per barrel at ~~July 17, 2020, an increase of 46~~April 16, 2021, increasing nine percent from the ~~second~~first quarter of ~~2020~~2021 average. The price for natural gas was ~~$1.72~~at $2.68 per mmbtu at ~~July 17, 2020, an increase of three~~April 16, 2021, decreasing 25 percent from the ~~second~~first quarter of ~~2020~~2021 average.

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
	2020			2019			2020			2019			2021			2020
Revenue:
Wellbore Technologies	$	442		$	850		$	1,133		$	1,657		$	413		$	691
Completion & Production Solutions		611			663			1,286			1,244			439			675
Rig Technologies		476			671			1,033			1,274			431			557
Eliminations		(33	)		(52	)		(73	)		(103	)		(34	)		(40	)
Total revenue	$	1,496		$	2,132		$	3,379		$	4,072		$	1,249		$	1,883

Operating profit (loss):
Wellbore Technologies	$	(67	)		(3,295	)	$	(730	)	$	(3,276	)	$	(14	)		(663	)
Completion & Production Solutions		42			(1,932	)		(971	)		(1,967	)		(17	)		(1,013	)
Rig Technologies		(25	)		(422	)		(227	)		(391	)		(8	)		(202	)
Eliminations and corporate costs		(50	)		(79	)		(122	)		(142	)		(49	)		(72	)
Total operating profit (loss)	$	(100	)	$	(5,728	)	$	(2,050	)	$	(5,776	)	$	(88	)	$	(1,950	)

Operating profit (loss)%:
Wellbore Technologies														(3.4	%)		(95.9	%)
Completion & Production Solutions														(3.9	%)		(150.1	%)
Rig Technologies														(1.9	%)		(36.3	%)
Total operating profit (loss)%														(7.0	%)		(103.6	%)

Three ~~and six~~ months ended ~~June 30, 2020~~March 31, 2021 and ~~2019.~~2020. Revenue from Wellbore Technologies was ~~$442~~$413 million for the three months ended ~~June 30, 2020,~~March 31, 2021, compared to ~~$850~~$691 million for the three months ended ~~June 30, 2019,~~March 31, 2020, a decrease of ~~$408~~$278 million or 48 percent. For the six months ended June 30, 2020, revenue from Wellbore Technologies was $1,133 million compared to $1,657 million for the six months ending June 30, 2019, a decrease of $524 million or 3240 percent.

Operating loss from Wellbore Technologies was ~~$67~~$14 million for the three months ended ~~June 30, 2020~~March 31, 2021 compared to ~~$3,295~~an operating loss of $663 million for the three months ended ~~June 30, 2019,~~March 31, 2020, an increase of $3,228 million. For the six months ended June 30, 2020, operating loss from Wellbore Technologies was $730 million compared to $3,276 million for the six months ending June 30, 2019, an increase of $2,546$649 million primarily due to the impairment of certain ~~assets.~~assets in 2020.

Three ~~and six~~ months ended ~~June 30, 2020~~March 31, 2021 and ~~2019.~~2020. Revenue from Completion & Production Solutions was ~~$611~~$439 million for the three months ended ~~June 30, 2020,~~March 31, 2021, compared to ~~$663~~$675 million for the three months ended ~~June 30, 2019,~~March 31, 2020, a decrease of $52 million dollars or eight percent. For the six months ended June 30, 2020, revenue from Completion & Production Solutions was $1,286 million compared to $1,244 million for the six months ending June 30, 2019, an increase of $42$236 million or ~~three~~35 percent.

Operating profit from Completion & Production Solutions was $42 million for the three months ended June 30, 2020 compared to an operating loss of $1,932 million for the three months ended June 30, 2019, an increase of $1,974 million. For the six months ended June 30, 2020, operating loss from Completion & Production Solutions was ~~$971 million compared to $1,967~~$17 million for the ~~six~~three months ~~ending June 30, 2019,~~ended March 31, 2021 compared to $1,013 million for the three months ended March 31, 2020, an increase of $996 million primarily due to the impairment of certain ~~assets.~~assets in 2020.

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 ~~$1.0 billion~~$810 million at ~~June 30, 2020,~~March 31, 2021, a decrease of ~~$215 million, or 18~~32 percent from backlog of ~~$1.22 million~~$1.2 billion at ~~June 30, 2019. Numerous~~March 31, 2020. Although numerous factors ~~may~~ affect the timing of revenue out of ~~backlog. Considering these factors,~~backlog, the Company reasonably expects approximately 67$657 million of revenue out of backlog for the remainder of 2021 and approximately $153 million of revenue out of backlog in 2022 and thereafter. At March 31, 2021, approximately 56 percent of the capital equipment backlog was for offshore products and approximately 77 percent of the capital equipment backlog was destined for international markets.

