# NOV Inc. (NOV) Informational only - not investment advice. CIK: 0001021860 SIC: 3533 Oil & Gas Field Machinery & Equipment SIC breadcrumb: [Manufacturing](/division/D/) > [Industrial And Commercial Machinery And Computer Equipment](/major-group/35/) > [SIC 3533 Oil & Gas Field Machinery & Equipment](/industry/3533/) Latest 10-K filed: 2026-02-12 SEC page: https://www.sec.gov/edgar/browse/?CIK=1021860 Filing source: https://www.sec.gov/Archives/edgar/data/1021860/000119312526048350/nov-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 8744000000 | USD | 2025 | 2026-02-12 | | Net income | 145000000 | USD | 2025 | 2026-02-12 | | Assets | 11291000000 | USD | 2025 | 2026-02-12 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001021860.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | 7,251,000,000 | 7,304,000,000 | 8,453,000,000 | 8,479,000,000 | 6,090,000,000 | 5,524,000,000 | 7,237,000,000 | 8,583,000,000 | 8,870,000,000 | 8,744,000,000 | | Net income | -2,412,000,000 | -237,000,000 | -31,000,000 | -6,095,000,000 | -2,542,000,000 | -250,000,000 | 155,000,000 | 993,000,000 | 635,000,000 | 145,000,000 | | Operating income | -2,411,000,000 | -277,000,000 | 211,000,000 | -6,279,000,000 | -2,425,000,000 | -134,000,000 | 264,000,000 | 651,000,000 | 876,000,000 | 494,000,000 | | Gross profit | -101,000,000 | 892,000,000 | 1,444,000,000 | 845,000,000 | 434,000,000 | 774,000,000 | 1,334,000,000 | 1,833,000,000 | 2,010,000,000 | 1,767,000,000 | | Diluted EPS | -6.41 | -0.63 | -0.08 | -15.96 | -6.62 | -0.65 | 0.39 | 2.50 | 1.60 | 0.39 | | Assets | 21,140,000,000 | 20,206,000,000 | 19,796,000,000 | 13,149,000,000 | 9,929,000,000 | 9,550,000,000 | 10,135,000,000 | 11,294,000,000 | 11,361,000,000 | 11,291,000,000 | | Liabilities | 7,137,000,000 | 6,046,000,000 | 5,907,000,000 | 5,303,000,000 | 4,650,000,000 | 4,486,000,000 | 5,001,000,000 | 5,052,000,000 | 4,933,000,000 | 4,969,000,000 | | Stockholders' equity | 13,940,000,000 | 14,094,000,000 | 13,819,000,000 | 7,778,000,000 | 5,210,000,000 | 4,997,000,000 | 5,096,000,000 | 6,168,000,000 | 6,376,000,000 | 6,268,000,000 | | Cash and cash equivalents | 1,408,000,000 | 1,437,000,000 | 1,427,000,000 | 1,171,000,000 | 1,692,000,000 | 1,591,000,000 | 1,069,000,000 | 816,000,000 | 1,230,000,000 | 1,552,000,000 | | Net margin | -33.26% | -3.24% | -0.37% | -71.88% | -41.74% | -4.53% | 2.14% | 11.57% | 7.16% | 1.66% | | Operating margin | -33.25% | -3.79% | 2.50% | -74.05% | -39.82% | -2.43% | 3.65% | 7.58% | 9.88% | 5.65% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-28. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001021860.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | 0.18 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | 0.08 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | 0.32 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 2,093,000,000 | 155,000,000 | 0.39 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 2,185,000,000 | 114,000,000 | 0.29 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 2,343,000,000 | 598,000,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 2,155,000,000 | 119,000,000 | 0.30 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 2,216,000,000 | 226,000,000 | 0.57 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 2,191,000,000 | 130,000,000 | 0.33 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 2,308,000,000 | 160,000,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 2,103,000,000 | 73,000,000 | 0.19 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 2,188,000,000 | 108,000,000 | 0.29 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 2,176,000,000 | 42,000,000 | 0.11 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 2,277,000,000 | -78,000,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 2,052,000,000 | 19,000,000 | 0.05 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1021860/000119312526185866/nov-20260331.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-04-28 Report date: 2026-03-31 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Introduction NOV is a leading independent equipment and technology provider to the global energy industry. NOV and its predecessor companies have spent over 160 years helping transform oil and gas development and improving its cost-effectiveness, efficiency, safety, and environmental impact. NOV’s extensive proprietary technology portfolio supports the industry’s drilling, completion, and production needs. With unmatched cross-segment capabilities, scope, and scale, NOV continues to develop and introduce technologies that further enhance the economics and efficiencies of energy production, with a focus on digital, automation, and robotics solutions. Lower-cost, reliable sources of energy significantly contribute to raising the global standard of living by powering economic development, enabling better infrastructure and facilitating the production of goods and services that improve quality of life. Over the past few decades, the Company has pioneered and refined key technologies to improve the economic viability of frontier resources, including unconventional and deepwater oil and gas. More recently, by applying its deep expertise and technology, NOV has developed solutions to improve the economics of alternative energy sources. NOV serves major-diversified, national, and independent service companies, contractors, and energy producers in 57 countries. NOV operates under two segments, Energy Products and Services and Energy Equipment. Results of operations are presented in accordance with GAAP. Certain reclassifications have been made to prior period financial information in order to conform with current period presentation. The Company discloses Adjusted Operating Profit (defined as Operating Profit excluding gains and losses on sales of fixed assets, and, when applicable, pre-tax Other Items (as defined below under “Executive Summary”)) and Adjusted EBITDA (defined as Operating Profit excluding depreciation, amortization, gains and losses on sales of fixed assets, and, when applicable, pre-tax Other Items) in its periodic earnings press releases and other public disclosures to provide investors additional information about the results of ongoing operations. See “Non-GAAP Financial Measures and Reconciliations in Results of Operations” for an explanation of our use of non-GAAP financial measures and reconciliations to their corresponding measures calculated in accordance with GAAP. Energy Products and Services The Company’s Energy Products and Services segment primarily designs, manufactures, rents, and sells products and equipment used in drilling, intervention, completion, and production activities. Products include drill bits, downhole tools, premium drill pipe, drilling fluids, integral and weld-on connectors for conductor strings and surface casing, completion tools, and artificial lift systems. The segment also designs, manufactures, and delivers high-end composite pipe, tanks, and structures engineered to solve both corrosion and weight challenges in a wide variety of applications, including oil and gas, chemical, industrial, wastewater, fuel handling, marine and offshore, and rare earth mineral extraction. In addition to product and equipment sales, the segment provides services, software, and digital solutions to improve drilling and completion operational performance. Services include tubular inspection and coating, solids control, waste management. Software and digital solutions offered include drilling and