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National Oilwell Varco Announces Fourth Quarter And Full Year 2012 Earnings

Statements made in this press release that are forward-looking in nature are intended to be "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 and may involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to documents filed by National Oilwell Varco with the Securities and Exchange Commission, including the Annual Report on Form 10-K, which identify significant risk factors which could cause actual results to differ from those contained in the forward-looking statements.

 
NATIONAL OILWELL VARCO, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
             
December 31, December 31,
2012 2011
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 3,319 $ 3,535
Receivables, net 4,320 3,291
Inventories, net 5,891 4,030
Costs in excess of billings 1,225 593
Deferred income taxes 349 336
Prepaid and other current assets   574   325  
Total current assets 15,678 12,110
 
Property, plant and equipment, net 2,945 2,445
Deferred income taxes 413 267
Goodwill 7,172 6,151
Intangibles, net 4,743 4,073
Investment in unconsolidated affiliates 393 391
Other assets   140   78  
$ 31,484 $ 25,515  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities:
Accounts payable $ 1,200 $ 901
Accrued liabilities 2,571 2,376
Billings in excess of costs 1,189 865
Current portion of long-term debt and short-term borrowings 1 351
Accrued income taxes 355 709
Deferred income taxes   333   214  
Total current liabilities 5,649 5,416
 
Long-term debt 3,148 159
Deferred income taxes 1,997 1,852
Other liabilities   334   360  
Total liabilities   11,128   7,787  
 
Commitments and contingencies
 
Stockholders’ equity:
Common stock – par value $.01; 1 billion shares authorized; 426,928,322 and 423,900,601
shares issued and outstanding at December 31, 2012 and December 31, 2011 4 4
Additional paid-in capital 8,743 8,535
Accumulated other comprehensive income (loss) 107 (23 )
Retained earnings   11,385   9,103  
Total National Oilwell Varco stockholders’ equity 20,239 17,619
Noncontrolling interests   117   109  
Total stockholders’ equity   20,356   17,728  
$ 31,484 $ 25,515  
 
                               
NATIONAL OILWELL VARCO, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In millions, except per share data)
 
Three Months Ended Years Ended
December 31, September 30, December 31,
2012 2011 2012 2012 2011
Revenue:
Rig Technology $ 2,896 $ 2,316 $ 2,547 $ 10,107 $ 7,788
Petroleum Services & Supplies 1,770 1,570 1,717 6,967 5,654
Distribution & Transmission 1,268 560 1,315 3,927 1,873
Eliminations   (249 )   (187 )   (260 )   (960 )   (657 )
Total revenue 5,685 4,259 5,319 20,041 14,658
Gross profit 1,410 1,287 1,411 5,413 4,538
Gross profit % 24.8 % 30.2 % 26.5 % 27.0 % 31.0 %
Selling, general, and administrative 456 427 465 1,725 1,560
Other costs   51     12     57     143     41  
Operating profit 903 848 889 3,545 2,937
Interest and financial costs (21 ) (9 ) (10 ) (48 ) (40 )
Interest income 2 5 2 10 18
Equity income in unconsolidated affiliates 15 12 7 58 46
Other income (expense), net   (28 )   (13 )   (14 )   (60 )   (39 )
Income before income taxes 871 843 874 3,505 2,922
Provision for income taxes   203     270     265     1,022     937  
Net income 668 573 609 2,483 1,985
 
Net loss attributable to noncontrolling interests   -     (1 )   (3 )   (8 )   (9 )
Net income attributable to Company $ 668   $ 574   $ 612   $ 2,491   $ 1,994  
 
Net income attributable to Company per share:
 
Basic $ 1.57   $ 1.36   $ 1.44   $ 5.86   $ 4.73  
 
Diluted $ 1.56   $ 1.35   $ 1.43   $ 5.83   $ 4.70  
 
Weighted average shares outstanding:
 
Basic   426     422     425     425     422  
 
Diluted   428     425     427     427     424  
 
 
NATIONAL OILWELL VARCO, INC.
OPERATING PROFIT – AS ADJUSTED SUPPLEMENTAL SCHEDULE (Unaudited)
(In millions)
 
        Three Months Ended       Years Ended
December 31,       September 30, December 31,
2012       2011 2012 2012       2011
 
Revenue:
Rig Technology $ 2,896 $ 2,316 $ 2,547 $ 10,107 $ 7,788
Petroleum Services & Supplies 1,770 1,570 1,717 6,967 5,654
Distribution & Transmission 1,268 560 1,315 3,927 1,873
Eliminations   (249 )   (187 )   (260 )   (960 )   (657 )
Total revenue $ 5,685   $ 4,259   $ 5,319   $ 20,041   $ 14,658  
 
Operating profit:
Rig Technology $ 648 $ 603 $ 610 $ 2,380 $ 2,070
Petroleum Services & Supplies 355 301 383 1,519 1,095
Distribution & Transmission 78 45 78 253 136
Unallocated expenses and eliminations   (127 )   (89 )   (125 )   (464 )   (323 )

Total operating profit (before other costs)

$ 954   $ 860   $ 946   $ 3,688   $ 2,978  
Operating profit %:
Rig Technology 22.4 % 26.0 % 23.9 % 23.5 % 26.6 %
Petroleum Services & Supplies 20.1 % 19.2 % 22.3 % 21.8 % 19.4 %
Distribution & Transmission 6.2 % 8.0 % 5.9 % 6.4 % 7.3 %
Other unallocated   -     -     -     -     -  
 
Total operating profit % (before other costs)   16.8 %   20.2 %   17.8 %   18.4 %   20.3 %
 
 

NATIONAL OILWELL VARCO, INC.

AS ADJUSTED EBITDA RECONCILIATION EXCLUDING OTHER COSTS
(Unaudited)
(In millions)
                               
Three Months Ended Years Ended
December 31, September 30, December 31,
2012 2011 2012 2012 2011
 
Reconciliation of EBITDA excluding other costs (Note 1):
GAAP net income attributable to Company $ 668 $ 574 $ 612 $ 2,491 $ 1,994
Provision for income taxes 203 270 265 1,022 937
Interest expense 21 9 10 48 40
Depreciation and amortization   166   142   157   628   555
EBITDA 1,058 995 1,044 4,189 3,526
Other costs:
Transaction costs 51 12 57 143 24
Libya asset write-down   -   -   -   -   17
EBITDA excluding other costs (Note 1) $ 1,109 $ 1,007 $ 1,101 $ 4,332 $ 3,567
 

Note 1: EBITDA excluding other costs means earnings before interest, taxes, depreciation, amortization, and other costs, and is a non-GAAP financial measurement. Management uses EBITDA excluding other costs because it believes it provides useful supplemental information regarding the Company’s on-going economic performance and, therefore, uses this financial measure internally to evaluate and manage the Company’s operations. The Company has chosen to provide this information to investors to enable them to perform more meaningful comparisons of operating results and as a means to emphasize the results of on-going operations.

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