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National Oilwell Varco Announces Third Quarter 2013 Results

Stocks in this article: NOV

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)

 
September 30, December 31,
2013 2012
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 2,741 $ 3,319
Receivables, net 4,801 4,320
Inventories, net 6,078 5,891
Costs in excess of billings 1,640 1,225
Deferred income taxes 370 349
Prepaid and other current assets   625   574
Total current assets 16,255 15,678
 
Property, plant and equipment, net 3,333 2,945
Deferred income taxes 372 413
Goodwill 9,036 7,172
Intangibles, net 5,180 4,743
Investment in unconsolidated affiliates 373 393
Other assets   124   140
$ 34,673 $ 31,484
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities:
Accounts payable $ 1,312 $ 1,200
Accrued liabilities 2,857 2,571
Billings in excess of costs 1,553 1,189
Current portion of long-term debt and short-term borrowings - 1
Accrued income taxes 260 355
Deferred income taxes   335   333
Total current liabilities 6,317 5,649
 
Long-term debt 3,749 3,148
Deferred income taxes 2,443 1,997
Other liabilities   439   334
Total liabilities   12,948   11,128
 
Commitments and contingencies
 
Stockholders’ equity:
Common stock – par value $.01; 1 billion shares authorized; 427,719,063 and 426,928,322
shares issued and outstanding at September 30, 2013 and December 31, 2012 4 4
Additional paid-in capital 8,846 8,743
Accumulated other comprehensive income 1 107
Retained earnings   12,776   11,385
Total Company stockholders’ equity 21,627 20,239
Noncontrolling interests   98   117
Total stockholders’ equity   21,725   20,356
$ 34,673 $ 31,484
                   

NATIONAL OILWELL VARCO, INC.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(In millions, except per share data)

 
Three Months Ended Nine Months Ended
September 30, June 30, September 30,
2013 2012 2013 2013 2012
Revenue:
Rig Technology $ 2,843 $ 2,547 $ 2,833 $ 8,304 $ 7,211
Petroleum Services & Supplies 1,809 1,717 1,749 5,259 5,197
Distribution & Transmission 1,342 1,315 1,295 3,864 2,659
Eliminations   (307 )   (260 )   (276 )   (832 )   (711 )
Total revenue 5,687 5,319 5,601 16,595 14,356
Gross profit 1,355 1,411 1,320 3,962 4,003
Gross profit % 23.8 % 26.5 % 23.6 % 23.9 % 27.9 %
Selling, general, and administrative 502 465 494 1,467 1,269
Other costs   (92 )   57     57     38     92  
Operating profit 945 889 769 2,457 2,642
Interest and financial costs (26 ) (10 ) (30 ) (84 ) (27 )
Interest income 2 2 3 8 8
Equity income in unconsolidated affiliates 13 7 15 47 43
Other income (expense), net   (15 )   (14 )   13     (15 )   (32 )
Income before income taxes 919 874 770 2,413 2,634
Provision for income taxes   283     265     239     746     819  
Net income 636 609 531 1,667 1,815
 
 
Net income (loss) attributable to noncontrolling interests   -     (3 )   -     (2 )   (8 )
Net income attributable to Company $ 636   $ 612   $ 531   $ 1,669   $ 1,823  
 
Net income attributable to Company per share:
 
Basic $ 1.49   $ 1.44   $ 1.25   $ 3.92   $ 4.29  
 
Diluted $ 1.49   $ 1.43   $ 1.24   $ 3.90   $ 4.28  
 
Weighted average shares outstanding:
 
Basic   426     425     426     426     425  
 
Diluted   428     427     428     428     426  
                   

NATIONAL OILWELL VARCO, INC.

OPERATING PROFIT – AS ADJUSTED SUPPLEMENTAL SCHEDULE (Unaudited)

(In millions)

 
Three Months Ended Nine Months Ended
September 30, June 30, September 30,
2013 2012 2013 2013 2012
 
Revenue:
Rig Technology $ 2,843 $ 2,547 $ 2,833 $ 8,304 $ 7,211
Petroleum Services & Supplies 1,809 1,717 1,749 5,259 5,197
Distribution & Transmission 1,342 1,315 1,295 3,864 2,659
Eliminations   (307 )   (260 )   (276 )   (832 )   (711 )
Total revenue $ 5,687   $ 5,319   $ 5,601   $ 16,595   $ 14,356  
 
Operating profit:
Rig Technology $ 606 $ 610 $ 587 $ 1,750 $ 1,732
Petroleum Services & Supplies 324 383 304 939 1,164
Distribution & Transmission 78 78 71 214 175
Unallocated expenses and eliminations   (155 )   (125 )   (136 )   (408 )   (337 )

Total operating profit (before other costs)

$ 853   $ 946   $ 826   $ 2,495   $ 2,734  
Operating profit %:
Rig Technology 21.3 % 23.9 % 20.7 % 21.1 % 24.0 %
Petroleum Services & Supplies 17.9 % 22.3 % 17.4 % 17.9 % 22.4 %
Distribution & Transmission 5.8 % 5.9 % 5.5 % 5.5 % 6.6 %
Other unallocated   -     -     -     -     -  
 
Total operating profit % (before other costs)   15.0 %   17.8 %   14.7 %   15.0 %   19.0 %
                   

NATIONAL OILWELL VARCO, INC.

AS ADJUSTED EBITDA RECONCILIATION EXCLUDING OTHER COSTS (Unaudited)

(In millions)

 
Three Months Ended Nine Months Ended
September 30, June 30, September 30,
2013 2012 2013 2013 2012
 
Reconciliation of EBITDA excluding other costs (Note 1):
GAAP net income attributable to Company $ 636 $ 612 $ 531 $ 1,669 $ 1,823
Provision for income taxes 283 265 239 746 819
Interest expense 26 10 30 84 27
Depreciation and amortization   191     157   190   555     462
EBITDA 1,136 1,044 990 3,054 3,131
Other costs:
Transaction costs 10 57 57 132 92
Litigation gain (102 ) - - (102 ) -
Devaluation costs   -     -   -   8     -
EBITDA excluding other costs (Note 1) $ 1,044   $ 1,101 $ 1,047 $ 3,092   $ 3,223
 

Note 1: EBITDA means earnings before taxes, interest, depreciation, amortization, and other costs, and is a non-GAAP measurement. Management uses EBITDA 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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