UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934

October 26, 2010
Date of Report (Date of earliest event reported)

NATIONAL OILWELL VARCO, INC.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation)		1-12317 (Commission File Number)		76-0475815 (IRS Employer Identification No.)

7909 Parkwood Circle Dr.
Houston, Texas (Address of principal executive offices)		77036 (Zip Code)

Registrant’s telephone number, including area code: 713-346-7500

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02		Results of Operations and Financial Condition

On October 26, 2010, National Oilwell Varco, Inc. issued a press release announcing earnings for the third quarter ended September 30, 2010 and conference call in connection therewith. A copy of the release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.

The information contained in this Current Report shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01		Financial Statements and Exhibits

		(d) Exhibits
		The following exhibit is provided as part of the information furnished under Item 2.02 of this Current Report on Form 8-K:
99.1		National Oilwell Varco, Inc. press release dated October 26, 2010 announcing the earnings results for the third quarter ended September 30, 2010.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Index to Exhibits

	99.1			National Oilwell Varco, Inc. press release dated October 26, 2010 announcing the earnings results for the third quarter ended September 30, 2010.

EXHIBIT 99.1

NEWS		Contact:   Clay Williams
		(713)346-7606

FOR IMMEDIATE RELEASE

NATIONAL OILWELL VARCO ANNOUNCES THIRD QUARTER 2010 RESULTS

HOUSTON, TX, October 26, 2010 — National Oilwell Varco, Inc. (NYSE: NOV) today reported that for the third quarter ended September 30, 2010 it earned net income of $404 million, or $0.96 per fully diluted share, compared to second quarter ended June 30, 2010 net income of $401 million, or $0.96 per fully diluted share.

Transaction charges for the third quarter of 2010 were $2 million pre-tax. Net income for the third quarter of 2010 excluding transaction charges was $406 million, or $0.97 per fully diluted share. This compares to second quarter of 2010 net income of $405 million, or $0.97 per fully diluted share, and third quarter 2009 net income of $396 million or $0.95 per fully diluted share, excluding transaction charges from both periods.

The Company’s revenues for the third quarter of 2010 were $3.01 billion, an increase of two percent from the second quarter of 2010 and a decrease of two percent from the third quarter of 2009. Operating profit for the third quarter of 2010 was $598 million or 19.9 percent of sales, excluding transaction charges. Year-over-year third quarter operating profit declined $20 million on $76 million lower revenue, resulting in operating profit flow-through (change in operating profit divided by the change in revenue) of 26 percent, excluding transaction and restructuring charges.

Backlog for capital equipment orders for the Company’s Rig Technology segment at September 30, 2010 was $4.87 billion, which was up slightly from the end of the second quarter of 2010. New orders during the quarter were $1.18 billion, reflecting a broad mix of the Company’s products including new offshore and land rigs, workover rigs, cranes, and well-stimulation equipment, from domestic and international customers.

Pete Miller, Chairman, President and CEO of National Oilwell Varco, remarked, “High oil and gas activity across North America and continued outstanding execution of equipment orders enabled the Company to achieve solid earnings and cash flow again this quarter. We are pleased that bookings into our capital equipment backlog exceeded shipments during the third quarter, driving backlog a little higher sequentially and signaling renewed interest in drilling equipment construction and refurbishment, and improving credit markets. We are pursuing new orders aggressively, and remain well-positioned to execute strategic internal growth and acquisition opportunities.

We expect to close our proposed acquisition of Advanced Production and Loading PLC, a subsidiary of BW Offshore Limited, during the fourth quarter. We believe this acquisition will help us expand our product offerings in the Floating Production, Storage and Offloading vessels (FPSO) market, which we consider to be the next phase of deepwater development in the oil and gas sector. FPSO’s offer us a terrific opportunity to create value for our shareholders.”

Rig Technology
Third quarter revenues for the Rig Technology segment were $1.65 billion, essentially flat from the second quarter of 2010 and a decrease of 18 percent from the third quarter of 2009. Operating profit for this segment was $480 million, or 29.1 percent of sales. Revenue out of backlog for the segment decreased eight percent sequentially and decreased 28 percent year-over-year, but non-backlog revenue increased 17 percent sequentially and 23 percent year-over-year, reflecting higher demand for aftermarket parts, services and capital spares.

Petroleum Services & Supplies

Revenues for the third quarter of 2010 for the Petroleum Services & Supplies segment were $1.09 billion, up five percent compared to second quarter 2010 results and up 23 percent from the third quarter of 2009. Operating profit was $164 million, or 15.1 percent of revenue, up 19 percent from the second quarter of 2010. Operating profit flow-through was 46 percent sequentially and 38 percent from the third quarter of 2009 to the third quarter of 2010. Rising levels of rig activity in U.S. shale plays and seasonal recovery in Canada resulted in higher demand for products and services provided by the segment.

Distribution Services
The Distribution Services segment generated third quarter revenues of $424 million, which were up 16 percent from the second quarter of 2010 and were up 39 percent from the third quarter of 2009. Third quarter operating profit was $24 million or 5.7 percent of sales. Operating profit flow-through was 19 percent sequentially and 14 percent from the third quarter of 2009 to the third quarter of 2010. This segment benefited from sequential seasonal sales improvements in Canada, as well as strong sequential gains in U.S. operations on higher rig counts.