Three months ended March 31, 2021 and 2020. Revenue from Rig Technologies was $431 million for the three months ended March 31, 2021, compared to $557 million for the three months ended March 31, 2020, a decrease of $126 million or 23 percent.

Operating loss from Rig Technologies was $8 million for the three months ended March 31, 2021 compared to $202 million for the three months ended March 31, 2020, an increase of $194 million primarily due to the impairment of certain assets in 2020.

The Rig Technologies segment monitors its capital equipment backlog to ~~become~~plan its business. New orders are added to backlog when the Company receives a firm written order for major drilling rig components or a signed contract for a construction project. The capital equipment backlog was $2.6 billion at March 31, 2021, a decrease of 12 percent, from backlog of $2.9 billion at March 31, 2020. Although numerous factors affect the timing of revenue ~~during~~out of backlog, the ~~rest~~Company reasonably expects approximately $422 million of ~~2020 and~~revenue out of backlog for the remainder of 2021 and approximately $2.2 billion of revenue out of backlog in 2022 and thereafter. At ~~June 30, 2020,~~March 31, 2021, approximately 6322 percent of the capital equipment backlog was for offshore products and approximately 90 percent of the capital equipment backlog was destined for international markets.

~~Three and six months ended June 30, 2020~~ ~~and 2019~~. Revenue from Rig Technologies was $476 million for the three months ended June 30, 2020, compared to $671 million for the three months ended June 30, 2019, a decrease of $195 million or 29 percent. For the six months ended June 30, 2020, revenue from Rig Technologies was $1,033 million compared to $1,274 million for the six months ending June 30, 2019, a decrease of $241 million or 19 percent.

Operating loss from Rig Technologies was $25 million for the three months ended June 30, 2020 compared to $422 million for the three months ended June 30, 2019, an increase of $397 million. For the six months ended June 30, 2020, operating loss from Rig Technologies was $227 million compared to $391 million for the six months ending June 30, 2019, an increase of $164 million, primarily due to asset impairments.

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 $2.79 billion at June 30, 2020, a decrease of $381 million, or 12 percent, from backlog of $3.17 billion at June 30, 2019. Numerous factors may affect the timing of revenue out of backlog. Considering these factors, the Company reasonably expects approximately 12 percent of backlog to become revenue during the rest of 2020 and the remainder thereafter. At June 30, 2020, approximately 26 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 ~~$50 million and $122~~$49 million for the three ~~and six~~ months ended ~~June 30, 2020, respectively,~~March 31, 2021, compared to ~~$79 million and $142~~$72 million for the three ~~and six~~ months ended ~~June 30, 2019.~~March 31, 2020. The decrease 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 ~~$8 million and $11~~$10 million for the three ~~and six~~ months ended ~~June 30, 2020, respectively,~~March 31, 2021 compared to expenses of ~~$8 million and $26~~$3 million for the three ~~and six~~ months ended ~~June 30, 2019, respectively.~~March 31, 2020. The change in expense was primarily due to the fluctuations in foreign currencies.

The effective tax rate for the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 2020 was ~~35.1%~~5.0% and ~~8.7%~~7.1%, ~~respectively, compared to 6.5%~~respectively. The Company has established valuation allowances on deferred tax assets for losses and ~~6.6% for the same periods~~tax credits generated in ~~2019.~~2021 and 2020. The ~~company’s 2019 and 2020~~ effective tax ~~rates are~~rate for 2021 was negatively impacted by ~~incremental valuation allowances primarily on net operating loss~~current year losses in certain jurisdictions with no tax benefit, partially offset by favorable adjustments related to utilization of losses and tax ~~attributes available~~credits for prior year tax returns. The effective tax rate for 2020 was negatively impacted by losses in ~~those years and~~certain jurisdictions with no tax benefit as well as the impairment of nondeductible ~~goodwill. Furthermore, the Company revised its estimated~~goodwill, partially offset by an income tax benefit ~~related to~~from 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 Company recorded an income tax benefit of $123 million in the three months ended March 31, 2020 in anticipation of filing a refund claim to carryback its 2019 United States net operating loss to its 2014 tax year. The Company refined its estimated income tax benefit during the three months ended June 30, 2020, resulting in a reduction to the income tax benefit from $123 million to $100 million. The Company received a cash refund of $94 million in June 2020 and anticipates receiving an additional refund upon the filing of the final 2019 United States income tax return and final net operating loss carryback claim to 2014. The Company will finalize these computations during the three months ended September 30, 2020. In addition, the effective tax rate in the three months and six months ended June 30, 2020 was favorably impacted by an income tax benefit of $90 million related to the Company’s decision to amend its 2016 United States income tax return in order to deduct foreign taxes paid rather than to claim foreign tax credits which would carryforward and be expected to expire unused in 2026. The resulting net operating loss in 2016 will be carried back to the Company’s 2014 tax return and will result in a net income tax refund of $90 million. The income tax receivable of $90 million is recorded in Other Assets on the balance sheet as the Company believes the refund will not be received within twelve months.

