NOV Inc
For the period ended Sep 30, 2024. Filed Oct 25, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 25, 2024
NOV$17.56+1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-29.
0000950170-24-087179
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-25.
0000950170-24-117316
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 79 previous paragraphs and 78 current paragraphs.
41 unchanged; 30 reworded; 7 added; 7 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
Energy Products and Services generated revenues of $1,003 million in the third quarter of 2024, a decrease of 3 percent from the third quarter of 2023. Operating profit decreased $31 million from the prior year to $114 million, or 11.4 percent of sales, and included $3 million in Other Items. Adjusted EBITDA decreased $25 million from the prior year to $172 million, or 17.1 percent of sales. The decrease in revenue and profit was primarily due to lower drilling activity levels in North America, partially offset by contributions from the Company's recent artificial lift acquisition..
Current report
The macro environment and geopolitical uncertainties continue to drive volatility and pressure commodity prices with oil prices reflecting growing concerns regarding diminishing demand from weakening global economies, excess OPEC capacity, and rising non-OPEC production. These concerns along with ample supplies of natural gas in North America are increasing cautiousness among oil and gas producers, resulting in lower drilling activity in the U.S. land market and are beginning to affect shorter-cycle activity in international markets.
Current report
Despite growing concerns that global oil and U.S. natural gas markets may be oversupplied in 2025, management believes commodity prices and activity levels should remain relatively rangebound, with any pullback in activity short-lived, and that the industry remains in an extended recovery due to: (1) current inventory levels in relation to OECD demand that are lower than historical averages; (2) natural oil production decline rates that average almost 15 percent; (3) anticipated increases in LNG exports from the U.S.; (4) increasing focus on energy security; and (5) capital discipline across the industry, which has diminished the global oil and gas industry’s ability to easily ramp production.
Current report
three and nine months ended September 30, 2024 and 2023. Revenue from Energy Products and Services was $1,003 million for the three months ended September 30, 2024, compared to $1,034 million for the three months ended September 30, 2023, a decrease of $31 million or 3 percent. For the nine months ended September 30, 2024, revenue from Energy Products and Services was $3,070 million compared to $3,004 million for the nine months ended September 30, 2023, an increase of $66 million or 2 percent. The decrease in revenue during the three months ended September 30, 2024 was due to an increase in North America revenue of 1 percent offset by a decrease in international revenue of 5 percent. North American revenue increased despite the decline in drilling activity primarily due to the acquisition of our artificial lift business and market share gains, while international revenue declined primarily due to lower sales of drill pipe and conductor pipe connections. The increase in revenue during the nine months ended September 30, 2024 was due to increases in North America and international revenue of 4 percent and 2 percent, respectively. The growth in North America was primarily due to the acquisition of our artificial lift business and market share gains, and the growth in international revenue was primarily due to higher activity levels in international markets, partially offset by lower sales of drill pipe and conductor pipe connections.
Current report
Interest income was $11 million and $27 million for the three and nine months ended September 30, 2024, compared to $5 million and $21 million for the three and nine months ended September 30, 2023. The increase was primarily related to interest earned on larger cash balances in the current year compared to prior year.
Current report
Capital expenditures were $233 million.
Current report
Share repurchases were $117 million.
Removed paragraphs (7)
Previous report
The Company’s Energy Products and Services segment provides a variety of technologies used primarily to perform drilling and well completion operations and offers services that optimize their performance.
Previous report
Energy Products and Services generated revenues of $1,050 million in the second quarter of 2024, an increase of 2 percent from the second quarter of 2023. Operating profit decreased $28 million from the prior year to $128 million, or 12.2 percent of sales, and included $1 million in Other Items. Adjusted EBITDA decreased $14 million from the prior year to $184 million, or 17.5 percent of sales. Revenue improved from strong demand in international and offshore markets, which more than offset declining North American activity. A less favorable sales mix led to the lower level of profitability compared to the prior year.
Previous report
Despite the recent declines in U.S. drilling activity resulting from lower natural gas prices and consolidation among North American oil and gas producers, management believes the industry remains in the early stages of an extended recovery. Macro environment and geopolitical uncertainties drive volatility and pressure commodity prices near-term; however, management believes diminished global oil and gas production capacity and rising energy security risks will continue to spur increased oilfield activity and demand for the Company’s equipment and technology.