completion optimization and remote monitoring (via downhole and surface instrumentation), wired drill pipe services, software controls and applications, and data management and analytics services at the edge and in the cloud. Energy Products and Services serves oil and gas companies, drilling contractors, oilfield service companies, oilfield equipment rental companies and developers of geothermal energy. Demand for the segment’s products and services primarily depends on the level of oilfield drilling activity by oil and gas companies, drilling contractors, and oilfield service companies. Demand for the segment’s composite solutions serving applications outside of oil and gas are driven by industrial activity, infrastructure spend, and population growth. Energy Equipment The Company’s Energy Equipment segment manufactures and supports the capital equipment and integrated systems needed for oil and gas exploration and production, both onshore and offshore, as well as for other marine-based, industrial and renewable energy markets. The segment designs, manufactures, and integrates technologies for drilling and producing oil and gas wells. This includes equipment and technologies needed for drilling, including land rigs, offshore drilling equipment packages, drilling rig components, managed pressure drilling, and software control systems that mechanize and automate the drilling process and rig functionality; hydraulic fracture stimulation; well intervention, including coiled tubing units, coiled tubing, and wireline units and tools; cementing products; onshore production, including fluid and gas processing, flow control and pumping solutions; offshore production, including integrated production systems and subsea production technologies; and aftermarket support of these technologies, providing spare parts, service, and repair. 18 Energy Equipment primarily serves contract drillers, oilfield service companies, and oil and gas companies. Demand for the segment’s products primarily depends on capital spending plans by drilling contractors, service companies, and oil and gas companies, and secondarily on the overall level of oilfield drilling, completions, and workover activity which drives demand for equipment, spare parts, service, and repair for the segment’s large installed base of equipment. The segment also serves marine and offshore markets, where it designs and builds equipment for wind turbine installation and cable lay vessels, and offers heavy lift cranes and jacking systems; industrial markets, where the segment provides pumps and mixers for a wide breadth of industrial end markets; and other renewable energy markets, where it provides solutions that support wind power development, and carbon sequestration by applying its gas processing expertise. Critical Accounting Policies and Estimates In our annual report on Form 10-K for the year ended December 31, 2025, we identified our most critical accounting policies. In preparing the financial statements, we make assumptions, estimates and judgments that affect the amounts reported. We periodically evaluate our estimates and judgments that are most critical in nature which are related to revenue recognition under long-term construction contracts, impairment of goodwill and other indefinite-lived intangible assets, inventory reserves, and income taxes. Our estimates are based on historical experience and on our future expectations that we believe are reasonable. The combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results are likely to differ from our current estimates and those differences may be material. EXECUTIVE SUMMARY For the first quarter ended March 31, 2026, the Company generated revenues of $2.05 billion, a decrease of two percent compared to the first quarter of 2025. Net income decreased $54 million, or $0.14 per diluted share, year-over-year to $19 million. The Company recorded $37 million within pre-tax Other Items during the first quarter of 2026 primarily related to a non-recurring stock-based compensation charge, severance and facility closures, and costs associated with streamlining our business operations. Operating profit was $47 million and adjusted operating profit was $85 million, compared to operating profit of $152 million and adjusted operating profit of $163 million in the first quarter of 2025. Adjusted EBITDA decreased $75 million year-over-year to $177 million, or 8.6 percent of sales. Segment Performance Energy Products and Services Energy Products and Services generated revenues of $897 million in the first quarter of 2026, a decrease of 10 percent from the first quarter of 2025. Operating profit decreased $57 million from the prior year to $26 million, or 2.9 percent of sales, and included $8 million in pre-tax Other Items. Adjusted EBITDA decreased $49 million from the prior year to $96 million, or 10.7 percent of sales. Disruptions in the Middle East and lower global drilling activity more than offset strong performance from the segment’s drill bit and digital services business. Energy Equipment Energy Equipment generated revenues of $1.19 billion in the first quarter of 2026, an increase of four percent when compared to the first quarter of 2025. Operating profit decreased $41 million from the prior year to $93 million, or 7.8 percent of sales, and included $9 million in pre-tax Other Items. Adjusted EBITDA decreased $34 million from the prior year to $131 million, or 11.0 percent of sales. Strong execution on the segment’s backlog more than offset lower sales of aftermarket parts and services, which were impacted by war related disruptions in the Middle East. A less favorable sales mix and higher costs from the Middle East disruptions contributed to lower profitability. New orders booked during the quarter totaled $520 million, an increase of $83 million when compared to the $437 million of new orders booked during the first quarter of 2025. Orders shipped from backlog were $650 million, representing a book-to-bill of 80 percent and an increase of $101 million when compared to the $549 million orders shipped and an 80 percent book-to-bill during the first quarter 2025. As of March 31, 2026, backlog for capital equipment orders for Energy Equipment totaled $4.23 billion, a decrease of $184 million from the first quarter of 2025. 19 Oil & Gas Equipment and Services Market and Outlook Macroeconomic and geopolitical uncertainty remains elevated due to the conflict in the Middle East. Widespread damage to energy infrastructure and the closure of the Strait of Hormuz have materially tightened oil and gas fundamentals, causing volatility in global commodity markets and renewing focus on the need for energy security. Management believes reduced production capacity resulting from years of underinvestment in the oil and gas industry along with the growing need to diversify supply sources will spur renewed investment in upstream capacity and regional infrastructure needed to support more resilient supply. In this environment, management expects increased demand for the Company’s equipment and technology. NOV remains focused on the development and commercialization of innovative products and services that lower the marginal cost and environmental footprint of energy production. The Company also remains focused on improving operational efficiency, simplifying processes, and allocating capital to opportunities where it believes it has competitive advantages, technology differentiation, and attractive return potential. Management believes