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~~inventory charges, severance accruals, and ~~finite-lived intangible assets, long-lived tangible assets, restructure costs for facility closures, inventory write downs, severance payments and adjustments of certain reserves.~~other restructuring costs.

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

	Three Months Ended									Six Months Ended						Three Months Ended
	June 30,						March 31,			June 30,						March 31,						December 31,
	2020			2019			2020			2020			2019			2021			2020			2020
Operating profit (loss):
Operating loss:
Wellbore Technologies	$	(67	)	$	(3,295	)	$	(663	)	$	(730	)	$	(3,276	)	$	(14	)	$	(663	)	$	(78	)
Completion & Production Solutions		42			(1,932	)		(1,013	)		(971	)		(1,967	)		(17	)		(1,013	)		(31	)
Rig Technologies		(25	)		(422	)		(202	)		(227	)		(391	)		(8	)		(202	)		(132	)
Eliminations and corporate costs		(50	)		(79	)		(72	)		(122	)		(142	)		(49	)		(72	)		(60	)
Total operating loss	$	(100	)	$	(5,728	)	$	(1,950	)	$	(2,050	)	$	(5,776	)	$	(88	)	$	(1,950	)	$	(301	)

Other items:
Wellbore Technologies	$	62		$	3,345		$	715		$	777		$	3,343		$	6		$	715		$	46
Completion & Production Solutions		12			1,939			1,054			1,066			1,950			(2	)		1,054			43
Rig Technologies		20			474			238			258			476			3			238			132
Corporate		8			11			16			24			11			2			16			15
Total other items	$	102		$	5,769		$	2,023		$	2,125		$	5,780		$	9		$	2,023		$	236

Depreciation & amortization:
Wellbore Technologies	$	47		$	84		$	51		$	98		$	184		$	42		$	51		$	44
Completion & Production Solutions		14			45			30			44			97			15			30			16
Rig Technologies		19			22			20			39			45			18			20			19
Corporate		2			3			4			6			5			4			4			3
Total depreciation & amortization	$	82		$	154		$	105		$	187		$	331		$	79		$	105		$	82

Adjusted EBITDA:
Wellbore Technologies	$	42		$	134		$	103		$	145		$	251		$	34		$	103		$	12
Completion & Production Solutions		68			52			71			139			80			(4	)		71			28
Rig Technologies		14			74			56			70			130			13			56			19
Eliminations and corporate costs		(40	)		(65	)		(52	)		(92	)		(126	)		(43	)		(52	)		(42	)
Total Adjusted EBITDA	$	84		$	195		$	178		$	262		$	335		$	—		$	178		$	17

Reconciliation of Adjusted EBITDA:
GAAP net loss attributable to Company	$	(93	)	$	(5,389	)	$	(2,047	)	$	(2,140	)	$	(5,466	)	$	(115	)	$	(2,047	)	$	(347	)
Noncontrolling interests		6			5			(2	)		4			7			1			(2	)		(1	)
Benefit for income taxes		(47	)		(373	)		(156	)		(203	)		(383	)
Provision (benefit) for income taxes																	(6	)		(156	)		22
Interest expense		22			25			22			44			50			20			22			19
Interest income		(2	)		(6	)		(3	)		(5	)		(12	)		(2	)		(3	)		(2	)
Equity loss in unconsolidated affiliate		6			2			233			239			2			4			233			10
Other (income) expense, net		8			8			3			11			26			10			3			(2	)
Depreciation and amortization		82			154			105			187			331			79			105			82
Other items		102			5,769			2,023			2,125			5,780			9			2,023			236
Total Adjusted EBITDA	$	84		$	195		$	178		$	262		$	335		$	—		$	178		$	17