Previous report
three and six months ended June 30, 2024 and 2023. Revenue from Energy Products and Services was $1,050 million for the three months ended June 30, 2024, compared to $1,029 million for the three months ended June 30, 2023, an increase of $21 million or 2 percent. For the six months ended June 30, 2024, revenue from Energy Products and Services was $2,067 million compared to $1,970 million for the six months ended June 30, 2023, an increase of $97 million or 5 percent. Revenue improved primarily due to strong demand in international markets, which helped drive international revenue growth of 5 percent in the second quarter of 2024 and 6 percent year-to-date when compared to the prior year. Despite a decrease in drilling activity, North America revenue grew 3 percent in the second quarter of 2024 and 5 percent year-to-date due to market share gains as well as contributions from our new artificial lift business that was acquired in the first quarter of 2024.
Previous report
Interest income remained flat year-over-year at $8 million and $16 million for the three and six months ended June 30, 2024, and June 30, 2023.
Previous report
Capital expenditures were $151 million.
Previous report
Share repurchases were $37 million.
Reworded paragraphs (30)
Previous wording
NOV serves major-diversified, national, and independent service companies, contractors, and energy producers in 61 countries. Effective January 1, 2024, NOV consolidated its reporting structure into two segments: Energy Products and Services, and Energy Equipment. Segment disclosures pertaining to prior periods have been restated to reflect the change in reportable segments.
Current wording
NOV serves major-diversified, national, and independent service companies, contractors, and energy producers in 60 countries. Effective January 1, 2024, NOV consolidated its reporting structure into two segments: Energy Products and Services, and Energy Equipment. Segment disclosures pertaining to prior periods have been restated to reflect the change in reportable segments.
Previous wording
Energy Products and Services designs, manufactures, rents, and sells equipment and products for drilling, intervention, completion, and production activities, including: drill bits, downhole tools, premium drill pipe, drilling fluids, managed pressure drilling, integral and weld-on connectors for conductor strings and surface casing, completion tools, and artificial lift systems.
Current wording
The Company’s Energy Products and Services segment primarily designs, manufactures, rents, and sells products and equipment used in drilling, intervention, completion, and production activities. Products include drill bits, downhole tools, premium drill pipe, drilling fluids, managed pressure drilling, integral and weld-on connectors for conductor strings and surface casing, completion tools, and artificial lift systems. The segment also designs, manufactures, and delivers high-end composite pipe, tanks, and structures engineered to solve both corrosion and weight challenges in a wide variety of applications, including oil and gas, chemical, industrial, wastewater, fuel handling, marine and offshore, and rare earth mineral extraction.
Previous wording
The segment delivers services, software, and digital solutions to improve drilling and completion operational performance. Services include tubular inspection and coating services, solids control and waste management equipment and services, and managed pressure drilling solutions. Software and digital services and solutions offer drilling and completion optimization and remote monitoring capabilities 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.
Current wording
In addition to product and equipment sales, the segment provides services, software, and digital solutions to improve drilling and completion operational performance. Services include tubular inspection and coating, solids control, waste management , and managed pressure drilling. Software and digital solutions offered include drilling and completion optimization and remote monitoring (via downhole and surface instrumentation), wired drill pipe services, software controls and applications, and data management and analytics services at the edge and in the cloud.
Previous wording
For the second quarter ended June 30, 2024, the Company generated revenues of $2.22 billion, an increase of 6 percent compared to the second quarter of 2023. Net income was $226 million, or 10.2 percent of sales, an increase of $71 million compared to the second quarter of 2023. Operating profit increased $132 million from the prior year to $313 million, or 14.1 percent of sales. The company recorded a net credit of $118 million within Other Items, primarily related to gains from the divestiture of its Pole Products business. Adjusted EBITDA (operating profit excluding depreciation, amortization, gains and losses on sales of fixed assets and, when applicable, Other Items) increased 15 percent year-over-year to $281 million, or 12.7 percent of sales.