The Company has scheduled a conference call for October 26, 2010, at 8:00 a.m. Central Time to discuss third 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 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)

		September 30,				December 31,
		2010				2009
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	3,070			$	2,622
Receivables, net			2,408				2,187
Inventories, net			3,562				3,490
Costs in excess of billings			769				740
Deferred income taxes			232				290
Prepaid and other current assets			285				269
Total current assets			10,326				9,598
Property, plant and equipment, net			1,808				1,836
Deferred income taxes			269				92
Goodwill			5,525				5,489
Intangibles, net			3,877				4,052
Investment in unconsolidated affiliate			365				393
Other assets			61				72
		$	22,231			$	21,532
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	585			$	584
Accrued liabilities			2,289				2,267
Billings in excess of costs			293				1,090
Current portion of long-term debt and short-term borrowings			354				7
Accrued income taxes			351				226
Total current liabilities			3,872				4,174
Long-term debt			516				876
Deferred income taxes			2,197				2,091
Other liabilities			242				163
Total liabilities			6,827				7,304
Commitments and contingencies
Stockholders’ equity:
Common stock — par value $.01; 419,167,762 and 418,451,731 shares issued and outstanding at September 30, 2010 and December 31, 2009			4				4
Additional paid-in capital			8,267				8,214
Accumulated other comprehensive income			109				90
Retained earnings			6,906				5,805
Total National Oilwell Varco stockholders’ equity			15,286				14,113
Noncontrolling interests			118				115
Total stockholders’ equity			15,404				14,228
		$	22,231			$	21,532

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,
		2010				2009				2010				2010				2009
Revenue:
Rig technology		$	1,650			$	2,000			$	1,672			$	5,208			$	6,116
Petroleum services and supplies			1,089				882				1,033				3,045				2,809
Distribution services			424				306				365				1,123				1,019
Eliminations			(152	)			(101	)			(129	)			(392	)			(366	)
Total revenue			3,011				3,087				2,941				8,984				9,578
Gross profit			947				897				932				2,852				2,813
Gross profit %			31.5	%			29.1	%			31.7	%			31.7	%			29.4	%
Selling, general, and administrative			349				279				338				1,012				886
Intangible asset impairment			—				—				—				—				147
Transaction, devaluation and voluntary retirement costs			2				17				4				44				73
Operating profit			596				601				590				1,796				1,707
Interest and financial costs			(12	)			(14	)			(13	)			(38	)			(40	)
Interest income			4				4				3				9				8
Equity income in unconsolidated affiliate			8				1				8				22				45
Other income (expense), net			(23	)			(13	)			(3	)			(15	)			(87	)
Income before income taxes			573				579				585				1,774				1,633
Provision for income taxes			169				192				186				552				551
Net income			404				387				399				1,222				1,082
Net income (loss) attributable to noncontrolling interests			—				2				(2	)			(5	)			7
Net income attributable to Company		$	404			$	385			$	401			$	1,227			$	1,075
Net income attributable to Company per share:
Basic		$	0.97			$	0.93			$	0.96			$	2.94			$	2.58
Diluted		$	0.96			$	0.92			$	0.96			$	2.93			$	2.58
Weighted average shares outstanding:
Basic			417				416				417				417				416
Diluted			419				418				419				419				417

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,
		2010				2009				2010				2010				2009
Revenue:
Rig technology		$	1,650			$	2,000			$	1,672			$	5,208			$	6,116
Petroleum services and supplies			1,089				882				1,033				3,045				2,809
Distribution services			424				306				365				1,123				1,019
Eliminations			(152	)			(101	)			(129	)			(392	)			(366	)
Total revenue		$	3,011			$	3,087			$	2,941			$	8,984			$	9,578
Operating profit:
Rig technology		$	480			$	579			$	509			$	1,570			$	1,721
Petroleum services and supplies			164				86				138				415				346
Distribution services			24				7				13				48				42
Unallocated expenses and eliminations			(70	)			(54	)			(66	)			(193	)			(182	)
Total operating profit (before intangible asset impairment and transaction, devaluation and voluntary retirement costs)		$	598			$	618			$	594			$	1,840			$	1,927
Operating profit %:
Rig technology			29.1	%			29.0	%			30.4	%			30.1	%			28.1	%
Petroleum services and supplies			15.1	%			9.8	%			13.4	%			13.6	%			12.3	%
Distribution services			5.7	%			2.3	%			3.6	%			4.3	%			4.1	%
Other unallocated			—				—				—				—				—
Total operating profit % (before intangible asset impairment and transaction, devaluation and voluntary retirement costs)			19.9	%			20.0	%			20.2	%			20.5	%			20.1	%

NATIONAL OILWELL VARCO, INC.
AS ADJUSTED EBITDA RECONCILIATION EXCLUDING INTANGIBLE ASSET IMPAIRMENT AND TRANSACTION,
DEVALUATION AND VOLUNTARY RETIREMENT COSTS

(Unaudited)
(In millions)

		Three Months Ended												Nine Months Ended
		September 30,								June 30,				September 30,
		2010				2009				2010				2010				2009
Reconciliation of EBITDA (Note 1):
GAAP net income attributable to Company		$	404			$	385			$	401			$	1,227			$	1,075
Provision for income taxes			169				192				186				552				551
Interest expense			12				14				13				38				40
Depreciation and amortization			127				126				124				378				364
Intangible asset impairment			—				—				—				—				147
Transaction, devaluation and voluntary retirement costs			2				17				4				44				73
EBITDA (Note 1)		$	714			$	734			$	728			$	2,239			$	2,250

Note 1: EBITDA means earnings before interest, taxes, depreciation, amortization, intangible asset impairment, transaction, devaluation and voluntary retirement 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. Clay Williams, (713) 346-7606 Clay.Williams@nov.com