At ~~June 30, 2020,~~March 31, 2021, the Company had cash and cash equivalents of ~~$1,447~~$1,607 million and total debt of ~~$2,029~~$1,851 million. At December 31, ~~2019,~~2020, cash and cash equivalents were ~~$1,171~~$1,692 million and total debt was ~~$1,989~~$1,834 million. As of ~~June 30, 2020,~~March 31, 2021, approximately ~~$849~~$850 million of the ~~$1,447~~$1,607 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.~~taxation if transferred among countries or repatriated to the U.S. If opportunities to invest in the U.S. are greater than available cash balances that are not subject to income tax, rather than repatriating cash, the Company may choose to borrow against its revolving credit facility.

The Company has a $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 ~~June 30, 2020,~~March 31, 2021, the Company was in compliance with a debt-to-capitalization ratio of ~~29.4%~~29.0% and had no outstanding letters of credit issued under the facility, resulting in $2.0 billion of available 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 ~~June 30,~~March 31, 2020, the Company was in compliance.

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.

~~Our~~The Company’s outstanding debt at ~~June 30, 2020~~March 31, 2021 was ~~$2,029~~$1,851 million and consisted ~~primarily~~ of ~~$399 million in 2.60% Senior Notes,~~ $1,089 million in 3.95% Senior Notes, $493 million in 3.60% Senior Notes, $182 million in 2.60% Senior Notes, and other debt of ~~$48~~$87 million. The Company was in compliance with all covenants at ~~June 30, 2020. Lease liabilities totaled $752~~March 31, 2021.

On April 9, 2021, the Company repaid the entire outstanding balance ($182 million) of its 2.60% unsecured Senior Notes due December 2022 using available cash balances. Upon redemption, the Company paid $191 million, ~~at June 30, 2020.~~which included a redemption premium of $6.8 million as well as accrued and unpaid interest of $1.7 million. As a result of the redemption, the Company recorded a loss on extinguishment of debt of $7.1 million, which included the make whole premium of $6.8 million and non-cash charges of $0.3 million attributable to the write-off of unamortized discount and debt issuance costs. Following the repayment, the Company’s earliest bond maturity is in 2029.

WeThe Company had ~~$524~~$444 million of outstanding letters of credit at ~~June 30, 2020,~~March 31, 2021, 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):

	Six Months Ended						Three Months Ended
	June 30,						March 31,
	2020			2019			2021			2020
Net cash provided by (used in) operating activities	$	417		$	(111	)
Net cash provided by (used by) operating activities							$	(27	)	$	39
Net cash used in investing activities		(111	)		(156	)		(51	)		(53	)
Net cash used in financing activities		(27	)		(39	)		(3	)		(43	)

Significant sources and uses of cash during the first ~~six~~three months of ~~2020~~2021

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 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. 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 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 a decrease of $3$4 million and $0an increase of $1 million for the first ~~six~~three months of ~~2020~~2021 and ~~2019,~~2020, 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 ~~intend to~~may pursue additional acquisition candidates, but the timing, size or success of any acquisition effort and the related potential capital commitments cannot be predicted. We continue to expect to fund future cash acquisitions primarily with cash flow from operations and borrowings, including the unborrowed portion of the revolving credit facility or new debt issuances, but may also issue additional equity either directly or in connection with acquisitions. There can be no assurance that additional financing for acquisitions will be available at terms acceptable to us.

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,~~2020, 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 and liabilities of these operations are exposed to changes in foreign currency exchange rates, although such fluctuations ~~have a muted effect on net~~generally do not affect income since ~~the~~their functional currency ~~for the majority of them~~ 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 a foreign exchange loss in our income statement ~~of approximately $3 million in~~for the first ~~six~~three months of ~~2020,~~2021 of $10 million, compared to ~~approximately $12 million~~nil 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. In order to mitigate that risk, we may utilize foreign currency forward contracts to better match the currency of our revenues and associated costs. We do not use foreign currency forward contracts for trading or speculative purposes.