this strategy will further strengthen the Company’s competitive position across market cycles. Operating Environment Overview The Company’s results are dependent on, among other things, the level of worldwide oil and gas drilling, well remediation activity, the prices of crude oil and natural gas, capital spending by exploration and production companies and drilling contractors, worldwide oil and gas inventory levels and, to a lesser degree, the level of investment in wind and geothermal energy projects. Key industry indicators for the first quarter of 2026 and 2025, and the fourth quarter of 2025 include the following: % increase (decrease) 1Q26 v 1Q26 v 1Q26* 1Q25* 4Q25* 1Q25 4Q25 Active Dri [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General Overview The Company is a leading independent provider of equipment and technology to the upstream oil and gas industry. With operations in approximately 503 locations across six continents, NOV designs, manufactures and services a comprehensive line of drilling, well servicing and offshore production and construction 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. NOV also manufactures coiled tubing, high-pressure fiberglass tubing, and sells and rents advanced in-line inspection equipment to makers of oil country tubular goods. More recently, by applying its deep knowledge in technology, the Company has helped advance solutions supporting alternative forms of energy. The Company has a long tradition of pioneering innovations which improve the cost-effectiveness, efficiency, safety, and environmental impact of oil and gas operations. NOV’s revenue and operating results are principally directly related to the level of worldwide oil and gas drilling and production activities and the profitability and cash flow of oil and gas companies and drilling contractors, which in turn are affected by current and anticipated prices of oil and gas. Oil and gas prices have been and are likely to continue to be volatile. See Item 1A. “Risk Factors”. 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 the prior year financial statements to conform with the 2025 presentation. The Company discloses Adjusted Operating Profit (defined as Operating Profit excluding gains and losses on sales of fixed assets, and, when applicable, pre-tax Other Items (as defined below under “Executive Summary”)) and Adjusted EBITDA (defined as Operating Profit excluding depreciation, amortization, gains and losses on sales of fixed assets, and, when applicable, pre-tax 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. Operating Environment Overview NOV’s results are dependent on, among other things, the level of worldwide oil and gas drilling, well remediation activity, the price of crude oil and natural gas, capital spending by exploration and production companies and drilling contractors, and worldwide oil and gas inventory levels. Key industry indicators for the past three years include the following: % increase (decrease) 2025 v 2025 v 2025* 2024* 2023* 2024 2023 Active Drilling Rigs: U.S. 562 600 689 (6.3 )% (18.4 )% Canada 177 188 177 (5.9 )% — % International 1,082 1,162 948 (6.9 )% 14.1 % Worldwide 1,821 1,950 1,814 (6.6 )% 0.4 % West Texas Intermediate Crude Prices (per    barrel) $ 65.46 $ 76.55 $ 77.64 (14.5 )% (15.7 )% Natural Gas Prices ($/mmbtu) $ 3.53 $ 2.19 $ 2.54 61.2 % 39.0 % * Averages for the years indicated. See sources below. 29 The following table details the U.S., Canadian, and international rig activity and West Texas Intermediate Oil prices for the past nine quarters ended December 31, 2025 on a quarterly basis. During the third quarter of 2025, Baker Hughes updated its methodology for calculating rig counts in the Kingdom of Saudi Arabia effective for periods beginning January 2024. Prior-period international rig count data has been restated to reflect this change. Source: Rig count: Baker Hughes, Inc. (www.bakerhughes.com); West Texas Intermediate Crude Price, Natural Gas Price: US Department of Energy, Energy Information Administration (www.eia.doe.gov). The average price per barrel of West Texas Intermediate Crude was $65.46 in 2025, a decrease of 14.5% over the average price for 2024 of $76.55 per barrel. The average natural gas price in 2025 was $3.53 per mmbtu, an increase of 61.2% compared to the 2024 average of $2.19 per mmbtu. Average rig activity worldwide a decrease of 6.6% for the full-year in 2025 compared to 2024. The average crude oil price for the fourth quarter of 2025 was $59.64 per barrel, and natural gas was $3.75 per mmbtu. As of February 6, 2026, there were 779 rigs actively drilling in North America, comprised of U.S. and Canada, compared to the fourth quarter of 2025 average of 733 rigs, an increase of 6 percent. The price for West Texas Intermediate Crude Oil was $63.55 per barrel at February 6, 2026, an increase of 7 percent from the fourth quarter of 2025 average. The price for natural gas was $3.42 per mmbtu at February 6, 2026, a decrease of 9 percent from the fourth quarter of 2025 average. 30 EXECUTIVE SUMMARY NOV generated revenue of $8.74 billion in 2025, a 1% decline from prior year despite a 7% decrease in global activity levels due to increased demand for offshore capital equipment. For the year ended December 31, 2025, the Company reported net income attributable to the Company of $145 million, a decrease of $490 million from 2024, reflecting lower levels of operating profit, a higher effective tax rate from valuation allowances on deferred tax assets, and a higher mix of foreign earnings. Operating profit was $494 million and adjusted operating profit was $674 million, compared to operating profit of $876 million and adjusted operating profit of $767 million in the prior year. Adjusted EBITDA decreased $81 million to $1.03 billion, or 11.8 percent of sales for the full-year 2025. For the fourth quarter ended December 31, 2025, revenue was $2.28 billion, a decrease of 1 percent compared to the fourth quarter of 2024. Net income decreased $238 million, or $0.62 per diluted share, year-over-year from $160 million, primarily due to a higher effective tax rate from valuation allowances on deferred tax assets, a higher mix of foreign earnings, and an increase in pre-tax Other Items. Operating profit was $92 million and adjusted operating profit was $177 million, compared to operating profit of $207 million and adjusted operating profit of $214 million in the fourth quarter of 2024. Adjusted EBITDA decreased $35 million year-over-year to $267 million, or 11.7 percent of sales. Segment Performance Energy Products and Services Energy Products and Services generated revenues of $989 million in the fourth quarter of 2025, a decrease of 7 percent from the fourth quarter of 2024. Operating profit decreased $39 million from the prior year to $73 million, or 7.4 percent of sales, and included $7 million in pre-tax Other Items. Adjusted EBITDA decreased $33 million from the prior year to $140 million, or 14.2 percent of sales. Lower revenues reflected reduced global activity, partially offset by market share gains. Profitability was further impacted by increased tariffs and inflationary pressures. Energy Equipment Energy Equipment generated revenues of $1.33 billion in the fourth quarter of 2025, an increase of 4 percent from the fourth quarter of 2024. Operating profit decreased $45 million from the prior year to $107 million, or 8.0 percent of sales, and included $46 million in pre-tax Other Items. Adjusted EBITDA decreased $5 million