Current wording
For the third quarter ended September 30, 2024, the Company generated revenues of $2.19 billion, an increase of $6 million compared to the third quarter of 2023. Net income increased 14 percent to $130 million, or 5.9 percent of sales, an increase of $16 million compared to the third quarter of 2023. Operating profit increased $11 million from the prior year to $194 million, or 8.9 percent of sales. The company recorded $5 million within Other Items, primarily related to severance pay. Adjusted EBITDA (operating profit excluding depreciation, amortization, gains and losses on sales of fixed assets and, when applicable, Other Items) increased 7 percent year-over-year to $286 million, or 13.1 percent of sales.
Previous wording
Energy Equipment generated revenues of $1,204 million in the second quarter of 2024, an increase of 8 percent from the second quarter of 2023. Operating profit increased $151 million from the prior year to $232 million, or 19.3 percent of sales, and included a $119 million net credit of Other Items. Adjusted EBITDA increased $43 million from the prior year to $142 million, or 11.8 percent of sales. Higher revenue and profitability, excluding the gain from the divestiture of its Pole Products business, were the result of improved demand for aftermarket products and services, strong execution on the segment's improving capital equipment backlog, and cost savings initiatives.
Current wording
Energy Equipment generated revenues of $1,219 million in the third quarter of 2024, an increase of 2 percent from the third quarter of 2023. Operating profit increased $31 million from the prior year to $129 million, or 10.6 percent of sales, and included $1 million in Other Items. Adjusted EBITDA increased $35 million from the prior year to $159 million, or 13.0 percent of sales. Improved profitability was the result of strong execution on the segment’s improving backlog and better demand for aftermarket parts and services.
Previous wording
New orders booked during the quarter totaled $977 million, an increase of $466 million when compared to the $511 million of new orders booked during the second quarter of 2023. Orders shipped from backlog in the second quarter of 2024 was $553 million, representing a book-to-bill of 177 percent, compared to the $505 million orders shipped and a book-to-bill of 101 percent in the second quarter of 2023. As of June 30, 2024, backlog for capital equipment orders for Energy Equipment was $4,331 million, an increase of $472 million from the second quarter of 2023.
Current wording
New orders booked during the quarter totaled $627 million, an increase of $79 million when compared to the $548 million of new orders booked during the third quarter of 2023. Orders shipped from backlog in the third quarter of 2024 were $563 million, representing a book-to-bill of 111 percent, compared to the $537 million orders shipped and a book-to-bill of 102 percent in the third quarter of 2023. As of September 30, 2024, backlog for capital equipment orders for Energy Equipment was $4,478 million, an increase of $485 million from the third quarter of 2023.
Previous wording
NOV remains committed to improving organizational efficiencies while focusing on the development and commercialization of innovative products and services, including technologies to reduce the environmental impact of oil and gas operations and technologies to accelerate the energy transition that are responsive to the longer-term needs of NOV’s customers. We believe this strategy will further advance the Company’s competitive position in all market conditions.
Current wording
Regardless of the operating environment, NOV remains committed to improving organizational efficiencies while focusing on the development and commercialization of innovative products and services, including technologies to reduce the environmental impact of oil and gas operations, and technologies to accelerate the energy transition that are responsive to the longer-term needs of NOV’s customers. We believe this strategy will further advance the Company’s competitive position in all market conditions.
Previous wording
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 products. Key industry indicators for the second quarter of 2024 and 2023, and the first quarter of 2024 include the following:
Current wording
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 products. Key industry indicators for the third quarter of 2024 and 2023, and the second quarter of 2024 include the following:
Previous wording
The worldwide quarterly average rig count decreased 6 percent (from 1,797 to 1,695) in the second quarter of 2024 compared to the first quarter of 2024, mainly attributable to Canada. The average per barrel price of West Texas Intermediate Crude Oil increased 5 percent (from $77.56 per barrel to $81.71 per barrel) and natural gas prices decreased 2 percent (from $2.13 per mmbtu to $2.08 per mmbtu) in the second quarter of 2024 compared to the first quarter of 2024.