The Company had other financial market risk sensitive instruments (cash balances, overdraft facilities, accounts receivable and accounts payable) denominated in foreign currencies ~~for~~with transactional exposures totaling ~~$357~~$362 million and translation exposures totaling ~~$122~~$381 million as of ~~June 30, 2020 excluding trade receivables and payables, which approximate fair value. These market-risk sensitive instruments consisted of cash balances and overdraft facilities.~~March 31, 2021. 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~~$29 million and the translational exposures ~~financial market risk sensitive instruments~~ could affect ~~the future fair value~~Other Comprehensive Income by ~~$12~~$38 million.

The counterparties to forward contracts are major financial institutions. ~~The~~We monitor the credit ratings and our concentration of credit risk ofwith 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, which are net-settled instruments, our exposure is limited to the foreign currency rate differential.

At ~~June 30, 2020, long term~~March 31, 2021, borrowings consisted of ~~$399 million in 2.60% Senior Notes,~~ $1,089 million in 3.95% Senior Notes, ~~and~~ $493 million in 3.60% Senior Notes, and $182 million in 2.60% Senior Notes. At ~~June 30, 2020,~~March 31, 2021, there were no outstanding letters of credit issued under the credit facility, resulting in $2.0 billion of funds available ~~funds.~~under this credit facility. 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~~2020 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. Physical markets became distressed as spot prices were negatively impacted by a lack of available storage capacity. 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 and briefly negative in April, before partially recovering to near $40 in June. While OPEC+ agreed in April to cut production (with subsequent plans announced to reduce the cuts over time), commodity prices remain low.

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

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

3.2		Amended and Restated By-laws of ~~National Oilwell Varco,~~NOV Inc. (Exhibit ~~3.1) (2)~~3.2) (1)

4.1		Description of Securities ~~(12)~~ (13)

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)~~(3)

10.3		National Oilwell Varco, Inc. 2018 Long-Term Incentive Plan, as amended and restated. ~~(5)~~(4)*

10.4		Form of Employee Stock Option Agreement. (Exhibit 10.1) ~~(6)~~(5)

10.5		Form of Non-Employee Director Stock Option Agreement. (Exhibit 10.2) ~~(6)~~(5)

10.6		Form of Performance-Based Restricted Stock. (18 Month) Agreement (Exhibit 10.1) ~~(7)~~(6)

10.7		Form of Performance-Based Restricted Stock. (36 Month) Agreement (Exhibit 10.2) ~~(7)~~(6)

10.8		Form of Performance Award Agreement (Exhibit 10.1) ~~(8)~~(7)

10.9		Form of Executive Employment Agreement. (Exhibit 10.1) ~~(9)~~(8)

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)

10.18		Form of Performance Award Agreement (2021) (14)

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

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

32.1		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (14)

32.2		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (14)

95		Mine Safety Information pursuant to section 1503 of the Dodd-Frank Act. (14)

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)

~~(10)~~
(9)		Filed as an Exhibit to our Current Report on Form 8-K filed on November 21, 2014.

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


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

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

(14)		Filed herewith.

Date: ~~July~~April 28, ~~2020~~2021	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	☐

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


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 under the plans or programs*
January 1 through January 31, 2021		—		—		—		—
February 1 through February 28, 2021		867	$	15.22		—		—
March 1 through March 31, 2021		—		—		—		—
Total ⁽¹⁾		867	$	15.22		—

(1)
~~Period~~	~~Total number~~ ofThe 867 thousand shares purchased*		~~Average~~ ~~price paid~~ ~~per share~~		~~Total number of~~ listed as “purchased” during 2021 were withheld from employee’s vesting restricted stock grants, as required for income taxes, and retired. These shares ~~purchased~~ aswere not part of a publicly announced ~~plans~~ ~~or programs~~		~~Approximate dollar~~ ~~value of shares that~~ ~~may yet be purchased~~ ~~under the plans or~~ programs*
~~April 1 through April 30, 2020~~		—		—		—		—
~~May 1 through May 31, 2020~~		—		—		—		—
~~June 1 through June 30, 2020~~		—		—		—		—
~~Total~~		—	$	-		—			program to purchase common stock.

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

~~(4)~~
(3)		Filed as an Exhibit to our Current Report on Form 8-K filed on November 4, 2019.

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

~~(6)~~
(5)		Filed as an Exhibit to our Current Report on Form 8-K filed on February 23, 2006.

~~(7)~~
(6)		Filed as an Exhibit to our Current Report on Form 8-K filed on March 27, 2007.

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

~~(9)~~
(8)		Filed as an Exhibit to our Current Report on Form 8-K filed on ~~November 21, 2017.~~December 4, 2020.


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