from the prior year to $180 million, or 13.5 percent of sales. Revenues benefited from strong execution on backlog, while lower demand for aftermarket spare parts and services led to a less favorable sales mix. New orders booked during the quarter totaled $532 million, a decrease of $225 million when compared to the $757 million of new orders booked during the fourth quarter of 2024. Orders shipped from backlog were $728 million, representing a book-to-bill of 73 percent, compared to the $628 million orders shipped and a 121 percent book-to-bill for the fourth quarter of 2024. As of December 31, 2025, backlog for capital equipment orders for Energy Equipment totaled $4.34 billion, a decrease of $93 million from $4.43 billion in fourth quarter of 2024. Oil & Gas Equipment and Services Market and Outlook Macroeconomic uncertainties remain elevated due to geopolitical events, changes to trade policies, and the decision by OPEC+ to return larger than anticipated quantities of oil to the market. These factors are raising concerns for both supply and demand related challenges to global commodity markets, resulting in lower oil prices, significant market volatility, and greater uncertainty. Current market conditions present a difficult environment for making capital investment decisions, and the short-term outlook remains uncertain, with clearer downside risk than upside. However, management does not expect near-term volatility to affect broader industry trends including: (1) offshore and international resources becoming the primary source for future incremental supplies of oil to meet global demand; (2) growing focus on natural gas from deepwater and unconventional resources to meet growing global demand for power; and (3) the application of emerging technologies to drive efficiencies and productivity in energy operations. NOV remains focused on the development and commercialization of innovative products and services that lower the marginal cost and environmental footprint of energy production. We believe this strategy along with continued efforts to improve organizational efficiencies will further advance the Company’s competitive position in any market environment. 31 Results of Operations The following table summarizes the Company’s revenue, operating profit, and adjusted operating profit by operating segment (in millions): Year Ended December 31, % Change 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Revenue: Energy Products and Services $ 3,977 $ 4,130 $ 4,077 (3.7 )% 1.3 % Energy Equipment 4,934 4,888 4,669 0.9 % 4.7 % Eliminations (167 ) (148 ) (163 ) 12.8 % (9.2 )% Total revenue $ 8,744 $ 8,870 $ 8,583 (1.4 )% 3.3 % Operating profit: Energy Products and Services $ 277 $ 475 $ 507 (41.7 )% (6.3 )% Energy Equipment 493 608 371 (18.9 )% 63.9 % Eliminations and corporate costs (276 ) (207 ) (227 ) 33.3 % (8.8 )% Total operating profit $ 494 $ 876 $ 651 (43.6 )% 34.6 % Operating profit %: Energy Products and Services 7.0 % 11.5 % 12.4 % Energy Equipment 10.0 % 12.4 % 7.9 % Total operating profit % 5.6 % 9.9 % 7.6 % Adjusted operating profit: Energy Products and Services $ 333 $ 482 $ 560 (30.9 )% (13.9 )% Energy Equipment 568 490 357 15.9 % 37.3 % Eliminations and corporate costs (227 ) (205 ) (215 ) 10.7 % (4.7 )% Total adjusted operating profit $ 674 $ 767 $ 702 (12.1 )% 9.3 % Adjusted operating profit %: Energy Products and Services 8.4 % 11.7 % 13.7 % Energy Equipment 11.5 % 10.0 % 7.6 % Total adjusted operating profit % 7.7 % 8.6 % 8.2 % Years Ended December 31, 2025 and December 31, 2024 Energy Products and Services Revenue from Energy Products and Services for the year ended December 31, 2025 was $3.98 billion, a decrease of $153 million, or 4 percent, compared to the year ended December 31, 2024. International revenue decreased 13 percent consistent with the decrease in international rig count, while North American revenue increased 4 percent on higher service and rental activity due to accelerating market adoption of newer performance technologies. Operating profit from Energy Products and Services was $277 million for the year ended December 31, 2025, a decrease of $198 million compared to the year ended December 31, 2024. Operating profit percentage for 2025 was 7.0 percent compared to an operating profit percentage of 11.5 percent in 2024. The decrease in profitability was due to a less favorable sales mix, tariffs and other inflationary pressures experienced throughout the year, and an increase in pre-tax Other Items compared to prior year. Pre-tax Other Items included in operating profit for Energy Products and Services were $59 million for the year ended December 31, 2025 and $7 million for the year ended December 31, 2024. Pre-tax Other Items in the current year were primarily due to timing related discounts on royalty receivables currently in litigation (see Note 14 to the Consolidated Financial Statements for further discussion), charges incurred for the write-down of certain inventory associated with facility closures and discontinued product lines, and severance charges associated with facility consolidations. Energy Equipment Revenue from Energy Equipment for the year ended December 31, 2025 was $4.93 billion, an increase of $46 million, or 1 percent, compared to the year ended December 31, 2024. The increase in revenue is attributable to higher sales in international offshore markets despite the decrease in rig count. Revenue improved from international sales by 4 percent and offshore sales increased by 9 percent for the year ended December 31, 2025, when compared to the prior year, as a result of strong execution on backlog. The increases in international and offshore sales, were offset by decline in sales of aftermarket parts and services. 32 Operating profit from Energy Equipment was $493 million for the year ended December 31, 2025, a decrease of $115 million compared to the year ended December 31, 2024. Operating profit percentage for 2025 was 10.0 percent compared to operating profit percentage of 12.4 percent in 2024. The decrease in profitability for the year ended December 31, 2025, was primarily due to the $130 million gain from the divestiture of the segment’s Pole Products business in the second quarter of 2024 partially offset by strong execution in the current year on the segment’s capital equipment backlog. Pre-tax Other Items included in operating profit for Energy Equipment were $79 million for the year ended December 31, 2025 and a net credit of $118 million for the year ended December 31, 2024. Pre-tax Other Items in the current year were primarily related to goodwill and long-lived asset impairments, severance, and facility closure costs. The Energy Equipment segment monitors its capital equipment backlog to plan its business. New orders are added to backlog only when the Company receives a firm written order for longer-term major components or a construction project. The capital equipment backlog was $4.34 billion at December 31, 2025, a decrease of $93 million, or 2 percent, from backlog of $4.43 billion at December 31, 2024. Although numerous factors can affect the timing of revenue out of backlog (including, but not limited to, customer change orders and supplier accelerations or delays), the Company reasonably expects approximately 49 percent of backlog to become revenue during 2026 and the remainder thereafter. At December 31, 2025, approximately 58 percent of the capital equipment backlog was for offshore products and approximately 94 percent of the capital