National Oilwell Varco Announces First Quarter 2013 Earnings and Backlog

  National Oilwell Varco Announces First Quarter 2013 Earnings and Backlog

Business Wire

HOUSTON -- April 26, 2013

National Oilwell Varco, Inc. (NYSE: NOV) today reported that for its first
quarter ended March 31, 2013 it earned net income of $502 million, or $1.17
per fully diluted share, compared to fourth quarter ended December 31, 2012
net income of $668 million, or $1.56 per fully diluted share. The first
quarter 2013 results included transaction costs primarily related to the
Robbins & Myers acquisition and Venezuela currency devaluation charges, which
combined for a total of $73 million in pre-tax costs and charges. Excluding
these costs and charges, earnings were $553 million, or $1.29 per fully
diluted share.

Revenues for the first quarter of 2013 were $5.31 billion, a decrease of seven
percent from the fourth quarter of 2012 and an increase of 23 percent from the
first quarter of 2012. Operating profit for the quarter, excluding the
transaction charges, was $816 million, or 15.4 percent of sales. Sequentially,
first quarter operating profit decreased 14 percent, while year-over-year
first quarter operating profit decreased seven percent.

Backlog for capital equipment orders for the Company’s Rig Technology segment
at March 31, 2013 was a record at $12.92 billion, up eight percent from the
fourth quarter of 2012, and up 24 percent from the first quarter of 2012. New
orders during the quarter were $3.04 billion, reflecting continued strong
demand for oilfield equipment.

Pete Miller, Chairman and CEO of National Oilwell Varco, remarked, “The North
American market was softer than anticipated; however, our strong backlog for
drilling equipment, coupled with the recent investments that we have made in
acquisitions, international expansion and incremental capacity, enabled our
Company to generate solid earnings in the first quarter. As we move through
the year, we expect to see continued improvements in international activity,
strong industry demand for both floaters and jackups, and a heightened level
of interest and orders in our floating production equipment offering.” Miller
continued, “Additionally, while we are cautious regarding the timing of a
North America recovery, we remain confident that land drillers and well
service firms will soon consume their current inventories, ultimately
requiring more of our products and services. Until that time, we take comfort
in knowing that we are well positioned for this market, given our strong
financial resources, unparalleled market presence, exceptional backlog, and
extraordinary workforce.”

Rig Technology

First quarter revenues for the Rig Technology segment were $2.63 billion, a
decrease of nine percent from the fourth quarter of 2012 and an increase of 16
percent from the first quarter of 2012. Operating profit for this segment was
$557 million, or 21.2 percent of sales. Operating profit flow-through (change
in operating profit divided by the change in revenue) was two percent from the
first quarter of 2012 to the first quarter of 2013. Revenue out of backlog for
the segment increased 16 percent year-over-year, and was down ten percent from
the fourth quarter of 2012 to $1.98 billion for the first quarter of 2013.

Petroleum Services & Supplies

Revenues for the first quarter of 2013 for the Petroleum Services & Supplies
segment were $1.70 billion, down four percent compared to fourth quarter 2012
results and flat from the first quarter of 2012. Operating profit was $311
million, or 18.3 percent of revenue. Operating profit flow-through was down 64
percent from the fourth quarter of 2012 to the first quarter of 2013.

Distribution & Transmission

The Distribution & Transmission segment generated first quarter revenues of
$1.23 billion, down three percent from the fourth quarter of 2012 and up 118
percent from the first quarter of 2012 (due mostly to previously disclosed
mergers completed in 2012). First quarter operating profit was $65 million, or
5.3 percent of sales. Operating profit flow-through was three percent from the
first quarter of 2012 to the first quarter of 2013.

The Company has scheduled a conference call for April 26, 2013, at 8:00 a.m.
Central Time to discuss first quarter 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 asking 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.

                                                             
NATIONAL OILWELL VARCO, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except share data)
                                                                  
                                                  March 31,       December 31,
                                                  2013            2012
                                                  (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents                         $  2,441        $   3,319
Receivables, net                                     4,279            4,320
Inventories, net                                     6,135            5,891
Costs in excess of billings                          1,333            1,225
Deferred income taxes                                332              349
Prepaid and other current assets                    474            574
Total current assets                                 14,994           15,678
                                                                  
Property, plant and equipment, net                   3,215            2,945
Deferred income taxes                                395              413
Goodwill                                             9,056            7,172
Intangibles, net                                     5,399            4,743
Investment in unconsolidated affiliate               410              393
Other assets                                        138            140
                                                  $  33,607      $   31,484
                                                                  
LIABILITIES AND STOCKHOLDERS’ EQUITY
                                                                  
Current liabilities:
Accounts payable                                  $  1,283        $   1,200
Accrued liabilities                                  2,468            2,571
Billings in excess of costs                          1,093            1,189
Current portion of long-term debt and                -                1
short-term borrowings
Accrued income taxes                                 406              355
Deferred income taxes                               388            333
Total current liabilities                            5,638            5,649
                                                                  