Current wording
The worldwide quarterly average rig count increased 2 percent (from 1,695 to 1,727) in the third quarter of 2024 compared to the second quarter of 2024, mainly attributable to Canada. The average per barrel price of West Texas Intermediate Crude Oil decreased 7 percent (from $81.71 per barrel to $76.24 per barrel) and natural gas prices increased 1 percent (from $2.08 per mmbtu to $2.11 per mmbtu) in the third quarter of 2024 compared to the second quarter of 2024.
Previous wording
At July 12, 2024, there were 773 rigs actively drilling in North America, comprised of U.S. and Canada, which increased 5 percent from the second quarter average of 739 rigs. The price for West Texas Intermediate Crude Oil was $82.21 per barrel at July 12, 2024, an increase of 1 percent from the second quarter of 2024 average. The price for natural gas was $2.33 per mmbtu at July 12, 2024, an increase of 12 percent from the second quarter of 2024 average.
Current wording
On October 11, 2024, there were 809 rigs actively drilling in North America, comprised of U.S. and Canada, which increased 2 percent from the third quarter average of 795 rigs. The price for West Texas Intermediate Crude Oil was $75.56 per barrel at October 11, 2024, a decrease of 1 percent from the third quarter of 2024 average. The price for natural gas was $2.63 per mmbtu at October 11, 2024, an increase of 25 percent from the third quarter of 2024 average.
Previous wording
Operating profit from Energy Products and Services was $128 million for the three months ended June 30, 2024, compared to an operating profit of $156 million for the three months ended June 30, 2023, a decrease of $28 million. For the six months ended June 30, 2024, operating profit from Energy Products and Services was $249 million compared to operating profit of $268 million for the six months ending June 30, 2023, a decrease of $19 million. The decrease in profitability was due to a less favorable sales mix, including a 23 percent decline in sales of drill pipe in the second quarter of 2024 and an 8 percent decline year-to-date when compared to the prior year.
Current wording
Operating profit from Energy Products and Services was $114 million for the three months ended September 30, 2024, compared to an operating profit of $145 million for the three months ended September 30, 2023, a decrease of $31 million. For the nine months ended September 30, 2024, operating profit from Energy Products and Services was $363 million compared to operating profit of $413 million for the nine months ending September 30, 2023, a decrease of $50 million. The decrease in profitability was due to a less favorable sales mix, including a 35 percent decline in sales of drill pipe in the third quarter of 2024 and a 17 percent decline year-to-date when compared to the prior year.
Previous wording
three and six months ended June 30, 2024 and 2023. Revenue from Energy Equipment was $1,204 million for the three months ended June 30, 2024, compared to $1,117 million for the three months ended June 30, 2023, an increase of $87 million or 8 percent. For the six months ending June 30, 2024, revenue from Energy Equipment was $2,382 million compared to $2,169 million for the six months ending June 30, 2023, an increase of $213 million or 10 percent. The increase in revenue is attributable to an increase in sales in both the international land and offshore markets. Revenue improved from international sales by 14 percent in the second quarter of 2024 and 17 percent year-to-date when compared to the prior year and offshore sales increased by 10 percent in the second quarter of 2024 and by 21 percent year-to-date when compared to the prior year. The increase in sales to these markets is a result of strong demand for aftermarket products and services and execution on the segment’s improving capital equipment backlog. The increases in the international land and offshore markets more than offset a decline in sales into the North American land market and the effect of divesting the segment’s Pole Products business during the second quarter of 2024. Our North American sales decreased 8 percent in the second quarter of 2024 and 6 percent year-to-date when compared to the prior year primarily related to declines in North America activity in our completions products. The divestiture of the segment’s Pole Products business during the quarter reduced revenues by 2 percent and 1 percent for the three months and six months ended June 30, 2024.