equipment backlog was destined for international markets. Eliminations and corporate costs Eliminations and corporate costs were $276 million for the year ended December 31, 2025 compared to $207 million for the year ended December 31, 2024. Sales from one segment to another generally are priced at estimated equivalent commercial selling prices; however, segments originating an external sale are credited with the full profit to the Company. Eliminations include intercompany transactions conducted between the two reporting segments that are eliminated in consolidation. Intrasegment transactions are eliminated within each segment. Eliminations increased 7 percent when compared to 2024 on higher activity, while corporate costs increased 51 percent. Corporate costs included $45 million in pre-tax Other Items for the year ended December 31, 2025, compared to $2 million in the prior year. Pre-tax Other Items in the current year primarily related to non-recurring charges for impairment of long-lived assets and the deconsolidation of our Russian subsidiaries. Interest and financial costs and Interest income Interest and financial costs were $88 million for the year ended December 31, 2025 compared to $91 million for the year ended December 31, 2024. The decrease in interest and financial costs were primarily due to debt borrowings on the revolving credit facility in the prior year. Interest income was $51 million for the year ended December 31, 2025 compared to $38 million for the year ended December 31, 2024. The increase was primarily related to interest earned on larger cash balances and tax refunds in the current year compared to prior year. Equity income (loss) in unconsolidated affiliates Equity income (loss) in unconsolidated affiliates was $(16) million for the year ended December 31, 2025 compared to $36 million for the year ended December 31, 2024. Sales for our largest investment in unconsolidated affiliates declined 30 percent compared to prior year. The decline in sales is primarily due to pricing pressures and lower volume for oil country tubular goods, as well as higher cost for labor and materials, which led to lower profitability year-over-year. Other expense, net Other expense, net was $66 million for the year ended December 31, 2025 compared to $28 million for the year ended December 31, 2024. The increased in expense was primarily due to larger foreign currency fluctuations in the current year affecting multiple currencies. Provision for income taxes The effective tax rate for the year ended December 31, 2025 was 59.7 percent, compared to 23.6 percent for 2024. For 2025, the effective tax rate was negatively impacted by the establishment of additional valuation allowances for foreign tax credit carryforwards and losses in certain jurisdictions, an unfavorable earnings mix including withholding taxes in higher tax rate jurisdictions, and the impairment of nondeductible goodwill, partially offset by the release of reserves for unrecognized tax benefits. For 2024 the effective tax rate was negatively impacted by increased withholding taxes, nondeductible expenses, and losses in certain jurisdictions with no tax benefit, partially offset by a lower rate of U.S. tax on global intangible low-taxed income (GILTI) and the deduction of foreign-derived intangible income (FDII) and the release of valuation allowances in certain jurisdictions as a result of improving forecasted taxable income and availability of net operating losses. 33 Results of Operations in 2024 Compared to 2023 Information related to the comparison of our operating results between the years 2024 and 2023 is included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2024 Form 10-K filed with the SEC and is incorporated by reference into this annual report on Form 10-K. Non-GAAP Financial Measures and Reconciliations This Form 10-K contains certain non-GAAP financial measures that management believes are useful tools for internal use and the investment community in evaluating NOV’s overall financial performance. These non-GAAP financial measures are broadly used to value and compare companies in the oilfield services and equipment industry. Not all companies define these measures in the same way. In addition, these non-GAAP financial measures are not a substitute for financial measures prepared in accordance with GAAP and should therefore be considered only as supplemental to such GAAP financial measures. The Company defines Adjusted Operating Profit as Operating Profit excluding gains and losses on sales of fixed assets, and, when applicable, pre-tax Other Items. The Company defines Adjusted EBITDA as Operating Profit excluding depreciation, amortization, gains and losses on sales of fixed assets, and, when applicable, pre-tax Other Items. Adjusted Operating Profit % is a ratio showing Adjusted Operating Profit as a percentage of sales and Adjusted EBITDA % is a ratio showing Adjusted EBITDA as a percentage of sales. Management believes this is important information to provide because it is used by management to evaluate the Company’s operational performance and trends between periods and manage the business. Management also believes this information may be useful to investors and analysts to gain a better understanding of the Company’s results of ongoing operations. Adjusted Operating Profit, Adjusted Operating Profit %, Adjusted EBITDA, and Adjusted EBITDA % are not intended to replace GAAP financial measures, such as Net Income and Operating Profit %. Additionally, Excess Free Cash Flow is defined as cash flows from operations less capital expenditures and other investments, including acquisitions and divestitures. Excess Free Cash Flow does not represent the Company’s residual cash flow available for discretionary expenditures, as the calculation of these measures does not account for certain debt service requirements or other non-discretionary expenditures. Pre-tax Other Items consist of charges and credits related to (in millions): Three Months Ended Year Ended December 31, September 30, December 31, 2025 2024 2025 2025 2024 Pre-tax Other Items by category: Goodwill and long-lived asset impairment $ 70 $ — $ — $ 70 $ — Royalty timing discount — — 24 24 — Business divestiture — 1 — — (130 ) Severance, facility closures and other restructuring activities 16 6 41 89 21 Total pre-tax Other Items $ 86 $ 7 $ 65 $ 183 $ (109 ) 34 The following tables set forth the reconciliation of Adjusted EBITDA to its most comparable GAAP financial measures (in millions): Three Months Ended Year Ended December 31, September 30, December 31, 2025 2024 2025 2025 2024 Operating profit: Energy Products and Services $ 73 $ 112 $ 38 $ 277 $ 475 Energy Equipment 107 152 130 493 608 Eliminations and corporate costs (88 ) (57 ) (61 ) (276 ) (207 ) Total operating profit $ 92 $ 207 $ 107 $ 494 $ 876 Operating profit %: Energy Products and Services 7.4 % 10.6 % 3.9 % 7.0 % 11.5 % Energy Equipment 8.0 % 11.8 % 10.4 % 10.0 % 12.4 % Eliminations and corporate costs — — — — — Total operating profit % 4.0 % 9.0 % 4.9 % 5.6 % 9.9 % Pre-tax Other Items, net: Energy Products and Services $ 7 $ 3 $ 41 $ 59 $ 7 Energy Equipment 46 4 21 79 (118 ) Corporate 33 — 3 45 2 Total pre-tax Other Items $ 86 $ 7 $ 65 $ 183 $ (109 ) (Gain) loss on sales of fixed assets Energy Products and Services $ 1 $ — $ (2 ) $ (3 ) $ — Energy Equipment (2 ) — (1 ) (4 ) — Corporate — — — 4 — Total (gain) loss on sales of fixed assets $ (1 ) $ — $ (3 ) $ (3 ) $ — Adjusted operating profit: Energy Products