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EXHIBIT 99.1

 

LOGO

 

NEWS    Contact: Jeremy Thigpen

              (713) 346-7301

FOR IMMEDIATE RELEASE

NATIONAL OILWELL VARCO ANNOUNCES

FOURTH QUARTER AND FULL YEAR 2012 EARNINGS

HOUSTON, TX, February 1, 2013 — National Oilwell Varco, Inc. (NYSE: NOV) today reported that for the fourth quarter ended December 31, 2012 it earned net income of $668 million, or $1.56 per fully diluted share. Earnings improved nine percent compared to the third quarter of 2012, and improved 16 percent compared to the fourth quarter of 2011. Excluding $51 million in pre-tax transaction charges and a net $69 million tax benefit related to certain U.S. foreign tax credits in the fourth quarter of 2012, net income was $638 million, or $1.49 per fully diluted share, down two percent from the third quarter of 2012, and up nine percent from the fourth quarter of 2011, excluding transaction charges from all periods. The net $69 million tax benefit resulted from a strategic reorganization of certain foreign operations to more fully integrate recently acquired business groups.

Revenues reported for the full year 2012 were $20.04 billion, and net income was $2.49 billion, or $5.83 per fully diluted share. Operating profit for the full year 2012 was $3.55 billion. Excluding $143 million in pre-tax transaction charges and a net $69 million tax benefit related to certain U.S. foreign tax credits in 2012, net income was $2.52 billion, or $5.91 per fully diluted share, and operating profit was $3.69 billion or 18.4 percent of sales, for the full year 2012. Earnings per share increased 24 percent from 2011, excluding transaction charges and unusual tax benefits from both periods.

Revenues for the fourth quarter increased seven percent sequentially to $5.69 billion. Operating profit for the fourth quarter, excluding transaction charges, was $954 million or 16.8 percent of sales, up one percent from the third quarter of 2012. Operating profit flow-through, or the change in operating profit divided by the change in revenue, was two percent from the third quarter of 2012 to the fourth quarter of 2012, and was seven percent from the fourth quarter of 2011 to the fourth quarter of 2012, excluding transaction charges from all periods.

Backlog for capital equipment orders for the Company’s Rig Technology segment at December 31, 2012 was a record at $11.86 billion, up two percent from the third quarter of 2012. New orders during the quarter were $2.42 billion, reflecting continued good demand for oilfield equipment.

Pete Miller, Chairman and CEO of National Oilwell Varco, remarked, “The fourth quarter marked a strong finish to a record-breaking year. For the year, the Company’s continued investments in technology, product and service line extensions, facilities and machines, and our people, enabled us to better support our customers and establish new benchmarks in revenues, net income and ending backlog. I would like to thank all of our dedicated employees for their hard work and outstanding execution this year.


As we enter 2013, we recognize that there are some near-term headwinds facing us in the North American land market. However, we are excited to be entering the year with strong financial resources, a solid backlog, a well-constructed and balanced business, and an experienced and capable group at NOV that remains committed to delivering the highest quality of products and services to our customers. We also enter the year with the firm belief that the oil and gas industry will continue to upgrade the world’s aging rig fleet, while simultaneously building out both a deepwater and a worldwide shale infrastructure that are still in the early stages of development, and we look forward to playing a leadership role in those efforts.”

Rig Technology

Fourth quarter revenues for the Rig Technology segment were $2.90 billion, an increase of 14 percent from the third quarter of 2012 and an increase of 25 percent from the fourth quarter of 2011. Operating profit for this segment was $648 million, or 22.4 percent of sales, an increase of six percent from the third quarter of 2012 and an increase of seven percent from the fourth quarter of 2011. Sequential operating profit flow-through was 11 percent. Year-over-year operating profit flow-through was eight percent. Revenue out of backlog for the segment increased 16 percent sequentially and increased 25 percent year-over-year, to $2.21 billion for the fourth quarter of 2012.

Petroleum Services & Supplies

Revenues for the fourth quarter of 2012 for the Petroleum Services & Supplies segment were $1.77 billion, up three percent compared to third quarter 2012 results and up 13 percent compared to fourth quarter 2011 results. Operating profit was $355 million, or 20.1 percent of sales, down seven percent from the third quarter of 2012 and an increase of 18 percent from the fourth quarter of 2011. Operating profit flow-through was 27 percent from the fourth quarter of 2011 to the fourth quarter of 2012.

Distribution & Transmission

Fourth quarter revenues for the Distribution & Transmission segment were $1.27 billion, down four percent from the third quarter of 2012, and up 126 percent from the fourth quarter of 2011 (due mostly to previously disclosed mergers completed in 2012). Fourth quarter operating profit was $78 million or 6.2 percent of sales. Operating profit flow-through was flat sequentially, and was five percent from the fourth quarter of 2011 to the fourth quarter of 2012.

The Company has scheduled a conference call for February 1, 2013, at 8:00 a.m. Central Time to discuss fourth quarter and 2012 results. The call will be broadcast through the Investor Relations link on National Oilwell Varco’s web site at www.nov.com, and a replay will be available on the site for thirty days following the conference. Participants may also join the conference call by dialing 1- 800-446-1671 within North America or 1-847-413-3362 outside of North America five to ten minutes prior to the scheduled start time, and ask for the “National Oilwell Varco Earnings Conference Call.”

National Oilwell Varco is a worldwide leader in the design, manufacture and sale of equipment and components used in oil and gas drilling and production operations, the provision of oilfield services, and supply chain integration services to the upstream oil and gas industry.

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.

 

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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.

 

CONTACT:    National Oilwell Varco, Inc.
   Jeremy Thigpen, (713) 346-7301
   Jeremy.Thigpen@nov.com