Current wording
three and nine months ended September 30, 2024 and 2023. Revenue from Energy Equipment was $1,219 million for the three months ended September 30, 2024, compared to $1,195 million for the three months ended September 30, 2023, an increase of $24 million or 2 percent. For the nine months ended September 30, 2024, revenue from Energy Equipment was $3,601 million compared to $3,364 million for the nine months ended September 30, 2023, an increase of $237 million or 7 percent. The increase in revenue is attributable to higher sales in both international land and offshore markets. Revenue improved from international sales by 1 percent in the third quarter of 2024 and 11 percent year-to-date when compared to the prior year, and offshore sales increased by 3 percent in the third quarter of 2024 and by 14 percent year-to-date when compared to the prior year. The increase in sales to these markets is a result of strong demand for aftermarket products and services and execution on the segment’s improving capital equipment backlog. Revenues in North America increased 6 percent in the third quarter of 2024 on strong sales of capital equipment but declined 3 percent year-to-date when compared to the prior year, primarily due to the divestiture of the segment’s Pole Products business during the second quarter of 2024.
Previous wording
Operating profit from Energy Equipment was $232 million for the three months ended June 30, 2024, compared to an operating profit of $81 million for the three months ended June 30, 2023, an increase of $151 million. For the six months ended June 30, 2024, operating profit from Energy Equipment was $327 million compared to operating profit of $152 million for the six months ending June 30, 2023, an increase of $175 million. Higher profitability for the three and six months ended June 30, 2024 was the result of a $131 million gain from the divestiture of the segment's Pole Products business and higher margin sales primarily driven by improved demand for aftermarket products and services. Strong execution on the segment's improving capital equipment backlog also contributed to the increase in profitability.
Current wording
Operating profit from Energy Equipment was $129 million for the three months ended September 30, 2024, compared to an operating profit of $98 million for the three months ended September 30, 2023, an increase of $31 million. For the nine months ended September 30, 2024, operating profit from Energy Equipment was $456 million compared to operating profit of $250 million for the nine months ended September 30, 2023, an increase of $206 million. Higher profitability for the three and nine months ended September 30, 2024 was the result of higher margin sales primarily driven by improved demand for aftermarket products and services and strong execution on the segment’s improving capital equipment backlog. A $131 million gain from the divestiture of the segment’s Pole Products business in the second quarter of 2024 also contributed to the increase in profitability for the nine months ended September 30, 2024.
Previous wording
The Energy Equipment segment monitors its capital equipment backlog to plan its business. New orders are added to backlog only when the Company receives a firm written order for major completion and production components or a contract related to a construction project. The capital equipment backlog was $4,331 million at June 30, 2024, an increase of $472 million from backlog of $3,859 million at June 30, 2023. 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 25 percent of backlog to become revenue during the rest of 2024 and the remainder thereafter. At June 30, 2024, approximately 45 percent of the capital equipment backlog was for offshore products and approximately 92 percent of the capital equipment backlog was destined for international markets.
Current wording
The Energy Equipment segment monitors its capital equipment backlog to plan its business. New orders are added to backlog only when the Company receives a firm written order for major completion and production components or a contract related to a construction project. The capital equipment backlog was $4,478 million at September 30, 2024, an increase of $485 million from backlog of $3,993 million at September 30, 2023. 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 13 percent of backlog to become revenue during the rest of 2024 and the remainder thereafter. At September 30, 2024, approximately 53 percent of the capital equipment backlog was for offshore products and approximately 91 percent of the capital equipment backlog was destined for international markets.
Previous wording
Eliminations and corporate costs were $47 million and $101 million for the three and six months ended June 30, 2024, compared to $56 million and $113 million for the three and six months ended June 30, 2023.
Current wording
Eliminations and corporate costs were $49 million and $150 million for the three and nine months ended September 30, 2024, compared to $60 million and $173 million for the three and nine months ended September 30, 2023.
Previous wording
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 declined 19 percent when compared to the second quarter of 2023 due to lower intrasegment activity but remained relatively flat for year-to-date intrasegment activity when compared to 2023.
Current wording
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 declined 20 percent when compared to the third quarter of 2023 and 14 percent year-to-date due to lower intrasegment activity.
Previous wording
Corporate costs declined 5 percent from the second quarter of 2023 and 12 percent year-to-date due to our cost savings initiatives and workforce reductions.
Current wording
Corporate costs declined 15 percent from the third quarter of 2023 and 13 percent year-to-date due to our cost savings initiatives and workforce reductions.