and Services $ 81 $ 115 $ 77 $ 333 $ 482 Energy Equipment 151 156 150 568 490 Eliminations and corporate costs (55 ) (57 ) (58 ) (227 ) (205 ) Adjusted operating profit $ 177 $ 214 $ 169 $ 674 $ 767 Depreciation & amortization: Energy Products and Services $ 59 $ 58 $ 58 $ 233 $ 221 Energy Equipment 29 29 30 115 115 Corporate 2 1 1 7 7 Total depreciation & amortization $ 90 $ 88 $ 89 $ 355 $ 343 Adjusted EBITDA: Energy Products and Services $ 140 $ 173 $ 135 $ 566 $ 703 Energy Equipment 180 185 180 683 605 Eliminations and corporate costs (53 ) (56 ) (57 ) (220 ) (198 ) Total Adjusted EBITDA $ 267 $ 302 $ 258 $ 1,029 $ 1,110 Adjusted EBITDA %: Energy Products and Services 14.2 % 16.3 % 13.9 % 14.2 % 17.0 % Energy Equipment 13.5 % 14.4 % 14.4 % 13.8 % 12.4 % Eliminations and corporate costs — — — — — Total Adjusted EBITDA % 11.7 % 13.1 % 11.9 % 11.8 % 12.5 % 35 Three Months Ended Year Ended December 31, September 30, December 31, 2025 2024 2025 2025 2024 Reconciliation of Adjusted EBITDA: GAAP net income (loss) attributable to Company $ (78 ) $ 160 $ 42 $ 145 $ 635 Noncontrolling interests (3 ) 1 2 6 — Provision for income taxes 147 38 29 224 196 Interest expense 22 24 22 88 91 Interest income (19 ) (11 ) (11 ) (51 ) (38 ) Equity (income) loss in unconsolidated affiliates 6 1 11 16 (36 ) Other (income) expense, net 17 (6 ) 12 66 28 (Gain) loss on sales of fixed assets (1 ) — (3 ) (3 ) — Depreciation and amortization 90 88 89 355 343 Pre-tax Other Items, net 86 7 65 183 (109 ) Total Adjusted EBITDA $ 267 $ 302 $ 258 $ 1,029 $ 1,110 Liquidity and Capital Resources Overview At December 31, 2025, the Company had cash and cash equivalents of $1,552 million, and total debt of $1,718 million. At December 31, 2024, cash and cash equivalents were $1,230 million and total debt was $1,740 million. As of December 31, 2025, approximately $888 million of the $1,552 million of cash and cash equivalents was held by our foreign subsidiaries and the earnings associated with this cash, if repatriated to the U.S., could be subject to foreign withholding taxes and incremental U.S. taxation. If opportunities to invest in the U.S. are greater than available cash balances that are not subject to income tax, rather than repatriating cash, the Company may choose to borrow against its revolving credit facility. The Company has a five-year unsecured revolving credit facility with a borrowing capacity of $1.5 billion, which matures on September 12, 2029. The Company has the right to increase the aggregate commitments under this new agreement to an aggregate amount of up to $2.5 billion upon the consent of only those lenders holding any such increase. Interest under the multicurrency facility is based upon Secured Overnight Financing Rate (SOFR), Euro Interbank Offered Rate (EURIBOR), Sterling Overnight Index Average (SONIA), Canadian Overnight Repo Rate Average (CORRA), or Norwegian Interbank Offered Rate (NIBOR), plus 1.25% subject to a ratings-based grid or the U.S. prime rate. The credit facility contains a financial covenant establishing a maximum debt-to-capitalization ratio of 60%. As of December 31, 2025, the Company was in compliance with this covenant, with a debt-to-capitalization ratio of 23.8% and had no outstanding borrowing or letters of credit issued under the facility, resulting in $1.5 billion of available funds. A consolidated joint venture of the Company borrowed $120 million against a $150 million bank line of credit, payable by June 2032, for the construction of a facility in Saudi Arabia. Interest under the bank line of credit is based upon SOFR plus 1.40%. The bank line of credit contains a financial covenant regarding maximum debt-to-equity ratio of 75%. As of December 31, 2025, the joint venture was in compliance, and will not have future borrowings on the line of credit. As of December 31, 2025, the Company has a carrying value of $84 million in borrowings related to this line of credit. The Company has $11 million in payments related to this line of credit due in the next twelve months. The Company can repay the entire outstanding facility balance without penalty at its sole discretion. The Company’s outstanding debt at December 31, 2025 consisted primarily of $1,092 million in 3.95% Senior Notes, $497 million in 3.60% Senior Notes, and other debt of $129 million. The Company was in compliance with all covenants at December 31, 2025. Long-term lease liabilities totaled $521 million at December 31, 2025. The Company had $946 million of outstanding letters of credit at December 31, 2025, 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. 36 The following table summarizes our net cash provided by (used in) continuing operating activities, continuing investing activities and continuing financing activities for the periods presented (in millions): Year Ended December 31, 2025 2024 2023 Net cash provided by operating activities $ 1,251 $ 1,304 $ 143 Net cash used in investing activities (362 ) (471 ) (293 ) Net cash used in financing activities (584 ) (406 ) (103 ) Significant uses and sources of cash during 2025: • Cash flows provided by operating activities were $1.25 billion, primarily driven by profitability and changes in the primary components of our working capital (inventories, contract assets and liabilities, receivables, and accounts payable). • Capital expenditures were $375 million. • Dividend payments to our shareholders were $190 million. • Share repurchases were $315 million. Other The effect of the change in exchange rates on cash was an increase of $17 million for the year ended December 31, 2025, a decrease of $13 million for the year ended December 31, 2024, and no change for the year ended December 31, 2023. 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, working capital needs, capital expenditure requirements, dividends and financing obligations for the foreseeable future. During the year ended December 31, 2025, the Company repurchased 22.8 million shares of common stock under its share repurchase program for an aggregate amount of $315 million. During the year ended December 31, 2024, the Company repurchased 14.2 million shares of common stock under the program for an aggregate amount of $229 million. The Company expects to return at least 50% of Excess Free Cash Flow (defined as cash flows from operations less capital expenditures and other investments, including acquisitions and divestitures), through a combination of quarterly base dividends, stock buybacks, and if needed, an annual supplemental dividend to true-up returns to shareholders on an annual basis. We may pursue additional acquisition candidates, but the timing, size or success of any acquisition effort and the related potential capital commitments cannot be predicted. We continue to expect to fund future cash acquisitions primarily with cash flows 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. As of December 31, 2025, the Company had $56 million of unrecognized tax benefits. This represents the tax benefits associated with various tax positions taken, or expected to be taken, on domestic and international tax returns that have not been recognized in our financial statements due to uncertainty regarding their resolution. For further information related to unrecognized tax benefits, see Note 15 to the Consolidated Financial Statements. Critical Accounting Policies and Estimates In preparing the financial statements, we make assumptions, estimates and judgments that affect the amounts reported. We periodically evaluate our estimates and judgments that are most critical in nature which are related to revenue recognition under long-term construction contracts and impairment of goodwill and other indefinite-lived intangible assets. 