nov-10q_20200930.htm

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

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

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

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

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

As of October 16, 2020 the registrant had 388,264,052 shares of common stock, par value $0.01 per share, outstanding.

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

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

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

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

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

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

	Nine Months Ended
	September 30,
	2020			2019
Cash flows from operating activities:
Net loss	$	(2,189	)	$	(5,708	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		270			433
Provision for inventory losses		171			592
Deferred income taxes		(72	)		(367	)
Loss on extinguishment of debt		8			—
Equity loss in unconsolidated affiliates		250			6
Goodwill and indefinite-lived intangible asset impairment		1,378			3,186
Long-lived asset impairment		513			2,199
Other, net		93			119
Change in operating assets and liabilities, net of acquisitions:
Receivables		469			338
Inventories		288			(169	)
Contract assets		86			(42	)
Prepaid and other current assets		38			(49	)
Accounts payable		(240	)		(20	)
Accrued liabilities		(127	)		(182	)
Contract liabilities		(56	)		(7	)
Income taxes payable		32			(58	)
Other assets/liabilities, net		(172	)		(30	)
Net cash provided by operating activities		740			241

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

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

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

	Common Stock		Additional Paid in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Loss)			Total Company Stockholders' Equity			Noncontrolling Interests			Total Stockholders' Equity
Balance at December 31, 2019	$	4	$	8,507		$	(1,423	)	$	690		$	7,778		$	68		$	7,846
Net loss		—		—			—			(2,047	)		(2,047	)		(2	)		(2,049	)
Other comprehensive loss		—		—			(232	)		—			(232	)		—			(232	)
Cash dividends, $0.05 per common share		—		—			—			(19	)		(19	)		—			(19	)
Adoption of new accounting standard		—		—			—			(5	)		(5	)		—			(5	)
Noncontrolling interest		—		—			—			—			—			2			2
Stock-based compensation		—		27			—			—			27			—			27
Withholding taxes		—		(18	)		—			—			(18	)		—			(18	)
Balance at March 31, 2020	$	4	$	8,516		$	(1,655	)	$	(1,381	)	$	5,484		$	68		$	5,552
Net loss		—		—			—			(93	)		(93	)		6			(87	)
Other comprehensive income		—		—			42			—			42			—			42
Noncontrolling interest		—		—			—			—			—			(1	)		(1	)
Stock-based compensation		—		27			—			—			27			—

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

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