Previous wording
Interest and financial costs were $22 million and $46 million for the three and six months ended June 30, 2024, compared to $21 million and $42 million for the three and six months ended June 30, 2023. The increase in interest and financial costs were primarily due to debt borrowings on the revolving credit facility in the first quarter of 2024.
Current wording
Interest and financial costs were $21 million and $67 million for the three and nine months ended September 30, 2024, compared to $23 million and $65 million for the three and nine months ended September 30, 2023. The changes were primarily due to fluctuations in debt balances between periods.
Previous wording
Equity income in unconsolidated affiliates was $8 million and $37 million for the three and six months ended June 30, 2024, compared to $37 million and $85 million for the three and six months ended June 30, 2023. A decline in sales of almost 30 percent from the second quarter of 2023 and 17 percent year-to-date, with a relatively flat cost structure, led to lower profitability year-over-year for our largest investment in unconsolidated affiliates.
Current wording
Equity income in unconsolidated affiliates was $0 million and $37 million for the three and nine months ended September 30, 2024, compared to $16 million and $101 million for the three and nine months ended September 30, 2023. A less favorable product sales mix and lower volume in sales led to lower profitability year-over-year for our largest investment in unconsolidated affiliates.
Previous wording
Other expense, net was $14 million and $24 million for the three and six months ended June 30, 2024, compared to $29 million and $45 million for the three and six months ended June 30, 2023, respectively. The change in expense was primarily due to larger foreign currency fluctuations in the prior year, particularly with the currency devaluation in Argentina.
Current wording
Other expense, net was $10 million and $34 million for the three and nine months ended September 30, 2024, compared to $25 million and $70 million for the three and nine months ended September 30, 2023, respectively. The change in expense was primarily due to larger foreign currency fluctuations in the prior year, particularly with the currency devaluation in Argentina.
Previous wording
The effective tax rate for the three and six months ended June 30, 2024 was 23.9% and 24.9%, compared to 10.8% and 12.1% for the same period in 2023. The effective tax rate for 2024 was negatively impacted by a mix of earnings in higher tax rate jurisdictions, losses in certain jurisdictions with no tax benefit, and adjustments to the carrying value of deferred tax assets, partially offset by the reduction of valuation allowances related to U.S. and state deferred tax assets. The effective tax rate for 2023 was positively impacted by the utilization of previously unrealized loss carryforwards and tax credits as well as favorable adjustments related to changes in certain exchange rates, partially offset by current year losses in certain jurisdictions with no tax benefit.
Current wording
The effective tax rate for the three and nine months ended September 30, 2024 was 25.3% and 25.0%, respectively, compared to 30.8% and 18.2% for the same periods in 2023. The effective tax rate for 2024 was negatively impacted by a mix of earnings in higher tax rate jurisdictions, losses in certain jurisdictions with no tax benefit, and adjustments to the carrying value of deferred tax assets, partially offset by the reduction of valuation allowances related to U.S. and state deferred tax assets. The effective tax rate for 2023 was positively impacted by the utilization of previously unrealized loss carryforwards and tax credits as well as favorable adjustments related to changes in certain exchange rates, partially offset by current year losses in certain jurisdictions with no tax benefit.
Previous wording
At June 30, 2024, the Company had cash and cash equivalents of $827 million and total debt of $1,748 million. At December 31, 2023, cash and cash equivalents were $816 million and total debt was $1,725 million. As of June 30, 2024, approximately $533 million of the $827 million of cash and cash equivalents was held by our foreign subsidiaries and the earnings associated with this cash could be subject to foreign withholding taxes and incremental U.S. taxation if transferred among countries or repatriated to the U.S. If opportunities to invest in the U.S. are greater than available cash balances that are not subject to income tax, rather than repatriating cash, the Company may choose to borrow against its revolving credit facility.
Current wording
At September 30, 2024, the Company had cash and cash equivalents of $985 million and total debt of $1,749 million. At December 31, 2023, cash and cash equivalents were $816 million and total debt was $1,725 million. As of September 30, 2024, approximately $534 million of the $985 million of cash and cash equivalents was held by our foreign subsidiaries and the earnings associated with this cash could be subject to foreign withholding taxes and incremental U.S. taxation if transferred among countries or repatriated to the U.S. If opportunities to invest in the U.S. are greater than available cash balances that are not subject to income tax, rather than repatriating cash, the Company may choose to borrow against its revolving credit facility.