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. Revenue Recognition under Long-Term Construction Contracts Revenue is recognized over-time for certain long-term construction contracts in the Energy Equipment segment. These contracts include custom designs for customer-specific applications that are unique and require significant engineering efforts. Revenue is recognized as work progresses on each contract. Right to payment is enforceable for performance completed to date, including a reasonable profit. 37 Because of control transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. We generally use the cost-to-cost (input) measure of progress for our contracts because it best depicts the transfer of assets to the customer which occurs as we incur costs. Under the cost-to-cost measure of progress, progress towards completion of each contract is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. These costs include labor, materials, subcontractors’ costs, and other direct costs. Any expected losses on a project are recorded in full in the period in which the loss becomes probable. These long-term construction contracts generally include integrating a complex set of tasks and components into a single project or capability, so they are accounted for as one performance obligation. Estimating total revenue and cost at completion of long-term construction contracts is complex, subject to many variables and requires significant judgment. It is common for our long-term contracts to contain late delivery fees, work performance guarantees, and other provisions that can either increase or decrease the transaction price. We estimate variable consideration as the most likely amount we expect to receive. We include variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur, or when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based on an assessment of our anticipated performance and historical, current and forecasted information that is reasonably available to us. Net revenue recognized from performance obligations satisfied in previous periods was $5 million and $19 million for the years ended December 31, 2025 and 2024, respectively, primarily due to change orders. Goodwill Goodwill represents the excess of acquisition price paid over the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed. The Company has approximately $1.6 billion of goodwill as of December 31, 2025. Generally accepted accounting principles require the Company to test goodwill for impairment at least annually or more frequently whenever events or circumstances indicate that goodwill might be impaired. Events or circumstances which could indicate a potential impairment include (but are not limited to): a significant sustained reduction in worldwide oil and gas prices or drilling; a significant sustained reduction in profitability or cash flow of oil and gas companies or drilling contractors; a significant sustained reduction in the market capitalization of the Company; a significant sustained reduction in capital investment by drilling companies and oil and gas companies; and a significant sustained increase in worldwide inventories of oil or gas. The Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is greater than its carrying amount. If the qualitative assessment indicates that it is more likely than not that the fair value of a reporting is greater than its carrying amount, no further testing is required. However, if the Company concludes otherwise, then it is required to perform a quantitative assessment. For the year ended December 31, 2025, the Company elected to bypass the qualitative assessment and proceed directly to a quantitative impairment test for each reporting unit. When the Company performs a quantitative assessment, it estimates the fair value of its reporting units using a discounted cash flow analysis. The discounted cash flow is based on management’s forecast of operating performance for each reporting unit. The two main assumptions used in measuring goodwill impairment, which bear the risk of change and could impact the Company’s goodwill impairment analysis, include the cash flows from operations from each of the Company’s individual reporting units and the weighted average cost of capital. The starting point for each of the reporting unit’s cash flows from operations is the detailed annual plan or updated forecast. Cash flows beyond the specific operating plans 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. The financial and credit market volatility directly impacts our fair value measurement through our weighted average cost of capital that we use to determine our discount rate. During times of volatility, significant judgment must be applied to determine whether credit changes are a short-term or long-term trend. Based on the results of the quantitative assessment performed as of October 1, 2025, the Company recorded $40 million in impairment charges to goodwill related to our Renewables reporting unit during the year ended December 31, 2025. See Note 6 to the Consolidated Financial Statements for further discussion. 38 Inventory Reserves Inventory is carried at the lower of cost or estimated net realizable value using the first-in, first-out or average cost methods. Inventories consist of raw materials and supplies, work-in-process and finished goods and purchased products. The Company reviews historical usage of inventory on-hand, assumptions about future demand and market conditions, current cost and estimates about potential alternative uses, which are limited, to estimate net realizable value. The Company’s estimated carrying value of inventory depends upon demand largely driven by levels of oil and gas well drilling and remediation activity, which depends in turn upon oil and gas prices, the general outlook for economic growth worldwide, available financing for the Company’s customers, political stability and governmental regulation in major oil and gas producing areas, and the potential obsolescence of various types of equipment we sell, among other factors. During 2025, 2024, and 2023 we recorded inventory provision charges to inventory reserves of $36 million, $31 million, and $28 million, respectively. At December 31, 2025 and 2024, inventory reserves totaled $261 and $286 million, or 12.7% and 12.9% of gross inventory, respectively. The Company has continued to invest in developing and advancing products and technologies, contributing to the obsolescence of certain older products in a dramatically-shifted and more highly-competitive recovering market, but also ensuring that the portfolio of products and services offered by the Company will meet customer needs in 2026 and beyond. We will continue to assess our inventory levels and inventory offerings for our customers, which could require the Company to record additional allowances to reduce the value of its inventory. Such changes in our estimates or assumptions could be material under weaker market conditions or outlook. Income Taxes The Company is U.S. registered and is subject to income taxes in the U.S. The Company operates through various subsidiaries in a number of countries throughout the world. Income taxes have been recorded based upon the tax laws and rates of the countries in which the Company operates and income is