Long-term debt                                       4,349            3,148
Deferred income taxes                                2,451            1,997
Other liabilities                                   439            334
Total liabilities                                   12,877         11,128
                                                                  
Commitments and contingencies
                                                                  
Stockholders’ equity:
Common stock – par value $.01; 1 billion
shares authorized; 427,216,689 and
426,928,322 shares issued and outstanding at         4                4
March 31, 2013 and December 31, 2012
Additional paid-in capital                           8,772            8,743
Accumulated other comprehensive income (loss)        (7     )         107
Retained earnings                                   11,831         11,385
Total Company stockholders’ equity                   20,600           20,239
Noncontrolling interests                            130            117
Total stockholders’ equity                          20,730         20,356
                                                  $  33,607      $   31,484

                                                         
NATIONAL OILWELL VARCO, INC.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(In millions, except per share data)
                                                                  
                                  Three Months Ended
                                  March 31,                       December 31,
                                  2013            2012            2012
                                                                  
Revenue:
Rig Technology                    $ 2,628         $ 2,259         $  2,896
Petroleum Services & Supplies       1,701           1,704            1,770
Distribution & Transmission         1,227           564              1,268
Eliminations                       (249  )        (224  )         (249   )
Total revenue                       5,307           4,303            5,685
Gross profit                        1,287           1,271            1,410
Gross profit %                      24.3  %         29.5  %          24.8   %
Selling, general, and               471             390              456
administrative
Transaction and devaluation        73            7              51     
costs
Operating profit                    743             874              903
                                                                  
Interest and financial costs        (28   )         (8    )          (21    )
Interest income                     3               3                2
Equity income in                    19              17               15
unconsolidated affiliate
Other income (expense), net        (13   )        (13   )         (28    )
                                                                  
Income before income taxes          724             873              871
                                                                  
Provision for income taxes         224           269            203    
Net income                          500             604              668
                                                                  
Net loss attributable to           (2    )        (2    )         -      
noncontrolling interests
Net income attributable to        $ 502          $ 606          $  668    
Company
                                                                  
Net income attributable to
Company per share:
                                                                  
Basic                             $ 1.18         $ 1.43         $  1.57   
                                                                  
Diluted                           $ 1.17         $ 1.42         $  1.56   
                                                                  
Weighted average shares
outstanding:
                                                                  
Basic                              426           423            426    
                                                                  
Diluted                            428           426            428    


NATIONAL OILWELL VARCO, INC.

OPERATING PROFIT – AS ADJUSTED SUPPLEMENTAL SCHEDULE (Unaudited)

(In millions)
                              
                                  Three Months Ended
                                  March 31,                    December 31,
                                  2013         2012            2012
                                                                  
Revenue:
Rig Technology                    $ 2,628         $ 2,259         $  2,896
Petroleum Services &                1,701           1,704            1,770
Supplies
Distribution & Transmission         1,227           564              1,268
Eliminations                       (249  )        (224  )         (249   )
Total Revenue                     $ 5,307        $ 4,303        $  5,685  
                                                                  
Operating profit:
Rig Technology                    $ 557           $ 551           $  648
Petroleum Services &                311             388              355
Supplies
Distribution & Transmission         65              43               78
Unallocated expenses and           (117  )        (101  )         (127   )
eliminations
Total operating profit            $ 816          $ 881          $  954    
(before other costs)
                                                                  
Operating profit %:
Rig Technology                      21.2  %         24.4  %          22.4   %
Petroleum Services &                18.3  %         22.8  %          20.1   %
Supplies
Distribution & Transmission         5.3   %         7.6   %          6.2    %
Other unallocated                  -             -              -      
                                                                  
Total operating profit %           15.4  %        20.5  %         16.8   %
(before other costs)

                                                       
NATIONAL OILWELL VARCO, INC.

AS ADJUSTED EBITDA RECONCILIATION EXCLUDING TRANSACTION AND DEVALUATION COSTS

(Unaudited)

(In millions)
                                                                
                                      Three Months Ended
                                      March 31,                  December 31,
                                      2013          2012          2012
                                                                  
Reconciliation of EBITDA
excluding other costs (Note 1):
GAAP net income attributable to       $ 502         $ 606         $    668
Company
Provision for income taxes              224           269              203
Interest expense                        28            8                21
Depreciation and amortization          174          148             166
EBITDA                                  928           1,031            1,058
                                                                  
Other costs:
Transaction costs                       65            7                51
Devaluation costs                      8            -               -
EBITDA excluding other costs          $ 1,001       $ 1,038       $    1,109
(Note 1)
                                                                       

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.

Contact:

National Oilwell Varco, Inc.
Jeremy Thigpen, (713) 346-7301
Jeremy.Thigpen@nov.com
 
Press spacebar to pause and continue. Press esc to stop.