Previous wording
The Company has a revolving credit facility with a borrowing capacity of $2.0 billion through October 30, 2024, and a borrowing capacity of $1.8 billion from October 31, 2024, to October 30, 2025. 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 SOFR, NIBOR or CDOR plus 1.25% 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, 2024, the Company was in compliance with a debt-to-capitalization ratio of 23.6% and had no borrowings or letters of credits issued under the facility, resulting in $2.0 billion of available funds.
Current wording
On September 12, 2024, the Company entered into a new $1.5 billion five-year unsecured revolving credit facility. This new credit facility replaced the Company's previous $2.0 billion revolving credit facility. 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 new credit facility contains a financial covenant establishing a maximum debt-to-capitalization ratio of 60%. As of September 30, 2024, the Company was in compliance with a debt-to-capitalization ratio of 23.4% and had no borrowings or letters of credits issued under the facility, resulting in $1.5 billion of available funds.
Previous wording
The Company’s outstanding debt at June 30, 2024 consisted of $1,091 million in 3.95% Senior Notes, $496 million in 3.60% Senior Notes, and other debt of $161 million. The Company was in compliance with all covenants at June 30, 2024. Long-term lease liabilities totaled $553 million at June 30, 2024.
Current wording
The Company’s outstanding debt at September 30, 2024 consisted of $1,091 million in 3.95% Senior Notes, $496 million in 3.60% Senior Notes, and other debt of $162 million. The Company was in compliance with all covenants at September 30, 2024. Long-term lease liabilities totaled $551 million at September 30, 2024.
Previous wording
The Company had $457 million of outstanding letters of credit at June 30, 2024, primarily in Norway and the United States, that are under various bilateral letter of credit facilities. Letters of credit are issued as bid bonds, advanced payment bonds and performance bonds.
Current wording
The Company had $472 million of outstanding letters of credit at September 30, 2024, primarily in Norway and the United States, that are under various bilateral letter of credit facilities. Letters of credit are issued as bid bonds, advanced payment bonds and performance bonds.
Previous wording
Significant uses of cash during the first six months of 2024
Current wording
Significant uses of cash during the first nine months of 2024
Previous wording
Cash flows provided by operating activities were $354 million, primarily driven by changes in the primary components of our working capital (receivables, inventories, accounts payable, and accrued liabilities).
Current wording
Cash flows provided by operating activities were $713 million, primarily driven by higher levels of profitability and changes in the primary components of our working capital (receivables, inventories, accounts payable, and accrued liabilities).
Previous wording
Payments of $50 million in dividends to our shareholders.
Current wording
Payments of $79 million in dividends to our shareholders.
Previous wording
The effect of the change in exchange rates on cash flows was a decrease of $4 million for the first six months of 2024, and a decrease of $2 million for the first six months of 2023.
Current wording
The effect of the change in exchange rates on cash flows was a decrease of $1 million for the first nine months of 2024, and a decrease of $5 million for the first nine months of 2023.
Previous wording
NOV repurchased 2.0 million shares of common stock at an average price of $18.50 per share and also increased its base dividend by 50 percent during the second quarter. The Company expects to return at least 50% of Excess Free Cash Flow (defined as cash flow from operations less capital expenditures and other investments, including acquisitions), through a combination of steady, quarterly base dividends, opportunistic stock buybacks, and an annual supplemental dividend to true-up returns to shareholders on an annual basis.
Current wording
During the three months ended September 30, 2024, the Company repurchased 4.6 million shares of common stock under its stock program for an aggregate amount of $80 million. During the nine months ended September 30, 2024, the Company repurchased 6.6 million shares of common stock under the program for an aggregate amount of $117 million. The Company expects to return at least 50% of Excess Free Cash Flow (defined as cash flow from operations less capital expenditures and other investments, including acquisitions), through a combination of steady, quarterly base dividends, opportunistic stock buybacks, and an annual supplemental dividend to true-up returns to shareholders on an annual basis.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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 .