earned. The Company’s annual tax provision is based on taxable income, statutory rates and tax planning opportunities available in the various jurisdictions in which it operates. The determination and evaluation of the annual tax provision and tax positions involves the interpretation of the tax laws in the various jurisdictions in which the Company operates. It requires significant judgment and the use of estimates and assumptions regarding significant future events such as the amount, timing and character of income, deductions and tax credits. Changes in tax laws, regulations, treaties, foreign currency exchange restrictions or the Company’s level of operations or profitability in each jurisdiction could impact the tax liability in any given year. The Company also operates in many jurisdictions where the tax laws relating to the pricing of transactions between related parties are open to interpretation, which could potentially result in aggressive tax authorities asserting additional tax liabilities with no offsetting tax recovery in other countries. In 2022, the Company received and paid a $51 million transfer pricing tax assessment in Denmark. The Company and its advisors believe the assessment is without merit. The Company is presently appealing and believes it will be reimbursed following a successful appeals process. The payment has been recorded as a long-term receivable. The Company maintains liabilities for estimated tax exposures in jurisdictions of operation. The annual tax provision includes the impact of income tax provisions and benefits for changes to liabilities that the Company considers appropriate, as well as related interest. Tax exposure items primarily include potential challenges to intercompany pricing and certain operating expenses that may not be deductible in foreign jurisdictions. These exposures are resolved primarily through the settlement of audits within these tax jurisdictions or by judicial means. The Company is subject to audits by federal, state and foreign jurisdictions which may result in proposed assessments. The Company believes that an appropriate liability has been established for estimated exposures under the guidance in ASC Topic 740 “Income Taxes” (“ASC Topic 740”). However, actual results may differ materially from these estimates. The Company reviews these liabilities quarterly and to the extent audits or other events result in an adjustment to the liability accrued for a prior year, the effect will be recognized in the period of the event. The IRS has proposed an adjustment to certain restructuring steps which occurred in 2017. The Company and its advisors believe these restructuring steps were properly completed in accordance with U.S. tax laws and regulations and has appealed the proposed adjustment. However, if the Company is unsuccessful in the appeals process, the IRS proposed adjustment would be substantially offset by the utilization of foreign tax credit carryforwards which subsequently expired unused or are fully reserved by a valuation allowance and $48 million additional income tax expense would be owed. The Canada Revenue Agency has proposed an adjustment for dividends received in Canada between 2016 and 2018. The Company and its advisors believe its filing position is consistent with Canadian tax law and tax court cases and has appealed the proposed adjustment. If the Company is unsuccessful in the process, $31 million additional income tax expense would be owed. 39 During 2023, the Company determined it was more likely than not that the Company would be able to realize the benefit of a substantial portion of the deferred tax assets in the United States and the majority of its other international jurisdictions and released valuation allowances on certain deferred tax assets. Management applied significant judgment in assessing the positive and negative evidence available in the determination of the amount of deferred tax assets that were more likely than not to be realized in the future. Although the Company considered future taxable income in its assessment, the Company concluded that, as of December 31, 2023, a valuation allowance was still required for certain United States foreign tax credit carryforwards and deferred tax assets in certain other jurisdictions. The Company increased the valuation allowance during 2025 from $266 million to $352 million to reflect its assessment that additional United States foreign tax credits carryforwards as well as deferred tax assets in certain other jurisdictions were not more likely than not to be realized. Income tax expense recorded in the future will be reduced to the extent of any decreases in the Company’s valuation allowances. The realization of remaining deferred tax assets is primarily dependent on future taxable income. Any reduction in future taxable income, including but not limited to any future restructuring activities, may require that the Company record an additional valuation allowance against deferred tax assets. An increase in the valuation allowance would result in additional income tax expense in such period and could have a significant impact on future earnings. Recently Issued and Recently Adopted Accounting Standards See Note 2 to the Consolidated Financial Statements for further discussion on recently issued and recently adopted accounting standards. Cautionary Note Regarding Forward–Looking Statements This document contains, or has incorporated by reference, statements that are not historical facts, including estimates, projections, and statements relating to our business plans, objectives, and expected operating results that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements often contain words such as “may,” “can,” “likely,” “believe,” “plan,” “predict,” “potential,” “will,” “intend,” “think,” “should,” “expect,” “anticipate,” “estimate,” “forecast,” “expectation,” “goal,” “outlook,” “projected,” “projections,” “target,” and other similar words, although some such statements are expressed differently. Other oral or written statements we release to the public may also contain forward-looking statements. Forward-looking statements involve risk and uncertainties and reflect our best judgment based on current information. You should be aware that our actual results could differ materially from results anticipated in such forward-looking statements due to a number of factors, including but not limited to changes in oil and gas prices, customer demand for our products, potential catastrophic events related to our operations, protection of intellectual property rights, compliance with laws, and worldwide economic activity, including matters related to recent Russian sanctions and changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs and their related impacts on the economy. Given these uncertainties, current or prospective investors are cautioned not to place undue reliance on any such forward-looking statements. We undertake no obligation to update any such factors or forward-looking statements to reflect future events or developments. You should also consider carefully the statements under “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” which address additional factors that could cause our actual results to differ from those set forth in the forward-looking statements, as well as additional disclosures we make in our press releases and other securities filings. We also suggest that you listen to our quarterly earnings release conference calls with financial analysts.